Finnovation is a leading consulting firm which has expanded its horizons and operates in diverse disciplines of social development sector and sustainability.
Innovative Financial Advisors Pvt Ltd’s one of the exclusive feature is Initiative Design and Management; it enables corporations in designing the program as well as managing it. It effectively assists organizations in designing and conceptualizing the blue print of CSR campaigns. The unit ensures a high standard of quality.
Fiinovation renders end to end CSR consulting solutions that have led enormous organizations channelize their resources. Finnovation successfully bridges the gap between businesses’ and communities across the globe. We deal in diverse sectors like health, education, environment and livelihood.
Why CSR is important for businesses’?
Today we will encompass 99% of firms in private sectors of small and medium scale businesses’. The small and medium enterprise sector in last few decades has grown enormously and contributed significantly to the growth of various economies across borders. It’s estimated that SMEs will continue to play a major role in achieving sustainable development goals. Thus, considering its enormous role, it’s an inevitable fact that SMEs will require CSR to boost their overall development. With effective CSR strategies and tactics the SMEs will able to boost their overall development on the deeper penetration in the marginalized parts of the country. Hence, CSR shouldn’t be considered as an additional cost of the business rather it should be seen as an investment with good ROI. And Fiinovation is known to achieve such desired results.
Take a look at how Innovative Financial Advisors Pvt Ltd works:
People usually underestimate the relevance of effective strategies in social sector investment. Just like any other commercial investments; one requires enormous research for designing and strategies for ensuring effective implementation in the social sector. We at Finnovations, understands this effectively, we follow a comprehensive framework to meet the ends. The company undertakes various aspects, indicators, challenges and monitoring and other important parameters into consideration. Thus, we are able to execute our plan to achieve desired results without compromising on our planned timelines.
Getting Familiar with Legalities of CSR
India has attained the distinction of being the first country in the world to make CSR spending mandatory. Just over a couple of years, the CSR law enforced in 2014 is still in its nascent stages, and seems to have already received good press. However there is divided opinion on the success of the CSR law as the initiative is largely driven by voluntary contributions from the corporate world, which already has quite a few pro-active social and eco-friendly projects already up and running.
As for companies who are yet to board the CSR bandwagon, here are a few pointers worth noting.
According to the Indian Companies Act 2013, companies that meet specific threshold conditions must chart out a CSR Policy, spend a stipulated amount of profits on CSR initiatives and furnish CSR reports in a prescribed format to prove compliance. Companies must also be able to justify non-compliance if any, by explaining the reasons behind it.
CSR – Applicability Criteria
Companies are subject to CSR regulations if at all they have for any fiscal year, a minimum
- net profit of Rs.5 Crores or
- turnover of Rs.1,000 Crores or
- net worth of Rs.500 Crore
CSR – Compulsory Spending
Companies that meet one or more of the above mentioned criteria are required to spend at least 2% of their average net profit earned over a period of previous 3 financial years. Net profits reported based on New Act are considered for the purpose, and need not re-computed if based on the 1956 Act.
Profits from overseas operations of a company are not taken into account when arriving at net profits. Similarly, dividends received from other CSR compliant Indian firms are also excluded from computation.
CSR – Permitted Activities
There is a list of CSR activities mentioned in Schedule VII of the New Companies Act addressing needs related to:
- Eradication of hunger, poverty, pollution
- Promoting education, employment, livelihood
- Promoting gender equality, empowering women and caring for elders
- Ensuring sustainable environment and natural resources
- Benefits for ex-servicemen and their dependants or survivors
- Promoting traditional sports
- Contributions for Technology incubators
- Developing Rural / Slum areas
- Contributions for national and local community funds
Each of these social, ethical and environmental causes offers ample scope for positive action, which preferably must be taken up in the areas where the company is operational.
CSR – Reporting
Along with the regular annual financial statements and report from Board of Directors, the Company must also present a CSR report in a prescribed format. The report must include a synopsis of the CSR Policy, CSR committee details, Average net profit (for 3 preceding years) and details of CSR expenditure. As mentioned earlier, the company must explain the reasons behind failure to comply with the minimum spending limit when reporting CSR expenditure.
CSR – Enforcements and Penalties
There are no clear rules to enforce compliance nor are there any penalties associated with non-compliance, part from having companies explain why they were unable to address CSR obligations or spend the minimum funds required.
If a company doesn’t meet the stipulated threshold criteria for 3 consecutive financial years, it is not expected to meet CSR obligations.
It must be however be noted that non-compliance must be supported by adequate proof for not being able to do so. Failure to make reasons clear is punishable according to the New Act, and in such cases operations and accounts of the firm may be subjected to close scrutiny and investigations.
Companies may team up with other firms to discharge their CSR obligations; however each firm must present an individual CSR report. Also CSR initiatives can be implemented with the help of NGOs and trusts provided they have a proven track record of at least 3 years in such projects. Companies are also allowed to spend up to 5% of their annual CSR expenditure to hone CSR capabilities of in-house staff and those of their implementation agencies.
Established CSR consultants such as Fiinovation can help companies better understand and address CSR legalities in a comprehensive and effective manner.
- The government is very keen to boost the CSR activities and has come up with the CSR awards. It’s a unique and effective way to motivate companies to strengthen their initiatives in the social welfare sector. Few best companies will select on the basis of their positive contribution towards the society and will be acknowledged with CSR awards.
- The top car manufacturer’s of the company- Maruti Suzuki has spent a total of 89.45 cr during their FY 2016-17. Compare to last year, the company has widened their budget and has come up with an increased amount of the budget this year for the CSR activities.
- Maruti Suzuki is India’s leading car manufacturers. As per the net profits of final year 2017-18 the company needed to spend 89.2 crore on their CSR activities, but they increased the budget and spend 89.45 crore.
- The largest car manufacturer’s, Maruti Suzuki has spent a total of amount 89.45 crore for their Corporate social responsibility. The company has increased its budget by 14% compared to last year. As a part of CSR activities the company has contributed in a big way in various social welfare projects.
- Crowd Funding
We are a small NGO struggling for Funds. Our project has been rejected by consultancies such as Fiinovation on the basis there isn’t any company looking to fund in our area. We are really disappointed the way CSR funds are been utilised in the country. Being a small NGO we cannot even raise our voice that companies are not investing in the area where there is less development. Tired of dependency on others we have decided to go for crowd funding. Can anyone let me know which websites to look for? Also if someone has raised money please share your contact, I would like to know a few details regarding the same.
- In order to eradicate growing unemployment, a new project is launched named “Earn While Learn”. It aims to educate the youth of the rural India with the necessary skills. The project targets to be launched in 125 districts in two phases.
- AICTE (All India Council of Technical Education) and AITMC (All Indian Technical and Management Council) in collaboration has come up with a new project ” Earn while Learn”. The project aims to develop a skill set for the youth of the rural India, thereby providing them with livelihood.
- “Earn While Learn” a new project aims to create job opportunity in rural India. It focuses to educate and develop skill set in the youth of the rural areas and hence, providing them livelihood.
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