BIBLIOGRAPHY

Internet Sources:-

1. http://lexicon.ft.com/Term?term=corporate-social-responsibility--(CSR)
2. https://www.industryweek.com/environment/corporate-social-responsibility-supply-
chain
3. https://www.investopedia.com/terms/c/corp-social-responsibility.asp
4. https://www.transparenthands.org/different-types-of-corporate-social-responsibility-
csr/
5. http://isrn.in/Corporate%20Social%20Responsibility%20Policy%20Rules%202014.p
df
6. http://www.iisd.org/business/issues.

Books:-

1. Corporate Social Responsibility Practices in India, Times Foundation, the corporate

social responsibility wing of the Bennett, Coleman & CO. Ltd.
2. Kotler, Philip and Nancy Lee, Corporate Social Responsibility: Doing the Most Good
for Your Company and Your Cause.
3. Corporate Social Responsibility - Issues and Challenges in India, IJRFM Volume 3,
Issue 2 (March 2013) (ISSN 2231-5985).
 TABLE OF CONTENTS

S . No. Topic Page No.

1. INTRODUCTION

2. DEFINITION OF CSR

3. WHY CORPORATE SOCIAL RESONSIBILITY?

4. CONCEPT OF CSR UNDER COMPANIES ACT,2013

5. TYES OF CSR

6. BENEFITS OF CSR

7. CHALLENGES WITH CSR

8. VOLUNTARY GUIDELINES ON CSR

9. PRINCIPLES AND GUIDELINES ON CSR

10. CURRENT STATUS OF CSR IN INDIA

11. CONCLUSION
 ABBREVIATIONS USED

1. CSR - Corporate Social Responsibility

2. SRI - Socially Responsible Investment
3. Ltd. - Limited
4. S. - Section
5. PAFs - Project Affected Families
 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistance from
many people and I am extremely fortunate to have got this all along the completion of my project
work. Whatever I have done is only due to such guidance and assistance and I would not forget
to thank them.

I respect and thank Asst. Prof. Chandra Kant Singh for giving me an opportunity to do the
Project work on Concept of CSR with special emphasis on Companies Act, 2013 and I am
extremely grateful to him, our subject teacher for providing all the support and guidance.
 1. INTRODUCTION
“CSR policies need to be considered as a core and inseparable component of the overall
service or product offering.”

Movement aimed at encouraging companies to be more aware of the impact of their business on
the rest of society, including their own stakeholders and the environment. CSR is a concept
whereby organizations consider the interests of society by taking responsibility for the impact of
their activities on customers, employees, shareholders, communities and the environment in all
aspects of their operations. This obligation is seen to extend beyond the statutory obligation to
comply with legislation and sees organizations voluntarily taking further steps to improve the
quality of life for employees and their families as well as for the local community and society at
large.

CSR is a business approach that contributes to sustainable development by delivering economic,

social and environmental benefits for all stake holders. CSR is a concept with many definitions
and practices. The way it is understood and implemented differs greatly for each company and
country. Moreover, CSR is a very broad concept that addresses many and various topics such as
human rights, corporate governance, health and safety, environmental effects, working
conditions and contribution to economic development. Whatever the definition is, the purpose of
CSR is to drive change towards sustainability.

The concept of CSR came into play under the Companies Act, 2013. The Ministry of Corporate
Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the
provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into
effect from April 1, 2014. With effect from April 1, 2014, every company, private limited or
public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or net
profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately
preceding three financial years on corporate social responsibility activities.

CSR aims to ensure that companies conduct their business in a way that is ethical. This means
taking account of their social, economic and environmental impact, and consideration of human
rights.
It can involve a range of activities such as:

• Working in partnership with local communities

• Socially responsible investment (SRI)

• Developing relationships with employees and customers

• Environmental protection and sustainability

2. DEFINITION OF CSR:-
Michael Hopkins- Corporate Social Responsibility is concerned with treating the
stakeholders of a company or institution ethically or in a responsible manner. ‘Ethically or
responsible' means treating key stakeholders in a manner deemed acceptable according to
international norms.

The European Commission defines CSR as “the responsibility of enterprises for their
impacts on society”. To completely meet their social responsibility, enterprises “should
have in place a process to integrate social, environmental, ethical human rights a nd
consumer concerns into their business operations and core strategy in close collaboration
with their stakeholders”

The World Business Council for Sustainable Development defines CSR as “the continuing
commitment by business to contribute to economic development while improving the
quality of life of the workforce and their families as well as of the community and society at
large.”

According to the United Nations Industrial Development Commission, “Corporate social

responsibility is a management concept whereby companies integrate social and
environmental concerns in their business operations and interactions with their stakeholders.
CSR is generally understood as being the way through which a company achieves a balance
of economic, environmental and social imperatives (Triple-Bottom-Line Approach), while
at the same time addressing the expectations of shareholders and stakeholders. In this sense
it is important to draw a distinction between CSR, which can be a strategic business
management concept, and charity, sponsorships or philanthropy. Even though the latter can
also make a valuable contribution to poverty reduction, will directly enhance the reputation
of a company and strengthen its brand, the concept of CSR clearly goes beyond that.”

3. WHY CORPORATE SOCIAL RESPONSIBILITY?

Corporate Social Responsibility main aim is to embrace responsibility for the company's
actions and encourage a positive impact through its activities on the environment,
consumers, employees, communities, stakeholders and all other members of the public
spare. There are many numbers of business models developed in order to achieve CSR
objectives. Being a good corporate citizen the companies have to be internally well
governed and externally responsible. In other words, CSR and corporate governance are two
sides of the same coin. The following are some of the drivers pushing business towards
Corporate Social Responsibility.

1. The Shrinking Role of Government: Shrinking government resources, coupled with a

distrust of regulations, has led to the exploration of voluntary and non-regulatory
initiatives instead.
2. Demands for Greater Disclosure including customers, suppliers, emplo yees,
communities, investors, and activist organizations.
3. Increased Customer Interest: In a recent survey by Environics International, more than
one in five consumers reported having either rewarded or punished companies based on
their perceived social performance.
4. Growing Investor Pressure: The Social Investment Forum reports that in the US in
1999, there was more than $2 trillion worth of assets invested in portfolios that used
screens linked to the environment and social responsibility. A separate survey by
Environics International revealed that more than a quarter of share-owning Americans
took into account ethical considerations when buying and selling stocks.
5. Competitive Labour Markets: Employees are increasingly looking beyond paychecks
and benefits, and seeking out employers whose philosophies and operating practices
match their own principles. In order to hire and retain skilled employees, companies are
being forced to improve working conditions.
6. Supplier Relations: As stakeholders are becoming increasingly interested in business
affairs, many companies are taking steps to ensure that their partners conduct
themselves in a socially responsible manner are introducing codes of conduct for their
suppliers, to ensure that other companies' policies or practices do not tarnish their
reputation.

4. CONCEPT OF CSR UNDER COMPANIES ACT,2013

With the enactment of the Companies Act, 2013, India has become the forerunner to mandate
spend on Corporate Social Responsibility (CSR) activities through a statutory provision.

❖ S 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 such Policy in its report and also place 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.— For the purposes of this section “average net profit” shall be calculated in
accordance with the provisions of section 198.

Considering the bare act under Section 135 of the Act it can be gathered that the Ministry of
Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well
as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come
into effect from April 1, 2014. With effect from April 1, 2014, every company, private limited or
public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or net
profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately
preceding three financial years on corporate social responsibility activities. The CSR activities
should not be undertaken in the normal course of business and must be with respect to any of the
activities mentioned in Schedule VII of the 2013 Act. Contribution to any political party is not
considered to be a CSR activity and only activities in India would be considered for
computing CSR expenditure.

The net worth, turnover and net profits are to be computed in terms of Section 198 of the 2013
Act as per the profit and loss statement prepared by the company in terms of Section 381 (1) (a)
and Section 198 of the 2013 Act. The CSR Rules appear to widen the ambit for compliance
obligations to include the holding and subsidiary companies as well as foreign companies whose
branches or project offices in India fulfil the specified criteria. There is a need for clarity with
respect to the compliance obligations of a company as well as its holding and subsidiary
companies.

To formulate and monitor the CSR policy of a company, a CSR Committee of the Board needs to
be constituted. Section 135 of the 2013 Act requires the CSR Committee to consist of at least
three directors, including an independent director. However, CSR Rules exempts unlisted public
companies and private companies that are not required to appoint an independent director from
having an independent director as a part of their CSR Committee and stipulates that the
Committee for a private company and a foreign company need have a minimum of only 2
members. A company can undertake its CSR activities through a registered trust or society, a
company established by its holding, subsidiary or associate company or otherwise, provided that
the company has specified the activities to be undertaken, the modalities for utilization of funds
as well as the reporting and monitoring mechanism.

The CSR Rules specify that a company which does not satisfy the specified criteria for a
consecutive period of three financial years is not required to comply with the CSR obligations,
implying that a company not satisfying any of the specified criteria in a subsequent financial year
would still need to undertake CSR activities unless it ceases to satisfy the specified criteria for a
continuous period of three years. The report of the Board of Directors attached to the financial
statements of the Company would also need to include an annual report on the CSR activities of
the company in the format prescribed in the CSR Rules setting out inter alia a brief outline of the
CSR policy, the composition of the CSR Committee, the average net profit for the last three
financial years and the prescribed CSR expenditure. If the company has been unable to spend the
minimum required on its CSR initiatives, the reasons for not doing so are to be specified in the
Board Report.

Following are the amendments made to section 135:

• Companies which are otherwise not required to appoint Independent Directors (‘IDs’) need not
appoint IDs, for the purpose of constituting CSR committees. CSR committees to have two or
more directors in such cases.

• The ambiguity with respect to the words “any financial year” has been removed by replacing it
with the words ‘preceding financial year’.

• Section 135 (3) (a) has been modified to refer to subjects in Schedule VII within which CSR
activities could be taken up by an eligible company.

• The term “average net profit” in section 135(5) has been replaced with the words “net profit”,
to remove any ambiguity.

• Section 384 has also been amended in order to make the provisions of section 135 applicable to
foreign companies.

Implication: The amendments in this section are largely to remove ambiguities that exist
currently. Also, some of these issues were resolved by the relevant rules. For example, the
applicability of CSR provisions to foreign companies and elimination of the need to appoint ID
where it was otherwise not required under section 149. Such issues have now been addressed
in the section itself, thus removing the disconnect between the section and the relevant rules.

❖ Schedule VII of the Companies Act, 2013

Schedule VII mandates expenditure for the following activity-

1. Eradicating hunger, poverty and malnutrition, promoting preventive health care and
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, daycare centres and such other facilities for senior
 citizens and measures for reducing inequalities faced by socially and economically
backward ,
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;
5. Protection of national heritage, art and culture including restoration of buildings and sites
of historical importance and works of art; setting up public libraries; promotion and
development of traditional art 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, paraolympic 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 academic
institutions which are approved by the Central Government,
10. Rural development projects,
11. Slum Area Development

❖ CSR (Policy) Rules, 2014

(1) Corporate Social Responsibility

The term "Corporate Social Responsibility (CSR)" can be referred as corporate initiative to assess
and take responsibility for the company's effects on the environment and impact on social welfare.
The term generally applies to companies efforts that go beyond what may be required by regulators
or environmental protection groups. Corporate social responsibility may also be referred to as
"corporate citizenship" and can involve incurring short-term costs that do not provide an
immediate financial benefit to the company, but instead promote positive social and environmental
change.
While proposing the Corporate Social Responsibility Rules under Section 135 of the Companies
Act, 2013, the Chairman of the CSR Committee mentioned the Guiding Principle as follows: "CSR
is the process by which an organization thinks about and evolves its relationships with stakeholders
for the common good, and demonstrates its commitment in this regard by adoption of appropriate
business processes and strategies. Thus CSR is not charity or mere donations. CSR is a way of
conducting business, by which corporate entities visibly contribute to the social good. Socially
responsible companies do not limit themselves to using resources to engage in activities that
increase only their profits. They use CSR to integrate economic, environmental and social
objectives with the company's operations and growth."

(2) CSR Reporting

Rule 8 of the CSR Rules provides that the companies shall be required to incorporate in its
Board's report an annual report on CSR containing the following particulars:

• 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; • The composition of the CSR Committee;

• Average net profit of the company for last three financial years; • Prescribed CSR Expenditure
(2% of the amount of the net profit for the last 3 financial years);

• Details of CSR Spent during the financial year;

• In case the company has failed to spend the 2% of the average net profit of the last three
financial year, reasons thereof;

(3) CSR Committee

The CSR Committee will consist of four Directors, who shall meet at least twice in a year to
discuss and review the CSR activities and policy. The quorum shall be two members are required
to be present for the proceeding to take place.

Scope And functions of CSR Committee: The CSR committee will recommend a formal CSR
Policy, this document and will recommend particular CSR activities, set forth a budget, describe
how the company will implement the project, and establish a transparent means to monitor
progress.

Administration of CSR Projects: The Corporation can meet its CSR obligations by funneling its
activities on its own or through a third party, such as a society, trust, foundation or Section 8
company (i.e., a company with charitable purposes) that has an established record of at least five
years in CSR-like activities. Companies may also collaborate and pool their resources, which
could be especially useful for small and medium-sized enterprises. Managing Director will have
the power to sanction any project for CSR up to a limit of 7.5 lakhs, above which Board‘s
approval will be required to sanction the amount.

The CSR Committee constituted in pursuance of Section 135 of the Companies Act, 2013 shall
be required to carry out the following activities:

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) What if a Company ceases to be covered u/s 135

Rule 3(2) of the Corporate Social Responsibility Rules, 2014 provides that every company which
ceases to be a company covered under section 135(1) 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 subsection (2) to (5) of the said section till such time
it meets the criteria specified in sub section (1) of Section 135

Accordingly, if a company, for 3 consecutive years, ceases to be covered under the ambit of
section 135(1), it shall not be required to fulfill the conditions relating to the constitution of CSR
Committee and other related provisions.
 5. TYPES OF CSR
Corporate Social Responsibility initiatives are based on four different categories:

1. Ethical/Moral Responsibility

Ethical responsibility is about looking after the welfare of the employees by ensuring fair labor
practices for the employees and also the employees of their suppliers. Ethical labor practices for
suppliers mean that the companies will ensure the use of products that have been certified as
meeting fair trade standards. Ensuring fair labor practices for employees mean that there will be
no gender, race or religious discrimination among the employees and each employee will be given
equal pay for equal work and better living wage compensation. Here, a good example can be
Google. Google employees have high levels of job satisfaction because they are well compensated
and well paid at work. The work environment at Google is supportive and the company looks after
the well being of its employees. Google offers free meal at work which saves a lot of money from
their wages. Google gives its employees free access to campus cafes, micro kitchens and other
options for breakfast, lunch, and dinner.

2. Philanthropic Responsibility:

Philanthropic responsibility means to serve the humanity. This criterion pays attention to the well
being of the unprivileged or needy people who badly require our support to sustain on this planet.
Companies fulfill their philanthropic responsibility by donating their time, money or resources to
charities and organizations at national or international levels. These donations are mainly given to
a variety of worthy causes including human rights, national disaster relief, and clean water and
education programs in underdeveloped countries. No other business tycoon has fulfilled the
philanthropic responsibilities better than Bill Gates. Bill Gates has donated billions of dollars to
the Bill and Melinda Gates Foundation, which supports numerous causes including education, the
eradication of malaria and agricultural developments etc.

3. Environmental Responsibility:

Currently, we need to focus on two main areas of our environment: limiting pollution and reducing
greenhouse gases. Companies are bound to fulfill their economic responsibility because awareness
of environmental issues are growing largely among the consumers and today they want
businesses to take necessary steps to save our planet and preserve all the lives in it. Companies
that are concerned about reducing air, land and water pollution have increased their standing as
good corporate citizens while benefiting the society. An example of environmental responsibility
is Tesla Motors that design cars combining style, acceleration and handling with advanced
technologies in order to make it more environmental friendly and reduce pollutions. Tesla cars do
not need gasoline refueling and it can be charged at home.

4. Economic Responsibility:

Economic responsibility is an interconnected field which focuses to strike a balance between

business, environmental and philanthropic practices. Economic responsibility abides by, the set
standards of ethical and moral regulations. In this context, companies try to find out a solution
which can facilitate their business growth and generate profits by benefitting the community and
our society. Here economic decisions are made by considering their overall effects on society and
businesses at the same time. Hence, economic responsibility can improve business operations
while engaging in sustainable practices.

6. BENEFITS OF CSR

❖ The ability to have positive impact in the community

Keeping social responsibility front of mind encourages businesses to act ethically and to consider
the social and environmental impacts of their business. In doing so, organisations can avoid or
mitigate detrimental impacts of their business on the community. In some cases, organisations
will find ways to make changes in their services or value chain that actually delivers benefits for
the community, where they once didn’t.

❖ It supports public value outcomes

Put simply, public value is about the value that an organisation contributes to society. A sound,
robust corporate social responsibility framework and organisational mindset can genuinely help
organisations deliver public value outcomes by focusing on how their services can make a
difference in the community. This might happen indirectly, where an organisation’s services
enable others to contribute to the community, or directly through the organisation’s own
activities, such as volunteerism and philanthropy.

❖ It supports being an employer of choice

Being an employer of choice typically translates into the company’s ability to attract and retain
high calibre staff. There are ways to approach being an employer of choice, including offering
work life balance, positive working conditions and work place flexibility. Studies have shown
that a robust corporate social responsibility framework can also help a company become more
attractive to potential future employees who are looking for workplaces with socially responsible
practices, community mindedness and sound ethics.

❖ It encourages both professional and personal development

Providing employees with the opportunity to be involved in a company’s socially responsible

activities can have the benefit of teaching new skills to staff, which can in turn be applied in the
workplace. By undertaking activities outside of their usual work responsibilities, employees have
the chance to contribute to work and causes that they might feel passionate about, or learn
something entirely new which can help enrich their own perspectives. By supporting these
activities, organisations encourage growth and support for employees.

❖ It enhances relationships with clients

A strong corporate social responsibility framework is essential to building and maintaining trust
between the company and clients. It can strengthen ties, build alliances and foster strong working
relationships with both existing and new clients. One way this can be achieved is by offering
pro-bono or similar services where a company can partner with not-for-profit organisations to
support their public value outcomes, where funds or resources may be limited. In turn, this helps
deliver public value outcomes that may not have been delivered otherwise.

In a nutshell the advantages of CSR are as follows:-

• better brand recognition
• positive business reputation
• increased sales and customer loyalty
• operational costs savings
• better financial performance
• greater ability to attract talent and retain staff
• organisational growth
• easier access to capital

7. CHALLENGES WITH CSR

❖ Lack of participation
The situation is further frustrated by a lack of communication between the company and the
community at the grassroots .The reason is a lack of interest of the local community in
participating and contributing to CSR activities of companies.

❖ Need to build local capacities

There is a need for capacity building of the local nongovernmental organizations as there is
scarcity of trained and efficient organizations that can contribute to the ongoing CSR activities
initiated by companies.

❖ Issues of transparency
Lack of transparency is one of the key issues. The companies expression that there exists lack of
transparency on the part of the local agencies as they do not make adequate efforts to disclose
information on their programmes, audit issues, impact assessment and utilization of funds.

❖ Visibility factor
The role of media in highlighting the success in CSR initiatives is welcomed as it spreads good
stories and sensitizes the local population. This helps in influencing non-government
organization to involve in event- based programmes for gaining visibility and branding; in the
process, they often miss out on meaningful grassroots interventions.
 ❖ Lack of consensus on implementing CSR issues
There is a lack of consensus amongst local agencies regarding CSR projects. This lack of
consensus often results in duplication of activities by corporate houses in areas of their
intervention. This results in a competitive spirit between local implementing agencies rather than
building collaborative approaches on issues. This factor limits company’s abilities to undertake
impact assessment of their initiatives towards CSR activities from time to time.

8. VOLUNTARY GUIDELINES ON CSR

CORPORATE GOVERNANCE -VOLUNTARY GUIDELINES 2009

Preamble-
Good corporate governance practices enhance companies’ value and stakeholders’ trust resulting
into robust development of capital market, the economy and also help in the evolution of a
vibrant and constructive shareholders’ activism. The Ministry of Corporate Affairs has examined
committee reports as well as suggestions received from various stakeholders on issues related to
corporate governance. Keeping in mind that the subject of corporate governance may go well
beyond the Law and that there are inherent limitations in enforcing many aspects of corporate
governance through legislative or regulatory means, it has been considered necessary that a set of
voluntary guidelines called “Corporate Governance -Voluntary Guidelines 2009” which are
relevant in the present context, are prepared and disseminated for consideration and adoption by
corporates. These guidelines provide for a set of good practices which may be voluntarily
adopted by the Public companies. Private companies, particularly the bigger ones, may also like
to adopt these guidelines. The guidelines are not intended to be a substitute for or addition to the
existing laws but are recommendatory in nature. While it is expected that more and more
corporates should make sincere efforts to consider adoption of the guidelines, there may be
genuine reasons for some companies in not being able to do so completely. In such a case it is
expected that such companies should inform their shareholders about the reasons for not
adopting these guidelines either fully or partially. It is hoped that “India Inc” would respond to
these guidelines with keen interest. It is also hoped that by following good governance practices,
the Indian corporate sector would be in a better position to enhance not only the economic value
of enterprise but also the value for every stakeholder who has contributed in the success of the
enterprise, and while doing so, it would be setting the global benchmarks for good corporate
governance. After taking into account the experience of voluntary adoption of these guidelines
by the corporates and consideration of relevant feedback, the Government would initiate the
exercise for review of these guidelines for further improvement after one year.

9. PRINCIPLES AND GUIDELINES ON CSR

A comprehensive guidance for companies pertaining to CSR is available in the form of several
globally recognised guidelines, frameworks, principles and tools, some of which are discussed
below. It must be noted that most of these guidelines relate to the larger concept of sustainability
or business responsibility, in keeping with the fact that these concepts are closely aligned globally
with the notion of CSR.

In National Textile Worker’s Union vs. P.R. Ramakrishnan1

The Apex Court held that the traditional view that a company is the property of the shareholders
is an exploded myth. According to the new socio-economic thinking, a company is a social
institution having duties and responsibilities towards the community in which it functions.

In Birla Zauri Agro Chemical Ltd., Goa Case2

In this case, the Goa High Court ordered the closure of the company’s operations because the
effluents of the company were polluting the sea.

10. CURRENT STATUS OF CSR IN INDIA

CSR – the corporate belief that a company needs to be responsible for its actions: socially,
ethically, and environmentally. CSR has become the need of growing business. Businesses need
to be practicise their activities to earn a good image. Big corporates like Reliance Industries, Tata

1
JUDGMENT05/05/1983
2
AIR ,April 1975,999
Group, Aditya Birla Group, The Coca Cola Company, and Indian Oil Corporation are involved
in serving the community. These corporates are fulfilling their responsibilities towards the
society.
Many other organizations have been doing their part for the society through donations and
charity events. Today, CSR in India has gone beyond merely charity and donations, and is
approached in a more organized fashion. It has become an integral part of the corporate strategy.
Companies have CSR teams that devise specific policies, strategies and goals for their CSR
programs and set aside budgets to support them. These programs, in many cases, are based on a
clearly defined social philosophy or are closely aligned with the companies business expertise.
Employees become the backbone of these initiatives and volunteer their time and contribute their
skills, to implement them. CSR Programs could range from overall development of a community
to supporting specific causes like education, environment, health care etc.

Best practices followed by Indian Companies related to CSR are as follows:

• ONGC and Indian Oil Corporation

(1) Education including vocational courses, Health Care,
(2) Entrepreneurship (self-help & livelihood generation) schemes,
(3) Infrastructure support near ONGC operational areas,
(4) Environment protection, ecological conservation, promotion,
(5) Protection of heritage sites, UNESCO heritage monuments etc.
(6) Promotion of artisans, craftsman, musicians, artists etc. for preservation of heritage, Art
& Culture,
(7) Women’s Empowerment, Girl Child Development, Gender sensitive projects,
(8) Water Management including ground water recharge,
(9) Initiatives for Physically and Mentally challenged, Sponsorship of seminars, conferences,
workshops etc. Promoting Sports/sports persons; supporting agencies promoting sports /
sports persons.

• SAIL - SAIL has taken successful actions in environment conservation, health and
medical care, education, women upliftment providing drinking water.
• BHEL & Indian Airlines - They have been acclaimed for disaster management efforts.
BHEL has also adopted 56 villages having nearly 80,000 inhabitants.

• The Coca Cola Company - Coca Cola and NDTV engaged in “Support my school” The
Coca-Cola Company Expands 5by20 Women's Economic Empowerment Initiative.
Under this program, The Coca-Cola Company today announced strong progress toward
its goal to enable the economic empowerment of 5 million women entrepreneurs across
the Coca-Cola value chain by 2020. The initiative, known as 5by20, is expanding beyond
its pilot programs in four countries to launch and scale programs across a total of 12
countries: Brazil, China, Costa Rica, Egypt, Haiti, India, Kenya, Mexico, Nigeria, the
Philippines, South Africa and Thailand. 5by20 is on track to reach 300,000 women by the
end of 2012. By providing access to business skills, financial services, assets and support
networks of peers and mentors, 5by20 is helping women succeed as entrepreneurs, while
also creating thriving, sustainable communities. Coca-Cola Announces Long-Term
Partnership with DEKA R&D To Help Bring Clean Water To Communities In Need.
Coca-Cola India Partners With Rotary International against Polio Coca-Cola Helps
Improve Lives of African Women and Girls. The Coca-Cola Company Joins (RED) to
help Eliminate AIDS.

• Reliance Industries - Reliance Industries initiated a project named as “ Project- Drishti”

to bring back the eyesight of visually challenged Indians from the economically weaker
sections of the society. This project has brightened up the lives of over 5000 people so
far. Reliance Power in its continuous efforts to positively impact the society, especially
the areas around its sites and offices, has formulated policies for social development that
are based on the following guiding principles:

1. Adopt an approach that aims at achieving a greater balance between social

development and economic development.
 2. Adopt new measures to accelerate and ensure the basic needs of all people work
towards elimination of all barriers for the social inclusion of disadvantaged
groups- such as the poor and the disabled.
3. Give unfailing attention to children for in their hands lies the country's future. It is
for their sake that health, education and environment get topmost priority in our
programmes and investments.

Health
At its various project sites, Reliance Power sites runs medical facility center, physiotherapy
center, and mobile medical vans that dispenses free medicines and provide free health checkups.
Also periodically we come up with health camps like general health checkup camps, gynecology
camps, eye checkup camps and corrective surgery camps for disabled children.

Education
Reliance Power is involved in a surfeit of activities that have changed the lives of the people
residing at the sites or the PAFs .Education is the main thrust of these activities. Major
contributions made in the area include building of a DAV school at the site for the children of the
PAFs and the children of the villages around the sites, free school bus facility for the students,
stipend to every child who attends school (a boy child gets Rs. 250 per month while a girl child
gets a stipend of Rs. 300 per month), free uniforms, study tours for children, teaching aids to the
teachers, training of teachers, as well as night schools for uneducated adults etc.

Employment
Reliance Power invests significantly in skill up gradation of people of local communities. The
trained manpower available for construction will ensure quality and accident free working.
CIDC, a Government of India initiative has been engaged and has trained about 300 project
affected youths as electricians, welders, carpenters and masons and bar benders in batches of 40
each. To further encourage them we paid them, a monthly stipend of Rs.1000 per month. In
addition efforts are on to enroll the oustees in short term courses at the ITI operating in the
region. Apart from these, training is also provided are:
- Computer coaching centre
- English speaking classes
- Personality development classes
- Physiotherapy training center
- Training by NAC (National Academy of Construction) and use them for future requirement of
the construction. For the women folk of the villages, in an effort to empower them the company
trains them in soft skills like tailoring and poultry farming etc. Reliance Power provides
assistance to women keen on starting their own businesses.

The Human Touch beyond policy imperatives

Although the main thrust of Reliance Power’s CSR lies in providing quality education, health
care and livelihood, we don’t restrict ourselves to it. In order to better lives around our areas of
interest and business, we strive to provide basic amenities like electrification in the villages,
augmentation and development of roads connecting the village to the main roads, old age support
for senior citizens of the project affect families, development of the grazing lands for the cattle of
the villagers, a forestation and veterinary camps for domestic cattle. Moral and financial support
is extended during social occasions like marriages, community prayers, funerals and other such
occasions.

• Mahindra & Mahindra - KC Mahindra education trust, support 75,000 underprivileged

girls. Tech Mahindra’s social work is currently focused upon three areas – School
Education, Employability and Technical Education.

• GlaxoSmithKline Pharmaceuticals - GlaxoSmithKline Pharmaceuticals CSR programs

primarily focus on health and healthy living. They work in tribal villages where they
provide medical check-up and treatment, health camps and health awareness programs.
They also provide money, medicines and equipment to non-profit organizations that work
towards improving health and education in under-served communities.

• Bajaj Electricals Ltd. - Bajaj Electricals Ltd. corporate social responsibility activities
include Education, Rural Development & Environment.
• Infosys- Hunger , Poverty , Malnutrition, and Health , Education, Rural development
projects, Gender equality and women empowerment Environmental sustainability ,
National heritage, art and culture, initiative for 100 school teachers in Karnataka –for
arthritis –free surgery program.

• ITC- Enhancing environmental and natural capital; supporting rural development;

promoting education; providing healthcare, providing sanitation and drinking water;
creating livelihoods for people, especially those from disadvantaged sections of society,
in rural and urban India; preserving and promoting sports;

• Maruti Suzuki- Community Development: The Company is committed to improving the

well-being of the local community by implementing social projects in designated villages
and local communities. -- a) Water and Sanitation: b) Education a) Up gradation of
Government Vocational and Technical Training Institutes: b) Skill enhancement in
automobile trade: a) Driving Training: The Company will scale up the number of Maruthi
Driving Schools. b) Road Safety Education.

• WIPRO - Education –Wipro Applying thought in schools( WATIS) – helps more than 1000
schools, 10,000 educators and 30 social organizations across 17 states in the country.
Wipro care –health care during disasters rehabilitation project during flood and earthquake.
Mission 10X –employability of our engineering graduates. Eco Eye( environment) -Biogas
plant –good quality manure, Rain water harvesting , ecofriendly chemical ; to help in
climate change.
 11.CONCLUSION
As society is getting more concerned about the working policies of the companies. Society
expectations are increasing towards the social development by the companies. So, it has become
necessary for the companies to practice social responsibilities to enhance their image in the
society. Even though companies are taking serious efforts for the sustained development, some
critics still are questioning the concept of CSR. There are people who claim that Corporate
Social Responsibility underlies some ulterior motives while others consider it as a myth. The
reality is that CSR is not a tactic for brand building; however, it creates an internal brand among
its employees. Indulging into activities that help society in one way or the other only adds to the
goodwill of a company. Corporate Social Responsibility is the duty of everyone i.e. business
corporations, governments, individuals because of the reasons: the income is earned only from
the society and therefore it should be given back; thus wealth is meant for use by self and the
public; the basic motive behind all types of business is to quench the hunger of the mankind as a
whole; the fundamental objective of all business is only to help people. CSR cannot be an
additional extra - it must run into the core of every business ethics, and its treatment of
employees and customers. Thus, CSR is becoming a fast-developing and increasingly
competitive field. The case for demonstrating corporate responsibility is getting stronger as
expectations among key opinion formers, customers and the public are increasing. Being a good
corporate citizen is increasingly crucial for commercial success and the key lies in matching
public expectations and priorities, and in communicating involvement and achievements widely
and effectively.
 TABLE OF CASES

1. National Textile Worker’s Union vs. P.R. Ramakrishnan, JUDGMENT05/05/1983.

2. Birla Zauri Agro Chemical Ltd., Goa Case, AIR ,April 1975,999.