Prior to Companies Amendment Act, 2020
As per Section 135, Companies having net worth of rupees five hundred crore 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 were required to constitute a Corporate Social Responsibility Committee and were required to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years for CSR activity.
For eg. if the Company had turnover of 1345 crore, they were mandatorily required to constitute the CSR committee.
However, the amendment act, 2020 which got effective on September 28, 2020 has provided the relaxation to the Companies for constitution of the Corporate Social Responsibility Committee if the amount to be spent by them on CSR activity does not exceed fifty lakh rupees.
For eg. If the amount to be spent by the Company on CSR activity comes to 30 lakhs, Company is not required to constitute CSR committee and the functions can be discharged by Board.
Question arises what if he Company already has CSR committee??
Company can still continue with the committee or it may dissolve the same.