CSR spend up by 28%; contribution to PM’s relief fund up by 418%

The Companies Act mandates spending on CSR activities by the companies

jasleen

Jasleen Kaur | October 24, 2016 | New Delhi


#Company Act   #PM's relief fund   #Corporate Social Responsibility   #CSR  
Picture for representational purpose only
Picture for representational purpose only

The spending under the corporate social responsibility (CSR) by the NSE listed companies has seen a huge increase of 28% in 2015-16. The Companies Act (2013) has statutory provisions, making the CSR mandatory for companies with net worth of Rs 500 crore or more, turnover of at least Rs 1,000 crore and net profit of at least Rs 5 crore are required to spend at least 2 percent of their average net profits of last 3 years on CSR activities, while constituting a separate committee on their board. The law, implemented from April 2014, makes India the only country with legislated CSR.

There are 1,579 companies listed on NSE, 1,520 companies were listed during 2015-16 (balance 59 have got listed subsequent to April 2016). Out of 1,520 companies, annual reports for 2015-16 have been released by 1,421 companies.

Of these 1,421 companies, 1,332 had details relating to CSR given in the annual reports, while no such details were available for the rest of the 89 companies.

Of the 1,332 companies, 920 were applicable under the provisions of CSR in the Companies Act, up from 895 companies in 2014-15. The analysis is thus based on the data of 920 companies.

According to Prime Database, which compiles data on capital markets and related matters, which has done analysis of this data - the average net profit of these 920 companies over last 3 years was Rs 4.60 lakh crore. As per the CSR provision, the companies were required to spend Rs 9,146 crore. The companies, however, went one step further and spent Rs 9,309 crore, Rs 163 crore more than the requirement.

However, Rs 1,984 crore remain unspent and the final actual CSR expenditure by these companies was Rs 8,345 crore. This is an increase of 28 percent from Rs 6,526 crore spent in 2014-15.

The data shows that the maximum spending of CSR by the companies has been on the education sector, followed by Healthcare.
In comparison to previous year, CSR spending as contribution to PMs funds saw the maximum increase by 418% from Rs 168 crore in 2014-15 to Rs 701 crore in 2015-16. This was followed by spending on hunger/poverty (66% increase) and gender equality (38 %). Meanwhile, spending on child mortality and maternal health saw the maximum fall with 22 %. According to Pranav Haldea, allocation as a percent of total under different schedules though remained fairly constant.

According to data the top 10 companies in terms of CSR spend are

Rank Company CSR expenditure (Rs.cr)
1 RELIANCE INDUSTRIES LTD. 651.57
2 NTPC LTD. 491.80
3 OIL & NATURAL GAS CORP.LTD. 409.01
4 TATA CONSULTANCY SERVICES LTD. 294.23
5 ITC LTD. 247.50
6 NMDC LTD. 210.09
7 TATA STEEL LTD. 204.46
8 INFOSYS LTD. 202.30
9 POWER FINANCE CORP.LTD. 196.88
10 ICICI BANK LTD. 171.51


Also, there were 363 companies which exceeded their prescribed spending. The top 10 of these companies are:

Company Prescribed CSR expenditure (Rs.cr) Actual CSR expenditure (Rs.cr) Excess spend (Rs.cr)
NTPC LTD. 271.35 491.80 220.45
RELIANCE INDUSTRIES LTD. 557.78 651.57 93.79
TVS MOTOR CO.LTD. 7.15 78.26 71.11
TATA STEEL LTD. 150.00 204.46 54.46
COAL INDIA LTD. 19.69 73.26 53.57
GUJARAT MINERAL DEVELOPMENT CORP.LTD. 14.47 66.03 51.56
POWER FINANCE CORP.LTD. 145.79 196.88 51.09
NLC INDIA LTD. 44.27 81.93 37.66
NHPC LTD. 43.28 72.68 29.40
STEEL AUTHORITY OF INDIA LTD. 57.20 76.16 18.96


Also, the companies which have missed the mandatory spending of 2% of profit decreased from 422 in 2014-15 to 376 in 2015-16. The top 10 companies in terms of highest unspent amount in 2015-16 were:

Company Prescribed CSR expenditure (Rs.cr) Actual CSR expenditure (Rs.cr) Unspent Amount (Rs.cr)
OIL & NATURAL GAS CORP.LTD. 593.70 409.01 184.69
BHARTI AIRTEL LTD. 189.00 43.94 145.06
HCL TECHNOLOGIES LTD. 144.63 14.16 130.47
HDFC BANK LTD. 248.00 127.28 120.72
HINDUSTAN ZINC LTD. 170.05 63.26 106.79
TATA CONSULTANCY SERVICES LTD. 360.00 294.23 65.77
CAIRN INDIA LTD. 107.21 51.50 55.71
INFOSYS LTD. 256.01 202.30 53.71
HOUSING DEVELOPMENT FINANCE CORP.LTD. 139.26 85.70 53.56
BHARAT HEAVY ELECTRICALS LTD. 110.03 66.20 43.83

According to Haldea, PSU spending saw a huge increase of 41 % from previous year. The 48 PSUs spent Rs 2,078 crore in 2014-15. Whereas, 47 PSUs spent Rs 2,936 crore in 2015-16.

The CSR Act also mandates companies to appoint a CSR committee comprising at least 3 members of the board of which at least 1 should be independent. 1197 out of 1520 companies had such a CSR committee in place. Several companies though went beyond the requirement. According to Haldea, as many as 331 companies had appointed more than 3 members.

 

 

Comments

 

Other News

Soil Health Cards scheme moves at snail’s pace

An ambitious scheme to provide Soil Health Cards for 14 crore land holdings spread across the country seems to be moving at a painfully slow pace.   Prime minister Narendra Modi on August 21 reviewed the progress and he was informed that 16 States/UTs have completed the first

Major train accidents since May 2014

With two major train accidents in succession this week, we list the major train accidents that have occurred since 2014:    26 May 2014 – 12556 Gorakhdham Express collided with a stationary freight train near Khalilabad station in Uttar Pradesh. 25

“Stressed assets liquidation key to de-clog bank balance sheets”

Swift, time-bound resolution or liquidation of stressed assets will be critical for de-clogging bank balance sheets and for efficient reallocation of capital, said Reserve Bank of India governor Urjit Patel.   Addressing the inaugural session of the “National Conference

Tweaking MSP: Is PDP the right formula?

Should the practice of paying farmers a minimum support price (MSP) for some crops be scrapped? That is what several experts have suggested. This is part of the discourse that follows the recent supreme court advice to the government to formulate a national policy to protect farmers.  MSP ha

Should there be uniform civil code in India?

Should there be uniform civil code in India?

From Shah Bano to Shayara Bano: How Rajiv’s blunder undid secularism

History could have repeated itself as a farce, but in the triple talaq case today, there has been no replay. A historic blunder has been undone, though it has taken three decades. The supreme court has once again taken a stance in favour of individual freedom and against fundamentalism &nda



Video

Punjab and Haryana are on high alert before judgement on baba ram rahim

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter