Corporate Social Responsibility (CSR) is a proactive and synergistic business philosophy, while attention is paid to broader economic, environmental, and social issues in a balanced way. Augmenting profits is no longer t

Corporate Social Responsibility (CSR) is a proactive and synergistic business philosophy, while attention is paid to broader economic, environmental, and social issues in a balanced way. Augmenting profits is no longer the sole business performance indicator for the corporates and they have to play the role of responsible corporate citizens by undertaking activities for betterment of the society and the environment under the umbrella of Corporate Social Responsibility (CSR). Organizations use resources that belongs to the society and it is expected that they should operate in a sustainable manner and spend some amounts for preservation and sustainability of resources which belong to the society. Over the last two decades, significant economic growth and integration has taken place in the global economy, resulting in several changes in the way businesses operate. Governments across the world have been using different forms of regulations to improve corporate behavior so as to promote increased accountability, disclosures and transparency from them. Gone are the days when Milton Friedman, the reputed Economics Nobel laureate, opined in 1960s that companies have no responsibility towards the society and that their objective was primarily the enhancement of shareholders' wealth. With the enactment of the Companies Act, 2013, CSR became a norm in India. India is perhaps one of the few countries in the world where CSR is mandated under the Statute. Companies Act, 2013 ["Act"] is a legislation which officially embarked on one of the world's largest experiments of introducing the concept of CSR as a mandatory provision. With the introduction of Act, there is a statutory obligation for the corporates to take initiatives towards Social, Environmental and Economic Responsibilities. The initiatives taken have to be reported to the company and other stakeholders appropriately. Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ["CSR Rules"] framed thereunder govern CSR in India. In view of above background and CSR related provisions in India, analyze the following questions and provide the answers : W Ltd. is a big listed company and it has huge profits. The company management is very keen in establishing the company as a socially responsible organization and it has involved most of its employees in its CSR related activities. During financial year 2023-24, the company has CSR obligations of ₹ 48 Crore. The company has spent ₹ 46 Crore in various eligible CSR activities. Beside it, the company has monetized ₹ 2 Crore towards cost of the service employed by its various employees in different CSR activities and shown this amount of ₹ 2 Crore as expenditure towards CSR obligations. The secretarial auditor of the company has questioned this treatment of monetarizing the cost of services of the employees. You are required to analyze this case and comment whether the secretarial auditor's observation is correct and what actions need to be taken up by the company ?