Corporate Social Responsibility and the Existing Companies Law

There is no provision for Corporate Social Responsibility (CSR) spending by companies in the existing Companies law i.e. Companies Act, 1956. However, the Companies Bill, 2012 incorporates a provision of CSR under Clause 135. Giving this information in written reply to a question in the Rajya Sabha, Shri Sachin Pilot, Minister of Corporate Affairs, said that Clause 135 states that every company having net worth Rs. 500 crore or more, or turnover of Rs. 1000 crore or more or net profit of rupees five crore or more during any financial year, shall constitute a CSR Committee of the Board consisting of three or more Directors, including at least one Independent Director, to recommend its activities for discharging CSR in such a manner that the company would spend at least 2 per cent of its average net profits of the previous three years on specified CSR activities.

KKP/sg

(Release ID :95362)