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CSR and Companies Act, 2013 – Responsibility or Compulsion

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The persistent commitment of corporates to act ethically and contribute to the socio-economic development, while refining the living standards of the employees and their families, as well as of the local community and society at large is Corporate Social Responsibility. It is also understood as a way through which companies achieve balance of social, environmental and economic imperatives in order to fulfil – the now global – dream of sustainable development.

In our modern world, sustainable development and inclusive growth have become catch phrases. An ideal situation calls for equal distribution of wealth and equal availability of opportunities for everyone. This, though, is easier said than done. The state alone is not accountable for the socio-economic development of a country, the corporate sector being as crucial cog in the wheel of development as the state. The profits that the private and/or the public sector make are supposed to be shared for the good of the nation. Corporate Social Responsibility (CSR) is an arrow in the quiver for holistic development of the nation. It is a mean to an end, the end being socio-economic development. It gives an opportunity to the corporates to give back to the nation.

Unfortunately, we live in a real world rather than an ideal one. Many questions arise when we talk about CSR. Is CSR enough? Is it followed to the letter? Is it merely a vehicle for corporates to build their brand value? To even try answering these questions, we have to have a deeper understanding of CSR.

CSR and Companies Act, 2013

There is a thin line that is drawn between a strategic business management concept, which CSR or Corporate Social Responsibility actually is, and charity, philanthropy or sponsorships. CSR is seen by businesses more as a technique to enhance the image of the brand than actually contributing to the society. It is the same all across the globe, with no exception. Ever since the birth of this concept, the mighty corporates have made fundamental contributions to the society as a whole and built a respectful brand image.

Let’s take the example of India. Before its independence and immediately after it, the social contribution of private companies was mostly confined to religious context, like building places of worship or donating to religious charities. With the liberalisation of Indian economy and surge of young entrepreneurs, organisations began to see beyond religion for their social contributions. Organisations like Aditya Birla group, Tata group and Reliance are some of the note-worthy companies that have made major investments in their CSR. Foreign companies like Larsen and Toubro, Cairn Energy, Coca Cola Company and others have also initiated many schemes under their CSR. These schemes range from setting up hospitals to starting vocational education or self-employment centres. Nowadays many organisations are involved in schemes like developing village industry clusters, adopting model villages and assistance to PAP (Project Affected People), and environment initiatives.

With the bill passed in the new Companies Act, 2013, the age old concept of Corporate Social Responsibility has seen a dramatic change in India. It is no longer a stunt to gain reputation but statutory responsibility that every company has to fulfil. According to the act, every company that meets any one of the following criteria of: a net worth of ₹500 crore or more, or with a turnover of ₹1000 crore or more or a net profit of ₹5 crore or more during any financial year will have to spend at least 2% of the average net profits of the company for CSR. It is also mentioned in the act that the company shall give preference to the local area and areas around where it operates, for spending the amount kept aside for Corporate Social Responsibility activities. These new rules would be applicable from 2014.

To assess the performance of the companies in their Corporate Social Responsibility, Bombay Stock Exchange (BSE) and Indian Institute of Corporate Affairs (IICA) have plans to develop India’s first CSR index. This index will also look into the mandatory two percent spending of the corporates as per the new Companies Act, 2013.    CSR and Companies Act, 2013

Although the amended Companies Act, 2013 lays down certain guidelines for the amount of money to be spent on CSR activities it – probably intentionally – stops short of defining the ambit of such activities. The government has left it open for the companies to decide on what activities/programs they would undertake to fulfil their CSR. Sachin Pilot, the Honourable Minister of Corporate Affairs, stated that the government has left the canvas wide open for the companies to decide on their own about CSR activities they wish to undertake to comply with the new norms. He also said the few areas prescribed under the law are only suggestive in nature and it should not be seen as a restrictive list.

After the amended Companies Act, 2013, many believe that the act of social responsibility shall be forced out of the corporates rather than being their natural and dedicated decision towards the society. However, it is imperative to understand the importance of contributions from corporates, as they can radically upgrade a community and the nation. The impact of CSR is not confined to  only social and economic well-being but it spreads to environmental and emotional well-being as well. With a mixed response to this bill from companies, it remains to be seen whether the Indian corporate sector takes CSR as an honest responsibility or merely a compulsion after the introduction of Companies Act, 2013.

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Explore What May Work Better For Your Business

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Marketing business work

What works for one business is not necessarily going to work for another. But one mistake that many small business owners make is chasing solutions that they see working for other businesses. It leads to the copycat style of business, and it’s not always going to do good. It’s easy to follow in the footsteps of those that have gone before you, but now that the business market is so crowded, following what someone else is doing is not going to get you anywhere. Being in business should be about being innovative and successful. We know that someone is always going to have done what you have done, but you should be figuring out what works for your business based on your own ideas. There are ideas such as marketing techniques that work universally, but there are some things that we’re going to discuss today. We want to show you how you can explore what may work for your business, and the areas of your business that might need a little boost at this time of the year. We’re still very much in the New Year dip in terms of sales, so hopefully this will help you boost them!

Better Business Management 

Better business management is obviously going to improve the chances of success of your business. We’re not all born to manage a business, and often, the modern day entrepreneur is setting up their business without a clue what they’re doing. There are some that start out having been a manager at a company before, but still, the actual processes of running a business are all a learning curve. Some of you may not have learnt as well as others. Although you will have learnt how to make sure your business is running, when you get to the stage of hiring employees, you’ll realise you don’t know much about business management. About how to get a team of people working together to do the work that you used to do on your own. So better management techniques could be monthly meetings to check in on your employees, even if you only have one. Get them to explore share their worries and support them. Business is always going to work better if you do.

Better Data Management

Data management becomes essential to a growing business. Filing away loose pieces of paper, and using computer systems to electronically organise files is not going to work. There are only so many folders and documents you can store before it gets too chaotic, especially for a growing business. So you suddenly require a database, and enter this alien world that you don’t understand. Which is why it’s best left to an expert. They can advise you what database will work for you, such as this oracle database compare, and support you with it along the way. It takes specialist companies who dedicate their time to data management to actually control the database and utilise it. A company can easily use the database to process and understand customer data, for example, which can then allow sales to be manipulated.

Better Social Media Management

Social media management is key to a small business. It’s usually the marketing technique of choice for a startup, and sometimes we see such poor management of it. Social media management should be daily. You should be taking time each hour to interact with customers, post to your social media pages, and gain a following. The world is revolving around social media at the minute, so it’s the perfect place to attract the right attention. It’s not something that’s going to happen in a week or two, it’s something that’s going to happen over the course of many months. Building a following takes knowing algorithms, customer interests, and the best way to make posts look eye catching.

Improve Your Customer Relationships

Customer relationships are hard to maintain. Once you get on a path of creating problems with a few, the bad reviews come flooding in, and your company suffers because of it. So, to improve customer relationships, you need to focus on building rapport beforehand. Customers need to know that you’re interested in something other than a sale. If all you’re talking is numbers and products or services, you’ll fail to build solid relationships. If you learn about their lives and take an interest, they become long term customers. It’s simply what’s needed to build basic human relationships, let alone a customer to business one. Loyal customers are the backbone of a growing business.

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Breach Interceramic with payments agreed to Dal-Tile and Mohawk Industries

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The plan of Interceramic´s president in Mexico, Víctor Almeida García, to turn the company he directs into a relevant player of that industry but in the United States, falls apart with accusations of default of agreed payments, in a sales process in the one that participated with two North American companies.

The conflict has as its origin that for some years, Internacional de Cerámica S.A.B. from C.V. (Interceramic), belongs to the American firm Dal-Tile International, Inc., which in turn is part of the American giant Mohawk Industries, Inc, both companies with subsidiaries in Mexico.

Almeida García himself said in recent months that the company he runs was at a vulnerable point, since the demand for its products in Mexico has declined considerably in recent years, in addition to maintaining a historical debt in dollars, which makes Your income an unstable situation.

Under that context, Dal-Tile determined to liquidate the Mexican company Recubimientos Interceramic, S.A. de C.V, of which it is a partner, as well as closing the production plant in Mexico, supported by an arbitration process.

Although Interceramic has filed lawsuits and appeals to appeal the decision of the company belonging to Mohawk Industries, the resolutions have not been in its favor in the absence of compliance with payments and evidence, as judicial and federal authorities have granted protections to Dal-Tile to stop the legal process to which the Mexican company clings.

Among other accusations, Interceramic in Mexico has argued that this is a case of corruption, bribe of judges, influence peddling and nepotism, however, it has not presented any evidence confirming its appeals.

In November 2019, Interceramic filed a criminal complaint with the Special Prosecutor’s Office in Combating Corruption, an agency that responds to the Attorney General’s Office, against the Tenth District Judge, Matilde del Carmen González Barbosa and the Magistrates Ignacio Cuenca Zamora and José de Jesús González Ruiz, both officials from Chihuahua, a Mexican state located in the north of the country, who have been pointed out about corruption, influence and bribery traffic, without having proven their participation in the process, whose file number It is FED / FECC / UNAI-CHIH / 0000712/2019.

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6 Things That Can Undermine Your Small Business

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business success

It’s not easy running a small business, as anyone who has undertaken that challenge can attest to. You need to work harder than the bigger companies around you, with a smaller budget and a smaller team. However, while there are plenty of external aspects that can make it difficult to build success, sometimes the damage happens internally, too. Many small business owners end up inadvertently undermining their business, without realizing it. Below, we take a look at some of the more common mistakes that company owners make, as well as provide some tips on how to overcome them. 

Jack of all Trades

You might know that you’re a small, one-person operation, but there’s little value in shouting it from the rooftops. Your customers don’t need to know that, or at least not from their very first interaction with you. It just doesn’t always look so great if a person is the receptionist, accountant, support person, and expert in the company. If you’re handing out business cards, put your name and your main role as the title. You may also consider outsourcing your receptionist duties to another company. Both these things will make your small venture look bigger than it really is.

A Bad Employee

However, it’s not as if you’re out of the woods just because you’ve got a team of staff. The more people that you add, the more potential there is for something unprofessional to occur; at least when it’s just you, you’re aware of what’s going on. Because of the impact that your employees can have, it’s really important that you take steps to develop a robust hiring policy, one that’ll lead to professional and courteous employees coming on board. Don’t forget: everyone at your company has the potential to undermine your professionalism. 

Inconsistent Branding

It’s important that you’re firing on all cylinders if you’re going to make the most of your business. As we said earlier, you’ll be competing against bigger companies, so there’s little margin for error. In your quest to deliver your best, your branding will be key. If you get this aspect of your business right, then you’ll appear much larger than you really are. However, in many cases, business owners don’t take their branding as seriously as they should, and it shows. The message and the visuals used to portray that message can be used inconsistently. As such, it’s recommended that you use a Corporate Identity Management platform, which will help ensure that all your visual assets are used correctly. Ultimately, it’s all about creating a solid image of your business in the eyes of your potential customers.

Lack of Updates

You might have worked hard to develop an excellent website when you first got your business up and running, but alas, it’s not as if you can just sit back and enjoy your work. If your business is going to stay relevant, then it needs to be updated. This doesn’t mean changing everything; it just means showing that the website is actively managed, rather than dormant. You could have a blog, for example, or slightly change your design to match whatever is happening seasonally (such as Christmas or Halloween). The same principle applies to your social media channels. They can be excellent tools for your business, but only if there are regular updates. There’s nothing sadder than seeing a company’s Facebook or Twitter page that hasn’t been updated in months. It can make people doubt if the company is still in operation.

Untidy Environments

So far, we’ve talked about the things that you pump out into the world, such as your website and branding and so on. But from time to time, you may find that you have visitors to your work premises. This is another area where things can be undermined, so it’s important to look at your environment and ask some questions, such as: is it tidy? Does it reflect your company well? Is there anything that would give someone an unfavorable impression of our business? People do, rightly or wrongly, make snap judgements about, well, everything. If your offices fall short in any way, then it could be a mark against your business. 

Suppliers and Practices

Finally, it’s always worth interrogating your working practices to ensure they’re in line with modern standards and expectations. If they’re not — say, you’re using practices that harm the environment and/or people — then there could be a backlash. It pays to have an ear to the ground and move as times change.

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