GUIDELINES on CORPORATE SOCIAL RESPONSIBILITY for CENTRAL PUBLIC SECTOR ENTERPRISES

CHANGE IN APPROACH
With the rapidly changing corporate environment, CPSEs today are required to adopt CSR as a strategic tool for sustainable growth. CSR means not only investment of funds for social activities but also integration of business processes with social processes.
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NEED FOR LINKAGE WITH COMMUNITY

An enterprise needs to address the concerns of the society in which it is operating.
In order to address the needs of the community, there should be free interaction between enterprises and community leaders to identify viable and sustainable projects. 3

OVERARCHING CONCEPT
Corporate Social Responsibility is a professional management process, with a long-term strategy integrated with its corporate strategies. CSR activities may be planned in parallel to the business plan, looking at every possible opportunity to link and integrate business plans with the need based social and environmental concerns.
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PLANNING THE CSR INITIATIVE

CSR

plan may be long, medium or short term. However, every plan must have annualised physical targets and budget allocations. Such plans must specify activities to be undertaken, budgets allocated, and must also define responsibilities and authorities and measurable, 5 expected results.

THRUST AREAS

Assistance to be project based rather than mere donations. Finalization of time-frames and various milestones before commencement of a project. However any contribution (which is not project based) towards any of the areas mentioned in the annexure would count as a CSR activity, subject to it not exceeding 5% of the CSR budget of the enterprise. Any money released directly to Central/State Government Treasury, Gram Panchayat or District Administration will not qualify as CSR expenditure. All contributions by CPSEs to the CSR HUB will be treated as CSR expenditure. All expenditure on CSR training will be treated as CSR expenditure.
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ACTIVITIES THAT WILL COUNT AS CSR

NOT

Activities that are already part of the core business of the CPSE; Benefits to Staff; Activities conducted by Staff (unless such staff have been specifically recruited for CSE alone) Mere grants to ORGANIZATIONS/INSTITUTIONS (excepting the special provision mentioned in the previous slide.) Activities that are not specific projects i.e. those that do not have a specific start date, end date and allocated budget. Contributions to Central/State/District or Panchayat exchequer. 7

IMPLEMENTATION MODALITIES

CSR Activities to be carried out by Specialist Agencies and generally not to be conducted by CPSE employees/staff; However, they may be taken up in the PPP mode, if found desirable in specific cases; Specialist Agencies include NGOs, Institutes, Academic Organizations, Civil Society/Community-based orgns., Trusts, Missions, Professional Consultancy Organizations, Contracted agencies for civil 8 works etc., who have requisite expertise.

IMPLEMENTATION MODALITIES

While assigning CSR projects to specialised agencies, every possible efforts must be made to verify the reliability and clean track record of such agencies. CPSEs may make efforts to prepare suitable panels of such agencies or they may select from panels maintained by Government, Semi-Government, Autonomous Organisations or the National CSR Hub, etc. For actual selection of agencies, CPSEs may follow procedures specific to their organization.
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IMPLEMENTATION MODALITIES
contd

Initiatives

of State Governments as well as Central Government Departments /Agencies could be dovetailed/ synergised with CSR activities. of any duplication of CSR activities by the CPSEs, the State Governments and local level Programmes. 10

Avoidance

IMPLEMENTATION MODALITIES
CPSEs

contd

should generate awareness among all levels of their staff possible, CPSEs should set up independent divisions/ deptts./ sections or cells for CSR activities. and awareness programmes should be conducted for all staff 11 connected with CSR work

Wherever

Training

FUNDING

Type of CPSEs Net Profit (Previous Year)

The CSR budget to be mandatorily created through a Board Resolution as a percentage of net profit in the following manner:Expenditure range for CSR in a Financial Year (% of profit) 3% 5%
2% 3%
(Subject to a Min. of 3 cr)

(i) Less than Rs. 100 crore

(ii) 100 crore to Rs. 500 crore (iii) 500 crore and above

0.5% 2%
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CSR budget to be fixed for each year and is non-lapsable.

MONITORING
Monitoring of the CSR projects is very crucial and should be done as far as possible by the specified Division/Department/Cell of the CPSE. However, such monitoring can also be out sourced to a specialized monitoring agency if felt necessary. The Board of CPSE/Administrative ministry should discuss the implementation of CSR activities on a regular basis. CSR activities should be mentioned in a separate paragraph/chapter in the Annual Report of the CPSE. Under MoU guidelines, from 2010-11 onwards, 5 marks have been earmarked out of the non13 financial parameters for CSR.

EVALUATION
For

proper monitoring of CSR activities, companies may appoint a CSR committee/Project Implementation Committee or Social Audit Committee etc. for critical assessment. CSR projects should also be evaluated by an independent external agency. This evaluation should be both 14 concurrent and final.

BASELINE SURVEYS AND DOCUMENTATION

Impacts

made may be quantified to the best possible extent with reference to base line data, which need to be created by the CPSEs before the start of any project. Hence Base-line Surveys mandatory. Meticulous documentation relating to CSR activites, policies, programmes, expenditures, procurement, etc. should invariably be prepared and made 15 available to the CSR HUB on-line.

CSR HUB
CSR

HUB will undertake/facilitate the following activities:

Nation-wide compilation, documentation, and creation of database; Advocacy; and Research; Preparation of panels of Implementing Orgns.; Promotional activities, including production of short films, printing of brochures, pamphlets, 16 promotional materials etc.;

CSR HUB

contd.

Training and Orientation of CSR Personnel; Setting up a National Data Centre; Conferences, Seminars, Workshops both national and international; Act as a Think Tank; CSR Hub at TISS will undertake as well as coordinate training activities relating to CSR; May take steps to set up a Corpus Fund Any other matter as entrusted to it from time to time by the DPE or any other activity that 17 it deems fit for the promotion of CSR;

CSR HUB

contd

The Hub will begin operations with funding provided by Deptt. PE; It will, however, be free to receive funds from;
SCOPE and both Central as well as State CPSEs; UN Agencies, reputed international agencies such as World Bank, EU and other multilateral bodies and orgns.; Reputed National and State Bodies; Govt. Deptts., Autonomous Orgns., Planning Commission, Attached and Subordinate Offices, Corporations etc. Philanthropic Missions, Trusts, etc. of national and international repute.
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TABLE 1 DETAILS OF 5 CHOSEN PROJECTS

Sl. No. Name of the Project Starting Completion Amount Date Date Allotted with Yearwise Breakup Date of Completion of Need Assessment/ Baseline Survey & Name of Agency Name of Implementing Agency and Date of Appointment Amount spent on Documentation and Dissemination and Name of Agency Appointed Name of Monitoring Organisa tion where
applicable

Name of Evaluation Agency and Brief Details of Evaluation Report (Separate Sheet to be Attached)
(10)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

1.
2. 3. 4.

TOTAL

N.B. Copy of Board Minutes in which specific budget of CSR has been passed. If this is not available ,poor rating will be awarded. (Clause 5.1 of CSR Guidelines). ENCLOSURES 1. 5 samples of detailed documentation/publicity material/dissemination material to be attached one for each of the 5 projects listed. 2. Final Evaluation reports for 5 selected projects of previous year to be attached.(Not applicable to Review Year 201112) 19 3. Details of CSR training imparted to be attached (CSR training to be treated as CSR expenditure).

TABLE 2 List of All Projects/Activities Reported to TISS HUB

Sl. No. Name of the CSR Project/Activity Date of Reporting of Date of Acceptance Details to TISS Conveyed by TISS Database
(3) (4)

(1)

(2)

1.

2.

3.

4.

5.
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TABLE 3 Details of CSR Expenditure

S.No

Item

Amount in crores or percentage (3)

(1)

(2)

1.

PAT for the year under review

2.

CSR expenditure

3.
4. 5. 6.

CSR expenditure as percentage of PAT

CSR expenditure as percentage of minimum prescribed

Training expenditure on CSR (to be treated as CSR expenditure)

Unspent Balance amount of CSR Budget rolled over to the following year Contribution to CSR HUB as percentage of CSR budget
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