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Nowadays, the concept of Corporate Social Responsibility is fast becoming very popular in India. According to this concept, companies can decide on their own. Like how much they want to contribute to society's welfare and the cleanliness of the environment. According to a report, India is the first country in the world who has made Corporate Social Responsibility (CSR) compulsory. It was initiated by an amendment in the Companies Act 2013. After this new amendment in the company Act companies can now invest their profits in different social welfare areas like curbing poverty, working for gender equality, fighting hunger, etc. In this article, you will get all necessary information related to csr applicability... here we begin

Important Notice

During the recent outbreak of COVID 19 The Ministry of Corporate Affair has notified that if a company does expenditure on equipment and medicine to fight with COVID19 pandemic, it will be considered valid under Corporate Social Responsibility (CSR) activities.

Social Awareness for Corporate Social Responsibilities

In recent times, due to growing social awareness about Corporate Social Responsibility among common people. The popularity of Corporate Social Responsibility among companies in the corporate world is increasing day by day. Corporate Social responsibility (CSR) focuses on the thought that while earning profits from their business operations, companies should also fulfill their social obligation toward the welfare of society as a whole.

Corporate Social Responsibility is a continuing obligation of the companies to behave ethically and give their contribution to the socio-economic development of the country. In general terms, Corporate Social Responsibility helps in achieving success in business along with the fulfillment of social obligations toward society. Corporate Social Responsibility helps companies in gaining commercial success while performing a different task for the betterment of society.

Board Of Directors Roles

~ To approve the CSR policy after consideration of committee.

~ To check the activities are undertaken as per policy.

~ CSR committee composition has to be disclosed by the board of Directors.

SCOPE OF CSR (Corporate Social Responsibility)

Generally, Corporate Social Responsibility is a process of integrating socioeconomic and environmental obligations of the companies while performing other business operations.

Main features of Corporate Social Responsibility

The important features of Corporate Social Responsibility are listed below:

1: CSR (Corporate Social Responsibility) aims to keep the local and global atmosphere clean and safe along with this it may help in consumer protection from all type of social hazards.

2: Besides, this Corporate Social Responsibility helps in the protection of human rights,

3: It may also help to secure society from corruption.

4: I will also promote adherence to Labor standards by the companies.

Applicability of Corporate Social Responsibility

In modern times the concept of Corporate Social Responsibility is gaining more popularity all over the world. Now day Government of India is also taking several steps for the compliance of Corporate Social Responsibility by all eligible companies operating their business in the society. In recent times. The provisions of CSR will be applied on every company with Net Worth >500 crores, turn over>1000crore and Net Profit>5 Crore in preceding financial year along with its holding company or its subsidiary company

Note: The provisions of CSR are also applied to Foreign Companies.

Corporate Social Responsibility (CSR) is the moral responsibility of every eligible company under the company Act2013. Under CSR all eligible Companies will have to contribute to various socially useful productive works like waste and pollution reduction, educational, and other social welfare works. This is only possible when a company becomes an eco-friendly company with social welfare motive along with making profits from business operations in the society.

5 Steps To Build A Sustainable CSR Program

1: Build your strategy around your organization's center capabilities

2: Develop CSR initiatives that make your representatives pleased.

3: Measure the ROI of your CSR efforts

4: Expand CSR definition in your company

5: Be ready for rapid response

Why csr is aggressively needed today

what is csr? CSR fund is not only related to doing charity work or donations by an eligible company. CSR is doing business in such a way in which companies give their contribution to society by their social welfare initiatives like eradicating hunger, poverty, etc. The concept of CSR is now being used by the Government of India to make the company a socially responsible company. An eligible company that integrates CSR activity in its business operations is socially responsible. CSR Activities generally create a good image of a company among its clients and society

Main features of CSR Applicability 

According to financial experts’ new company Act, 2013 has made provision of Corporate Social Responsibility (CSR) in India. The basic concept of csr applicability about the business operations of all eligible companies is based on the principle of “Give & Take” from society.

Note: MCA has notified section 135 and Schedule VII of the Companies Act2013 along with the provision of CSR Policy.

Section 135 of the companies Act 2013 provides an entry limit for the applicability of CSR to a specific company which includes the following conditions:

1. The net worth of the company should be Rs500 crore or more than that.

2. The annual yield of the company should be equal to or more than 1000 crore.

3. The Net Profit of the company should be 5 crores or more.

Note: According to the CSR Rules conditions of csr applicability are not only applicable to Indian companies but also on branch or project offices of overseas(foreign) companies.

CSR committee constitution

1: Minimum 3 directors must be there.

2: One of three director has to be an independent director.

3: In case of Foreign company, one person has to be an Indian resident.

Significance of Corporate Social responsibility

Corporate Social Responsibility may generally help a specific company in the following ways: -

Good Public Image:  Since in recent times every company generally aims to get a large number of customers, so that it can more profits than before. Now by accepting the social welfare responsibility of society and the responsibility of protecting the environment a company can easily build its better image in public.

Long Term Business Interest: Since a safe, prosperous, and healthy society may produce a good atmosphere in which a company can reap more profits in long run. A better society gives a better environment to a company so that it can earn more profits than before, that’s why a company that implements programs of social welfare will be able to earn maximum profits in the future.

Avoid Government restrictions or intervention: Regulations and restrictions may affect the proper functioning of a company’s business. If a company fails to fulfill its social obligations towards the welfare of society then the government of the country may put some controls or restrictions on operations of the company which may affect the profits of the company. So, a company should try its best to fulfill its social obligations to avoid any type of government control or restrictions on its operations. 

Advantages of Corporate Social Responsibility

There are many benefits that a company can get by fulfilling its social obligations toward society and the environment. Some of the benefits a company can get for fulfilling its Corporate social responsibility are given below:

• A company that fulfills its all-social obligations for the betterment of society may get the benefit of its better reputation in the public as well as the business community

• A company involved in social welfare investment can easily get capital for business from different financial institutions due to its better reputation and public image in the local area.

• A socially responsible company can achieve better results in its business operations. This is because a large number of people may take its products and services due to better reputation in public.

Different activities included in CSR

According to schedule VII of the company Act some important activities included in CSR activities are given below:

• Eradicating poverty, malnutrition, hunger, and improving health care.

• Improvement in education which may include special education, generating employment, and providing vocational skill to the youth, women, and children

• Working for gender equality, setting up an orphanage, etc.

• Taking actions to reduce inequalities in socioeconomically backward groups.

• Protecting the environment and helping to maintain ecological balance.

Conclusion

The basic purpose for investing in social and environmental welfare is to give back the society what a company earns while performing its business operations, along with this by taking part in social welfare activities under corporate social responsibility companies can build a good reputation in society. Nowadays due to increase in social awareness and to adhere government rules and regulation a large number of companies are being involved in CSR applicability like investing in preventive health care, sanitation, promotion of employment enhancing vocational skills, especially in the young generation, safeguarding national heritage, art and culture, the setting of public libraries, providing training for the promotion of rural sport, nationally recognized sports, Para Olympic and Olympic sports, contribution to the Prime Minister National relief fund, investing in rural development projects, etc. Lastly, you can see that company’s involvement in csr applicability activities may help in building a better society and nation.

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