New Delhi, 25 March 2020: A total of 59 per cent of top 100 companies have disclosed that their employees participated in implementation of CSR projects of the companies, however, it is not known if their salaries are counted in the CSR expenditure of the company or not.
There is an increasing trend of employees participating in CSR activities of their companies. In 2016-17 and 2017-18, around 56 per cent of the companies confirmed that their employees volunteered for the CSR work carried out by the company. In the latest year for which the data is available, 59 per cent of companies have confirmed the same, as per a report published by KPMG, an international research group.
In the report, KPMG analysed the five years performance of the Act and the response from the companies. Published in February, the report is an analysis of 100 largest listed Indian origin companies by market capitalization (N100).
However, it is still not clear how these companies are handling the salary part of the employees who have come forward to volunteer in CSR activities. The government has also only added to the confusion.
In June 2014, MCA came with a circular telling that the salaries paid by the companies to regular CSR staff as well as to the volunteers of the companies (in proportion to company’s time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure. However, through another circular in September, 2014, MCA omitted it.
"It will be interesting to understand if companies account for salaries for employees as well as that of volunteers, to CSR, which post this amendment was withdrawn and is not permissible. With increasing trend of employees volunteering, it is important for MCA to seek disclosure from companies to confirm compliance of companies to this omission," says the KPMG report.
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