Serial Defaulter:  Alkem Laboratories fails to spend prescribed CSR budget for six years in a row

New Delhi, 1 September 2020: Indian multinational pharmaceutical company Alkem Laboratories has emerged as a regular defaulter on mandatory CSR obligations. The Mumbai-headquartered company has been failing to spend its prescribed CSR budget year after year. 

Any company with net worth of Rs 500 Crore or more, or turnover of Rs 1000 Crore or more; or net profit of Rs 5 Crore or more in ‘any financial year’  is required to spend 2 % of their average net profit of the last three years on CSR activities.

Although the company has increased its CSR spending in the last few years, it has never been able to spend its total prescribed CSR budget.

In the financial year 2014-15, when spending on the CSR became mandatory, Alkem Laboratories failed to spend 87% of its prescribed CSR budget. In fact, the company did utterly fail to spend the prescribed CSR amount over last 6 years. In the year 2019-20, the company didn’t spend 22.16% of its prescribed CSR budget.

Interestingly, the reason for failing in spending the prescribed budget given by the company in its annual reports is also not convincing enough. In its many yearly financial reports, the company would always note that it has been looking for some ‘Long Term projects which shall benefit the society at large’ to spend the CSR budget.

Annual CSR expenditure details with explanation

 It used ‘Long Term project’ first time in 2016-17 saying, "the long term projects for meeting the long term health needs of the Society could not take shape on account of our inability in finding the required infrastructure". Since then, it kept harping on the same issue for not being able to spend its complete CSR budget.

During the financial year 2017-18, the company claimed that it could not materialise its long term CSR initiatives on account of inability to find the required infrastructure. In this regard, the Company acquired a non-profit organization named Alkem Foundation for supplementing its efforts in implementation of its CSR objectives in a structured manner and in helping the community from the long term point of view.

However, despite acquiring Alkem Foundation, the company failed to spend its mandatory CSR budget in subsequent years.