India is a country of myriad contradictions.

On the one hand, it has grown to be one of the

largest economies in the world, and an increasingly important player in the emerging global

order, on the other hand, it is still home to the largest number of people living in absolute

poverty. What emerges is a picture of uneven distribution of the benefits of growth which many

believe, is the root cause of social unrest. Companies too have been the target of those perturbed

by this uneven development and as a result, their contributions to society are under severe

scrutiny. Due to this, many companies have been quick to sense this development, and have

responded proactively while others have done so only when pushed. Governments as well as

regulators have responded to this unrest and the CSR clause within the Companies Act, 2013

was added as a result.

The following assignment will discuss in detail about the definition and role of Corporate social

Responsibility in India.
While there may be no single universally accepted definition of CSR, each definition that

currently exists underpins the impact that businesses have on society at large and the societal

expectations of them. The EC1 defines CSR as “the responsibility of enterprises for their

impacts on society”. To completely meet their social responsibility, enterprises “should have

in place a process to integrate social, environmental, ethical human rights and consumer

concerns into their business operations and core strategy in close collaboration with their

stakeholders” The WBCSD defines CSR as2 “the continuing commitment by business to

contribute to economic development while improving the quality of life of the workforce and

their families as well as of the community and society at large.” According to the UNIDO3,

“Corporate social responsibility is a management concept whereby companies integrate social

and environmental concerns in their business operations and interactions with their

stakeholders. CSR is generally understood as being the way through which a company achieves

a balance of economic, environmental and social imperatives (Triple-Bottom-Line Approach),

while at the same time addressing the expectations of shareholders and stakeholders. In this

sense it is important to draw a distinction between CSR, which can be a strategic business

management concept, and charity, sponsorships or philanthropy. Even though the latter can

also make a valuable contribution to poverty reduction, will directly enhance the reputation of

a company and strengthen its brand, the concept of CSR clearly goes beyond that.” From the

above definitions, it is clear that: • The CSR approach is holistic and integrated with the core

business strategy for addressing social and environmental impacts of businesses. • CSR needs

to address the well-being of all stakeholders and not just the company’s shareholders. •

Philanthropic activities are only a part of CSR, which otherwise constitutes a much larger set

of activities entailing strategic business benefits.

Global Guidelines on CSR

CSR moved from a social practice to an effective business tool. There are several globally

recognised guidelines, frameworks; tools pertaining to CSR are available. Some of them are

discussed below, these relate to larger perspective of business responsibility and sustainability.

UN Guiding Principles on Business and Human Rights: Human rights are at the heart of the

debate, and so is the question of which tools can be deployed to make sure that they are

respected. In 2011, the Human Rights Council of the United Nations adopted concrete

guidelines for action, the Guiding Principles on Business and Human Rights, intended to move

beyond the debate on voluntary versus binding instruments in the area of human rights. The

Guiding Principles rest on three pillars: • the state duty to protect • the corporate responsibility

to respect • access to remedy

OECD Guidelines for Multinational Enterprises, they offer a comprehensive code of conduct

designed to provide multinational enterprises (MNEs) with guidance and support in their

interactions with trade unions and in the areas of environmental protection, the fight against

corruption and respect of the interests of consumers. The Guidelines also contain

recommendations on overseas investment and cooperation with foreign suppliers. The

International Labour Organization (ILO), which was founded in 1919, aims to introduce

minimum social standards around the world. The idea behind these efforts is to prevent

companies from gaining competitive advantages by violating workers' rights. The mission and

the actions of the ILO are based on four basic principles: • Freedom of association and the right

to collective bargaining • Elimination of forced labour • Abolition of child labour • Elimination

of discrimination in respect of employment and occupation

CSR IN INDIA

In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013, which

was passed by both Houses of the Parliament, and had received the assent of the President of

India on 29 August 2013. The CSR provisions within the Act is applicable to companies with

an annual turnover of 1,000 crore INR and more, or a net worth of 500 crore INR and more, or

a net profit of five crore INR and more. The new rules, which will be applicable from the

The Act lists out a set of activities eligible under CSR. Companies may implement these

activities taking into account the local conditions after seeking board approval. The indicative

activities which can be undertaken by a company under CSR have been specified under

Schedule VII of the Act.

FOR WHOM it’s APPLICABLE?

The companies on whom the provisions of the CSR shall be applicable are contained in Sub

Section 1 of Section 135 of the Companies Act, 2013. As per the said section, the companies

having Net worth of INR 500 crore or more; or Turnover of INR 1000 crore or more; or Net

Profit of INR 5 crore or more during any financial year shall be required to constitute a

Corporate Social Responsibility Committee of the Board.

WHAT TO DO WHEN CSR IS APPLICABLE?

Once a company is covered under the ambit of the CSR, it shall be required to comply with the

provisions of the CSR. The companies covered under the Sub section 1 of Section 135 shall be

required to do the following activities:

1. As provided under Section 135(1) itself, the companies shall be required to Constitute

Corporate Social Responsibility Committee of the Board "hereinafter CSR Committee". The
CSR Committee shall be comprised of 3 or more directors, out of which at least one director

shall be an independent director.

2. The Board's report shall disclose the compositions of the CSR Committee.

3. All such companies shall spend, 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. It has been clarified that the average

net profits shall be calculated in accordance with the provisions of Section 198 of the

Companies Act, 2013. Also, proviso to the Rule provide 3(1) of the CSR Rules that the 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 of clause (a) of sub-section (1) of section 381 and section 198 of the Companies

Act, 2013.epresentation of Section 135 (1).

REPORTING FOR CSR

Rule 8 of the CSR Rules provides that the companies, upon which the CSR Rules are applicable

on or after 1st April, 2014 shall be required to incorporate in its Board's report an annual report

on CSR containing the following particulars:

A brief outline of the company's CSR Policy, including overview of projects or programs

proposed to be undertaken and a reference to the web-link to the CSR policy and projects or

programs;

The composition of the CSR Committee;

Average net profit of the company for last three financial years;

Prescribed CSR Expenditure (2% of the amount of the net profit for the last 3 financial

years);
 Details of CSR Spent during the financial year;

In case the company has failed to spend the 2% of the average net profit of the last three

financial year, reasons thereof;

ROLE OF CSR COMMITTEE

The CSR Committee constituted in pursuance of Section 135 of the Companies Act, 2013 shall

be required to carry out the following activities:

a) Formulate and recommend to the Board, a Corporate Social Responsibility Policy which

shall indicate the activities to be undertaken by the company as specified in Schedule VII;

b) Recommend the amount of expenditure to be incurred on the activities referred to in clause

(a); and

c) Monitor the Corporate Social Responsibility Policy of the company from time to time.

WHAT IF A COMPANY CEASES TO BE COVERED UNDER SECTION 135?

Rule 3(2) of the Corporate Social Responsibility Rules, 2014 provides that every company

which ceases to be a company covered under section 135(1) of the Act for three consecutive

financial years shall not be required to:

a. constitute a CSR Committee ; and

b. comply with the provisions contained in subsection (2) to (5) of the said section till such

time it meets the criteria specified in sub section (1) of Section 135.

Accordingly, if a company, for 3 consecutive years, ceases to be covered under the ambit of

section 135(1), it shall not be required to fulfill the conditions relating to the constitution of

CSR Committee and other related provisions.

the Objectives of the Policy

This Policy shall be read in line with Section 135 of the Companies Act 2013, Companies

(Corporate Social Responsibility Policy) Rules, 2014 and such other rules, regulations,

circulars, and notifications (collectively referred hereinafter as ‗Regulations‘) as may be

applicable and as amended from time to time and will, inter-alia, provide for the following: •

Establishing a guideline for compliance with the provisions of Regulations to dedicate a

percentage of Company‘s profits for social projects. • Ensuring the implementation of CSR

initiatives in letter and spirit through appropriate procedures and reporting • Creating

opportunities for employees to participate in socially responsible initiatives.

3.CSR activities of some Indian companies

The first company of good corporate governance is the Indian IT industry bellwether, Infosys.

Indeed, Infosys is one of the companies that has set benchmarks for other companies not only

in India but all over the world in the way corporate governance and social responsibility are

handled and projected to the outside world. The point here is that companies not only need to

walk the talk for CSR but also broadcast their achievements to the world at large. Another

company that has done an exceptional job of portraying itself as a good corporate citizen is the

TATA group in India. Four Tata Group companies have secured top 10 Rank in CSR for 2nd

consecutive year in Economic Times Survey, report published on September 15, 2016. There

are four Tata group companies in the top 10 list. Tata Power retains its position. Compared to

the previous study, it has jumped two places. Mahindra & Mahindra the top ranked company

in 2014 has dropped 3 ranks to be placed fourth. Ultratech Cement and Shree Cements are a

surprise entrant in the top 10. Interestingly no foreign Players made it to the top 10 list – a trend

that follows from 2014. CSR activities of some Indian companies are as follows: Infosys: They

established Infosys Foundation in 1996. The focus areas are to strive for economic
development, promoting education, to fight for hunger, poverty, malnutrition, to strengthen

rural areas, to promote gender equality and women empowerment and environment

sustainability. Reliance Industries: To provide impetus to various philanthropic initiatives of

RIL, Reliance Foundation (RF) was set up in 2010 as an expression of its vision towards

sustainable growth in India. Reliance Foundation works for the people belonging to

marginalized community. It works to promote quality life among rural people, to provide

access to quality and affordable healthcare in India, work for urban renewal and provide

affordable education, to promote art and culture of India, also work to revolutionize grassroots

sports. TATA: The group believes corporate social responsibility (CSR) is a critical mission

that is at the heart of everything that it does, how it thinks and what it is. The company uses the

power of business to solve social and environmental problems. Tata companies are involved in

a wide variety of community development and environment preservation projects. The Tata

group's social activities relate to health, primary education, skills training and entrepreneurship,

livelihoods, women empowerment and strengthening services for the differently-abled.

Mahindra and Mahindra: The Company focuses on the constituencies of girls, youth, and

farmers, by supporting them in education, health and livelihood enhancement, with innovative

programmes that harness the leveling power of technology. Rise for Good also entails running

our business with integrity, responsibility and transparency, caring for the well-being of the

planet and striving for the welfare of our employees, customers and the community. Key CSR

issues in India are environmental management, eco-efficiencies, responsible sourcing,

stakeholder engagement, labour standards and working conditions, employee and community

relations, social equity, human rights, good governance and anti-corruption measures. As CSR

becomes a priority (and the norm) for more and more businesses, we expect to see a surge of

innovative programs addressing sustainability over the long term.