CSR regime begins on disappointing note; 2 / 3rd cos miss target – Business Standard

          
     
 In a disappointing start to the much-touted CSR regime, nearly two-third of the top Listed companies have failed to spend the minimum 2 per cent of profits on social responsibility activities in the first year.

On the otherhand, Mukesh Ambani-led corporate giant Reliance Industries Ltd (RIL) HAS exceeded the mandatory 2 per cent Prescribed Limit the while spending the maximum amount (Rs 761 crore) Among the Sensex companies thathave so far Disclosed Their CSR spending figures for 2014 15 – The First Financial Year for Which The New Law HAS BEEN into force.

Others who have managed to meet the target include Azim Premji-led Wipro, tobacco-to-fashion conglomerate ITC, FMCG major Hindustan Unilever and the auto giant Mahindra and Mahindra.

Infosys missed the limit by a small margin as on March 31, 2015, but said it managed to meet the target after spending the Remainder amount of about Rs 3 crore in April.

So far, half of the 30 Sensex Firms have Disclosed Their CSR details for the latest financial year, but the actual CSR spending During 2014-15 for at least ten of them was below 2 per cent of Their respectively the three- Year-average net profit – as required under the new Companies Act.

Together, all of These 15 companies spent a little over Rs 2,100 crore on CSR During The fiscal.

The government HAS Also set up a six-member high-level panel to suggest steps for Improved Monitoring of Social Welfare activities done by them under the Companies Law.

The companies Whose actual CSR spending was less than 2 per cent During The Year include HDFC Bank, ICICI Bank, Axis Bank, SBI, Dr Reddy’s, HDFC and Bajaj Auto. While Thanksgiving Reasons for Their respectively the shortfalls, all of them have Expressed Their Commitment to the CSR work.

Among others, Vedanta said there was “no bond for the company to spend on CSR as the average profit computed as a commission of the Companies Act for last three years is negative “. Still, it had spent Rs 25.5 crore (1.3 per cent of its last fiscal profit after tax) in the CSR Projects and Initiatives.

The new law Applies to companies with a net worth of Rs 500 crore or more, Or a turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more in a financial year.

They are overpriced required to constitute a CSR committee with three or more directors, at least one of Whom Should be an Independent Director. If a company fails to spend full or part of the Prescribed amount, it needs to explain the shortfall.

Giving the update of Their compliance status on the new law, Which came into force from April 1, 2014, five Sensex Firms have so far Disclosed CSR spending of 2 per cent or more.

RIL tops the list with the total CSR spending of Rs 761 crore (2.85 per cent). The major areas for this expenditure included rural transformation, health care, education, environment, protection of the national heritage, art and culture and Disaster Response, the company said in its annual CSR report.