Free Press Journal

Smaller cos outshine bigger peers in CSR spending: Crisil


corporate governance

New Delhi – Small listed companies outpaced their bigger counterparts in spendings on corporate social responsibility in current fiscal so far taking the total amount spent to Rs 6,800 crore, a Crisil study said today.

As per the current provisions of Companies Law, certain class of profitable companies are required to shell out at least two per cent of their three-year annual average net profit towards CSR works.

According to the Crisil CSR Yearbook, in fiscal 2015, small listed firms spent relatively more on CSR than the biggies.

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As per the study, 53 per cent of companies with an annual sales turnover between Rs 100-500 crore spent 2 per cent or more on CSR.

This compares 50 per cent companies with a turnover between Rs 500-10,000 crore spending the same amount on CSR. Whereas only 31 per cent companies with turnover of more than Rs 10,000 crore spent 2 per cent or more on CSR.

As regards companies which spent 1.5 per cent or more, the study showed that spending was done by 62 per cent of the companies with an annual sale turnover between Rs 100-500 crore.

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Whereas 59 per cent of the companies with an annual turnover of Rs 500-10,000 crore and 47 per cent of companies with turnover of more than Rs 10,000 crore spent the same amount under CSR.

Crisil said as many as 1,300 companies, or 40 per cent of those listed on the BSE are required to formally spend and report on their CSR activity.

“Smaller companies were relatively more enthusiastic about spending on CSR activity compared with their larger counterparts in fiscal 2015. Clearly, they are not short on altruistic, society-building motivation. This also reflects a broad-basing of CSR activity in India Inc,” Crisil said.

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Sectors which got majority of the CSR funding include education and skills development, healthcare and sanitation, rural development projects and environment conservation.

Crisil said for the bigger companies, the challenge is the large size of their spending mandate so they need considerable time and effort to conceptualise and design processes to maximise outcomes.

“The trend will thus change by the time we revisit the numbers after the current fiscal and we expect most lagging large corporates to show traction in their CSR activity,” it added.