New Delhi, 13 September, 2020: Bajaj Steel Industries failed to allocate and spend more than 75 % of its CSR budget in the financial year 2019-20. The BSE listed company which made a profit of Rs 19 Crore in the same year, did also not hit the ground to undertake any project with its managerial expertise as recommended by the CSR rules.
The prescribed CSR budget for Bajaj Steel Industries, in the year 2019-20, stood at around Rs 13.5 lakh. However, the company did only spend a paltry sum of Rs 3 lakh during the entire year. As per the company, about Rs 10.5 lakh of CSR money remained unspent during the year.
The average net profit of the company over the last three years (preceding the financial year 2019-20) was Rs 6.73 Cr. Accordingly, the prescribed CSR amount calculated as 2 % of the average annual profit over last three years, was about Rs 13.5 lakh.
| Particulars | Amount (in Rs) |
| Average Net Profit of the company over last three financial year | 6,73,35,860 |
| Prescribed CSR Expenditure for the financial year 2019-20 | 13,46,717 |
| Total amount spent on CSR | 3,00,000 |
| Total unspent amount | 10,46,717 |
*Source: Company’s Annual Report 2019-20
Reason for not spending: Capital investment on the cost of CSR
Bajaj Steel Industries cited its huge capital investments in machineries and industrial sheds in its various units as the key reason for not meeting its CSR obligation.
"During the year 2019-20 to cater the increased demand & to enhance the productivity of your company the BSIL has done substantial capital investment,which includes capital investments in machineries and industrial sheds in our various units.The total amount of investment is about Rs. 20 crore rupees. Due to such huge amount on capital expenditure of the Company, BSIL was not able to spend entire amount of CSR on CSR activities," the company stated.
However, in the same financial year of 2019-20, the company also made a profit of Rs 19 Cr,as per the reports filed to the BSE.
A lackluster approach
The company’s CSR execution statements also indicate to a lack of spirit towards the company’s involvement in CSR activities.
For example, the Rs 3 lakh that company spent during the year was in the form of the contribution to Indian Red Cross Society towards promoting preventive health care and sanitation.Toward this CSR spent, the company did not need any active involvement in CSR implementation part. Further, the company took no other activity where its officials had to oversee and assess its CSR impact.
In the preceding year(2018-19) also, the company did not spend any amount on CSR there was no obligation as the profit over last three years was only Rs 32 lakh. Under the mandatory CSR provisions, a company needs to spend 2 % of the profit only when they have an average profit of Rs 5 Cr over last three years.
Though the company has constituted its CSR Committee, it seems to have hardly worked on its responsibility of formulating and monitoring the company’s CSR Policy.
The Nagpur-headquartered company produces machinery for all cotton ginning technologies. As per the company’s website, the company has been a pioneer in double roller cotton ginning technology with largest market share in the segment. The company has grown rapidly and now expanded its manufacturing, fabrication and assembly facilities manifold. Earlier the company was having only factory at Imambada, Nagpur, however now it is having four major manufacturing facilities.
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