Press Information Bureau

Government of India

Ministry of Corporate Affairs

26-November-2012 19:30 IST

Government has said that Clause 135 of the Companies Bill, 2011, inter alia, provides for the Boards of specified companies to spend at least 2% of the average net profits (of last 3 years) in pursuance of the company’s Corporate Social Responsibility(CSR) policy and in case of failure, to specify the reasons for not spending such amount in the Board’s Report. Giving this information in written reply to a question in the Rajya Sabha today Shri Sachin Pilot, Minister of Corporate Affairs said that the provisions on CSR in the Companies Bill, 2011 were formulated also keeping in view the suggestions received from various stakeholders. He informed the House that the Parliamentary Standing Committee on Finance which examined the Companies Bill, 2009 and the Companies Bill, 2011 has also recommended inclusion of these provisions in the Bill. The Ministry of Corporate Affairs has not received any communication from any company expressing reservations/objections about the provision referred above, Shri Pilot said.

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KKP

Corporate social responsibility requirement compels specified companies to allocate a portion of average profits and disclose reasons if not spent. Clause 135 requires boards of specified companies to spend at least 2% of the average net profits of the last three years on CSR in line with the company's CSR policy, and to disclose in the Board's Report reasons for any failure to spend the prescribed amount.