Assertion A: Every company having net worth of rupees five hundred crores or more or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee (CSRC).
Reason R: The CSR Committee monitors CSR policy of the company.
In the light of the above statements, choose the most appropriate answer from the options given below
Assertion A: CSR Committee Constitution Criteria
Assertion A correctly outlines the thresholds stipulated by the Companies Act, 2013, for mandating the formation of a Corporate Social Responsibility Committee (CSRC).
The criteria include:
- A company having a net worth of ₹500 crore or more; OR
- A company having a turnover of ₹1000 crore or more; OR
- A company having a net profit of ₹5 crore or more
These financial metrics must be met during the immediately preceding financial year.
Reason R: CSR Committee Function
Reason R accurately states that the CSR Committee is responsible for monitoring the CSR policy of the company. This aligns with the duties specified for the committee under Section 135 of the Companies Act, 2013.
Thus, Reason R is a correct statement.
Relationship Between Assertion A and Reason R
Both Assertion A and Reason R are factually correct statements:
- Assertion A details the conditions under which a CSR Committee must be established.
- Reason R describes a key *function* of the CSR Committee once established.
However, the function described in Reason R (monitoring the policy) does not serve as the reason or explanation for *why* the committee is constituted based on the financial thresholds mentioned in Assertion A. The thresholds are legal requirements for mandating the committee's existence, not a direct consequence of its monitoring role.
Therefore, Reason R is not the correct explanation for Assertion A.
Final Answer Determination
Based on the analysis:
- Assertion A is correct.
- Reason R is correct.
- Reason R is not the correct explanation of Assertion A.
This leads to the conclusion that both statements are correct, but Reason R does not explain Assertion A.
Important Questions from Company law
Arrange the following as per sections of the Companies Act, 2013 in descending order :
A. Execution of Bills of Exchange, etc.
B. Punishment in case of repeated default
C. Annual reports on Government Companies
D. Petition for winding up
E. Functions of Company Secretary
Choose the correct answer from the options given below:
Match List I with List - II.
List - I
List - II
(A)
Producer companies
(I)
Do not necessarily require Memorandum of Association
(B)
Statutory companies
(II)
Association not for profit
(C)
Section 8 company
(III)
Formed to convert cooperative into a company
(D)
Small company
(IV)
Paid up share capital is between 50 lakh-5 crore and turnover is between 2 crore - 20 crore
Choose the correct answer from the options given below:
Red herring prospectus is a prospectus issued:
- The problem of double taxation in international transactions can be reduced by:
i. Market agreement
ii. Multilateral agreement
iii. Bilateral agreement.
iv. Trade agreement - Which of the following is not a type of prospectus under the Companies Act, 2013?
