CSR Report

Since last few years CSR, as a concept, has been the focus
of many deliberations and research. It has grown in importance both
academically as well as in business sense. It captures a spectrum of values and
criteria for measuring a company’s contribution to social development. As the
term “CSR” is used continually, many complementary and overlapping concepts,
such as corporate citizenship, business ethics, stakeholder management and
sustainability, have emerged. These extensive ranges of synonymously used terms
indicate that multiple definitions has been devised for CSR, mostly different perspectives
and by those in facilitating roles such as the corporate sector, government
agencies, academics and the public sector.

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A Widely cited definition of CSR in the business and social context
has been given by the European Union (EU). It describes CSR as “the concept
that an enterprise is accountable for its impact on all relevant stakeholders.
It is the continuing commitment by business to behave fairly and responsibly,
and contribute to economic development while improving the quality of life of
the work force and their families as well as of the local community and society
at large…

In other words, CSR refers to ensuring the success of the
business by inclusion of social and environmental considerations into a
company’s operations. It means satisfying your shareholders’ and customers’
demands while also managing the expectation of other stakeholders such as
employees, suppliers and the community at large. It also means contributing
positively to society and managing your organization’s environmental impact.
Hence, CSR is a contribution to sustainable development, implying the way a
company balances its economic, environmental and social objectives while
addressing stakeholder expectations and enhancing shareholder value.

Some existing CSR policy initiatives across countries As the
importance of being socially responsible is being recognized throughout the
world, governments are aware of the national competitive advantages won from a
responsible business sector. Large corporations have progressively realized the
benificts of CSR initiatives in their business operations are located.

The Organization for Economic Co-operation and Development
(OECD) established a set of guidelines for multinational enterprises in 1976,
and thus they are the pioneer in developing the concept of CSR. The purpose of
these guidelines was to improve the investment climate and encourage the
positive contribution multinational enterprises can make to economic and social.

 

APPLICABlity of CSR

Budgetary allocation is determined by the profits after tax
(PAT) of the company in the previous year:

PAT of CPSE in the previous year

Range of budgetary allocation for CSR and sustainability activities
(as % of PAT in previous year)

Less than INR 100 crore

3%–5%

INR 100 crore to INR500 crore

2%–3%

INR 500 crore and above

1%–2%

These are the guidelines came into effect under sec 135 and
schedule VII of Companies act 2013

The Clause 135 will be applicable to all companies that have
either of the following:

 Net worth of INR 500
crore or more

Turnover of INR 1000 crore or more

Net profit of INR 5crore or more

An Average of last Three Financial Year PAT will be considered
for calculating the 2% for CSR.

 

The relevance of CSR within an organization

CSR is not only relevant because of a changing policy
environment but also because of its ability to meet business objectives.
Undertaking CSR initiatives and being socially responsible can have a host of benefits
for companies such as the following:

Strengthening relationships with stakeholders

 Enabling continuous
improvement and encouraging innovation

 Attracting the best
industry talent as a socially responsible company

Additional motivation to employees

Risk mitigation because of an effective corporate governance
framework

 Enhanced ability to
manage stakeholder expectations