This document covers the New CSR Rules in India as per the New Companies Act 2013, an estimate of how much CSR fund is available under CSR budget of top 100 BSE listed companies and an analysis of BR reports of the companies.

1. SECTION 135
(The NEW COMPANIES ACT 2013)
CSR SPENDING ESTIMATES - BSE TOP 100
(Including Business Responsibility Reports Analysis)

2. A
fter the Lok Sabha gave its approval in December last year, there arose some noise
surrounding the New Companies Bill 2013. Media, companies, and that part of the general
public that seems interested in the legislative affairs of the country dissected the Bill end to
end, discussed and debated the likely impacts. A few days later, the noise ceased. Nobody seemed
to know what ultimately would become of the bill. Every Parliament session post December –
2012 saw increased anticipation among interested stakeholders as to when Rajya Sabha will
formally take up the bill for consideration. After more than seven months, on August 8th, the bill
was moved for consideration in the upper house. “This is a momentous day, as this will usher in a
new era for the company law," said Sachin Pilot, Minister of State for corporate affairs after the bill
was passed, aptly encapsulating the end of a long and anxious wait.
The President gave his approval to the bill to be enacted into a law end of August 2013. The
spanking new Act is simpler, with fewer clauses and pages and looks at contemporary issues such
as corporate governance, investor protection, corporate social responsibility (CSR) and measures
to check frauds. Further, a third of corporate boards have to necessarily comprise independent
members, some boards would have to include more women, auditors will be compulsorily
changed every ten years, minority shareholders and depositors can launch action suits against
managements, among other sea changes.
What interests us, Partners in Change (PiC), as an organization
that has been pioneering the understanding and practice of
corporate responsibility issues in India, is Clause 135 that makes
it mandatory for companies of a certain size and profitability to
spend 2% of their average net profits of previous 3 years on CSR.
The proposed draft CSR rules under Section 135 of the Act has
been posted on the Ministry of Corporate Affairs (MCA) website
for public comments till 7th October 2013.
The proposed draft
rules specify that “Net
Profit’ for the
section 135.. shall
mean, net profit
before tax as per
books of accounts..”
The clause on CSR is being celebrated and criticized in, may we say, equal measure. The
development sector, as the world of NGOs and professionals working in the area of social and
economic development has come to be known as, is rejoicing. It sees this clause as a late but
welcome measure to make companies understand its responsibilities towards the society and act
conscientiously. The other side of their joy is the opening up of much-needed funding options.
Some in the sector, however, feel that the clause dilutes the meaning of a company’s commitment
to ethical and responsible business and instead focuses on the end (under Schedule VII) as
opposed to means of doing business.
The reactions seem appear mixed on the other side as well. Some in the corporate sector are
worried that making CSR spending mandatory would lead to what is informally referred to as
“cheque-book CSR”. Others, while sounding positive about a law that encourages companies to act
1

3. responsibly, find the list and scope of activities too small to comprehensively correspond to what
entails a company’s responsibilities towards the society.
We at PiC, through this document, have tried to analyze the likely impact of the new Act on the
CSR landscape of the country. Although we do have an opinion on the subject, we have tried to
keep this document unbiased and objective. We believe that the use or misuse of the CSR clause
will be determined by the intent of the companies. As Plato said “Good people do not need laws to
tell them to act responsibly, while bad people will find a way around the laws.”
CLAUSE 135
WHO MUST COMPLY?
Every registered company with:
Net worth  Rs 500cr or
Turnover  Rs 1,000cr or
Net profit  Rs 5cr; during any financial year
WHO WILL BE ACCOUNTABLE?
Company to constitute a CSR Committee of the board members consisting of at least 3 directors
At least 1 committee member to be an independent director
WHAT WILL THE CSR COMMITTEE DO?
Formulate and recommend to Board, a CSR Policy which shall indicate the activities to be
undertaken
Recommend amount of expenditure to be incurred on activities
Monitor CSR Policy of the company from time to time
WHAT WILL BE THE 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 company's report/website
Ensure that company spends at least 2% of its average profits during previous 3 financial years.
WHAT ARE THE ACTIVITIES A COMPANY CAN UNDERTAKE?
As per Schedule VII, activities, as a Project Mode:
Eradication of hunger and poverty
Promotion of education
Promotion of gender equality and women empowerment
Health - reducing child mortality, improving maternal health, combating HIV, AIDS, malaria
Employment enhancing vocational skills
Contribution to PM's fund or other fund set up by central govt or the state govts for socioeconomic development and relief and funds for the welfare of SC, ST, backward classes,
minorities and women
Ensuring environmental sustainability
Social business projects
Such other matters as may be prescribed
2

4. T
he biggest challenge in providing an in-depth quantitative analysis of the impact of the CSR
clause was the huge universe that needed to be sampled and scrutinized –all listed and
unlisted companies which match the net worth, turnover and profitability parameters. The
other pressing challenge was the availability of reliable financial information relating to
companies, especially the amount allocated or spent on CSR.
For the purpose of this document, hence, we have chosen the Top 100 listed companies in India
based on Bombay Stock Exchange (BSE) rankings on 31st March 2011. Not only are these
companies the biggest and the most influential, establishing benchmarks for others to measure up
to, they have also been mandated by Securities and Exchange Board of India (SEBI) to publish a
yearly Business Responsibility Report (BRR) separately or along with their annual reports.
BRR is a disclosure of adoption of responsible business practices by a listed company to all its
stakeholders. Based on 'National Voluntary Guidelines on Social, Environmental and Economic
Responsibilities of Business (NVGs) notified by Ministry of Corporate Affairs, Government of India,
in July, 2011, BRR has been designed to provide basic information about the company, information
related to its performance and processes, and information on principles and core elements. The
prescribed format also provides a set of generic reasons which the company can use for explaining
their inability to adopt the business responsibility policy.
The analyses in this document are based on the information relating to these top 100 companies
available in the public domain. For each of these companies, we collated information on the profits
after tax during financial years (FY) 2009-10 to 20012-13 from the annual reports, BRR and other
secondary sources. In case of the amount spent on CSR activities during FY 2012-13 we chose to
strictly stick to the BRR or annual report. We could have collected information from alternative
sources such as sustainability documents, CSR websites and news reports but for robust analyses,
we relied on the latest information made available by the company itself.
It should be noted that the process and results of this assessment are based on
companies’ profit after taxes (specified in the original rules), as opposed to net profit
before tax specified in the recent draft rules posted on the MCA website. As per PiC’s
calculations the amounts stated in the in pages below may rise by 20-30%, depending
on what finally comes to be included in the calculation of net profit before taxes for the
purpose of Section 135.
After having collected this information, we calculated the actual CSR spending as a percentage of
average profits after tax for FY 09-10, 10-11 and 11-12 (which would be necessary amount to be
spent on CSR, as per the clause, if applied retrospectively). Then we calculated what would amount
3

5. to 2% of average profits after tax for FY 09-10, 10-11 and 11-12 to
assess the difference between actual and stipulated spending. Lastly,
we estimated what the spending may be in FY 13-14, based on the
profits of FY 10-11, 11-12 and 12-13).
Note: Although we have calculated the amount that may be
spent on CSR in FY 13-14, section 135 makes it mandatory to
spend on CSR from FY 14-15 onwards only.
Section 135 makes
it mandatory to
spend on CSR from
FY 14-15 onwards.
XYZ Company India Ltd
FINANCIALS (INR Crore)
Net Profit in FY 2009-10
1,000
Net Profit in FY 2010-11
2,000
Net Profit in FY 2011-12
3,000
Net Profit in FY 2012-13
4,000
CSR Spending in FY 2012-13
100
% of Net Profit of FY 12-13 spent on CSR
(100/4000)*100
2.5%
Average Net Profit of FY 2009-10, 2010-11,
2011-12
2% of Average Net Profit of FY 2009-10,
2010-11, 2011-12
Actual CSR spending as % of Average Net
Profit of FY 2009-10, 2010-11, 2011-12
Average Net Profit of FY 2010-11, 2011-12,
2012-13
CSR spending required in FY 2012-14
(1000+2000+3000)/3
2,000
(2/100)*2000
40
(100/2000)*100
5%
(2000+3000+4000)/3
3,000
(2/100)*3000
60
4

6. AVAILABILITY OF INFORMATION
As of 30th September 2013, we were able to access 84 companies’ AR and/or BRR. In case of seven
companies, the BRR did not have the required information. In case of 9 companies on the Top 100 list,
BRR was not available on the company websites. These either did not have their annual reports/BRR on
the website or the annual report was not due to be released.
Figure I: Availability of Information
9
7
BRR with required information
BRR available without required
information
BRR not available
84
COMBINED CSR ACCOUNT
The 84 companies whose CSR specific information was available and assessed spent
approximately Rs Rs 2724 crores in 2012-13. If all the 100 companies follow the clause under the
new companies bill in 2013-14, the total CSR expenditure for this financial year would be at least
Rs 5,690 crores.
Figure II: Actual CSR spending and requirement
2,724
Actual CSR spending by the assessed 84
companies in FY 12-13
4,276
2% of Average net profit of FY 10, 11 and
12 for the assessed 84 companies
4,688
CSR spending requirement in FY 13-14 as
per the Act for the assessed 84 companies
COMPANY GRADING
CSR spending requirement in FY 13-14 as
5,690
per the Act for top 100 listed companies
5

7. To analyse the companies on the basis of how much they spent on CSR in FY 12-13, keeping in
mind the 2% clause which has come into effect, four grades were set. Companies that spent more
than 2% of their average profits of the previous three years in FY 12-13 were categorized under
Grade A; those who spent between 1 and 2% under Grade B; those who spent between 1 to .5%
under Grade C and companies that spent lower than that in the last category, i.e Grade D.
GRADING
CSR SPENDING IN 2012-13
A
More than 2 % of Average Net Profit of FY 09-10, 10-11 & 11-12
B
Between 2-1% of Average Net Profit of FY 09-10, 10-11 & 11-12
C
Between 1 - .5 % of Average Net Profit of FY 09-10, 10-11 & 11-12
D
Less than 0.5 of Average Net Profit of FY 09-10, 11-12 & 11-12
Among the top 100 companies, only 16 fell under Grade A; 28 came under Grade B and 22 in Grade
C. A total of 15 companies in the Top 100 list spent less than .5% of their profits on CSR, with one
company admitting it has not spent anything. While information for 16 companies was not
available at the time of writing this report, 3 companies spent on CSR, despite incurring losses in
FY 12-13.
Figure III: Number of companies in each grade
16
16
3
Grade A
Grade B
Grade C
Grade D
15
28
Spent despite losses
No information
22
Adani enterprises topped the Grade A list with almost 5.28% of the average of the previous three
years’ profits spent on CSR in FY 12-13. The other top spenders include Adani Power, Reliance
Power, NALCO, Ambuja Cements and Nestle India. The graph above shows the companies falling
6

8. under Grade A and the following figures show the companies falling under Grade B and C and the
percentage of profit they spent on CSR during FY 12-13.
Topping the list of companies which came under Grade B is Bajaj auto with around 1.93% of its
average profits spent on CSR. This figure, however, is lower than what will be expected of
companies once the new law comes into effect. Other big spenders in this category include Dr
Reddy’s Laboratories, ACC, Reliance Industries among others. There’s one company in the Top 100
list which claimed that it has not spent anything on CSR in 2012-13.
The following figure shows the companies under Grades A and B and the amount spent by them on
CSR in 2012-13 as a percentage of the profits of the previous three financial years (as per the
Companies Act requirement). For Grades C and D, only company names have been mentioned.
7

9. Figure IV: Companies in Grade A and B
Adani Enterprises
Jindal Steel & Power
Adani Power
Reliance Power
National Aluminium Company
Ambuja Cements
Nestle India
Hindustan Unilever
Tata Steel
Adani Ports & Special Economic Zone
Ultratech Cement
IDFC
Colgate-Palmolive (India)
ICICI Bank
Jaiprakash Associates
Hindustan Copper
Bajaj Auto
Dr. Reddy'S Laboratories
ACC
Reliance Industries
Gail (India)
Larsen & Toubro
Grasim Industries
LIC Housing Finance
ITC
Indusind Bank
MMTC
Hindalco Industries
United Breweries
Oil India Limited
ABB
Cadila Healthcare
Mahindra & Mahindra
JSW Steel
Cummins India
Oil And Natural Gas Corporation
State Bank Of India
Axis Bank
Lupin
Bharat Petroleum Corporation
Indian Oil Corporation
Neyveli Lignite Corporation
Bharat Heavy Electricals
Tata Motors
5.28%
5.26%
4.89%
3.75%
3.40%
3.22%
3.01%
2.88%
2.75%
2.70%
2.63%
2.43%
2.34%
2.24%
2.22%
2.18%
1.93%
1.90%
1.90%
1.89%
1.87%
1.72%
1.71%
1.63%
1.62%
1.58%
1.55%
1.42%
1.39%
1.38%
1.37%
1.35%
1.32%
1.32%
1.29%
1.29%
1.27%
1.25%
1.24%
1.22%
1.11%
1.11%
1.09%
1.09%
8

10. HDFC Bank
Yes Bank
Maruti Suzuki India
NTPC
Power Grid Corporation Of India
Tata Consultancy Services
Tata Power
Power Finance Corporation
Cipla
Godrej Consumer Products
Glaxosmithkline Pharmaceuticals
Reliance Infrastructure
Bharti Airtel
Canara Bank
Sun Pharmaceutical Industries
Wipro
Zee Entertainment Enterprises
Exide Industries
Bank of Baroda
MMTC
GRADE C
Sesa Goa
Titan Industries
NHPC
Bosch
DLF
Steel Authority Of India
Petronet LNG
Bharat Electronics
Container Corporation Of India
Shriram Transport Finance Company
Kotak Mahindra Bank
GRADE D
Asian Paints
Punjab National Bank
Hero Motocorp
Bank of India
Union Bank of India
Glaxosmithkline Consumer Healthcare
Oracle Financial Services Software
COMPANIES THAT SPENT DESPITE LOSSES IN FY12-13
Ranbaxy Laboratories
Adani Power
COMPANIES THAT SPENT MORE THAN 2% OF AVERAGE NET PROFIT OF
FY11,12 & 13
Among the top 100 companies, there were a few who may not worry about not meeting the 2%
target, at least for the FY 2012-13. These companies spent more than 2% of their average profits
of the previous three years in 2012-13. The graph below shows which companies went beyond the
2% rule and by how much.
9

11. Figure V: Companies that went beyond 2%
2% of Average PAT of FY10, 11 and 12
Hindustan Copper
Colgate-Palmolive (India)
Jaiprakash Associates
Adani Power
Reliance Power
IDFC
Adani Ports & SEZ
Nestle India
Adani Enterprises
Ultratech Cement
CSR Spending in FY 13
4.68
5.11
8.47
9.92
26.01
28.81
2.66
6.50
5.71
10.70
25.65
31.21
19.09
25.78
16.29
24.54
5.89
15.57
32.95
43.40
104.27
ICICI Bank
National Aluminium Company
Ambuja Cements
116.55
18.22
30.99
24.73
39.82
47.99
Hindustan Unilever
69.09
124.05
Tata Steel
Jindal Steel & Power
37.69
170.59
99.14
TOP SPENDERS IN ABSOLUTE TERMS
The figures above are based on the percentage of profits spent on CSR. The list changes its
character once we look at the amount spent in absolute terms. The list is, unsurprisingly, topped
by Reliance Industries with almost Rs 357 crore spent on CSR in 2012-13. The list also includes
ONGC, Tata Steel, State Bank of India, ICICI Bank, ITC, Indian Oil Corporation, Larsen and Taubro
and Hindustan Unilever. The chart below shows the top ten spenders among the top 100 and the
approximate amount they spent on CSR in 2012-13.
10

12. Figure VI: Top spending companies
Larsen & Toubro
73.16
NTPC
79.53
Indian Oil Corporation
80.08
ITC
82.34
Jindal Steel & Power
ICICI Bank
State Bank of India
Amount in INR Crore
99.14
116.55
123.27
Tata Steel
Oil and Natural Gas Corporation
Reliance Industries
170.59
261.58
357.05
OBSERVATIONS ON COMPANY BRRs
While studying the Business Responsibility reports of the companies under assessment, quite a
few anomalies were observed. While SEBI has created a structured format for reporting, the same
has not been followed by many companies. A few of the observations are listed below.
Many companies are not using the suggested format
In many cases, the reporting requirements have been diluted by excessive descriptive text
and avoiding statistics
Companies do not seem to be on the same page when it comes to the understanding of NVG
principles
Many companies have not provided (sufficient) information on resource consumption.
Sustainable sourcing as a subject has not been addressed by many companies, either due to
lack of understanding or due to lack of initiatives. There’s a need to define what sustainable
sourcing entails.
Many companies seem to treat impact assessments by external agencies at par with
internal feedback mechanisms.
Companies have avoided information about joint ventures and subsidiaries, therefore
weaken the significance of the report.
11

13. ANNEXURE
Table 1. Companies and their current and potential CSR spending
Company Name
CSR Spending in FY
12- 13
2% of Average PAT of
FY 10, 11 and 12
CSR spending estimate
in FY 13-14
2% of PAT of FY 11,
12 and 13
Reliance Industries
357.05
INR Crore
377.07
Oil And Natural Gas
Corporation
Tata Consultancy Services
261.58
405.42
433.15
65.21
161.09
208.88
ITC
82.34
101.41
123.79
NTPC
79.53
180.35
206.29
123.27
194.25
227.18
Bharti Airtel
29.56
152.48
123.61
HDFC Bank
39.01
80.27
105.46
Wipro
14.13
93.29
101.19
116.55
104.27
132.94
Hindustan Unilever
69.09
47.99
58.61
Larsen & Toubro
73.16
85.26
88.82
MMTC
2.10
2.71
0.80
Tata Motors
19.14
35.29
22.36
Indian Oil Corporation
80.08
144.13
109.36
Cairn India
20.50
NA*
79.25
Bharat Heavy Electricals
63.00
115.75
131.11
Sun Pharmaceutical
Industries
Jindal Steel & Power
4.55
28.01
25.25
99.14
37.69
38.44
Power Grid Corporation Of
India
Bajaj Auto
21.75
53.27
67.90
51.73
53.63
62.57
GAIL (India)
64.65
69.03
74.91
Axis Bank
42.42
67.63
85.39
Tata Steel
170.59
124.05
124.15
Nestle India
24.54
16.29
18.97
Mahindra & Mahindra
33.52
50.85
59.28
State Bank of India
ICICI Bank
408.86
12

14. Ultratech Cement
43.40
32.95
43.37
Hero Motocorp
1.27
43.58
42.83
Kotak Mahindra Bank
4.08
16.43
21.76
Maruti Suzuki India
18.90
42.80
42.10
Steel Authority of India
32.55
101.33
70.77
Adani Enterprises
15.57
5.89
7.66
DLF
6.81
20.50
18.74
Reliance Power
10.70
5.71
7.32
Bank of Baroda
7.17
82.03
91.51
Asian Paints (India)
0.98
16.71
18.55
Oil India
41.28
59.63
66.15
Dr. Reddy'S Laboratories
16.82
17.67
20.47
Punjab National Bank
3.32
88.15
93.76
Ambuja Cements
39.82
24.73
25.25
Bosch
5.75
17.13
19.59
Adani Ports & SEZ
25.78
19.09
26.11
ACC
25.60
27.01
23.37
Bharat Petroleum
Corporation
Hindalco Industries
17.88
29.30
36.66
29.79
41.93
40.49
Hindustan Copper
5.11
4.68
6.01
Cipla
7.65
21.10
23.94
Power Finance Corporation
22.10
57.88
67.13
NHPC
15.73
46.85
48.57
Grasim Industries
25.30
29.67
23.89
Tata Power
7.88
20.38
20.89
Lupin
9.32
15.08
19.15
Oracle Financial Services
Software
Canara Bank
0.00
18.11
20.57
11.20
68.87
67.87
IDFC
31.21
25.65
31.15
Titan Industries
2.97
8.53
11.70
Ranbaxy Laboratories
4.26
NA*
NA*
Bank of India
1.10
46.04
52.76
Glaxosmithkline
Pharmaceuticals
3.69
10.37
10.47
13

15. ABB
2.74
4.01
2.56
Jaiprakash Associates
28.81
26.01
17.96
Reliance Communications
2.62
NA*
0.15
Sesa Goa
22.59
63.65
61.32
Godrej Consumer Products
3.07
8.58
10.33
Jsw Steel
24.85
37.72
36.25
Cadila Healthcare
7.98
11.80
11.77
Reliance Infrastructure
6.40
28.21
33.86
Colgate-Palmolive (India)
9.92
8.47
8.96
Indusind Bank
9.12
11.53
16.27
Adani Power
6.50
2.66
NA*
Neyveli Lignite Corporation
14.59
26.37
27.79
United Breweries
1.72
2.47
2.97
National Aluminium Company
30.99
18.22
16.75
Cummins India
7.00
10.84
12.97
Shriram Transport Finance
Company
Yes Bank
5.58
22.39
25.64
6.50
14.54
20.03
Exide Industries
1.25
11.09
10.99
Petronet LNG
3.68
13.87
18.83
LIC Housing Finance
13.89
17.00
19.41
Zee Entertainment
Enterprises
Union Bank of India
1.41
10.83
11.37
0.76
39.61
40.17
Container Corporation Of
India
Bharat Electronics
4.38
16.93
17.95
4.21
16.08
17.21
Glaxosmithkline Consumer
Healthcare
0.01
5.92
7.27
2723.75
4276.07
4687.86
TOTAL
* Losses in previous years
14

16. Established as a not-for-profit organization in 1995, Partners in Change (PiC) has been
pioneering the understanding and practice of corporate responsibility issues in India,
whilst simultaneously promoting cross-sector partnerships as a tool to overcome complex
development challenges. Partners in Change works with companies, NGOs, business
associations and governments for promoting the practice of corporate social responsibility
for the all-round sustainable development of the society. We have been Drafting Committee
member for the ‘National Voluntary Guidelines (NVGs) on Social, Environmental and
Economic Responsibilities of Businesses’ under Ministry of Corporate Affairs. We were a
Steering Committee member for the Planning Commission's report on the Voluntary
Sector for the Eleventh Five Year Plan. We have been instrumental in designing the
Workplace Code of Conduct with Bureau of Indian Standards(BIS) – GoI.
PiC’s core strength lies in helping companies to devise CSR strategy, identify
implementation partners, undertake need assessment, stakeholder mapping and
impact assessment. PiC has been helping many national and international NGOs to
establish CSR partnerships in India.
Contact
Sunanda Poduwal
Sunanda.poduwal@projects.picindia.org
+91-9971593423
Bhomik Shah
Bhomik.shah@picindia.org
+91-8860179180
C - 75, South Extension – Part II, New Delhi - 110049 (India)
Tel: +91 11 41642348-51; Fax: +91 11 41642995
www.picindia.org
Note: The information provided in this document has been derived from the secondary sources and
Partner in Change indemnifies itself from the further use or citing of the information contained
herein.
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