Auditing & Corporate

Governance
Presentation(Sem VI)
Corporate Social Responsibility
PRESENTED BY –
Kalpataru Giri – 52 Sunil Kumar Gouda –
53
Abhipsha Pradhan – 54 P Pawan – 56
Siba Prasad Gharai - Ankita Ray –
Mukesh Panda – 62 Ankit Anand – 63
Banani Das – 64 Jay Krishna Nayak – 65
Ayusi Das – 68 D Bharan - 69
 Corporate social responsibility (CSR)
• Is the idea That a business has a responsibility to the society that exists around
it.
• Describe a company efforts to improve society in some way.

• Applicability section 135(1) Of companies act 2013 every company having ,

• Net worth – Rs. 500 crore and more
• Turnover – Rs. 1000 crore and more
• Net profit – Rs. 5 crore and more
• During any financial year
• If any company does not Satisfy during last 3 consecutive years need not to
comply.

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 The 4 main types of corporate social responsibility

Environmental social responsibility

Ethical/human rights social responsibility
Philanthropic corporate responsibility
• Economic corporate responsibility

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 What is Strategic Planning ?
Strategic Planning is a system process, based on an internal and
external analysis, that determines: what am organisation intends
to be in future, and how to get there: the process and
philosophy of dominating the dynamic and volatile Operating
environment: the actions to be carried out within A specific
Period of time In order to achieve the organization mission .

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 Why do we need Strategic Planning?
Building a Strategic Planning is a best way to ensure that your
while team is on the same page, from the initial vision, to the
metrics for success, to evaluating outcomes and adjusting ( if
necessary) for the future.

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 Objectives of Strategic Planning
• They specify the results desired In pursuing the Organization’s
mission .
• They are compatible with the Organization’s philosophy and
culture.
• They are derived from :
Organization culture
Competitive analysis
Environmental scanning and analysis

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 Three basic Elements of Strategic
Planning
• Environmental scanning To determine the critical areas of
concern And their possible Implications to the organization.
• Analysing the existing and yet to created Capabilities to
Selected organization vision.
• Taking and managing appropriate actions now to achieve the
vision.

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 The Strategic Planning Process
Five steps Of Strategic Planning are:
Step 1- Define Or review the Organization’s value, mission and
vision.
Step 2- Assess where you are
Step 3- Determine your priorities and objectives
Step 4- Define tactics and responsibilities
Step 5- Manage, measure and evaluate

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 SWOT Analysis of Strategic Planning &
CSR
• Strengths : These are the internal attributes that add value mad give you a competitive
edge over others. So take an objective look at:
What Is your USP?
What advantages do you have over others ?
What relevant resources you have access to ?
• Weakness : What weakness can you identify in your offering?
How does your product compare to others in the market places?
• Opportunities: studying your strengths or looking to eliminate weakness can open up a Window of new
opportunities. They may compromising an expanding job, new markets and other prospects for further development.

• Threats: Threats are External obstacles in our path that are largely Beyond your control.

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Different Models of CSR
 Models of CSR

Environment Stockholders
Friedman Ackerman Carroll al Integrity & Corporate and New Models
Model Model Model Community Citizenship Stakeholders of CSR
Health Model Model Model

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 Friedman Model(1962-73)

• A businessmen should perform his duty well, he is

performing a social as well as a moral duty.
• A businessmen has no other social responsibility to
perform except to serve his shareholders &
stockholders.

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 Ackerman Model (1976)
• The model has emphasized on the internal policy goals & their relation to the CSR
• Four stages involved in CSR.
• Managers of the company get to know the most common social problem
& then express a willingness to take a particular project which will solve
some social problems.
• Intensive study of the problem by hiring experts & getting their
suggestions to make it operational.
• Managers take up the project actively & work hard.
• Evaluating of the project by addressing the issues.

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 Carroll Model(1991)

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 Environmental Integrity & Community Health Model

• This model developed by Redman.

• Many corporate in US adopted this model.
• Corporate contribution towards environmental integrity &
• Human health, there will be greater expansion opportunities.
• Healthy people can work more & earn more.
• CSR is beneficial for the corporate sector.
• CSR in a particular form is welcome.

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 Corporate Citizenship Model
• To be a corporate citizen, a corporate firm has to satisfy four
• conditions:
•Consistently satisfactory
•Sustainable economic performance
•Ethical actions.
•Behavior.
• A particular firm’s commitment to corporate citizenship
• requires the fulfillment of certain social responsibility.

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 Stockholders & Stakeholders Model

• The stakeholder model of corporate social responsibility argues that

everyone has equal rights, and the legitimate rights of stakeholders
should limit the actions of corporations.
• Stakeholders, apart from business owners, rarely have any claims of
ownership to the company in which they have interests.

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 New Models of CSR

Strong

New Models
of CSR
Poor

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 Benefits of CSR
• Increased employee satisfaction
• Improved public image
• Increased customer loyalty
• Increased creativity
• Better bottom-line financials.
• More support for local and global communities.
• Increased investment opportunities.

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Sustainability & Types of Sustainability
• Meeting the needs of the present without compromising the ability of
future generations to meet their needs.

Economic sustainability
Environmental sustainability
Social Sustainability

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 Economic sustainability
It refers to practices that support long-term economic growth without negatively impacting
social, environmental, and cultural aspects of the community.

Environmental sustainability
It is the ability to maintain an ecological balance in our planet's natural environment and
conserve natural resources to support the wellbeing of current and future generations.

Social sustainability
It is about identifying and managing business impacts, both positive and negative, on people.
The quality of a company's relationships and engagement with its stakeholders is critical.

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The relation between CSR and Sustainability :
In the process of manufacturing, a company consumes certain natural resources belonging to
the society, though it pays for it. Every manufacturing process causes damage to the nature by
the exploitation of natural resources, pollution and harm to the environment in many ways
(extraction of minerals, release of effluents after manufacture; and pollution of water, soil, air,
etc.).

Damage done to the nature cannot be repaired, and cannot be compensated in the form of
money; the concept of CSR is trying to find out a monetary equivalence to the damage done.
This damage prevents the idea of the sustainability of the natural resources.

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 Aims of CSR
Social and
Environmental Sustainable
community
Aims development
activities

Business
Ethical issues
relationship

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 Objectives of CSR

Maximize the Create

Community
company awareness

Support various
campaign

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 Business Ethics

Ethics: it is a set of rules that defines right and wrong

conduct.

Business Ethics: can be defined as written and

unwritten code of principles and values that govern
decision and action within the company.

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 Importance of Business Ethics
Control business malpractices
Better relation with employees
Improves customer satisfaction
Increase profitability
Improves business goodwill
Better decision making

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 Principles of Business Ethics
Promise-
Honesty Integrity
Keeping

Loyalty Fairness Caring

Respect Leadershi Law

for others p Abiding

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 What is corporate governance ?

• The primary purpose of corporate leadership is to create wealth

legally and ethically.
• The translate to bringing a high level of satisfaction to five
constituencies – customer, employees, investors, vendors, and
the society-at-large.

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 Parties to corporate governance :-
Employees Dominant shareholders Small investors
• Labour law
• Approval requires for key decision.
• Board appointments. • Disclosure norms.
• Contractual mechanisms • Regulatory protection.

Customer & Consumers

• Consumer protection laws Suppliers
Company • Sales of goods law.

Creditors Government and public at large

• • Companies required to function in
Participation in winding up of a company.
• Recovery statues for public financial institution. public interest.
• Regulatory mechanisms.

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 Characteristics :-
• Accountable
• Transparent
• Follows the rules of law
• Effective and efficient
• Equitable and inclusive
• Responsive

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 Benefits of CSR :-
Reduced regulatory Enhanced reputation Alliance with Better stake-holders
intervention and strongest brand business partners relations

Access to and lower cost

Attractive
of capital Shareholders values
employers

Cost Customer
Minimise risk operations New business
saving satisfaction, loyalty
and M&A opportunities
and high sales

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3
 Corporate Social Responsibility
Section 135
Section 135(1) – Which company is covered under Section 135
Every company having
a) Net worth of ≥ ₹ 500 Crores, or
b) turnover of ≥ ₹ 1000 Crore, or
c) a net profit of ≥ ₹ 5 Crore during the immediately preceding financial
year, shall constitute a CSR committee of the board consisting of 3 or
more directors, out of which at least 1 director shall be an independent
director

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 Section 135(2)- Disclosure in Board Report
The Board’s report under sub-section(3) of section 134 shall disclose the
composition of the CSR Committee.

Section 135(3)- Role of CSR Committee

The CSR 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 in
areas or subject, 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  

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 Section 135(4)- Duty of the Board of Directors

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.

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 Section 135(5)- Amount to be spent on CSR
At least 2% of the average net profits of the Company made during the 3
immediately preceding financial years or where the company has not completed the
period of 3 financial years since its incorporation, during such immediately
preceding financial years, shall be spent for every financial year commencing from
1st April 2014. 

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.

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 Section 135(6)- Unspent CSR Account
Any amount remaining unspent under 135(5), pursuant to any ongoing project,
fulfilling such conditions as may be prescribed, undertaken by a company in
pursuance of its CSR Policy, shall be transferred by the company within a period of
30 days from the end of the financial year to a special account to be opened by the
company in that behalf for that financial year in any scheduled bank to be called the
Unspent CSR Account, and
Such amount shall be spent by the company in pursuance of its obligation towards
the CSR Policy within a period of 3 financial years from the date of such transfer,
failing which, the company shall transfer the same to a Fund specified in Schedule
VII, within a period of 30 days from the date of completion of the 3rd
financial year. 

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 Section 135(7)- Punishment in case of non- compliance
If a company contravenes the provisions of 135(5) or (6), the punishment shall be as
follows:-

On company - ₹ 50,000 ≤ Fine ≤ ₹ 25 lakhs

On officer in default - Imprisonment ≤ 3 years or ₹50,000 ≤ Fine ≤ ₹5 Lakhs or
both

Section 135(8)- Special Directions by CG

The Central Government may give such general or special directions to a company or
class of companies as it considers necessary to ensure compliance of provisions of this
section and such company or class of companies shall comply with such directions. 

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 CSR Committee Applicability
• Every company to which CSR criteria are applicable shall
constitute a Corporate Social Responsibility (CSR) Committee.
• The CSR Committee should consist of 3 or more directors, out
of which at least 1 director must be an independent director.
• An unlisted public company or a private company shall have its
CSR Committee without any independent director if an
independent director is not required.
• A private company having only two directors on its Board shall
constitute its CSR Committee with two directors.

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 Duties of CSR Committee
• The CSR Committee shall formulate and recommend a CSR policy to
the Board. CSR policy shall point out the activities to be undertaken
by the company as enumerated in Schedule VII.
• CSR Committee shall recommend the amount of expenditure to be
incurred on the CSR activities to be undertaken by the company.
• CSR Committee shall monitor the CSR policy of the Company from
time to time.
• The committee shall establish a transparent controlling mechanism for
the implementation of the CSR projects or programs or activities
undertaken by the company.

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 CSR Reporting
• With respect to CSR Reporting, the provisions are as follows :
• The Board’s Report referring to any financial year initiating
on or after the 1st day of April 2014 shall include an annual
report on CSR.
• In the case of a foreign company, the balance sheet filed shall
contain an Annexure regarding a report on CSR.

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 CSR Policy
• CSR Policy elaborates the activities to be undertaken by the Company as
named in Schedule VII to the Act and spend. The activities should not be
the same which are done by the company in its normal course of business
• Contents of CSR Policy should be placed on the company’s website by the
Board.
• The activities mentioned in the policy must be undertaken by the company.
• The Company can join hands with other companies for undertaking
projects or programs or CSR activities and report separately on such
programs or projects.
• The CSR policy shall monitor the projects or programs.

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THERE ARE 4 MODELS OF CSR
• Environmental Responsibility
• Philanthropic Responsibility
• Economic Responsibility
• Ethical Responsibility

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 Environment Responsibility
• Environmental responsibility is our duty to protect and improve our
environment. An environmentally responsible individual, industry,
community
• Or government assesses their environmental sustainability and applies
their
• This knowledge to their decision-making.

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 Philanthropic Responsibility
Philanthropic responsibility refers to a corporation aims, goals and
objectives
For actively bettering society as a whole.
One huge aspect of corporate philanthropy is donating money from
company earnings to worthy causes within the local community – often
In the form of a trust or foundation

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 Economic Responsibility
Economic responsibility refers to the practice of making financial
decisions based on a commitment to doing good.
Some common examples of economic responsibility include investing in
alternative energy sources, putting more money into education programs
and funding local charities as a way of bolstering their mission

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 Ethical Responsibility

Ethical/human rights social responsibility

Ethical responsibility refers to a company’s commitment to operate their
business in an ethical manner that upholds human rights principles, such as fair
treatment of all
Stakeholders, fair trade practices and equal pay

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 Codes of CSR

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 CSR Code of conduct
1. Developing Fair, Transparent, and Sound Business,
and Anti-Corruption-:
1-1 ． Compliance - We respect international and
regional norms, guidelines, and initiatives, and also
strictly comply with the laws and regulations in each
country and region in which we operate.
1-2 ． Elimination of mixing up official business
with personal affairs.
1-3 ． Fair, Transparent and free competition and
trade.

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 Cont…
2. Respect for Human Rights-:
2-1 ． Prohibition of discrimination and respect for
diversity.
2-2 ． Respect for individual personality.
2-3 ． Respect for labour rights.
2-4 ． Prohibition of forced labor and child labor.
2-5 ． Avoidance of complicity in human rights abuses.

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 Cont…
1-4 ． Management of confidential information
1-5 ． Respect for intellectual property
1-6 ． Separation from organized crime
1-7 ． Transparency of information disclosure
1-8 ． Legal compliance for political funds control.
1-9 ． Prohibition to offer entertainment or gifts to public
employees
1-10 ． Sound relationship with business partners.

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Cont…
3. Conservation and Improvement of Adequate Working
Environment-:
3-1 ． Conservation and improvement of safety and health
in working environments.
3-2 ． Ensuring appropriate working hours, securing
minimum wages and prohibiting unreasonable wage reduction.
3-3 ． Mid to long-term human resources development and
appropriate ability assessment.
3-4 ． Respect for individual work-life balance.
3-5 ． Offer of equal employment and working
opportunities.

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 Cont…
4. Fulfillment of Our Responsibilities to Provide Safe and Secure
Products and Services-:
4-1 ． Focus on safety and quality.
4-2 ． Making safety Information accessible
4-3 ． Solutions in case of product accidents
5. Global Environmental Conservation
5-1 ． Promoting environmental protection
5-2 ． Providing environmentally conscious products
6. Building Better Relationships with Local Communities-:

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 CSR Code of Ethics
• Developing Fair, Transparent, and Sound Business, and Anti-
Corruption.
• Respect for Human Rights.
• Conservation and Improvement of Adequate Working Environment
• Fulfillment of Our Responsibilities to Provide Safe and Secure
Products and Services
• Global Environmental Conservation
• Building Better Relationships with Local Communities
• Ensuring Social Responsibility within Our Supply Chain

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What is CSR?
•CSR is an extended model of corporate governance based on the fiduciary
duties owed to all the firm's shareholders.
•CSR is about how companies manage the business processes to produce
an overall positive impact on the society
•CSR is the responsibility of corporations to go above and beyond what the
law requires them to do .
•CSR is the responsibility of corporations to contribute to a better society and
cleaner environment .
 CSR Policy:
• The CSR policy of the company shall include:
• Projects and programs that are to be undertaken
• A list of CSR projects/programs which a company plans to
undertake, which may also focus on integrating business models
with social and environmental priorities and process in order to
create shared value, specifying modalities of execution in the
areas/sectors chosen and implementation schedules.

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Corporate Responsibility Standards:
ISSUES STANDARDS

ENVIRONMENT Kyoto protocol

ISO 14000 Environmental management series
Labor Fair labor associations workplace code of conduct

Corporation governance OECD principles of corporate governance. Principles of Corporate

governance in commonwealth .
Money laundering Basel committee on banking supervision.
Wolfsburg anti-money laundering principles.
Bribery and Corruption OECD convention combating bribery of foreign public officials in
international business transactions.
Human Rights Amnesty international Human right principles.

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 Published Standards of Corporate Responsibilities:

• Agenda 21: A plan of action for governments, companies and civil society to
address human impacts on society.
• Beijing declaration: (www.un.org) An international declaration on the rights
of women
• CERES principles: A ten-point code of corporate environmental conduct for
use an environmental mission statement or ethics.
• Organization for Economic Co-operation and
Development(OECD) guidelines for multinational enterprises
(www.oecd.org)

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 Published Standards of Corporate Responsibilities:

• Wolfsburg anti-money laundering principles: Principles offer private banks to counter

money laundering.
• Social Accountability 8000: Workplace standard against which to assure worker rights &
welfare.(www.sa-intl.org).
• Principles of responsible investment: Principles of environmental, social and corporate
governance issues pertaining to investors.(www.unpri.org).
• Convention on biological diversity: Principles for the conservation of biological
diversity including sustainable use, sharing of benefits and access to genetic resources (
www.biodev.org)
• Global reporting initiative: A framework for reporting on social environmental and
economic performances(www.globalreporting.org).

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