Lok Sabha Question No. 3168 (UNSTARRED), answered on 2021-03-15
Subject: Use of CSR Funds by Companies
Ministry: CORPORATE AFFAIRS
Asked by: Ramdas Chandrabhanji Tadas, Sangamlal Kadedin Gupta

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 3168 ANSWERED ON MONDAY THE 15 th  MARCH, 2021/ PHALGUNA 24, 1942 (SAKA)

## USE OF CSR FUNDS BY COMPANIES QUESTION

3168. SHRI RAMDAS C. TADAS: SHRI SANGAM LAL GUPTA:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) the details of the amount spent by various corporate companies including Public Sector Undertakings  (PSUs)  and  Public  Sector  Enterprises  (PSEs)  under  the  Corporate  Social Responsibility (CSR) during each of the last three years and the current year;
- (b)  whether  the  Government  is  aware  that  several  companies  have  established  NonGovernmental Organisations (NGOs) to spent their CSR funds and are thereby misusing the provisions of the CSR policy;
- (c) if so, the details thereof, company-wise; and
- (d) whether the Government has formulated any scheme to review the works done by them and if so, the details thereof?

## ANSWER

THE MINISTER OF STATE FOR FINANCE

AND CORPORATE AFFAIRS                                                    (SHRI ANURAG SINGH THAKUR) वित्त एिं कारपोरेट कार्य  मंत्रालर् में राज्र् मंत्री ( श्री अनुराग स ंह ठाक ु र )

(a):  As  per  filings  made  by  the  Companies  in  the  MCA21  registry,  the  Corporate  Social Responsibility (CSR) spent by various public and private sector companies for the financial years 2017-18, 2018-19 and 2019-20 respectively are given below:

|                                   | FY 2017-18       | FY 2017-18                  | FY 2018-19       | FY 2018-19                  | FY 2019-20       | FY 2019-20                  |
|-----------------------------------|------------------|-----------------------------|------------------|-----------------------------|------------------|-----------------------------|
| Nature of Company                 | No. of Companies | Total Amount Spent (in Cr.) | No. of Companies | Total Amount Spent (in Cr.) | No. of Companies | Total Amount Spent (in Cr.) |
| Public Sector Undertakings (PSUs) | 535              | 2,704.32                    | 609              | 3,835.50                    | 14               | 438.29                      |
| Non-PSUs                          | 20,915           | 11,185.53                   | 24,323           | 14,819.32                   | 1061             | 7,384.21                    |
| Grand Total                       | 21,450           | 13,889.85                   | 24,932           | 18,654.82                   | 1,075            | 7,822.50                    |

(Data upto 30.09.2020) [Source: National CSR Data Portal]

As per the Companies Act, 2013 ('Act'),  companies  are required to  hold Annual General Meeting  (AGM)  within  six  months  from  the  end  of  financial  year.  Thereafter,  financial statements and board report containing  disclosure about CSR, are to be  filed in  MCA21 within 30 days of the AGM. Thus, for the ongoing financial year no filing has been made by CSR mandated companies.

(b) & (c): Section 135 of the Act read with Rule 4 of the Companies (CSR Policy) Rules, 2014 prescribes that the Board of the company is empowered to undertake its CSR activities either by itself or through implementing agencies, namely:

- i). a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company, or
- ii). a  company  established  under  section  8  of  the  Act  or  a  registered  trust  or  a registered society, established by the Central Government or State Government; or
- iii). any entity established under an Act of Parliament or a State legislature; or
- iv). a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.

(d): CSR is a Board driven process and the Board of the company is empowered to plan, decide, execute and monitor CSR activities of the company based on the recommendation of  its  CSR  Committee.  The  CSR  architecture  is  disclosure  based  and  CSR  mandated companies are required to  file  details  of  CSR  activities  annually  in  the  MCA21  registry. Further, the Board of the company is also required to disclose the CSR Policy developed and implemented by the company, including the details like funds earmarked, expenditure made, implementing agencies appointed etc., in their board report. The existing legal provisions such  as  mandatory  disclosures,  accountability  of  the  CSR  Committee  and  the  Board, provisions for statutory audit of accounts of the company etc. provide sufficient safeguards for  implementation  of  CSR  by  companies.  Whenever  any  violation  of  CSR  provisions  is reported, action against such non-compliant Companies are initiated as per provisions of the Act after due examination of records and following due process of law.

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