CGBE ASSIGNMENT

SUBMITTED TO: SUBMITTED BY:

Prof. Hari Parmeshwar Saumya Nigam- 90

Harleen kaur-63

Manjari Saboo- 127

(PGDM VII- B)

Q1 . What is the latest guidelines on corporate social responsibility in the  New Companies Act'2013 and the latest guidelines issued by the Ministry of Corporate Office? 

A1.)

CORPORATE SOCIAL RESPONSIBILITY UNDER THE COMPANIES ACT, 2013

Corporate social responsibility (CSR) has been in existence for a long time and is

almost as old a s civilization. It is based on the Gandhian Principe of “trusteeship

concept” whereby business houses are looked upon as trustees of the resources they

draw from society and thus are expected to return them back manifold. CSR is

extremely important for sustainable development of all stakeholders (all the people, on

whom the business has an impact, including the society at large).

Corporate social responsibility is also called corporate conscience, corporate

citizenship, social performance, or sustainable business. It is a form of corporate self-

regulation integrated into a business model. CSR policy functions as a built-in, self-

regulating mechanism whereby a business monitors and ensures its active compliance

with the spirit of the law, ethical standards, and international norms.

Companies Act of 2013, which has already been notified partially, gives the concept of

CSR the importance it deserves. Section 135 of the Companies Act, 2013 contains

provisions exclusively dealing with corporate social responsibility. Schedule VII contains

a list of the activities which a company can undertake as part of its CSR initiatives.

PROVISIONS OF COMPANIES ACT, 2013 ON CSR

Applicability

Following companies to constitute CSR committee:

Net worth of Rs.500 crore or more, or

Turnover of Rs.1000 crore or more, or

Net profit of Rs.5 crore or more

CSR rules shall come into force on the date of their publication in the official gazette

and shall be applicable from the financial year 2014-15.

CSR Committee

CSR committee should consist of atleast 3 directors out of which atleast 1 director

should be independent director. Some companies may not mandatorily required to

appoint independent directors as per provisions of companies Act 2013 but CSR

applicability may be there for those companies. How will this criteria of independent

director be met in case of those companies need to be clarified.

Functions of CSR committee:

I. 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 of the Act.

II. Recommend the amount of expenditure to be incurred on the activities referred

to in clause (a); and

III. Monitor the corporate social responsibility policy of the company from time to

time.

IV. Prepare a transparent monitoring mechanism for ensuring implementation of the

projects/ programmes/ activities proposed to be undertaken by the company.

Responsibility of the Board of Directors

To ensure that atleast 2% of average net profit of last 3 preceding years is

spent on CSR activities every year.

‘net profit’ shall mean, net profit before tax as per books of accounts and shall

not include profits arising from branches outside India.

2% CSR spending would be computed as 2% of the average net profits

made by the company during every bock of three years. For the purpose of

first CSR reporting the Net Profit shall mean average of the annual net profit

of the preceding three years ending on or before 31 March 2014.

To approve the CSR policy after considering recommendations of CSR

committee.

To disclose CSR policy and initiatives in Board’s report and company’s

website.

To ensure that activities reflected in CSR policy are actually undertaken by

company.

If the company does not spend 2% of net profits as required, then Board to

report the reasons in the Board’s report.

Contents of CSR Policy

CSR policy of the company should reflect the following:

Projects and programmes that are to be undertaken by the company n pursuit of

CSR.

List of CSR projects/ programmes which a company plans to undertake durng

the implementation yea, specifying modalities of execution in the areas/ sectors

chosen and implementation schedules for the same.

A statement that surplus arising out of the CSR activity will not be part of

business profits of a company.

A statement that the corpus would include the following:

a) 2% of the average net profits,

b) Any income arising therefrom

c) Surplus arising out of CSR activities.

Activities which may be included by companies in their Corporate Social Responsibility Policies

Activities relating to:-

I. Eradicating extreme hunger and poverty;

II. Promotion of education;

III. Promoting gender equality and empowering women;

IV. Reducing child mortality and improving maternal health;

V. Combating human immune deficiency virus, acquired immune deficiency

syndrome, malaria and other diseases;

VI. Ensuring environmental sustainability;

VII. Employment enhancing vocational skills;

VIII. Social business projects;

IX. Contribution to the Prime Minister’s National Relies Fund or any other fund set up

by the Central Government or the State Governments for socio-economic

development and relief and funds for the welfare of the Scheduled Castes, the

Scheduled Tribes, other backward classes, minorities and women; and

X. Such other matters as may be prescribed.

Other important points relating to CSR

Tax treatment of CSR spent will be in accordance with the IT Act as may be

notified by CBDT.

A company may set up an organization which is registered as a Trust or Section

8 Company, or Society or Foundation or any other form of entity operating within

India to facilitate implementation of its CSR activities in accordance with is stated

CSR Policy.

A company may also conduct/ implement its CSR programmes through Trusts,

Societies, or Section 8 companies operating in India, which are not set up by the

company itself.

Companies may collaborate or pool resources with other companies to undertake

CSR activities and any expenditure incurred n such collaborative efforts would

qualify for computing the CSR sending.

Only such CSR activities will be taken into consideration as are undertaken

within India.

Only activities which are not exclusively fr the benefit of employees of the

company or their family members shall be considered as CSR activity.

Company shall give preference t the local area and areas around it where it

operates, for spending the amount earmarked for Corporate Social Responsibility

activities.

Format of annual report on CSR initiatives to be included in the board report by

qualifying companies has been prescribed under draft rules.

Wrapping up

Companies Act, 2013 has introduced the concept f CSR in the Act itself and even

though the Act advocates it strongly but it has still prescribed a “comply or explain”

approach only. This means as per the new norms, the two percent spending on CSR is

not mandatory but reporting about it is mandatory. In case, a company is unable to

spend the required amount, then it has to give an explanation for the same.

Q2.  Examine the CSR activities of any 3 companies? 

A2.)CSR activities of TCS

At TCS, sustainability is seen as a state of being in balance between Corporate

Economic Responsibility (CER) and Corporate Social Responsibility (CSR).

The guiding principle of TCS’ Corporate Social Responsibility programs is “Impact

through Empowerment,” where empowerment is a process of strengthening the future

today, so that risks are minimized, value created and certainty is experienced. We strive

to ensure that the communities engaged through our CSR initiatives also experience

certainty in their lives.

The core areas for TCS’ CSR programs are

education,

health ,and

environment.

TCS' Initiatives

Some of the initiatives include the following:

India

Adult Literacy Programs  University Alliances TCS’ BPO Employability Program Academic Interface Program Mkrishi WebHealth Center Mansuki TCS Maitree village development initiative TCS Maitree’s Advanced Computer Training Center  Med Mantra  InsighT  Empower CSR Technical Team’s support to social organizations

North America

First Book club GoIT

UK and Europe

IT Futures Environmental sustainability and the ICT industry

Asia Pacific

InsighT- Australia SINDA Computer Training

Go for IT! Library Program in China Operation Smile

Latin America

Environment leaders

Middle East and Africa

Landmark computer training Scholarships at CIDA City Campus City Ambassadors Football Club Support to Reach for Dreams

CSR activities of ITC

ITC’s overarching aspiration to create large scale societal value while simultaneously

deliver shareholder valueis manifest in the Company’s strategy to enhance the

competitiveness of its value chains which encompass the disadvantaged sections of

society.

In pursuance of the Company’s policy on Corporate Social Responsibility (ITC’s CSR

Policy detailed in the Policies & Guidelines section of this Report), ITC has crafted

innovative business models that create larger and enduring value by not only generating

new sources of competitive advantage for its businesses, but also in the process

augmenting natural capital and sustainable livelihoods for the nation.

AREA ACTIVITIES/INITIATIVES/PROGRAMMES

Eradication of hunger and poverty

Crop productivity improvement

Livestock/Dairy development

Creation of sustainable livelihoods for the poor

Promotion of Education Promotion of Education

Promoting Gender Equality & Empowering Women Promotion of women-based micro enterprises

Reducing child mortality & improving maternal health Basic hygiene and sanitation improvement initiatives

Combating diseases Health centres and camps

Ensuring Environmental Sustainability

Social and Farm Forestry

Soil and Moisture Conservation

Solid Waste Management

Promotion of sustainable business practices

Employment enhancing vocational skills Vocational/skills development

Social Business Initiatives Farmer Knowledge empowerment through IT-enablement

Others Promotion of Art and Culture

CSR activities of HUL

Consumer goods major Hindustan Unilever (HUL) today said it has tied up with the Tata Group retail arm Star Bazaar to promote education among the underprivileged children.

HUL and Star Bazaar had conducted the ‘India’s Favourites’ campaign last September

and had created awareness about various social causes, including education of the

underprivileged children, welfare of theblind children and supporting orphans.

The campaign this year started on August 29 and lasts till September 21 in 13 Star

Bazaar stores across seven cities, HUL said in a statement here.

“One of the key endeavours as part of the Unilever’s sustainable living plan is to

motivate consumers to take the small achievable actions that add up to a big difference.

The India’s Favourites campaign helps us to further this cause of increasing the

awareness among consumers and helping them to contribute to an important social

cause,” HUL chief executive officer Nitin Paranjpe said in the statement.

The initiative will offer consumers attractive discounts on specific HUL brands–Brooke

Bond Red Label, Kissan, Knorr, Kwality Wall’s, Clear, Dove, Vaseline, Axe, Surf and

Vim.

“Five percent of the sales proceeds from of this consumer initiative will be donated to

the Smile Foundation, Parikrma and Thozhamai, which work in the area of education for

the underprivileged children,” the release said.

Customer would also be given an opportunity to win a weekly grand prize by participating in the ‘Vote for India’s Favourite Brand’ contest that will be run at the Star Bazaar stores.

“We believe that providing our customers opportunities to support good causes in a

simple and meaningful way is the right approach. We are delighted to associate with

HUL on the India’s Favourites initiative. We had received encouraging feedback last

year and do hope our customers continue to see value in such initiatives,” Trent

Hypermarket chief executive Jamshed Daboo said in the statement.

HUL and Star Baazar are committed to promoting this campaign every year and will

seek to continuously increase consumer awareness on social issues, the statement

said.