The Companies Act
which came into effect from April 1, 2014 stipulates that firms with a net worth of Rs 500 crore or more, or a turnover of Rs 100 crore or more, or a net profit of Rs 5 crore or more during the immediately preceding financial year are required to spend 2 per cent of their profits on corporate social responsibility (CSR) programmes.
Eligible companies need to form a CSR committee, formulate a policy, and implement projects in alignment with Schedule VII of the Act.
CSR-related disclosures need to be made in the annual report in the format prescribed by the Act.
According to the report, there has been a 325 per cent increase in the number of companies that have disclosed details of outreach in annual report. Besides, 30 per cent firms studied in the report have had more than three CSR committee meetings.
"While the overall CSR spending is increasing, it is also heartening to observe the increase in number of companies going beyond the 2 per cent mandate and even companies who are not required to spending allocating budgets for CSR and spending," said Santhosh Jayaram, Partner and Head, Sustainability and CSR Advisory at KPMG in India.