Jammu – On 22nd August, 2015 JK Bank held 77th Annual General Meeting (AGM) of the shareholders. Besides transacting statutory business the annual accounts of the Bank (2014-15) were discussed by the shareholders preferably those having expertise in financial analysis. The chairman of the Bank responded very comfortably and convincingly to all the queries.
The annual accounts for the financial year 2014-15 carried a comprehensive report for the first time on Corporate Social Responsibility( CSR) of the Bank. This is in accordance with the schedule VII of the companies Act, 2013 that the Bank has to provide 2% of the average net profits before tax for past three years toward CSR.
Accordingly the Bank constituted CSR committee of the Board on 6th March, 2014 to monitor the CSR activities. Besides two directors, the chairman and CEO of the Bank performs the chairman of the committee. As regards CSR the issues like computation mechanism, accounting treatment, activities identification, budgetary allocation, cash outflow, cumulative liability, committee report and so on need deliberations as CSR is a subject in which the society at lager is interested in now.
An amount of RS 29.87 cr computed as per well set norms laid down under companies Act, 2013 was available to the Bank to be utilized for the year 2014-15 at least under ten broad activities identified like: disaster relief, preventive health care, promotion of education, sports, health care with special focus on differently able, improving public health delivery system, eradication of poverty and hunger, promotion of general and health education etc.
The Bank spent an amount of RS 13.74 cr ( 46.00%) only during the financial year 2014-15. RS 11.51 cr ( 83.77% ) was spent to meet Disaster Relief, the situation compounded by Sep, 2014 deluge. Whereas RS 2.23 cr (16.23% ) were spent on other activities viz: Rahat, Koshih, Muskan, the complete details of which are given in the report. The unspent amount RS 16. 13 cr or 54.00% has been carried forward to the financial year 2015-16.
Rationality demands that an amount earmarked for CSR should be spent on the identified projects with due regard to budgetary allocations during the relevant year which it pertains to. No balance ordinarily should have been carried forward to the next year. The accumulation of liability on account of unspent money defeats the very purpose of this socio-economic-environment initiative.
The Bank has not made mention of the amount of CSR worked out ending 31st March, 2015. This needs to be highlighted prominently at its appropriate schedule under which the amount has been booked. CSR is now, besides a philosophy of caring and sharing, considered a core statutory activity of a business enterprise governed under relevant provisions of law. Accordingly disclosure of the statutory requirement is essential leading to transparency as the society and the concerned stakeholders are kept informed and empowered ,
Though the Bank has not made any revelation of the amount worked out based on the profits for financial year ending 2014-15 as revealed in the Corporate Report, the CSR amount thus arrived at keeping in view 2% of the average net profits before taxation for three years viz: 2014-15(820.31cr), 2013-14 (1751.88cr), 2012-13(1526.59 cr) works out Rs 27.33 cr when added to the unspent balance of RS16.13 carried forward ,the Bank is in a position to spend an amount of RS 43.46 cr during the current financial year 2015-16.
With the changing times the Bank has to play an added role, and identify new CSR activities. Corporate financial support across the globe has witnessed technological revolutions. People are financially empowered to think-observe-experiment and come out with unique ideas that lead to innovations generating patents leading to inventions that result in socio-economic revolution.
The CSR Committee Report of the Bank is quite exhaustive as the project-wise information is in place. The computation mechanism, however, needs further elaboration to facilitate easy understanding about the amount arrived at. This is so required as not only the shareholders but the members of society are now interested in CSR activities of the Bank as was evidenced during the course of the AGM. It is pertinent to mention here that JK Bank is the only business organization in the state that meets the requirements of an effective and responsible corporate citizen governing its operations under law .
This article was taken from here.