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.
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.
