Clause 135 of the Companies Bill 2011 says that every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year should spend, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.
1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director
2) The Board’s report shall disclose the composition of the Corporate Social Responsibility Committee
3) The Corporate Social Responsibility Committee shall,—
a. formulate and recommend to the Board, a Corporate Social ResponsibilityPolicy which shall indicate the activities to be undertaken by the company
b. recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
c. monitor the Corporate Social Responsibility Policy of the company from time to time
4) The Board of every company referred to in sub-section (1) shall,—
a. after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed; and
b. ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company
5) The Board of every company referred to in sub-section (1), shall make every endeavor to ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediate preceding financial years, in pursuance of its Corporate Social Responsibility Policy: Provided that if the company fails to spend such amount, the Board shall, in its report, specify the reasons for not spending the amount.