CS-Professional New Syllabus Marks- 100

Subject – CSR & Social Governance Time- 180 minutes

PART-I
Question 1
As per Rule 2(d) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 “Corporate Social
Responsibility” means the activities undertaken by a company in pursuance of its statutory obligation laid
down in section 135 of the Act in accordance with the provisions contained in CSR Rules, but shall not include
the following, namely: -
(i) activities undertaken in pursuance of normal course of business of the company:
Provided that any company engaged in research and development activity of new vaccine, drugs and medical
devices in their normal course of business may undertake research and development activity of new vaccine,
drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22, 2022-23 subject to the
conditions that –
(a) such research and development activities shall be carried out in collaboration with any of the institutes
or organisations mentioned in item (ix) of Schedule VII to the Act;
(b) details of such activity shall be disclosed separately in the annual report on CSR included in the Board’s
Report.
(ii) any activity undertaken by the company outside India except for training of Indian sports personnel
representing any State or Union territory at national level or India at international level;
(iii) contribution of any amount directly or indirectly to any political party under section 182 of the Act;
(iv) activities benefitting employees of the company as defined in clause (k) of section 2 of the Code on
Wages, 2019;
(v) activities supported by the companies on sponsorship basis for deriving marketing benefits for its
products or services;
(vi) activities carried out for fulfilment of any other statutory obligations under any law in force in India.
Section 135(1) of the Companies Act, 2013 provides that every company having net worth of rupees five
hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore
or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more Directors, out of which at least one director shall be an
independent director.
It may be noted that where a company is not required to appoint an independent director under section
149(4), it shall have in its Corporate Social Responsibility Committee two or more Directors.

1. DEF Traders Ltd. is incorporated as a small company. State with reference to the relevant legal provisions
whether it is required to set up a Corporate Social Responsibility Committee?

2. Board of Directors of Charity Ltd. wants to understand from you applicability of the provisions relating to
CSR to companies including requirements to constitute CSR Committee. Inform the Board.

3. Mind-Game Ltd., is a subsidiary company of Mind-Guru Ltd. Mind- Game attracts the provisions of section
135 of the Companies Act, 2013 and it has minimum average obligation to spend Corporate Social
Responsibility (CSR) amount of ₹ 15 Crore during each of the preceding 5 years. In this connection, Board of
directors needs your expert views on the following matters:
(i) What is the meaning of "impact assessment"?
(ii) Whether impact assessment is required to be undertaken by all the companies?
(iii) Who can conduct impact assessment?

4. A company's net profit calculated under section 198 of the Companies Act, 2013 as per the audited
financial statements was as under:
Year 2021-2022 : Net Profit ₹ 8 Crore Year 2020-2021 : Net Profit ₹ 5 Crore Year 2019-2020 : Net Profit ₹ 4
Crore
The profit for the financial year 2021-2022 included the profit of ₹ 1 Crore from its foreign subsidiary
company and₹1 Crore from an Indian company covered under section 135 of the Companies Act, 2013, as
dividend. Comment on the amount, if any, liable to be spent on Corporate Social Responsibility (CSR)
activities by the company.

5. RS Limited has incurred ₹ 5,00,000 for the fulfilment of Labour Law, Land Acquisition Act and Food Safety
& Standards Act in the month of May, 2018. The company has accounted for this ₹ 5,00,000 as Corporate
Social Responsibility (CSR) expenditure. Explaining the provision of Companies Act, 2013 discuss whether the
company has rightly accounted for the amount in CSR.

Answer 1
Companies to which CSR provisions are applicable [Section 135(1)]: - CSR provisions are applicable
to companies which fulfils any one of the following criteria during the immediately preceding
financial year

◆ Net worth - ₹ 500 Crore or more

◆ Turnover - ₹ 1,000 Crore or more.

Small Company [Section 2(85) ]: Small company means a private company -

(i) Paid-up share capital of which does not exceed 4 Crore or such higher amount as may be
prescribed which shall not be more than 10 Crore and

(ii) Turnover of which as per its last profit and loss account does not exceed *40 Crore or such
higher amount as may be prescribed which shall not be more than ₹ 100 Crore.

Nothing in this definition shall apply to: [This means following companies can- not be small
companies]

(a) Holding or a subsidiary company

(b) Company registered u/s 8

(c) Company or body corporate governed by any Special Act.

DEF Traders Ltd. is a small company. It does not meet the criteria specified in section 135 of the
Companies Act, 2013 and hence DEF Traders Ltd. is not required to constitute CSR Committee.

Answer 2

Companies to which CSR provisions are applicable [Section 135(1)]: CSR provisions are
applicable to companies which fulfils any one of the following criteria during the immediately
preceding financial year:

◆ Net worth-₹500 Crore or more ◆ Turnover ₹1,000 Crore or more.

◆ Net profit - 5 Crore or more.

Composition of CSR Committee: CSR Committee shall consist of 3 or more directors, out of which at
least 1 director shall be an independent director.

However, unlisted public company and private company which is not required to appoint an
independent director, CSR Committee shall consist of 2 or more directors.

Applicability of CSR provisions to foreign branch office/project office: As per Rule 3(1) of the
Companies (CSR Policy) Rules, 2014, every company including its holding or subsidiary, and a foreign
company defined under Section 2(42) of the Act having its branch office or project office in India,
which fulfils the criteria specified in Section 135(1) of the Act shall comply with the provisions of
section 135 of the Act and CSR Rules.

Role and responsibilities of the CSR Committee [Section 135(3)]: Following shall be the
responsibilities of the CSR Committee:

(a) To formulate and recommend to the Board, CSR Policy which shall indi- cate the activities to be
undertaken by the company in areas or subject, specified in Schedule VII.

(b) To recommend the amount of expenditure to be incurred on CSR activities. (c) To monitor CSR
Policy of the company from time to time.

Answer 3

(i) Impact Assessment: The impact assessment is exercise to assess the social impact of a particular

project. Impact assessment intends to evaluate "social return on investment".

Impact assessment is the exercise of taking a retroactive view on the CSR Activities completed by
the entity.

Impact assessment is seemingly another step to encourage companies to take considered

(ii) Who are required to undertake Impact Assessment: Since impact assessment is cost-intensive
and time consuming, the idea is to obligate only certain classes of companies which have large
amounts of spending and have completed their large CSR projects.

Accordingly, as per Rule 8(3) of the Companies (CSR Policy) Rules, 2014, every company having
average CSR obligation of ₹ 10 Crore or more in pursuance of section 135(5) of the Act, in the 3
immediately preceding financial years, shall undertake impact assessment, through an
independent agency, of their CSR projects having outlays of₹ 1 Crore or more, and which have
been completed not less than one year before undertaking the impact study.

The impact assessment reports shall be placed before the Board and shall be annexed to the
annual report on CSR.
A Company undertaking impact assessment may book the expenditure towards CSR for that
financial year, which shall not exceed 2% of the total CSR expenditure for that financial year or ₹50
lakh, whichever is higher.

(iii) The impact assessment shall be conducted by an independent agency.

Answer 4

Companies to which CSR provisions are applicable [Section 135(1)]: - CSR provisions are applicable
to companies which fulfils any one of the following criteria during the immediately preceding
financial year

◆ Net worth - ₹ 500 Crore or more

◆ Turnover - ₹ 1,000 Crore or more.

Amount required to be spent on CSR [Section 135(5)]: The Board of every company to which CSR
provisions are applicable shall ensure that the company spends, in every financial year, at least 2% of
the average net profits of the company made during the 3 immediately preceding financial years, or
where the company has not completed the period of 3 financial years since its incorporation, during
such immediately preceding financial years in pursuance of its CSR Policy.

Explanation: Net Profit shall not include such sums as may be prescribed, and shall be calculated in
accordance with the provisions of section 198.

As per Rule 2(h) of the Companies (CSR Policy) Rules, 2014, Net Profit means the net profit of a
company as per its financial statement prepared in accordance with the applicable provisions of the
Act. Net Profit shall not include the following:

(i) Any profit arising from any overseas branch or branches of the company, whether operated as a
separate company or otherwise.

(ii) Any dividend received from other companies in India, which are covered under and complying
with the provisions of section 135 of the Act.

Answer 6

As per Section 135(3) of the Companies Act, 2013, CSR Committee is required to formulate and
recommend to the Board, CSR Policy which shall indicate the activities to be undertaken by the
company in areas or subject, specified in Schedule VII.

Schedule VII specifies various activities which may be included by companies in their Corporate Social
Responsibility Policies.

The Board of directors every company to which CSR provisions are applicable shall ensure that the
activities as are included in CSR Policy are undertaken by the company.

Amount spent for Labour Law, Land Acquisition Act and Food Safety & Standards Act are not included
in Schedule VII and hence amounts spend for it cannot be accounted as CSR expenditure by the RS
Limited.
Question No. 2
Discuss the different modes of incurring CSR expenditure? Are administrative overheads applicable only for
expenses incurred by the company, or can they be applied to expenses incurred by the implementing agency
as well? (5 Marks)
Answer
Companies can incur CSR expenditure through various modes to support social development initiatives. The
different modes of incurring CSR expenditure include:
Direct Implementation by the Company: Companies can directly undertake CSR activities using their internal
resources, including funds, employees, infrastructure, and expertise. This mode allows companies to have
direct control over the planning, execution, and monitoring of CSR projects.
Implementing through External Agencies: Companies may engage external implementing agencies such as
NGOs, trusts, foundations, societies, academic institutions, or specialized agencies to execute CSR projects
on their behalf. These agencies possess domain expertise, community networks, and local knowledge,
facilitating effective project implementation.
Financial Assistance to Implementing Agencies: Companies can provide financial assistance to NGOs, trusts,
or other implementing agencies to support their existing or proposed CSR projects. This mode enables
companies to leverage the expertise and infrastructure of external agencies while maintaining flexibility in
resource allocation.
Partnerships and Collaborations: Companies may collaborate with government bodies, industry associations,
international organizations, or other corporate entities to jointly implement CSR initiatives. Partnerships
enhance resource mobilization, share risks and responsibilities, and maximize the social impact of CSR
projects.
Regarding administrative overheads, they refer to expenses incurred by companies for managing and
administering CSR activities, including salaries of CSR staff, office rent, utilities, travel expenses,
communication costs, etc. Administrative overheads are considered an integral part of CSR expenditure, as
they support the efficient implementation and monitoring of CSR projects.
Administrative overheads can be applied to expenses incurred by both the company and the implementing
agency, depending on the nature of the expenditure and the terms of the agreement between the company
and the implementing agency. However, it's essential to ensure transparency, reasonableness, and
compliance with CSR regulations in allocating and reporting administrative overheads.
Companies should maintain documentation and records to justify the allocation of administrative overheads,
demonstrating that they are directly related to CSR activities and contribute to the overall effectiveness and
sustainability of CSR initiatives. Proper accounting and reporting of administrative overheads enhance
transparency, accountability, and credibility in CSR expenditure management.

Question No. 3
(i) The purpose of impact assessment is to assess the social impact of a particular CSR project. Discuss the
objective of providing impact assessment of CSR activities? Which companies are required to undertake
impact assessment?
(ii) Warner Ltd. is an Indian company with a net profit of ₹ 4 Crore, ₹7 Crore, 6 Crore and ₹7 Crore respectively
in the last four years. Net profit for each of last four years including dividend of ₹ 1 Crore received from WB
Ltd. which is an Indian company. Discuss whether Warner Ltd. is required to spend on CSR activities? If yes,
how much it should spend? If no, state the reasons for it. (5 Marks each)
Answer 3(i)
The objective of providing impact assessment of CSR activities is multifaceted, aiming to evaluate and
communicate the social, environmental, and economic outcomes of CSR initiatives. The primary objectives
include:
Measure Effectiveness: Impact assessment helps in measuring the effectiveness of CSR activities in achieving
their intended objectives and desired outcomes. It provides insights into whether the implemented projects
are making a tangible difference in addressing social or environmental issues.
Demonstrate Accountability: Impact assessment enhances transparency and accountability by providing
stakeholders, including shareholders, investors, employees, customers, and communities, with clear
evidence of the company's CSR efforts and their impact on society.
Inform Decision-Making: Impact assessment informs future CSR strategy and decision-making by identifying
areas of success, areas needing improvement, and lessons learned from past initiatives. It helps companies
refine their CSR priorities, allocate resources more efficiently, and enhance the overall effectiveness of their
CSR programs.
Engage Stakeholders: Impact assessment fosters stakeholder engagement by soliciting feedback,
understanding stakeholder perspectives, and addressing concerns related to CSR activities. It enables
companies to build trust, credibility, and positive relationships with stakeholders by demonstrating a
genuine commitment to social responsibility and sustainable development.
Drive Continuous Improvement: Impact assessment serves as a tool for continuous improvement, enabling
companies to learn from their experiences, adapt strategies based on empirical evidence, and innovate new
approaches to maximize social impact and value creation.
Enhance Reporting and Communication: Impact assessment facilitates the development of comprehensive
CSR reports and communication materials that effectively communicate the social, environmental, and
economic value generated by CSR activities to internal and external stakeholders. It enhances the company's
reputation and brand image as a responsible corporate citizen.
As for the companies required to undertake impact assessment, the Companies Act, 2013, mandates certain
companies to include impact assessment as part of their CSR reporting. Specifically, companies meeting the
CSR spending criteria outlined in the Act must undertake impact assessment for their CSR projects. These
companies include:
Companies with a net worth of rupees five hundred crore or more.
Companies with turnover of rupees one thousand crore or more.
Companies with a net profit of rupees five crore or more during any financial year.
These companies are required to allocate at least two percent of their average net profits over the preceding
three financial years towards CSR activities and conduct impact assessments to evaluate the social,
environmental, and economic outcomes of their CSR initiatives.

Answer 3(ii)
Companies to which CSR provisions are applicable [Section 135(1)]: - CSR provisions are applicable to
companies which fulfils any one of the following criteria during the immediately preceding financial year
◆ Net worth - ₹ 500 Crore or more
◆ Turnover - ₹ 1,000 Crore or more.
◆ Net profit - ₹ 5 Crore or more.
Amount required to be spent on CSR [Section 135(5)]: The Board of every company to which CSR provisions
are applicable shall ensure that the company spends, in every financial year, at least 2% of the average net
profits of the company made during the 3 immediately preceding financial years, or where the company has
not completed the period of 3 financial years since its incorporation, during such immediately preceding
financial years in pursuance of its CSR Policy.
Explanation: Net Profit shall not include such sums as may be prescribed, and shall be calculated in
accordance with the provisions of section 198.
As per Rule 2(h) of the Companies (CSR Policy) Rules, 2014, Net Profit means the net profit of a company as
per its financial statement prepared in accordance with the applicable provisions of the Act. Net Profit shall
not include the following:
(i) Any profit arising from any overseas branch or branches of the company, whether operated as a separate
company or otherwise.
(ii) Any dividend received from other companies in India, which are covered under and complying with the
provisions of Section 135 of the Act.
It is assumed that WB Ltd. is covered under section 135 of the Companies Act, 2015 and dividend received
by Warner Ltd. from WB Ltd. will be excluded while calculating net profit for the purpose of CSR provisions.
Thus, net profit of last three years of Warner Ltd. for the purpose of CSR provisions after excluding dividend
of 1 Crore will be ₹6 Crore, ₹5 Crore and 6 Crore.
 6,00,00,000+5,00,00,000+4,00,00,000
Average Net Profit = = Rs.5,66,66,667

Amount required to be spent on CSR Activities by Warner Ltd. = ₹ 5,66,66,667 × 2% = Rs.11,33,333

Question No. 4
(i) ABC Ltd. required to be spent on CSR is Rs. Forty-nine lakh rupees. As a Company Secretary of ABC Ltd.
advise the requirement for constitution of the CSR Committee and the functions of the CSR Committee, in
such cases.
(ii) The CSR activities/projects listed in the approved Annual Plan shall be implemented using internal
resources or through an identified suitable agency or through providing financial assistance to NGOs/
specialized agencies/trusts/institutions/foundations/ societies/bodies/international institutions. Draft a
specimen CSR policy regarding “Execution & Implementation Methodology”.
(5 Marks each)
Answer 4(i)
As the Company Secretary of ABC Ltd., in compliance with the CSR provisions under the Companies Act,
2013, and assuming that the company is required to spend Rs. Forty-nine lakh rupees on CSR, I would advise
on the requirement for constituting the CSR Committee and outline the functions of the CSR Committee as
follows:
Requirement for Constitution of the CSR Committee:
Mandatory Provision: As per Section 135 of the Companies Act, 2013, companies meeting specific financial
criteria are required to constitute a CSR Committee of the Board.
Financial Criteria: ABC Ltd. is mandated to spend Rs. Forty-nine lakh rupees on CSR activities, indicating that
it falls within the threshold for constituting a CSR Committee.
Constitution of CSR Committee: ABC Ltd. must constitute a CSR Committee comprising at least three
directors, including one independent director.
Functions of the CSR Committee:
Formulating CSR Policy: The CSR Committee is responsible for formulating and recommending the CSR policy
to the Board of Directors. This policy outlines the company's CSR objectives, focus areas, and guidelines for
CSR activities.
Identifying CSR Activities: The CSR Committee identifies suitable CSR activities/projects that align with the
company's CSR objectives and are eligible for funding under the CSR policy.
Recommendation of CSR Expenditure: The CSR Committee recommends the amount of expenditure to be
incurred on CSR activities, ensuring compliance with the statutory requirement of spending at least two
percent of the average net profits of the preceding three financial years.
Oversight and Monitoring: The CSR Committee provides oversight and monitors the implementation of CSR
activities/projects to ensure they are executed effectively, efficiently, and in accordance with the CSR policy
and legal requirements.
Engagement with Stakeholders: The CSR Committee engages with relevant stakeholders, including
employees, communities, NGOs, government agencies, and regulatory authorities, to gather input, foster
collaboration, and address CSR-related concerns.
Reviewing CSR Reports: The CSR Committee reviews and approves the annual CSR report, which includes
details of CSR activities undertaken, expenditure incurred, and the impact achieved during the financial year.
Compliance and Reporting: The CSR Committee ensures compliance with CSR provisions under the
Companies Act, 2013, and other applicable regulations. It prepares and submits the CSR report to the Board
for inclusion in the company's annual report.
By constituting a CSR Committee and defining its functions, ABC Ltd. can effectively manage its CSR
initiatives, enhance stakeholder engagement, and fulfill its social responsibility obligations while contributing
positively to society.
Answer 4(ii)
CSR Policy: Execution & Implementation Methodology
1. Introduction:
At [Company Name], we recognize Corporate Social Responsibility (CSR) as a fundamental aspect of our
business ethos. This policy outlines our approach to executing and implementing CSR activities/projects in
alignment with our commitment to social development and sustainable practices.
2. Objectives:
To effectively execute and implement CSR activities/projects in accordance with applicable laws, regulations,
and best practices.
To maximize the positive impact of CSR initiatives on communities and stakeholders.
To ensure transparency, accountability, and efficiency in the execution and implementation of CSR projects.
3. Execution & Implementation Methodology:
Annual Planning: CSR activities/projects shall be identified, prioritized, and documented in an annual CSR
plan approved by the Board of Directors. The plan will include a detailed scope of activities, timelines, budget
allocation, and expected outcomes.
Internal Resources: Where feasible and appropriate, CSR activities/projects may be executed using internal
resources, including employee volunteers, expertise, and infrastructure. Internal teams will be assigned
responsibilities and provided necessary support for implementation.
Identification of Suitable Agencies: For specialized or large-scale CSR initiatives beyond internal capabilities,
suitable agencies, including NGOs, trusts, foundations, societies, and international institutions, will be
identified through a transparent selection process. Criteria for selection will prioritize credibility, track
record, alignment with CSR objectives, and capacity for project delivery.
Engagement with External Partners: Collaboration with external partners, including government bodies,
academic institutions, community-based organizations, and industry stakeholders, will be fostered to
leverage synergies, resources, and expertise for effective project execution and implementation.
Financial Assistance: Financial assistance may be provided to selected NGOs, specialized agencies, or
implementing partners for executing CSR projects. Funds will be disbursed in accordance with agreed-upon
terms, milestones, and monitoring mechanisms to ensure proper utilization and accountability.
Monitoring & Evaluation: A robust monitoring and evaluation framework will be established to track the
progress, performance, and impact of CSR activities/projects. Key performance indicators (KPIs) and
benchmarks will be defined to assess the effectiveness and sustainability of initiatives.
4. Compliance and Reporting:
Compliance with CSR provisions under the Companies Act, 2013, and other applicable regulations will be
ensured throughout the execution and implementation process.
Regular reporting on CSR activities/projects, including progress updates, expenditure details, and impact
assessments, will be provided to the Board of Directors, shareholders, and other stakeholders through the
company's annual reports, website, and other communication channels.
5. Continuous Improvement:
We are committed to continuously reviewing and refining our execution and implementation methodology
to enhance the efficiency, effectiveness, and social impact of our CSR initiatives. Feedback from stakeholders
and lessons learned from past experiences will inform our approach to future projects.
This specimen CSR policy provides a framework for executing and implementing CSR activities/projects,
emphasizing transparency, accountability, stakeholder engagement, and continuous improvement in line
with the company's CSR objectives and values.

PART-II
Question No. 5
XYZ Corp, a mid-sized company, has recently decided to list on a Social Stock Exchange (SSE) to attract
investors focused on social impact. The company aims to fund its CSR initiatives, which include community
development, environmental sustainability, and education programs. By listing on the SSE, XYZ Corp hopes
to enhance its visibility and credibility while promoting its commitment to social responsibility.
Questions and Answers
1. What are the primary benefits for XYZ Corp in listing on a Social Stock Exchange?
Answer:
The primary benefits include access to a new pool of socially conscious investors, increased visibility and
credibility in the market, potential funding for CSR initiatives, and enhanced reputation among stakeholders,
leading to greater customer loyalty and employee satisfaction.

2: How does the Social Stock Exchange differ from traditional stock exchanges in terms of regulatory
requirements?
Answer:
The Social Stock Exchange typically emphasizes transparency in social impact reporting, requiring companies
to disclose not just financial performance but also measurable social outcomes. This may involve more
rigorous assessments of social projects and the impact on communities compared to traditional exchanges,
which focus mainly on financial metrics.

3. What role does the concept of "impact measurement" play in the success of XYZ Corp's listing on the SSE?
Answer:
Impact measurement is crucial as it helps XYZ Corp quantify the social benefits of its CSR initiatives,
demonstrating to investors the tangible outcomes of their investments. Effective impact measurement can
attract more investors and enhance the company’s reputation, making it essential for successful engagement
with the SSE.

4. Discuss how the listing on the SSE might influence XYZ Corp's corporate governance practices.
Answer:
Listing on the SSE may lead to enhanced corporate governance practices by necessitating greater
transparency and accountability regarding social impact initiatives. XYZ Corp might adopt stronger
stakeholder engagement strategies, develop dedicated committees for CSR oversight, and integrate social
performance metrics into overall corporate governance frameworks.

5. What challenges might XYZ Corp face after listing on the Social Stock Exchange, and how can they be
addressed?
Answer:
Challenges may include maintaining consistent social impact reporting, managing investor expectations, and
ensuring that CSR initiatives align with business goals. These can be addressed by establishing clear reporting
frameworks, regular communication with investors, and aligning CSR strategies with core business objectives
to ensure sustainability and effectiveness.
Conclusion
XYZ Corp's decision to list on the Social Stock Exchange represents a strategic move towards integrating
social responsibility into its core business model. By understanding the unique aspects of the SSE and its
implications for corporate governance and impact measurement, the company can effectively navigate the
challenges and opportunities that arise from this initiative.

Question No. 6
The minimum reporting standards have been created by benchmarking elements from various national and
international frameworks of measurement that have been developed and are being deployed. Enumerate
the main elements of the reporting standard. (5 Marks)
Answer:
The main elements of the reporting standard for minimum reporting standards typically include:
Mission and Objectives: Clearly articulate the organization's mission, vision, values, and objectives, providing
a framework for understanding its purpose and direction.
Governance Structure: Describe the organization's governance structure, including the roles and
responsibilities of the board of directors, management team, and key stakeholders. This section may also
include information about governance policies, procedures, and decision-making processes.
Financial Performance: Provide financial statements and performance indicators to assess the organization's
financial health, including revenue, expenses, assets, liabilities, and net income or loss. This section may also
include information about funding sources, fundraising activities, and financial sustainability.
Operational Activities: Outline the organization's core activities, programs, projects, and initiatives, detailing
their objectives, scope, target beneficiaries, geographic reach, and outcomes. This section may also include
information about partnerships, collaborations, and resource utilization.
Social Impact: Report on the organization's social impact, including the outcomes and benefits generated by
its programs and activities. This may involve measuring and quantifying social, environmental, and economic
indicators such as poverty reduction, education attainment, health outcomes, environmental conservation,
and community development.
Stakeholder Engagement: Describe the organization's engagement with stakeholders, including
beneficiaries, donors, partners, employees, volunteers, and the broader community. This may involve
feedback mechanisms, consultation processes, and communication channels to ensure accountability,
transparency, and responsiveness to stakeholder needs and interests.
Risk Management and Compliance: Address risk management practices and compliance with relevant laws,
regulations, and standards. This may include identifying and assessing risks, implementing risk mitigation
strategies, and ensuring legal and regulatory compliance in areas such as governance, finance, and
operations.
Ethical Practices and Values: Articulate the organization's commitment to ethical principles, integrity, and
accountability in its operations and interactions. This may involve adherence to codes of conduct, ethical
guidelines, and best practices in areas such as fundraising, procurement, and human resource management.
Monitoring and Evaluation: Describe the organization's monitoring and evaluation processes to assess the
effectiveness, efficiency, and impact of its programs and activities. This may include performance indicators,
data collection methods, evaluation frameworks, and mechanisms for learning and improvement.
Transparency and Reporting: Demonstrate transparency and accountability through clear and accessible
reporting practices. This may involve publishing annual reports, impact assessments, financial statements,
and other relevant documents to inform stakeholders and the public about the organization's activities,
achievements, and challenges.

Question No. 7
(i) The Secretary of the Non-Corporate Entity shall convene a Meeting on the direction of the Chairman or
any other competent authority, if any, appointed for the purpose of meeting. Discuss the role of Secretary
pertaining to convene a Meeting of the Non-Corporate Entity.
(ii) Whether registration of a partnership firm is compulsory? Discuss the effects of non-registration.
(5 Marks each)
Answer 7 (i)
The role of the Secretary in convening meetings of a non-corporate entity is crucial for ensuring effective
communication, coordination, and decision-making within the organization. Here are the key responsibilities
of the Secretary pertaining to convening meetings:
Compliance with Rules and Regulations: The Secretary is responsible for ensuring that meetings are
convened in compliance with the rules, regulations, and procedures governing the non-corporate entity. This
includes adherence to statutory requirements, organizational bylaws, and any other applicable guidelines.
Communication with Stakeholders: The Secretary acts as the primary point of contact for communicating
meeting notices, agendas, and related information to members, directors, trustees, or other stakeholders of
the non-corporate entity. They are responsible for disseminating relevant documents and ensuring that all
concerned parties are informed in a timely manner.
Preparation of Meeting Materials: The Secretary assists in the preparation of meeting materials, including
agendas, minutes, reports, presentations, and other documents essential for the smooth conduct of
meetings. They work closely with the Chairman or competent authority to finalize meeting agendas and
ensure that all necessary information is provided to participants.
Coordination and Logistics: The Secretary coordinates logistics related to meeting arrangements, including
venue booking, scheduling, audio-visual equipment setup, and catering arrangements if applicable. They
ensure that meeting facilities are conducive to productive discussions and that all necessary resources are
available for participants.
Record-Keeping and Documentation: The Secretary maintains accurate records of meetings, including
minutes, resolutions, attendance registers, and other relevant documentation. They document decisions
taken, action points assigned, and follow-up tasks agreed upon during meetings, ensuring accountability and
transparency in the decision-making process.
Facilitation of Proceedings: During meetings, the Secretary facilitates proceedings by assisting the Chairman
or presiding officer in maintaining order, managing time, and ensuring that the agenda is followed. They may
help clarify agenda items, record discussions, and provide procedural guidance to participants as needed.
Follow-Up and Implementation: After meetings, the Secretary follows up on action items, resolutions, and
decisions taken during the meeting, ensuring that they are implemented in a timely manner. They may
coordinate with relevant stakeholders, monitor progress, and provide updates on the status of action items
as required.
Continuous Improvement: The Secretary plays a proactive role in enhancing the effectiveness and efficiency
of meetings by soliciting feedback from participants, identifying areas for improvement, and implementing
best practices in meeting management and governance.
Overall, the Secretary's role in convening meetings of a non-corporate entity is essential for facilitating
communication, collaboration, and decision-making among stakeholders, ultimately contributing to the
organization's success and achievement of its objectives.

Answer 7 (ii)
Registration of a partnership firm is not compulsory under Indian law; however, it is highly advisable for
several reasons. Let's discuss the effects of non-registration:
Legal Status: An unregistered partnership firm does not have a separate legal identity distinct from its
partners. Consequently, it cannot sue or be sued in its own name. This means that partners would need to
file lawsuits or defend legal actions in their individual capacities, which can be cumbersome and legally
disadvantageous.
Limited Rights: An unregistered partnership firm lacks the legal capacity to enter into contracts, acquire or
hold property, or enjoy other rights conferred upon registered firms. This limitation can hinder the firm's
ability to engage in business activities effectively, particularly in dealings with third parties who may require
evidence of registration.
Dispute Resolution: In case of disputes among partners or with third parties, unregistered partnership firms
face limitations in seeking resolution through legal channels. They may encounter difficulties in enforcing
agreements, recovering debts, or resolving conflicts, as they do not enjoy the statutory benefits and
protections available to registered firms.
Tax Implications: Unregistered partnership firms are taxed as separate entities, and partners are individually
taxed on their share of profits. This can result in higher tax liabilities compared to registered firms, which
enjoy certain tax benefits and deductions. Additionally, non-registration may lead to non-compliance with
tax laws and regulations, attracting penalties and legal consequences.
Limited Credit Access: Banks, financial institutions, and creditors may be reluctant to extend credit or
financial assistance to unregistered partnership firms due to concerns about legal enforceability and
creditworthiness. This can restrict the firm's ability to obtain loans, lines of credit, or other forms of financing
essential for business operations and growth.
Limited Market Access: Certain industries or sectors may require registration as a prerequisite for
participation or eligibility for government contracts, tenders, licenses, permits, or incentives. Non-
registration may exclude unregistered partnership firms from accessing lucrative opportunities or competing
on an equal footing with registered entities.
In summary, while registration of a partnership firm is not compulsory, failing to register can have significant
legal, financial, and operational implications. Registration provides legal recognition, enhances credibility,
and confers various rights, protections, and benefits that are essential for the smooth functioning and
growth of the firm. Therefore, partners are strongly advised to consider the advantages of registration and
comply with the relevant legal requirements to safeguard their interests and ensure the firm's legal and
financial well-being.

Question No. 8
(i) State the eligibility conditions for being Identified as a Social Enterprise.
(ii) Effective social governance is essential for building a more just, equitable, and inclusive society that
promotes the well-being of all its members. Discuss some examples of social governance practices.
(5 Marks each)
Answer 8 (i)
The eligibility conditions for being identified as a social enterprise can vary depending on the context and
the criteria established by relevant authorities or organizations. However, some common eligibility
conditions for social enterprises may include:
Mission and Purpose: Social enterprises are organizations that prioritize social or environmental objectives
alongside financial sustainability. Eligible entities must demonstrate a clear mission and purpose focused on
addressing a social or environmental issue, improving the well-being of individuals or communities, or
advancing sustainable development goals.
Business Model: Social enterprises typically operate using business principles and generate revenue through
the sale of goods or services. They may engage in commercial activities, but profits are primarily reinvested
back into the organization to further its social or environmental mission. Eligible entities should have a viable
business model that integrates social and financial objectives.
Social Impact: Eligible social enterprises must demonstrate a tangible and measurable social impact or
benefit resulting from their activities. They should have systems in place to track, monitor, and evaluate their
impact on target beneficiaries, communities, or the environment.
Legal Structure: Social enterprises may take various legal forms, including for-profit companies, non-profit
organizations, cooperatives, or hybrid structures. Eligible entities should have a legal structure that allows
them to pursue social or environmental objectives while complying with relevant laws and regulations.
Ethical Practices: Social enterprises are expected to uphold ethical standards and values in their operations,
including transparency, integrity, accountability, and respect for stakeholders' rights. Eligible entities should
adhere to ethical business practices and demonstrate a commitment to social responsibility and
sustainability.
Innovation and Creativity: Social enterprises often adopt innovative approaches, technologies, or business
models to address social or environmental challenges effectively. Eligible entities should demonstrate
innovation, creativity, and adaptability in their strategies, products, or services.
Beneficiary Focus: Social enterprises prioritize the needs and interests of their target beneficiaries or the
communities they serve. Eligible entities should have a clear understanding of their target audience, engage
with stakeholders, and involve beneficiaries in decision-making processes.
Financial Viability: While social impact is a primary objective, social enterprises must also maintain financial
viability and sustainability to ensure long-term effectiveness and impact. Eligible entities should have sound
financial management practices, generate sufficient revenue to cover costs, and have a plan for growth and
scalability.
These eligibility conditions provide a framework for identifying and recognizing social enterprises that
effectively balance social, environmental, and financial objectives to create positive change and contribute
to sustainable development.

Answer 8 (ii)
Effective social governance encompasses a range of practices aimed at fostering social justice, equity, and
inclusion while promoting the well-being of all members of society. Here are some examples of social
governance practices:
Policy Formulation and Implementation: Governments and policymakers develop and implement policies
and programs aimed at addressing social inequalities, promoting access to essential services such as
education, healthcare, housing, and social protection, and ensuring the rights and dignity of marginalized
and vulnerable populations.
Community Engagement and Participation: Social governance encourages active participation and
engagement of communities, civil society organizations, and marginalized groups in decision-making
processes, policy development, and program implementation. Participatory approaches empower
communities to voice their needs, concerns, and aspirations and contribute to shaping policies and initiatives
that affect their lives.
Stakeholder Collaboration and Partnerships: Effective social governance involves collaboration and
partnerships among governments, civil society organizations, the private sector, academia, and international
agencies to address complex social challenges. Multi-stakeholder partnerships leverage diverse resources,
expertise, and networks to develop innovative solutions, scale up successful interventions, and maximize
social impact.
Data-driven Decision Making: Social governance relies on evidence-based policymaking and data-driven
decision-making processes to understand social issues, monitor progress, and evaluate the effectiveness of
interventions. Data collection, analysis, and monitoring systems help identify priority areas, measure
outcomes, and allocate resources efficiently to address social needs and disparities.
Accountability and Transparency: Social governance promotes accountability, transparency, and integrity in
public institutions and governance processes. Mechanisms such as independent oversight bodies, citizen
feedback mechanisms, social audits, and transparency in budgeting and resource allocation enhance public
trust, ensure responsible stewardship of resources, and prevent corruption and mismanagement.
Human Rights Protection and Rule of Law: Social governance upholds human rights principles, including
equality, non-discrimination, freedom, and justice, and ensures adherence to the rule of law. Legal
frameworks, constitutional protections, and mechanisms for judicial review safeguard individual rights,
promote social cohesion, and provide avenues for seeking redress against injustice and discrimination.
Capacity Building and Empowerment: Social governance invests in building institutional capacity,
strengthening governance systems, and empowering individuals and communities to participate actively in
social development processes. Capacity-building initiatives enhance the skills, knowledge, and capabilities
of policymakers, civil servants, community leaders, and marginalized groups to drive positive change and
advocate for their rights and interests.
Sustainable Development and Environmental Justice: Social governance integrates social and environmental
considerations into development policies and practices to achieve sustainable outcomes and ensure
environmental justice. Strategies such as sustainable urban planning, climate resilience, natural resource
management, and environmental conservation promote social well-being, ecological integrity, and
intergenerational equity.
By embracing these examples of social governance practices, societies can advance towards building more
just, equitable, and inclusive communities where all members have the opportunity to thrive and ful-fill their
potential.!
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