Business Law Term 3 : Batch 2015-17

Assignment
On

CSR activites of JK Tyres in Mysore

Submitted By

Anitha Narayanan
PGDM No: 15133
Section C

SDM Institute for Management Development

Mysore, Karnataka, India
March 2016

TABLE OF CONTENTS
INTRODUCTION...................................................................................................... 2
WHAT IS CSR?........................................................................................................ 3
BENEFITS OF CSR................................................................................................... 3
ABOUT JK TYRES.................................................................................................... 5
CSR INITATIVES BY THE COMPANY..........................................................................6
CSR FUNDING...................................................................................................... 10
CONCLUSION....................................................................................................... 12
REFERENCES........................................................................................................ 13

INTRODUCTION
Corporate Social Responsibility is not a new concept in India, however, the Ministry of
Corporate Affairs, Government of India has recently notified the Section 135 of the
Companies Act, 2013 along with Companies (Corporate Social Responsibility Policy) Rules,
2014 "hereinafter CSR Rules" and other notifications related thereto which makes it
mandatory (with effect from 1st April, 2014) for certain companies who fulfil the criteria to
comply with the provisions relevant to Corporate Social Responsibility.
The evolution of corporate social responsibility in India refers to changes over time in India
of the cultural norms of corporations' engagement of CSR. CSR refers to the way that
businesses are managed to bring about an overall positive impact on the communities,
cultures, societies and environments in which they operate. The fundamentals of CSR rest on
the fact that not only public policy but even corporates should be responsible enough to
address social issues. Thus companies should deal with the challenges and issues looked after
to a certain extent by the states.

WHAT IS CSR?
The term "Corporate Social Responsibility (CSR)" [1]can be referred as corporate initiative
to assess and take responsibility for the company's effects on the environment and impact on
social welfare. The term generally applies to companies efforts that go beyond what may be
required by regulators or environmental protection groups.
Corporate social responsibility may also be referred to as "corporate citizenship" and can
involve incurring short-term costs that do not provide an immediate financial benefit to the
company, but instead promote positive social and environmental change.
Moreover, while proposing the Corporate Social Responsibility Rules under Section 135 of
the Companies Act, 2013, the Chairman of the CSR Committee mentioned the Guiding
Principle as follows: "CSR is the process by which an organization thinks about and evolves
its relationships with stakeholders for the common good, and demonstrates its commitment in
this regard by adoption of appropriate business processes and strategies. Thus CSR is not
charity or mere donations. CSR is a way of conducting business, by which corporate entities
visibly contribute to the social good. Socially responsible companies do not limit themselves
to using resources to engage in activities that increase only their profits. They use CSR to
integrate economic, environmental and social objectives with the company's operations and
growth."
There are actually two different types of corporate social responsibility to consider. The first
one consists of corporations providing funding and resources for worthwhile social causes,
such as donating money or employee time to charities. For many people, this is the definition
used when thinking about corporate responsibility. However, another type of CSR involves
putting together a real plan to produce products or provide services that are in the best
interests of society. These include things like using safe materials in design and manufacture,
corporate environmental initiatives, and other factors such as job creation and economic
development.

BENEFITS OF CSR
1. Showing a True Commitment
The most successful corporate social responsibility programs integrate these two types
of CSR [1] together to show a true commitment to a cause. For example, a company
3

that uses sustainable materials in their products, donates financial resources to

environmental causes, and allows employees to take paid time off for volunteering at
environmental charities would be showing a true commitment to the environment that
goes beyond any single CSR initiative.
2. Social Media Visibility
One of the reasons that corporations should have visible CSR campaigns is due to the
importance and prevalence of social media. Corporations that want to protect their
brand understand that social media is an integral part of public perception. When a
corporation exercises social responsibility in the form of fundraising or setting up
employee giving programs, using social media to promote these actions helps to
create a positive branding environment and it is a great way to engage with your
audience on a deeper level that goes beyond your products or services.
3. Public Relations Benefits
Public relations is a potent tool for shaping consumer perception and building a
companys image. Corporations that actively promote their social responsibility
activities often take steps to publicize these efforts through the media. Getting the
word out about corporate donations, employee volunteer programs, or other CSR
initiatives is a powerful branding tool that can build publicity for you in both online
and print media.
4. Government Relations
Corporations that place an emphasis on corporate social responsibility typically have
an easier experience when dealing with politicians and government regulators. In
contrast, businesses that present a reckless disregard for social responsibility tend to
find themselves fending off various inquiries and probes, often brought on at the
insistence of public service organizations. The more positive the public perception is
that a corporation takes social responsibility seriously, the less likely it is that activist
groups will launch public campaigns and demand government inquiries against it.
5. Building a Positive Workplace Environment
Finally, one of the greatest benefits of promoting social responsibility in the
workplace is the positive environment you build for your employees. When
employees and management feel they are working for a company that has a true
conscience, they will likely be more enthusiastic and engaged in their jobs. This can
4

build a sense of community and teamwork which brings everyone together and leads
to happier, more productive employees.

ABOUT JK TYRES
JK Tyre & Industries Ltd is an Automotive Tyre, Tubes and flaps manufacturing
company based in Delhi, India. It is a part of J. K. Organisation group of Companies.
JK Organisation, the Rs 21,000-crore conglomerate with a workforce of over 40,000,
has business interests across the globe, spanning over 90 countries. The pioneering
spirit of J.K. Organisation which has been constantly striving to provide best products
to its consumers also felt the need to have a functionally effective education system
for the growing generations of India.
The company is the undisputed market leader in Truck/Bus radials in India, with 138
selling locations, 4,000 strong dealer network served by six plants in India and three
plants in JK Tornel, Mexico. With state-of-the-art modern production facilities in all 9
plants, total production capacity is almost 20 million tyres p.a. The Tyre business has
recently announced an investment of INR 1,430 crore to expand capacity for the
production of trucks, buses and car radial tyres at its plant near Chennai over the next
15 months.
JK Tyre has actively engaged with its customers with its continual mass media
presence. Through one of its print advertisements, JK Tyre states itself as The
Baadshah of radial tyres on Indian roads with more than 3 million truck and bus
radial tyres on Indian roads. It is Indias No. 1 truck and bus radial tyre manufacturer.
JK Tyres campaign 'Made for India and Made for You' is built around the advantage
of using JK truck and bus radial tyres. The Company has been actively promoting
various disciplines of motorsport in India and has invested over Rs. 100 crores
towards building infrastructure. The Racing and Karting programmes are the breeding
ground for the country's young motorsport talent. JK Tyre prodigies like Narain
Karthikeyan, Armaan Ebrahim and Karun Chandhok have done India proud in the
global arena.
JK Tyre is a leading corporate entity, which believes in excellence, innovation and
technology. It has continuously modernised and expanded its manufacturing facilities
to retain the edge in several markets across the world. The key area of thrust continues
5

to be in enlarging its offering to expand the customer base, providing them with better
quality of products and value added services.

CSR INITATIVES BY THE COMPANY

[1]JK Tyre is a green citizen and all its plants are ISO 14001-certified for
environmental conservation. It has taken many green initiatives and launched the
Soles with Souls programme, an eco-friendly initiative to use discarded tyres as a
lifestyle accessory, which has been acclaimed internationally. JK Tyre Mysore Plant is
a recipient of the Golden Peacock Environment Award.
They have implemented many programmes in order to enrich people in and around
our workplaces. It includes:
1. Education
JK organization has always believed in the importance of learning, appreciating the
fact that if adults are literate, the entire family will benefit leading to growth in the
community, the village and the country.
a) Adult Literacy Programme in Villages
They started Adult Literacy Programme initiative in 2005-06 with the intention to
convert illiterates into literates for better India looking at our countrys illiteracy
rate. So far they have made 3726 people literate in remote villages of Mysore
District where the illiteracy rate is high.
b) Adult Literacy Programme in Central Prison
They initiated Adult Literacy Classes in the prison in 2006 and about 2000
inmates have become literate. The classes are still going on for 2016. The
programme is unique because it is very useful for inmates to enrich their
knowledge and to understand the importance of education, besides enabling them
to rehabilitate themselves & join the main stream of the society.
After attending Adult Literacy Classes, the inmates understood the importance of
education to be successful in life and the impact that can make on ones life. By
Adult Literacy Programme inmates are able to read and write and able to perform
in skits. They are also able to perform simple arithmetic calculation in day to day
6

living (E.g. bank transaction, reading bus boards, reading expiry dates of
medicines etc) Moreover, their behaviour has changed. ALP classes are greatly
helping the personal lives of inmates as well. Adult Literacy Programme is really
helpful for betterment of the society.
2. Healthcare
The organisation strongly believe in human development priorities for both
education and health. They are essential for short term reconstruction and longterm sustainable development. We have been supporting a number of health
programmes for people living in and around Mysore. Some of our efforts in this
area are:
a) HIV / AIDS awareness Programme
They have corporate agreement with ILO. Based on the guidelines provided by
them , they are spreading awareness on HIV / AIDS among employees. They have
been conducting awareness programme for employees. Awarness is also spread by
organizing skits. So for they have covered 1628 employees.
b) Free Medical Camps
They are organizing the Free Medical camps in remote villages around Mysore
city. This has helped the poorest of the poor people to avail the free medical
check-ups followed by the distribution of free medicines. The response is
overwhelming. Camps have been held in villages like Doddayemmigoondi,
Doddahattigundi, Gopalpura, Gungralchatra etc. Till now 3833 people have
undergone general medical check-ups and took the medical benefits.
c) Blood Donation Camp
As part of Centenary Celebration of Late Lakshmipat Singhania, they have been
organizing Blood Donation Camps. Employees voluntarily donated blood to the
blood bank of KR Hospital, Mysore, and (Government Hospital) to help poor
patients. VP- Works (Unit Head) inaugurated the camp by being the first donor.
3. Environment initiatives
We have taken up Environment Management as a critical function. In order to
improve ecology, we have initiated following activities:
7

a) World Environment Day Celebration

They organize the World Environment Day (WED) celebration 5th June of every
year. On the eve of WED, they distribute Prizes for winners of Environment and
Health slogan competition.
b) Go Green Programme
Inauguration of mega trees plantation was taken up on World Environment Day
12-06.2012. So for over 5000 saplings have been planted in and around the
factory premises. A cheque of Rs 2,00,000 has been submitted to Hunsur Forest
Development Agency for development of saplings and distribution of the same to
farmers in the surrounding villages.
c) Vehicle emission test
They conduct Emission Test of Vehicles for employees and to the communities
every year.
d) Green Nurturing programme
Green Nurturing Program was organized by JK Tyre & Industries Ltd. on World
Environment Day at Govt High School & Government Lower Primary School,
Gungral Chatra, Mysore Taluk.
e) Eco friendly practices awareness programme
JK Tyre undertook extensive awareness programme to all employees and
communities impressing upon them the need to use Eco Friendly Ganesha to
avoid pollution of lakes & tanks by not using chemically made Ganeshas during
the last Ganesha Chaturthi celebrations.
4. Children Career Counselling Programme
[2]JK Tyre has been organizing children career counselling programmes for
Employees children & Rural students in and around of Mysore. Children need to be
guidance with respect to prepare method of study; preparation required to face public
examination, different career opportunities available in todays world. This will help
them to compete effectively with urban students. The career counselling sessions are

conducted by professional career Counsellor. So far 1630 students in remote villages

& 1092 company employee children benefited from it.
5. Other programmes
a) On the eve of Centenary Celebration of Late Lakshmipat Singhania, Dr.
Raghupati Singhania, our VC & MD launched following CSR activities:

Presentation of school bags with books and geometry box to 50 school

children from rural background.

Awarding of scholarship to 10 meritorious students from economically

challenged background.
Distribution of sewing machines to needy widows Distribution of tricycles
to physically challenged persons.

b) Drinking Water
They have provided drinking water facility to Gopalura a backward village in
Mysore Taluk.
c) Construction of Toilets
They have constructed toilets and provided sanitation facilities in a Government
school for students at Gopalpura.
d) Construction of Bus Shelters
They have constructed bus shelters in Mysore for the use of public.
e) Socio & Cultural Activities
JK strongly believes in socio culture activities to uplift the Karnataka culture.
With this objective in mind, they have been regularly sponsoring sports, socio
cultural activities programmes & to enhance company brand value.
f) Supporting NGO Activities
They have been providing the financial assistance to the NGOs to conduct their
activities for the betterment of the society.

CSR FUNDING
9

As per the regulations the company will set aside, for annual CSR activities, an
amount equal to 2% of the average net profits of the Company made during the
three immediately preceding financial years. Any unutilized CSR allocation fund
of a particular year, will be carried forward to the next financial year i.e. the CSR
budget will be non- lapsable in nature.
For the financial year 2014-2015,
Average Net Profit of the Company for last three financial years: Rs 9229 lakhs.
Prescribed CSR Expenditure: Rs 185 lakhs (2% of the net profit)
Total amount spent for financial year: Rs 207.55 lakhs

CONCLUSION

10

It is now recognized that poverty reduction and sustainable development will not
be achieved through government action alone. Policy makers are paying
increasing attention to the potential contribution of the private sector to such
policy objectives.
The concept of CSR is sometimes used as shorthand for businesses contribution
to sustainable development. A number of core development issues are already
central to the international CRS agenda. They include labour standards, human
rights, education, health, child labour, poverty reduction, conflict and
environmental impacts.
CSR is often associated with large companies and particularly with multinational
and global enterprises. The international CSR agenda is dominated by OECDbased NGOs, investors, consumers, business and business associations. CSR has
even on occasion attracted criticism for being insensitive to local priorities and the
basic livelihood needs of people in developing countries, particularly where CSR
codes of conduct are perceived as barriers to market access for some producers.
But the CSR agenda needs to be locally owned if it is to make a significant
contribution to local development priorities and it must be relevant to local
enterprises, whether large or small.
This means creating a space to explore the relationship between business and
society at a regional, national or local level and finding the appropriate language
for these discussions.
Companies like JK Tyres have been one of the foremost proponents of inclusive
growth and since inception it has been undertaking projects for overall
development and welfare of the society in areas pertaining to promoting
preventive healthcare, education, rural development, environmental sustainability,
conservation of natural resources, etc.

REFERENCES
11

[1] CSR Policy, [Online]. Available: http://finance.bih.nic.in/Documents/CSR-Policy.pdf.

[2] JK Tyres, [Online]. Available: http://www.jktyre.com/csr.aspx#.
[3] JK Tyres, [Online]. Available:
http://ciicsrgateway.org/user_resource/1439277741re_&_Industries_Ltd.pdf.

12