More than half of Nifty companies spent less than what the law mandates them to towards corporate social responsibility (CSR) in FY16, data compiled by FE reveals.
The study reveals that while 25 of the 47 Nifty constituents that were required to spend towards CSR in FY16 spent less than the prescribed 2% of their profit, five of them did not even spend 1%. Since three of the companies had incurred losses over the last three years, they were not required to spend any amount.
At the top of the list of least spenders is the Shiv Nadar controlled IT major HCL Technologies, which spent just R10.5 crore on CSR activities as against the required R122.1 crore.
Telecom majors Bharti Airtel and Idea Cellular were not far behind, spending R135.5 and R36.4 crore less than what the law mandates them to. Interestingly, all the top private sector lenders — HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank and IndusInd Bank — figure in this list of miserly spenders towards CSR.
Reliance Industries, on the other hand, being India’s most profitable company, was the biggest CSR spender by giving away R651.6 crore — more than the required R557.8 crore — towards such activities. It, however, wasn’t the most generous. That position — highest percentage of profit spent towards CSR — was sealed by NTPC, which spent more than 3% of what it was required to. The state-owned power generator spent R491.8 crore towards CSR in FY16, which included last year’s arrear of R78.3 crore.
Despite it not being mandatory for them, three of the loss making constituents of Nifty —Tata Motors, Sun Pharma and Bank of Baroda — did their bit for society as well by spending anywhere between R12 crore and R20.6 crore on CSR during the financial year.
According to the provisions of the Companies Act, 2013, every company with a net worth of R500 crore, or a turnover of R1,000 crore, or a net profit of R5 crore during a financial year is required to constitute a CSR panel and ensure that at least two percent of its average net profits made during the three immediately preceding financial years is spent on CSR.
The study reveals that despite falling short of requirement, Nifty constituents spent R5,026 crore towards CSR in FY16.
This article was taken from here.