At least 33 companies, or one-third of the firms on the S&P BSE 100 list, have fallen short of the required corporate social responsibility (CSR) spending as mandated by the Companies Act. The Ministry of Corporate Affairs (MCA) is sending out notices seeking details of how and on what CSR funds are being disbursed, say people familiar with the issue, adding officials want to check if corporate social work is actually happening.
Abhishek Tripathi, director, CSR Advisory, PwC India, says companies have had the liberty of self-disclosure over the last four years, and there must have been gross violations and discrepancies for the notices to have been sent, but a part of the challenge, he says, is that in a lot of cases, too wide a range of activities can qualify as CSR.
For example, a company that makes its own products and then donates them to the needy requires third-party evaluation of the value of goods or services. Similarly, just giving funds to a non-governmental organisation is not being compliant either.
Based on the Act, the S&P BSE 100 companies were required to spend Rs 72.0 billion on CSR, and further disclosures regarding these spending will become more meaningful.(Story courtesy: Business Standard)