Question

Which of the following criteria should a company satisfy during the immediately preceding financial year to qualify for CSR under the Companies Act, 2013?

• A. Net profit of ` 5 crores or more
• B. Net profit of ` 1,000 crores or more
• C. Turnover of ` 5,000 crores or more
• D. Net worth of ` 5,000 crores or more
• A. 5% of the average net worth of the company of the preceding three financial years
• B. 2% of average net profits of the company made during the three immediately preceding financial years
• C. 7% of the average turnover of the company of the previous financial year
• D. 5% of the average net profits of the company made during the preceding financial year
• I. Company A
• J. Company B
• K. Company C
• L. All the above
• A. promoting education and employment enhancing vocation skills
• B. eradicating hunger, poverty and malnutrition
• C. rural development projects
• D. maintenance of law and order
• A. trusteeship and giving back to society
• B. utmost good faith
• C. leveraging India’s managerial, technological and innovative skills
• D. promoting greater protection for the environment
• A. determination of the amount of expenditure to be incurred by companies on CSR activities
• B. reporting on the amount remaining unspent by the Company for CSR activities with detailed reasons for failing to spend the amount
• C. impact assessment and disclosure requirements for CSR
• D. detailing the company’s sponsorship activities for deriving marketing benefits for its products or services
• A. ensure access to financial services like banking, remittance, credit, insurance, pension in an affordable manner
• B. promote entrepreneurship in India in manufacturing and other sectors
• C. improve India’s ranking in the Human Development Index
• D. facilitate easy access to credit facilities for people belonging to vulnerable populations
• A. Labour Welfare
• B. Skill Development
• C. Maternity Benefits
• D. Urban Employment
• A. Jharkhand
• B. West Bengal
• C. Karnataka
• D. Bihar
• A. a national CSR data portal be set up to monitor the progress of implementation of CSR policies by companies
• B. spending of CSR funds on Covid-19 related activities be considered as an eligible CSR activity
• C. CSR implementing agencies should mandatorily register with the central government
• D. companies should balance CSR spending between local areas and the less developed regions of the country

Answer 1

The Correct Option is A

The correct option is (A): Net profit of ` 5 crores or more.

Answer 2

Section 135(1) of the Companies Act, 2013 lists three separate financial yardsticks, and a company needs to cross just one of them in the immediately preceding financial year to be pulled into the CSR framework. Checking each option against the real figures in the section settles the question.

1. Net profit of ` 5 crores or more: this matches the net profit limb of Section 135(1) exactly. A company that made a net profit of ` 5 crore or more in the preceding financial year is covered.
2. Net profit of ` 1,000 crores or more: ` 1,000 crore is the turnover threshold under the section, not the net profit threshold. Net profit is pegged at a much lower figure, ` 5 crore, so this option mixes up the two limbs.
3. Turnover of ` 5,000 crores or more: the actual turnover threshold in the Act is ` 1,000 crore, not ` 5,000 crore, so this number is simply too high to be correct.
4. Net worth of ` 5,000 crores or more: the real net worth threshold is ` 500 crore, ten times lower than what this option states.

Only the net profit figure of ` 5 crore or more lines up with the statute; the other three options each borrow one of the correct thresholds but attach it to the wrong criterion or inflate the number.

Therefore, the correct answer is Net profit of ` 5 crore or more.

Answer 3

The correct option is (B): 2% of average net profits of the company made during the three immediately preceding financial years.

Answer 4

Section 135(5) fixes the actual CSR spending obligation, and the options here mix up both the percentage and the base figure it is applied to. Working through each shows which one matches the section.

1. 5% of the average net worth of the preceding three financial years: Section 135(5) does not use net worth as the base for the spending obligation at all; net worth is only relevant earlier, at the stage of deciding whether a company is covered by Section 135(1) in the first place.
2. 2% of average net profits of the company made during the three immediately preceding financial years: this is exactly how Section 135(5) is worded. The board must ensure the company spends at least 2% of the average net profits made during the three financial years immediately before the year in question.
3. 7% of the average turnover of the previous financial year: turnover is not the base used for the 2% obligation, and 7% is not a figure that appears anywhere in Section 135.
4. 5% of the average net profits made during the preceding financial year: this gets the base right, net profit, but the percentage is wrong (2%, not 5%) and it wrongly uses a single preceding year instead of the average of three.

Only the second option gets both the percentage and the three-year net profit base correct, matching Section 135(5) closely.

Therefore, the correct answer is 2% of average net profits of the company made during the three immediately preceding financial years.

Answer 5

The correct options are (B) and (C): Company B and C .

Answer 6

Section 135(1) tests a company against the net worth, turnover, and net profit thresholds using its financial figures for the financial year immediately preceding the year being checked. For FY 2020-21, that reference year is FY 2019-20, so working out which company had that year available as a genuinely fresh, immediately preceding year is the key to this question.

1. Company A: incorporated in FY 2020-21 itself. It did not exist during FY 2019-20 at all, so it has no financial figures for an immediately preceding year and cannot be tested under Section 135(1) for FY 2020-21.
2. Company B: incorporated in FY 2019-20. That year is both its own first completed financial year and the year immediately preceding FY 2020-21, so its FY 2019-20 net worth, turnover, and net profit are precisely the figures Section 135(1) uses to decide whether Company B is covered for FY 2020-21.
3. Company C: incorporated in FY 2018-19, one year earlier than Company B. By the time FY 2020-21 arrives, Company C already has an established financial history running back through FY 2019-20 and FY 2018-19, so its coverage would already have taken shape from an earlier assessment cycle rather than being freshly determined by the FY 2020-21 test in the way the question is pointing at.
4. All the above: cannot be right since Company A, having no completed financial year before FY 2020-21, is not tested at all under Section 135(1) for that year.

Company B is the company whose applicability under Section 135(1) for FY 2020-21 is decided squarely by the immediately preceding financial year, FY 2019-20, being its own first full year of existence.

Therefore, the correct answer is Company B.

Answer 7

The correct option is (D): maintenance of law and order.

Answer 8

Schedule VII of the Companies Act, 2013 lists the specific heads of activity that count as CSR spending. Checking each option against that list shows which one is missing from it.

1. Promoting education and employment enhancing vocation skills: this appears directly in Schedule VII, under promoting education, including special education, and employment enhancing vocation skills.
2. Eradicating hunger, poverty and malnutrition: this is the very first item listed in Schedule VII, alongside promoting preventive health care and sanitation.
3. Rural development projects: Schedule VII expressly includes rural development projects as a permitted CSR head.
4. Maintenance of law and order: Schedule VII has no clause covering law and order. Policing and law and order are core sovereign functions of the state, not areas the schedule opens up for corporate CSR spending.

Three of the four options are activities explicitly named in Schedule VII, while maintenance of law and order finds no place in it at all.

Therefore, the correct answer is maintenance of law and order.

Answer 9

The correct option is (A): trusteeship and giving back to society.

Answer 10

The philosophical basis of India's CSR framework is a specific, well documented idea, and checking each option against it shows which one is the real source.

1. Trusteeship and giving back to society: this is the Gandhian principle of trusteeship, which treats wealth held by a business as something held in trust for the benefit of society at large, not purely for private gain. This is the recognised philosophical root of India's CSR framework.
2. Utmost good faith: this is a principle from insurance and contract law, describing the duty of full disclosure between parties to a contract. It has nothing to do with why companies are asked to spend on social welfare.
3. Leveraging India's managerial, technological and innovative skills: this describes a practical benefit CSR can bring to development work, not the philosophical basis on which the CSR obligation itself rests.
4. Promoting greater protection for the environment: environmental protection is one of the many areas CSR money can be spent on under Schedule VII, but it is an application of the policy, not the founding principle behind it.

Only trusteeship, and the associated idea of giving back to society, is the actual philosophical foundation cited for India's CSR law.

Therefore, the correct answer is trusteeship and giving back to society.

Answer 11

The correct option is (C): impact assessment and disclosure requirements for CSR.

Answer 12

The Companies (CSR Policy) Rules, 2014 set out the operational, on the ground machinery for CSR, while the Companies Act itself fixes the underlying obligation. Sorting the options between the Act and the Rules answers this question.

1. Determination of the amount of expenditure: the 2% figure and the net profit base it is calculated on are fixed by Section 135(5) of the Act itself, not by the 2014 Rules.
2. Reporting on the amount remaining unspent, with reasons: this is closer to the disclosure obligations under the Act's annual report requirements, and while related, it is not the clause the 2014 Rules are best known for.
3. Impact assessment and disclosure requirements for CSR: the Rules go into detail on the mode of implementing CSR activities, the content required in a CSR policy, and impact assessment along with reporting and disclosure norms. This is squarely within what the 2014 Rules cover.
4. Detailing the company's sponsorship activities for deriving marketing benefits for its products or services: this describes something the law expressly excludes from CSR. Expenditure that mainly serves a company's own marketing or branding is carved out of Schedule VII activities, not brought within the Rules as permitted CSR.

Impact assessment and disclosure are the operational details the 2014 Rules are built around, while the other options either belong to the Act itself or describe something CSR rules exclude rather than cover.

Therefore, the correct answer is impact assessment and disclosure requirements for CSR.

Answer 13

The correct option is (C): improve India’s ranking in the Human Development Index.

Answer 14

The Aspirational Districts Programme targets the least developed regions of the country across a broad set of socio-economic indicators, and the question asks which option best captures its overall, chief objective rather than one narrow piece of it.

1. Ensure access to financial services like banking, remittance, credit, insurance, pension in an affordable manner: financial inclusion is one of the five themes the programme works on, but it is only one slice of the programme, not its overall aim.
2. Promote entrepreneurship in India in manufacturing and other sectors: the programme's themes are health, education, agriculture and water resources, financial inclusion and skill development, and basic infrastructure. Broad industrial entrepreneurship promotion is not among these themes.
3. Improve India's ranking in the Human Development Index: the five themes the programme works across, health and nutrition, education, agriculture and water resources, financial inclusion and skill development, and infrastructure, map closely onto the components that make up the Human Development Index. Lifting the least developed districts on these fronts is what improves the country's human development standing.
4. Facilitate easy access to credit facilities for people belonging to vulnerable populations: like financial inclusion, credit access is a narrower tool used within the programme, not its chief objective.

Improving India's Human Development Index ranking is the overarching goal that ties together the programme's health, education, and livelihood themes, while the other options describe only individual tools within it.

Therefore, the correct answer is improve India's ranking in the Human Development Index.

Answer 15

The correct option is (B): Skill Development.

Answer 16

The Aspirational Districts Programme is built around five named themes, so the fastest way to answer this is to check each option against that fixed list.

1. Labour Welfare: not one of the programme's five themes, which are health and nutrition, education, agriculture and water resources, financial inclusion and skill development, and basic infrastructure.
2. Skill Development: named directly as part of the "Financial Inclusion and Skill Development" theme.
3. Maternity Benefits: a specific labour welfare entitlement, not one of the programme's themes.
4. Urban Employment: the programme's focus is rural and district-level development in the least developed regions, not urban employment schemes.

Skill Development is the only option that matches one of the programme's five official themes.

Therefore, the correct answer is Skill Development.

Answer 17

The correct option is (A): Jharkhand.

Answer 18

Out of 112 aspirational districts recognised across the country, the numbers are not spread evenly; a handful of states account for a large share of them. Checking each option against the actual district count settles this.

1. Jharkhand: has 19 aspirational districts, the highest count of any state under the programme.
2. West Bengal: does not feature among the states with the largest number of aspirational districts; Bihar, Odisha, and Chhattisgarh are the other states with high counts, not West Bengal.
3. Karnataka: also does not feature among the states with the highest counts of aspirational districts.
4. Bihar: has 13 aspirational districts, the second highest count, but still fewer than Jharkhand's 19.

With 19 districts, Jharkhand tops the list, ahead of Bihar's 13 and Odisha and Chhattisgarh's 10 each.

Therefore, the correct answer is Jharkhand.

Answer 19

The correct option is (D): companies should balance CSR spending between local areas and the less developed regions of the country.

Answer 20

The 2018 High-Level Committee reviewed how the CSR framework was working in practice and made a specific recommendation about where companies direct their CSR money. Checking each option against that recommendation answers the question.

1. A national CSR data portal be set up to monitor implementation: tracking and monitoring CSR spending is a real policy concern, but it is not the specific recommendation on regional balance that the 2018 Committee is remembered for.
2. Spending on Covid-19 related activities be treated as eligible CSR: this became relevant only later, once the pandemic began in 2020, well after the 2018 Committee submitted its report, so it could not have been part of that Committee's recommendations.
3. CSR implementing agencies should mandatorily register with the central government: agency registration is a separate compliance requirement that came later through amendments to the CSR Rules, not the specific point the 2018 Committee raised.
4. Companies should balance CSR spending between local areas and the less developed regions of the country: the 2018 Committee specifically flagged that companies were concentrating CSR spending too heavily around their own local areas of operation and recommended a better balance with less developed regions, including aspirational districts.

The regional balance recommendation, directing companies to spread CSR spending between their local areas and less developed regions such as aspirational districts, is the specific point the 2018 High-Level Committee made.

Therefore, the correct answer is companies should balance CSR spending between local areas and the less developed regions of the country.