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
• A. Company A
• B. Company B
• C. Company C
• D. 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. promotion of rule of law and order
• 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

Step 1: Understanding the CSR applicability thresholds.
Section 135(1) of the Companies Act, 2013 mandates CSR if, in the immediately preceding financial year, a company meets any one of the following: Net worth of ₹ 500 crore or more, OR
Turnover of ₹ 1,000 crore or more, OR
Net profit of ₹ 5 crore or more.
Step 2: Eliminating incorrect options.
(B), (C), and (D) give incorrect or inflated thresholds not present in law. \[ \boxed{\text{A}} \]

Answer 2

This question asks which criterion, met in the immediately preceding financial year, triggers mandatory CSR under the Companies Act, 2013.

1. Option A: Section 135(1) of the Act sets three independent thresholds, any one of which is sufficient to trigger CSR applicability: net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more. A net profit of ₹5 crore or more is exactly one of these three statutory triggers.
2. Option B: ₹1,000 crores of net profit is a wildly inflated figure; no such profit threshold exists under Section 135, and this number does not correspond to any of the three actual criteria.
3. Option C: ₹5,000 crores of turnover is also far higher than the actual statutory turnover threshold of ₹1,000 crore, so this figure does not match the law either.
4. Option D: ₹5,000 crores of net worth is likewise ten times higher than the actual statutory net worth threshold of ₹500 crore, so this too misstates the law.

Only option A states one of the actual figures set out in Section 135(1).

Hence, the correct answer is A) Net profit of ₹ 5 crores or more.

Answer 3

Step 1: Legal requirement under Section 135(5).
CSR spending = at least 2% of the average net profits of the company during the three immediately preceding financial years. Step 2: Why other options are wrong.
(A) and (C) mention net worth/turnover, which are applicability triggers, not spending formulas. (D) mentions 5%, which is not prescribed in law. \[ \boxed{\text{B}} \]

Answer 4

This question asks for the correct CSR spending formula under Section 135 of the Companies Act, 2013.

1. Option A: "5% of average net worth" is wrong on two counts: net worth is not the base figure used for the spending calculation at all (it is only relevant to applicability), and the percentage is also incorrect.
2. Option B: Section 135(5) requires the Board of every CSR-mandated company to ensure the company spends, in every financial year, at least 2% of the average net profits made during the three immediately preceding financial years. This precisely matches both the correct base figure (average net profit over three years) and the correct percentage (2%).
3. Option C: "7% of average turnover" uses the wrong base entirely (turnover, again only relevant to applicability, not spending) and an incorrect percentage that does not appear anywhere in the section.
4. Option D: "5% of average net profits" gets the right base (net profit) but the wrong percentage (5% instead of 2%) and also wrongly limits the averaging period to only the preceding financial year rather than three years.

Only option B correctly states both the base and the rate.

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

Answer 5

Step 1: Applicability timeline.
CSR applicability is determined based on the immediately preceding financial year’s financial data. A newly incorporated company without 3 years’ profit history cannot be mandated for CSR in its first years. Step 2: Application to given data.
FY 2020-21 CSR applicability uses FY 2019-20 data.
Company A: Incorporated in FY 2020-21 — no preceding year data.
Company B: Incorporated in FY 2019-20 — only 1 year of data.
Company C: Incorporated in FY 2018-19 — has preceding FY 2019-20 full-year data.
Hence, only Company C can qualify. \[ \boxed{\text{C}} \]

Answer 6

This question tests application of the CSR-applicability timing rule to three companies incorporated in different years, asking which one is covered for FY 2020-21.

1. Option A (Company A): Company A was incorporated in FY 2020-21 itself, the very year for which coverage is being tested. Since CSR applicability is assessed on the basis of the immediately preceding financial year's financial results, and Company A has no immediately preceding financial year of its own existence at all, it cannot be covered for FY 2020-21.
2. Option B (Company B): Company B was incorporated in FY 2019-20, meaning that as of FY 2020-21 it has only one completed financial year (FY 2019-20) behind it, its own first year of operations. Among the three companies, only Company C has a clearly completed, unambiguous preceding financial year of full independent operations by FY 2020-21.
3. Option C (Company C): Company C was incorporated in FY 2018-19, so by the time FY 2020-21 arrives, it has already completed at least one full immediately preceding financial year (FY 2019-20) with a settled set of financial statements that can be tested against the Section 135(1) thresholds. This makes Company C the company that can definitively be assessed and, if it meets a threshold, covered under Section 135(1) for FY 2020-21.
4. Option D (All the above): This cannot be correct because Company A, having no preceding financial year of its own, mathematically cannot be tested against a preceding year's figures for FY 2020-21.

Since only a company with a completed immediately preceding financial year can be assessed for coverage, Company C is the one clearly covered.

Hence, the correct answer is C) Company C.

Answer 7

Step 1: Understanding Schedule VII.
Schedule VII lists permissible CSR activities like:
Education and skill enhancement
Eradicating extreme hunger and poverty
Rural development projects
Health care, gender equality, environmental sustainability, etc.
Step 2: Excluding non-CSR items.
Maintenance of law and order is a sovereign function, not a CSR activity, and thus is absent from Schedule VII. \[ \boxed{\text{D}} \]

Answer 8

This question asks which listed activity is not among the permissible CSR activities specified in Schedule VII of the Companies Act, 2013.

1. Option A: Promoting education and employment-enhancing vocation skills is expressly listed in Schedule VII, which includes promotion of education, including special education, and employment-enhancing vocational skills among the recognised CSR areas.
2. Option B: Eradicating hunger, poverty, and malnutrition is the very first item listed in Schedule VII, making it one of the clearest examples of a permitted CSR activity.
3. Option C: Rural development projects are also expressly listed as a distinct category in Schedule VII, covering activities aimed at improving conditions in rural areas.
4. Option D: Maintenance of law and order is a core sovereign function of the state, carried out through police and public administration; it is nowhere listed in Schedule VII, and CSR expenditure is expressly confined to the areas the Schedule specifies, so spending on policing or law-and-order functions would not even qualify as CSR expenditure at all.

Since A, B, and C are each expressly named in Schedule VII and D is not listed and falls outside the CSR framework entirely, D is the answer.

Hence, the correct answer is D) maintenance of law and order.

Answer 9

Step 1: Source principle.
India’s CSR philosophy is rooted in Gandhian principles of trusteeship — businesses hold resources in trust for society and should give back for its welfare. Step 2: Eliminating other options.
(B) is more relevant to insurance law. (C) and (D) are not core CSR guiding principles in the statute. \[ \boxed{\text{A}} \]

Answer 10

This question asks which principle underlies India's CSR policy.

1. Option A: India's CSR philosophy traces back to the Gandhian concept of trusteeship, under which those who control wealth are seen as trustees holding it for the benefit of society rather than as absolute owners, and are expected to give back to the community. This historical and philosophical grounding is explicitly recognised as the source of India's CSR approach.
2. Option B: "Utmost good faith" (uberrimae fidei) is a principle from insurance and certain fiduciary contract law, requiring parties to disclose all material facts to each other; it has no established connection to the CSR framework under the Companies Act.
3. Option C: Leveraging India's managerial, technological, and innovative skills describes a broader economic development policy goal, not the specific philosophical foundation of the CSR mandate, which is rooted in social responsibility rather than harnessing technical capability.
4. Option D: Promotion of rule of law and order is a governance and constitutional value, not a business-ethics principle underlying corporate charitable or developmental spending.

Only option A correctly identifies the philosophical foundation of Indian CSR policy.

Hence, the correct answer is A) trusteeship and giving back to society.

Answer 11

Step 1: Read the given passage on the scope of the Rules.
The extract states that the Companies (CSR Policy) Rules, 2014 prescribe the operational framework for CSR: “the mode of implementation of CSR activities, content of CSR policy, impact assessment, reporting requirements and disclosure for CSR”.
Step 2: Map each option to the stated scope.
(C) explicitly matches “impact assessment and disclosure requirements” ⇒ within scope.
(A) Quantum of CSR spend is fixed by \S135(5) of the Act (2% of average net profits) ⇒ statute, not Rules.
(B) While reporting is within scope, the option’s phrasing is narrowly about “unspent” amounts; the passage does not emphasise that sub-detail—our safest pick is the direct statement in (C).
(D) Sponsorship for marketing benefits is not CSR; the passage says expenditure outside Schedule VII is not recognised.
Step 3: Conclude.
Only (C) squarely and directly mirrors the language of the extract.
\[ \boxed{\text{C}} \]

Answer 12

This question asks which item falls within the scope of the Companies (CSR Policy) Rules, 2014, as opposed to the parent Act or activities outside CSR altogether.

1. Option A: Determining the amount of CSR expenditure (the 2% of average net profits formula) is fixed by Section 135(5) of the Companies Act itself, not by the CSR Policy Rules; the Rules operationalise how CSR is implemented and reported, but the quantum of spend is a statutory, not a rules-based, determination.
2. Option B: While reporting on unspent CSR amounts is indeed addressed somewhere in the CSR framework, the specific requirement to report unspent amounts with detailed reasons is itself rooted in Section 135(5)'s proviso and the related sub-sections on unspent CSR accounts, making this more precisely a statutory obligation under the Act (with procedural detail in the Rules) rather than the general scope description given for the Rules; it is a narrower, more specific sub-topic than option C.
3. Option C: The passage states directly that the Companies (CSR Policy) Rules, 2014 "prescribe the operational framework and manner in which companies should comply with CSR provisions," specifically covering "the mode of implementation of CSR activities, content of CSR policy, impact assessment, reporting requirements and disclosure for CSR." Impact assessment and disclosure requirements are named exactly in this description, making option C a direct, explicit match.
4. Option D: Sponsorship activities undertaken to derive marketing benefits for a company's own products or services are expressly excluded from CSR; the Act does not recognise any expenditure outside Schedule VII as CSR expenditure, and using CSR as a marketing tool defeats the very purpose of the mandate, so this falls entirely outside the Rules' scope.

Only option C is both expressly named in the passage's description of the Rules' scope and consistent with the general operational (rather than quantum-fixing) role the Rules play.

Hence, the correct answer is C) impact assessment and disclosure requirements for CSR.

Answer 13

Step 1: Extract the programme’s aim from the passage.
The ADP (Aspirational Districts Programme) “aim[s] to improve the socio-economic status of the least developed regions across India.” That aligns with human development outcomes overall.
Step 2: Evaluate each option against this overarching aim.
(A) and (D) are sub-components under the theme of “Financial Inclusion and Skill Development”, not the overarching objective.
(B) Entrepreneurship is not specifically named in the extract as the programme’s goal.
(C) Captures the ultimate development objective in aggregate terms—improving human development, which best reflects “improve socio-economic status” at a macro level.
Step 3: Conclude.
(C) is most consistent with the chief objective described in the extract.
\[ \boxed{\text{C}} \]

Answer 14

This question asks us to identify the core, overarching purpose behind the Aspirational Districts Programme (ADP), as opposed to the specific tools or sub-components used to achieve that purpose. Each option below is assessed on its own merits against this distinction between "means" and "end goal".

1. Option A (financial services access): Ensuring affordable access to banking, remittances, credit, insurance and pension is a textbook description of "financial inclusion". This is one specific instrument used under the programme's "Financial Inclusion and Skill Development" theme, not the ultimate purpose the programme exists to serve. A programme's chief objective is normally broader than any single delivery mechanism it uses.
2. Option B (entrepreneurship promotion): Encouraging manufacturing and other enterprise activity could support district-level growth, but it is not identified as the programme's guiding goal. It would, at best, be a possible downstream effect of improved infrastructure and skilling, not the reason the districts were selected for special attention in the first place.
3. Option C (improve India's HDI ranking): The Human Development Index aggregates health, education and standard-of-living outcomes into a single composite score, which is exactly the kind of multi-dimensional, umbrella measure a programme aimed at "improving the socio-economic status of the least developed regions" would ultimately be judged against. Because the ADP itself tracks districts across several themes (health and nutrition, education, agriculture, financial inclusion and skill development, and infrastructure), an aggregate human-development outcome is the natural overarching objective that ties all these themes together.
4. Option D (credit access for vulnerable groups): Like Option A, this is a narrower, targeted intervention aimed at a specific population segment rather than a description of the programme's overall mission. It sits inside the financial inclusion theme rather than above it.

Options A, B and D each describe a specific activity or instrument that could plausibly be undertaken within one theme of the programme, but none of them describes the aggregate, multi-dimensional purpose the programme as a whole is designed to achieve. Only Option C operates at the correct level of generality to be called the "chief objective".

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

Answer 15

Step 1: List the five themes given in the passage.
Health & Nutrition; Education; Agriculture & Water Resources; Financial Inclusion and Skill Development; and basic infrastructure.
Step 2: Match options to these themes.
Only Skill Development appears verbatim among the five themes. Labour welfare, maternity benefits, and urban employment are not named in the extract.
\[ \boxed{\text{B}} \]

Answer 16

The question asks which of the four listed areas actually falls within the thematic scope of the Aspirational Districts Programme (ADP), as opposed to belonging to a separate policy or legal domain altogether. Each option is examined below on that basis.

1. Option A (Labour Welfare): Labour welfare measures, such as working conditions, industrial safety and worker benefits, are generally governed under separate labour legislation and ministries. It is not one of the specific themes the ADP tracks at the district level.
2. Option B (Skill Development): Skilling initiatives are explicitly bundled together with financial inclusion as one of the named thematic pillars the ADP uses to rank and monitor districts, making this a direct match with the programme's declared scope.
3. Option C (Maternity Benefits): Maternity benefits fall under dedicated welfare legislation aimed at working women and are not listed as a district-level development theme tracked by the ADP.
4. Option D (Urban Employment): Urban employment generation is typically addressed through separate urban-development missions aimed at cities and towns, whereas the ADP's thematic basket is oriented towards broader district-level development rather than a dedicated urban-employment theme.

Only skill development is explicitly named among the programme's core themes; the other three options belong to distinct policy areas that sit outside the ADP's declared scope.

Hence, the correct answer is Skill Development.

Answer 17

Step 1: Use the numeric fact from the extract.
The extract states: “As on date, 112 aspirational districts are recognised… Jharkhand has the highest number, i.e., 19, followed by Bihar (13), and Odisha and Chhattisgarh (10 each).”
Step 2: Compare with options.
Only (A) matches the explicit statement; (B) and (C) are not mentioned; (D) Bihar is second-highest, not highest.
\[ \boxed{\text{A}} \]

Answer 18

This question asks which state has the highest number of aspirational districts. Rather than only checking numbers, we can first sort the options into "states named in the ranking" versus "states not named at all", and then compare within the named group.

1. Option A (Jharkhand): Named as the state with the largest count of aspirational districts among those explicitly ranked.
2. Option B (West Bengal): Not among the states identified with the largest counts of aspirational districts, so it cannot be the answer to a "highest" question.
3. Option C (Karnataka): Likewise not among the states identified with the largest counts, ruling it out on the same basis.
4. Option D (Bihar): Named in the ranking, but specifically as the state with the next-largest count after the top state, not the top state itself.

Since B and C are not part of the ranked group at all, they are eliminated immediately. Between the two ranked states, A and D, the ranking order places D right after A rather than ahead of it, confirming A holds the top position.

Hence, the correct answer is Jharkhand.

Answer 19

Step 1: Lift the exact recommendation from the extract.
The extract states that the 2018 HLC “noted that companies need to balance CSR spending between local area/areas around where it operates, and less developed regions such as aspirational districts.”
Step 2: Test each option.
(D) matches the quoted recommendation ⇒ Correct.
(A) and (C) are not mentioned in the extract (even if similar ideas exist elsewhere, we must stick to the passage).
(B) relates to a later policy response during the COVID-19 period, not a 2018 recommendation.
\[ \boxed{\text{D}} \]

Answer 20

This question asks specifically what the High-Level Committee reviewing the CSR framework recommended in its 2018 report. Since the options mix genuine content of that report with ideas that belong to other points in time or other kinds of reform, each is checked for both topical and chronological fit.

1. Option A (national CSR data portal): A monitoring portal is an administrative tracking tool. While digital monitoring has featured in India's CSR reforms more broadly, it is not the specific balancing recommendation attributed to this 2018 committee.
2. Option B (COVID-19 spending eligibility): The COVID-19 pandemic began in 2020, two years after this committee's 2018 report, so a recommendation about COVID-19 related CSR eligibility could not have originated from that report. This option fails on chronological grounds alone.
3. Option C (mandatory registration of implementing agencies): A registration requirement for CSR implementing agencies is a procedural, compliance-oriented rule of the kind introduced through later regulatory amendments, not the substantive spending-balance recommendation this committee is credited with.
4. Option D (balance spending between local and less-developed regions): This directly matches the committee's actual concern, that companies tend to concentrate CSR spending near their own operational areas, and its recommendation that this be balanced against the needs of less developed regions such as aspirational districts.

Once options are checked for whether they could plausibly have come from a 2018 report and whether they match its substantive concern about geographic spending balance, only one option survives both tests.

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