CSR default: Since 2014, Bajaj Steel continues to commit capital investment on CSR cost

New Delhi, 24 October 2020: While many Corporates and business leaders opine CSR to be viewed as opportunity rather than a compulsion, some corporates are literally treating it as a baggage that they carry with heavy heart!

Sample this:

Bajaj Steel Industries failed to spend close to 75 % of its CSR budget in the financial year 2019-20. A further investigation into its CSR activities reveals repeated default by the company on CSR.

Complete disregards to CSR rules?

As per Section 135 of the Companies Act, 2013, Every Company having a net worth of Rs 500 Crores or more, or turnover of Rs 1,000 Crores or more or net profit of Rs 5 Crores or more during immediately preceding financial year shall spend 2 % of their profit on CSR activities.

The Bajaj Steel Industries,however, never spent its prescribed CSR budget completely.In fact, the Bajaj Steel Industries reported any CSR spent only twice since the CSR provisions came into effect under the Companies Act 2013 in the year 2014.

Though the company’s average annual profit remained positive since 2014, its CSR track record turned for the worst.

In the last 6 years (2014-1920), its overall spent on CSR was only Rs 13 lakh whereas its prescribed budget was around Rs 73 lakh. It means that despite the mandatory provisions for CSR spent in place, the company spent less than 25 % of the prescribed CSR budget. See the table below:

Bajaj Steel Industries- CSR spent year after year

CSR Reporting Formality continue year after year

Though the company miserably failed to comply with the mandatory CSR spent, it continued to highlight its Corporate Social Responsibility Committee and CSR policy in its annual reports.

But, there also, the company copy-pasted the same reason year after year for not spending its CSR budget. It repeatedly took shield of "extreme tight liquidity position and committed capital investments" to justify its inability to spend on CSR.