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Under section 135(1) of the Companies Act, 2013, which company meets the financial thresholds that…

Section 135(1) of the Companies Act, 2013 applies to every company having a net worth of rupees five hundred crore or more, or a turnover of rupees one thousand crore or…

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Under section 135(1) of the Companies Act, 2013, which company meets the financial thresholds that attract the Corporate Social Responsibility provisions?

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Answer and explanation

Correct answer C

Section 135(1) of the Companies Act, 2013 applies to every company having a net worth of rupees five hundred crore or more, or a turnover of rupees one thousand crore or more, or a net profit of rupees five crore or more during the immediately preceding financial year; any one threshold is enough. Only the company with net profit of 5 crores, net worth of 500 crores and turnover of 1000 crores meets them; the other companies fall below all three thresholds.

Such a company must ordinarily constitute a CSR Committee, but under section 135(9) the Board discharges the Committee's functions where the amount to be spent under section 135(5) does not exceed fifty lakh rupees.

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