TVS Motor Company Limited strategically approaches CSR by not investing in capital assets and adhering to legal spending norms, focusing on direct social impact.
TVS Motor Company Limited stands out in the automotive world. They take Corporate Social Responsibility (CSR) seriously. This aligns with Section 135 of the Companies Act, 2013. Their CSR policy mirrors their belief in giving back to society. As a responsible corporate citizen, they focus on sustainable development. They also work towards transforming rural communities.
TVS Motor Company has a unique take on CSR (Corporate Social Responsibility) spending. They’ve decided not to spend on creating or buying capital assets. This shows they’re sticking to legal requirements for CSR expenses. It seems they prefer direct social projects over long-term asset building. This aligns with their wider corporate values and commitment to society.
Context and Compliance
TVS Motor Company’s CSR spending this financial year is strategic. It aligns with legal and ethical standards. Their actions go beyond just meeting Section 135(5) of the Companies Act, 2013. It shows a deeper commitment to social welfare.
Financial Overview
Average Net Profit: Rs. 930.56 Crore.
Analysis of Key Financials
Mandatory CSR Contribution (2% of Net Profit)
Amount: 18.61 Crore INR
This figure meets the legal requirement. It’s about allocating 2% of average net profit for CSR. This sets the baseline for the company’s CSR spending.
Total CSR Expenditure
Amount: 19.00 Crore INR
TVS Motor Company goes above and beyond in CSR. They spend more than the law requires. This extra investment shows their dedication. It’s part of their strategy to be a strong corporate citizen. They’re really committed to social responsibility.
Excess CSR Spending
Amount: 0.39 Crore INR
This surplus spending shows more than just compliance. It reflects the company’s willingness to go beyond. It suggests they’re proactive in CSR. Maybe they’re aiming for bigger projects. Or they could be extending their current programs.
Surplus from Previous Years
Amount: NIL
The absence of surplus from past years means something. It shows the company used its CSR funds efficiently. They didn’t carry over any unspent amounts. This points to effective planning and execution in their CSR activities.
Future Financial Flexibility (Set Off Availability)
Amount: 0.39 Crore INR
This surplus amount is set aside for future CSR work. It gives the company financial flexibility. They can use it in smart ways. Like funding new initiatives or improving existing ones in the future.
Implications and Strategic Outlook
Strategic CSR Approach:
The analysis shows TVS Motor Company’s strategy in CSR. They do more than just meet legal obligations. They also put extra resources into social welfare. This approach could really boost their reputation. It highlights them as a socially responsible company.
Financial Planning and Execution:
The efficient use of CSR funds shows something important. There’s no surplus from previous years. This points to strong financial planning and execution. Such a trait is key for successful CSR initiatives. It ensures the resources make a real impact.
Future Prospects:
The surplus available for the future is a good sign. It means the company is ready for more CSR work next year. Their financial planning shows foresight. This allows for ongoing, maybe even bigger, CSR initiatives.
Impact Assessment
The company has potentially carried out an impact assessment of its CSR projects, as indicated by the expenditure on this aspect.
Analysis of Unspent CSR Amount for the Preceding 3 Financial Years
TVS Motor Company’s report regarding the unspent CSR (Corporate Social Responsibility) amount over the preceding three financial years presents a clear picture of their financial management in the realm of CSR activities.
Notably, the term “Not Applicable” is consistently used across different financial aspects related to unspent CSR amounts. This implies that for the last three financial years, there were no funds transferred to the “Unspent CSR Account” under subsection (6) of Section 135 of the Companies Act.
Furthermore, the balance in the Unspent CSR Account, as well as any amount spent in the financial year from this account, is also marked as “Not Applicable”.
This indicates that the company did not have any residual funds from their CSR allocations in these years. Additionally, there was no transfer of funds to any fund specified under Schedule VII as per the second proviso to subsection (5) of Section 135, which typically would be done if there were surplus CSR funds.
The report also notes that there is no amount remaining to be spent in succeeding financial years from these accounts, and no deficiency has been recorded.
TVS Motor Company’s reports show they’re efficient and precise in CSR spending. They use all their allocated funds within the financial year, avoiding any surplus or deficit. This shows great planning and execution in their CSR efforts.
Capital Assets and CSR Expenditure
In the context of Corporate Social Responsibility, capital assets refer to any significant physical assets such as buildings, machinery, or infrastructure that could be developed or acquired through CSR funds.
For TVS Motor Company, the report explicitly states that no capital assets have been created or acquired through the CSR amount spent in the financial year compliance with Section 135 of the Companies Act.
The company’s CSR funds mainly went to community development, education, health, and environmental projects. They chose not to invest in long-term physical assets. This strategy shows a focus on creating quick, visible impacts. These areas align with their CSR goals and strategy. This method highlights their dedication to solving urgent social and environmental problems effectively and promptly.
Compliance with Section 135 of the Companies Act
Regarding compliance with the mandate of spending 2% of the average net profit as per sub-section (5) of Section 135 of the Companies Act, the term “Not Applicable” has been used in TVS Motor Companyโs report.
This non-applicability indicates that the company has successfully met or exceeded the statutory requirement of allocating 2% of its average net profit towards CSR activities.
Therefore, there was no need to specify reasons for failing to meet this threshold, as the company effectively complied with the legal obligations.
This compliance demonstrates TVS Motor Company’s commitment to fulfilling its corporate social responsibilities. It shows a conscious effort to integrate social welfare into their business operations, reflecting positively on their corporate governance and ethical standards.
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Composition of the CSR Committee
The Corporate Social Responsibility (CSR) Committee plays a crucial role in guiding and overseeing the CSR activities and initiatives of an organization. The composition of the committee, including the number of meetings held and attended, provides insights into its functioning and commitment. Below is a detailed overview of the CSR Committee’s composition for the specified period:
Committee Members and Participation
1. Venu Srinivasan
- Designation: Chairman
- Meetings Held: 1
- Meetings Attended: 1
- Remarks: Demonstrated full participation, attending all the meetings held during the year.
2. R Gopalan
- Designation: Member
- Meetings Held: 1
- Meetings Attended: 1
- Remarks: Fully engaged in the committee’s activities, with attendance in all meetings.
3. T Kannan
- Designation: Member
- Meetings Held: Not Applicable
- Remarks: Appointed effective 28th July 2022. Given the timing of the appointment, participation in meetings held earlier in the year was not applicable.
4. H Lakshmanan
- Designation: Member
- Meetings Held: 1
- Meetings Attended: 1
- Remarks: Actively involved until the cessation of the role. Ceased as a Director / Member of the Committee effective 27th June 2022.
Summary of Committee Engagement
The CSR Committee’s overall engagement is commendable, with most members attending the meetings scheduled within their tenure. This active participation reflects the commitment of the members towards fulfilling their CSR obligations and responsibilities. The changes in the committee’s composition during the year, marked by the appointment and cessation of members, were managed without affecting the committee’s effectiveness.
Empowering Rural India
Srinivasan Services Trust’s 27-Year Journey of Impacting 1.6 Million Lives
Srinivasan Services Trust (SST), a vital player in the transformation of rural India, has been dedicated to empowering women in rural areas. Over the last 27 years, SST has made a significant impact, touching the lives of 1.6 million people across 2,500 villages nationwide.
This remarkable journey reflects a deep commitment to uplifting and transforming rural communities by focusing on the empowerment and advancement of women.
Through its various initiatives, SST has not only contributed to the betterment of individual lives but also fostered a holistic development in these rural regions, setting a strong example of positive change and sustainable development.
Source: Annaul Report 2022-23
(CopyRight@IndiaCSR)
