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What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) is a compliance under Section 135 of the Indian Companies Act 2013 for every company (whether public, private, or foreign) which is registered under the Indian Companies Act (1956 or 2013) and which has net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more during the immediately preceding financial year.

Such a company is required to appoint a CSR Committee of the board consisting of three or more directors, out of which at least one director should be an independent director. However, where a company is not required to appoint an independent director (e.g. in a Private Company), it may have in its CSR Committee two or more directors.

What is the Importance of CSR in India?

• Education: Improves access to quality education for women and children.
• Healthcare: Offers healthcare services and support.
• Skill Development: Provides training to enhance employability.
• Gender Equality: Promotes women’s rights and opportunities.
• Economic Empowerment: Supports financial independence through livelihood programs.
• Child Protection: Works against child marriage, child labor and abuse.
• Nutritional Support: Provides food and nutrition to needy families.
• Community Upliftment: Strengthens local infrastructure and resources.
• Social Awareness: Raises awareness about women’s and children’s rights.
• Sustainable Development: will help long-term economic and social stability.

Benefits of Corporate Social Responsibility:

Corporate Social Responsibility is important for companies nowadays because consumers and stakeholders expect them to give back to the society and environment. Companies improve their reputation, retain clients and keep their Team members/ Employees happy through CSR.

CSR activities can improve the morale of your team mates. CSR activities enhance a company’s goodwill by showcasing social responsibility, building trust, improving brand reputation, community relationships, and demonstrating a commitment to ethical practices and sustainability.

What activities would not qualify as CSR?

The following would not be considered as CSR expenditure:

Cap on administrative overheads

There is some confusion surrounding the cap on administrative overheads which companies often tend to force down on CSR implementing agencies.

According to Rule 2(b) ‘administrative overheads’ means: the expenses incurred by the company for ‘general management and administration’ of CSR functions in the company, but shall not include the expenses directly incurred for the designing, implementation, monitoring, and evaluation of a particular CSR project or program;

According to Rule 7: The board shall ensure that the administrative overheads shall not exceed five percent of total CSR expenditure of the company for the financial year.

Thus, the company may incur expenses for ‘general management and administration’ of CSR functions in the company up to five per cent of total CSR expenditure of the company for the financial year. General management and administration of CSR functions in the company is not specifically defined under the law but would include costs like travel and such expenditure of administrative nature. Very clearly, Rule 2(b) refers to ‘expenses incurred by the company’ and ‘CSR functions in the company’. This provision is for companies that carry out CSR activities on their own with the help of their own company staff. Nowhere is there even a remote hint or an inference that the NGO or ‘CSR implementing agency’ or ‘CSR program /project partner’ must also ensure that the administrative overheads shall not exceed five percent of total CSR grant given to implement the project or program.

Further, the Ministry of Corporate Affairs (MCA) in Notification (FAQ) dated 25th August 2021 has clarified: “Administrative overheads are the expenses incurred by the company for ‘general management and administration’ of CSR functions. However, the expenses which are directly incurred for the designing, implementation, monitoring, and evaluation of a particular CSR project or program, shall not be included in the administrative overheads. Administrative overheads generally comprise items such as employee costs, utilities, office supplies, legal expenses, etc.

However, expenses which are attributed to the project implementation shall be included in project cost only. Example: Salary and training for the employees working in the CSR division of a company, stationery cost, travelling expenses, etc. may be categorized as administrative overheads.

However, salary of school teachers or other staff, etc. for education related CSR projects shall be covered under education project cost.”

Company must ensure that unspent CSR funds NOT related to an ongoing project (unallocated) at the end of the fiscal year must be transferred within six months of the end of the financial year to a fund mentioned in Schedule VII of the Act (such as the Prime Minister’s National Relief Fund, PMCARES, etc.). it is suggested that it’s better to utilize such an unspent amount to the Child development centers, shelters, Child care institutes like Unicorn Child Development center where an initiative has been taken to turn the dreams of orphans, semi orphans’ kids to reality & for the betterment of the community

Any surplus arising out of CSR

activities must not go back to the company. It must either be:

1. Ploughed back or spent on the same project/program that gave rise to the surplus
2. Also, it can be spent for the project which empower underprivileged children to achieve better life opportunities like Kokan Ngo.
3. Transferred to Unspent CSR Account.
4. Transferred to a fund mentioned in Schedule VII of the Act.
5. If a company spends more than the mandated two per cent on CSR expenditure, the amount can be set-off over the next three financial years after the board passes a resolution to that effect.

Why Kokan Ngo

Transparency: Transparency is deeply ingrained in our values. We consistently share relevant updates through our website and social media channels as well as we share evaluation reports of the projects frequently.

Administrative Expenses:  By carefully reducing administrative expenses and maintaining detailed financial records, we prioritize the effective and responsible functioning of the projects.

Global Sustainable Development Goals: Kokan NGO’s thematic areas are aligned to Sustainable Development Goals (SDGs), covering social, economic and environmental aspects of sustainable development. Kokan NGO contributes in: SDG 1: No Poverty, 2: Zero Hunger, 3: Good Health and Well-being, 4: Quality Education, 5: Gender Equality, 6: Clean Water and Sanitation, 8: Decent work and economic growth, 10: Reduced Inequalities, SDG 13 Climate action and SDG 17: Partnerships and the Goals.

National Award: Over the course of the upcoming years, Kokan NGO envisions a transformative journey by 2030, aspiring to become one of the top 100 NGOs working for rural and urban development in India. Our projects aim to positively impact lives and together contribute to the Sustainable Development Goals for the betterment of society. And for this initiative Kokan NGO has been awarded with 3 National Awards in past few Years in Delhi, Bengaluru & Hyderabad. This makes us a top choice for corporate companies interested in CSR projects.

This needs to

Our holistic approach helps us to address the issues faced by children and women and amplify our impact. For over a decade, we have been serving humanity through our diverse programs that promote quality education, village development, sustainable livelihoods, orphanage support, WaSH, disaster relief, and preparedness.

We have consistently and transparently improved the lives of more than 11,67,606 people so far. In collaboration with government and corporate partners, we tackle the complex and interrelated problems of education, health, poverty, and empowerment for lasting and sustainable change.

We are currently working in the states of Maharashtra, Karnataka, Delhi, Gujarat, Madhya Pradesh, Andhra Pradesh, Tamil Nadu, Telangana, Goa, and Kerala to make a difference. We aspire to reach more remote areas and impact more than 3 million lives by 2030 and empower marginalized children, women, and communities to advocate for their health, education, protection, and development.

Kokan Ngo projects under CSR:

VDP

Journey of Change:

Established in 2012, Kokan Kala Va Shikshan Vikas Sanstha’s main objective is to improve the overall welfare of society by offering educational and medical support. The organization is deeply committed to aiding underprivileged children, promoting education, driving rural development, supporting shelter homes, offering disaster relief, and providing vital medical aid to seriously ill children. Our strong connections with national professionals and a wide range of partnerships enable us to deliver holistic outcomes to various stakeholders. Working together, we firmly believe that by providing education and healthcare, we can broaden our influence to create a positive difference in the lives of the less fortunate.