As per the report of KPMG survey, Top 100 listed Indian companies have managed to improve their corporate social responsibility (CSR) compliance.’ According to the Companies Act, 2013 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% of their profits to CSR. Compliance to the requirements of the Companies Act has improved.
Furthermore 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 corporate.
As per the Act’s requirements and public disclosures of N100 companies’ profits, they are required to spend INR 7233 Cr. against which companies committed INR 7355 Cr (higher by INR 122 Cr.) and have spent INR 6518 Cr. (90 per cent). This is higher as compared to last year wherein the companies had spent INR 5115 Cr. (79 per cent) against the requirement of INR 6490 Cr.
An increase of 11 per cent spends is observed during the current year as compared to the previous year. The average spending per company has also seen a nearly 15 per cent increase.
This is an indication of India Inc. getting familiar with the requirements of the Act and also getting the internal controls in place, a major reason for companies that were not able to spend the required amount during the previous year.
During the current year, 70 per cent of companies have disclosed the direct and overhead expenditure towards CSR projects.
There is almost a 50 per cent increase in clearly disclosing the direct and overhead expenses as compared to the previous year, which indicates an increase in better financial monitoring of projects by companies. Eleven per cent of companies have spent more than 5 per cent of their total spends towards administration.
The health, sanitation and education sector accounts for the 63.74 per cent (INR 4155 Cr.) of the total spends on CSR against 50 per cent (INR 2592 Cr.) in last year, an increase by 14 per cent. CSR spent on rural development sector has considerably increased from INR 443 Cr. (8.84 per cent) in 2014-15 to INR 804 Cr. (12.34 per cent) in 2015-16.
Certain Schedule VII areas such as National Heritage, Support to War Veterans, PM Relief Fund, Sports, Technology Incubators,Slum Development , put together, accounted for fro 3 percent (INR 154 Cr.) of the total spends this year as well (INR 153 Cr. last year)
"We generate wealth for the people, what comes from the people, must to the extent possible, therefore get back to the people.”-Bharat Ratna-JRD Tata VISION: TO BRING WORLD PEACE THROUGH INTERNAL TRANSFORMATION. MISSION: "TO CREATE PLATFORM FOR LINKAGE BETWEEN BOTH THE ENDS FOR CONTINUOUS SOCIAL REFORMATION" .
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