With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements: 1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities. 2. CSR rules do not specify minimum spending on CSR activities. Which of the statements given above is/are correct?

Under the Companies (CSR Policy) Rules, 2014 framed under Section 135 of the Companies Act 2013, activities that benefit only the employees of the company and their families, or that exclusively benefit the company itself, are specifically excluded from being counted as CSR — so statement 1 is correct. The rules in fact mandate a minimum spending of at least 2% of the average net profits of the immediately preceding three financial years on CSR activities for qualifying companies — so statement 2, which says no minimum is specified, is incorrect. Therefore only statement 1 is correct.