The new company law will make it mandatory for companies to disclose details of social sector initiatives, called CSR, in addition to money spent, to shareholders in their annual reports. Not just how much, but companies will also have to disclose to their shareholders where they have spent the 2 per cent of net profit earmarked for corporate social responsibility (CSR) initiatives, once the Companies Bill 2009 is passed by Parliament.
“Although we do not plan to make implementation of the provisions mandatory, companies will have to mention in the footnote of their annual reports how much and where they have spent the money kept for CSR,” a senior Corporate Affairs Ministry official told PTI.
He said that disclosure is necessary for shareholders to be able to discuss and raise questions on the initiatives taken up or announced by the companies.
