Corporate Social Responsibility

Corporate Social Responsibility (CSR) is a component of doing business that is growing more and more important in India. India offers a special environment for companies to participate in CSR projects that boost social welfare while also generating profit for their stakeholders. India is a country with a rapidly developing economy, a sizable population, and several social issues. Corporate social responsibility in India empowers companies to start projects, programs, or activities that benefit society.

    Introduction

    The process of company registration in India is done under the Ministry of Corporate Affairs(MCA). There are different Registrar of Companies in every state to regulate the working or compliances of such companies. ROC Jaipur is located in the middle of the city near 22 Godown Circle.

    The incorporation of Companies in India or any foreign companies is regulated by the Companies Act,2013 and gets its approval from CRC, Manesar.

    Importance of Corporate Social Responsibility

    The CSR Committee is directly responsible for approving the CSR policy and ensuring its implementation. They must disclose the content of the CSR policy related to their report. They also have to upload the details online and ensure that the company spends the statutory amount on CSR activities. All companies are required to spend at least 2% of their average net profit over three financial years on CSR activities such as poverty eradication, education support, gender equality, donations to government funds, and so on.

    Benefits of CSR

    • Improved brand recognition
    • Boosts sales and customer loyalty
    • Improved financial performance
    • Organizational Development
    • Greater Capital Access
    • Reducing Operating Costs

    Committee and Policy for CSR

    The CSR Committee’s responsibilities include the following:

    • Formulating and recommending to the Board of Directors CSR Principles that will specify the activities that the Company will carry out.

    • Recommending the amount of money to be spent on the aforementioned activities.

    • Follow the company’s CSR policy sometime.

    • Create a transparent monitoring system for the execution of CSR projects, programs, or activities that the company undertakes.

    CSR Committee

    Every company covered by CSR must establish a CSR committee of the board consisting of:

    • 3 or more directors, at least one of whom is an independent director. If the company is not required to appoint an independent director, then it has 2 or more directors on the committee.

    • 2 directors in the case of a private company that has only two directors on the board.

    • At least 2 persons in case of foreign company out of which one person will be its authorized person and resident in India and another person nominated by the foreign company.

    Role of Board of Directors in the field of CSR Activities

    The board of directors of each company subject to the Corporate Social Responsibility in India are responsible for the following:

    • After carefully reviewing the suggestions of the CSR Committee, approving the CSR Policy for the Company, and disseminating its details in the board of directors’ report.

    • Ensure that the organization carries out the CSR-related activities that are listed in the policy.

    • Reveals the CSR committee’s membership in the board report.

    • Make sure that each fiscal year, the company spends at least 2% of the average net profit it generated over the three financial years that have just passed by its CSR policies. CSR expenditure consists of projects, programs, and activities that are only carried out in India.

    • Activities falling under CSR Activities

      The board of directors of each company subject to the Corporate Social Responsibility in India are responsible for the following:

      • Eradication of hunger, poverty, and malnutrition, promotion of health care including preventive health care and hygiene, including contributing to the Swach Bharat Kosh established by the Central Government to promote hygiene and make safe drinking water available.

      • Support for education, including special education and job skills enhancing professional skills, especially for children, women, the elderly, and people with various disabilities, and projects to improve livelihoods.

      • Promotion of gender equality, empowerment of women, establishment of homes and hostels for women and orphans; establishment of homes for the elderly.

      • Ensuring environmental sustainability, ecological balance, the preservation of flora and fauna, animal welfare, agroforestry, the preservation of natural resources, and the preservation of the quality of the soil, the air, and the water, including contributions to the Clean Ganga Fund established by the Central Government for the rejuvenation of the Ganga River.

      • Protection of the nation’s artistic, cultural, and historical legacy, including the restoration of works of art, historical structures, and monuments; creation of public libraries; and encouragement of traditional crafts and arts.

      • Measures to assist veterans of the armed forces, war widows and their dependents, veterans of the Central Armed Police Force (CAPF) and Central Paramilitary Forces (CPMF), including widows.

      • Training to support rural sports, nationally recognized sports, Paralympic sports, and Olympic sports.

      • Donation to the PM CARES Fund, the PM National Humanitarian Fund, or any other fund established by the Central Government for the socio-economic development, relief, and welfare of scheduled caste, tribal, and other underprivileged classes, minorities, and women.

      • Contribution to incubators or initiatives for scientific, technology, engineering, and medical research and development that are supported by the federal government, a state government, or a public sector enterprise.

      • Donations to publicly supported institutions of higher learning, the Indian Institute of Technology (IIT), national laboratories, and autonomous organizations established by the Department of Atomic Energy (DAE), the Institute of Biotechnology (DBT), the Defense Research and Development Organization (DRDO), the Institute of Science and Technology (DST), the Department of Medicines, the Indian Council of Agricultural Research (ICAR), the Indian Council of Medical Research (ICMR), and the Ministry of Ayurveda, Yoga, and Naturopathy.

      • Rural development projects.

      • Development of slum area.

      • Disaster management.

    • New Role of the CSR Committee and New Requirements for the CSR Policy

      The CSR committee is expected to create and suggest to the board of directors an annual action plan to support the organization’s CSR policy in compliance with the extra CSR rules. On the proposal of the CSR Committee, the Board may alter the plan at any moment throughout the fiscal year if it has a good reason to do so. The following must be covered by the CSR policy:

      • A list of CSR initiatives that have been authorized.

      • How initiatives or projects are carried out.

      • Methods for using budgets and timetables to carry out projects or initiatives.

      • Project or program monitoring and reporting mechanisms.

      • Information on any need and effect assessments for the company’s projects.