Power Finance, National Mineral Development Corporation, Tata Steel, NTPC and Reliance spent more than their prescribed CSR budgets in FY 2015/16, according to the India CSR Outlook Report (ICOR). In FY 2014/2015, only Reliance Industries had spent more than its prescribed CSR budget, among the top 10 performers.
The report, published by NGOBOX, analysed the CSR spending of 250 companies for FY 2015/16 which accounts for one-third of the total CSR spends in India.
The other five top CSR spenders for FY 2015/16 are ICICI, Infosys, ITC, Tata Consultancy, and Oil and Natural Gas Corporation.
These 10 companies together spent Rs 3,350 crore as part of their CSR fund, when their prescribed CSR spend was Rs 3,064 crore – almost 9 per cent more than what Section 135 of the Companies Act 2013 demands.
Among the 250 companies, 58 per cent have spent either exactly or even more than the prescribed CSR. This is an improvement from the FY 2014/15 during which this percentage was 48 per cent. In 2014/15, there were three companies which had not spent a single penny from their prescribed CSR budget, whereas in 2015/16 all companies have spent a certain amount on CSR. This indicates a renewed sense of seriousness among companies as they strive to match the prescribed CSR requirements with the actual CSR spends.
However, 8 per cent of them failed to meet the requirement as per the CSR Act, making the overall CSR spend reach Rs 6,578 crore, when it should have been Rs 7,143 crore.
Nevertheless, in FY 2015/16, 13 per cent more companies complied with the CSR spends, when compared to FY 2014/15, taking the percentage of companies which adhered to the Companies Act to 92 per cent. These companies implemented a total of 2,862 CSR projects; 25 per cent of these projects are in the states of Maharashtra, West Bengal and Andhra Pradesh.
Top sectors for CSR spending are education (including skilling, which has 1,189 projects) and healthcare (with 876 projects), while rural sports promotion is gradually becoming popular. The other areas that companies are looking to spend in are rural development and environment sustainability.
The 250 companies analysed had the prescribed CSR spends of more than Rs 1 crore, for FY2015-16, and also had their annual reports along with the information on CSR available by August 30.
Section 135 of the Companies Act 2013, requires companies with net worth of Rs 500 crore or more, or with annual turnover of Rs 1,000 crore or more, or with a net profit of Rs 5 crore or more, to mandatorily spend 2 per cent of the average net profit of the preceding three years on CSR activities, establish a CSR committee and report CSR activities.
The report highlighted that there was a lot of discrepancy in the data when accounting for actual CSR spends and project-wise CSR spends of companies. Also, despite the fact that it is mandatory for companies to prepare CSR report (as part of the annual report) in a particular format, more than 30 companies did not follow the same, and went on hiding crucial information like project location, implementing partners, project specific budget and spends.
This article was taken from here.