With reference to Corporate social responsibility(CSR), consider the following statements:1.CSR provisions are applicable to all companies established in India.2.The CSR provisions in the company act, 2013 encourages companies to spend 20% of their average net profit in the previous three years on CSR activities.Which of the statements given above is/are correct?

Q. With reference to Corporate social responsibility(CSR), consider the following statements:
1.CSR provisions are applicable to all companies established in India.
2.The CSR provisions in the company act, 2013 encourages companies to spend 20% of their average net profit in the previous three years on CSR activities.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: D

Notes:

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 crore and more, or a net worth of Rs. 500 crore and more, or a net profit of Rs. 5 crore and more.

The Act encourages companies to spend 2% of their average net profit in the previous three years on CSR activities.

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