KMML is one of the most profitable
and reputable Public Sector Undertakings (PSUs) in the state of Kerala.
According to KMML’S annual reports for the financial year 2015-16,  it generated an annual income of about 600Crores
and a profit of nearly 28Crores. These figures have increased considerably from
311 and 10.4Crores respectively in the financial year of 2007-08. As the income
generated by the company increased, the amount allocated to CSR activities also
increased. The enactment of the New Companies Act, 2013 was also a driving
factor behind the company’s increased spending on CSR activities.

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 Sec. 135 of the Acts states that a company
having a net worth of more than 500 Crore or a net profit of over 5Crore should
constitute a CSR committee and
spend at least 2% of the average net profit of the immediately preceding three
financial years on CSR activites.

CSR Committee

CSR Committee was formed to recommend and formulate the companies CSR
policy.The role and functions of the KMML CSR are as follows:

to the Board of Directors the amount of expenditure to be incurred on CSR

the Board, the modifications to CSR policy as and when required

the implementation of the CSR policy from time to time

CSR Spending

per, annual reports of the financial year 2015-16, the average net profit of KMML’s
past 3 financial years is estimated to 24.91Crore INR. So as per the Act, the
prescribed amount of money KMML had to spent on CSR activities was 49,83,493
INR. But the company was not able to fully utilize the allotted amount. It
could only manage to spend 28,83,493 INR leaving a total of 21,60,992 INR

for not spending the prescribed CSR expenditure

There was more than one reason for KMML to fail at
spending the prescribed amount of money on CSR activities. They were

the financial year 2015-16, the company made a loss of 1.77 Crores after tax.

company’s products were also under stiff competition from several international
players and the pricing was reduced.

difference between the sum of liquid assets and incoming cash flows on one side
and outgoing cash flows, i.e. liquidity position of the company also was also a
matter of concern and the availment of bank overdraft also increased.