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Corporate Social

Responsibility
2018-2019
MBA Programme
Lecture 9
CSR in India
CSR in India
Common Thematic Area 40%
60%

Rural
Education
Development
100%
88%

Livelihood CSR thru,


94% Health own
Care department
28% CSR thru’
or own Partnership
90%
Foundations with other
72% Companies
Environment
94%
Source : E&Y Study
Mindful, catalytic
participation of corporate Purpose of
India in development Section 135 &
CSR Rules

Opened new opportunities


for nation building
Section 135 and Its Characteristics

Requires qualifying companies to


spend a prescribed formula-based
amount on CSR

A “comply or explain” law


Companies Act, 2013: Section 135- Focus Area

Set up CSR process

Governance structure

Allocation of CSR budget mandatory for a stipulated


category of profit making companies
CSR Implementation Parameters As per the Act

CSR action: Set measurable


Partner with NGOs
programmatic outcomes

CSR Committee of the


Board: monitor the CSR Review CSR Policy
Policy
Section 135 : Eligibility of Companies
Apply to all Companies that have any one of the following
in any financial year
Net worth Net profit
500 crore or more • 5crore or more
($100 million or ($1 million or
more) more)

Turnover
• 1000crore or more
($200 million or
more)

An average of the previous three financial years’ profit before tax will be
considered for calculating the 2% for CSR
Section 135 : Requirements

Constitute a Corporate Social Responsibility


Committee of the Board

The Board's report should disclose the


composition of the CSR Committee

The Board should report the details about the


CSR policy developed

The Board should report the CSR initiatives


implemented by the company taken on during
a particular financial year
Section 135 : Roles & Responsibilities of the
Board
Appoint the CSR Committee through Board Resolution

Approve the CSR Policy of the Company

Disclose names of CSR Committee members, CSR Policy in the


Annual Report as well as on the website

Ensure CSR spend: Procure Utilization Certificates from Partnering


Organizations

Ensure CSR Monitoring Mechanism


Section 135 : Roles & Responsibilities of the CSR
Committee
Formulate & seek approval from
the Board for the CSR policy

Identify CSR activities for the


company

Monitoring of the policy and CSR


activities
Schedule VII : Thematic Areas

1. Eradicating hunger, poverty 2. Promotion of


and malnutrition, promoting education, special
health care, sanitation & safe education and
drinking water vocational skills

3. Gender Equality,
Women empowerment , 5.
4. Protection Benefits to
senior citizens and of National
economically backward armed forces
Heritage, art veterans,
groups and culture war widows
Schedule VII : Thematic Areas (contd)

6. Ensuring
environmental 7. Technology 8. Rural sports,
sustainability, ecological incubators Paralympic and
balance, wildlife & within academic Olympic sports
natural resources institutions
conservation

9. PM National Relief Fund and any other 10. Rural


funds setup by the Central Govt. for socio Development
economic development & welfare of projects
SC/ST/OBC
Section 135 : Implementation of CSR
Operationalizing Implementing
Project
the institutional Agencies
Developing a CSR Development –
mechanism – team (conducting due
Strategy Detailed Project
identification & diligence, if
Report (DPR)
capacity building required

Project approval – Finalizing


Clear identification insertion of the agreement with the Project
of CSR Budget approved projects implementing Implementation
in the policy agency

Documentation, Evaluation Preparation of


Monitoring (at (Concurrent, Final & Project impact reporting format
Board and Sub- preferably Third assessment and placement in
board level) Party) public domain
Section 135 : Activities not admissible as CSR
• Projects that benefits only employees of the
company & their families

• One of events like marathons -------

• Activities which are not taken up in a project mode

• Expenses incurred by companies for any Act


/statute of regulations

• Contribution of any amount directly or indirectly to


political party

• Activities undertaken by the company in pursuance


of its normal course of business
Reporting Template
1. 2. 3. 4. 5. 6. 7. 8.
Sr CSR project/ Sector in Projects/ Amount outlay Amount spent on Cumulative Amount
Progra-mmes
No. activity which the (budget) the programme / spend up to spent
1.Local
identified project is project/ project the reporting Direct
areas/
covered programme Subheads period or
others
wise 1.Direct through
1.Specify
Expenditure Implementing
agency*
on projects
the state/
district 2.Over heads

* Give details of Implementing Agency


Reporting template
 Signed

…………………………………………..
 (CEO/Managing Director/Director)

……………………………………
 (Chairman CSR Committee)

……………………………………
 (Person specified under clause (d) of sub-section (1) of section 380 of the Act)
(wherever applicable)