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CS Professional · CSR and Social Governance · CSR Policy

Vihaan Pharma Ltd is required to spend Rs 45 lakh on CSR for the year under section 135(5). What is the position regarding the CSR Committee?

Since the amount to be spent, Rs 45 lakh, does not exceed fifty lakh rupees, the company need not constitute a CSR Committee. The Board of Directors performs the Committee's functions, including recommending the policy and monitoring it.

  1. AThe Committee is not required, and the Board discharges its functionsCorrect
  2. BThe Committee of three directors including an independent director is mandatory
  3. CA Committee of two directors is mandatory
  4. DThe company is exempt from CSR policy altogether

Explanation

Under section 135(9), where the amount to be spent does not exceed fifty lakh rupees, the requirement to constitute the CSR Committee does not apply. The Board of Directors discharges the Committee's functions. The company still must have a CSR policy and spend the amount.

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