CSR

Muthu Palaniappan N & Vinodh V

About CSR and Responsibility of Corporate sector towards Primary Education in India

CSR means ?

Contribution of corporate for societal good.

Socially responsible companies do not restrict themselves to practicing resources to engage in processes that increase only their profits.

Integrate economic, environmental and social objectives with the companys operations and development.

It is becoming more central to the societal expectations from commercial establishments

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Every business running at the cost of society, i.e., Usage of natural resources like land, water, minerals and man power. And it pollutes the environment. So every organisation is responsible to give some thing in return for the benefit of the society.

What is the need for corporate to take responsibility

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Traditionally in the US, CSR has been defined much more in terms of a philanthropic model, which involves giving funds, goods, or serves, sometimes functioning as advertising.

The European model of CSR is much more focused on operating the core business in a socially responsible way, complemented by investment in communities for solid business case reasons.

CSR Model [p1]

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CSR in India has traditionally been seen as a philanthropic activity. But has moved from institutional building to community development through various projects.

Sustainable development - the needs of the present without compromising the ability of future generations to meet their own needs - Brundtland Commission.

CSR Model [p2]

Bulk of Indias population residing in rural areas, it is vital to unlock the countrys huge economic potential.

Government schools, which comprise the majority of schools in rural India, have been unable to address the challenge due to lack facilities, ineffective teaching and mismanagement.

Need for the hands of CSR in primary education

Applicability: For every registered company with net worth of Rs 500cr or turnover of Rs 1,000cr or net profit of Rs 5cr; during any financial year.CSR Committee should consist of three or more directors with at least one independent director.Role Of The Board Of Directors: Review recommendations made by the CSR Committee Approve CSR Policy for the company Disclose contents of the Policy in the company's report/website Ensure that the company spends at least 2% of its average profits during previous 3 financial years.

COMPANIES ACT 2013 Sec (135)

The CSR Committee shall prepare the CSR Policy of the company which shall include the following:Specify the projects and programmes to be undertaken

Prepare a list of CSR projects/ programmes which a company plans to undertake during the implementation year, specifying modalities of execution in the areas/sectors chosen and implementation schedules for the same

CSR projects/ programmes of a company may also focus on integrating business models with social and environmental priorities and processes in order to create shared value

surplus arising out of the CSR activity will not be part of business profits of a company and should be credited to CSR initiative.

Would specify that the corpus would include 2 percent of the average net profits, any income arising there from, and surplus arising out of CSR activities need to be credited to CSR Corpus.

What CSR Committee Should do?

As per the recommendations of the Company Bill, 2012; it is estimated that a total of 8,000 companies in India would be required to meet the CSR requirements as detailed in the Bill, among the 9 lakh active companies in India.

It is estimated that the 2% CSR expenditure would translate to companies' spending around Rs 12,000 crore to 15,000 crore annually.

Total CSR spending as disclosed by the top 70 companies amounts to Rs 2,023 Cr (or an average of 0.82% of PAT of profit making companies)

Rs 2,300 crores the estimated spending by the top 100 corporates in India.

Only 6 companies in India are already spending 2% of their PAT on CSR activities and they are not the top spenders on CSR

Some of CSR activities in India (as of September 2013): [p1]

TOP 5 CSR INVESTORS IN INDIA Reliance industries: Rs 357.00 Cr Tata Steel : Rs 146.00 Cr State Bank of India: Rs 123.37 Cr ICICI: Rs 116.55 Cr HDFC: Rs 89.85 Cr

Among the top 100 companies, the above mentioned firms invest about 35% in CSR activities.

Some of CSR activities in India (as of September 2013): [p2]

Some of CSR activities in India (as of September 2013): [p3]

SOME OF THE CORPORATE IN PRIMARY EDUCATION:Microsoft Primary school in MaharashtraComputer literacy program for rural India.Training and motivating teacher to improve studying experience with e-learning.RelianceSchools in and around its manufacturing plants also runs education awareness program. English relay program in 100 government schools.InfosysSetup 40,000 school libraries in Karnataka. Teacher training in rural Karnataka. BhartiEnglish language learning product using mobile Interactive VoiceCompetitive exam preparation through smart phones, computers and tablet devices.

Some of CSR activities in India (as of September 2013): [p4]

Vocational Training Institute

Establishment of an affordable private English medium school in the district, which will teach humanities and practical approach to the core subject.

Implementation of Information and communication Technology (ICT) in school, which includes: Detailed evaluation of various multimedia in classroom solutions.Pilot implementation of the most practicable solution in 1-2 government SchoolsContinuous impact and effectiveness assessment for 6-9 months before launching it to other schools To ensure the proper doing, the Law needs to be stricter to curb malpractices on CSR activities. Periodical review should be taken place.

Recommendations

As water collected in a tank gets pure by filtration, so accumulated wealth is preserved by being employed in charity.- CHANAKYA, Vridda-Chanakya

Conclusion