Assignment no 1

Corporate Social Responsibility (CSR) provisions are likely to be effective from financial year 2014-15. Guidelines
Every company satisfying certain financial strength criteria is mandatorily required to spend at least 2 percent of its average net profit of three preceding financial years on specified CSR activities. Each qualifying company to form a CSR committee which will formulate the CSR policy of the company and effectively monitor the CSR activities of the company. Board of Directors of the companies are responsible to ensure that the company spends the mandatory CSR spend on specified CSR activities in accordance with the CSR policy of the company and disclose the CSR policy and CSR activities of the company as specified in the provisions. Recently, the Ministry of Corporate Affairs (MCA) has issued draft rules on CSR for public discussion.The said draft CSR rules lay down the framework and guidance on the manner in which every eligible company is expected to undertake CSR initiatives. In this, we will discuss the Corporate Social Responsibility provisions (CSR provisions) introduced in the New Companies Act, 2013 (the Act). When the President of India gave assent to the Companies Bill, 2013, India became the first country to mandate spend on CSR activities through a statutory provision. In India, while many corporate houses have been traditionally engaged in doing CSR activities voluntarily, the new CSR provisions put formal and greater responsibility on companies to set out clear framework and process to ensure strict compliance. As per Section 135 of the Act, companies with a specified net worth or turnover or net profit are required to mandatorily spend 2 percent of its average net profit towards specified CSR activities.

 Recently, the rule making committee of MCA has published the draft CSR rules and uploaded the same on MCA website for public discussion and debate. Our comments in this bulletin are based on the CSR provisions as laid down under the Act and the draft CSR rules. Our comments are subject to final CSR rules that may be notified by the Government after considering the public discussion and debate. While the Government is soon expected to notify the effective date of applicability of CSR provisions, the draft CSR rules suggest that CSR provisions will be made effective from financial year 2014-15. The analysis on the CSR provisions and salient features of the draft CSR rules are provided as under. Every company having net worth of INR 5000 million or more, or turnover of INR 10000 million or more or net profit of INR 50 million or more during any financial year will have to comply with the CSR provisions as laid down under the Act. If any of the above financial strength criteria is met, the qualifying company is mandatorily required to spend at least 2 percent of the average net profit1 of past three financial years on specified CSR activities. While the threshold limit of net worth criteria and the turnover criteria are kept higher, the net profit threshold limit of mere INR. 50 million will bring majority of companies under the CSR net. Under the draft CSR rules, net profit is defined to mean net profit before tax as per books of accounts and shall not include profits arising from branches outside India. While the reporting framework under the draft CSR rules suggest that the unspent amount of the specified CSR spend to be rolled over to the succeeding financial years, it does not clarify whether the excess spend of over and above 2 percent mandatory CSR spend in any particular financial year can be carried forward in succeeding financial year or not.

Appointment of CSR committee

Every qualifying company needs to constitute a CSR committee of the Board consisting of 3 or more directors2 Though the CSR provisions under the Act required minimum 3 directors for constitution of CSR committee, the issue that needs to be clarified is whether qualifying private companies (which requires minimum two directors only) would be required to appoint one more director only to constitute CSR committee and comply with the CSR provisions. The mandate of the said CSR committee shall be: To formulate and recommend a CSR policy to the Board; To recommend amount of expenditure to be incurred on CSR activities; To monitor the CSR policy of the company from time to time. In this context, the draft CSR rules specifies that following should be included in CSR policy: Details regarding list of projects / programs to be undertaken, modalities of execution, areas /sector chosen, implementation schedules, etc; That the surplus arising out of the CSR activity will not be part of business profits of a company; That corpus to include the following: sing therefrom; arising out of CSR activities.

Responsibility of the Board

The Board of every qualifying company is required to hold following responsibilities: To approve the CSR policy recommended by the CSR committee and disclose the contents of such policy in its report and place it on companys website; To ensure the CSR activities are undertaken by the company;

 To ensure 2 percent spending on CSR activities; To report CSR activities in Boards report and disclose noncompliance (if any) with the CSR provisions.

Assignment no 2
CORPORATE SOCIAL RESPOSIBILITIES OF COMPANIES

ADITYA BIRLA GROUP :

VISION: To actively contribute to the social and economic development of the communities in which we operate. In doing so, build a better, sustainable way of life for the weaker sections of society and raise the country's human development index. STRATEGY: Our projects are carried out under the aegis of the "Aditya Birla Centre for Community Initiatives and Rural Development", led by Mrs. Rajashree Birla. The Centre provides the strategic direction, and the thrust areas for our work ensuring performance management as well. Our focus is on the all-round development of the communities around our plants located mostly in distant rural areas and tribal belts. All our Group companies Grasim, Hindalco, Aditya Birla Nuvo and UltraTech have Rural Development Cells, which are the implementation bodies. Our partners in development are government bodies, district authorities, village panchayats and the end beneficiaries the villagers. The Government has, in their 5-year plans, special funds earmarked for human development and we recourse to many of these. PROJECT MECHANISM:

All projects are planned in a participatory manner, in consultation with the community, literally sitting with them, and gauging their basic needs. We take recourse to "participatory rural appraisal", which is a mapping process. Subsequently, based on a consensus and in discussion with the village panchayats, we prioritise requirements. And thus a project is born. Implementation is the responsibility of the community and our team, as is the monitoring of milestones and the other aspects. Monitoring entails physical verification of the progress and the actual output of the project. Village meetings are held periodically to elicit feedback on the benefits of our community programmes and the areas where these need to be beefed up. We try and ensure that while in the short term we have to do enormous hand-holding, the projects become sustainable by the beneficiaries over the long haul. Once this stage is reached, we withdraw. In this way we do not build a culture of dependence, instead we make the villagers self-reliant. MODEL VILLAGE : One of our unique initiatives is to develop model villages, so each of our major companies is working towards the total transformation of a number of villages in proximity to our plants. Making of a model village entails ensuring self-reliance in all aspects viz., education, health care and family welfare, infrastructure, agriculture and watershed management, and working towards sustainable livelihood patterns. Fundamentally, ensuring that their development reaches a stage wherein village committees take over the complete responsibility and our teams become dispensable. PROJECT OPERATION: The footprint of our community work straddles 3,000 villages across the length and breadth of our country. We reach out to more than 7 million people annually. Over 60 per cent of these live below the poverty line and belong to scheduled castes and tribes.

The Group spends in excess of Rs.130 crore annually, inclusive of the running of 18 hospitals and 42 schools. The Group transcends the conventional barriers of business and reaches out to the marginalised as a matter of duty and to bring in a more equitable society.

FOCUS AREAS: Our rural development activities span five key areas and our single-minded goal here is to help build model villages that can stand on their own feet. Our focus areas are healthcare, education, sustainable livelihood, infrastructure and espousing social causes. PARTNERS: WHO, Australia India Council, Bill and Melinda Gates Foundation, Habitat for Humanity, CII, European Union (EU), British Council, City& Guilds (UK), Global Compact Network, International Rotary Club, NSDC, FICCI, NABARD, NACO, CARE, IGNOU, Aide et Action, SEWA, BAIF, MYRADA, Basix, CARD, Art of Living Foundation, Smile Foundation, Maya Foundation, Childline India Foundation, local NGOs, District Development Offices, Central and State governments.

ITC:
VISION: ITC Limited (ITC) is one of India's foremost private sector companies having a diverse portfolio of businesses. The company has been undertaking several CSR initiatives over the years and been appreciated for them globally. The case discusses ITC's CSR initiatives and focuses on its approach. The company's

innovative ways and heavy investments to achieve the 'triple bottom line' are discussed. The question to be look forward "Is it taking the right initiatives and setting standards to follow. CSR PHILOSOPHY: Inspired by the overarching vision of making a contribution to the national goals of sustainable development and inclusive growth, ITC has innovatively crafted unique business models that synergise long-term shareholder value creation with enhancing societal capital. This commitment is reflected when ITC measures accomplishments not only in terms of financial performance but also by the transformation ITC has consciously engendered to augment the social capital of the nation. in ITC's 'Triple Bottom Line' approach of contributing to the economic, environmental and social capital of the country. Envisioning a larger societal purpose has always been a hallmark of ITC. The company sees no conflict between the twin goals of shareholder value enhancement and societal value creation. The challenge lies in fashioning a corporate strategy that enables realisation of these goals in a mutually reinforcing and synergistic manner. As a corporate citizen with enduring relationships in rural India, ITC has a history of collaboration with communities and government institutions to enhance farm productivity and the rural resource base. ITC's commitments in agricultural R&D and knowledge sharing have spanned vital aspects of competitiveness - efficient farm practices, soil and water management. ITC is committed to a national agenda of raising agricultural productivity and making the rural economy more socially inclusive. ITC believes that the urgency and scale of these tasks make market linked solutions and innovations more effective and sustainable than capital intensive approaches. CSR IN INDIA: ITC's philosophy revolves around goal congruence with the national goals of sustainable development and inclusive growth. Various environmental & Social initiatives are taken by ITC to ensure sustainable growth. Some of the key initiatives taken by ITC for improvement of livelihood of disadvantaged sections of society and the reach of initiatives in mentioned in table below

Initiatives

Milestones

4 million farmers e - Choupal empowered, 6,500 e - Choupals installed 114,428 hectares greened, Social & Farm generating 51.48 million Forestry person - days of employment 56,951 hectares Watershed brought under soil and Development moisture conservation Women's 15,378 women members Empowerment 1183 self - help groups 176 Cattle Development Livestock Centres Development 3,520 villages covered annually 252,329 children covered through 2,334 Primary Education Supplementary Learning Centres

SAHARA INDIA PARIVAR:

VISION: Sahara Welfare Foundation, the social development unit of Sahara India Pariwar, is engaged in social welfare projects, alleviating people's sufferings and bringing to them new rays of hope and a brighter tomorrow. The projects of Sahara Welfare Foundation focus on women and disabled who are socially and economically deprived and hence marginalised. It aims to initiate and facilitate such processes and initiatives where socially & economically marginalised and deprived people and communities irrespective of age, caste, class, gender or race are able to participate actively in the process of their development so that they

may lead a life of dignity and respect. Major programmes undertaken by the unit include. MEGA REHABILATION PROJECT: The village, Bhimasar-Chakasar, taluka Anjar district Kutch is about 15 km. from Gandhidham and is spread over 9457.31 acres. It is home to 3153 persons of which 19 died and 135 were injured due to the earthquake. Of the total families, houses of 801 were destroyed owing to the earthquake. The village was emotionally adopted by Sahara India Pariwar for relocation. Members of the Pariwar were there within 48 hours for providing relief services to the survivors and from then onwards the task of rehabilitating the earthquake affected persons by reconstructing 839 houses with basic community facilities is accomplished.

ADOPTION OF FAMILIES OF KARGIL MARTYRS: Sahara India Pariwar has adopted the families of Kargil Martyrs and has committed itself to provide emotional and economic support to all such families by allocating 50 crore (USD 10.65 million ) approx. under seven schemes for this purpose. In addition to providing monthly assistance, help is also extended for specific activities such as marriages, purchasing academic books for the children who are studying and attempts are also made to develop emotional bonds with them. PROGRAMMES FOR HANDICAPPED: To address the nationwide problems of our physically challenged brethren, Sahara India Pariwar has established the Center for Handicapped. It aims at identifying the types of problems faced by the disabled persons, providing early identification guidelines, assessing disability, providing management & guidance for guardians of disabled. Facilities like physical & audio-metric tests, speech therapy, I.Q tests, repairing of co-appliances, providing essential aids & appliances on short-term basis is being provided through experienced specialists in the relevant fields.

SAKSHAR BHARAT: The objective of this programme is to help children and adults residing in slums of cities develop their overall personality and a functional understanding of aspects that affect their day-to-day lives. People of different age groups have benefited from this programme since its inception. PULSE POLIO PROGRAMME: Since 1997 Sahara Welfare Foundation has been participating in Pulse Polio immunization programme in coordination with the National Programme of Polio Immunization. More than 2 lac (0.2 million) children have been vaccinated. MOBILE HEALTHCARE UNITS: In addition to the existing 09 medical vans in Pune, we are also operating 40 medical vans across the country, running 30 days a month, throughout the year, taking healthcare to the remotest rural areas where medical services do not exist. JANSAWATHYA PROGRAMME: The objective of this project is to provide assistance through various modes to help people, especially the deprived and marginalised develop their mental and physical health, making them aware regarding several health aspects in socioeconomic backward parts of the country. Through a team of experts and mobile vans it has benefited lacs (millions) of people. The Janswasthya project is also partnering with the Govt. of India Health Programmes. The Revised National Tuberculosis Control Programme and School Health Programme & Blindness Control have delivered benefits to the society. REHABILATION OF CHALLENGED PEOPLE: In order to fulfill our social commitment, we have a dedicated Sahara Sankalp Rehabilitation Centre for the Challenged People. The Rehabilitation Centre manufactures and distributes aids and appliances to physically challenged people from Lucknow and Gorakhpur and surrounding districts. Equipped with latest equipments and a small workshop, a team of well experienced and qualified

doctors is also in place at the centres. Hundreds of physically challenged people have been able to stand on their feet and have become independent by the services provided through the centre. NCC SCHOLARSHIP: As a gesture of deep respect for NCC with which Mr. Subrata Roy Sahara was involved during his school and college days and commanded 1600 NCC cadets, a scheme has been constituted by Sahara India Pariwar to pay over 800 NCC cadets stipends and incentives amounting to over 1 crore annually.