Skip to content

CS Professional · CSR and Social Governance · Guidelines on CSR

Meera, a trainee, writes in her note that the Ministry of Corporate Affairs' CSR Voluntary Guidelines of 2009 required every company to spend a fixed percentage of its profit on social activities. Which statement correctly corrects her note?

The MCA CSR Voluntary Guidelines of 2009 were voluntary and imposed no compulsory spending. They encouraged companies to adopt responsible practices by choice. The statutory 2% spending requirement came only later through the Companies Act, 2013, so Meera's note is incorrect.

  1. AThe guidelines were voluntary and set no mandatory spending requirement, so companies adopted them by choiceCorrect
  2. BThe guidelines were mandatory only for companies listed on stock exchanges
  3. CThe guidelines fixed spending at 2% of net profit but allowed carry forward without limit
  4. DThe guidelines applied only to Central Public Sector Enterprises and had no application to private companies

Explanation

The 2009 MCA guidelines were voluntary in nature and encouraged companies to integrate social responsibility into their operations. They did not mandate any spending percentage; the fixed 2% spending requirement arrived later with the Companies Act, 2013. Mandatory and listed-only readings are wrong.

Did you get it right without looking?

One question tells you little. A timed set on Guidelines on CSR shows your real accuracy, how long you take and where you lose marks.

Practise Guidelines on CSRFree diagnostic mock

More Guidelines on CSR questions