Introduction
Since ancient times the people of India have been true supporters of social welfare and always promote brotherhood among the people.
In today's world modernisation and technology advancement unfortunately most of the people are being victimed of fraud and crimes we are forgetting the fundamentals principles of social welfare and wellbeing of human kinds.
It might look these principles have lost their relevance in this modern world but still it exist in different forms such as rules and regulations guidelines and loss which is implemented by the government.
The act that articulate the the provision to the duty of the company and businesses towards social welfare and well being of the society including its employees and customers is the company at 2013 and section 135 135 of this act 2013 this act list down the provision of corporate social responsibility ( also referred to CSR ).
CSR is nothing but an idea for the betterment and upliftment of the society by promoting social welfare CSR is the philanthropic in nature.
Corporate utilise various human resources and natural resources for their profit making means it becomes their moral obligation towards society community environment governance issues and welfare ethical governance etc.
Section 135 of the Companies Act, 2013
Section 135 of the companies act 2013 it state that
Company having network of 500 crore or more than
Company having turnover of thousand crore or more than
Company having net profit of 5 crore
They have obligations of two spend two percent of their profit from the three consecutive financial year for various activities of social welfare and wellbeing in schedule VII of company act 2013.
This all be done by the CSR committee appointed by the company for the formulation of CSR policies under section 135 of the act 2013.
What is CSR
CSR referred as corporate social responsibility CSR is the responsibility of a company and the work done by it on environmental ethical social and economic issues.
CSR basically increase is the social accountability and responsibility of companies or business towards society.
The term CSR can be legally in this understood as the duty or obligation of corporate entities for the betterment of its employees share holders their families or society referred to as corporate citizenship and can involve in curing short term cost that do not provide an immediate financial benefit to the company but instead promote positive and social and environment change.
CSR content one of section 135 of the company act 2013 as per this section the company having network of INR 500 cr aur mor aur turnover of inr 1000 CR or more or net profit of 5 cr shall be required to constitute csr committee of board hearing after CSR committee with effect from first April 2014.
Guiding Principles of CSR
The chairman of the CSR committee mentioned the guiding principles as follow
CSR is the process by which organisation things about the evolves its relationship with stakeholders for the common goods and demonstrates its commitment in this regard by adoption of appropriate business process and strategies.
Is not charity or mayor donation CSR is a way of conducting business by which corporate and it is visible contribute to the social good.
Socially responsible company do not limits themselves to using resources to engage in activities that increases only their profit they use CSR to integrate economic environmental or social objective with the companies operation and growth.
CSR and United Nations Industrial Development Organisation
The United Nations industrial development organisation also explain the concept of CSR that corporate entities incorporate various activities of social welfare and wellbeing into their regular date today operational activities by balancing between social environmental and economic activities.
This particular method of balancing by 3 necessity is termed as
Triple Bottom Line Approach
It is an accounting framework that measures companies performance in terms of people planet and profit.
The TBl is a way to measure a companies commitment to CSR and its impact on the environment. CSR initiatives can including advancing human rights ending poorti and ensuring is safe environment.
TBL Benefits
It can lead to benefit such as retaining employees increasing investments and boosting sales.
TBL History
The phrase triple bottom line was coined in 1994 by British management consultant John Eelkington.
TBL Examples
Apple is a company non for its commitment to TBL. Apple aims to become Karbonn neutral by 2030 and is investing in improving labour conditions and in its supply chain.
TBL Components
People - Coincidency all stakeholders including employees community and future generation
Planet - Measures environmental footprint of an org such as energy use and waste
Profit - A company financial performance.
Section 135 (5)
The company must prioritize local areas and the areas around where its operate.
Section 135 (6)
Requires companies to transfer any unspent CSR fund to a special account within 30 days of the end of financial year.
If the company does not spend the fund within the time limit it must transfer them to a fund specified in schedule 7 within 30 days of the third financial year.
Composition of CSR Committee
As per section 135 (1) of the companies act 2013 of CSR committee structured as follow
A minimum of three directors
B at least one is an independent director
CSR committee varie depending upon the company
(i) Listed Company
Must have at least three directors including at least one independent director
(ii) Unlisted Company
According to section 135 (1), If an independent director is not required then the committee must have at least two directors
(iii) Private Company
Mast hai at least two directors independence directors are not required as specified in the provision under section 135 (1) of companies act
(iv) Foreign Companies
Mast hai at least two persons including 1 person as specified in clause (d) aur sab section 1 of section 380 of companies act 2013
Another person nominated by the foreign company ( according to rule 5(1) of the CSR policy 2014 ).
Roles and Responsibilities of the CSR Committee
As per section 135 (5) of the company act 2013 CSR committee are required to perform the following roles
A. Formulate and recommend CSR policy
The committee must draft CSR policy to the board then the company will under take in areas specified by the law
B. Recommend CSR expenditure
The committee is responsible for advising on the amount of money to be allocated for the activities mentioned in the CSR policy
C. Monitor CSR policy
The committee must regularly review and monitor the implementation of CSR policy to enjoy its alignment with the company objectives and legal requirement
Definition of CSR
CSR is defined in rule 2 (F) of the company
( Corporate social responsibility policy rule 2014 )
Also referred to as 2014 rules as below
Corporate social responsibility means and include but is not limited to:
Projects or program relating to activities specified in schedule 7 of the act or
Projects or program relating to activities undertaken by the board of director of a company in pursuance of recommendation of the CSR committee of the board as per the declared CSR policy of the company subject to the condition that such policy will cover the subject environment in schedule VII of the Act
Functions of the Board of the Company
The following are functions of the board in insurance CSR complaince
Approval of CSR policy
The board must approve a formal CSR policy by outlining the companies goes and objectives for social responsibility
(i) Public disclosure
The board is required to disclose the CSR policy in the companies annual report and ensure that it is available on the companies website
(ii) Implementation of CSR activities
The board must ensure that the activities outline in the CSR policy are effectively under taken by the company
(iii) CSR expenditure
The board must ensured the companies spend at least 2% of its average net profit from the past 3 financial years on CSR initiatives
(iv) Monitoring fund neutralization
The board must satisfied itself that the CSR fund dispute are being properly utilised for their intent purpose
(v) Reporting and transfer of unspend CSR fund
If the company fails to spend the requisite two percent on CSR the board must include and explanation in its annual report and transfer transparent funds according to section 135 (5) 135 (6) of company act
Historical Background of CSR in India
Since ancient time India has been practicing CSR activities in different different way such as religious customs tradition and families value etc csr charitable and philanthropy nature.
In the old time a lot of will the merchant share their wealth for making temples hospital educational institution. Industrial revolution had a deep impact on CSR after industrialisation company and business admin motive of making profit rather than welfare or upliftment of the society.
There after Indian industrialist were under pressure due to we are fighting for the independence that's why they had to show the dedication towards uplement and welfare of the society. Mahatma Gandhi also urged the Indian industrialist to manage and use their wealth in a such way to upliftment of the society at large. He termed the Indian company as a temple of modern India. His vision and influence made the company to established various institutions such as scientific educational and trust.
In 1980's error there is a lot of Mal practices from the corporate and this lead to the development of the concept of corporate governance.
Tata Group
Tata group is The pioneer of the CSR activity in India this group has done undoubtedly activities for the society this company is the leader of CSR. CSR is the keep business process of the TATA group. Tata trust received 63% of the profit from its parent company that is data group of social welfare activities.
Conclusion
In conclusion this survey or study highlight the PVT lul in enhancing the organisational sustainability well being of the society. CSR not only contribute towards society or community but also in Delhi competitive in a rapid evolving global market. CSR influence on consumer behaviour employee satisfaction or in addressing global challenges such as climate change global warming etc and the government policy of that Nation. This concept CSR which makes responsibility of corporate enterprises for company for the social or community and the environmental concern in their day to day operation.
CSR required the company to address all those concern of their employee stakeholder and all the people who is directly or indirectly related to that company. After CSR policy mandate to those company to fall in this criteria have the obligation of social welfare.
In recent year CSR in India has witness a dynamic changes and now it is not just limited to philanthropy activity however in the present time there is a drawback of this law the company is trying to escape in spending 2% of their profit on CSR by the loop Hall of this law Even though the penalty provision in the company act 2013. At least the government should take serious steps so that the company can't escape and take CSR policy seriously. Ultimately the integration of CSR into core business studied the is no longer a choice but an acidity for the corporate for reflecting the growing expectation of stakeholder and the need of the sustainable development