In what could be the highest CSR spend by an Indian conglomerate, the Tata Group spent Rs 1,000 crore on corporate social responsibility (CSR) in 2013-14.
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MUMBAI: Tata Group has emerged as biggest CSR spending group in the country. As per a media report an Indian conglomerate, the Tata Group spent Rs 1,000 crore on corporate social responsibility (CSR) in 2013-14. According to Times of India, If one were to exclude the salt-to-software enterprise’s philanthropic trusts, the Tata Group companies spent Rs 660 crore on CSR in the just ended fiscal. The diversified Indian multinational’s CSR spend was well above 2% of its net profit, a minimum requirement for an Indian company under the Companies Act.
A significant amount of the total CSR spend by the Tata Group has gone into skill development, health and education, with Tata Steel emerging as the biggest spender within the group. Among other Indian conglomerates, the $40-billion Aditya Birla Group spent Rs 200 crore on CSR in fiscal 2014, which is a little over 2% of the net profit from India.
Under the new law, all companies with at least Rs 5-crore net profit or Rs 1,000-crore turnover will have to spend 2% of their annual net profit on CSR activities — which include slum redevelopment, road safety awareness and consumer protection services — with effect from April 1, 2015.
While some Tata companies spend more than 2% of their profits on CSR, others like Tata Consultancy Services (TCS) are yet to meet the requirement. In fiscal 2014, the outsourcing giant’s CSR expenditure was Rs 93 crore, which was 0.48% of its profits. At TCS’ annual general meeting last month, chairman Cyrus Mistry informed shareholders on TCS’ intent to do more on CSR.
“Over the last decade, our spend on CSR activities, between the Tata trusts and the Tata companies, has been in excess of Rs 8,000 crore. In the last three years, we have been trending at an average of Rs 1,000 crore per annum between the trusts and our companies, typically in a 60:40 ratio between the companies and the trusts,” said Mukund Govind Rajan, member-group executive council and brand custodian, Tata Sons, the holding company of the $100-billion group.
The Aditya Birla Group, which has a presence in cement, telecom, carbon black and financial services, spent Rs 150 crore on CSR in 2012-13. The CSR spend has risen in 2013-14 with growth in profits. The group’s CSR initiatives are led by Aditya Birla Centre for Community Initiatives and Rural Development.
The Godrej Group is also among conglomerates that run their philanthropic activities through trusts. About 25% of the shares of the Godrej Group’s holding company Godrej & Boyce are held in a trust that supports initiatives in education, healthcare and environmental sustainability. Apart from the trust, Godrej Group companies spent around Rs 18 crore on CSR under the ‘Good and Green’ initiative, which is more than 2% of the profits.
Around 8,000 companies are expected to come under the ambit of the new CSR regulations. The annual CSR funding by companies is expected to be in the range of Rs 15,000-20,000 crore, according to industry estimates.
(Times of India, 16 July 2014)