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FOREWORD
“Businesses need to go beyond the interest of their companies to the communities they serve”
– Ratan Tata
From inactive philanthropy to the incorporation of the stakeholders’ interest in the business
model, the Indian business sector practices various methods of discharging its social
responsibility. While a lot of human and economic energy is available for utilization in this area,
a suitable mechanism was required to channelize this energy. For which the Government,
included Corporate Social Responsibility in the newly enacted Companies Act, 2013.
I am pleased to share that Ekal, in association with Bhartiya Vitta Salahkar Samiti (BVSS) has
jointly conducted the present study on Corporate Social Responsibility (CSR). The theme of
the study is to compare, analyse and understand the behavior of CSR spent during last two
years, by top listed companies operating under Government, Family Owned Businesses
(FOBs) and Multi-National Companies (MNCs) tag with varied interest in manufacturing and
service sector. The study also covers the challenges faced by them and suggestions for better
& transparent implementation and presentation.
I hope that this joint study would give rich insight to all the stakeholders and create greater
awarenessaboutdifferentaspectsrelatingtoCSRtogetherwithsuggestionstothechallenges
faced by companies in India.
Dr. Subhash Chandra
Member, Rajya Sabha,
Chairman, Ekal Global
New Delhi
March 28, 2017
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CHAIRMAN’S MESSAGE
Provisions of Companies Act, 2013, relating to Corporate Social Responsibility (CSR) have
been used by the government not only to ensure sustainable development for companies, but
also to help and support under-privileged section of society living primarily in tribal and rural
Bharat.
It has been nearly three years since CSR was mandated and the behavior of spent under CSR
is a reality now. Bhartiya Vitta Salahkar Samiti (BVSS) has been addressing issues relating to
CSR by oraganising workshops, seminars and discussions. We at BVSS felt that a publication
on some critical and comparative study of CSR spent during Financial Year 2014-15 and
2015-16 may be beneficial to various stakeholders including Companies, Government, NPOs,
General Public and of course Professionals engaged with CSR.
BVSS entrusted this assignment to its senior professionals CA Anil Sharma and CA Sushil
Gupta, who have done an excellent job by putting their time and experience in bringing out
this publication and for that I on my behalf and on behalf of BVSS put on record deep gratitude
and appreciation for them.
BVSS is also thankful to Ekal Abhiyan for their valuable inputs in carrying out the present
endeavor.
The study is also suggesting few inputs for the regulators for improved implementation of
CSR provisions.
BVSS is hopeful that the publication shall serve the purpose and shall be a good reference
material as the professional update on the subject.
CA Subhash C. Aggarwal
Chairman, Advisory Board - BVSS
New Delhi
March 28, 2017
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PREFACE
Introduction of corporate social
responsibility as a part of corporate
legislation was a praiseworthy action. It
was expected that large portion of rural
population especially located in tribal and
remote areas, which hitherto could not taste
the fruits of economic development, would
be benefitted with these provisions.
Bhartiya Vitta Salahkar Samiti (BVSS), a
not- for-profit organization, run by finance
professionals, regularly conducts various
programs related to professional and
social issues. Based on specific studies and
workshops conducted, it provides inputs
to the governments and other respective
regulators.
Ekal Abhiyan is an integrated program for
rural development and its activities include
running Ekal Schools in more than 54,000
remotevillagesinvariouspartsofthecountry
and to propagate health consciousness and
sense of self- reliance in the rural folks.
Nearly 30 years of uninterrupted journey
of Ekal gave BVSS a prefect reason and
inspiration to take up the present Study
to understand the interface between the
corporate sector and various development
initiatives for marginalized people.
The Study highlights the pattern of spending
by various corporate models under CSR
initiatives over the last two years of its
implementation. The Study also aims to
suggest suitable amendments in relevant
lawsandrulestomakeCSRmoremeaningful,
transparent and objective.
We place on record our sincere thanks to
Hon’ble Shri Shyam Ji (Founder Ekal), CA
Bajrang Lal Bagra Ji (Ex-CMD, NALCO and
President, Central Executive Committee,
Ekal Abhiyan), Dr. Subhash Chandra Ji
(Hon'ble Member of Parliament, Chairman
Essel Gourp and Ekal Global), CA Subhash
Aggarwal Ji (Chairman SMC Group and
Chairman, Advisory Board-BVSS) and CA
Raj Kumar Agarwal ji (President BVSS) for
their inspiration and guidance.
We also wish to thank Adv. Imran Ahmed
Siddiqui for his hard work in bringing out this
Study.
In any publication there is always a scope
for further improvement. We would be
grateful to users to offer their suggestions /
comments for further refinement.
For Team BVSS
CA Sushil Gupta
CA Anil Sharma
New Delhi
March 28, 2017
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INTRODUCTION
Social Responsibility is not a new concept in
India. Our thousands of years old civilization
carries a resonance legacy delivering duties
and responsibilities at every sphere of
our life, be it family, friends or society as a
whole. Roots of social responsibility lie in
philanthropic activities such as giving money,
goods, services or time to the unfortunates,
either directly or by means of an organized
structure of a charitable trust, without
any expectation of some benefit in return.
Various practices prevalent in India, such as
DaaninHinduism,ZakatandFitrainMuslims,
Dasvand in Sikhism and Tethe in Christians
are explicit evidences. The basic aim of all has
been to help under-privileged. Hence, roots
of social responsibility are found in religious
belief and practices. Those who were unable
to serve society directly, but were able to
provide money and other material resources,
either established charitable institutions and
built Dharamshalas, Schools, Orphanages,
Homes for destitute and the like; and,
donated funds to run them. Some benevolent
individuals established endowments to
provide monetary help in perpetuity for
some charitable cause. Traditionally, most
forms of social obligations are concerned
with providing basic necessities such as food,
water, clothing, education, healthcare and
shelter.
An old belief is:
Adatt Danachha Bhavet Daridra
A vnÙk nkukPp Hkosr~ nfjnz A
Daridra Bhavachha Karuti Papam
A nfjnz HkoPp djksfr ikie A
Papam Prabhavat Narakam Prayanti
A ikie izHkkor ujde iz;kfUr A
Punaha Daridra Punarepa Papi
A iqu% nfjnz iqujsik ikih A
Which means if one does not donate, the
person is penniless and being in misery, he
performs evil deeds. By performing evil
deeds he ends up in here and after taking
rebirth, he once again ends up in the vicious
cycle of misery and evil deeds.
in Geeta, Chapter 17, shloka 20 defines the
saatvika daan (pure charity):
nkrO;fefr ;íkua nh;rs ^uqidkfj.ks A
ns'ks dkys p ik=ks p ríkua lkfÙoda Le`re AA
that giving is called saattvika (pure) which
is given with the intent that ‘I must give’, to
someone who can’t return the favor; and
given in the right place, time and to the
worthy/needy recipient.
ç[;kr lektlsoh LoxhZ; Jh ukukth ns'keq• us dgk
Fkk
¶eSa vius fy, ugha] viuksa ds fy, gw¡A
vkSj vius vFkkZr~] oks lc tks misf{kr gSa] oafpr gSaA¸
This message equally applies to corporate
citizens. Indian companies have had a
long tradition of being engaged in social
initiatives that have gone beyond meeting a
company’s immediate financial objectives.
Business organisation, have been making
decisions based not only on financial factors,
but also on the social and environmental
consequences, while meeting the interests](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-18-2048.jpg)
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accordance with the provisions of section
198.”
Schedule VII to the Companies Act, 2013
ACTIVITIES WHICH MAY BE INCLUDED
BY COMPANIES IN
THEIR CORPORATE SOCIAL
RESPONSIBILTY POLICIES
Activities relating to:-
1) Eradicating hunger, poverty and
malnutrition, promoting health care
including preventive Health care] and
sanitation [including contribution to
the Swach Bharat Kosh set-up by the
Central Government for the promotion
of Sanitation] and making available safe
drinking water;
2) Promoting education, including special
education and employment enhancing
vocation skills especially among children,
women, elderly, and the differently abled
and livelihood enhancement projects;
3) Promoting gender equality, empowering
women, setting up homes and hostels for
women and orphans; setting up old age
homes, day care centres and such other
facilities for senior citizens and measures
for reducing inequalities faced by socially
and economically backward groups;
4) Ensuring environmental sustainability,
ecological balance, protection of flora
and fauna, animal welfare, agro forestry,
conservation of natural resources
and maintaining quality of soil, air and
water[including contribution to the
Clean Ganga Fund set-up by the Central
Government for the rejuvenation of river
Ganga ];
5) Protection of national heritage, alt and
culture including restoration of buildings
and sites of historical importance
and works of art; setting up public
libraries; promotion and development of
traditional arts and handicrafts;
6) Measures for the benefit of armed
forces veterans, war widows and their
dependents;
7) Training to promote rural sports,
nationally recognised sports,
Paralympics sports and Olympic
sports;
8) Contribution to the Prime Minister's
National Relief Fund or any other fund
set up by the Central Government for
socio-economic development and relief
and welfare of the Scheduled Castes,
the Scheduled Tribes, other backward
classes, minorities and women;
9) Contributions or funds provided to
technology incubators located within
academicinstitutionswhichareapproved
by the Central Government;
10) Rural development projects.
11) Slum area Development *
*Explanation - For the purposes of this item,
the term ‘Slum area’ shall means any area
declared as such by the Central Government
or any State Government or any other
competent Authority under any law for the
time being in force.
Companies (Corporate Social
Responsibility Policy) Rules, 2014
In exercise of the powers conferred under
section 135 and sub-sections (1) and (2) of
section 469 of the Companies Act, 2013,
the Central Government hereby makes the
following rules, namely:-
Short title and commencement.
Rule 1: (1) These rules may be called the
Companies (Corporate Social Responsibility
Policy) Rules, 2014.](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-50-2048.jpg)
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of clause (a) of sub-section (1) of section 381
and section 198 of the Act.
(2) Every company which ceases to be a
company covered under subsection
(1) of section 135 of the Act for three
consecutive financial years shall not be
required to—
(a) Constitute a CSR Committee; and
(b) Comply with the provisions
contained in sub-sections (2) to (5)
of the said section, till such time it
meets the criteria specified in sub-
section (1) of section 135.
CSR Activities
Rule 4: (1) The CSR activities shall be
undertaken by the company, as per its stated
CSR Policy, as projects or programs or
activities (either new or ongoing), excluding
activities undertaken in pursuance of its
normal course of business.
(2) The Board of a company may decide to
undertake its CSR activities approved by
the CSR Committee, through
(a) a company established under section
8 of the Act or a registered trust or a
registered society, established by the
company, either singly or along with
any other company, or
(b) a company established under section
8 of the Act or a registered trust or
a registered society, established by
the Central Government or State
Governmentoranyentityestablished
under an Act of Parliament or a State
legislature :
Provided that- if, the Board of a company
decides to undertake its CSR activities
through a company established under
section 8 of the Act or a registered trust or a
registered society, other than those specified
in this sub-rule, such company or trust
or society shall have an established track
record of three years in undertaking similar
programs or projects; and the company has
specified the projects or programs to be
undertaken, the modalities of utilisation of
funds of such projects and programs and the
monitoring and reporting mechanism”
(3) A company may also collaborate with
other companies for undertaking
projects or programs or CSR activities in
such a manner that the CSR Committees
of respective companies are in a position
to report separately on such projects or
programs in accordance with these rules.
(4) Subject to provisions of sub-section (5) of
section 135 of the Act, the CSR projects
or programs or activities undertaken
in India only shall amount to CSR
Expenditure.
(5) The CSR projects or programs or
activities that benefit only the employees
of the company and their families shall
not be considered as CSR activities in
accordance with section 135 of the Act.
(6) Companies may build CSR capacities
of their own personnel as well as
those of their Implementing agencies
through Institutions with established
track records of at least three financial
years but such expenditure [including
expenditure on administrative
overheads] shall not exceed five per
cent of total CSR expenditure of the
company in one financial year.
(7) Contribution of any amount directly or
indirectly to any political party under
section 182 of the Act, shall not be
considered as CSR activity.
CSR Committees
Rule 5: (1) The companies mentioned in the](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-52-2048.jpg)
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General Circular No-21/2014 dated 18th
June, 2014
Clarifications with regard to provisions
of Corporate Social Responsibility under
section 135 of the Companies Act, 2013.
ThisMinistryhasreceivedseveralreferences
and representation from stakeholders
seekingclarificationsontheprovisionsunder
Section 135 of the Companies Act, 2013
(herein after referred as ‘the Act’) and the
Companies (Corporate Social Responsibility
Policy) Rules, 2014, as well as activities to
be undertaken as per Schedule VII of the
Companies Act, 2013. Clarifications with
respect to representations received in the
Ministry on Corporate Social Responsibility
(hereinafterreferredas(‘CSR’)areasunder:-
(i) The statutory provision and provisions of
CSR Rules, 2014, is to ensure that while
activities undertaken in pursuance of the
CSR policy must be relatable to Schedule
VII of the Companies Act 2013, the
entries in the said Schedule VII must be
interpreted liberally so as to capture the
essence of the subjects enumerated in
the said Schedule. The items enlisted in
the amended Schedule VII of the Act, are
broad-based and are intended to cover
a wide range of activities as illustratively
mentioned in the Annexure.
(ii) It is further clarified that CSR activities
should be undertaken by the companies
in project/ programme mode [as referred
in Rule 4 (1) of Companies CSR Rules,
2014].One-offeventssuchasmarathons/
awards/ charitable contribution/
advertisement/ sponsorships of TV
programmes etc. would not be qualified
as part of CSR expenditure.
(iii) Expenses incurred by companies for
the fulfilment of any Act/ Statute of
regulations (such as Labour Laws, Land
Acquisition Act etc.) would not count as
CSR expenditure under the Companies
Act.
(iv) Salaries paid by the companies to regular
CSR staff as well as to volunteers of the
companies (in proportion to company’s
time/hours spent specifically on CSR)
can be factored into CSR project cost as
part of the CSR expenditure.
(v) “Any financial year” referred under Sub-
Section (1) of Section 135 of the Act read
with Rule 3(2) of Companies CSR Rule,
2014, implies ‘any of the three preceding
financial years’.
(vi) ExpenditureincurredbyForeignHolding
Company for CSR activities in India
will qualify as CSR spend of the Indian
subsidiary if, the CSR expenditures are
routed through Indian subsidiaries and if
the Indian subsidiary is required to do so
as per section 135 of the Act.
(vii) ‘Registered Trust’ (as referred in Rule
4(2) of the Companies CSR Rules,
2014) would include Trusts registered
under Income Tax Act 1956, for those
States where registration of Trust is not
mandatory.
(viii) Contribution to Corpus of a Trust/
society/ section 8 companies etc. will
qualify as CSR expenditure as long as (a)
the Trust/ society/ section 8 companies
etc.iscreatedexclusivelyforundertaking
CSR activities or (b) where the corpus is
created exclusively for a purpose directly
relatabletoasubjectcoveredinSchedule
VII of the Act.](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-55-2048.jpg)
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SI. No. Additional items requested to be included in
Schedule VII or to be clarified as already being
covered under Schedule VII of the Act
Whether covered under Schedule VII of the Act
(ii) Protecting consumer’s health and safety,
sustainable consumption, consumer service,
support and complaint resolution.
(iii) Consumer protection activities.
(iv) Consumer Rights to be mandated.
(v) all consumer protection programs and
activities”onthesamelinesasRuralDevelopment,
Education etc.
5. a) Donations to IIM [A] for conservation of
buildings and renovation of classrooms
would qualify as “promoting education” and
hence eligible for compliance of companies
with Corporate Social Responsibility.
b) Donations to IIMA for conservation of
buildings and renovation of classrooms
would qualify as “protection of national
heritage, art and culture, including
restoration of buildings and sites of
historical importance” and hence eligible for
compliance of companies with CSR.
Conservation and renovation of school buildings
and classrooms relates to CSR activities under
Schedule VII as “promoting education”.
6. Non Academic Technopark TBI not located
within an academic Institution but approved
and supported by Department of Science and
Technology.
Schedule VII (ii) under “promoting education”,
if approved by Department of Science and
Technology.
7. Disaster Relief Disaster relief can cover wide range of activities
that can be appropriately shown under various
items listed in Schedule VII. For example,
(i) medical aid can be covered under ‘promoting
health care including preventive health care.’
(ii) food supply can be covered under eradicating
hunger, poverty and malnutrition.
(iii) supply of clean water can be covered under
‘sanitation and making available safe drinking
water’.
8. Trauma care around highways in case of road
accidents.
Under ‘health care’.
9. Clarity on rural development projects” Any project meant for the development of rural
India will be covered under this.
10. Supplementing of Govt. schemes like mid-day
meal by corporates through additional nutrition
would qualify under Schedule VII.
Yes. Under Schedule VII, item no. (i) under
‘poverty and malnutrition’.](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-57-2048.jpg)
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Annexure 2.2 (a)
Summary of CSR Expenditure as per Audited Financial Statements for
Financial Year 2014-15
A. MANUFACTURING SECTOR (CPSEs)
( R in crore)
S.
No.
Name of the Company Govt
Holding
%
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total
Spent
1 Oil Natural Gas Corporation
Limited (ONGC)
68.94 3,030.00 660.61 - 495.23 495.23 165.38
2 National Thermal Power
Corporation Limited (NTPC)
74.96 4,173.78 283.48 - 205.19 205.19 78.30
3 National Mineral Dev Corp Ltd
(NMDC Ltd.)
80 9,979.14 210.56 49.40 139.05 188.45 21.91
4 Bharat Heavy Electricals Ltd
(BHEL)
63.06 8,222.33 164.45 84.49 18.02 102.51 62.94
5 Gas Authority of India Ltd
(GAIL)
56.11 5,933.37 118.67 - 17.15 17.15 77.31
(Balance
provided
for)
Sub Total (A) 1,338.62 1,437.77 133.89 874.64 1,008.53 328.53
B. SERVICE / TRADING SECTOR (CPSEs)
( R in crore)
S.
No.
Name of the Company Govt
Holding
%
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total
Spent
1 Power Finance Corporation
Limited (PFC)
72.8 5,874.47 117.49 2.77 48.92 51.69 65.81
2 Power Grid Corporation of
India Limited
57.9 5,525.52 110.51 4.10 43.32 47.42 63.09
3 Rural Electrification
Corporation Limited
65.64 5,162.24 103.25 0.02 46.02 46.04 57.21
4 Oil India Ltd (OIL) 67.64 4,909.38 98.19 72.79 60.52 133.31 -
5 Container Corporation of India
Ltd (CONCOR)
61.8 1,226.00 26.90 1.11 19.45 20.56 5.69
Sub Total (B) 22,697.61 456.34 80.79 218.23 299.02 191.80
Grand Total [(A)+(B)] 94,036.23 1,894.11 214.68 1,092.87 1,307.55 520.33](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-77-2048.jpg)
![64
Annexure 2.2 (b)
Summary of CSR Expenditure as per Audited Financial Statements for
Financial Year 2015-16
A. MANUFACTURING SECTOR (CPSEs)
( R in crore)
S.
No.
Name of the Company Govt
Holding
%
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
(Including
L/Y spent,
if any)*
1 Oil Natural Gas Corporation
Limited (ONGC)
68.94 29,684.80 593.69 16.49 402.57 419.06 172.70
2 National Thermal Power
Corporation Limited (NTPC)
74.96 13,567.43 271.35 252.69 239.12 491.81 -
3 National Mineral Dev Corp Ltd
(NMDC Ltd.)
80 9,664.05 193.28 104.04 106.05 210.09 -
4 Indian Oil Corporation Ltd
(IOCL)
58.57 7,075.00 141.50 101.60 55.08 156.68 4.43
5 Bharat Petroleum Corporation
Limited (BPCL)
55.79 5,629.89 112.60 25.45 70.13 95.58 17.02
Sub Total (A) 65,621.17 1,312.42 500.27 872.95 1,373.22 194.15
B. SERVICE / TRADING SECTOR (CPSEs)
( R in crore)
S.
No.
Name of the Company Govt
Holding
%
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
(Including
L/Y spent,
if any)*
1 Power Finance Corporation
Limited (PFC)
72.8 7,289.31 145.79 - 195.52 195.52 -
2 Rural Electrification
Corporation Limited
65.64 6,372.65 127.45 0.02 128.18 128.20 -
3 Power Grid Corporation of
India Limited
57.9 6,089.70 121.79 19.35 96.44 115.79 6.01
4 Oil India Limited 67.64 4,415.73 88.31 48.85 43.36 92.21 -
5 Container Corporation of India
Ltd (CONCOR)
61.8 1,263.59 25.27 - 30.96 30.96 -
Sub Total (B) 25,430.98 508.61 68.22 494.46 562.68 6.01
Grand Total [(A)+(B)] 91,052.15 1,821.03 568.49 1,367.41 1,935.90 200.16
* Bifurcation of yearly spent not available. The figure may include amount pertaining to previous year also.](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-78-2048.jpg)
![65
Annexure 2.2 (c)
Summary of CSR Expenditure as per Audited Financial Statements for
Financial Year 2014-15
A. MANUFACTURING SECTOR (FOBs)
( R in crore)
S.
No.
Name of the Company Promoters'
Holding %
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
1 Reliance Industries Ltd 45.24 26,648.00 532.96 25.30 735.28 760.58 -
2 Tata Steel 31.35 8,412.82 168.26 171.46 - 171.46 -
3 Bajaj Auto Ltd 49.24 4,316.49 86.33 42.91 - 42.91 43.42
4 Mahindra Mahindra Ltd. 25.55 4,151.74 83.03 10.37 72.87 83.24 -
5 UltraTech Cement Limited 61.69 3,076.00 61.51 44.46 - 44.46 17.05
Sub Total (A) 46,605.05 932.09 294.50 808.15 1,102.65 60.47
B. SERVICE / TRADING SECTOR (FOBs)
( R in crore)
S.
No.
Name of the Company Promoters'
Holding %
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total
Spent
1 Tata Consultancy Services Ltd 73.89 14,250.00 285.00 60.90 157.50 218.40 66.00
2 Bharti Airtel Ltd 43.72 6,998.60 140.00 - 27.38 27.38 98.9
(Balance
provided
for)
3 Wipro Ltd 73.39 6,415.40 128.30 - 132.70 132.70 -
4 HCL Technologies Limited 45.57 4,499.27 89.99 - 7.17 7.17 83.83
5 Kotak Mahindra Bank Limited 40.02 1,959.79 39.20 - 8.59 8.59 Balance
provided
for
Sub Total (B) 34,123.06 682.49 60.90 333.34 394.24 149.83
Grand Total [(A)+(B)] 80,728.11 1,614.58 355.40 1,141.49 1,496.89 210.30](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-79-2048.jpg)
![66
Annexure 2.2 (d)
Summary of CSR Expenditure as per Audited Financial Statements for
Financial Year 2015-16
A. MANUFACTURING SECTOR (CPSEs)
( R in crore)
S.
No.
Name of the Company Promoters'
Holding %
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
(Including
L/Y spent,
if any)*
1 Reliance Industries Ltd 45.24 27,889.00 557.78 - 651.57 651.57 -
2 Tata Steel 31.35 7,518.00 150.00 99.87 104.60 204.47 -
3 Bajaj Auto Ltd 49.24 4,323.05 86.46 - 86.72 86.72 -
4 Mahindra Mahindra Ltd. 25.55 4,247.45 84.95 7.68 78.24 85.92 -
5 UltraTech Cement Limited 61.69 2,891.00 57.82 50.89 - 50.89 6.93
Sub Total (A) 46,868.50 937.01 158.44 921.13 1,079.57 6.93
B. SERVICE / TRADING SECTOR (FOBs)
( R in crore)
S.
No.
Name of the Company Promoters'
Holding %
Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
(Including
L/Y spent,
if any)*
1 Tata Consultancy Services Ltd 73.89 17,994.00 360.00 1.45 292.78 294.23 66.00
2 Wipro Ltd 73.39 7,800.20 156.00 - 159.82 159.82 -
3 HCL Technologies Limited 45.57 6,106.44 122.13 - 12.37 12.37 111.61
4 Bharti Airtel Ltd 43.72 9,450.20 189.00 4.33 39.61 43.94 135.53
(Balance
provided
for)
5 Kotak Mahindra Bank Limited 40.02 2,366.37 47.33 - 11.10 11.10 36.23
Sub Total (B) 43,717.21 874.46 5.78 515.68 521.46 213.84
Grand Total [(A)+(B)] 90,585.71 1,811.47 164.22 1,436.81 1,601.03 220.77
* Bifurcation of yearly spent not available. The figure may include amount pertaining to previous year also.](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-80-2048.jpg)
![67
Annexure 2.2 (e)
Summary of CSR Expenditure as per Audited Financial Statements for
Financial Year 2014-15
A. MANUFACTURING SECTOR (MNCs)
( R in crore)
S.
No.
Name of the Company FDI % Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
1 ITC Ltd. 51.64 10,646.11 212.92 0.01 214.05 214.06 -
2 Cairn India Ltd 65.27 6,489.82 129.80 62.42 7.94 70.36 59.44
3 Larsen Toubro Limited 25.55 5,310.29 106.21 59.39 17.15 76.54 29.67
4 Hindustan Unilever Limited 61.69 3,990.93 79.82 54.85 27.50 82.35 -
5 Maruti Suzuki India Limited 80.29 3,269.10 65.40 75.44 3.02 78.46 -
Sub Total (A) 29,706.25 594.15 252.11 269.66 521.77 89.11
B. SERVICE / TRADING SECTOR (MNCs)
( R in crore)
S.
No.
Name of the Company FDI % Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
1 HDFC Bank Ltd 45.24 12,385.00 248.00 9.98 117.30 127.28 53.19
(Balance
provided
for)
2 Infosys Ltd 31.35 12,133.00 243.00 - 243.00 243.00 3.46
3 Indiabulls Housing Finance Ltd 61.69 1,159.97 23.20 - 4.35 4.35 Balance
provided
for
4 Zee Entertainment Enterprises
Ltd
68.17 965.80 19.34 - 16.84 16.84 2.50
5 Blue Dart Express Ltd 82.99 193.80 3.88 0.33 3.69 4.02 -
Sub Total (B) 26,837.57 537.42 10.31 385.18 395.49 5.96
Grand Total [(A)+(B)] 56,543.82 1,131.57 262.42 654.84 917.26 95.07](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-81-2048.jpg)
![68
Annexure 2.2 (f)
Summary of CSR Expenditure as per Audited Financial Statements for
Financial Year 2015-16
A. MANUFACTURING SECTOR (MNCs)
( R in crore)
S.
No.
Name of the Company FDI % Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
(Including
L/Y spent,
if any)*
1 ITC Ltd. 51.64 12,338.22 246.76 - 247.50 247.50 -
2 Cairn India Ltd 65.27 5,360.30 107.21 51.50 - 51.50 55.71
3 Larsen Toubro Limited 25.55 5,073.00 101.46 38.42 81.47 119.89 -
4 Hindustan Unilever Limited 61.69 4,597.07 91.94 62.81 29.31 92.12 -
5 Maruti Suzuki India Limited 80.29 3,269.10 65.40 72.84 5.62 78.46 -
Sub Total (A) 0,637.69 612.77 225.57 363.90 589.47 55.71
B. SERVICE / TRADING SECTOR (MNCs)
( R in crore)
S.
No.
Name of the Company FDI % Average
Net Profit
Prescribed
spent for
CSR
Amount actually spent Amount
unspent
Direct Through
Implementation
Agencies
Total Spent
(Including
L/Y spent,
if any)*
1 HDFC Bank Ltd 45.24 12,385.00 248.00 9.98 117.30 127.28 53.19
(Balance
provided
for)
2 Infosys Ltd 31.35 12,800.00 256.01 83.24 119.06 202.30 53.71
3 Indiabulls Housing Finance Ltd 51.79 1,591.05 31.82 - 10.53 10.53 Balance
provided
for
4 Zee Entertainment Enterprises Ltd 68.17 1,107.10 22.14 - 22.83 22.83 1.80
5 Blue Dart Express Ltd 82.99 202.22 4.05 - - - 1.01
(Balance
provided
for)
Sub Total (B) 8,085.37 562.02 93.22 269.72 362.94 55.51
Grand Total [(A)+(B)] 8,723.06 1,174.79 18.79 633.62 952.41 111.22
* Bifurcation of yearly spent not available. The figure may include amount pertaining to previous year also.](https://image.slidesharecdn.com/csr-astudybybvss-200426191634/75/CSR-Activities-in-India-82-2048.jpg)
Uploaded byBhartiya Vitta Salahkar Samiti - BVSSOnline
CSR Activities in India
This document provides a summary of a study conducted by Bhartiya Vitta Salahkar Samiti (BVSS) on Corporate Social Responsibility (CSR) activities in India from 2014-2016. The study analyzed spending patterns of top listed companies from government, family-owned businesses, and multinational companies in manufacturing and services. It found varied approaches to CSR spending between these groups. The study also identified challenges faced by companies and provides suggestions to improve transparency and effectiveness of CSR implementation. The document acknowledges contributions from Ekal Abhiyan, an organization working on rural development, in conducting this study on the interface between corporations and social development initiatives.
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CSR Activities in India
- 1. STUDY FOR EKALABHIYAN BY BHARTIYA VITTA SALAHKARSAMITI (BVSS) CSR Activities in India Design&PrintedbyVIBAPRESSPVT.LTD.-9810049515 CSRACTIVITIESININDIA-ANALYSISANDTRENDS ANALYSIS AND TRENDS
- 2. DISCLAIMER This publication hasbeen compiled and summarized from information available in official documents, circulars, other publically available information and websites of the Government of India, Corporate Houses and NGOs. This Study is intended to serve as a guide to all users and does not purport to be a legal document. In case of any variation between what has been stated in this Study and the relevant Act, Rules etc., the latter shall prevail. This publication is for information purposes only. Due care has been taken during the compilation of this publication to ensure that the information is current and accurate to the best of our knowledge and belief. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without first obtaining written prior permission of EkalAbhiyan. Please send the e-feedback on: [email protected] ,dy xhr fuekZ.kksa ds ikou ;qx esa ge pfj=k fuekZ.k u Hkwysa LokFkZ lk/uk dh vka/h esa olq/k dk dY;k.k u HkwysaA ekuk vxe vxk/ flU/q gS la?k"kkZs dk ikj ugha gSA fdUrq Mwcuk e>/kjksa esa lkgl dks Lohdkj ugha gSA tfVy leL;k lqy>kus dks uwru vuqla/ku u HkwysaAA 'khy fou; vkn'kZ Js"Brk rkj fcuk >adkj ugha gSA f'k{kk D;k Loj lk/ ldsxh ;fn uSfrd vk/kj ugha gSA dhfrZ dkSeqnh dh xfjek esa laLÑfr dk lEeku u HkwysaAA vkfo"dkjksa dh Økafr;ksa esa ;fn ekuo dk I;kj ugha gSA l`tughu foKku O;FkZ gS çk.kh dk midkj ugha gSA HkkSfrdrk ds mRFkkuksa esa thou dk mRFkku u HkwysaAA
- 3. i FOREWORD “Businesses need togo beyond the interest of their companies to the communities they serve” – Ratan Tata From inactive philanthropy to the incorporation of the stakeholders’ interest in the business model, the Indian business sector practices various methods of discharging its social responsibility. While a lot of human and economic energy is available for utilization in this area, a suitable mechanism was required to channelize this energy. For which the Government, included Corporate Social Responsibility in the newly enacted Companies Act, 2013. I am pleased to share that Ekal, in association with Bhartiya Vitta Salahkar Samiti (BVSS) has jointly conducted the present study on Corporate Social Responsibility (CSR). The theme of the study is to compare, analyse and understand the behavior of CSR spent during last two years, by top listed companies operating under Government, Family Owned Businesses (FOBs) and Multi-National Companies (MNCs) tag with varied interest in manufacturing and service sector. The study also covers the challenges faced by them and suggestions for better & transparent implementation and presentation. I hope that this joint study would give rich insight to all the stakeholders and create greater awarenessaboutdifferentaspectsrelatingtoCSRtogetherwithsuggestionstothechallenges faced by companies in India. Dr. Subhash Chandra Member, Rajya Sabha, Chairman, Ekal Global New Delhi March 28, 2017 uo lEor~ üú÷þ] pS=k] çfrink
- 5. iii CHAIRMAN’S MESSAGE Provisions ofCompanies Act, 2013, relating to Corporate Social Responsibility (CSR) have been used by the government not only to ensure sustainable development for companies, but also to help and support under-privileged section of society living primarily in tribal and rural Bharat. It has been nearly three years since CSR was mandated and the behavior of spent under CSR is a reality now. Bhartiya Vitta Salahkar Samiti (BVSS) has been addressing issues relating to CSR by oraganising workshops, seminars and discussions. We at BVSS felt that a publication on some critical and comparative study of CSR spent during Financial Year 2014-15 and 2015-16 may be beneficial to various stakeholders including Companies, Government, NPOs, General Public and of course Professionals engaged with CSR. BVSS entrusted this assignment to its senior professionals CA Anil Sharma and CA Sushil Gupta, who have done an excellent job by putting their time and experience in bringing out this publication and for that I on my behalf and on behalf of BVSS put on record deep gratitude and appreciation for them. BVSS is also thankful to Ekal Abhiyan for their valuable inputs in carrying out the present endeavor. The study is also suggesting few inputs for the regulators for improved implementation of CSR provisions. BVSS is hopeful that the publication shall serve the purpose and shall be a good reference material as the professional update on the subject. CA Subhash C. Aggarwal Chairman, Advisory Board - BVSS New Delhi March 28, 2017 uo lEor~ üú÷þ] pS=k] çfrink
- 7. v EKAL ABHIYAN Bringing happinessto tribal and rural communities through education The heart touching story began in 1983-84 when four young men, all in their prime stage of career decided to give up their lucrative jobs and render their lives in the service of Ma Bharti. The clarion call was given to promising youth by eminent social activist late Shri Bhaurao Deshmukh to serve in remoteareasofthecountry.Thenationalistic ideals and burning patriotism became the motivating force, and the firm decision was taken by Shri Ashok Rai (Bhagat), Dr. Mahesh Sharma both alumni from BHU Varanasi, Dr. Rajneesh Arora, IIT Delhi and Late Dr. Rakesh Popli, nuclear scientist from USA to work in remote tribal areas of Jharkhand. Their initial work in the field of Education and Development resulted into the establishment of the first 60 Ekal Schools in Ratanpur Tundi, near Dhanbad (1989-90) by late Shri Madan Lal Agrawala who owned coalminesthere.InthemeantimeShriShyam Gupt (Gold-medallist in M.Sc. Physics) a life devotee pracharak and social activist was already involved in educational work in tribal areas of Odisha. He took the reins of Ekal Vidyalaya and through his social genius and farsightedness, he converted Ekal Schools into an action oriented holistic Model of Social change and Development; a powerful Nation Building tool. Shri Shyamjee infused the spiritual energy in Ekal and made it a People’s Movement, a worldwide Abhiyan. “Brilliance & Devotion of Ekal Pioneers” At one hand late Shri Agarwala called upon hisindustrialist friendlate Shri P.DChitlangia to join him in Kolkata. And Kolkata became the center for urban involvement in Ekal. As a result Friends of Tribals Society (FTS) was establishedinKolkatain1989.ShriShyamjee by sheer magic of his brilliance, divinity and devotion invoked thousands of Rural/Tribal/ Urban youth to come forward and join Ekal as volunteers. There was no dearth of work force at ground. Many business magnets joined Ekal thereafter on his call. The jewel in the crown of Ekal, Dr. Subhash Chandra as chairperson of Ekal Global gave tremendous push to industrialists, thinkers and pioneers around the world to join this Nation Building Movement.
- 8. vi “Ekal Abhiyan asa Model for Social Change” A great vision for integrated and holistic development of Rural/Tribal Bharat emerged in the form of Ekal Vidyalaya Movement which gradually got transformed into “Ekal Abhiyan”, which is involved in spreading the light of Education with an aim to reach over one lakh remote villages of India. This has been proved by the statistics of more than 54,000 Ekal schools running in inaccessible areas of Bharat with the support of more than 50,000 donors both national and international with more than 54,000 Acharyas (Teachers), 6,200 full time volunteers and local supporters from Gram Samiti to Urban Samities running into more than 5 lakh, all dedicating themselves for Ekal’s cause; created a history of 28 years of unique journey of Human endeavour. The Mission and the Model of Ekal TheMissionofEkalMovementisempowering India through development of Rural and Tribal Villages of Country by imparting functional Education consisting of literacy, Healthcare, Economic Development, Ethics and Values, to the communities. PanchmukhiShikshamodelofEkaltoachieve 8 goals for complete social change is: 1. f'kf{kr xk¡o – Educated village 2. LoLFk xk¡o – Healthy village 3. LokoyEch xk¡o – Self-reliant village 4. tkx:d xk¡o – Aware village 5. O;lu eqDr xk¡o – Liquor free village 6. laxfBr xk¡o – Organized village 7. lqjf{kr xk¡o – Safe & secure village 8. lejl xk¡o – Socially harmonious village From Laddakh to Kerela and Arunachal to Gujarat, Ekal stands for education, health, wealth, security and social harmony of villages of Bharat. The partner organizations of Ekal Abhiyan Friends of Tribal Society (FTS), Bharat Lok Shiksha Parishad (BLSP), Ekal Vidyalaya Foundation of India (EVFI), Vanvasi Raksha Parivar Foundation (VRPF), Ekal Sansthan (EKS), Arogya Foundation of India (AFI), Ekal Gramothan Foundation (EGF), Ekal Gram Sanghathan (EGS), all together made a magnanimous human chain of volunteers & supporters in and around Bharat and the world to empower rural & tribal Bharat that is India.
- 9. vii BHARTIYA VITTA SALAHKARSAMITI BVSS is a voluntary body of Chartered Accountants, Cost Accountants, Company Secretaries and allied professionals from industry and in practice with an endeavour to work towards nation building by following the ideology of Antyodaya since 1999. BVSS currently has more than 1000 professionals in Delhi and NCR. VISION AND MISSION STATEMENT 1. To unite financial consultants • By organising programmes, seminars and workshops relating to professionals and socio economic topics. • By providing a platform and voice to financial consultants in making efforts for nation building. 2. To evolve economic models for India • To develop economic model for India based on ‘Antyodaya’ and ‘Integral humanism’ concepts. • To discuss and critically analyse various economic bills introduced in public domain. • To take up cause for professional fraternity. • To interact with regulatory and policy agencies and bodies. 3. Promoting Indian culture PAST ACTIVITIES 1. Towards uniting financial consultants (i) Regular Monthly meetings are held to discuss topics of professional interest and providing platform for active interactions amongst members. (ii) Organised seminars and workshops on various professional topics namely: o International Trade Laws o GST, Service Tax, VAT, Income Tax and Audits o Accounting Standards o FEMA for small and medium practitioners o Impact of exchange fluctuation in Indian Economy o Organise Seminars through Video Teleconferencing at Reliance Web
- 10. viii Centres connecting 15cities in various states of the country 2. Towards evolving economic models for India (i) Organised a talk on ‘Economic Growth - The Way Forward’ – addressed by then Chief Minister of Gujrat, Shri Narendra Modi Ji, Hon’ble Prime Minster of India (ii) Organised a program ‘Relevance of Transparency in Democracy’ – addressed by Transparency International Convenor, Admiral Tahiliani and Shri Jag Mohan, Former Governor, J&K (iii) Organised Budget programmes with Delhi University, PHD Chamber of Commerce, Delhi Stock Exchange etc. (iv) The Economic model of China addressed by Shri Yashwant Sinha ji, Former Union Minister (v) Seminar on the Economics of Terrorism organised in NOIDA and addressed by Shri Indresh Kumar and Maulana Abass Ali (vi) Organised seminar on Relevance of Corporate Governance and Satyam Fiasco (vii) Organised seminar on Encountering the Menace of Money Laundering and Tax Havens presided by Hon’ble Justice Mool Chand Garg (viii)Organised unique seminar on Corporate Sustainability addressed by ICAI President, ICSI Vice President and ICWAI Vice President and was presided by Accountant General of Delhi Shri Rajvir Singh (ix) Posted comments on Real Estate (Regulation and Development) Bill, 2011 (x) Interactive seminar on Insolvency and Bankruptcy Code, 2016 addressed by Dr. M.S. Sahoo, Chairman, Insolvency and Bankruptcy Board of India 3. Promoting Indian Culture • Program in the series of Pujya Sri Guruji’s ‘Janam Shatabdi Samaroh’ addressed by Sri Sri Ravi Shankar Ji • Program in collaboration with IIT, Delhi ‘Yog Dwara Jeevan mein Sampoornata’ – Lecture by Baba Ramdev • Program on ‘Importance of Gita in Daily Life’ – Lecture delivered by Swami Nikhilanand of the Chinmaya Mission • Program on the topic ‘Marriage- Bond or Bondage’ • Program on the topic ‘Pranic Urja’ delivered by Dr. Surakshi Goswami of the Speaking Tree (Time of India)
- 11. ix PREFACE Introduction of corporatesocial responsibility as a part of corporate legislation was a praiseworthy action. It was expected that large portion of rural population especially located in tribal and remote areas, which hitherto could not taste the fruits of economic development, would be benefitted with these provisions. Bhartiya Vitta Salahkar Samiti (BVSS), a not- for-profit organization, run by finance professionals, regularly conducts various programs related to professional and social issues. Based on specific studies and workshops conducted, it provides inputs to the governments and other respective regulators. Ekal Abhiyan is an integrated program for rural development and its activities include running Ekal Schools in more than 54,000 remotevillagesinvariouspartsofthecountry and to propagate health consciousness and sense of self- reliance in the rural folks. Nearly 30 years of uninterrupted journey of Ekal gave BVSS a prefect reason and inspiration to take up the present Study to understand the interface between the corporate sector and various development initiatives for marginalized people. The Study highlights the pattern of spending by various corporate models under CSR initiatives over the last two years of its implementation. The Study also aims to suggest suitable amendments in relevant lawsandrulestomakeCSRmoremeaningful, transparent and objective. We place on record our sincere thanks to Hon’ble Shri Shyam Ji (Founder Ekal), CA Bajrang Lal Bagra Ji (Ex-CMD, NALCO and President, Central Executive Committee, Ekal Abhiyan), Dr. Subhash Chandra Ji (Hon'ble Member of Parliament, Chairman Essel Gourp and Ekal Global), CA Subhash Aggarwal Ji (Chairman SMC Group and Chairman, Advisory Board-BVSS) and CA Raj Kumar Agarwal ji (President BVSS) for their inspiration and guidance. We also wish to thank Adv. Imran Ahmed Siddiqui for his hard work in bringing out this Study. In any publication there is always a scope for further improvement. We would be grateful to users to offer their suggestions / comments for further refinement. For Team BVSS CA Sushil Gupta CA Anil Sharma New Delhi March 28, 2017 uo lEor~ üú÷þ] pS=k] çfrink
- 12. x ACRONYMS Acronyms Full form ASSOCHAM Associated Chambers of Commerce of India BSE Bombay Stock Exchange BRR Business Responsibility Report CII Confederation of Indian Industry CPSEs Central Public Sector Enterprises CSR Corporate Social Responsibility DPE Department of Public Enterprises EAG Empowered Action Group FOB Family Owned Business FCRA Foreign Contribution (Regulation) Act IICA Indian Institute of Corporate Affairs INR Indian National Rupee LODR Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 MCA Ministry of Corporate Affairs MNC Multi-National Company NGOs Non-Government Organizations NSE National Stock Exchange PAT Profit After Tax PMNRF Prime Minister National Relief Fund PSUs Public Sector Undertakings SEBI Securities and Exchange Board of India
- 13. xi CONTENTS Foreword i Chairman's Message iii About Ekal Abhiyan v About Bhartiya Vitta Salahkar Samiti (BVSS) vii Preface ix Acronyms x Executive Summary 1 Introduction 4 Objectives of the Study 7 Methodology of the Study 8 Findings/Observations 10 Suggestions/Recommendations 31 References 33 Annexures: 34 1. Regulatory provisions relating to CSR 1.1 Extract of the Companies Act, 2013 and related Rules Circulars 35 1.2 Guidelines on CSR Sustainability for CPSEs 45 1.3 SEBI guidelines on CSR and amendment notification 53 2. Summary of CSR Expenditure for the years ended 31.03.2015 and 31.03.2016 by the selected 30 companies in tabular form 55
- 15. 1 CSR Activities inIndia-Analysis and Trends EXECUTIVE SUMMARY 1. Introduction: Social activities carried out by business houses are not new in India. However, corporate social responsibility, as a business agenda, gained recognition in 2001 when an industry association developed CSR guidelines to be followed voluntarily by the industry. Later it became part of statute in the shape of Section 135 of the Companies Act, 2013. The statutory provisions were introduced to encourage companies to fulfil their responsibilities towards society by not only imbibing sustainability and other social objectives in their corporate culture but also by spending a specified percentage of their profit on defined social activities on year to year basis. Schedule VII to the Act contains a list of activities for which expenditure incurred by the companies is considered as compliance of their corporate social responsibilities mandated under section 135 oftheAct.Theseprovisionsbecameeffective from 01.04.2014. 2. Objectives of the Study: One of the objectives of the Study is to find out whether the purpose for which section 135 was introduced, has been achieved, and if so to what extent. The Study has also made an attempt to know the nature and pattern of expenditure preferred by companies for their CSR expenditure during the two years’ period ended March 31, 2016. The Study shall provide an overview of current trends and practices of expenditure incurred under CSR mandate by major listed companies in India. It is expected that the Study would help in evaluating various approaches adopted by corporates to achieve CSR objectives and would encourage and motivate others to adopt best CSR practices keeping in view their specific nature of operations, location ad philosophy. It is also expected that the Studyshallprovideguidancetocompaniesto execute and monitor their CSR activities, to set up parameters for evaluating the impact of expenditure incurred and to elucidate criteria for partnering implementation agencies. OtherobjectivesoftheStudyaretoexamine whether proper and adequate disclosures have been made by the companies in their reports to the stakeholders with respect to their CSR spending and to suggest other steps, if any, to be taken by the companies to ensure disclosure of full and transparent information on their CSR initiatives including spending. The Study was to explore any changes to be made in law and rules for effective implementation of provisions governing CSR.
- 16. 2 3. Methodology: The Studypresents the analysis and trends of CSR activities in India by three formats of business organizations namely Central Public Sector Enterprises (CPSEs), Family Owned Business (FOBs) and Multi-National Companies (MNCs) operating in India both in manufacturing and service sectors and TheStudyhasbeenpreparedafterreviewing, analyzing and comparing the annual reports and CSR policies of the selected companies for the years ended on 31.3.2015 and 31.3.2016 and related miscellaneous data available in public domain. Few other reports available in public domain have also been referred for providing a comparative analysis of the subject. Data of 125 major companies were collected and out of which top five companies were selected in specified groups. Two broad groups were conceived on the basis of ownership namely Public Sector and Private Sector. Private sector was further divided into two groups namely Family Owned Businesses (FOBs) and Multi-National Corporations(MNCs).Boththebroadgroups werefurthersub-dividedintoManufacturing Sector and Service Trading Sector. This resulted in formation of six groups. The Study has also made an attempt to capture information on different modes used by the selected Group companies for CSR spending and unspent expenditure on year to year basis. 4. Findings/Observations of the Study: The study found that 30 selected companies have spent R 8,211 crores in two years with increase in spending of 21% in the year 2015-16 as compared to 2014-15. The higher increase in expenditure was noticed in the case of public sector companies. The selected companies spent upto 93% of the amount prescribed to be spent. Over all percentage of expenditure incurred by the selected corporates through Implementation Agencies of their total spent was 76.58 % in 2015-16 which was not very different from that in 2014-15. However, CPSEs spent more amount directly during 2015-16 as compared to 2014-15 whereas FOBs and MNCs spent higher amount through Implementation Agencies during 2015-16 as compared to 2014-15. The selected companies across the Groups have spent maximum on Healthcare and Water Sanitation related activities. Promotion of education has also featured prominently in their expenditure. Environmental sustainability was the most favourable expenditure stream during 2014- 15 whereas Healthcare was preferred by the selected corporates during 2015-16. CPSEs spent higher amount on Education in 2015-16 as compared to 2014-15 whereas FOBs and MNCs spent lesser amount on Education in 2015-16 as compared to 2014- 15. All the Groups spent higher amount on Social Empowerment and Skill Development in 2015-16 as compared to 2014-15. All the Groups also spent higher expenditure on Infrastructure Development and Rural and Slum Area Development during 2015-16 as compared to 2014-15. Measures for the benefits of armed forces veterans,WarWidowsandtheirDependents, Contribution to Technology Incubators located within academic institutions and Promotion of Sports are some of the areas which have not yet received due attention
- 17. 3 of the corporatesas part of their CSR expenditure. FOBs and MNCs spent higher amount on capacity building in 2015-16 as compared to 2014-15 whereas CPSEs expenditure on capacity building has come down substantially in 2015-16 as compared to 2014-15. It was also observed that there was no clarity on accounting of capital expenditure resulting in asset creation out of amount spent by corporates themselves and income generated from CSR activities during the period, if any. The Study also observed that formal processes for selection of activities, implementing agency and for impact assessment of CSR expenditure made were not in place as no disclosure was made in this regard. Reporting format also have number of shortcomings resulting in non- availability of some important information on CSR expenditure. 5. Recommendations/Suggestions: Based on various findings/observations, the Study has made some recommendations/ suggestions of certain steps to be taken to implement the provisions of the Act more objectively and effectively and also to improve disclosure of various aspects of CSR spending. These recommendations also include few changes in respective laws and implementation rules. The most important recommendation is to amend section 135 of the Companies Act to make the CSR spending mandatory on the same manner as prescribed by Department of Public Enterprises for public sector enterprises. The Study is also recommending to set up some formal mechanism to carry out an impact assessment study and publish the results for stakeholders. Creating a database of implementing agencies containing their profiles and resources, past achievements and area of specialization, accounting aspects of capital expenditure incurred, recognizing the best performers in the field, are other important recommendations of the Study.
- 18. 4 INTRODUCTION Social Responsibility isnot a new concept in India. Our thousands of years old civilization carries a resonance legacy delivering duties and responsibilities at every sphere of our life, be it family, friends or society as a whole. Roots of social responsibility lie in philanthropic activities such as giving money, goods, services or time to the unfortunates, either directly or by means of an organized structure of a charitable trust, without any expectation of some benefit in return. Various practices prevalent in India, such as DaaninHinduism,ZakatandFitrainMuslims, Dasvand in Sikhism and Tethe in Christians are explicit evidences. The basic aim of all has been to help under-privileged. Hence, roots of social responsibility are found in religious belief and practices. Those who were unable to serve society directly, but were able to provide money and other material resources, either established charitable institutions and built Dharamshalas, Schools, Orphanages, Homes for destitute and the like; and, donated funds to run them. Some benevolent individuals established endowments to provide monetary help in perpetuity for some charitable cause. Traditionally, most forms of social obligations are concerned with providing basic necessities such as food, water, clothing, education, healthcare and shelter. An old belief is: Adatt Danachha Bhavet Daridra A vnÙk nkukPp Hkosr~ nfjnz A Daridra Bhavachha Karuti Papam A nfjnz HkoPp djksfr ikie A Papam Prabhavat Narakam Prayanti A ikie izHkkor ujde iz;kfUr A Punaha Daridra Punarepa Papi A iqu% nfjnz iqujsik ikih A Which means if one does not donate, the person is penniless and being in misery, he performs evil deeds. By performing evil deeds he ends up in here and after taking rebirth, he once again ends up in the vicious cycle of misery and evil deeds. in Geeta, Chapter 17, shloka 20 defines the saatvika daan (pure charity): nkrO;fefr ;íkua nh;rs ^uqidkfj.ks A ns'ks dkys p ik=ks p ríkua lkfÙoda Le`re AA that giving is called saattvika (pure) which is given with the intent that ‘I must give’, to someone who can’t return the favor; and given in the right place, time and to the worthy/needy recipient. ç[;kr lektlsoh LoxhZ; Jh ukukth ns'keq• us dgk Fkk ¶eSa vius fy, ugha] viuksa ds fy, gw¡A vkSj vius vFkkZr~] oks lc tks misf{kr gSa] oafpr gSaA¸ This message equally applies to corporate citizens. Indian companies have had a long tradition of being engaged in social initiatives that have gone beyond meeting a company’s immediate financial objectives. Business organisation, have been making decisions based not only on financial factors, but also on the social and environmental consequences, while meeting the interests
- 19. 5 of its stakeholdersincluding shareholders, customers, employees, suppliers, business partners, local communities, exchequer and other organizations. It is well recognized that integrating social, environmental and ethical responsibilities into the governance of businesses ensures their long term success, competitiveness and sustainability. Companies with ethical practices, good governance and effective corporate social responsibility (CSR), have the image of socially responsible entities and their products and services are also preferred by the customers. Since late nineties, CSR activities have increasingly come under the lens both of policy makers as well as of companies’ stakeholders as a governance issue. It is evident from the Companies Act 2013 that brought CSR to the forefront and Schedule VII, which lists out the CSR activities, suggesting communities to be the focal point. And CSR rules which suggest that CSR needs to go beyond communities and concept of philanthropy. CSR journey in India, so far, can be summarised as under: 2001-2008 The first visible step came from the industry itself when the CII National Committee on Corporate Social Responsibility Community Development was constituted to make CSR an actionable business agenda in 2001. The Committee developed CSR guidelines and promoted the sharing of CSR experiences and best practices. To bridge the gap between companies and NGOs, it also created an online platform named ‘SAMMAAN’ in association with Bombay Stock Exchange (BSE) and Indian Institute of Corporate Affairs (IICA). December 2009 Ministry of Corporate Affairs (MCA) issued Corporate Social Responsibility Voluntary Guidelines 2009, wherein it was proposed that each business entity should formulate a CSR policy to guide its strategic planning and provide a roadmap for its CSR initiatives, which should be an integral part of overall business policy and aligned with its business goals with the participation of various level executives and should be approved by the Board. July 2011 MCA came out with more comprehensive set of guidelines based on feedback from stakeholders and considering international practices.The‘NationalVoluntaryGuidelines on Social, Environmental and Economic Responsibilities of Business’ contained comprehensive principles to be adopted by companies as part of their business practices and a structured business responsibility reporting format requiring certain specified disclosures, demonstrating the steps taken by companies to implement the principles of social responsibility was introduced. August 2012 In line with above referred Guidelines issued by MCA in July, 2011, the Securities and Exchange Board of India (SEBI) issued a circular which mandated top 100 listed entities based on market capitalisation at BSE and NSE as on March 31, 2012 to include Business Responsibility Report as a part of their annual report. Hence in order to enhance the quality of disclosures made by listed entities, certain listing conditions were specified by way of inserting Clause 55 in the equity Listing Agreement. These Guidelines
- 20. 6 were made applicablefrom the financial year ending on or after December 31, 2012. December 2012 Department of Public Enterprises (DPE), Ministry of Heavy Industries and Public Enterprises also issued guidelines on Corporate Social Responsibility and Sustainability for Central Public Sector Enterprises (CPSEs) which came into effect w.e.f. April 1, 2013. September 2013 The Companies Act, 2013 was enacted replacing the Companies Act, 1956. The new Act contained a specific provision as Section-135 read with Schedule-VII, which made CSR as a statutory provision applicable to specified companies on the principle of ‘Spend or Explain’. Detailed rules have been framed for implementation of the section 135 w.e.f. April 1, 2014. (Refer Annexure 1.1 for text of the Section, Schedule, Rules and subsequent amendments and clarifications issued in this regard). October 2014 DPE issued fresh guidelines on Corporate Social Responsibility and Sustainability for CPSEs which came into effect from April 1, 2014. These Guidelines superseded earlier guidelines issued in December 2012 and were in supplement to the CSR Rules framed under the Companies Act, 2013. The Guidelines make CPSEs to mandatorily spend the amount which meet the criteria as laiddowninsection135(1)oftheCompanies Act, 2013. (Refer Annexure 1.2 for the text of the Guidelines issued by DPE on 21.10.2014). September 2015 SEBI issued Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) which replaced earlier directions. LODR required top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) to prepare a Business Responsibility Report (BRR), as part of their Annual Report, describing the initiatives taken by them from an environmental, social and governance perspective w.e.f. December 31, 2015. SEBI amended the Regulations to make preparation of BRR mandatory for top five hundred companies w.e.f. April 1, 2016. (Refer Annexure 1.3 for relevant extract of LODR and Amendment notification.)
- 21. 7 The main aimof the Study is to understand trends and practices of expenditure under CSR over past two years, i.e. 2014-15 and 2015-16, followed by major companies doing business in different segments in India and to make suggestions for strengthening the regulatory and reporting mechanism. To make a fair assessment of implementation of legal provisions relating to CSR and other policies adopted by the companies, the following questions were framed to be answered: 1. Whether the purpose for which section 135 was introduced has been achieved, and if so to what extent? 2. What is the pattern of expenditure preferred by companies on yearly basis? 3. What is the accounting aspects of revenueandcapitalexpenditureincurred under CSR activities especially when the company has incurred that expenditure itself? 4. What can be the best CSR practices which can become role model for others to emulate, for implementation of strategies for improvement in operation standards? 5. What can be the guiding document to help execute and monitor CSR initiatives and to elucidate criteria for partnering implementation agencies? 6. How the companies have made CSR a key business process for sustainable development? 7. What can be the best approach to be adopted for evaluating success in achieving CSR objectives? 8. How an impact assessment of CSR initiatives has been made or can be improved upon? 9. Whether something is required to be done for better and transparent implementation and presentation? 10. Whether any changes in Sections / Rules of the Companies Act, 2013 for better implementation of the CSR provisions are required? OBJECTIVES OF THE STUDY
- 22. 8 Pictorial presentation ofSample selection SECTORS Public Manufacturing (Group-1) Service and Trading (Group-2) Private Family Owned Business Multi-National Companies Manufacturing (Group-3) Service and Trading (Group-4) Manufacturing (Group-5) Service and Trading (Group-6) The Study has been carried out after collecting, reviewing and comparing the Annual Reports and CSR policies of 125 listed companies to whom Section 135 of the Companies Act, 2013 is applicable, for two years i.e. 2014-15 and 2015-16. In the first step, these 125 companies were segregated into two sectors on the basis of their ownership namely (i) public sector companies, (ii) private sector companies. Private Sector was further divided into two sub sectors namely (i) Family owned businesses and (ii) multi-national companies operating in India. All the three sectors/ sub-sectors were further divided in two groupsonthebasisoftheirnatureofproducts and services namely (i) manufacturing and (ii) service and trading. METHODOLOGY OF THE STUDY In the second step, top five companies in each group of the three sectors/sub-sectors were selected on the basis of their average net profit determined in term of section 135 of the Companies Act, 2013. This exercise gave the following six groups having five companies each: Group-1 Five Central Public Sector Enterprises (CPSEs) in Manufacturing Sector Group-2 Five Central Public Sector Enterprises (CPSEs) in Service and Trading Sector Group-3 Five Family Owned Businesses (FOBs) in Manufacturing Sector Group-4 Five Family Owned Businesses (FOBs) in Service and Trading Sector Group-5 Five Multi-National Companies (MNCs) in Manufacturing Sector Group-6 Five Multi-National Companies (MNCs) in Service and Trading Sector The companies in each of these six Groups are listed below: Group-1: Central Public Sector Enterprises (CPSEs) in Manufacturing Sector 1. Oil and Natural Gas Corporation Ltd (ONGC) 2. National Thermal Power Corporation Ltd (NTPC) 3. National Mineral Development Corporation Ltd (NMDC) 4. Indian Oil Corporation Ltd (IOC) 5. Bharat Petroleum Corporation Ltd (BPCL)
- 23. 9 Group-2: Central PublicSector Enterprises (CPSEs) in Service and Trading Sector 1. Power Finance Corporation Ltd (PFC) 2. Rural Electrification Corporation Ltd (RECL) 3. The Power Grid Corporation of India Ltd (PGCL) 4. Oil India Ltd (OIL) 5. Container Corporation of India Ltd (CONCOR) Group-3: Family Owned Businesses (FOBs) in Manufacturing Sector 1. Reliance Industries Ltd (RIL) 2. Tata Steel Ltd (Tata Steel) 3. Bajaj Auto Ltd (Bajaj Auto) 4. Mahindra and Mahindra Ltd (Mahindra and Mahindra) 5. UltraTech Cement Ltd (Ultratech Cement) Group-4: Family Owned Businesses (FOBs) in Service and Trading Sector 1. Tata Consultancy Services Ltd (TCS) 2. Wipro Ltd (WIPRO) 3. HCL Technologies Ltd (HCL) 4. Bharti Airtel Ltd (Bharti Airtel) 5. Kotak Mahindra Bank Ltd (Kotak Mahindra Bank) Group-5:Multi-NationalCompanies(MNCs) in Manufacturing Sector 1. ITC Ltd (ITC) 2. Cairn India Ltd (Cairn India) 3. Larsen Toubro Ltd (L T) 4. Hindustan Unilever Ltd (HUL) 5. Maruti Suzuki India Ltd (Maruti Suzuki India) Group-6:Multi-NationalCompanies(MNCs) in Service and Trading Sector 1. HDFC Bank Ltd (HDFC Bank) 2. Infosys Ltd (Infosys) 3. Indiabulls Housing Finance Ltd (Indiabulls Housing Finance) 4. Zee Entertainment Enterprises Ltd (Zee Entertainment) 5. Blue Dart Express Ltd (Blue Dart Express) From the audited financial statements of the above companies for the year ended 31.03.2015 and 31.03.2016, the following information was collected and tabulated on yearly basis: 1. Average net profit; 2. Amount spent for CSR; 3. Amount on CSR incurred directly and through implementation agencies; 4. Amount unspent; and 5. Head-wise spent on CSR. (Refer Annexure 2.1 and 2.2 for the above referred company wise information for the years ended 31.03.2015 and 31.03.2016.)
- 24. 10 It was foundthat the overall CSR spent by public sector has increased considerably by more than 48% on year on year basis as against an increase of less than 6% by private sector. I. Expenditure under CSR (i). Trends of CSR spending by different sectors during Financial Year 2014-15 and FY 2015-16: S. No. Heads Spent (Amount in Cr.) 2014-15 2015-16 % Increase 1 Public Sector 1307.54 1935.91 48.06 2 Private Sector* 1207.08 1276.72 05.77 (a) FOBs 1496.89 1601.02 06.96 (b) MNCs 917.26 952.41 03.83 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs. FINDINGS/OBSERVATIONS OF THE STUDY
- 25. 11 (ii) Trends ofCSR spending by CPSEs (Manufacturing Sector) during Financial Year 2014- 15 and FY 2015-16: Initiative through FY 2014-15 FY 2015-16 Total Amount in Cr. % Amount in Cr. % Amount in Cr. % Own 133.89 13.28 500.27 36.43 634.16 26.63 Implementing Agency 874.64 86.72 872.95 63.57 1,747.59 73.37 Total 1,008.53 100.00 1,373.22 100.00 2,381.75 100.00 The above table shows that there is an increasing trend in CPSEs manufacturing sector towards taking up CSR initiatives on their own. (iii) Trends of CSR spending by CPSEs (Service and Trading Sector) during Financial Year 2014-15 and FY 2015-16: Initiative through FY 2014-15 FY 2015-16 Total Amount in Cr. % Amount in Cr. % Amount in Cr. % Own 80.79 27.02 68.22 12.12 149.02 17.29 Implementing Agency 218.22 72.98 494.47 87.88 712.69 82.71 Total 299.01 100.00 562.69 100.00 861.71 100.00
- 26. 12 Initiative through FY 2014-15FY 2015-16 Total Amount in Cr. % Amount in Cr. % Amount in Cr. % Own 294.50 26.71 158.44 14.68 452.93 20.76 Implementing Agency 808.15 73.29 921.13 85.32 1,729.28 79.24 Total 1,102.65 100.00 1,079.56 100.00 2,182.21 100.00 The above table shows that there is a decreasing trend in CPSEs service and trading sector towards taking up CSR initiatives on their own. (iv) Trends of CSR spending by FOBs (Manufacturing Sector) during Financial Year 2014- 15 and FY 2015-16:
- 27. 13 Initiative through FY 2014-15FY 2015-16 Total Amount in Cr. % Amount in Cr. % Amount in Cr. % Own 60.90 15.45 5.78 1.11 66.69 7.28 Implementing Agency 333.34 84.55 515.68 98.89 849.02 92.72 Total 394.25 100.00 521.46 100.00 915.71 100.00 The above table shows that there is a decreasing trend in FOBs manufacturing sector towards taking up CSR initiatives on their own. (v) Trends of CSR spending by FOBs (Service and Trading Sector) during Financial Year 2014-15 and FY 2015-16:
- 28. 14 Initiative through FY 2014-15FY 2015-16 Total Amount in Cr. % Amount in Cr. % Amount in Cr. % Own 252.11 48.32 225.57 38.27 477.68 42.99 Implementing Agency 269.66 51.68 363.90 61.73 633.56 57.01 Total 521.77 100.00 589.47 100.00 1,111.24 100.00 The above table shows that there is a decreasing trend in FOBs service and trading sector towards taking up CSR initiatives on their own. (vi) Trends of CSR spending by MNCs (Manufacturing Sector) during Financial Year 2014- 15 and FY 2015-16:
- 29. 15 Initiative through FY 2014-15FY 2015-16 Total Amount in Cr. % Amount in Cr. % Amount in Cr. % Own 103.35 26.13 93.22 25.68 196.57 25.92 Implementing Agency 292.14 73.87 269.72 74.32 561.86 74.08 Total 395.49 100.00 362.94 100.00 758.43 100.00 TheabovetableshowsthatthereisadecreasingtrendinMNCsmanufacturingsectortowards taking CSR initiatives on their own. (vii) Trends of CSR spending by MNCs (Service and Trading Sector) during Financial Year 2014-15 and FY 2015-16:
- 30. 16 The above tableshows that there is almost no change in trend of MNCs service and trading sector towards taking CSR initiatives on their own or through some implementing agency. In a Study published in Economic and Political Weekly (Vol.49, Issue No.50 dated 13th December, 2014), CSR expenditure by public sector firms increased considerably in 2012- 13 compared to 2011-12. The passage of the Act also led to an increase in the average CSR spending of public sector firms from Rs.25.72 million (around Rs.2.57 Cr.) in 2012 to Rs.147 million (around Rs.14.7 Cr.) in 2013. The Study further shows that there has also been a significant increase in the average CSR expenditure by domestic firms as compared to foreign firms. Average CSR expenditure by domestic and foreign firms was Rs.3.79 million (around Rs.0.37 Cr.) and Rs.8.5 million (around Rs.0.85 Cr.) respectively in 2011-12, but this increased to Rs.22.6 million (around Rs.2.26 Cr.) and Rs.19.5 million (around Rs.1.95 Cr.) respectively in 2012-13.1 Further, an annual research publication ‘India CSR Outlook Report (ICOR)’ prepared by NGOBOX (Renalysis Consultants Pvt. Ltd) on CSR spending of 250 companies for the Financial Year 2015-16 showed that there was substantial improvement in the actual CSR spend to prescribed CSR in FY 2015-16. While it was 79% in FY 2014-15, it has increased to 92% in financial year 2015-16. There was an actual CSR spend of Rs.6578.66 Cr. as against prescribed CSR spend of Rs.7143.91 Cr. for the Financial Year 2015-16 for these 250 companies.2 II. CSR Expenditure Pattern: (i) Overall spent: AsummaryofspentonvariousCSRinitiatives in descending order of spent is as under:
- 31. 17 S. No. Heads Spent FYAmount (in Cr.) % of Total Spent 1 Health Care, Water and Sanitation 2014-15 1119.69 30.09 2015-16 1736.70 38.68 2 Promotion of Education 2014-15 782.70 21.03 2015-16 888.82 19.80 3 Infrastructure Development / Rural and Slum Area Development Projects 2014-15 584.86 15.18 2015-16 624.88 13.92 4 Social Empowerment / Skill development 2014-15 497.73 13.37 2015-16 428.66 09.55 5 Environment Sustainability 2014-15 441.84 11.87 2015-16 321.26 07.16 6 Capacity Building and Others 2014-15 142.01 03.82 2015-16 283.75 06.32 7 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 2014-15 56.47 01.52 2015-16 78.46 01.75 8 Protection of National Heritage, Arts Culture 2014-15 77.73 02.09 2015-16 26.88 00.60 9 Promotion of Sports 2014-15 38.46 01.03 2015-16 23.67 00.53 10 Contribution to Technology Incubators located within academic institutions 2014-15 00.20 00.01 2015-16 72.05 01.60 11 Measures for benefit of armed forces veterans, war widows and their dependents 2014-15 NIL NIL 2015-16 04.22 00.09 Health Care / Water / Sanitation 35% Education 20% Social Empowerment / Skill development 11% Environment Sustainability 9% National Heritage, Arts Culture 1% Benefit of armed forces 0% Sports 1% PMNRF / Other Funds 2% Technology Incubators located within academic institutions 1% Infrastructure Development / Rural and Slum Area Development Projects 15% Relief to victims of natural calamities / disasters 0% Directly by Subsidiaries (No breakup available) 2% Capacity Building 3% CSR Spent during FY 2014-15 2015-16 (All 30 Companies)
- 32. 18 Health Care /Water / Sanitation 30% Education 21% Social Empowerment / Skill development 13% Environment Sustainability 12% National Heritage, Arts Culture 2% Benefit of armed forces 0% Sports 1% PMNRF / Other Funds 2% Technology Incubators 0% Infrastructure Development / Rural and Slum Area Development Projects 15% Relief to victims of natural calamities / disasters 0% Directly by Subsidiaries (No breakup available) 0% Capacity Building 4% CSR Spent during FY 2014-15 (All 30 Companies) Health Care / Water / Sanitation 39%Education 20% Social Empowerment / Skill development 9% Environment Sustainability 7% National Heritage, Arts Culture 1% Benefit of armed forces 0% Sports 0% PMNRF / Other Funds 2% Technology Incubators 2% Infrastructure Development / Rural and Slum Area Development Projects 14% Relief to victims of natural calamities / disasters 0% Directly by Subsidiaries (No breakup available) 4% Capacity Building 2% CSR Spent during FY 2015-16 (All 30 Companies)
- 33. 19 It was foundthat there is an overall increased focus in terms of percentage as well as quantum on Health Care and Water Sanitation related initiatives (From 30.09% in FY 2014-15 to 38.68% in FY 2015-16). On the other hand, spent on Environment, Sustainability has come down from 11.87% in FY 2014-15 to 7.16% in FY 2015-16. Further, most of the companies have taken negligible or no interest in Measures for benefit of armed forces veterans, war widows and their dependents, Contribution to Technology Incubators located within academic institutions, Promotion of Sports or Protection of National Heritage, Arts Culture in both the years. In addition to the above contribution to the Prime Minister’s National Relief Fund or any otherfundsetupbytheCentralGovernment for socio-economic development and relief and welfare of the Scheduled Casts, the Scheduled Tribes and other backward classes,minoritiesandwomen,thecompanies contributed almost similar percentage of their CSR spent towards contribution in both the years. (ii) Sector-wise top three spending trends: A summary of initiatives taken is as under: Category: CPSEs Financial Year Spent Amount (in Cr.) % 2014-15 Environment Sustainability 322.40 24.7 Promotion of Education 264.90 20.3 Health Care / Water / Sanitation 234.56 17.9 2015-16 Health Care, Water and Sanitation 985.91 50.9 Infrastructure Development / Rural and Slum Area Development Projects 263.90 13.6 Promotion of Education 221.65 11.5 Category: Private Sector* 2014-15 Health Care / Water / Sanitation 442.56 36.7 Promotion of Education 258.90 21.5 Social Empowerment / Skill development 197.00 16.3 2015-16 Health Care, Water and Sanitation 375.39 29.4 Promotion of Education 333.58 26.1 Infrastructure Development / Rural and Slum Area Development Projects 180.49 14.1 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs.
- 34. 20 In case ofPublic Sector Enterprises, it was found that focus on Environment Sustainability (24.66%) during 2014-15 has been replaced by Health Care, Water and Sanitation (50.93%) in 2015-16. Also spent on Promotion of Education has been substantially gone down to 11.45% in 2015- 16 as against more than 20% in 2014-15. The spent has also been reduced in absolute terms from Rs.265 Cr. in 2014-15 to 222 Cr in 2015-16. On the other hand, in case of Private Enterprises, it is clear here that focus on Healthcare Water and Sanitation i.e. 36.66% during 2014-15 has been reduced to 29.40% in 2015-16. Also spent on Promotion of Education is increased from 21.45% in 2014-15 to 26.13% in 2015-16. (iii) A further bifurcation of Private Sector Enterprises into FOBs and MNCs (top three spends): Category: FOBs Financial Year Heads Spent Amount (in Cr.) % 2014-15 Health Care / Water / Sanitation 704.47 47.06 Promotion of Education 275.31 18.39 Social Empowerment / Skill development 205.04 13.70 2015-16 Health Care, Water and Sanitation 544.20 33.99 Promotion of Education 481.78 30.09 Infrastructure Development / Rural and Slum Area Development Projects 199.67 12.47 Category: MNCs 2014-15 Promotion of Education 242.49 26.44 Social Empowerment / Skill development 188.95 20.6 Health Care / Water / Sanitation 180.65 19.69 2015-16 Health Care, Water and Sanitation 206.57 21.69 Promotion of Education 185.37 19.46 Environment Sustainability 164.04 17.22 FOBs and MNCs both continued spending the highest amount towards Health Care, Water and Sanitation except by MNCs in the year 2014-15. However, FOBs have decreased the said expenditure in 2015-16 in percentage as well as in absolute terms, as compared to 2014-15. Same time in case of FOBs expenditure on Promotion of Education has been increase substantially during 2015-16 as compared to previous year. In case of FOBs, spent on Social Empowerment and Skill development has been replaced by Infrastructure Development and Rural and Slum Area Development Projects during 2015- 16. Similarly, in case of MNCs Social
- 35. 21 Category: CPSEs Financial YearHeads Spent Amount (in Cr.) % 2014-15 Promotion of Sports 25.46 1.95 Protection of National Heritage, Arts Culture 30.15 2.31 Social Empowerment and Skill development 103.73 7.93 2015-16 Contribution to Technology Incubators located within academic institutions 72.04 3.72 Environment Sustainability 126.44 6.53 Social Empowerment and Skill development 176.12 9.1 Category: Private Sector* 2014-15 Protection of National Heritage, Arts Culture 23.79 1.97 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 26.35 2.18 Environment Sustainability 59.72 4.95 2015-16 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 39.23 3.07 Environment Sustainability 97.41 7.63 Infrastructure Development and Rural and Slum Area Development Projects 180.49 14.14 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs. Empowerment and Skill development has been replaced by Promotion of Education during 2015-16. (iv) Sector-wise least spending trends (1% or more) during Financial Year 2014-15 and FY 2015-16: As evident from earlier analysis, the public sector enterprises have given least preference to Promotion of Sports and Contribution to Technology Incubators located within academic institutions. And it maybeduetocomplicaciesinvolvedinsetting up of related infrastructure, operation and contingent outcomes with long gestation period. On the other hand, the private enterprises have given least preference to Protection of National Heritage, Arts Culture and Contribution to PMNRF and other Funds for relief to SC, ST, OBC, minorities and women. Still, public sector has shown seriousness by taking up various social initiatives during both the years as against private sector which has more compliance only attitude by donating to PMNRF and other related funds. Some private sector domestic companies seem to have taken more initiatives in comparison to MNCs.
- 36. 22 (v) A furtherbifurcation of Private Sector Enterprises into FOBs and MNCs (1% or more spend): Category: FOBs Financial Year Heads Spent Amount (in Cr.) % 2014-15 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 23.48 1.57 Environment Sustainability 53.70 3.59 Infrastructure Development and Rural and Slum Area Development Projects 170.51 11.39 2015-16 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 15.44 01.00 (Approx.) Social Empowerment and Skill development 127.11 7.94 Environment Sustainability 30.77 1.92 Category: MNCs 2014-15 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 29.21 3.19 Protection of National Heritage, Arts Culture 38.92 4.24 Environment Sustainability 65.73 7.17 2015-16 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 63.02 6.62 Social Empowerment and Skill development 125.42 13.17 Infrastructure Development and Rural and Slum Area Development Projects 161.30 16.94 Category: CPSEs Financial Year Heads Spent Amount (in Cr.) % 2014-15 Measures for the benefit of armed forces veterans, war widows their dependents NIL 0.00 Contribution to Technology Incubators located within academic institutions 00.20 0.02 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women 03.77 0.29 (vi) Sector-wise least spending trends (between NIL to 1%) during Financial Year 2014-15 and FY 2015-16:
- 37. 23 Financial Year HeadsSpent Amount (in Cr.) % 2015-16 PMNRF and other Funds for relief to SC, ST, OBC, minorities and women NIL 0.00 Measures for the benefit of armed forces veterans, war widows their dependents 04.14 0.21 Protection of National Heritage, Arts Culture 08.83 0.46 Promotion of Sports 12.30 0.64 Category: Private Sector* 2014-15 Measures for the benefit of armed forces veterans, war widows their dependents NIL NIL Contribution to Technology Incubators located within academic institutions NIL NIL Promotion of Sports 06.49 0.54 2015-16 Contribution to Technology Incubators located within academic institutions NIL NIL Measures for the benefit of armed forces veterans, war widows their dependents NIL NIL Promotion of Sports 05.69 0.45 Protection of National Heritage, Arts Culture 09.02 0.71 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs. (vii) A further bifurcation of Private Sector Enterprises into FOBs and MNCs (between NIL to 1%) : Category: FOBs Financial Year Heads Spent Amount (in Cr.) % 2014-15 Measures for the benefit of armed forces veterans, war widows their dependents NIL 0.00 Contribution to Technology Incubators located within academic institutions NIL 0.00 Protection of National Heritage, Arts Culture 08.66 0.58 Promotion of Sports 12.76 0.85
- 38. 24 Financial Year HeadsSpent Amount (in Cr.) % 2015-16 Measures for the benefit of armed forces veterans, war widows their dependents NIL 0.00 Contribution to Technology Incubators located within academic institutions NIL 0.00 Protection of National Heritage, Arts Culture 10.61 0.66 Promotion of Sports 11.37 0.71 Category: MNCs 2014-15 Measures for the benefit of armed forces veterans, war widows their dependents NIL 0.00 Contribution to Technology Incubators located within academic institutions NIL 0.00 Promotion of Sports 00.22 0.02 2015-16 Measures for the benefit of armed forces veterans, war widows their dependents NIL 0.00 Contribution to Technology Incubators located within academic institutions NIL 0.00 Promotion of Sports NIL 0.00 Protection of National Heritage, Arts Culture 07.43 0.78 It can be observed from the above data that the following heads found either negligible or no focus from public as well as private sectors enterprises: 1. Measures for the benefit of armed forces veterans, war widows their dependents, 2. Contribution to Technology Incubators located within academic institutions, 3. PMNRF and other Funds for relief to SC, ST, OBC, minorities and women, 4. Protection of National Heritage, Arts Culture and 5. Promotion of Sports. In a study published in the CRISIL CSR Yearbook published in January 2016, it was also observed that 82% of CSR spending was in only 4 major sectors i.e. education and skill development (33%), healthcare and sanitation (27%), rural development projects (13%) and environment conservation (9%). 73% of the CSR spending was focused on education / skill development, health care / sanitation and rural development. Further, funds for technology development and setting up of incubation centers have received scant attention with a mere 6 out of around 1300 companies considering such investments. Similarly, support for armed forces veterans and their families, along with sports, barely received attention.3 Another study conducted by Institutional Investor Advisory Services published in January, 2016 also shows that majority of companies are spending their CSR funds on Hunger, Poverty and Healthcare, Education and Environment Sustainability.4 An annual research publication ‘India CSR
- 39. 25 Outlook Report (ICOR)’prepared by NGOBOX (Reanalysis Consultants Pvt. Ltd) on CSR spending of 250 companies for the Financial Year 2015-16 also showed that Education (including skilling) and Healthcare (including WASH)themeshavebeenfavoritesofcompanies for implementing CSR projects. Rural sports promotion is the new area which is gradually becoming popular in CSR projects.2 A study conducted by Vision IAS Institute, the six areas that failed to attract significant interest are slum development; technology incubators at academic institutions; promotion of rural as well as Paralympics and Olympic sports; the Prime Minister’s Relief Fund; preservation of national heritage, art and culture; and welfare of armed forces veterans and war widows.5 III. Mode of CSR Expenditure: (i) TrendsofCSRspendingbyallenterprises directly or through Implementation Agency: S. No. Heads Spent 2014-15 2015-16 Amount (in Cr.) % Amount (in Cr.) % 1 Direct 925.55 24.87 1051.50 23.42 2 Through Implementing Agencies 2796.15 75.13 3437.85 76.58
- 40. 26 It was observedthat CSR spent by majority of the companies has been through Implementing Agencies. In a Study conducted by Institutional Investor Advisory Services published in January, 2016 revealed that during the financial year 2014- 15 around 70% of CSR funds were spent by implementing agencies and only 30% directly by the company.2 (ii) Sector-wise trends of spending directly or through Implementation Agency during the last two financial years by different categories of companies: S. No. Particulars Spent 2014-15 2015-16 Amount (in Cr.) % Amount (in Cr.) % CPSEs 1 Direct 214.68 16.42 568.49 29.37 2 Through Implementing Agencies 1092.86 83.58 1367.42 70.63 Private Sector* 1 Direct 355.43 29.45 241.50 18.92 2 Through Implementing Agencies 851.64 70.55 1035.21 81.08 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs. (iii) A further bifurcation of Private Sector Enterprises into FOBs and MNCs (directly or through Implementation Agency) : S. No. Particulars Spent 2014-15 2015-16 Amount (in Cr.) % Amount (in Cr.) % FOBs 1 Direct 355.40 23.74 164.22 10.26 2 Through Implementing Agencies 1141.49 76.26 1436.80 89.74 MNCs 1 Direct 355.47 38.75 318.79 33.47 2 Through Implementing Agencies 561.79 61.25 633.62 66.53
- 41. 27 It is observedthat only government companies increasingly taking up CSR initiatives on their own as compared to private sector which has opted for the implementing agencies route. In a study published in Economic and Political Weekly (Vol.49, Issue No.50 dated 13th December, 2014), It was emphasized that in 2012-13, around 34% of the top 300 firms in India worked through own foundations or trusts. They served the society through various measures like community development, rural development, etc. About 19% of the companies organised free medical check-up camps in rural areas, blood donation camps and educational camps for farmers in the rural areas and school children. Around 30% of the firms collaborated with non-profit organisations to carry out their CSR activities. Around 5% of the companies adopted environmentally sustainable methods of production. 12% of the firms made donations to local schools and hospitals.1 IV. CSR Expenditure on Capacity Building Trends of CSR spending on Capacity Building during Financial Year 2014-15 and FY 2015- 16:
- 42. 28 S. No. HeadsSpent 2014-15 2015-16 Amount (in Cr.) % Amount (in Cr.) % 1 CPSEs 82.93 6.34 29.08 1.50 2 Private Sector * 45.01 1.86 48.36 1.89 (a) FOBs 38.79 2.59 38.76 2.42 (b) MNCs 06.21 0.68 09.59 1.01 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs. It was observed that public sector enterprises have spent a large part of CSR spent towards capacity building initiatives as compared to FOBs and MNCs especially in the year 2014-15. V. Unspent CSR Allocation: During the period of two years, actual spent was less than prescribed spent in both the FY 2014-15 and FY 2015-16: S. No. Heads Spent (Amount in Cr.) 2014-15 2015-16 Prescribed Actual % Prescribed Actual % 1 CPSEs 1894.11 1307.54 69.03 1821.03 1935.91 106.31 2 Private Sector * 1373.08 1207.08 87.91 1493.13 1276.72 85.51 (a) FOBs 1614.58 1496.89 92.71 1811.47 1601.42 88.40 (b) MNCs 1131.57 917.26 81.06 1174.79 952.41 81.07 Total (1) + (2) 4640.26 3721.70 4807.29 4489.34 * As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with CPSEs.
- 43. 29 A further breakupbetween Manufacturing Sectors and Service Trading Sectors is as under: S. No. Heads Spent (Amount in Cr.) 2014-15 2015-16 Prescribed Actual % Prescribed Actual % 1 CPSEs (a) Manufacturing Sector 1,437.77 1,008.53 70.15 1,312.42 1,373.22 104.63 (b)ServiceandTradingSector 456.34 299.01 65.52 508.61 562.69 110.63 Total 1,894.11 1,307.54 1,821.03 1,935.91 2 FOBs (a) Manufacturing Sector 932.09 1,102.65 118.30 937.01 1,079.56 115.21 (b)ServiceandTradingSector 682.49 394.25 57.77 874.56 521.46 59.63 Total 1,614.58 1,496.89 1,811.47 1,601.02 3 MNCs (a) Manufacturing Sector 594.15 521.77 87.82 612.77 589.47 96.20 (b)ServiceandTradingSector 537.42 395.49 73.59 562.02 362.94 64.58 Total 1,131.57 917.26 1,174.79 952.41 Grand Total 4,640.26 3,721.70 4,807.29 4,489.34
- 44. 30 It was foundthat during 2014-15, Public Sector Enterprises spent only 69% of the amount out of the prescribed amount but during 2015-16, they spent 106%. It is to be kept in mind that Government Guidelines require CPSEs to carry forward the unspent amount to the next year. It can also be observed that Private Sector Enterprisesspentonly88%oftheprescribed amount during the year 2014-15 and that percentage further came down to 85.5% during the year 2015-16. In a study published in the CRISIL CSR Yearbook published in January 2016, it was found that out of around 1000 companies only the half of the companies spent 2% of their profits on CSR and 60% of them spent 1.5% while 28% spent less than 1%.3 Further,asperLiveMintpublishedonSeptember 21, 2016, there was an increase of 11% and 27% in prescribed as well as actual spent respectively during the financial year 2015-16 as compared to financial year 2014-15.6 Other Important Observations: 1) Itwasobservedthatduringthetwoyears’ period ended 31.03.2016, the selected public sector companies have spent R 783.17 Crores directly by themselves and similarly selected private sector companies have also spent R 1193.87 Crores directly by themselves during that period. The information regarding amount spent on fixed assets (which have useful life of more than one year), if any, out the above expenditure was not available. Moreover, information on policy and accounting treatment of the fixed assets so created out of that capital expenditure was also not available. 2) Similarly, policy and accounting treatment of income generated from the CSR related activities during the period, if any, was also not available. 3) During the two years’ period ended 31.03.2016, the selected public sector companies have spent R 2,460.28 Crores through Implementing Agencies and similarly selected private sector companies have also spent R 3,773.72 Crores through Implementing Agencies during that period. An assessment whether such expenditure was simply incurred by third parties or incurred as joint efforts where companies’ personnel were also involved, was not available in their reports. 4) It was observed that CSR policies of majorityofidentifiedcorporates,relating to strategy and process for selection of CSR activities and implementing agencies, are general in nature. 5) It appeared that due to preference given to local area of operations for incurring CSR expenditure, such expenditure was concentrated to those states which are having higher industrial establishments within the states. 6) It was also noticed that formal process of making an impact assessment of CSR expenditure made by selected corporate was not in place. It was noticed that Reporting Format prescribed under the Rules was not facilitating availability of some important information on CSR expenditure.
- 45. 31 There is nodoubt that incorporating social responsibility of corporate in the statute has shown good results. In spite of the fact that statutory provisions are on the principle of “spend or explain”, most of the companies to whom the said provisions are applicable, have taken reasonable steps towards nation building by providing much needed funds for the benefit of civil society. However, to strengthen the mechanism of corporate social responsibility and based on the observations of the Study, some suggestions are being made. The suggestions are bifurcated in three categories: (a) Proposed changes in Law (b) Proposed changes in Rules and Regulations (c) Others a) Proposed changes in Law (i) Section 135 of the Companies Act, 2013 may be amended to bring Private Sector companies at par with Public Sector companies with regard to provision of carried forward of unspent CSR allocation. Let them also move from ‘spentorexplain’to‘spentoraccumulate + spent’. (ii) Schedule III to the Companies Act, 2013 may be amended so as to include information on fixed assets created out of CSR expenditure incurred by the companyitself.However,depreciationon that should not be allowed as an expense to the company. b) Proposed changes in rules and Regulations (i) The Rules may provide for preparation of outcome budget to be presented to the CSR Committee for any project to be undertaken where expenditure, including capital expenditure, exceeds R 10 Crores or so. (ii) The Rules may provide for undertaking impact assessment in respect of CSR expenditure incurred on a single project. Such impact assessment may be done by a third party, which has prescribed technical and professional expertise available with it. (iii) The Rules may provide for approval of the Board, if Implementing Agency, being engaged, has some interest representing the directors or their relatives. Such disclosure should be part of disclosure of ‘related party transactions’. (iv) CSR Rules may be amended to provide for enhanced disclosures incorporating the above referred suggestions. c) Other Suggestions (i) Some government agency like IICA may be asked to publish successful case studies so that those can be replicated by other corporate. (ii) Companies which have done good work in CSR initiative may be awarded and SUGGESTIONS / RECOMMENDATIONS
- 46. 32 appropriately circulated toencourage others. (iii) IICA may be made a nodal agency to not only empanel various Implementing Agencies but also to make a database made of such agencies with information on their core expertise and successful projects executed, available to corporate. (iv) With a view to make available the requisite workforce in various specialized field covered in schedule VII to the Companies Act, management institutes may be suggested to start specialized courses or diploma programs on the subjects. (v) With a view to inculcate corporate social responsibilities awareness in the higher management of the companies, prospective mid-level management cadre may be asked to work with some live projects before their induction in the management. (vi) CSR projects carried out through implementing agencies and creating fixed assets, the benefits of which are to be there for a period more than one year, may continue to be reported by the companies in their CSR activities reporting with proper disclosure, even if they continue to be shown in the books of the Implementing Agencies. (vii) The government should, with full clarity, give its stand as to whether any tax benefit should be available to expenses incurred under CSR spent or not. Situation where some of the expenses are eligible for tax benefits manipulate the flow of funds to some specified heads or agencies only.
- 47. 33 REFERENCES 1) Economic andPolitical Weekly (Vol.49, Issue No.50 dated 13th December, 2014) http://www.epw.in/journal/2014/50/ web-exclusives/analysis-corporate- social-responsibility-expenditure-india. html 2) ‘India CSR Outlook Report (ICOR)’ by NGOBOX - Renalysis Consultants Pvt. Ltd. (September, 2016) http://ngobox.org/media/India%20 CSR%20Outlook%20Report%20 2016-NGOBOX.pdf 3) ‘The CRISIL CSR Yearbook (January, 2016) https://www.crisil.com/pdf/corporate/ The-CRISIL-CSR-yearbook-20Jan2016. pdf 4) ‘Institutional Investor Advisory Services – CSR: Taking Root (January, 2016) http://iias.in/corporate-social- responsibility-taking-root.aspx 5) Vision IAS Institute http://visionias.in/home/resources/ open_doc/current_affairs/imp_issues/ One_year_of_CSR_under_Companies_ Act_Final.pdf 6) Live Mint – CSR spending picks up in FY 16 (Edition: September 21, 2016) http://www.livemint.com/Companies/ AGHffjRinGGi2FwXEGR1qL/CSR- spending-picks-up-in-FY16.html
- 48.
- 49. 35 CSR Activities inIndia - Analysis and Trends ANNEXURE - 1.1 Extract of the Companies Act, 2013: “Section -135: Corporate Social Responsibility (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. (2) The Board's report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee. (3) The Corporate Social Responsibility Committee shall,— (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII; (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and (c) monitor the Corporate Social Responsibility Policy of the company from time to time. (4) The Board of every company referred to in sub-section (1) shall,— (a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of suchPolicyinitsreportandalsoplace it on the company's website, if any, in such manner as may be prescribed; and (b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company. (5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy: Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities: Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount. Explanation.—Forthepurposesofthissection “average net profit” shall be calculated in
- 50. 36 accordance with theprovisions of section 198.” Schedule VII to the Companies Act, 2013 ACTIVITIES WHICH MAY BE INCLUDED BY COMPANIES IN THEIR CORPORATE SOCIAL RESPONSIBILTY POLICIES Activities relating to:- 1) Eradicating hunger, poverty and malnutrition, promoting health care including preventive Health care] and sanitation [including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of Sanitation] and making available safe drinking water; 2) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects; 3) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; 4) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water[including contribution to the Clean Ganga Fund set-up by the Central Government for the rejuvenation of river Ganga ]; 5) Protection of national heritage, alt and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts; 6) Measures for the benefit of armed forces veterans, war widows and their dependents; 7) Training to promote rural sports, nationally recognised sports, Paralympics sports and Olympic sports; 8) Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; 9) Contributions or funds provided to technology incubators located within academicinstitutionswhichareapproved by the Central Government; 10) Rural development projects. 11) Slum area Development * *Explanation - For the purposes of this item, the term ‘Slum area’ shall means any area declared as such by the Central Government or any State Government or any other competent Authority under any law for the time being in force. Companies (Corporate Social Responsibility Policy) Rules, 2014 In exercise of the powers conferred under section 135 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013, the Central Government hereby makes the following rules, namely:- Short title and commencement. Rule 1: (1) These rules may be called the Companies (Corporate Social Responsibility Policy) Rules, 2014.
- 51. 37 (2) They shallcom.e into force on the 1st day of April, 2014. Definitions. Rule 2: (1) In these rules, unless the context otherwise requires,— (a) “Act” means the Companies Act, 2013; (b) “Annexure” means the Annexure appended to these rules; (c) “Corporate Social Responsibility (CSR)” means and includes but is not limited to :— (i) Projects or programs relating to activities specified in Schedule VII to the Act; or (ii) Projects or programs relating to activities undertaken by the board of directors of a company (Board) in pursuance of recommendations of the CSR Committee of the Board as per declared CSR Policy of the company subject to the condition that such policy will cover subjects enumerated in Schedule VII of the Act. (d) “CSR Committee” means the Corporate Social Responsibility Committee of the Board referred to in section 135 of the Act. (e) “CSR Policy” relates to the activities to be undertaken by the company as specified in Schedule VII to the Act and the expenditure 2 thereon, excluding activities undertaken in pursuance of normal course of business of a company; (f) “Net profit” means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the Act, but shall not include the following, namely :— (i) any profit arising from any overseas branch or branches of the company, whether operated as a separate company or otherwise; and (ii) any dividend received from other companies in India, which are covered under and complying with the provisions of section 135 of the Act: Provided that net profit in respect of a financial year for which the relevant financial statements were prepared in accordance with the provisions of the Companies Act, 1956 (1 of 1956), shall not be required to be re-calculated in accordance with the provisions of the Act: Provided further that in case of a foreign company covered under these rules, net profit means the net profit of such company as per profit and loss account prepared in terms of clause (a) of sub-section (1) of section 381 read with section 198 of the Act. (2) Words and expressions used and not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act. Corporate Social Responsibility Rule 3: (1) Every company including its holding or subsidiary, and a foreign company defined under clause (42) of section 2 of the Act having its branch office or project office in India, which fulfils the criteria specified in sub-section (1) of section 135 of the Act shall comply with the provisions of section 135 of the Act and these rules: Provided that net worth, turnover or net profit of a foreign company of the Act shall be computed in accordance with balance sheet and profit and loss account of such company prepared in accordance with the provisions
- 52. 38 of clause (a)of sub-section (1) of section 381 and section 198 of the Act. (2) Every company which ceases to be a company covered under subsection (1) of section 135 of the Act for three consecutive financial years shall not be required to— (a) Constitute a CSR Committee; and (b) Comply with the provisions contained in sub-sections (2) to (5) of the said section, till such time it meets the criteria specified in sub- section (1) of section 135. CSR Activities Rule 4: (1) The CSR activities shall be undertaken by the company, as per its stated CSR Policy, as projects or programs or activities (either new or ongoing), excluding activities undertaken in pursuance of its normal course of business. (2) The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through (a) a company established under section 8 of the Act or a registered trust or a registered society, established by the company, either singly or along with any other company, or (b) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Governmentoranyentityestablished under an Act of Parliament or a State legislature : Provided that- if, the Board of a company decides to undertake its CSR activities through a company established under section 8 of the Act or a registered trust or a registered society, other than those specified in this sub-rule, such company or trust or society shall have an established track record of three years in undertaking similar programs or projects; and the company has specified the projects or programs to be undertaken, the modalities of utilisation of funds of such projects and programs and the monitoring and reporting mechanism” (3) A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR Committees of respective companies are in a position to report separately on such projects or programs in accordance with these rules. (4) Subject to provisions of sub-section (5) of section 135 of the Act, the CSR projects or programs or activities undertaken in India only shall amount to CSR Expenditure. (5) The CSR projects or programs or activities that benefit only the employees of the company and their families shall not be considered as CSR activities in accordance with section 135 of the Act. (6) Companies may build CSR capacities of their own personnel as well as those of their Implementing agencies through Institutions with established track records of at least three financial years but such expenditure [including expenditure on administrative overheads] shall not exceed five per cent of total CSR expenditure of the company in one financial year. (7) Contribution of any amount directly or indirectly to any political party under section 182 of the Act, shall not be considered as CSR activity. CSR Committees Rule 5: (1) The companies mentioned in the
- 53. 39 rule 3 shallconstitute CSR Committee as under:— (i) an unlisted public company or a private company covered under sub- section(1)ofsection135whichisnot required to appoint an independent director pursuant to sub-section (4) of section 149 of the Act, shall have its CSR Committee without such director; (ii) a private company having only two directorsonitsBoardshallconstitute its CSR Committee with two such directors; (iii) with respect to a foreign company covered under these rules, the CSR Committee shall comprise of at least two persons of which one person shall be as specified under clause (d) of sub-section (1) of section 380 of the Act and another person shall be nominated by the foreign company. (2) The CSR Committee shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company. CSR Policy Rule 6 : (1) The CSR Policy of the company shall, inter alia, include the following namely : (a) a list of CSR projects or programs which a company plans to undertake falling within the purview of the Schedule VII of the Act, specifying modalities of execution of such project or programs and implementation schedules for the same; and (b) monitoring process of such projects or programs: Provided that the CSR activities does not include the activities undertaken in pursuance of normal course of business of a company : Provided further that the Board of Directors shall ensure that activities included by a company in its Corporate Social Responsibility Policy are related to the activities included in Schedule VII of the Act. (2) The CSR Policy of the company shall specify that the surplus arising out of the CSR projects or programs or activities shall not form part of the business profit of a company. CSR Expenditure Rule 7: CSR expenditure shall include all expenditure including contribution to corpus for projects or programs relating to CSR activities approved by the Board on the recommendation of its CSR Committee, but does not include any expenditure on an item not in conformity or not in line with activities which fall within the purview of Schedule VII of the Act. CSR Reporting Rule 8: (1) The Board’s Report of a company covered under these rules pertaining to a financial year commencing on or after the 1st day of April, 2014 shall include an annual report on CSR containing particulars specified in Annexure. (2) In case of a foreign company, the balance sheet filed under subclause (b) of sub-section (1) of section 381 shall contain an Annexure regarding report on CSR. Display of CSR activities on its website Rule 9: The Board of Directors of the company shall, after taking into account the recommendations of CSR Committee,
- 54. 40 approve the CSRPolicy for the company and disclose contents of such policy in its report and the same shall be displayed on the company’s website, if any, as per the particulars specified in the Annexure. ANNEXURE FORMAT FOR THE ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED IN THE BOARD’S REPORT 1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. 2. The Composition of the CSR Committee. 3. Average net profit of the company for last three financial years. 4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above). 5. Details of CSR spent during the financial year: (a) Total amount to be spent for the financial year; (b) Amount unspent, if any; (c) Manner in which the amount spent during the financial year is detailed below: (1) (2) (3) (4) (5) (6) (7) (8) S.No. CSR project or activity identified Sector in which the project is covered Projects or programs (1) Local area or other (2) Specify the state and district where projects or programs was undertaken Amount outlay (budget) projects or programs wise Amount spent on the projects or programs Sub-heads: (1) Direct expenditure on projects or programs (2) Overheads: Cumulative expenditure up to the reporting period Amount spent Direct or through implementing agency* 1. 2. 3. TOTAL *Give details of implementing agency 6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. 7. A responsibility statement of the CSR Committee that the implementation and monitoringofCSRPolicy,isincompliance with CSR objectives and Policy of the company. Sd/- (Chief Executive Officer or Managing Director or Director) Sd/- (Chairman CSR Committee) Sd/- (Person specified under clause(d) of sub-section (1) of section 380 of the Act ) (wherever applicable)
- 55. 41 General Circular No-21/2014dated 18th June, 2014 Clarifications with regard to provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013. ThisMinistryhasreceivedseveralreferences and representation from stakeholders seekingclarificationsontheprovisionsunder Section 135 of the Companies Act, 2013 (herein after referred as ‘the Act’) and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as well as activities to be undertaken as per Schedule VII of the Companies Act, 2013. Clarifications with respect to representations received in the Ministry on Corporate Social Responsibility (hereinafterreferredas(‘CSR’)areasunder:- (i) The statutory provision and provisions of CSR Rules, 2014, is to ensure that while activities undertaken in pursuance of the CSR policy must be relatable to Schedule VII of the Companies Act 2013, the entries in the said Schedule VII must be interpreted liberally so as to capture the essence of the subjects enumerated in the said Schedule. The items enlisted in the amended Schedule VII of the Act, are broad-based and are intended to cover a wide range of activities as illustratively mentioned in the Annexure. (ii) It is further clarified that CSR activities should be undertaken by the companies in project/ programme mode [as referred in Rule 4 (1) of Companies CSR Rules, 2014].One-offeventssuchasmarathons/ awards/ charitable contribution/ advertisement/ sponsorships of TV programmes etc. would not be qualified as part of CSR expenditure. (iii) Expenses incurred by companies for the fulfilment of any Act/ Statute of regulations (such as Labour Laws, Land Acquisition Act etc.) would not count as CSR expenditure under the Companies Act. (iv) Salaries paid by the companies to regular CSR staff as well as to volunteers of the companies (in proportion to company’s time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure. (v) “Any financial year” referred under Sub- Section (1) of Section 135 of the Act read with Rule 3(2) of Companies CSR Rule, 2014, implies ‘any of the three preceding financial years’. (vi) ExpenditureincurredbyForeignHolding Company for CSR activities in India will qualify as CSR spend of the Indian subsidiary if, the CSR expenditures are routed through Indian subsidiaries and if the Indian subsidiary is required to do so as per section 135 of the Act. (vii) ‘Registered Trust’ (as referred in Rule 4(2) of the Companies CSR Rules, 2014) would include Trusts registered under Income Tax Act 1956, for those States where registration of Trust is not mandatory. (viii) Contribution to Corpus of a Trust/ society/ section 8 companies etc. will qualify as CSR expenditure as long as (a) the Trust/ society/ section 8 companies etc.iscreatedexclusivelyforundertaking CSR activities or (b) where the corpus is created exclusively for a purpose directly relatabletoasubjectcoveredinSchedule VII of the Act.
- 56. 42 Annexure referred toat para (i) of General Circular No. 21/2014 dated 18.06.2014 SI. No. Additional items requested to be included in Schedule VII or to be clarified as already being covered under Schedule VII of the Act Whether covered under Schedule VII of the Act 1. Promotion of Road Safety through CSR: (i)(a) Promotions of Education, “Educating the Masses and Promotion of Road Safety awareness in all facets of road usage, (a) Schedule VII (ii) under “promoting education”. (b) Drivers’ training, For drivers training etc. Schedule VII (ii) under “vocational skills”. (c) Training to enforcement personnel, It is establishment functions of Government (cannot be covered). (d) Safety traffic engineering and awareness through print, audio and visual media” should be included. Schedule VII (ii) under “promoting education”. (ii) Social Business Projects : “giving medical and Legal aid, treatment to road accident victims” should be included. (ii) Schedule VII (i) under ‘promoting health care including preventive health care.’ 2. Provisions for aids and appliances to the differently- able persons - ‘Request for inclusion’. Schedule VII (i) under ‘promoting health care including preventive health care.’ 3. The company contemplates of setting up ARTIIC (Applied Research Training and Innovation Centre) at Nasik. Centre will cover the following aspects as CSR initiatives for the benefit of the predominately rural farming community: (a) Capacity building for farmers covering best sustainable farm management practices. (b) Training Agriculture Labour on skill development. (c) Doing our own research on the field for individual crops to find out the most cost optimum and Agri – ecological sustainable farm practices. (Applied research) with a focus on water management. (d) To do Product Life Cycle analysis from the soil conservation point of view. Item no. (ii) of Schedule VII under the head of “promoting education” and “vocational skills” and “rural development”. (a) “Vocational skill” livelihood enhancement projects. (b) “Vocational skill” (c) ‘Ecological balance’, ‘maintaining quality of soil, air and water’. (d) “Conservation of natural resource” and ‘maintaining quality of soil, air and water’. 4. To make “Consumer Protection Services” eligible under CSR. (Reference received by Dr. V.G. Patel, Chairman of Consumer Education and Research Centre). (i) Providing effective consumer grievance redressal mechanism. Consumer education and awareness can be covered under Schedule VII (ii) “promoting education”.
- 57. 43 SI. No. Additionalitems requested to be included in Schedule VII or to be clarified as already being covered under Schedule VII of the Act Whether covered under Schedule VII of the Act (ii) Protecting consumer’s health and safety, sustainable consumption, consumer service, support and complaint resolution. (iii) Consumer protection activities. (iv) Consumer Rights to be mandated. (v) all consumer protection programs and activities”onthesamelinesasRuralDevelopment, Education etc. 5. a) Donations to IIM [A] for conservation of buildings and renovation of classrooms would qualify as “promoting education” and hence eligible for compliance of companies with Corporate Social Responsibility. b) Donations to IIMA for conservation of buildings and renovation of classrooms would qualify as “protection of national heritage, art and culture, including restoration of buildings and sites of historical importance” and hence eligible for compliance of companies with CSR. Conservation and renovation of school buildings and classrooms relates to CSR activities under Schedule VII as “promoting education”. 6. Non Academic Technopark TBI not located within an academic Institution but approved and supported by Department of Science and Technology. Schedule VII (ii) under “promoting education”, if approved by Department of Science and Technology. 7. Disaster Relief Disaster relief can cover wide range of activities that can be appropriately shown under various items listed in Schedule VII. For example, (i) medical aid can be covered under ‘promoting health care including preventive health care.’ (ii) food supply can be covered under eradicating hunger, poverty and malnutrition. (iii) supply of clean water can be covered under ‘sanitation and making available safe drinking water’. 8. Trauma care around highways in case of road accidents. Under ‘health care’. 9. Clarity on rural development projects” Any project meant for the development of rural India will be covered under this. 10. Supplementing of Govt. schemes like mid-day meal by corporates through additional nutrition would qualify under Schedule VII. Yes. Under Schedule VII, item no. (i) under ‘poverty and malnutrition’.
- 58. 44 SI. No. Additionalitems requested to be included in Schedule VII or to be clarified as already being covered under Schedule VII of the Act Whether covered under Schedule VII of the Act 11. Research and Studies in the areas specified in Schedule VII. Yes, under the respective areas of items defined in Schedule VII. Otherwise under ‘promoting education’. 12. Capacity building of government officials and elected representatives – both in the area of PPPs and urban infrastructure. No. 13. Sustainable urban development and urban public transport systems Not covered. 14. Enabling access to, or improving the delivery of, public health systems be considered under the head “preventive healthcare” or “measures for reducing inequalities faced by socially economically backward groups”? Can be covered under both the heads of “healthcare” or “measures for reducing inequalities faced by socially economically backward groups”, depending on the context. 15. Likewise, could slum re-development or EWS housingbecoveredunder“measuresforreducing inequalities faced by socially economically backward groups”? Yes. 16. Renewable energy projects Under ‘Environmental sustainability, ecological balance and conservation of natural resources’, 17. (i) Are the initiatives mentioned in Schedule VII exhaustive? (ii) In case a company wants to undertake initiatives for the beneficiaries mentioned in Schedule VII, but the activity is not included in Schedule VII, then will it count (as per 2(c) (ii) of the Final Rules, they will count)? (i) (ii) Schedule VII is to be liberally interpreted so as to capture the essence of subjects enumerated in the schedule. 18. US-India Physicians Exchange Program – broadly speaking, this would be program that provides for the professional exchange of physicians between India and the United States. No.
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- 67. 53 ANNEXURE - 1.3 EXTRACTOFSECURITIESANDEXCHANGE BOARD OFINDIA(LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 “Annual Report 34. (1) The listed entity shall submit the annual report to the stock exchange within twenty one working days of it being approved and adopted in the annual general meeting as per the provisions of the Companies Act, 2013. (2) The annual report shall contain the following: (a) audited financial statements i.e. balance sheets, profit and loss accounts etc; (b) consolidated financial statements audited by its statutory auditors; (c) cash flow statement presented only under the indirect method as prescribed in Accounting Standard-3 or Indian Accounting Standard 7, as applicable, specified in Section 133 of the Companies Act, 2013 read with relevant rules framed thereunder or as specified by the Institute of Chartered Accountants of India, whichever is applicable; (d) directors report; (e) management discussion and analysis report-either as a part of directors report or addition thereto; (f) for the top hundred listed entities based on market capitalization (calculated as on March 31 of every financial year), business responsibility report describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified by the Board from time to time: Provided that listed entities other than top 100 listed companies based on market capitalization and listed entities which have listed their specified securities on SME Exchange, may include these business responsibility reports on a voluntary basis in the format as specified. (3) The annual report shall contain any other disclosures specified in Companies Act, 2013 along with other requirements as specified in Schedule V of these regulations.”
- 68. 54 NOTIFICATION Mumbai, the 22ndDecember, 2015 SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2015 No. SEBI/LAD-NRO/GN/2015-16/27. In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, namely:- 1. These regulations may be called the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2015. 2. They shall come into force on the 1st day of April, 2016. 3. In the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in regulation 34, in sub regulation (2), – i. in clause (f), after the words “for the top” and before the words “listed entities”, for the word hundred the words five hundred shall be substituted; ii. intheprovisotoclause(f),afterthewords“otherthantop”andbeforethewords“listed companies”, for the number “100” the words “five hundred” shall be substituted. U.K. Sinha Chairman Securities and Exchange Board of India
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- 77. 63 Annexure 2.2 (a) Summaryof CSR Expenditure as per Audited Financial Statements for Financial Year 2014-15 A. MANUFACTURING SECTOR (CPSEs) ( R in crore) S. No. Name of the Company Govt Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent 1 Oil Natural Gas Corporation Limited (ONGC) 68.94 3,030.00 660.61 - 495.23 495.23 165.38 2 National Thermal Power Corporation Limited (NTPC) 74.96 4,173.78 283.48 - 205.19 205.19 78.30 3 National Mineral Dev Corp Ltd (NMDC Ltd.) 80 9,979.14 210.56 49.40 139.05 188.45 21.91 4 Bharat Heavy Electricals Ltd (BHEL) 63.06 8,222.33 164.45 84.49 18.02 102.51 62.94 5 Gas Authority of India Ltd (GAIL) 56.11 5,933.37 118.67 - 17.15 17.15 77.31 (Balance provided for) Sub Total (A) 1,338.62 1,437.77 133.89 874.64 1,008.53 328.53 B. SERVICE / TRADING SECTOR (CPSEs) ( R in crore) S. No. Name of the Company Govt Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent 1 Power Finance Corporation Limited (PFC) 72.8 5,874.47 117.49 2.77 48.92 51.69 65.81 2 Power Grid Corporation of India Limited 57.9 5,525.52 110.51 4.10 43.32 47.42 63.09 3 Rural Electrification Corporation Limited 65.64 5,162.24 103.25 0.02 46.02 46.04 57.21 4 Oil India Ltd (OIL) 67.64 4,909.38 98.19 72.79 60.52 133.31 - 5 Container Corporation of India Ltd (CONCOR) 61.8 1,226.00 26.90 1.11 19.45 20.56 5.69 Sub Total (B) 22,697.61 456.34 80.79 218.23 299.02 191.80 Grand Total [(A)+(B)] 94,036.23 1,894.11 214.68 1,092.87 1,307.55 520.33
- 78. 64 Annexure 2.2 (b) Summaryof CSR Expenditure as per Audited Financial Statements for Financial Year 2015-16 A. MANUFACTURING SECTOR (CPSEs) ( R in crore) S. No. Name of the Company Govt Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent (Including L/Y spent, if any)* 1 Oil Natural Gas Corporation Limited (ONGC) 68.94 29,684.80 593.69 16.49 402.57 419.06 172.70 2 National Thermal Power Corporation Limited (NTPC) 74.96 13,567.43 271.35 252.69 239.12 491.81 - 3 National Mineral Dev Corp Ltd (NMDC Ltd.) 80 9,664.05 193.28 104.04 106.05 210.09 - 4 Indian Oil Corporation Ltd (IOCL) 58.57 7,075.00 141.50 101.60 55.08 156.68 4.43 5 Bharat Petroleum Corporation Limited (BPCL) 55.79 5,629.89 112.60 25.45 70.13 95.58 17.02 Sub Total (A) 65,621.17 1,312.42 500.27 872.95 1,373.22 194.15 B. SERVICE / TRADING SECTOR (CPSEs) ( R in crore) S. No. Name of the Company Govt Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent (Including L/Y spent, if any)* 1 Power Finance Corporation Limited (PFC) 72.8 7,289.31 145.79 - 195.52 195.52 - 2 Rural Electrification Corporation Limited 65.64 6,372.65 127.45 0.02 128.18 128.20 - 3 Power Grid Corporation of India Limited 57.9 6,089.70 121.79 19.35 96.44 115.79 6.01 4 Oil India Limited 67.64 4,415.73 88.31 48.85 43.36 92.21 - 5 Container Corporation of India Ltd (CONCOR) 61.8 1,263.59 25.27 - 30.96 30.96 - Sub Total (B) 25,430.98 508.61 68.22 494.46 562.68 6.01 Grand Total [(A)+(B)] 91,052.15 1,821.03 568.49 1,367.41 1,935.90 200.16 * Bifurcation of yearly spent not available. The figure may include amount pertaining to previous year also.
- 79. 65 Annexure 2.2 (c) Summaryof CSR Expenditure as per Audited Financial Statements for Financial Year 2014-15 A. MANUFACTURING SECTOR (FOBs) ( R in crore) S. No. Name of the Company Promoters' Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent 1 Reliance Industries Ltd 45.24 26,648.00 532.96 25.30 735.28 760.58 - 2 Tata Steel 31.35 8,412.82 168.26 171.46 - 171.46 - 3 Bajaj Auto Ltd 49.24 4,316.49 86.33 42.91 - 42.91 43.42 4 Mahindra Mahindra Ltd. 25.55 4,151.74 83.03 10.37 72.87 83.24 - 5 UltraTech Cement Limited 61.69 3,076.00 61.51 44.46 - 44.46 17.05 Sub Total (A) 46,605.05 932.09 294.50 808.15 1,102.65 60.47 B. SERVICE / TRADING SECTOR (FOBs) ( R in crore) S. No. Name of the Company Promoters' Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent 1 Tata Consultancy Services Ltd 73.89 14,250.00 285.00 60.90 157.50 218.40 66.00 2 Bharti Airtel Ltd 43.72 6,998.60 140.00 - 27.38 27.38 98.9 (Balance provided for) 3 Wipro Ltd 73.39 6,415.40 128.30 - 132.70 132.70 - 4 HCL Technologies Limited 45.57 4,499.27 89.99 - 7.17 7.17 83.83 5 Kotak Mahindra Bank Limited 40.02 1,959.79 39.20 - 8.59 8.59 Balance provided for Sub Total (B) 34,123.06 682.49 60.90 333.34 394.24 149.83 Grand Total [(A)+(B)] 80,728.11 1,614.58 355.40 1,141.49 1,496.89 210.30
- 80. 66 Annexure 2.2 (d) Summaryof CSR Expenditure as per Audited Financial Statements for Financial Year 2015-16 A. MANUFACTURING SECTOR (CPSEs) ( R in crore) S. No. Name of the Company Promoters' Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent (Including L/Y spent, if any)* 1 Reliance Industries Ltd 45.24 27,889.00 557.78 - 651.57 651.57 - 2 Tata Steel 31.35 7,518.00 150.00 99.87 104.60 204.47 - 3 Bajaj Auto Ltd 49.24 4,323.05 86.46 - 86.72 86.72 - 4 Mahindra Mahindra Ltd. 25.55 4,247.45 84.95 7.68 78.24 85.92 - 5 UltraTech Cement Limited 61.69 2,891.00 57.82 50.89 - 50.89 6.93 Sub Total (A) 46,868.50 937.01 158.44 921.13 1,079.57 6.93 B. SERVICE / TRADING SECTOR (FOBs) ( R in crore) S. No. Name of the Company Promoters' Holding % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent (Including L/Y spent, if any)* 1 Tata Consultancy Services Ltd 73.89 17,994.00 360.00 1.45 292.78 294.23 66.00 2 Wipro Ltd 73.39 7,800.20 156.00 - 159.82 159.82 - 3 HCL Technologies Limited 45.57 6,106.44 122.13 - 12.37 12.37 111.61 4 Bharti Airtel Ltd 43.72 9,450.20 189.00 4.33 39.61 43.94 135.53 (Balance provided for) 5 Kotak Mahindra Bank Limited 40.02 2,366.37 47.33 - 11.10 11.10 36.23 Sub Total (B) 43,717.21 874.46 5.78 515.68 521.46 213.84 Grand Total [(A)+(B)] 90,585.71 1,811.47 164.22 1,436.81 1,601.03 220.77 * Bifurcation of yearly spent not available. The figure may include amount pertaining to previous year also.
- 81. 67 Annexure 2.2 (e) Summaryof CSR Expenditure as per Audited Financial Statements for Financial Year 2014-15 A. MANUFACTURING SECTOR (MNCs) ( R in crore) S. No. Name of the Company FDI % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent 1 ITC Ltd. 51.64 10,646.11 212.92 0.01 214.05 214.06 - 2 Cairn India Ltd 65.27 6,489.82 129.80 62.42 7.94 70.36 59.44 3 Larsen Toubro Limited 25.55 5,310.29 106.21 59.39 17.15 76.54 29.67 4 Hindustan Unilever Limited 61.69 3,990.93 79.82 54.85 27.50 82.35 - 5 Maruti Suzuki India Limited 80.29 3,269.10 65.40 75.44 3.02 78.46 - Sub Total (A) 29,706.25 594.15 252.11 269.66 521.77 89.11 B. SERVICE / TRADING SECTOR (MNCs) ( R in crore) S. No. Name of the Company FDI % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent 1 HDFC Bank Ltd 45.24 12,385.00 248.00 9.98 117.30 127.28 53.19 (Balance provided for) 2 Infosys Ltd 31.35 12,133.00 243.00 - 243.00 243.00 3.46 3 Indiabulls Housing Finance Ltd 61.69 1,159.97 23.20 - 4.35 4.35 Balance provided for 4 Zee Entertainment Enterprises Ltd 68.17 965.80 19.34 - 16.84 16.84 2.50 5 Blue Dart Express Ltd 82.99 193.80 3.88 0.33 3.69 4.02 - Sub Total (B) 26,837.57 537.42 10.31 385.18 395.49 5.96 Grand Total [(A)+(B)] 56,543.82 1,131.57 262.42 654.84 917.26 95.07
- 82. 68 Annexure 2.2 (f) Summaryof CSR Expenditure as per Audited Financial Statements for Financial Year 2015-16 A. MANUFACTURING SECTOR (MNCs) ( R in crore) S. No. Name of the Company FDI % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent (Including L/Y spent, if any)* 1 ITC Ltd. 51.64 12,338.22 246.76 - 247.50 247.50 - 2 Cairn India Ltd 65.27 5,360.30 107.21 51.50 - 51.50 55.71 3 Larsen Toubro Limited 25.55 5,073.00 101.46 38.42 81.47 119.89 - 4 Hindustan Unilever Limited 61.69 4,597.07 91.94 62.81 29.31 92.12 - 5 Maruti Suzuki India Limited 80.29 3,269.10 65.40 72.84 5.62 78.46 - Sub Total (A) 0,637.69 612.77 225.57 363.90 589.47 55.71 B. SERVICE / TRADING SECTOR (MNCs) ( R in crore) S. No. Name of the Company FDI % Average Net Profit Prescribed spent for CSR Amount actually spent Amount unspent Direct Through Implementation Agencies Total Spent (Including L/Y spent, if any)* 1 HDFC Bank Ltd 45.24 12,385.00 248.00 9.98 117.30 127.28 53.19 (Balance provided for) 2 Infosys Ltd 31.35 12,800.00 256.01 83.24 119.06 202.30 53.71 3 Indiabulls Housing Finance Ltd 51.79 1,591.05 31.82 - 10.53 10.53 Balance provided for 4 Zee Entertainment Enterprises Ltd 68.17 1,107.10 22.14 - 22.83 22.83 1.80 5 Blue Dart Express Ltd 82.99 202.22 4.05 - - - 1.01 (Balance provided for) Sub Total (B) 8,085.37 562.02 93.22 269.72 362.94 55.51 Grand Total [(A)+(B)] 8,723.06 1,174.79 18.79 633.62 952.41 111.22 * Bifurcation of yearly spent not available. The figure may include amount pertaining to previous year also.
- 83. DISCLAIMER This publication hasbeen compiled and summarized from information available in official documents, circulars, other publically available information and websites of the Government of India, Corporate Houses and NGOs. This Study is intended to serve as a guide to all users and does not purport to be a legal document. In case of any variation between what has been stated in this Study and the relevant Act, Rules etc., the latter shall prevail. This publication is for information purposes only. Due care has been taken during the compilation of this publication to ensure that the information is current and accurate to the best of our knowledge and belief. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without first obtaining written prior permission of EkalAbhiyan. Please send the e-feedback on: [email protected] ,dy xhr fuekZ.kksa ds ikou ;qx esa ge pfj=k fuekZ.k u Hkwysa LokFkZ lk/uk dh vka/h esa olq/k dk dY;k.k u HkwysaA ekuk vxe vxk/ flU/q gS la?kkkZs dk ikj ugha gSA fdUrq Mwcuk e/kjksa esa lkgl dks Lohdkj ugha gSA tfVy leL;k lqykus dks uwru vuqla/ku u HkwysaAA 'khy fou; vkn'kZ JsBrk rkj fcuk adkj ugha gSA f'k{kk D;k Loj lk/ ldsxh ;fn uSfrd vk/kj ugha gSA dhfrZ dkSeqnh dh xfjek esa laLÑfr dk lEeku u HkwysaAA vkfodkjksa dh Økafr;ksa esa ;fn ekuo dk I;kj ugha gSA l`tughu foKku O;FkZ gS çk.kh dk midkj ugha gSA HkkSfrdrk ds mRFkkuksa esa thou dk mRFkku u HkwysaAA
- 84. STUDY FOR EKALABHIYAN BY BHARTIYA VITTA SALAHKARSAMITI (BVSS) CSR Activities in India DesignPrintedbyVIBAPRESSPVT.LTD.-9810049515 CSRACTIVITIESININDIA-ANALYSISANDTRENDS ANALYSIS AND TRENDS