Press Information Bureau

Government of India

Ministry of Corporate Affairs

30-November-2012 18:52 IST

Clause 135 of the Companies Bill, 2011, inter alia, provides for the 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 Lok Sabha, Shri Sachin Pilot, Minister of Corporate Affairs, said that in case the disclosure about such reasons in the Board’s report is not made, the specified class of companies shall be liable for action under the provisions of the Companies Bill, 2011 which require disclosures to be made in the Board’s report. CSR policy to be undertaken by the companies as specified in schedule VII of the Companies Bill, 2011.

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KKP

 

Corporate Social Responsibility requirement mandates specified companies to fund CSR activities and disclose reasons for non-compliance in board reports. Clause 135 mandates specified companies to adopt a CSR policy and allocate at least 2% of the average net profits of the preceding three years to Schedule VII activities, and requires the Board's Report to disclose CSR spending and to state reasons where the prescribed amount is not spent, with non-disclosure attracting action under the Companies Bill's compliance provisions.