CSR MANDATE IN INDIA

ERA OF COMMAND &

CONTROL

PRESENTATION FLOW

CSR-EVOLUTION AND
UNDERSTANDING

CSR MANDATE
CSR FRAMEWORK

CSR-EVOLUTION & UNDERSTANDING

CSR-EVOLUTION IN INDIA
First Phase
Till 1850s

Culture, religion,
family, values &
tradition.

Second Phase
1900s to 1980s

Industrialization
had an influential
effect on CSR.

Era of Command and Control

Third Phase
Present

Integrated CSR into

a sustainable
business strategy.

CSR is way of conducting business, by which corporate entities visibly contribute to

the social good.

CSR UNDERSTANDING
Three Different Understanding of CSR

CSR AS VALUE
CREATION
CSR AS
RISK
MANAGEMENT

CSR AS
PHILANTROPY

CSR MANDATE

CSR MANDATE COMPANY BILL 2013

Clause 135of the Companies Bill (the CSR

CLAUSE) requires a qualifying corporation to
spend on CSR at least 2 percent of its average net
profits made in the preceding three financial years.

Bills is applicable to any company with

WHAT ACCOUNTS AS CSR

Eradicating Hunger

Ensuring Environmental
Sustainable

Promotion of Education

Employment Enhancing
Vocational Skills

Gender Equality &

Empowering Women

Social Business Projects

Reducing Child
Mortality & Improving
maternal health

Contribution to the Prime

Minister National Relief
Fund

Combating human
immunodeficiency virus,
other diseases

Such other matters as may

be prescribed

CSR MANDATE POSITIVE IMPACT

Business can contribute to equitable &
sustainable economic development

ONE THIRD

TWO- THIRD

of the population is
illiterate

lack access to
proper sanitation

400 MILION
PEOPLE
still live on less
than US$2 a day

CSR MANDATE NEGATIVE IMPACT

Indian companies still

equate CSR with
CORPORATE
PHILANTROPY

Company may treat it as

a CHECK THE BOX
exercise rather than
looking at ways to doing
social and environmental
good

Companies will comply

by CHALLENGING
FUNDS to community
organizations

Effort to meet the spending obligations, companies may not

do the right

WHERE INDIAN COMPANY STANDS

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

Company

Revenue
(In crore)

Avg PAT
(In crore)

Actual SpentCSR(In crore)

2% of PAT
(In crore)

Indian Oil

442,459

7,783

83

156

Reliance Industries

368,571

21,138

288

423

Tata Steel

135,978

3,895

146

78

TCS

48,894

8,935

51

179

Grasim Industries

27,899

3,395

16

68

Cairn India

11,861

5,108

NA

102

HDFC Bank

27,606

4,108

NA

82

Oil India

17,215

2,988

50

60

Infosys

33,734

7,128

26

143

INDIAS TOP 100 COMPANIES

2% of PAT- 5611Crores
Actual Spent- 1756 Crores

CSR
FRAMEWORKS

FRAMEWORK - CSR
Conduct CSR assessment
Plan
Develop a CSR Strategy

Develop a CSR Commitments

Do
Implement a CSR
Commitment
Assure & Progress Report

Check

Evaluate & Improve

Improve

PROCEDURE TO COMPANY
Create

CSR Committee

Allocate
Two percent of net
profit

Develop

Corporate Social
Responsibility
Policy

Report
CSR Initiatives to be
Reported

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

Questions ?