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:

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CollectorBabu · Accepted Answer

Correct Answer: Neither 1 nor 2. &bull; In India CSR was made mandatory for companies by an amendment to the Companies Act, 2013 in 2014. &bull; Under the Section 135(1) of the Act a company meeting the following conditions has mandatory social responsibility: 1) Net profit amounts to Rs 5 Crore or more 2) Turnover is Rs 1000 Crore or more or 3) Net worth is Rs 500 Crore or more &bull; As per the Companies (Amendment) Act, 2019, CSR is applicable to companies before completion of 3 financial years. &bull; As per the Companies (Amendment) Act, 2019, Companies would have to spend 2 percent of their profits in CSR activities. &bull; Under the Companies Act, businesses can invest their profits in areas such as promoting rural development in terms of healthcare, sanitation, education including skill development, environmental sustainability, etc.

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