While the CSR regulations came into force from 1 April, 2014, a clear picture of how much money has actually been spent during 2014-15 is yet to emerge
Finding discrepancies in CSR spending data, the government has asked all eligible companies to furnish details about social welfare activities undertaken by them under the companies law.
While the Corporate Social Responsibility (CSR) regulations came into force from 1 April, 2014, a clear picture of how much money has actually been spent during the first year of implementation—2014-15—is yet to emerge.
Officials said the corporate affairs ministry has asked companies to submit details about utilisation of CSR funds after noticing discrepancies in the data submitted by many of them in their statutory filings.
In this regard, the registrar of companies (RoC) has sought information on CSR works from the firms.
A random analysis of filings has indicated discrepancies in submissions about CSR activities. In some instances, firms have submitted that they do not come under CSR regulations while financial data suggest that they indeed come under it, sources said.
The information have been called for by the RoCs to have a clearer picture about compliance with CSR norms, they added.
Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least 2% of their three-year average annual net profit towards CSR activities. In case of non-spending, the firms have to furnish reasons for the same.
The Act—which is implemented by the corporate affairs ministry—also requires the eligible entities to mention about CSR activities and related spending in the report prepared by their board of directors.
As per the Act, every company having a net worth of at least Rs.500 crore, minimum turnover of Rs.1,000 crore or a net profit of Rs.5 crore or more are required to spend on CSR.
Such entities would have to constitute a CSR committee of their respective board of directors. This panel would formulate and recommend to the board CSR activities that can be taken up by the company.
In March, corporate affairs minister Arun Jaitley had informed the Rajya Sabha that as many as 460 listed firms had disclosed spending Rs.6,337.36 crore towards CSR activities in 2014-15.
Meanwhile, the ministry has amended rules thereby allowing corporates to carry out CSR activities through non-profit entities and societies set up by governments that do not have three years’ track record in undertaking such projects.
The move would provide entities a wider choice in carrying out CSR works.
This article was taken from here.