Jindal Stainless Limited’s CSR Expenditure Stands at Zero in FY 2021-22
NEW DELHI (India CSR): Jindal Stainless Limited (JSL), a leading stainless steel producer in India, has spent Rs. Nil on CSR initiatives during the financial year 2021-2022. This is in accordance with the provisions of Section 135 of the Companies Act, 2013, which requires companies to spend at least 2% of their average net profit for the preceding three years on CSR activities.
In accordance with Section 135 of the Act, Jindal Stainless Limited is required to allocate a certain percentage of its average net profits over the preceding three financial years towards CSR initiatives. However, as reported, the company did not spend any amount towards CSR activities during the specified period. Both the current year (Rs. nil) and the previous year (Rs. nil) reported no expenditure, indicating that Jindal Stainless Limited has yet to utilize the CSR funds.
“Currently, the Company has been taking swift affirmative actions to mitigate the negative impact caused due to the COVID-19 pandemic. JSL has also been closely monitoring the external environment and optimizing operations to align with the market conditions.”, Company’s annual report said.
JSL Voluntarily Advances CSR Activities
“Since the profits of the Company calculated in terms of the provisions of Section 198 of the Act, were inadequate therefore the Company was not required to incur expenditure on CSR activities till the financial year 2021-22. However, being guided by the vision and philosophy of its Founder Late Shri O. P. Jindal, the Company has planned interventions in various fields including education & vocational training, integrated health care, livelihood & women empowerment, rural infrastructure development, environment sustainability, sports and the like, on a voluntary basis.”, the company said in a statement.
“Despite zero profits during the Covid period, the Hisar arm of JSL (which existed as JSHL then), continued to invest in CSR projects in the JSL plant location at Jajpur, Odisha, besides other locations.”, the statement said.
“Despite COVID-19-induced challenges, healthy cash flow generation by the Company has gone a long way in significantly reducing the overall debt. JSL aspires to further deleverage and maintain a healthier balance sheet. Additionally, the management actively benchmarks relevant operational parameters and ensures adequate level of liquidity is maintained for smooth operations.”, the report said.
While the company’s current CSR spending stands at zero, it is crucial to note that the legislation mandates a certain percentage of profits to be allocated towards CSR. Going forward, Jindal Stainless Limited will need to align its CSR activities and financial outlay to fulfill the statutory requirements.
JSL’s CSR Committee, which is chaired by Chairman and Managing Director Ratan Jindal, has recommended that the company does not spend any money on CSR activities in the current financial year as well. The committee has cited the following reasons for its recommendation:
- The company’s financial performance has been adversely impacted by the COVID-19 pandemic.
- The company is currently in the process of implementing a number of capital expenditure projects, which will require significant financial resources.
- The company is committed to undertaking CSR activities in a sustainable manner and does not want to compromise on the quality or impact of its CSR initiatives.
