Assignment 1

Sruthi Ramachandran

MBA B

B2356

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 I. What is CSR?
CSR indicates the company’s responsibility to incorporate social, economical and
ethical concerns in day to day business activities. It involves strict compliance in
regard to appropriate business level interactions with its stakeholders, on a justified
basis.
CSR also includes actions which are beyond the interests of the firm. In short, it is the
ability of an organization to deliver a positive impact as an integral part of its social
responsibility towards the society.

II. Sustainability aspect of CSR

Sustainability describes the ability to maintain various systems and processes-
environmentally, socially and economically, over time whereas CSR refers to a
company’s commitment to practice environmental and social sustainability and to be
good stewards of the environment and the social landscapes in which they operate.
Hence, these are related but distinct concepts. In other words, sustainable
development can be a part of a company’s social responsibility program.
The seven key principles to CSR are as follows:-
1. Human Rights
2. Community Involvement and Development
3. Labour Practices
4. Environment
5. Organizational Government
6. Consumer Issues
7. Fair Operating Practices
It’s clearly evident from the listed key principles that the environment is only one of
the seven principles making sustainability an important part of wider CSR issues.

III. CSR Policies

The CSR Policies of a company include:-
 Projects and programmes to be undertaken
 A list of CSR Projects/Programmes which an entity plans to undertake with a
focus to integrate business models with social and environmental priorities to

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 create a shared value, specifying the modes of execution and implementation
schedules.
 Indications that prohibition the company to utilize the surplus funds arising
out CSR activities as the business profits of a company.
 Composition of corpus.

IV. What is practical about CSR?

The practical aspects of CSR discussed in Section 135 of the Companies Act, 2013
are as follows
Every company having:-
 The net worth of Rs 500 crores or more;
OR
 Turnover of Rs 1000 crores or more;
OR
 Net profit of Rs 5 crores or more

During the immediately preceding financial year have to constitute CSR committee
of the Board consisting of three or more directors, out of which at least one director
shall be an independent director.

Provided that where a company is not required to appoint an independent director

under sub-section (4) of section 149, it shall have in its CSR Committee two or more
directors.

V. The revenue and profitability aspects of CSR activities?

As per a research conducted by a Harvard University, ‘stakeholder balanced
companies always showed four times the growth rate and eight times the employment
generation when compared to companies that focussed only on shareholders and
profit maximization. So, healthy community relationships often help firms, earn
greater revenues. A basic assumption is that strict compliance to CSR activities results
in increased profits, too. Besides this, adhering to CSR practices can result in:-
 Improved efficiencies
 Lowered costs
 Enhanced employee loyalty
 Employment of better personnel to the firm

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  Better listing in FTSE4Good or Dow Jones Sustainability Indices
 Increased stock prices
 Attractive stock options
 Healthier financial strength of the company
 Improved triple bottom line
 Effective financial performance and
 Contended employees
On the contrary, empirical studies show that there exists a positive but weak
correlation between CSR and corporate financial performance. Further analyses have
led to the following conclusions:-
 CSR has an inbuilt potential to generate greater corporate revenues and profits.
 As a result, every company nowadays engage in CSR activities at a
considerable level.
VI. Company chosen

BHARAT HEAVY ELECTRICAL LIMITED (BHEL)

VII. Why BHEL?

 BHEL strictly adheres to a pre determined CSR Scheme.
 CSR Mission Statement on CSR:- “To sincerely and effectively discharge
company’s responsibility in the identified CSR thrust areas and other
areas listed out in the Companies Act 2013.”.
 CSR Vision statement:- “A responsible corporate citizen working towards
a better tomorrow.”
 Its areas of CSR, till date, include
 Adoption of villages
 Free medical camps/ charitable dispensaries
 School for the underprivileged and handicapped children
 Ban on child labour
 Disaster/natural calamity aid
 Employment for the differently able
 Widow resettlement
 Employment for ex-serviceman
 Irrigation using treated sewage

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  Pollution checking camps
 Plantation of millions of trees
 Energy saving
 Conservation of natural resources through environmental management.
 Financial assistance to various NGOs/Trusts/Social Welfare (56 villages
having nearly 80,000 inhabitants have been adopted).

VIII. Recent CSR Initiatives by BHEL

i. Grid Interlace Solar Power Plant in Schools of Punjab

The CSR wing of BHEL has granted Kalgidhar Trust for setting up 60 KW
multiple-grid interactive SPV Power Plant in two of its rural Akal academies,
located in Punjab. The power produced from these plants will meet the
requirement of two schools and surplus power will be fed to the main grid for
the utilization by the local people.

ii. Refurbishment of Swathantrata Sangram Sangralalya, Red Fort

One of the CSR initiatives of BHEL is the promotion of Art and Culture.
Appropriate financing for the refurbishment of Swathantrata Sangram
Sangralalya, Red Fort was offered by means of conducting various cultural
programmes which provided a glimpse into the major phases of India’s
struggle for independence.

The project mainly covers:-

 Up gradation of the museum building.
 Improving collection management, cataloguing, document and storage.
 Landscape around the museum building and visitor facilities.

iii. Clean Ganga Initiative

The company partnered with FICCI- DRDO in implementing this 4.65 crore
worth prestigious initiative aimed to set up bio digester toilets in 25 clusters on
the banks of river Ganga, between Haridwar and Rishikesh.

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 iv. Education through Mobile Science Labs for Underprivileged Children
The programme is conducted to impart a noble and innovative model of
learning to teachers and students belonging to the underprivileged sections of
the society. This initiative also aims to work alongside the Government
educational institutions to enhance and promote creative and scientific
learning.

v. Relief Efforts in aid of Hud Hud affected people of Vizag and flood
ravaged people of J & K
Emergency Health Camps in association with HelpAge India has been setup at
disaster affected locations of Andhra Pradesh. A team coordinated with local
authorities provided essential items for subsistence to the victims.
The agenda of this initiative also encompassed in effectively taking part in
medical relief operations for the food ravaged people in J&K.

vi. Medical Relief in disaster struck states, J& K and A.P

The project is being implemented by the Wockhardt Foundation equipped with
qualified doctors, medical teams and medicines are ought to provide primary
healthcare services to the victims of these states afflicted by the disasters.

vii. Value Education Program for Tihar Inmates

BHEL in association with ISCKON developed a comprehensive CSR initiative
to bring about a strong value system amongst the jail inmates of Tihar Jail and
Central Jail. 150 copies of Value Education books were distributed to the
inmates and all the others present.

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IX. Conclusion
BHEL Company intensively follows and develops CSR initiatives for employees,
conducts inter unit CSR meets as well as IICA Certificate Programmes and special
awards are given to employees most actively participating in CSR field.
In short, it has got immense potential to be India’s most admired company by doing
its best to sustain a healthy and prosperous environment and to improve the quality of
life of the people in our nation.

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 REFERENCES

1) Dr Joji Valli, CSR:Towards a DEFINITION, September 2014,

CreatiVentures
2) Fernando, A C, Business Ethics-An Indian Perspective, 2014, Second
Edition, New Delhi, Dorling Kingsley (India) Pvt. Ltd
3) Xenon Group, The Link Between CSR and Sustainability, Retrieved from
xenongroup.co.uk
4) Ethics Unwrapped, Curated Resources>Sustainability & CSR, Retrieved
from ethicsunwrapped.utexas.edu
5) Saraf Shalu, 2015, Presentation On Corporate Social Responsibility
(Chapter IX, Section 135), Retrieved from slideshare.net
6) Fonseca Luis, January 1, 2015, Sustainability and Corporate Social
Responsibility(CSR). Are they similar or difference concepts?, Retrieved from
researchgate.net
7) UnternehmensWerte, Sustainability and CSR, Retrived from csr-in-
deutschland.de
8) Instead Knowedge, Increase Revenues with CSR, knowledge.instead.edu
9) Bharat Heavy Electricals Limited (Home Page), Retrieved from bhel.com

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