With reference to the Corporate Social Responsibility (CSR), which of the statements is/are correct? 1) Companies Act 2014, introduces mandatory CSR. 2) Companies covered under this will have to spend atleast one percent of their annual net-profit in the activities under CSR. Select the correct answer using the codes given below:

The correct answer is D. Neither statement is correct.

Statement 1 is wrong because mandatory CSR came through the Companies Act 2013, not 2014. Section 135 of that Act requires companies meeting prescribed thresholds of net worth, turnover or net profit to constitute a CSR committee and spend on activities listed in Schedule VII.

Statement 2 is wrong because the mandated spend is 2 per cent, not 1 per cent. It is calculated on the average net profit of the three immediately preceding financial years, not on the current year's profit alone.

Core concept: CSR is a statutory obligation in India. If a company does not spend the required amount, the board must explain the shortfall in its report, and the Schedule VII list defines what counts as eligible CSR. For Mains GS-II and GS-III, the debate is whether a mandated CSR spend delivers real development outcomes or becomes mere compliance spending.

Trap: Aspirants often mix up the Act's year and the spending percentage, remembering 2014 or 1 per cent loosely and treating statement 1 or 2 as correct.