Pratyush Kumar

Division B

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Corporate Social Responsibility focusses on making Companies socially aware and responsible entities.
No business can operate in isolation- every business functions in an environment, consisting of different
parties and stakeholders that facilitate its smooth operation and success. Therefore, it is important for
these organizations, to give back to the environment and society, by being aware and conscious of the
impact that their activities have on the same and society, and working towards diluting and negating
them.

Corporate Social Responsibility is mutually beneficial for both the society as well as the Company, which,
through its different efforts, tries to create its own goodwill, and thereby benefit from the same.

Usually, large Companies undertake the CSR responsibility, as they are the ones earning high amount of
profits and can therefore afford to give back to the society and the environment. Though even Small and
medium-sized Companies undertake such activities.

CSR is a strategy undertaken by Companies in order to address social, economic and environmental
issues, along with catering to the needs and expectations of all their stakeholders, and at the same time,
flourish.

In order to develop and implement successful CSR initiatives, it is important for Companies to
collaborate with partners such as other Corporations, Non-Government Organizations, Non-Profit
Organizations, and other entities that have the required expertise- by this, both parties will mutually
benefit.

Furthermore, it is also important to keep tabs and do follow-ups on such projects, in order to ensure
that a Company does not end up with failed attempts in its wake. The knowledge gained through these
programmes must be utilised, as it will enhance the objectives of CSR initiatives. Also, it must be a cost-
effective programme, where the cost involved is minimized, while the benefit and impact on the target
group is maximized.

Every company which fulfills any of the undermentioned criteria (3 criteria are suggested u/s 135 of
Companies Act, 2013 to check applicability of CSR) during any financial year (any of the 3 preceding
Financial Years), the board of directors shall constitute a CSR Committee and carry out CSR activities:

(i) Having Net worth greater than or Equal to Rs. 500 Crore

(ii) Having Turnover greater than or Equal to Rs. 1000 Crore or

(iii)Have Net Profit greater than or Equal to Rs. 5 Crore

The Board of every company shall ensure that the company spends, in every financial year, atleast 2% of
the average net profits (Profit Before Tax) made during the three immediately preceding financial years.