CSR Mandate

India
Era of Command and Control"

5/23/16

PRESENTATION FLOW

CSR- EVOLUTION AND

UNDERSTANDING

CSR MANDATE

CSR FRAMEWORK

CSR- EVOLUTION
AND
UNDERSTANDING

CSR EVOLUTION IN INDIA

First Phase
Till 1850s

Culture, religion,
family values and
tradition

Second Phase
1900s to
1980s

Industrialization
had an influential
effect on CSR
Era of Command and Control"

Third Phase
Present

Integrated CSR
into a sustainable
business strategy

CSR is a way of conducting business, by which corporate

entities visibly contribute

CSR - UNDERSTANDING

Three Different
Understanding of CSR
Innovation,
Sustainable
business models

Compliance with
legislations

Contribute with
money and
knowledge

CSR AS
VALUE
CREATION
CSR AS
RISK
MANAGEMENT

CSR AS
PHILANTHROP
Y

Fundamental
strategic and
operational impact

Medium to High
Operational Cost

Little Strategic or
Operational Effect

CSR
MANDATE

CSR MANDATE COMPANY BILL 2013

Clause 135

of the Companies Bill (the CSR Clause)

requires a qualifying corporation to spend on CSR at

least

2 percent

of its average net profits made in the

preceding three financial years..

Bill is applicable to any company with...

A net worth of
rupees
500crore

A turnover of rupees
1000crore

A net profit of
rupees 5crore
or more in any fiscal
year

WHAT ACCOUNTS AS CSR?

Eradicating Hunger

Ensuring
Environmental
Sustainability

Promotion of
Education

Employment
Enhancing Vocational
Skills

Gender Equality and

Empowering Women

Social Business
Projects

Reducing child
mortality and
improving maternal
health

Contribution to the
Prime Ministers
National Relief Fund

Combating human
(IMV)immunodeficien
cy virus, other
diseases

Such other Matters as

may be prescribed

CSR MANDATE POSITIVE IMPACT

Business can contribute to equitable and
sustainable economicdevelopment..

ONE-THIRD
of the population is
illiterate

TWO-THIRD
lack access to proper
sanitation

MILLIONS OF
PEOPLE
still live on less than RS
100 a day.

CSR MANDATE NEGATIVE IMPACT

Indian companies still

equate CSR with

CORPORATE
PHILANTHROP
Y

Companies may treat

CHECK
THE BOX

it as a

exercise rather than

looking at ways to
doing social and
environmental good.

Companies will
comply by

CHANNELING
FUNDS to
community
organizations.

Effort to meet the spending obligations,

companies may not do the right

WHERE INDIAN COMPANY STANDS?

Comparative Analysis on how much Indian firms are spending
on CSR currently.
Company

Revenu
e

Avg
Profit
after
Tax

Actual
Spent - CSR

2% of
PAT

Indian Oil

442,459

7,783

83

156

Reliance
Industries

368,571

21,138

288

423

Tata Steel

135,978

3,895

146

78

TCS

48,894

8,935

51

179

Grasim
Industries

27,899

3,395

16

68

Cairn India

11,861

5,108

NA

102

HDFC Bank

27,606

4,108

NA

82

Oil India

17,215

2,988

50

60

Source: Forbes India magazine of 22 March, 20

INDIAS TOP 100

COMPANIES

5611 Crores
Actual Spent 1765 Crores
2% of PAT

CSR
FRAMEWORK

FRAMEWORK CSR
Aligned
with
Busines
s
Objecti
ves

Sustain
able

Complia
nce
with
Compa
ny Bill
Act

Result
Oriente
d

Scalabl
e

Effective
CSR

Brand
Visibility

Social
Capital

Partnership
s&
Relationship
s

Business
Opportuniti
es

Nation
Building

PROCEDURE TO COMPANY
Create
CSR Committee

Allocate
Two percent of
net profit

Develop

Corporate Social
Responsibility
Policy

Report
CSR Initiatives to
be Reported

*The two percent CSR spending needs to be computed as two percent of the average net profits made
by the company during every block of three years.