India inc beats mr scrooge hands down in art of giving

1. India Inc Beats Mr Scrooge
Hands Down in Art of Giving
Only 14 Nifty cos spent 2% of net profit on CSR in FY15

2. Contd..
India Inc has been slow to warm up to new rules on corporate social
responsibility (CSR) spending with only 14 Nifty companies managing to
spend the mandatory 2% of net profit towards social causes in FY15.A study
of annual reports of Nifty companies by ET Intelligence Group showed that
48 companies spent a combined `. 4,252 crore during FY15. This is 1.6% of
the standalone net profit earned by Nifty companies for FY15.Two companies
are yet to publish their annual reports.
“There is no readiness among companies to spend on CSR and there is no
readiness among NGOs to help corporates spend the money,“ Vineet Nayar,
chairman of Sampark Foundation and former chief executive of HCL
Technologies, said. “There is also ongoing tension between companies and
NGOs,“ he added. The former has always worked on shorter cycles of
performance and the social sector is used to longer cycles to produce
impact.

3. Contd..
FY15 was the first year of compliance of CSR provisions for companies.
Under the Companies Act, firms with a net worth of ` . 500 crore or a
turnover of ` . 1,000 crore or net profit of ` . 5 crore, need to spend at
least 2% of its average net profit for the immediately preceding three
financial years on CSR activities.
Social spending is proving to be alien for many companies. Idea Cellular
is the only Nifty company that did not spend anything on CSR last year.
In its annual report, the company explained that it spent the last year
preparing to implement a CSR policy. It evaluated various CSR activities
and conducted consultations with organisations in the area of educa
tion, health, sanitation, poverty eradication and livelihood gener ation,
it said in its annual report.

4. Contd..
It has now identified some key projects which will be executed during the
current financial year.Some companies like Infosys managed to comply with
the man datory CSR spending rules. Tata Motors spent ` . 18.6 crore on CSR
de spite incurring loss of ` . 4,738.95 crore on a standalone basis for the
financial year 2014-15. A big chunk of the money spent by Nifty compa nies
went into education, health care, sanitation, poverty eradica tion, generating
livelihoods and environmental sustainability .“Though (only) few companies
managed to complete their pre, scribed spending, it is still a very positive
thing since there is a gen eral awareness among companies about social
responsibility,“ said Professor Siva Raju of Tata Institute of Social Sciences.
Besides, this is still the first year since the norms kicked in and companies
took time to set up administrative structure to undertake CSR initiatives, he
added.

5. Contd..
The worst spenders included companies like Hero MotoCorp having
spent ` . 2.3 crore (0.1% of its net profit), PNB (0.12% of its net profit),
Kotak Mahindra Bank (0.6% of its net profit) and Lupin . 12.6 crore
(0.7% of its net profit).` Of the 11 state-owned companies in the Nifty,
NMDC and Coal India have managed to spend 2% of its net profit.
Public sector enterprises accumulate the unspent CSR funds in a non-
lapsable kitty to be spent in the coming years.
But companies promise they will get better in their CSR spending. Hero
MotoCorp has said it will not only spend the statutory amount this
year, but will also make up for the deficiency of FY15. Cipla already
stepped up CSR budgets by 25% last year and intends to increase it
further in the coming years.

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