Lok Sabha Question No. 188 (STARRED), answered on 2021-03-08
Subject: CSR Consultants
Ministry: CORPORATE AFFAIRS
Asked by: Sanjeev Kumar Singari

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA STARRED QUESTION NO. 188 ANSWERED ON MONDAY, MARCH 8, 2021/ PHALGUNA 17, 1942 (SAKA)

## CSR CONSULTANTS

## QUESTION

*188. DR. SANJEEV KUMAR SINGARI:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) whether the Government is aware of the existence of the Corporate Social Responsibility (CSR) consultants, who most of the time dwindle away huge share of CSR fund as consultation fee;
- (b) if  so,  the  details  thereof including the statuary actions taken against such consultants during each of the last two years;
- (c) the details of the rules under the Act to deal with such corrupt practices;
- (d) whether the Government has audited CSR activities conducted by various companies  situated in Kurnool district of  Andhra  Pradesh since the implementation of the Companies Act, 2013, if so, the details thereof during the last seven years, company-wise; and
- (e) if not, the reasons therefor?

## ANSWER

THE MINISTER OF FINANCE AND CORPORATE AFFAIRS                             (SHRIMATI NIRMALA SITHARAMAN) वित्त एिं कारपोरेट कार्य मंत्री                                                                                    (श्रीमती विमयला सीतारामि)

(a) to (e):  A Statement is laid on the Table of the House.

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STATEMENT  REFERRED  TO  IN  ANSWER  TO  PART  (a)  TO  (e)  OF  LOK  SABHA STARRED QUESTION NO. 188* (8 TH  POSITION) FOR 8 TH  MARCH, 2021 REGARDING CSR CONSULTANTS. (a) to (c):  The Government provides the broad framework for Corporate Social Responsibility  (CSR)  through  Section  135  of  the  Companies  Act,  2013  ('Act'), Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. CSR is a Board driven  process  and  the  Board  of  the  company  is  empowered  to  plan,  decide, execute  and monitor the CSR  activities of the  company  based  on  the recommendation  of  its  CSR  Committee.  Section  135  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 as mentioned in the said rule. There is no provision for CSR consultants in the legal framework of CSR provided in Section 135 of the Act and rules made thereunder. Whenever any violation of CSR provisions is reported, action against such non-compliant companies are initiated as per provisions of the  Companies Act,  2013  after  due  examination  of  records  and  following  due process of law. Further, the recent amendments in the Companies (CSR Policy) Rules, 2014 notified on 22 nd  January 2021 have strengthened the CSR eco-system by bringing more objectivity, transparency, entrusting more responsibility on the Board and enlarging the disclosures by the companies. (d) & (e):  The entire CSR architecture is disclosure based and CSR mandated companies  are  required  to  file  details  of  CSR  activities  annually  in  MCA21 registry.  Every  company  covered  under  Section  135  of  the  Act  is  required  to provide additional information in its Profit & Loss Account regarding amount of expenditure  incurred  on  CSR  activities.  The  details  reported  in  the  annual financial statement of the company are required to be audited by the statutory auditor of the company under the Act. Further, the Board of the company is also required 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  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 in this regard.

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