New Delhi: In a disappointing start to the much-touted CSR regime, nearly two-third of the top listed companies have failed to spend the minimum two per cent of profits on social responsibility activities in the first year. On the other hand, Mukesh Ambani-led corporate giant Reliance Industries Ltd (RIL) has exceeded the mandatory 2 per cent prescribed limit while spending the maximum amount (Rs 761 crore) among the Sensex companies that have so far disclosed their CSR spending figures for 2014-15 — the first financial year for which the new law has been in force.
Others who have managed to meet the target include Azim Premji-led Wipro, tobacco-to-fashion conglomerate ITC, FMCG major Hindustan Unilever and 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 respective three-year-average net profit as required under the new Companies Act.
Together, all 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 giving reasons for their respective shortfalls, all of them have expressed their commitment to the CSR work. Among others, Vedanta said there was “no obligation for the company to spend on CSR as the average profit computed as per provisions 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 CSR projects and initiatives. The new law applies to companies with a net worth of '500 crore or more, or a turnover of '1,000 crore or more or a net profit of '5 crore or more in a fiscal.
