Summary of Ministry of Corporate Affairs Announcement on Corporate governance & CSR

Summary of Ministry of Corporate Affairs Announcement

1. Strengthening Corporate Governance and Transparency:

The Companies Act, 2013, contains provisions for ensuring corporate governance and transparency in company management.

It mandates compliance through key managerial personnel, the Board of Directors, and shareholders.



2. Maintenance and Disclosure Requirements:

Companies are required to maintain financial records, returns, and registers.

Notices, explanatory statements, and financial reports must be shared with shareholders.

Annual filings with the Registrar ensure regulatory oversight.



3. Corporate Social Responsibility (CSR) Provisions:

Section 135 of the Companies Act, Schedule VII, and CSR Policy Rules, 2014, provide the legal framework for CSR.

CSR activities must align with the eligible activities listed in Schedule VII.



4. CSR Governance and Monitoring:

CSR is board-driven, with decisions based on the CSR Committee’s recommendations.

Companies must report CSR activities annually in the MCA21 registry.

CSR expenditure details must be included in the Annual Financial Statements.



5. Audit and Compliance:

Auditors are required to report any unspent CSR amounts under CARO, 2020, applicable from FY 2021-22.

Companies must publish their CSR Committee composition, CSR Policy, and approved projects on their websites.



6. Enforcement and Accountability:

Non-compliance with CSR provisions results in regulatory action under the Act.

The legal framework ensures the effective use of CSR funds and maintains corporate transparency.



7. Government Statement:

Minister of State Shri Harsh Malhotra provided this information in a written reply in the Lok Sabha. (11 March 2025)