Corporate Social Responsibility
What does it mean for you?
Building strong partnerships for a better tomorrow
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If your company has a turnover of INR10,000 million or more or a net worth of INR5,000 million
or more or a net profit of INR50 million or more during any financial year you will need to put in
place an effective Corporate Social Responsibility (CSR) policy. “Any financial year” has been
clarified to mean ‘any of the three preceding financial years.’
Starting from April 1, 2014, every company including holding or subsidiary/foreign companies
having a branch or project office in India also needs a CSR policy.
Companies are required to spend 2% of their three-year average annual net profit on CSR
activities in each financial year, beginning the next fiscal year, 2014-15.
Immediate next steps
 Form a CSR Committee
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You will need to form a CSR committee comprising of at least 2 directors and 1 independent
director.
An unlisted public/ private company that is not required to appoint an independent director can
have a CSR Committee without such a director.
A private company having only two directors on its Board shall constitute its CSR Committee with
two such directors.
The CSR Committee shall institute a transparent monitoring mechanism for implementation of
the CSR activities undertaken by the company.
 Formulate a CSR Policy
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The CSR Policy should list the CSR activities that a company plans to undertake by specifying
execution methods and their implementation schedules and monitoring process.
The CSR activities should not include activities undertaken in pursuance of normal course of
business of a company.
The Board of Directors must ensure that activities in its CSR Policy are related to the activities
included in Schedule VII of the Companies Act (see page 308).
The policy must specify that the surplus arising out of the CSR activities will not form a part of the
business profit of the company.
If you choose to partner with Room to Read, we can help you with a template CSR policy
that focuses on literacy and gender equality in education
About Room to Read
World Change Starts with Educated Children. ®
We envision a world in which all children can pursue a quality education, reach their full potential and
contribute to their community and the world.
To achieve this goal, we focus on two areas where we believe we can have the greatest impact: Literacy
and Gender Equality in education. We work in collaboration with communities and local governments
across India (and 9 other countries) to develop literacy skills and a habit of reading among primary school
children, and support girls to complete secondary school with the life skills they’ll need to succeed in
school and beyond.
In 2015, we plan to:
 Support over 500 schools across Delhi, Maharashtra, Rajasthan, Uttarakhand, Chhattisgarh and
Andhra Pradesh with out Literacy Program
 Add 908 new participants to our award-winning Girls’ Education Program to support over 6,075
girls through secondary school education in Delhi, Rajasthan, Uttarakhand, Chhattisgarh and
Andhra Pradesh.
Our commitment to delivering quality programs and maintaining the utmost fiscal efficiency has earned
recognition from leaders in the nonprofit and corporate sectors. We have built a strong organizational
foundation that combines business principles from the private sector with best practices and industryleading research from the nonprofit sector.
Room to Read India Trust is a registered public charitable trust in India. All donations are tax exempt
under 80G of the Income Tax Act, 1961. We take great pride in our financial efficiency, our accountability
to donors, and our transparency. We work to use every rupee contributed as efficiently and effectively
as possible. In fact, Room to Read has been recognized for its exceptional fiscal responsibility and
financial health, and has been awarded the Charity Navigator 4-star rating for 8 years in a row—a
recognition
that
less
than
1%
of
rated
charities
can
claim.
Our pledge to our donors is to continue to keep our overhead well below the industry average, to
maximize the percentage of contributions that go towards programs, and to spend investments, so that
we can have the most far-reaching impact on the lives of children through our work and programs.
We invite you to see what others have to say about us and read independent evaluations of our
organization. Audited financials for the global organization can be found at:
www.roomtoread.org/financials. Audited financials for Room to Read India Trust can be found at
https://www.roomtoread.org/donateindia
To start a partnership with Room to Read, please contact Mr. John Sankey
John.Sankey@roomtoread.org or 022-24965009.
Develop your CSR program with Room to Read
Undertaking CSR Activities
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The activities undertaken by the company, as per its stated CSR Policy excluding activities
undertaken in pursuance of its normal course of business.
The activities can be undertaken through a registered trust/ registered society/ a company
established by the company or its holding or subsidiary or associate company. Room to Read is a
registered trust.
The trust/ society/ company (if not established by the company) must have an established track
record of three years in undertaking similar programs or projects. Room to Read has an
established an award-winning track record. We have been operating programs in India since
2003.
The company must ensure that the trusts/ societies/ companies provide modalities of utilization
of funds on such projects and programs and the monitoring and reporting mechanism. Room to
Read will provide you with reports on utilization of funds, and operation of programs. Our
world-class monitoring programs will ensure that your investment is well spent.
A company may also collaborate with other companies for undertaking CSR activities in such a
manner that the CSR committees of respective companies are in a position to report separately
on such projects/ programs.
The CSR activities undertaken in India only shall amount to CSR expenditure.
The CSR activities that benefit only the employees of the company and their families shall not be
considered as CSR activities.
Companies may build CSR capacities of their own personnel as well as those of their implementing
agencies through institutions with established track records of at least 3 financial years but such
expenditure shall not exceed 5% of total CSR expenditure of the company in one financial year.
Direct or indirect contributions to any political party shall not be considered CSR activity.
CSR Expenditure
Following are the types of expenditure which will also be considered as expenditure on the CSR activity:
 Salaries paid to regular CSR staff and volunteers (in proportion to time spent on CSR activities) can
be factored into CSR project cost as part of CSR expenditure.
 Expenditure incurred by the foreign holding company for CSR activities in India will qualify as CSR
expenditure of the Indian subsidiary if:
o -the CSR expenditure is routed through the Indian subsidiary
o -the Indian subsidiary is covered under CSR provisions of the Act.
 Contribution to corpus of a trust/ society/ company with charitable objects, etc. will qualify as CSR
expenditure if either of the following is fulfilled:
o such entities are created exclusively for undertaking CSR activities
o the corpus is created exclusively for a purpose directly relatable to a subject covered in
schedule VII of the Act.
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Types of expenditure not considered as expenditure on CSR activity
Expenses incurred by companies for fulfillment of any Act/Statute of regulations (such as
LabourLaws, Land acquisition Act, etc.) would not be considered as CSR expenditure under the
Act.
Display of CSR activities on company’s website
The Board of Directors of the company must disclose contents of the approved CSR policy in its
report and display the same on the company's website. Room to Read can provide you with
standard language, information about your impact, including logos, quotes for your website and
reports that you can print as needed.
Developing Annual CSR Reports: What should be included?
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An annual CSR report covered for the financial year commencing on or after the 1 st day of April,
2014
A brief outline of the company's CSR policy, including overview of activities proposed to be
undertaken and a reference to the web-link to the CSR policy & activities
The composition of the CSR Committee
Average net profit of the company for the last three financial years
Prescribed CSR Expenditure made by the company
Details of CSR monies spent during the financial year, including the total amount to be spent for
the financial year and the amount unspent (if any)
In case the company has failed to spend 2% of the average net profit of the last three financial
years, the company needs to provide the reasons for not spending the amount
A responsibility statement of the CSR Committee that the implementation and monitoring of the
company policy is in compliance with the CSR objectives
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Reporting Template
CSR
project/
activity
identified
Sector in
which the
project is
covered
Projects/
Programs
1) Local area or
other
2) Specify the
state/ district
where project
was undertaken
Amount
Outlay
(Budget)
project/
programs
wise
Amount
Cumulative
spent
on expenditure
projects/
up to the
programs
reporting
period
Sub-heads:
1) Direct
on projects/
programs
2) Overhead
1
2
3
Total
To start a partnership with Room to Read, please contact:
Mr. John Sankey
India Lead, Corporate and Foundation Partnerships
John.Sankey@roomtoread.org
022-24965009
References:
http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification2_2014.pdf
http://www.mca.gov.in/Ministry/pdf/Companies_Act_1956_13jun2011.pdf
World Change Starts with Educated Children.®
Amount
spent- Direct/
through
implementing
agency