IIMB expert shares startling statistics at NASSCOM workshop
"Steel, Retail and Cement sectors are recording greater expenditure towards Corporate Social Responsibility (CSR) because they are rooted to the under-privileged society so spending on CSR is tactical for them," said Professor Sourav Mukherji, Associate Professor, IIM Bangalore at CSITM-NASSCOM Workshop on 'CSR: Rules, Legal Implications and Opportunities', on May 13, 2014.
According to the study conducted by his team while evaluating various Annual Reports of the companies that were researched, Professor Sourav Mukherji observed that the IT and Communication sector recorded the lowest CSR spending because "they neither employ the under-privileged nor have a clear notification on CSR spends from the Government".
As per the notified rules, the CSR spend excludes 'activities undertaken in pursuance of the normal course of business of the company'. Further, IT companies are mainly unaware of the tax treatment on CSR spends. Talking about CSR policy adopted by companies, he observed: "Strategic CSR Model is where sourcing happens in the industry with no extra work done and this is where the Cement companies are striking the right chord. The same cannot be adapted to IT domain, so there is a need for these companies, which file net profit of say Rs. 5 crore or more, to constitute a committee with three or more directors."
Explaining the need for CSR committees, Abhishek Hunbad, Co-Founder, NextGen PMS Pvt Ltd, said: "The committees will set up mechanisms to monitor the activities and govern the money-flow, project-flow and work-flow, look to deploy the CSR capital as a venture capitalist and not as philanthropy". Firstly, he urged the companies to decide the areas of intervention (education/ health care/ sanitation) and then work together with NASSCOM-directed NGOs to make a difference in the society.
"Incubation centers are also an intervention approved by Government. NextGen PMS was incubated at IIMB in 2009 and is now a billion dollar company", he said. It's the responsibility of each company to utilize 2% of its assets in CSR activities as there is no certified governing authority and NASSCOM road shows are a great way to educate industry on amendments to Schedule VII (CSR Rules) in the Companies Act 2013.
Earlier in the day, Mohan Reddy, Vice Chair, NASSCOM Executive Council, and Founder, Chairman & MD, Cyient Ltd., presented an industry overview and said: "With an intention to support communities and neighbourhoods, the Government reviewed the Companies Act and added the 2% CSR clause. Now, there are about 16,800 companies with over $2 billion under CSR funds. This huge amount needs to be diversified, so NASSCOM has earmarked initiatives that socially create an impact and also increase the company's and NASSCOM brand value."
Listing out the social initiatives, Dr. Ganesh Natarajan, Chair, NASSCOM Foundation, and Vice Chairman and CEO, Zensar Technologies, said: "The National digital Literacy Mission (NDLM) is our pet project and we invite corporate partners to set up digital literacy centres in villages; NASSCOM will adopt an NGO to run these centres".
Defining technology as a path breaker, he said NASSCOM believes digital literacy can create an inclusive and sustainable India. He urged the heads of companies not to cut 'fat cheques for NGOs', but to work alongside NASSCOM to create and engage employees in making the country a 'digitally empowered community'.
Santosh Jayaram, Technical Director, Sustainability and Climate Change at KPMG, India; Rajiv Badekar, Partner, KPMG, and Rita Soni, CEO, NASSCOM Foundation, spoke on tax treatment of CSR spends, what is recorded as CSR activities, committee formation, selection process of NGOs and more.
IIMB expert shares startling statistics at NASSCOM workshop
"Steel, Retail and Cement sectors are recording greater expenditure towards Corporate Social Responsibility (CSR) because they are rooted to the under-privileged society so spending on CSR is tactical for them," said Professor Sourav Mukherji, Associate Professor, IIM Bangalore at CSITM-NASSCOM Workshop on 'CSR: Rules, Legal Implications and Opportunities', on May 13, 2014.
According to the study conducted by his team while evaluating various Annual Reports of the companies that were researched, Professor Sourav Mukherji observed that the IT and Communication sector recorded the lowest CSR spending because "they neither employ the under-privileged nor have a clear notification on CSR spends from the Government".
As per the notified rules, the CSR spend excludes 'activities undertaken in pursuance of the normal course of business of the company'. Further, IT companies are mainly unaware of the tax treatment on CSR spends. Talking about CSR policy adopted by companies, he observed: "Strategic CSR Model is where sourcing happens in the industry with no extra work done and this is where the Cement companies are striking the right chord. The same cannot be adapted to IT domain, so there is a need for these companies, which file net profit of say Rs. 5 crore or more, to constitute a committee with three or more directors."
Explaining the need for CSR committees, Abhishek Hunbad, Co-Founder, NextGen PMS Pvt Ltd, said: "The committees will set up mechanisms to monitor the activities and govern the money-flow, project-flow and work-flow, look to deploy the CSR capital as a venture capitalist and not as philanthropy". Firstly, he urged the companies to decide the areas of intervention (education/ health care/ sanitation) and then work together with NASSCOM-directed NGOs to make a difference in the society.
"Incubation centers are also an intervention approved by Government. NextGen PMS was incubated at IIMB in 2009 and is now a billion dollar company", he said. It's the responsibility of each company to utilize 2% of its assets in CSR activities as there is no certified governing authority and NASSCOM road shows are a great way to educate industry on amendments to Schedule VII (CSR Rules) in the Companies Act 2013.
Earlier in the day, Mohan Reddy, Vice Chair, NASSCOM Executive Council, and Founder, Chairman & MD, Cyient Ltd., presented an industry overview and said: "With an intention to support communities and neighbourhoods, the Government reviewed the Companies Act and added the 2% CSR clause. Now, there are about 16,800 companies with over $2 billion under CSR funds. This huge amount needs to be diversified, so NASSCOM has earmarked initiatives that socially create an impact and also increase the company's and NASSCOM brand value."
Listing out the social initiatives, Dr. Ganesh Natarajan, Chair, NASSCOM Foundation, and Vice Chairman and CEO, Zensar Technologies, said: "The National digital Literacy Mission (NDLM) is our pet project and we invite corporate partners to set up digital literacy centres in villages; NASSCOM will adopt an NGO to run these centres".
Defining technology as a path breaker, he said NASSCOM believes digital literacy can create an inclusive and sustainable India. He urged the heads of companies not to cut 'fat cheques for NGOs', but to work alongside NASSCOM to create and engage employees in making the country a 'digitally empowered community'.
Santosh Jayaram, Technical Director, Sustainability and Climate Change at KPMG, India; Rajiv Badekar, Partner, KPMG, and Rita Soni, CEO, NASSCOM Foundation, spoke on tax treatment of CSR spends, what is recorded as CSR activities, committee formation, selection process of NGOs and more.