Corporate affairs ministry to launch new platform to track companies' CSR spending soon

NEW DELHI: The corporate affairs ministry is launching a CSR data analytics platform to keep a close tab on the Corporate Social Responsibility spends of companies under the new Companies Act. The platform will analyse sectoral as well as overall spending on CSR activities by companies, a senior official said, adding that the ministry is also in the process of unveiling a database for registered valuers, who will valuate property, stocks, shares, debentures, securities, goodwill, other assets, net worth of a company and its liabilities under the provision of the Act.

The ministry had earlier made available a similar database for independent directors. “Both these steps would further strengthen the e-governance mechanism of MCA,” the official said on condition of anonymity. “The CSR data analytics platform will have all information related to the CSR activities and the policies, which companies need to undertake. We will also be able to track whether the companies are complying with the Act. It will also have a database of NGOs, which can be engaged by corporates for CSR spending.”

The government has also constituted a high-level committee to suggest measures for a “proper” assessment of CSR initiatives taken by companies.

CSR provisions under the Companies Act of 2013 came into effect from April last year. The performance of companies in this regard can be assessed only after the companies file their statutory annual returns on CSR, which are due after September 2015. According to the ministry’s estimate, companies will spend around Rs 15,000 crore on CSR activities in the year to March 2015.“Smaller firms can adopt questionable practices like tying up with NGOs run by friends and families. All such activities will also be kept in check through data analytic mechanism,” added the official quoted above.

The CSR data analysis platform will also have geographical location of CSR analysis and statistical reporting.

The ministry is developing an electronic data gathering system for creating a database of companies.Under the new Companies Act, companies with a net worth of Rs 500 crore or a turnover of Rs 1,000 crore, or net profit of Rs 5 crore need to spend at least 2 per cent of their average net profit in the preceding three financial years on CSR activities. Schedule VIIof the Act provides a list of activities such as EWS housing, Clean India, Clean Ganga, education and health among others that can be undertaken as CSR.