Lok Sabha Question No. 3984 (UNSTARRED), answered on 2018-08-10
Subject: Social Audit of CSR Funds
Ministry: CORPORATE AFFAIRS
Asked by: DEVJI MANSINGRAM PATEL

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 3984 ANSWERED ON FRIDAY THE 10th AUGUST, 2018/ SHRAVANA 19, 1940 (SAKA)

## SOCIAL AUDIT OF CSR FUNDS

## QUESTION

3984.  SHRI DEVJI  M. PATEL: Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a)  whether  the  lack  of  social  audit  of  the  utilisation  of  Corporate  Social Responsibility (CSR) funds has made it convenient for the public sector and private sector enterprises to misuse the funds earmarked under CSR;
- (b) if so, whether the Government proposes to make a provision of spending 80 per cent funds only on panchayats, schools, hospitals and primary health centres;
- (c) whether it is being planned to upload the complete details of CSR funds of all  the  public  and  private  sector  industries  including  the  details  of  funds allocated,  the  funds  spent  and  the  name  of  the  institution  on  website  to ensure transparency and if so, the details thereof; and
- (d)  whether  the  Government  is  also  planning  to  upload  the  criteria  of selection  and  rating  of  NGOs  on  the  Department's    website  and  if  so,  the details thereof?

## ANSWER

MINISTER OF STATE FOR LAW AND JUSTICE AND CORPORATE AFFAIRS                                             (SHRI P. P. CHAUDHARY)

विधि और न्र्ार् एिं कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(

श्री पी॰ पी॰ चौिरी )

- (a):   Every company having net worth of Rs. 500 crore or more or turnover of Rs.  1,000  crore  or  more  or  a  net  profit  of  Rs.  5  crore  or  more  during  the immediately preceding financial year shall ensure that company spends, in

every financial year, at least 2% of the average net profits of the company made during the  three  immediately  preceding  financial  years  on  Corporate Social  Responsibility  (CSR)  activities  in  areas  or  subjects  specified  in Schedule VII of the Companies Act, 2013. Every such company will have a CSR Committee which will (i) formulate and recommend to the Board a CSR policy which shall indicate the activities to be undertaken by the company (ii)  recommend the amount of expenditure to be incurred on such activities and (iii) monitor the CSR policy from time to time. Further the Board of such company shall approve the CSR policy recommended by the CSR Committee and ensure that activities included in the CSR policy are undertaken by the company. Section 135 (5) read with Section 134 (3) (o) of the Act mandates the Board to disclose in its report, the CSR  Policy developed and implemented  by  the  company,  including  the  details  like  funds  earmarked, expenditure made, implementing agencies appointed etc. The details reported in the annual financial statement of the company are required to be audited by the auditor of the company under the Act.

- (b): No such proposal is under consideration of the Government.
- (c):  To  ensure  transparency  and  accountability  in  utilization  of  CSR  funds, Ministry of Corporate Affairs has launched  National CSR  Data  Portal (www.csr.gov.in) in January, 2018 displaying disclosures made by companies in MCA21 registry.
- (d) :  No such proposal is under consideration of the Government.

******