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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 at least one percent of their annual net-profit in the activities under CSR. Select the correct answer using the codes given below:

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 at least one percent of their annual net-profit in the activities under CSR. Select the correct answer using the codes given below: Correct Answer Neither 1 nor 2

The Correct Answer is Neither 1 nor 2
Key Points

  • Companies Act 2013, introduced mandatory CSR. Hence Statement 1 NOT is Correct.
  • The Act encourages companies to spend 2% of their average net profit in the previous three years on CSR activities. Hence Statement 2 is Not Correct.

 Important Points

  • "Corporate Social Responsibility" in general can be referred to as a corporate initiative to assess and take responsibility for the company's effects on the environment and impact on social welfare.
  • In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013.
  • The CSR provisions within the Act is applicable to companies with an annual turnover of 1,000 crores and more, or a net worth of Rs. 500 crore and more, or a net profit of Rs. 5 crores and more.

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