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Which of the following states one of the exact financial thresholds for application of section 135(1) of the Companies Act, 2013, measured during the immediately preceding financial year?

Question and options

Which of the following states one of the exact financial thresholds for application of section 135(1) of the Companies Act, 2013, measured during the immediately preceding financial year?

  1. Net worth of INR 1,000 crore or more

  2. Turnover of INR 1,000 crore or more

  3. Net profit of INR 50 crore or more

  4. Paid-up share capital of INR 200 crore or more

Answer and explanation

Correct answer: B - Turnover of INR 1,000 crore or more

Section 135(1) applies if, during the immediately preceding financial year, a company has net worth of at least INR 500 crore, turnover of at least INR 1,000 crore or net profit of at least INR 5 crore. The thresholds apply independently. Under section 135(9), a company whose required CSR spending under section 135(5) does not exceed INR 50 lakh does not need a separate CSR committee, and its board discharges the committee's functions.

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