<h1>Companies Bill 2011: Mandate for 2% Net Profit Allocation to CSR; Non-compliance Requires Board Report Explanation.</h1> Clause 135 of the Companies Bill, 2011 mandates that certain companies must allocate at least 2% of their average net profits from the last three years to Corporate Social Responsibility (CSR) activities. If a company fails to meet this requirement, it must explain the reasons in its Board's Report. Failure to disclose these reasons can result in penalties under the Companies Bill. The CSR activities are outlined in Schedule VII of the Bill. This information was provided by the Minister of Corporate Affairs in response to a question in the Lok Sabha.