Q. With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements:
- CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
- It is mandatory for companies having a Net worth of ₹500 crore or more, or an Annual turnover of ₹1,000 crore or more.
- Companies meeting the criteria set by the Companies Act, 2013 must spend a minimum of 8% of their average net profits over three years on CSR.
- Unspent funds must go to a Schedule VII fund by year-end,
Answer:
Only three
Notes:
- CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities. Correct: CSR activities aim to benefit society, not the company. Schedule VII of the Companies Act, 2013, lists eligible activities, including health, sanitation, education, environment, sports, among others.
- It is mandatory for companies having a Net worth of ₹500 crore or more, or an Annual turnover of ₹1,000 crore or more. Correct: Mandatory for companies meeting any of the following: Net worth of ₹500 crore or more, Annual turnover of ₹1,000 crore or more, Net profit of ₹5 crore or more.
- Companies meeting the criteria set by the Companies Act, 2013 must spend a minimum of 8% of their average net profits over three years on CSR. Incorrect: Such companies are required to allocate 2% of their average net profits from the past three years toward CSR.
- Unspent funds must go to a Schedule VII fund by year-end, used in three years, or sent to a government-specified fund. Correct: Post-amendment (2019), unspent funds must be transferred to a specified Schedule VII fund by the end of the fiscal year and utilized within three years, failing which, they must be deposited in a government-specified fund.