Corporate Social Responsibility Questions and Answers

Q: The Corporate Social Responsibility Committee consists of :

The CSR Committee consists of three or more directors, of whom at least one should be an independent director.Section 135(1) of the Companies Act, 2013 requires every company meeting the net worth, turnover or net profit thresholds to constitute a Corporate Social Responsibility Committee of the Board, consisting of three or more directors, out of which at least one director shall be an independent director.The Act does not require four directors, nor that all members be independent. (Companies not required to appoint an independent director may have two directors, but option B states the general rule in the Act.)

Q: The activities to be undertaken by corporate social responsibility committee of a company are specified in which Schedule of Companies Act, 2013 ?

The CSR activities are specified in Schedule VII.Section 135 of the Companies Act, 2013 requires qualifying companies to form a CSR committee and spend on activities listed in Schedule VII, such as eradicating hunger and poverty, promoting education and health, gender equality, environmental sustainability, protecting national heritage, and contributions to specified funds.Schedule V deals with the appointment and remuneration of managerial personnel, Schedule III with the format of financial statements, and Schedule VI with infrastructure projects and activities.

Q: Which of the following company is required to constitute a corporate social responsibility committee ?

The answer is every company having net worth of Rs. 500 crores or more.Section 135(1) of the Companies Act, 2013 requires every company having a net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more, or net profit of Rs. 5 crore or more, during the immediately preceding financial year, to constitute a Corporate Social Responsibility Committee of the Board.The other figures confuse the thresholds: Rs. 1,000 crore is the turnover test, not the net worth test, Rs. 5 crore is the net profit test, and Rs. 100 crore is not a CSR threshold at all.

The Corporate Social Responsibility Committee consists of :

A.Four or more directors
B.Three or more directors of whom at least one should be independent director
C.Two or more directors all of whom should be independent directors
D.Two independent directors.

Exam Year(s)

MH SET - 2019, SET Exam - 2019,

Answer: B

The CSR Committee consists of three or more directors, of whom at least one should be an independent director.

Section 135(1) of the Companies Act, 2013 requires every company meeting the net worth, turnover or net profit thresholds to constitute a Corporate Social Responsibility Committee of the Board, consisting of three or more directors, out of which at least one director shall be an independent director.

The Act does not require four directors, nor that all members be independent. (Companies not required to appoint an independent director may have two directors, but option B states the general rule in the Act.)

Discuss in Forum

The activities to be undertaken by corporate social responsibility committee of a company are specified in which Schedule of Companies Act, 2013 ?

A.Schedule V
B.Schedule III
C.Schedule VI
D.Schedule VII

Exam Year(s)

MH SET - 2020, SET Exam - 2020,

Answer: D

The CSR activities are specified in Schedule VII.

Section 135 of the Companies Act, 2013 requires qualifying companies to form a CSR committee and spend on activities listed in Schedule VII, such as eradicating hunger and poverty, promoting education and health, gender equality, environmental sustainability, protecting national heritage, and contributions to specified funds.

Schedule V deals with the appointment and remuneration of managerial personnel, Schedule III with the format of financial statements, and Schedule VI with infrastructure projects and activities.

Discuss in Forum

Which of the following company is required to constitute a corporate social responsibility committee ?

A.Every company having net worth of Rs. 500 crores or more
B.Every company having net worth of Rs. 5 crores or more
C.Every company having net worth of Rs. 100 crores or more
D.Every company having net worth of Rs. 1000 crores or more

Exam Year(s)

MH SET - 2021, SET Exam - 2021,

Answer: A

The answer is every company having net worth of Rs. 500 crores or more.

Section 135(1) of the Companies Act, 2013 requires every company having a net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more, or net profit of Rs. 5 crore or more, during the immediately preceding financial year, to constitute a Corporate Social Responsibility Committee of the Board.

The other figures confuse the thresholds: Rs. 1,000 crore is the turnover test, not the net worth test, Rs. 5 crore is the net profit test, and Rs. 100 crore is not a CSR threshold at all.

Corporate Social Responsibility Questions and Answers

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