11th to 21st January 2024 - CORPORATE SOCIAL RESPONSIBILITY

Question 1

What is Corporate Social Responsibility (CSR)?

Answer 1

A model where corporations self-regulate to integrate social, environmental, and ethical concerns into business operations in a way that benefits society.

Question 2

Why is CSR important in India?

Answer 2

India was the first country to legally mandate CSR, demonstrating a commitment to businesses working for sustainable development.

Question 3

What are the key provisions of India’s CSR law (Section 135 of the Companies Act 2013)?

Answer 3

Applies to companies meeting specific financial thresholds (net worth, turnover, or profit).
Requires spending 2% of average net profit (for the past 3 years) on CSR activities.

Question 4

Which companies MUST comply with India’s CSR law?

Answer 4

Companies with any of the following in the preceding financial year:

Net worth of at least Rs. 500 crore
Turnover of at least Rs. 1000 crore
Net profit of at least Rs. 5 crore

Question 5

Explain the term “net worth” in the CSR context.

Answer 5

Net worth is the total value of a company’s assets minus its liabilities.

Question 6

How is “turnover” defined in terms of CSR requirements?

Answer 6

Turnover is the total revenue generated by a company from the sale of goods or services.

Question 7

How much are eligible companies required to spend on CSR activities?

Answer 7

They must spend at least 2% of their average net profit for the preceding three financial years.

Question 8

If a company’s average net profit for the last three years is Rs. 15 crore, how much should it spend on CSR?

Answer 8

2% of Rs. 15 crore = Rs. 0.3 crore (or Rs. 30 lakhs)

Question 9

Can a company spend more than the mandated 2% on CSR?

Answer 9

Yes, companies are encouraged to go beyond the minimum and make significant contributions to society