New Delhi, Sept. 10 (PTI): The government is likely to make it mandatory for big companies to earmark at least 2 per cent of their net profit for corporate social responsibility (CSR) activities in the new Companies Bill.
The ministry of corporate affairs has agreed that the bill may now include provisions to ensure that every year at least 2 per cent of their (companies) average net profits during the three immediately preceding financial years shall be spent on CSR activities, a statement said.
The new provisions will apply to companies having a net worth of Rs 500 crore or more, or a turnover of Rs 1,000 crore or more, or a net profit of Rs 5 crore or more, in a year.
Directors will have to make suitable disclosures in their reports to members.
The committee feels that separate disclosures in their annual reports indicating the company policy as well as the specific steps taken for CSR will be a sufficient check on non-compliance, the statement said.