Regarding engage in CSR. Large number of companies

Regarding Corporate Social
Responsibility (CSR) growing research has been found in the study of the
relationship between CSR and business performance. CSR is a significant field
for the companies from old times, nowadays, a group of stakeholders seems to be
able to influence firm’s management practices. Yet, no conclusive answers have
been found so far as to clarify if CSR affect business performance or vice
versa. Study on the topic has been concentrated in developed economies. A small
amount of studies are conducted in the developing countries.

 

In India, since last some years, firms
have been under pressure to engage in CSR. Large number of companies implements
CSR activities in their operations. As a result, researchers have been attempting
to express the effect of CSR on profitability. However, the experimental
studies have recommended unconvincing results citing the relationship between
CSR and profitability with positive, negative and neutral results. This study
is an effort to investigate an impact of CSR disclosure on the financial
performance of firms in India.

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As per the guidelines of company act
2013 it is mandatory for the companies whose net worth is more than 500 crore
rupees or annual turnover more than 1000 crore rupees to invest 2% of their
profit of last three financial years. This practice helps to enhance the public
interest to invest in these companies. As for the future aspect, CSR practices
enhance company credibility and performance. These activities help companies to
borrow money from the public for the purpose of investment and expansion of
business.

 

CSR practices by corporations reduce the
government burden to allocation of fund for various activities like slum area
development, scholarships to students, environment protection and other social
activities. This practice helps the government to invest these savings in other
productive activities.

This study demonstrates the relationship
between companies CSR disclosure and financial performance of the Indian companies
listed on national stock exchange of India.

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