CSR Activities in India

STUDY
FOR
EKALABHIYAN
BY
BHARTIYA VITTA SALAHKAR SAMITI (BVSS)
CSR
Activities
in India
Design&PrintedbyVIBAPRESSPVT.LTD.-9810049515
CSRACTIVITIESININDIA-ANALYSISANDTRENDS
ANALYSIS AND TRENDS

DISCLAIMER
This publication has been compiled and summarized from information
available in official documents, circulars, other publically available
information and websites of the Government of India, Corporate Houses
and NGOs. This Study is intended to serve as a guide to all users and
does not purport to be a legal document. In case of any variation
between what has been stated in this Study and the relevant Act, Rules
etc., the latter shall prevail.
This publication is for information purposes only. Due care has been
taken during the compilation of this publication to ensure that the
information is current and accurate to the best of our knowledge and
belief.
All rights reserved. No part of this publication may be reproduced, stored
in a retrieval system, or transmitted, in any form or by any means,
including electronic, mechanical, photocopying, recording, or otherwise,
without first obtaining written prior permission of EkalAbhiyan.
Please send the e-feedback on:
csrforekal@ekal.org
,dy xhr
fuekZ.kksa ds ikou ;qx esa ge pfj=k fuekZ.k u Hkwysa
LokFkZ lk/uk dh vka/h esa olq/k dk dY;k.k u HkwysaA
ekuk vxe vxk/ flU/q gS la?k"kkZs dk ikj ugha gSA
fdUrq Mwcuk e>/kjksa esa lkgl dks Lohdkj ugha gSA
tfVy leL;k lqy>kus dks uwru vuqla/ku u HkwysaAA
'khy fou; vkn'kZ Js"Brk rkj fcuk >adkj ugha gSA
f'k{kk D;k Loj lk/ ldsxh ;fn uSfrd vk/kj ugha gSA
dhfrZ dkSeqnh dh xfjek esa laLÑfr dk lEeku u HkwysaAA
vkfo"dkjksa dh Økafr;ksa esa ;fn ekuo dk I;kj ugha gSA
l`tughu foKku O;FkZ gS çk.kh dk midkj ugha gSA
HkkSfrdrk ds mRFkkuksa esa thou dk mRFkku u HkwysaAA

i
FOREWORD
“Businesses need to go beyond the interest of their companies to the communities they serve”
– Ratan Tata
From inactive philanthropy to the incorporation of the stakeholders’ interest in the business
model, the Indian business sector practices various methods of discharging its social
responsibility. While a lot of human and economic energy is available for utilization in this area,
a suitable mechanism was required to channelize this energy. For which the Government,
included Corporate Social Responsibility in the newly enacted Companies Act, 2013.
I am pleased to share that Ekal, in association with Bhartiya Vitta Salahkar Samiti (BVSS) has
jointly conducted the present study on Corporate Social Responsibility (CSR). The theme of
the study is to compare, analyse and understand the behavior of CSR spent during last two
years, by top listed companies operating under Government, Family Owned Businesses
(FOBs) and Multi-National Companies (MNCs) tag with varied interest in manufacturing and
service sector. The study also covers the challenges faced by them and suggestions for better
& transparent implementation and presentation.
I hope that this joint study would give rich insight to all the stakeholders and create greater
awarenessaboutdifferentaspectsrelatingtoCSRtogetherwithsuggestionstothechallenges
faced by companies in India.
Dr. Subhash Chandra
Member, Rajya Sabha,
Chairman, Ekal Global
New Delhi
March 28, 2017
uo lEor~ üú÷þ] pS=k] çfrink

iii
CHAIRMAN’S MESSAGE
Provisions of Companies Act, 2013, relating to Corporate Social Responsibility (CSR) have
been used by the government not only to ensure sustainable development for companies, but
also to help and support under-privileged section of society living primarily in tribal and rural
Bharat.
It has been nearly three years since CSR was mandated and the behavior of spent under CSR
is a reality now. Bhartiya Vitta Salahkar Samiti (BVSS) has been addressing issues relating to
CSR by oraganising workshops, seminars and discussions. We at BVSS felt that a publication
on some critical and comparative study of CSR spent during Financial Year 2014-15 and
2015-16 may be beneficial to various stakeholders including Companies, Government, NPOs,
General Public and of course Professionals engaged with CSR.
BVSS entrusted this assignment to its senior professionals CA Anil Sharma and CA Sushil
Gupta, who have done an excellent job by putting their time and experience in bringing out
this publication and for that I on my behalf and on behalf of BVSS put on record deep gratitude
and appreciation for them.
BVSS is also thankful to Ekal Abhiyan for their valuable inputs in carrying out the present
endeavor.
The study is also suggesting few inputs for the regulators for improved implementation of
CSR provisions.
BVSS is hopeful that the publication shall serve the purpose and shall be a good reference
material as the professional update on the subject.
CA Subhash C. Aggarwal
Chairman, Advisory Board - BVSS
New Delhi
March 28, 2017

v
EKAL ABHIYAN
Bringing happiness to tribal and rural
communities through education
The heart touching story began in 1983-84
when four young men, all in their prime stage
of career decided to give up their lucrative
jobs and render their lives in the service
of Ma Bharti. The clarion call was given to
promising youth by eminent social activist
late Shri Bhaurao Deshmukh to serve in
remoteareasofthecountry.Thenationalistic
ideals and burning patriotism became the
motivating force, and the firm decision
was taken by Shri Ashok Rai (Bhagat), Dr.
Mahesh Sharma both alumni from BHU
Varanasi, Dr. Rajneesh Arora, IIT Delhi and
Late Dr. Rakesh Popli, nuclear scientist
from USA to work in remote tribal areas of
Jharkhand. Their initial work in the field of
Education and Development resulted into
the establishment of the first 60 Ekal Schools
in Ratanpur Tundi, near Dhanbad (1989-90)
by late Shri Madan Lal Agrawala who owned
coalminesthere.InthemeantimeShriShyam
Gupt (Gold-medallist in M.Sc. Physics) a life
devotee pracharak and social activist was
already involved in educational work in tribal
areas of Odisha. He took the reins of Ekal
Vidyalaya and through his social genius and
farsightedness, he converted Ekal Schools
into an action oriented holistic Model of
Social change and Development; a powerful
Nation Building tool. Shri Shyamjee infused
the spiritual energy in Ekal and made it a
People’s Movement, a worldwide Abhiyan.
“Brilliance & Devotion of Ekal Pioneers”
At one hand late Shri Agarwala called upon
hisindustrialist friendlate Shri P.DChitlangia
to join him in Kolkata. And Kolkata became
the center for urban involvement in Ekal. As
a result Friends of Tribals Society (FTS) was
establishedinKolkatain1989.ShriShyamjee
by sheer magic of his brilliance, divinity and
devotion invoked thousands of Rural/Tribal/
Urban youth to come forward and join Ekal
as volunteers. There was no dearth of work
force at ground. Many business magnets
joined Ekal thereafter on his call. The jewel
in the crown of Ekal, Dr. Subhash Chandra as
chairperson of Ekal Global gave tremendous
push to industrialists, thinkers and pioneers
around the world to join this Nation Building
Movement.

vi
“Ekal Abhiyan as a Model for Social
Change”
A great vision for integrated and holistic
development of Rural/Tribal Bharat emerged
in the form of Ekal Vidyalaya Movement
which gradually got transformed into “Ekal
Abhiyan”, which is involved in spreading
the light of Education with an aim to reach
over one lakh remote villages of India.
This has been proved by the statistics of
more than 54,000 Ekal schools running
in inaccessible areas of Bharat with the
support of more than 50,000 donors both
national and international with more than
54,000 Acharyas (Teachers), 6,200 full time
volunteers and local supporters from Gram
Samiti to Urban Samities running into more
than 5 lakh, all dedicating themselves for
Ekal’s cause; created a history of 28 years of
unique journey of Human endeavour.
The Mission and the Model of Ekal
TheMissionofEkalMovementisempowering
India through development of Rural and
Tribal Villages of Country by imparting
functional Education consisting of literacy,
Healthcare, Economic Development, Ethics
and Values, to the communities.
PanchmukhiShikshamodelofEkaltoachieve
8 goals for complete social change is:
1. f'kf{kr xk¡o – Educated village
2. LoLFk xk¡o – Healthy village
3. LokoyEch xk¡o – Self-reliant village
4. tkx:d xk¡o – Aware village
5. O;lu eqDr xk¡o – Liquor free village
6. laxfBr xk¡o – Organized village
7. lqjf{kr xk¡o – Safe & secure village
8. lejl xk¡o – Socially harmonious village
From Laddakh to Kerela and Arunachal to
Gujarat, Ekal stands for education, health,
wealth, security and social harmony of
villages of Bharat.
The partner organizations of Ekal Abhiyan
Friends of Tribal Society (FTS), Bharat Lok
Shiksha Parishad (BLSP), Ekal Vidyalaya
Foundation of India (EVFI), Vanvasi Raksha
Parivar Foundation (VRPF), Ekal Sansthan
(EKS), Arogya Foundation of India (AFI),
Ekal Gramothan Foundation (EGF), Ekal
Gram Sanghathan (EGS), all together made
a magnanimous human chain of volunteers
& supporters in and around Bharat and the
world to empower rural & tribal Bharat that
is India.

vii
BHARTIYA VITTA SALAHKAR SAMITI
BVSS is a voluntary body of Chartered
Accountants, Cost Accountants, Company
Secretaries and allied professionals from
industry and in practice with an endeavour
to work towards nation building by following
the ideology of Antyodaya since 1999. BVSS
currently has more than 1000 professionals
in Delhi and NCR.
VISION AND MISSION STATEMENT
1. To unite financial consultants
• By organising programmes, seminars
and workshops relating to professionals
and socio economic topics.
• By providing a platform and voice to
financial consultants in making efforts
for nation building.
2. To evolve economic models for India
• To develop economic model for India
based on ‘Antyodaya’ and ‘Integral
humanism’ concepts.
• To discuss and critically analyse various
economic bills introduced in public
domain.
• To take up cause for professional
fraternity.
• To interact with regulatory and policy
agencies and bodies.
3. Promoting Indian culture
PAST ACTIVITIES
1. Towards uniting financial consultants
(i) Regular Monthly meetings are held to
discuss topics of professional interest
and providing platform for active
interactions amongst members.
(ii) Organised seminars and workshops on
various professional topics namely:
o International Trade Laws
o GST, Service Tax, VAT, Income Tax
and Audits
o Accounting Standards
o FEMA for small and medium
practitioners
o Impact of exchange fluctuation in
Indian Economy
o Organise Seminars through Video
Teleconferencing at Reliance Web

viii
Centres connecting 15 cities in
various states of the country
2. Towards evolving economic models for
India
(i) Organised a talk on ‘Economic
Growth - The Way Forward’ –
addressed by then Chief Minister
of Gujrat, Shri Narendra Modi Ji,
Hon’ble Prime Minster of India
(ii) Organised a program ‘Relevance
of Transparency in Democracy’
– addressed by Transparency
International Convenor, Admiral
Tahiliani and Shri Jag Mohan, Former
Governor, J&K
(iii) Organised Budget programmes with
Delhi University, PHD Chamber of
Commerce, Delhi Stock Exchange
etc.
(iv) The Economic model of China
addressed by Shri Yashwant Sinha ji,
Former Union Minister
(v) Seminar on the Economics of
Terrorism organised in NOIDA and
addressed by Shri Indresh Kumar
and Maulana Abass Ali
(vi) Organised seminar on Relevance of
Corporate Governance and Satyam
Fiasco
(vii) Organised seminar on Encountering
the Menace of Money Laundering
and Tax Havens presided by Hon’ble
Justice Mool Chand Garg
(viii)Organised unique seminar on
Corporate Sustainability addressed
by ICAI President, ICSI Vice
President and ICWAI Vice President
and was presided by Accountant
General of Delhi Shri Rajvir Singh
(ix) Posted comments on Real Estate
(Regulation and Development) Bill,
2011
(x) Interactive seminar on Insolvency
and Bankruptcy Code, 2016
addressed by Dr. M.S. Sahoo,
Chairman, Insolvency and
Bankruptcy Board of India
3. Promoting Indian Culture
• Program in the series of Pujya Sri
Guruji’s ‘Janam Shatabdi Samaroh’
addressed by Sri Sri Ravi Shankar Ji
• Program in collaboration with IIT,
Delhi ‘Yog Dwara Jeevan mein
Sampoornata’ – Lecture by Baba
Ramdev
• Program on ‘Importance of Gita in
Daily Life’ – Lecture delivered by
Swami Nikhilanand of the Chinmaya
Mission
• Program on the topic ‘Marriage-
Bond or Bondage’
• Program on the topic ‘Pranic Urja’
delivered by Dr. Surakshi Goswami
of the Speaking Tree (Time of India)

ix
PREFACE
Introduction of corporate social
responsibility as a part of corporate
legislation was a praiseworthy action. It
was expected that large portion of rural
population especially located in tribal and
remote areas, which hitherto could not taste
the fruits of economic development, would
be benefitted with these provisions.
Bhartiya Vitta Salahkar Samiti (BVSS), a
not- for-profit organization, run by finance
professionals, regularly conducts various
programs related to professional and
social issues. Based on specific studies and
workshops conducted, it provides inputs
to the governments and other respective
regulators.
Ekal Abhiyan is an integrated program for
rural development and its activities include
running Ekal Schools in more than 54,000
remotevillagesinvariouspartsofthecountry
and to propagate health consciousness and
sense of self- reliance in the rural folks.
Nearly 30 years of uninterrupted journey
of Ekal gave BVSS a prefect reason and
inspiration to take up the present Study
to understand the interface between the
corporate sector and various development
initiatives for marginalized people.
The Study highlights the pattern of spending
by various corporate models under CSR
initiatives over the last two years of its
implementation. The Study also aims to
suggest suitable amendments in relevant
lawsandrulestomakeCSRmoremeaningful,
transparent and objective.
We place on record our sincere thanks to
Hon’ble Shri Shyam Ji (Founder Ekal), CA
Bajrang Lal Bagra Ji (Ex-CMD, NALCO and
President, Central Executive Committee,
Ekal Abhiyan), Dr. Subhash Chandra Ji
(Hon'ble Member of Parliament, Chairman
Essel Gourp and Ekal Global), CA Subhash
Aggarwal Ji (Chairman SMC Group and
Chairman, Advisory Board-BVSS) and CA
Raj Kumar Agarwal ji (President BVSS) for
their inspiration and guidance.
We also wish to thank Adv. Imran Ahmed
Siddiqui for his hard work in bringing out this
Study.
In any publication there is always a scope
for further improvement. We would be
grateful to users to offer their suggestions /
comments for further refinement.
For Team BVSS
CA Sushil Gupta
CA Anil Sharma
New Delhi
March 28, 2017

x
ACRONYMS
Acronyms Full form
ASSOCHAM Associated Chambers of Commerce of India
BSE Bombay Stock Exchange
BRR Business Responsibility Report
CII Confederation of Indian Industry
CPSEs Central Public Sector Enterprises
CSR Corporate Social Responsibility
DPE Department of Public Enterprises
EAG Empowered Action Group
FOB Family Owned Business
FCRA Foreign Contribution (Regulation) Act
IICA Indian Institute of Corporate Affairs
INR Indian National Rupee
LODR Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015
MCA Ministry of Corporate Affairs
MNC Multi-National Company
NGOs Non-Government Organizations
NSE National Stock Exchange
PAT Profit After Tax
PMNRF Prime Minister National Relief Fund
PSUs Public Sector Undertakings
SEBI Securities and Exchange Board of India

xi
CONTENTS
Foreword i
Chairman's Message iii
About Ekal Abhiyan v
About Bhartiya Vitta Salahkar Samiti (BVSS) vii
Preface ix
Acronyms x
Executive Summary 1
Introduction 4
Objectives of the Study 7
Methodology of the Study 8
Findings/Observations 10
Suggestions/Recommendations 31
References 33
Annexures: 34
1. Regulatory provisions relating to CSR
1.1 Extract of the Companies Act, 2013 and related Rules Circulars 35
1.2 Guidelines on CSR Sustainability for CPSEs 45
1.3 SEBI guidelines on CSR and amendment notification 53
2. Summary of CSR Expenditure for the years ended 31.03.2015 and
31.03.2016 by the selected 30 companies in tabular form 55

1
CSR Activities in India-Analysis and Trends
EXECUTIVE SUMMARY
1. Introduction:
Social activities carried out by business
houses are not new in India. However,
corporate social responsibility, as a business
agenda, gained recognition in 2001 when
an industry association developed CSR
guidelines to be followed voluntarily by the
industry. Later it became part of statute in
the shape of Section 135 of the Companies
Act, 2013. The statutory provisions were
introduced to encourage companies to fulfil
their responsibilities towards society by not
only imbibing sustainability and other social
objectives in their corporate culture but also
by spending a specified percentage of their
profit on defined social activities on year to
year basis. Schedule VII to the Act contains
a list of activities for which expenditure
incurred by the companies is considered
as compliance of their corporate social
responsibilities mandated under section 135
oftheAct.Theseprovisionsbecameeffective
from 01.04.2014.
2. Objectives of the Study:
One of the objectives of the Study is to find
out whether the purpose for which section
135 was introduced, has been achieved, and
if so to what extent. The Study has also made
an attempt to know the nature and pattern
of expenditure preferred by companies for
their CSR expenditure during the two years’
period ended March 31, 2016.
The Study shall provide an overview of
current trends and practices of expenditure
incurred under CSR mandate by major listed
companies in India.
It is expected that the Study would help in
evaluating various approaches adopted by
corporates to achieve CSR objectives and
would encourage and motivate others to
adopt best CSR practices keeping in view
their specific nature of operations, location
ad philosophy. It is also expected that the
Studyshallprovideguidancetocompaniesto
execute and monitor their CSR activities, to
set up parameters for evaluating the impact
of expenditure incurred and to elucidate
criteria for partnering implementation
agencies.
OtherobjectivesoftheStudyaretoexamine
whether proper and adequate disclosures
have been made by the companies in their
reports to the stakeholders with respect to
their CSR spending and to suggest other
steps, if any, to be taken by the companies
to ensure disclosure of full and transparent
information on their CSR initiatives
including spending.
The Study was to explore any changes
to be made in law and rules for effective
implementation of provisions governing
CSR.

2
3. Methodology:
The Study presents the analysis and trends
of CSR activities in India by three formats
of business organizations namely Central
Public Sector Enterprises (CPSEs), Family
Owned Business (FOBs) and Multi-National
Companies (MNCs) operating in India both
in manufacturing and service sectors and
TheStudyhasbeenpreparedafterreviewing,
analyzing and comparing the annual reports
and CSR policies of the selected companies
for the years ended on 31.3.2015 and
31.3.2016 and related miscellaneous data
available in public domain. Few other reports
available in public domain have also been
referred for providing a comparative analysis
of the subject.
Data of 125 major companies were collected
and out of which top five companies were
selected in specified groups. Two broad
groups were conceived on the basis of
ownership namely Public Sector and Private
Sector. Private sector was further divided
into two groups namely Family Owned
Businesses (FOBs) and Multi-National
Corporations(MNCs).Boththebroadgroups
werefurthersub-dividedintoManufacturing
Sector and Service Trading Sector. This
resulted in formation of six groups.
The Study has also made an attempt to
capture information on different modes used
by the selected Group companies for CSR
spending and unspent expenditure on year
to year basis.
4. Findings/Observations of the Study:
The study found that 30 selected companies
have spent R 8,211 crores in two years with
increase in spending of 21% in the year
2015-16 as compared to 2014-15. The
higher increase in expenditure was noticed
in the case of public sector companies. The
selected companies spent upto 93% of the
amount prescribed to be spent.
Over all percentage of expenditure incurred
by the selected corporates through
Implementation Agencies of their total spent
was 76.58 % in 2015-16 which was not very
different from that in 2014-15. However,
CPSEs spent more amount directly during
2015-16 as compared to 2014-15 whereas
FOBs and MNCs spent higher amount
through Implementation Agencies during
2015-16 as compared to 2014-15.
The selected companies across the Groups
have spent maximum on Healthcare and
Water Sanitation related activities.
Promotion of education has also featured
prominently in their expenditure.
Environmental sustainability was the most
favourable expenditure stream during 2014-
15 whereas Healthcare was preferred by the
selected corporates during 2015-16.
CPSEs spent higher amount on Education in
2015-16 as compared to 2014-15 whereas
FOBs and MNCs spent lesser amount on
Education in 2015-16 as compared to 2014-
15. All the Groups spent higher amount on
Social Empowerment and Skill Development
in 2015-16 as compared to 2014-15. All the
Groups also spent higher expenditure on
Infrastructure Development and Rural and
Slum Area Development during 2015-16 as
compared to 2014-15.
Measures for the benefits of armed forces
veterans,WarWidowsandtheirDependents,
Contribution to Technology Incubators
located within academic institutions and
Promotion of Sports are some of the areas
which have not yet received due attention

3
of the corporates as part of their CSR
expenditure.
FOBs and MNCs spent higher amount on
capacity building in 2015-16 as compared
to 2014-15 whereas CPSEs expenditure
on capacity building has come down
substantially in 2015-16 as compared to
2014-15.
It was also observed that there was no
clarity on accounting of capital expenditure
resulting in asset creation out of amount
spent by corporates themselves and income
generated from CSR activities during the
period, if any.
The Study also observed that formal
processes for selection of activities,
implementing agency and for impact
assessment of CSR expenditure made were
not in place as no disclosure was made in this
regard. Reporting format also have number
of shortcomings resulting in non- availability
of some important information on CSR
expenditure.
5. Recommendations/Suggestions:
Based on various findings/observations, the
Study has made some recommendations/
suggestions of certain steps to be taken
to implement the provisions of the Act
more objectively and effectively and also
to improve disclosure of various aspects of
CSR spending. These recommendations also
include few changes in respective laws and
implementation rules.
The most important recommendation is to
amend section 135 of the Companies Act to
make the CSR spending mandatory on the
same manner as prescribed by Department
of Public Enterprises for public sector
enterprises.
The Study is also recommending to set up
some formal mechanism to carry out an
impact assessment study and publish the
results for stakeholders.
Creating a database of implementing
agencies containing their profiles and
resources, past achievements and area of
specialization, accounting aspects of capital
expenditure incurred, recognizing the best
performers in the field, are other important
recommendations of the Study.

4
INTRODUCTION
Social Responsibility is not a new concept in
India. Our thousands of years old civilization
carries a resonance legacy delivering duties
and responsibilities at every sphere of
our life, be it family, friends or society as a
whole. Roots of social responsibility lie in
philanthropic activities such as giving money,
goods, services or time to the unfortunates,
either directly or by means of an organized
structure of a charitable trust, without
any expectation of some benefit in return.
Various practices prevalent in India, such as
DaaninHinduism,ZakatandFitrainMuslims,
Dasvand in Sikhism and Tethe in Christians
are explicit evidences. The basic aim of all has
been to help under-privileged. Hence, roots
of social responsibility are found in religious
belief and practices. Those who were unable
to serve society directly, but were able to
provide money and other material resources,
either established charitable institutions and
built Dharamshalas, Schools, Orphanages,
Homes for destitute and the like; and,
donated funds to run them. Some benevolent
individuals established endowments to
provide monetary help in perpetuity for
some charitable cause. Traditionally, most
forms of social obligations are concerned
with providing basic necessities such as food,
water, clothing, education, healthcare and
shelter.
An old belief is:
Adatt Danachha Bhavet Daridra
A vnÙk nkukPp Hkosr~ nfjnz A
Daridra Bhavachha Karuti Papam
A nfjnz HkoPp djksfr ikie A
Papam Prabhavat Narakam Prayanti
A ikie izHkkor ujde iz;kfUr A
Punaha Daridra Punarepa Papi
A iqu% nfjnz iqujsik ikih A
Which means if one does not donate, the
person is penniless and being in misery, he
performs evil deeds. By performing evil
deeds he ends up in here and after taking
rebirth, he once again ends up in the vicious
cycle of misery and evil deeds.
in Geeta, Chapter 17, shloka 20 defines the
saatvika daan (pure charity):
nkrO;fefr ;íkua nh;rs ^uqidkfj.ks A
ns'ks dkys p ik=ks p ríkua lkfÙoda Le`re AA
that giving is called saattvika (pure) which
is given with the intent that ‘I must give’, to
someone who can’t return the favor; and
given in the right place, time and to the
worthy/needy recipient.
ç[;kr lektlsoh LoxhZ; Jh ukukth ns'keq• us dgk
Fkk
¶eSa vius fy, ugha] viuksa ds fy, gw¡A
vkSj vius vFkkZr~] oks lc tks misf{kr gSa] oafpr gSaA¸
This message equally applies to corporate
citizens. Indian companies have had a
long tradition of being engaged in social
initiatives that have gone beyond meeting a
company’s immediate financial objectives.
Business organisation, have been making
decisions based not only on financial factors,
but also on the social and environmental
consequences, while meeting the interests

5
of its stakeholders including shareholders,
customers, employees, suppliers, business
partners, local communities, exchequer and
other organizations. It is well recognized
that integrating social, environmental and
ethical responsibilities into the governance
of businesses ensures their long term
success, competitiveness and sustainability.
Companies with ethical practices, good
governance and effective corporate social
responsibility (CSR), have the image of
socially responsible entities and their
products and services are also preferred by
the customers.
Since late nineties, CSR activities have
increasingly come under the lens both
of policy makers as well as of companies’
stakeholders as a governance issue. It is
evident from the Companies Act 2013 that
brought CSR to the forefront and Schedule
VII, which lists out the CSR activities,
suggesting communities to be the focal point.
And CSR rules which suggest that CSR needs
to go beyond communities and concept of
philanthropy.
CSR journey in India, so far, can be
summarised as under:
2001-2008
The first visible step came from the industry
itself when the CII National Committee
on Corporate Social Responsibility
Community Development was constituted
to make CSR an actionable business agenda
in 2001. The Committee developed CSR
guidelines and promoted the sharing of CSR
experiences and best practices. To bridge
the gap between companies and NGOs,
it also created an online platform named
‘SAMMAAN’ in association with Bombay
Stock Exchange (BSE) and Indian Institute of
Corporate Affairs (IICA).
December 2009
Ministry of Corporate Affairs (MCA) issued
Corporate Social Responsibility Voluntary
Guidelines 2009, wherein it was proposed
that each business entity should formulate
a CSR policy to guide its strategic planning
and provide a roadmap for its CSR initiatives,
which should be an integral part of overall
business policy and aligned with its business
goals with the participation of various level
executives and should be approved by the
Board.
July 2011
MCA came out with more comprehensive
set of guidelines based on feedback from
stakeholders and considering international
practices.The‘NationalVoluntaryGuidelines
on Social, Environmental and Economic
Responsibilities of Business’ contained
comprehensive principles to be adopted by
companies as part of their business practices
and a structured business responsibility
reporting format requiring certain specified
disclosures, demonstrating the steps taken
by companies to implement the principles of
social responsibility was introduced.
August 2012
In line with above referred Guidelines
issued by MCA in July, 2011, the Securities
and Exchange Board of India (SEBI) issued
a circular which mandated top 100 listed
entities based on market capitalisation
at BSE and NSE as on March 31, 2012 to
include Business Responsibility Report as a
part of their annual report. Hence in order to
enhance the quality of disclosures made by
listed entities, certain listing conditions were
specified by way of inserting Clause 55 in the
equity Listing Agreement. These Guidelines

6
were made applicable from the financial year
ending on or after December 31, 2012.
December 2012
Department of Public Enterprises (DPE),
Ministry of Heavy Industries and Public
Enterprises also issued guidelines on
Corporate Social Responsibility and
Sustainability for Central Public Sector
Enterprises (CPSEs) which came into effect
w.e.f. April 1, 2013.
September 2013
The Companies Act, 2013 was enacted
replacing the Companies Act, 1956. The
new Act contained a specific provision as
Section-135 read with Schedule-VII, which
made CSR as a statutory provision applicable
to specified companies on the principle of
‘Spend or Explain’. Detailed rules have been
framed for implementation of the section
135 w.e.f. April 1, 2014.
(Refer Annexure 1.1 for text of the
Section, Schedule, Rules and subsequent
amendments and clarifications issued in this
regard).
October 2014
DPE issued fresh guidelines on Corporate
Social Responsibility and Sustainability
for CPSEs which came into effect from
April 1, 2014. These Guidelines superseded
earlier guidelines issued in December 2012
and were in supplement to the CSR Rules
framed under the Companies Act, 2013.
The Guidelines make CPSEs to mandatorily
spend the amount which meet the criteria as
laiddowninsection135(1)oftheCompanies
Act, 2013.
(Refer Annexure 1.2 for the text of the
Guidelines issued by DPE on 21.10.2014).
September 2015
SEBI issued Securities and Exchange Board
of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (LODR)
which replaced earlier directions. LODR
required top five hundred listed entities
based on market capitalization (calculated
as on March 31 of every financial year) to
prepare a Business Responsibility Report
(BRR), as part of their Annual Report,
describing the initiatives taken by them from
an environmental, social and governance
perspective w.e.f. December 31, 2015. SEBI
amended the Regulations to make
preparation of BRR mandatory for top five
hundred companies w.e.f. April 1, 2016.
(Refer Annexure 1.3 for relevant extract of
LODR and Amendment notification.)

7
The main aim of the Study is to understand
trends and practices of expenditure under
CSR over past two years, i.e. 2014-15 and
2015-16, followed by major companies
doing business in different segments in India
and to make suggestions for strengthening
the regulatory and reporting mechanism.
To make a fair assessment of implementation
of legal provisions relating to CSR and
other policies adopted by the companies,
the following questions were framed to be
answered:
1. Whether the purpose for which section
135 was introduced has been achieved,
and if so to what extent?
2. What is the pattern of expenditure
preferred by companies on yearly basis?
3. What is the accounting aspects of
revenueandcapitalexpenditureincurred
under CSR activities especially when the
company has incurred that expenditure
itself?
4. What can be the best CSR practices
which can become role model for others
to emulate, for implementation of
strategies for improvement in operation
standards?
5. What can be the guiding document to
help execute and monitor CSR initiatives
and to elucidate criteria for partnering
implementation agencies?
6. How the companies have made CSR a
key business process for sustainable
development?
7. What can be the best approach to
be adopted for evaluating success in
achieving CSR objectives?
8. How an impact assessment of CSR
initiatives has been made or can be
improved upon?
9. Whether something is required to
be done for better and transparent
implementation and presentation?
10. Whether any changes in Sections / Rules
of the Companies Act, 2013 for better
implementation of the CSR provisions
are required?
OBJECTIVES OF THE STUDY

8
Pictorial presentation of Sample selection
SECTORS
Public
Manufacturing
(Group-1)
Service and Trading
(Group-2)
Private
Family Owned Business Multi-National Companies
Manufacturing
(Group-3)
Service and Trading
(Group-4)
Manufacturing
(Group-5)
Service and Trading
(Group-6)
The Study has been carried out after
collecting, reviewing and comparing the
Annual Reports and CSR policies of 125
listed companies to whom Section 135 of the
Companies Act, 2013 is applicable, for two
years i.e. 2014-15 and 2015-16.
In the first step, these 125 companies were
segregated into two sectors on the basis
of their ownership namely (i) public sector
companies, (ii) private sector companies.
Private Sector was further divided into
two sub sectors namely (i) Family owned
businesses and (ii) multi-national companies
operating in India. All the three sectors/
sub-sectors were further divided in two
groupsonthebasisoftheirnatureofproducts
and services namely (i) manufacturing and (ii)
service and trading.
METHODOLOGY OF THE STUDY
In the second step, top five companies in
each group of the three sectors/sub-sectors
were selected on the basis of their average
net profit determined in term of section 135
of the Companies Act, 2013. This exercise
gave the following six groups having five
companies each:
Group-1 Five Central Public Sector Enterprises
(CPSEs) in Manufacturing Sector
Group-2 Five Central Public Sector Enterprises
(CPSEs) in Service and Trading Sector
Group-3 Five Family Owned Businesses (FOBs) in
Manufacturing Sector
Group-4 Five Family Owned Businesses (FOBs) in
Service and Trading Sector
Group-5 Five Multi-National Companies (MNCs)
in Manufacturing Sector
Group-6 Five Multi-National Companies (MNCs)
in Service and Trading Sector
The companies in each of these six Groups
are listed below:
Group-1: Central Public Sector Enterprises
(CPSEs) in Manufacturing Sector
1. Oil and Natural Gas Corporation Ltd
(ONGC)
2. National Thermal Power Corporation
Ltd (NTPC)
3. National Mineral Development
Corporation Ltd (NMDC)
4. Indian Oil Corporation Ltd (IOC)
5. Bharat Petroleum Corporation Ltd (BPCL)

9
Group-2: Central Public Sector Enterprises
(CPSEs) in Service and Trading Sector
1. Power Finance Corporation Ltd (PFC)
2. Rural Electrification Corporation Ltd
(RECL)
3. The Power Grid Corporation of India Ltd
(PGCL)
4. Oil India Ltd (OIL)
5. Container Corporation of India Ltd
(CONCOR)
Group-3: Family Owned Businesses (FOBs)
1. Reliance Industries Ltd (RIL)
2. Tata Steel Ltd (Tata Steel)
3. Bajaj Auto Ltd (Bajaj Auto)
4. Mahindra and Mahindra Ltd (Mahindra
and Mahindra)
5. UltraTech Cement Ltd (Ultratech
Cement)
Group-4: Family Owned Businesses (FOBs)
1. Tata Consultancy Services Ltd (TCS)
2. Wipro Ltd (WIPRO)
3. HCL Technologies Ltd (HCL)
4. Bharti Airtel Ltd (Bharti Airtel)
5. Kotak Mahindra Bank Ltd (Kotak
Mahindra Bank)
Group-5:Multi-NationalCompanies(MNCs)
1. ITC Ltd (ITC)
2. Cairn India Ltd (Cairn India)
3. Larsen Toubro Ltd (L T)
4. Hindustan Unilever Ltd (HUL)
5. Maruti Suzuki India Ltd (Maruti Suzuki
India)
Group-6:Multi-NationalCompanies(MNCs)
1. HDFC Bank Ltd (HDFC Bank)
2. Infosys Ltd (Infosys)
3. Indiabulls Housing Finance Ltd
(Indiabulls Housing Finance)
4. Zee Entertainment Enterprises Ltd (Zee
Entertainment)
5. Blue Dart Express Ltd (Blue Dart
Express)
From the audited financial statements of
the above companies for the year ended
31.03.2015 and 31.03.2016, the following
information was collected and tabulated on
yearly basis:
1. Average net profit;
2. Amount spent for CSR;
3. Amount on CSR incurred directly and
through implementation agencies;
4. Amount unspent; and
5. Head-wise spent on CSR.
(Refer Annexure 2.1 and 2.2 for the above
referred company wise information for the
years ended 31.03.2015 and 31.03.2016.)

10
It was found that the overall CSR spent by public sector has increased considerably by more
than 48% on year on year basis as against an increase of less than 6% by private sector.
I. Expenditure under CSR
(i). Trends of CSR spending by different sectors during Financial Year 2014-15 and FY
2015-16:
S. No. Heads
Spent (Amount in Cr.)
2014-15 2015-16 % Increase
1 Public Sector 1307.54 1935.91 48.06
2 Private Sector* 1207.08 1276.72 05.77
(a) FOBs 1496.89 1601.02 06.96
(b) MNCs 917.26 952.41 03.83
* As there were 20 companies in the Private Sector, an average of 10 has been taken to compare the same with
CPSEs.
FINDINGS/OBSERVATIONS OF THE STUDY

11
(ii) Trends of CSR spending by CPSEs (Manufacturing Sector) during Financial Year 2014-
15 and FY 2015-16:
Initiative through
FY 2014-15 FY 2015-16 Total
Amount in
Cr.
%
Amount in
Cr.
%
Amount in
Cr.
%
Own 133.89 13.28 500.27 36.43 634.16 26.63
Implementing Agency 874.64 86.72 872.95 63.57 1,747.59 73.37
Total 1,008.53 100.00 1,373.22 100.00 2,381.75 100.00
The above table shows that there is an increasing trend in CPSEs manufacturing sector
towards taking up CSR initiatives on their own.
(iii) Trends of CSR spending by CPSEs (Service and Trading Sector) during Financial Year
2014-15 and FY 2015-16:
Initiative through
FY 2014-15 FY 2015-16 Total
Amount in
Cr.
%
Amount in
Cr.
%
Amount in
Cr.
%
Own 80.79 27.02 68.22 12.12 149.02 17.29
Implementing Agency 218.22 72.98 494.47 87.88 712.69 82.71
Total 299.01 100.00 562.69 100.00 861.71 100.00

12
Initiative through
FY 2014-15 FY 2015-16 Total
Amount in
Cr.
%
Amount in
Cr.
%
Amount in
Cr.
%
Own 294.50 26.71 158.44 14.68 452.93 20.76
Implementing Agency 808.15 73.29 921.13 85.32 1,729.28 79.24
Total 1,102.65 100.00 1,079.56 100.00 2,182.21 100.00
The above table shows that there is a decreasing trend in CPSEs service and trading sector
(iv) Trends of CSR spending by FOBs (Manufacturing Sector) during Financial Year 2014-
15 and FY 2015-16:

13
Initiative through
FY 2014-15 FY 2015-16 Total
Amount in
Cr.
%
Amount in
Cr.
%
Amount in
Cr.
%
Own 60.90 15.45 5.78 1.11 66.69 7.28
Total 394.25 100.00 521.46 100.00 915.71 100.00
The above table shows that there is a decreasing trend in FOBs manufacturing sector towards
taking up CSR initiatives on their own.
(v) Trends of CSR spending by FOBs (Service and Trading Sector) during Financial Year
2014-15 and FY 2015-16:

14
Initiative through
FY 2014-15 FY 2015-16 Total
Amount in
Cr.
%
Amount in
Cr.
%
Amount in
Cr.
%
Own 252.11 48.32 225.57 38.27 477.68 42.99
Total 521.77 100.00 589.47 100.00 1,111.24 100.00
The above table shows that there is a decreasing trend in FOBs service and trading sector
(vi) Trends of CSR spending by MNCs (Manufacturing Sector) during Financial Year 2014-
15 and FY 2015-16:

15
Initiative through
FY 2014-15 FY 2015-16 Total
Amount in
Cr.
%
Amount in
Cr.
%
Amount in
Cr.
%
Own 103.35 26.13 93.22 25.68 196.57 25.92
Total 395.49 100.00 362.94 100.00 758.43 100.00
TheabovetableshowsthatthereisadecreasingtrendinMNCsmanufacturingsectortowards
taking CSR initiatives on their own.
(vii) Trends of CSR spending by MNCs (Service and Trading Sector) during Financial Year
2014-15 and FY 2015-16:

16
The above table shows that there is almost
no change in trend of MNCs service and
trading sector towards taking CSR initiatives
on their own or through some implementing
agency.
In a Study published in Economic and Political
Weekly (Vol.49, Issue No.50 dated 13th
December, 2014), CSR expenditure by public
sector firms increased considerably in 2012-
13 compared to 2011-12. The passage of the
Act also led to an increase in the average CSR
spending of public sector firms from Rs.25.72
million (around Rs.2.57 Cr.) in 2012 to
Rs.147 million (around Rs.14.7 Cr.) in 2013.
The Study further shows that there has also
been a significant increase in the average CSR
expenditure by domestic firms as compared
to foreign firms. Average CSR expenditure by
domestic and foreign firms was Rs.3.79 million
(around Rs.0.37 Cr.) and Rs.8.5 million (around
Rs.0.85 Cr.) respectively in 2011-12, but this
increased to Rs.22.6 million (around Rs.2.26
Cr.) and Rs.19.5 million (around Rs.1.95 Cr.)
respectively in 2012-13.1
Further, an annual research publication ‘India
CSR Outlook Report (ICOR)’ prepared by
NGOBOX (Renalysis Consultants Pvt. Ltd)
on CSR spending of 250 companies for the
Financial Year 2015-16 showed that there
was substantial improvement in the actual CSR
spend to prescribed CSR in FY 2015-16. While
it was 79% in FY 2014-15, it has increased to
92% in financial year 2015-16. There was an
actual CSR spend of Rs.6578.66 Cr. as against
prescribed CSR spend of Rs.7143.91 Cr. for
the Financial Year 2015-16 for these 250
companies.2
II. CSR Expenditure Pattern:
(i) Overall spent:
AsummaryofspentonvariousCSRinitiatives
in descending order of spent is as under:

17
S. No. Heads
Spent
FY Amount (in Cr.) % of Total Spent
1 Health Care, Water and Sanitation 2014-15 1119.69 30.09
2015-16 1736.70 38.68
2 Promotion of Education 2014-15 782.70 21.03
2015-16 888.82 19.80
3 Infrastructure Development / Rural and
Slum Area Development Projects
2014-15 584.86 15.18
2015-16 624.88 13.92
4 Social Empowerment / Skill development 2014-15 497.73 13.37
2015-16 428.66 09.55
5 Environment Sustainability 2014-15 441.84 11.87
2015-16 321.26 07.16
6 Capacity Building and Others 2014-15 142.01 03.82
2015-16 283.75 06.32
7 PMNRF and other Funds for relief to SC,
ST, OBC, minorities and women
2014-15 56.47 01.52
2015-16 78.46 01.75
8 Protection of National Heritage, Arts
Culture
2014-15 77.73 02.09
2015-16 26.88 00.60
9 Promotion of Sports 2014-15 38.46 01.03
2015-16 23.67 00.53
10 Contribution to Technology Incubators
located within academic institutions
2014-15 00.20 00.01
2015-16 72.05 01.60
11 Measures for benefit of armed forces
veterans, war widows and their dependents
2014-15 NIL NIL
2015-16 04.22 00.09
Health Care / Water / Sanitation
35%
Education
20%
Social Empowerment / Skill development
11%
Environment Sustainability
9%
National
Heritage, Arts
Culture
1%
Benefit of armed forces
0%
Sports
1%
PMNRF / Other Funds
2%
Technology Incubators located within academic
institutions
1%
Infrastructure Development / Rural and Slum Area
Development Projects
15%
Relief to victims of natural calamities / disasters
0%
Directly by Subsidiaries (No breakup available)
2%
Capacity Building
3%
CSR Spent during FY 2014-15 2015-16 (All 30 Companies)

18
30%
Education
21%
13%
12%
National Heritage, Arts Culture
2%
0% Sports
1%
PMNRF / Other
Funds
2%
Technology Incubators
0%
15%
0%
0%
Capacity Building
4%
CSR Spent during FY 2014-15 (All 30 Companies)
39%Education
20%
9%
7%
National Heritage, Arts Culture
1%
0% Sports
0%
PMNRF / Other Funds
2%
Technology Incubators
2%
14%
0%
4%
Capacity Building
2%
CSR Spent during FY 2015-16 (All 30 Companies)

19
It was found that there is an overall
increased focus in terms of percentage as
well as quantum on Health Care and Water
Sanitation related initiatives (From 30.09%
in FY 2014-15 to 38.68% in FY 2015-16).
On the other hand, spent on Environment,
Sustainability has come down from 11.87%
in FY 2014-15 to 7.16% in FY 2015-16.
Further, most of the companies have taken
negligible or no interest in Measures for
benefit of armed forces veterans, war
widows and their dependents, Contribution
to Technology Incubators located within
academic institutions, Promotion of Sports
or Protection of National Heritage, Arts
Culture in both the years.
In addition to the above contribution to the
Prime Minister’s National Relief Fund or any
otherfundsetupbytheCentralGovernment
for socio-economic development and relief
and welfare of the Scheduled Casts, the
Scheduled Tribes and other backward
classes,minoritiesandwomen,thecompanies
contributed almost similar percentage of
their CSR spent towards contribution in
both the years.
(ii) Sector-wise top three spending trends:
A summary of initiatives taken is as under:
Category: CPSEs
Financial Year Spent
Amount (in Cr.) %
2014-15 Environment Sustainability 322.40 24.7
Promotion of Education 264.90 20.3
Health Care / Water / Sanitation 234.56 17.9
2015-16 Health Care, Water and Sanitation 985.91 50.9
263.90 13.6
Category: Private Sector*
2014-15 Health Care / Water / Sanitation 442.56 36.7
Social Empowerment / Skill development 197.00 16.3
180.49 14.1
CPSEs.

20
In case of Public Sector Enterprises, it
was found that focus on Environment
Sustainability (24.66%) during 2014-15
has been replaced by Health Care, Water
and Sanitation (50.93%) in 2015-16. Also
spent on Promotion of Education has been
substantially gone down to 11.45% in 2015-
16 as against more than 20% in 2014-15.
The spent has also been reduced in absolute
terms from Rs.265 Cr. in 2014-15 to 222 Cr
in 2015-16.
On the other hand, in case of Private
Enterprises, it is clear here that focus
on Healthcare Water and Sanitation i.e.
36.66% during 2014-15 has been reduced
to 29.40% in 2015-16. Also spent on
Promotion of Education is increased from
21.45% in 2014-15 to 26.13% in 2015-16.
(iii) A further bifurcation of Private Sector
Enterprises into FOBs and MNCs (top
three spends):
Category: FOBs
Financial Year Heads Spent
Amount (in Cr.) %
2014-15 Health Care / Water / Sanitation 704.47 47.06
199.67 12.47
Category: MNCs
2014-15 Promotion of Education 242.49 26.44
Health Care / Water / Sanitation 180.65 19.69
Environment Sustainability 164.04 17.22
FOBs and MNCs both continued spending
the highest amount towards Health Care,
Water and Sanitation except by MNCs in
the year 2014-15. However, FOBs have
decreased the said expenditure in 2015-16
in percentage as well as in absolute terms,
as compared to 2014-15. Same time in
case of FOBs expenditure on Promotion of
Education has been increase substantially
during 2015-16 as compared to previous
year.
In case of FOBs, spent on Social
Empowerment and Skill development
has been replaced by Infrastructure
Development and Rural and Slum Area
Development Projects during 2015-
16. Similarly, in case of MNCs Social

21
Category: CPSEs
Amount (in Cr.) %
2014-15 Promotion of Sports 25.46 1.95
Protection of National Heritage, Arts Culture 30.15 2.31
Social Empowerment and Skill development 103.73 7.93
2015-16 Contribution to Technology Incubators located within
academic institutions
72.04 3.72
2014-15 Protection of National Heritage, Arts Culture 23.79 1.97
PMNRF and other Funds for relief to SC, ST, OBC,
minorities and women
26.35 2.18
2015-16 PMNRF and other Funds for relief to SC, ST, OBC,
39.23 3.07
Infrastructure Development and Rural and Slum Area
180.49 14.14
CPSEs.
Empowerment and Skill development has
been replaced by Promotion of Education
during 2015-16.
(iv) Sector-wise least spending trends (1%
or more) during Financial Year 2014-15
and FY 2015-16:
As evident from earlier analysis, the
public sector enterprises have given least
preference to Promotion of Sports and
Contribution to Technology Incubators
located within academic institutions. And it
maybeduetocomplicaciesinvolvedinsetting
up of related infrastructure, operation and
contingent outcomes with long gestation
period. On the other hand, the private
enterprises have given least preference
to Protection of National Heritage, Arts
Culture and Contribution to PMNRF
and other Funds for relief to SC, ST, OBC,
minorities and women.
Still, public sector has shown seriousness
by taking up various social initiatives during
both the years as against private sector
which has more compliance only attitude by
donating to PMNRF and other related funds.
Some private sector domestic companies
seem to have taken more initiatives in
comparison to MNCs.

22
(v) A further bifurcation of Private Sector Enterprises into FOBs and MNCs (1% or more
spend):
Category: FOBs
Amount (in Cr.) %
23.48 1.57
170.51 11.39
15.44 01.00
(Approx.)
Category: MNCs
29.21 3.19
63.02 6.62
161.30 16.94
Category: CPSEs
Amount (in Cr.) %
2014-15 Measures for the benefit of armed forces veterans,
war widows their dependents
NIL 0.00
Contribution to Technology Incubators located within
00.20 0.02
PMNRF and other Funds for relief to SC, ST, OBC,
03.77 0.29
(vi) Sector-wise least spending trends (between NIL to 1%) during Financial Year 2014-15
and FY 2015-16:

23
Amount (in Cr.) %
NIL 0.00
Measures for the benefit of armed forces veterans,
04.14 0.21
Promotion of Sports 12.30 0.64
NIL NIL
NIL NIL
2015-16 Contribution to Technology Incubators located within
NIL NIL
Measures for the benefit of armed forces veterans,
NIL NIL
CPSEs.
(vii) A further bifurcation of Private Sector Enterprises into FOBs and MNCs (between
NIL to 1%) :
Category: FOBs
Amount (in Cr.) %
NIL 0.00
NIL 0.00

24
Amount (in Cr.) %
NIL 0.00
NIL 0.00
Category: MNCs
NIL 0.00
NIL 0.00
NIL 0.00
NIL 0.00
Promotion of Sports NIL 0.00
It can be observed from the above data that
the following heads found either negligible
or no focus from public as well as private
sectors enterprises:
1. Measures for the benefit of armed
forces veterans, war widows their
dependents,
2. Contribution to Technology Incubators
located within academic institutions,
3. PMNRF and other Funds for relief to SC,
ST, OBC, minorities and women,
4. Protection of National Heritage, Arts
Culture and
5. Promotion of Sports.
In a study published in the CRISIL CSR Yearbook
published in January 2016, it was also observed
that 82% of CSR spending was in only 4 major
sectors i.e. education and skill development
(33%), healthcare and sanitation (27%), rural
development projects (13%) and environment
conservation (9%). 73% of the CSR spending
was focused on education / skill development,
health care / sanitation and rural development.
Further, funds for technology development and
setting up of incubation centers have received
scant attention with a mere 6 out of around
1300 companies considering such investments.
Similarly, support for armed forces veterans and
their families, along with sports, barely received
attention.3
Another study conducted by Institutional
Investor Advisory Services published in January,
2016 also shows that majority of companies are
spending their CSR funds on Hunger, Poverty
and Healthcare, Education and Environment
Sustainability.4
An annual research publication ‘India CSR

25
Outlook Report (ICOR)’ prepared by NGOBOX
(Reanalysis Consultants Pvt. Ltd) on CSR
spending of 250 companies for the Financial
Year 2015-16 also showed that Education
(including skilling) and Healthcare (including
WASH)themeshavebeenfavoritesofcompanies
for implementing CSR projects. Rural sports
promotion is the new area which is gradually
becoming popular in CSR projects.2
A study conducted by Vision IAS Institute, the
six areas that failed to attract significant interest
are slum development; technology incubators at
academic institutions; promotion of rural as well
as Paralympics and Olympic sports; the Prime
Minister’s Relief Fund; preservation of national
heritage, art and culture; and welfare of armed
forces veterans and war widows.5
III. Mode of CSR Expenditure:
(i) TrendsofCSRspendingbyallenterprises
directly or through Implementation
Agency:
S. No. Heads Spent
2014-15 2015-16
Amount
(in Cr.)
% Amount
(in Cr.)
%
1 Direct 925.55 24.87 1051.50 23.42
2 Through Implementing Agencies 2796.15 75.13 3437.85 76.58

26
It was observed that CSR spent by majority
of the companies has been through
Implementing Agencies.
In a Study conducted by Institutional Investor
Advisory Services published in January, 2016
revealed that during the financial year 2014-
15 around 70% of CSR funds were spent by
implementing agencies and only 30% directly by
the company.2
(ii) Sector-wise trends of spending directly
or through Implementation Agency
during the last two financial years by
different categories of companies:
S. No. Particulars Spent
2014-15 2015-16
Amount
(in Cr.)
% Amount
(in Cr.)
%
CPSEs
1 Direct 214.68 16.42 568.49 29.37
Private Sector*
1 Direct 355.43 29.45 241.50 18.92
CPSEs.
(iii) A further bifurcation of Private Sector Enterprises into FOBs and MNCs (directly or
through Implementation Agency) :
S. No. Particulars Spent
2014-15 2015-16
Amount
(in Cr.)
% Amount
(in Cr.)
%
FOBs
1 Direct 355.40 23.74 164.22 10.26
MNCs
1 Direct 355.47 38.75 318.79 33.47

27
It is observed that only government
companies increasingly taking up CSR
initiatives on their own as compared to
private sector which has opted for the
implementing agencies route.
In a study published in Economic and Political
Weekly (Vol.49, Issue No.50 dated 13th
December, 2014), It was emphasized that in
2012-13, around 34% of the top 300 firms
in India worked through own foundations or
trusts. They served the society through various
measures like community development, rural
development, etc. About 19% of the companies
organised free medical check-up camps in rural
areas, blood donation camps and educational
camps for farmers in the rural areas and school
children. Around 30% of the firms collaborated
with non-profit organisations to carry out their
CSR activities. Around 5% of the companies
adopted environmentally sustainable methods
of production. 12% of the firms made donations
to local schools and hospitals.1
IV. CSR Expenditure on Capacity Building
Trends of CSR spending on Capacity Building
during Financial Year 2014-15 and FY 2015-
16:

28
S. No. Heads Spent
2014-15 2015-16
Amount
(in Cr.)
% Amount
(in Cr.)
%
1 CPSEs 82.93 6.34 29.08 1.50
2 Private Sector * 45.01 1.86 48.36 1.89
(a) FOBs 38.79 2.59 38.76 2.42
(b) MNCs 06.21 0.68 09.59 1.01
CPSEs.
It was observed that public sector enterprises have spent a large part of CSR spent towards
capacity building initiatives as compared to FOBs and MNCs especially in the year 2014-15.
V. Unspent CSR Allocation:
During the period of two years, actual spent was less than prescribed spent in both the FY
2014-15 and FY 2015-16:
S. No. Heads Spent (Amount in Cr.)
2014-15 2015-16
Prescribed Actual % Prescribed Actual %
1 CPSEs 1894.11 1307.54 69.03 1821.03 1935.91 106.31
2 Private Sector * 1373.08 1207.08 87.91 1493.13 1276.72 85.51
(a) FOBs 1614.58 1496.89 92.71 1811.47 1601.42 88.40
(b) MNCs 1131.57 917.26 81.06 1174.79 952.41 81.07
Total (1) + (2) 4640.26 3721.70 4807.29 4489.34
CPSEs.

29
A further breakup between Manufacturing Sectors and Service Trading Sectors is as under:
S.
No.
Heads Spent (Amount in Cr.)
2014-15 2015-16
Prescribed Actual % Prescribed Actual %
1 CPSEs
(a) Manufacturing Sector 1,437.77 1,008.53 70.15 1,312.42 1,373.22 104.63
(b)ServiceandTradingSector 456.34 299.01 65.52 508.61 562.69 110.63
Total 1,894.11 1,307.54 1,821.03 1,935.91
2 FOBs
(a) Manufacturing Sector 932.09 1,102.65 118.30 937.01 1,079.56 115.21
Total 1,614.58 1,496.89 1,811.47 1,601.02
3 MNCs
(a) Manufacturing Sector 594.15 521.77 87.82 612.77 589.47 96.20
Total 1,131.57 917.26 1,174.79 952.41
Grand Total 4,640.26 3,721.70 4,807.29 4,489.34

30
It was found that during 2014-15, Public
Sector Enterprises spent only 69% of the
amount out of the prescribed amount but
during 2015-16, they spent 106%. It is to be
kept in mind that Government Guidelines
require CPSEs to carry forward the unspent
amount to the next year.
It can also be observed that Private Sector
Enterprisesspentonly88%oftheprescribed
amount during the year 2014-15 and that
percentage further came down to 85.5%
during the year 2015-16.
In a study published in the CRISIL CSR Yearbook
published in January 2016, it was found that
out of around 1000 companies only the half of
the companies spent 2% of their profits on CSR
and 60% of them spent 1.5% while 28% spent
less than 1%.3
Further,asperLiveMintpublishedonSeptember
21, 2016, there was an increase of 11% and
27% in prescribed as well as actual spent
respectively during the financial year 2015-16
as compared to financial year 2014-15.6
Other Important Observations:
1) Itwasobservedthatduringthetwoyears’
period ended 31.03.2016, the selected
public sector companies have spent
R 783.17 Crores directly by themselves
and similarly selected private sector
companies have also spent R 1193.87
Crores directly by themselves during
that period. The information regarding
amount spent on fixed assets (which
have useful life of more than one year),
if any, out the above expenditure was
not available. Moreover, information on
policy and accounting treatment of the
fixed assets so created out of that capital
expenditure was also not available.
2) Similarly, policy and accounting
treatment of income generated from the
CSR related activities during the period,
if any, was also not available.
3) During the two years’ period ended
31.03.2016, the selected public sector
companies have spent R 2,460.28
Crores through Implementing Agencies
and similarly selected private sector
companies have also spent R 3,773.72
Crores through Implementing Agencies
during that period. An assessment
whether such expenditure was simply
incurred by third parties or incurred as
joint efforts where companies’ personnel
were also involved, was not available in
their reports.
4) It was observed that CSR policies of
majorityofidentifiedcorporates,relating
to strategy and process for selection
of CSR activities and implementing
agencies, are general in nature.
5) It appeared that due to preference given
to local area of operations for incurring
CSR expenditure, such expenditure was
concentrated to those states which are
having higher industrial establishments
within the states.
6) It was also noticed that formal process
of making an impact assessment of CSR
expenditure made by selected corporate
was not in place. It was noticed that
Reporting Format prescribed under the
Rules was not facilitating availability of
some important information on CSR
expenditure.

31
There is no doubt that incorporating social
responsibility of corporate in the statute has
shown good results. In spite of the fact that
statutory provisions are on the principle of
“spend or explain”, most of the companies
to whom the said provisions are applicable,
have taken reasonable steps towards nation
building by providing much needed funds
for the benefit of civil society. However, to
strengthen the mechanism of corporate
social responsibility and based on the
observations of the Study, some suggestions
are being made.
The suggestions are bifurcated in three
categories:
(a) Proposed changes in Law
(b) Proposed changes in Rules and
Regulations
(c) Others
a) Proposed changes in Law
(i) Section 135 of the Companies Act, 2013
may be amended to bring Private Sector
companies at par with Public Sector
companies with regard to provision
of carried forward of unspent CSR
allocation. Let them also move from
‘spentorexplain’to‘spentoraccumulate
+ spent’.
(ii) Schedule III to the Companies Act,
2013 may be amended so as to include
information on fixed assets created out
of CSR expenditure incurred by the
companyitself.However,depreciationon
that should not be allowed as an expense
to the company.
b) Proposed changes in rules and
Regulations
(i) The Rules may provide for preparation
of outcome budget to be presented
to the CSR Committee for any project
to be undertaken where expenditure,
including capital expenditure, exceeds
R 10 Crores or so.
(ii) The Rules may provide for undertaking
impact assessment in respect of CSR
expenditure incurred on a single project.
Such impact assessment may be done
by a third party, which has prescribed
technical and professional expertise
available with it.
(iii) The Rules may provide for approval of
the Board, if Implementing Agency, being
engaged, has some interest representing
the directors or their relatives. Such
disclosure should be part of disclosure of
‘related party transactions’.
(iv) CSR Rules may be amended to provide
for enhanced disclosures incorporating
the above referred suggestions.
c) Other Suggestions
(i) Some government agency like IICA
may be asked to publish successful case
studies so that those can be replicated by
other corporate.
(ii) Companies which have done good work
in CSR initiative may be awarded and
SUGGESTIONS / RECOMMENDATIONS

32
appropriately circulated to encourage
others.
(iii) IICA may be made a nodal agency to
not only empanel various Implementing
Agencies but also to make a database
made of such agencies with information
on their core expertise and successful
projects executed, available to corporate.
(iv) With a view to make available the
requisite workforce in various
specialized field covered in schedule
VII to the Companies Act, management
institutes may be suggested to start
specialized courses or diploma programs
on the subjects.
(v) With a view to inculcate corporate
social responsibilities awareness in the
higher management of the companies,
prospective mid-level management
cadre may be asked to work with some
live projects before their induction in the
management.
(vi) CSR projects carried out through
implementing agencies and creating
fixed assets, the benefits of which are
to be there for a period more than one
year, may continue to be reported by
the companies in their CSR activities
reporting with proper disclosure, even if
they continue to be shown in the books
of the Implementing Agencies.
(vii) The government should, with full clarity,
give its stand as to whether any tax
benefit should be available to expenses
incurred under CSR spent or not.
Situation where some of the expenses
are eligible for tax benefits manipulate
the flow of funds to some specified heads
or agencies only.

33
REFERENCES
1) Economic and Political Weekly (Vol.49,
Issue No.50 dated 13th December,
2014)
http://www.epw.in/journal/2014/50/
web-exclusives/analysis-corporate-
social-responsibility-expenditure-india.
html
2) ‘India CSR Outlook Report (ICOR)’ by
NGOBOX - Renalysis Consultants Pvt.
Ltd. (September, 2016)
http://ngobox.org/media/India%20
CSR%20Outlook%20Report%20
2016-NGOBOX.pdf
3) ‘The CRISIL CSR Yearbook (January,
2016)
https://www.crisil.com/pdf/corporate/
The-CRISIL-CSR-yearbook-20Jan2016.
pdf
4) ‘Institutional Investor Advisory Services
– CSR: Taking Root (January, 2016)
http://iias.in/corporate-social-
responsibility-taking-root.aspx
5) Vision IAS Institute
http://visionias.in/home/resources/
open_doc/current_affairs/imp_issues/
One_year_of_CSR_under_Companies_
Act_Final.pdf
6) Live Mint – CSR spending picks up in FY
16 (Edition: September 21, 2016)
http://www.livemint.com/Companies/
AGHffjRinGGi2FwXEGR1qL/CSR-
spending-picks-up-in-FY16.html

35
CSR Activities in India - Analysis and Trends
ANNEXURE - 1.1
Extract of the Companies Act, 2013:
“Section -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
suchPolicyinitsreportandalsoplace
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.—Forthepurposesofthissection
“average net profit” shall be calculated in

36
accordance with the provisions of section
198.”
Schedule VII to the Companies Act, 2013
ACTIVITIES WHICH MAY BE INCLUDED
BY COMPANIES IN
THEIR CORPORATE SOCIAL
RESPONSIBILTY POLICIES
Activities relating to:-
1) Eradicating hunger, poverty and
malnutrition, promoting health care
including preventive Health care] and
sanitation [including contribution to
the Swach Bharat Kosh set-up by the
Central Government for the promotion
of 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, day care centres and such other
facilities for senior citizens and measures
for reducing inequalities faced by socially
and economically backward groups;
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[including contribution to the
Clean Ganga Fund set-up by the Central
Government for the rejuvenation of river
Ganga ];
5) Protection of national heritage, alt and
culture including restoration of buildings
and sites of historical importance
and works of art; setting up public
libraries; promotion and development of
traditional arts 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,
Paralympics 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
academicinstitutionswhichareapproved
by the Central Government;
10) Rural development projects.
11) Slum area Development *
*Explanation - For the purposes of this item,
the term ‘Slum area’ shall means any area
declared as such by the Central Government
or any State Government or any other
competent Authority under any law for the
time being in force.
Companies (Corporate Social
Responsibility Policy) Rules, 2014
In exercise of the powers conferred under
section 135 and sub-sections (1) and (2) of
section 469 of the Companies Act, 2013,
the Central Government hereby makes the
following rules, namely:-
Short title and commencement.
Rule 1: (1) These rules may be called the
Companies (Corporate Social Responsibility
Policy) Rules, 2014.

37
(2) They shall com.e into force on the 1st
day of April, 2014.
Definitions.
Rule 2: (1) In these rules, unless the context
otherwise requires,—
(a) “Act” means the Companies Act, 2013;
(b) “Annexure” means the Annexure
appended to these rules;
(c) “Corporate Social Responsibility (CSR)”
means and includes but is not limited to
:—
(i) Projects or programs relating to
activities specified in Schedule VII to
the Act; or
(ii) Projects or programs relating to
activities undertaken by the board
of directors of a company (Board)
in pursuance of recommendations
of the CSR Committee of the Board
as per declared CSR Policy of the
company subject to the condition
that such policy will cover subjects
enumerated in Schedule VII of the
Act.
(d) “CSR Committee” means the Corporate
Social Responsibility Committee of the
Board referred to in section 135 of the
Act.
(e) “CSR Policy” relates to the activities
to be undertaken by the company as
specified in Schedule VII to the Act and
the expenditure 2 thereon, excluding
activities undertaken in pursuance of
normal course of business of a company;
(f) “Net profit” means the net profit of a
company as per its financial statement
prepared in accordance with the
applicable provisions of the Act, but shall
not include the following, namely :—
(i) any profit arising from any overseas
branch or branches of the company,
whether operated as a separate
company or otherwise; and
(ii) any dividend received from other
companies in India, which are
covered under and complying with
the provisions of section 135 of the
Act:
Provided that net profit in respect of a
financial year for which the relevant financial
statements were prepared in accordance
with the provisions of the Companies Act,
1956 (1 of 1956), shall not be required to
be re-calculated in accordance with the
provisions of the Act:
Provided further that in case of a foreign
company covered under these rules, net
profit means the net profit of such company
as per profit and loss account prepared
in terms of clause (a) of sub-section (1) of
section 381 read with section 198 of the Act.
(2) Words and expressions used and not
defined in these rules but defined in
the Act shall have the same meanings
respectively assigned to them in the Act.
Corporate Social Responsibility
Rule 3: (1) Every company including its
holding or subsidiary, and a foreign company
defined under clause (42) of section 2 of the
Act having its branch office or project office
in India, which fulfils the criteria specified in
sub-section (1) of section 135 of the Act shall
comply with the provisions of section 135 of
the Act and these rules:
Provided that net worth, turnover or net
profit of a foreign company of the Act shall be
computed in accordance with balance sheet
and profit and loss account of such company
prepared in accordance with the provisions

38
of clause (a) of sub-section (1) of section 381
and section 198 of the Act.
(2) Every company which ceases to be a
company covered under subsection
(1) of section 135 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 sub-sections (2) to (5)
of the said section, till such time it
meets the criteria specified in sub-
section (1) of section 135.
CSR Activities
Rule 4: (1) The CSR activities shall be
undertaken by the company, as per its stated
CSR Policy, as projects or programs or
activities (either new or ongoing), excluding
activities undertaken in pursuance of its
normal course of business.
(2) The Board of a company may decide to
undertake its CSR activities approved by
the CSR Committee, through
(a) a company established under section
8 of the Act or a registered trust or a
registered society, established by the
company, either singly or along with
any other company, or
(b) a company established under section
8 of the Act or a registered trust or
a registered society, established by
the Central Government or State
Governmentoranyentityestablished
under an Act of Parliament or a State
legislature :
Provided that- if, the Board of a company
decides to undertake its CSR activities
through a company established under
section 8 of the Act or a registered trust or a
registered society, other than those specified
in this sub-rule, such company or trust
or society shall have an established track
record of three years in undertaking similar
programs or projects; and the company has
specified the projects or programs to be
undertaken, the modalities of utilisation of
funds of such projects and programs and the
monitoring and reporting mechanism”
(3) A company may also collaborate with
other companies for undertaking
projects or programs or CSR activities in
such a manner that the CSR Committees
of respective companies are in a position
to report separately on such projects or
programs in accordance with these rules.
(4) Subject to provisions of sub-section (5) of
section 135 of the Act, the CSR projects
or programs or activities undertaken
in India only shall amount to CSR
Expenditure.
(5) The CSR projects or programs or
activities that benefit only the employees
of the company and their families shall
not be considered as CSR activities in
accordance with section 135 of the Act.
(6) Companies may build CSR capacities
of their own personnel as well as
those of their Implementing agencies
through Institutions with established
track records of at least three financial
years but such expenditure [including
expenditure on administrative
overheads] shall not exceed five per
cent of total CSR expenditure of the
company in one financial year.
(7) Contribution of any amount directly or
indirectly to any political party under
section 182 of the Act, shall not be
considered as CSR activity.
CSR Committees
Rule 5: (1) The companies mentioned in the

39
rule 3 shall constitute CSR Committee as
under:—
(i) an unlisted public company or a
private company covered under sub-
section(1)ofsection135whichisnot
required to appoint an independent
director pursuant to sub-section (4)
of section 149 of the Act, shall have
its CSR Committee without such
director;
(ii) a private company having only two
directorsonitsBoardshallconstitute
its CSR Committee with two such
directors;
(iii) with respect to a foreign company
covered under these rules, the CSR
Committee shall comprise of at least
two persons of which one person
shall be as specified under clause (d)
of sub-section (1) of section 380 of
the Act and another person shall be
nominated by the foreign company.
(2) The CSR Committee shall institute a
transparent monitoring mechanism for
implementation of the CSR projects or
programs or activities undertaken by the
company.
CSR Policy
Rule 6 : (1) The CSR Policy of the company
shall, inter alia, include the following namely :
(a) a list of CSR projects or programs
which a company plans to undertake
falling within the purview of
the Schedule VII of the Act,
specifying modalities of execution
of such project or programs and
implementation schedules for the
same; and
(b) monitoring process of such projects
or programs:
Provided that the CSR activities does
not include the activities undertaken in
pursuance of normal course of business of a
company :
Provided further that the Board of Directors
shall ensure that activities included
by a company in its Corporate Social
Responsibility Policy are related to the
activities included in Schedule VII of the Act.
(2) The CSR Policy of the company shall
specify that the surplus arising out of the
CSR projects or programs or activities
shall not form part of the business profit
of a company.
CSR Expenditure
Rule 7: CSR expenditure shall include all
expenditure including contribution to corpus
for projects or programs relating to CSR
activities approved by the Board on the
recommendation of its CSR Committee, but
does not include any expenditure on an item
not in conformity or not in line with activities
which fall within the purview of Schedule VII
of the Act.
CSR Reporting
Rule 8: (1) The Board’s Report of a company
covered under these rules pertaining to
a financial year commencing on or after
the 1st day of April, 2014 shall include an
annual report on CSR containing particulars
specified in Annexure.
(2) In case of a foreign company, the balance
sheet filed under subclause (b) of sub-section
(1) of section 381 shall contain an Annexure
regarding report on CSR.
Display of CSR activities on its website
Rule 9: The Board of Directors of the
company shall, after taking into account
the recommendations of CSR Committee,

40
approve the CSR Policy for the company
and disclose contents of such policy in its
report and the same shall be displayed on
the company’s website, if any, as per the
particulars specified in the Annexure.
ANNEXURE
FORMAT FOR THE ANNUAL REPORT ON
CSR ACTIVITIES
TO BE INCLUDED IN THE BOARD’S
REPORT
1. 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.
2. The Composition of the CSR Committee.
3. Average net profit of the company for
last three financial years.
4. Prescribed CSR Expenditure (two per
cent of the amount as in item 3 above).
5. Details of CSR spent during the financial
year:
(a) Total amount to be spent for the
financial year;
(b) Amount unspent, if any;
(c) Manner in which the amount spent
during the financial year is detailed
below:
(1) (2) (3) (4) (5) (6) (7) (8)
S.No. CSR project
or activity
identified
Sector in
which the
project is
covered
Projects or
programs
(1) Local
area or
other
(2) Specify
the state
and district
where
projects or
programs
was
undertaken
Amount
outlay
(budget)
projects or
programs
wise
Amount
spent on the
projects or
programs
Sub-heads:
(1)
Direct
expenditure
on projects
or programs
(2)
Overheads:
Cumulative
expenditure
up to the
reporting
period
Amount
spent Direct
or through
implementing
agency*
1.
2.
3.
TOTAL
*Give details of implementing agency
6. In case the company has failed to spend
the two per cent of the average net profit
of the last three financial years or any
part thereof, the company shall provide
the reasons for not spending the amount
in its Board report.
7. A responsibility statement of the CSR
Committee that the implementation and
monitoringofCSRPolicy,isincompliance
with CSR objectives and Policy of the
company.
Sd/-
(Chief Executive Officer or
Managing Director or Director)
Sd/-
(Chairman CSR Committee)
Sd/-
(Person specified under clause(d) of
sub-section (1) of section 380 of the Act )
(wherever applicable)

41
General Circular No-21/2014 dated 18th
June, 2014
Clarifications with regard to provisions
of Corporate Social Responsibility under
section 135 of the Companies Act, 2013.
ThisMinistryhasreceivedseveralreferences
and representation from stakeholders
seekingclarificationsontheprovisionsunder
Section 135 of the Companies Act, 2013
(herein after referred as ‘the Act’) and the
Companies (Corporate Social Responsibility
Policy) Rules, 2014, as well as activities to
be undertaken as per Schedule VII of the
Companies Act, 2013. Clarifications with
respect to representations received in the
Ministry on Corporate Social Responsibility
(hereinafterreferredas(‘CSR’)areasunder:-
(i) The statutory provision and provisions of
CSR Rules, 2014, is to ensure that while
activities undertaken in pursuance of the
CSR policy must be relatable to Schedule
VII of the Companies Act 2013, the
entries in the said Schedule VII must be
interpreted liberally so as to capture the
essence of the subjects enumerated in
the said Schedule. The items enlisted in
the amended Schedule VII of the Act, are
broad-based and are intended to cover
a wide range of activities as illustratively
mentioned in the Annexure.
(ii) It is further clarified that CSR activities
should be undertaken by the companies
in project/ programme mode [as referred
in Rule 4 (1) of Companies CSR Rules,
2014].One-offeventssuchasmarathons/
awards/ charitable contribution/
advertisement/ sponsorships of TV
programmes etc. would not be qualified
as part of CSR expenditure.
(iii) Expenses incurred by companies for
the fulfilment of any Act/ Statute of
regulations (such as Labour Laws, Land
Acquisition Act etc.) would not count as
CSR expenditure under the Companies
Act.
(iv) Salaries paid by the companies to regular
CSR staff as well as to volunteers of the
companies (in proportion to company’s
time/hours spent specifically on CSR)
can be factored into CSR project cost as
part of the CSR expenditure.
(v) “Any financial year” referred under Sub-
Section (1) of Section 135 of the Act read
with Rule 3(2) of Companies CSR Rule,
2014, implies ‘any of the three preceding
financial years’.
(vi) ExpenditureincurredbyForeignHolding
Company for CSR activities in India
will qualify as CSR spend of the Indian
subsidiary if, the CSR expenditures are
routed through Indian subsidiaries and if
the Indian subsidiary is required to do so
as per section 135 of the Act.
(vii) ‘Registered Trust’ (as referred in Rule
4(2) of the Companies CSR Rules,
2014) would include Trusts registered
under Income Tax Act 1956, for those
States where registration of Trust is not
mandatory.
(viii) Contribution to Corpus of a Trust/
society/ section 8 companies etc. will
qualify as CSR expenditure as long as (a)
the Trust/ society/ section 8 companies
etc.iscreatedexclusivelyforundertaking
CSR activities or (b) where the corpus is
created exclusively for a purpose directly
relatabletoasubjectcoveredinSchedule
VII of the Act.

42
Annexure referred to at para (i) of General Circular No. 21/2014 dated 18.06.2014
SI. No. Additional items requested to be included in
Schedule VII or to be clarified as already being
covered under Schedule VII of the Act
Whether covered under Schedule VII of the Act
1. Promotion of Road Safety through CSR:
(i)(a) Promotions of Education, “Educating the
Masses and Promotion of Road Safety
awareness in all facets of road usage,
(a) Schedule VII (ii) under “promoting education”.
(b) Drivers’ training, For drivers training etc. Schedule VII (ii) under
“vocational skills”.
(c) Training to enforcement personnel, It is establishment functions of Government
(cannot be covered).
(d) Safety traffic engineering and awareness
through print, audio and visual media”
should be included.
Schedule VII (ii) under “promoting education”.
(ii) Social Business Projects : “giving medical and
Legal aid, treatment to road accident victims”
should be included.
(ii) Schedule VII (i) under ‘promoting health care
including preventive health care.’
2. Provisions for aids and appliances to the
differently- able persons - ‘Request for inclusion’.
Schedule VII (i) under ‘promoting health care
including preventive health care.’
3. The company contemplates of setting up ARTIIC
(Applied Research Training and Innovation
Centre) at Nasik. Centre will cover the following
aspects as CSR initiatives for the benefit of the
predominately rural farming community:
(a) Capacity building for farmers covering best
sustainable farm management practices.
(b) Training Agriculture Labour on skill
development.
(c) Doing our own research on the field for
individual crops to find out the most cost
optimum and Agri – ecological sustainable
farm practices. (Applied research) with a focus
on water management.
(d) To do Product Life Cycle analysis from the soil
conservation point of view.
Item no. (ii) of Schedule VII under the head of
“promoting education” and “vocational skills” and
“rural development”.
(a) “Vocational skill” livelihood enhancement
projects.
(b) “Vocational skill”
(c) ‘Ecological balance’, ‘maintaining quality of
soil, air and water’.
(d) “Conservation of natural resource” and
‘maintaining quality of soil, air and water’.
4. To make “Consumer Protection Services” eligible
under CSR. (Reference received by Dr. V.G. Patel,
Chairman of Consumer Education and Research
Centre).
(i) Providing effective consumer grievance
redressal mechanism.
Consumer education and awareness can be
covered under Schedule VII (ii) “promoting
education”.

43
(ii) Protecting consumer’s health and safety,
sustainable consumption, consumer service,
support and complaint resolution.
(iii) Consumer protection activities.
(iv) Consumer Rights to be mandated.
(v) all consumer protection programs and
activities”onthesamelinesasRuralDevelopment,
Education etc.
5. a) Donations to IIM [A] for conservation of
buildings and renovation of classrooms
would qualify as “promoting education” and
hence eligible for compliance of companies
with Corporate Social Responsibility.
b) Donations to IIMA for conservation of
buildings and renovation of classrooms
would qualify as “protection of national
heritage, art and culture, including
restoration of buildings and sites of
historical importance” and hence eligible for
compliance of companies with CSR.
Conservation and renovation of school buildings
and classrooms relates to CSR activities under
Schedule VII as “promoting education”.
6. Non Academic Technopark TBI not located
within an academic Institution but approved
and supported by Department of Science and
Technology.
Schedule VII (ii) under “promoting education”,
if approved by Department of Science and
Technology.
7. Disaster Relief Disaster relief can cover wide range of activities
that can be appropriately shown under various
items listed in Schedule VII. For example,
(i) medical aid can be covered under ‘promoting
health care including preventive health care.’
(ii) food supply can be covered under eradicating
hunger, poverty and malnutrition.
(iii) supply of clean water can be covered under
‘sanitation and making available safe drinking
water’.
8. Trauma care around highways in case of road
accidents.
Under ‘health care’.
9. Clarity on rural development projects” Any project meant for the development of rural
India will be covered under this.
10. Supplementing of Govt. schemes like mid-day
meal by corporates through additional nutrition
would qualify under Schedule VII.
Yes. Under Schedule VII, item no. (i) under
‘poverty and malnutrition’.

44
11. Research and Studies in the areas specified in
Schedule VII.
Yes, under the respective areas of items defined
in Schedule VII. Otherwise under ‘promoting
education’.
12. Capacity building of government officials and
elected representatives – both in the area of
PPPs and urban infrastructure.
No.
13. Sustainable urban development and urban public
transport systems
Not covered.
14. Enabling access to, or improving the delivery
of, public health systems be considered under
the head “preventive healthcare” or “measures
for reducing inequalities faced by socially
economically backward groups”?
Can be covered under both the heads of
“healthcare” or “measures for reducing
inequalities faced by socially economically
backward groups”, depending on the context.
15. Likewise, could slum re-development or EWS
housingbecoveredunder“measuresforreducing
inequalities faced by socially economically
backward groups”?
Yes.
16. Renewable energy projects Under ‘Environmental sustainability, ecological
balance and conservation of natural resources’,
17. (i) Are the initiatives mentioned in Schedule VII
exhaustive?
(ii) In case a company wants to undertake
initiatives for the beneficiaries mentioned in
Schedule VII, but the activity is not included
in Schedule VII, then will it count (as per 2(c)
(ii) of the Final Rules, they will count)?
(i) (ii) Schedule VII is to be liberally interpreted
so as to capture the essence of subjects
enumerated in the schedule.
18. US-India Physicians Exchange Program – broadly
speaking, this would be program that provides for
the professional exchange of physicians between
India and the United States.
No.

45
ANNEXURE - 1.2
ANNEXURE-1.2

53
ANNEXURE - 1.3
EXTRACTOFSECURITIESAND EXCHANGE BOARD OFINDIA(LISTING OBLIGATIONS
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
“Annual Report
34. (1) The listed entity shall submit the annual report to the stock exchange within twenty
one working days of it being approved and adopted in the annual general meeting as per the
provisions of the Companies Act, 2013.
(2) The annual report shall contain the following: 
(a) audited financial statements i.e. balance sheets, profit and loss accounts etc;
(b) consolidated financial statements audited by its statutory auditors;  
(c) cash flow statement presented only under the indirect method as  prescribed in
Accounting Standard-3 or Indian Accounting Standard 7, as applicable, specified in
Section 133 of the Companies Act, 2013 read with relevant rules framed thereunder
or as specified by the Institute of Chartered Accountants of India, whichever is
applicable;  
(d) directors report;  
(e) management discussion and analysis report-either as a part of directors  report or
addition thereto;  
(f) for the top hundred listed entities based on market capitalization  (calculated as
on March 31 of every financial year), business responsibility report describing the
initiatives taken by them from an environmental, social and governance perspective,
in the format as specified by the Board from time to time:  Provided that listed entities
other than top 100 listed companies based on market capitalization and listed entities
which have listed their specified securities on SME Exchange, may include these
business responsibility reports on a voluntary basis in the format as specified.  
(3) The annual report shall contain any other disclosures specified in Companies Act, 2013
along with other requirements as specified in Schedule V of these regulations.”

54
NOTIFICATION
Mumbai, the 22nd December, 2015
SECURITIES AND EXCHANGE BOARD OF INDIA
(LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)
(AMENDMENT) REGULATIONS, 2015
No. SEBI/LAD-NRO/GN/2015-16/27. In exercise of the powers conferred by section 30 of
the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes
the following regulations to further amend the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, namely:-
1. These regulations may be called the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2015.
2. They shall come into force on the 1st day of April, 2016.
3. In the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, in regulation 34, in sub regulation (2), –
i. in clause (f), after the words “for the top” and before the words “listed entities”, for the
word hundred the words five hundred shall be substituted;
ii. intheprovisotoclause(f),afterthewords“otherthantop”andbeforethewords“listed
companies”, for the number “100” the words “five hundred” shall be substituted.
U.K. Sinha
Chairman
Securities and Exchange Board of India

55
(SpentRinlakhs)
S.No.Company'sNameHealthCareWater/
Sanitation
EducationSocialEmpow-
erment/Skill
development
EnvironmentArts
Culture
Benefitof
armedforces
veterans,war
widows
theirdepend-
ents
SportsPMNRF/
OtherFunds
/Reliefto
SC,ST,OBC,
minoritiesand
women
Contribution
toTechnology
Incubators
locatedwithin
academic
institutions
Infrastructure
Development
/Ruraland
SumArea
Development
Projects
Reliefto
victims
ofnatural
calamities/
disasters
Expend-
iture
directlyby
Subsidi-
aries
Capacity
Building
Total
1ONGC3,914.30-4,829.49-28,864.372,527.90----9,386.76---49,522.82
2NTPC1,905.471,492.452,499.061,871.47---2,162.56--2,364.88739.61-7,483.2120,518.71
3NMDC1,500.00770.009,021.001,504.28283.40272.00-216.00377.00-4,901.00---18,844.68
4BHEL430.032,486.805,297.60709.02169.3378.83-4.00--699.258.31-368.1910,251.36
5GAIL598.0263.61276.51170.54------606.70---1,715.37
6PFC-1,912.80-2,276.30706.70-----91.70--181.005,168.50
7PowerGrid84.69331.001,034.93381.97268.482.00----2,382.84144.94-110.744,741.59
8REC556.672,125.66417.00934.53295.98-----274.16---4,604.00
9OilIndia716.003,736.002,959.002,435.00880.0079.00-164.00--2,212.00--150.0013,331.00
10Concor118.23715.00155.6389.90771.8755.68---20.0030.00100.00--2,056.31
11RIL60,400.00-1,728.00-11.00--406.00--12,144.00-409.00960.0076,058.00
12TataSteel-4,119.004,425.004,308.00511.00407.00-861.00--1,698.00--817.0017,146.00
13BajajAuto550.17-1,353.7077.0030.00200.00-9.702,000.00-70.00---4,290.57
14MahindraMahindra2,186.00-2,487.00557.00554.00---200.00-1,503.00--837.008,324.00
Annexure2.1(a)
SummaryofspentonCorporateSocialResponsibility(AllEnterprises)
DuringtheFinancialYear:2014-15

CSR Activities in India

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Similar to CSR Activities in India

Similar to CSR Activities in India (20)

More from Bhartiya Vitta Salahkar Samiti - BVSSOnline

More from Bhartiya Vitta Salahkar Samiti - BVSSOnline (20)

Recently uploaded

Recently uploaded (20)

CSR Activities in India