Question : Activities by Companies under CSR

(a) whether the Government has notified Corporate Social Responsibility (CSR) policy norms under the Companies Act, 2013, if so, the details and salient features thereof;

(b) the details of expenditure incurred and work done by the public sector undertakings (PSUs) and private companies since the inception of the Companies Act, 2013, company-wise and State/UT-wise;

(c) whether any irregularities have come to the notice of the Government with regard to execution of CSR, if so, the details thereof along with the action taken by the Government against those companies;

(d) whether the Government has set up any monitoring mechanism to monitor the activities and utilisation of funds by the companies under CSR, if so, the details thereof; and

(e) whether the Government has taken note that the assistance of public representatives is not sought while selecting activities by companies under CSR, if so, the details thereof and corrective measures taken by the Government in this regard?

MINISTER OF STATE FOR LAW AND JUSTICE
AND CORPORATE AFFAIRS (SHRI P. P. CHAUDHARY)
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(a): The provisions of Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013 (the ‘Act’) and rules made thereunder have been notified on 27.02.2014. These notifications are available on the Ministry’s website (www.mca.gov.in). The salient features of CSR provision inter-alia, are as follows:

• mandates every company that is above a specified threshold of turnover or net worth or net profit to spend at least two per cent of the average net profits earned during three immediately preceding financial years on CSR activities as specified in Schedule VII of the Act;

contd….2/-
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• each such company is required to constitute a CSR committee of the Board;
• the Board of each such company is required to have the company’s CSR policy formulated and monitor its implementation;
• the Board''s report shall include an annual report on CSR containing particulars specified in prescribed format;
• the Board’s report shall specify the reasons for not spending the specified amount, if the company fails to spend such amount;
• companies may implement their CSR Policy through (i) registered trusts (ii) registered societies or (iii) a company established under section 8 of the Act.

(b): As per the data culled out from filings made by companies upto 30.11.2017 in the MCA21 registry for the years 2014-15, 2015-16 and 2016-17, the expenditure made by such companies on CSR is given in the Table below and States/UTs-wise CSR expenditure and development sector-wise CSR spend by companies which have reported any CSR expenditure are at Annexure I and Annexure II respectively.

CSR expenditure for the three Financial Years

Sl. No. Company Type Financial Year 2014-15
(in Rs. crore) Financial Year 2015-16
(in Rs. crore) Financial Year 2016-17
(in Rs. crore)
1. PSUs 2673.85 4163.09 1325.83
2. Private Sector Companies 6890.92 9664.77 3393.17
Total 9564.77 13827.86 4719.00

(c) to (e) : As per Section 135 (3) & (4) of the Companies Act, 2013 Board of the company is empowered to select programmes/projects/activities to be undertaken and monitor the same. Ministry of Corporate Affairs has no role to play in this regard.

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