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Why CSR

Corporate Social Responsibility is increasingly becoming an integral part of the strategy of Companies. Governments, Companies and Communities alike feel the greater need for initiatives that promises to bridge inequity, bring inclusive growth and expect a higher degree of transparency and accountability from businesses. Therefore the way a company goes on carrying its business and its stakeholders is paramount to the company.

Department of Public Enterprises made it mandatory for Central Public Sector Enterprises to allocate 1%-5% of the PAT of the previous year for Corporate Social Responsibility and Sustainability Activities. DPE Guidelines for CSR and Sustainability 2013 is a major development from the previous CSR Guidelines 2010 and SD Guidelines 2011, where both CSR and Sustainability have been merged with a single focus to impact the disadvantaged, bring about more inclusive growth and protect and preserve the environment to achieve sustainable growth.

The Companies Bill 2012 asks companies to report on the earmarked 2% of the average net profit of the preceding three years for corporate social responsibility (CSR) activities. This is applicable for companies having a net profit of 5 crores or a turnover of 1000 crores or net worth of 500 crores. As a precursor to this, the “National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) was released by the Ministry of Corporate Affairs in 2011. The 9 core principles of the NVGs play a quintessential role by providing policy inputs for better management of CSR and Sustainability within and outside the organization.

SEBI mandates the inclusion of Business Responsibility Reports (“BR reports”) as part of the Annual Reports for listed entities. Therefore, in line with the objective to enhance the quality of disclosures of companies.