Corporate Social Responsibility

Choose the Correct Answer

Correct Answer : Option a

Explanation
Statement 1 is correct: The provisions related to Corporate Social Responsibility (CSR) for the first time were incorporated in the Companies Act, 2013 that became effective from 2014. The government provides the broad framework of CSR through Section 135 of the Act, Schedule VII of the Act and the Companies (CSR Policy) Rules, 2014 (CSR Rules).

Statement 2 is correct: Section 135 of the Companies Act, 2013 makes it mandatory for companies to comply with Corporate Social Responsibility provisions if they have a net worth of ₹500 crore or more, or a turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more.

Statement 3 is not correct: It is mandatory for companies of a certain turnover and profitability to spend 2% of their average net profit for the past three years and not of turnover on corporate social responsibility activities.