Consider the following statements about Corporate Social Responsibility CSR under the Companies Act ...........

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Consider the following statements about Corporate Social Responsibility (CSR) under the Companies Act, 2013 in India

Companies meeting specific financial criteria must spend at least 5% of their average net profit from the last three years on CSR activities.
The CSR activities undertaken by companies must be limited to the local area where the company operates.
If a company fails to spend the required amount on CSR, it must specify the reasons in its annual report.

How many of the statements given above is/are correct?

Only One

Only Two

All Three

None

Only statement 3rd is correct.

Statement 1 is incorrect: Companies meeting specific financial criteria must spend at least 2% of their average net profit from the last three years on CSR activities.
Statement 2 is incorrect: CSR guidelines do not restrict them to these areas where the company operates.
The Companies Act, 2013, provides key provisions related to CSR. Provisions related to CSR are as follows:

Eligibility:

CSR is mandatory for companies that meet any one of the following financial criteria:

Spending Requirement

Eligible companies must spend at least 2% of their average net profits from the last three financial years on CSR activities.
If a company fails to spend the specified amount, it must explain the reasons in its annual report.

Hence option 1st is correct.