The move comes after govt introduced penal provisions to deal with CSR violations.
NEW DELHI: Companies may soon have to geotag and furnish pictures of projects undertaken under their corporate social responsibility (CSR) programs to the government.
The Ministry of Corporate Affairs is considering such a move after the government introduced penal provisions to deal with companies failing to meet their CSR obligations, a government official said.
Parliament last week approved amendments to the Companies Act, adding provisions that make companies criminally liable for CSR violations.
Companies with a minimum net worth of Rs 500 crore, turnover of Rs 1,000 crore, or net profit of Rs 5 crore are required every year to spend at least 2% of their average profit for the previous three years on CSR activities.
“We want greater transparency so people can see the CSR work being done,” said the official. Details of the CSR expenditure provided by some companies did not even tally with their annual reports, the official added.
Recent amendments also mandate that companies deposit any unspent CSR funds for a financial year into a fund specified by the government. If the unspent funds are for an ongoing project, then they may be deposited in an escrow account. If funds earmarked for a fiscal year are not spent even after three years, then the amount would be transferred to a fund specified by the government.
The official cited above said the provision allowing companies to transfer CSR funds to a government fund would be particularly useful in the case of companies with low levels of CSR expenditure, as in such cases the administrative cost might end up consuming a large portion of the CSR budget.
Courtesy: economics times