7 March 2017 12:00 am
ECONOMIC TIMES: Top 100 listed Indian companies have managed to improve their corporate social responsibility (CSR) compliance, according to a KPMG survey.
According to the Companies Act, every company with a net worth of Rs.500 crore or a turnover of Rs.1,000 crore or a net profit of Rs.5 crore is required to spend about 2 percent of their profits to CSR.
“Compliance to the requirements of the Companies Act has improved. A positive trend is that an improvement in the availability of information can be seen as compared to last year. Similarly, a strengthening of governance mechanisms for CSR projects is visible. Overall CSR spending has increased and thematic areas of health, education and sanitation witnessed higher budget allocation from corporates. It is heartening to see that a few corporates have gone beyond the 2 percent mandate and spent more. This opportunity needs to be seized to demonstrate to the world that Indian businesses are contributing constructively to address India’s development challenges and are doing so in an impactful way,” the survey report stated.
About 60 percent of the companies have not disclosed details on the focus areas of CSR intervention in the directors’ report, according to the KPMG survey. “During the current year, 25 percent of the companies have reported details regarding the outreach/people impacted,” the report stated.
During the current year, almost half of the companies (48 percent) were required to specify the reason for not spending the amount, of which all have given an explanation. Few reasons given by companies for not being able to spend 2 percent towards CSR include scaling up of activities, multi-year and long-term projects, difficulty in identification of appropriate partners, exploring new opportunities and areas of intervention, and delay in planned spends, the report stated.