CSR REPORTING AND COMPLIANCE

A PROJECT REPORT ON

CSR Reporting and Compliance

SUBMITTED BY
MR. ABHISHEK NANDALAL MISHRA
ROLL NO: 166030
M.Com. SEM- IV
(ADVANCE ACCOUNTANCY)
ACADEMIC YEAR: 2016-17

Under the guidance of PROJECT GUIDE

PROF. VINAY GUDI

SUBMITTED TO UNIVERSITY OF MUMBAI

MULUND COLLEGE OF COMMERCE
S N ROAD, MULUND (WEST)
MUMBAI 400080

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 CSR REPORTING AND COMPLIANCE

Declaration from the Student

I, ABHISHEK NANDALAL MISHRA R. No. 166030 Student of Mulund College Of

Commerce, S. N. Road, Mulund (West) 400080, studying in M.Com Part- II hereby declare

that I have completed the project on CSR REPORTING AND COMPLIANCE under the

guidance of project guide Prof. VINAY GUDI during the academic year 2016-17. The

information submitted is true to the best of my knowledge.

Date: Signature

Place:

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 CSR REPORTING AND COMPLIANCE

CERTIFICATE

I, Prof. VINAY GUDI, hereby certify that MR. ABHISHEK NANDALAL MISHRA

R.No. 166030 of Mulund College of Commerce, S. N. Road, Mulund (West), Mumbai

-400080 of M.com Part II (Advanced Accountancy) has completed her project on CSR

REPORTING AND COMPLIANCE during the academic year 2016-17. The information

submitted is true and original to the best of my knowledge.

____________________ ___________________

Project Guide External guide

_________________

____ ___________________

Co-coordinator Principal

Date:

ACKNOWLEDGEMENT

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 CSR REPORTING AND COMPLIANCE

I would like to express my sincere gratitude to Principal of Mulund College of

Commerce DR. (Mrs.) Parvathi Venkatesh, Course - Coordinator Prof. Rane and our

project guide Prof. VINAY GUDI, for providing me an opportunity to do my project

work on CSR REPORTING AND COMPLIANCE. I also wish to express my sincere

gratitude to the non - teaching staff of our college. I sincerely thank to all of them

in helping me to carrying out this project work. Last but not the least, I wish to avail

myself of this opportunity, to express a sense of gratitude and love to my friends and

my beloved parents for their mutual support, strength, help and for everything.

PLACE: Signature

DATE:

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 CSR REPORTING AND COMPLIANCE

INDEX

ABSTRACT...............................................................................................................................6

OBJECTIVE OF STUDY..........................................................................................................7

DATA SAMPLE.........................................................................................................................8

WHAT IS CORPORATE SOCIAL RESPONSIBILITY?.........................................................9

WHAT IS CSR REPORTING?................................................................................................11

ANALYSIS AND RESULT.....................................................................................................12

ANALYTICS............................................................................................................................15

CONCLUSION........................................................................................................................19

REFERENCES.........................................................................................................................20

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 CSR REPORTING AND COMPLIANCE

ABSTRACT

Section 135 of the Companies Act, 2013 mandates every company above a certain threshold
to formulate a Corporate Social Responsibility (CSR) Policy, and to ensure that the company
spends at least 2% of its average net profits made during the preceding three financial years,
on CSR activities.

This study focuses on identifying the initiatives taken by 10 companies around different
sector to fulfil the above mentioned mandate. Companies undertake many types of CSR and
sustainability activities in respect to this amendment. It is difficult to comprehend easily the
breadth and scope of their work. The study uses a measure called the Spread, which is
indicative of how broad-based the CSR and sustainability activities of a company are and is a
combined score of the four criteria shown below.

1. Governance
2. Disclosure
3. Stakeholders
4. Sustainability

This study also ascertains the actual spending on the CSR activity and its relation with the
Promotion and advertisement activities of the organisation, as CSR itself is a self-publicity
activity. Thus the study identifies that the companies are actually spending on Sustainability,
rather than diverging their promotional activities towards implementation of CSR.

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 CSR REPORTING AND COMPLIANCE

OBJECTIVE OF STUDY

The objective of study is broadly classified under two groups:

ASCERTAINMENT AND RATING

Companies are ranked based on their focus on sustainability and CSR for the current financial
year 2015-16 by creating a combined score that weighs each of the four criteria. The scores
have been arrived at by evaluating each companys sustainability reports, annual report and
website contents.

The criteria include:

1. Governance (20%) How well is the governance for CSR and sustainability
structured?
2. Disclosure (15%) How forthcoming are companies with respect to CSR and
sustainability
3. Stakeholders (30%) How well are key stakeholders (employees, community,
customers and suppliers) integrated within a companys CSR framework?
4. Sustainability (35%) How pervasive are sustainability practices of companies?

ANALYTICS

The spending of the organization is analysed and marked against the Promotion and Publicity
expenses to mark a relation between them for the past 5 Financial years.

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 CSR REPORTING AND COMPLIANCE

DATA SAMPLE

The study is based on data on sustainability and CSR drawn from sustainability reports,
business responsibility reports, CSR annual reports, company annual reports and company
websites. All the data pertains to financial year ranged between 2011-12 to 2015-2016.

Study data consists of data from 10 companies. Top 2 companies from various sectors are
selected details of which are below:

SECTOR COMPANY
Tobacco ITC
Tobacco Godfrey Philip
FMCG Nestle India
FMCG Dabur
Healthcare Fortis Ltd.
Healthcare Cipla Ltd
Oil Indian Oil
Oil Hindustan Petroleum Corporation
Banking HDFC
Banking ICICI

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 CSR REPORTING AND COMPLIANCE

WHAT IS CORPORATE SOCIAL RESPONSIBILITY?

Corporate social responsibility (CSR) refers to business practices involving initiatives that
benefit society. A business's CSR can encompass a wide variety of tactics, from giving away
a portion of a company's proceeds to charity, to implementing "greener" business operations.

There are a few broad categories of social responsibility that many of today's businesses are
practicing:
1. Environmental efforts: One primary focus of corporate social responsibility is the
environment. Businesses regardless of size have a large carbon footprint. Any steps
they can take to reduce those footprints are considered both good for the company and
society as a whole.
2. Philanthropy: Businesses also practice social responsibility by donating to national
and local charities. Businesses have a lot of resources that can benefit charities and
local community programs.
3. Ethical labour practices: By treating employees fairly and ethically, companies can
also demonstrate their corporate social responsibility. This is especially true of
businesses that operate in international locations with labor laws that differ from those
in the United States.
4. Volunteering: Attending volunteer events says a lot about a company's sincerity. By
doing good deeds without expecting anything in return, companies are able to express
their concern for specific issues and support for certain organizations.

WHY CSR MATTERS

Liz Maw, CEO of nonprofit organization Net Impact, noted that CSR is becoming more
mainstream as forward-thinking companies embed sustainability into the core of their
business operations to create shared value for business and society.
As consumers' awareness about global social issues continues to grow, so does the
importance these customers place on CSR when choosing where to shop. But consumers
aren't the only ones who are drawn to businesses that give back. Susan Cooney, founder of
crowdfunding philanthropy platform Givelocity, said that a company's CSR strategy is a big
factor in where today's top talent chooses to work

EXAMPLES OF CORPORATE SOCIAL RESPONSIBILITY

While many companies now practice some form of social responsibility, some are making it a
core of their operations. Ben and Jerry's, for instance, uses only fair trade ingredients and has
developed a sustainability program for dairy farms in its home state of Vermont. Starbucks
has created its C.A.F.E. Practices guidelines, which are designed to ensure the company
sources sustainably grown and processed coffee by evaluating the economic, social and
environmental aspects of coffee production. Tom's Shoes, another notable example of a

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 CSR REPORTING AND COMPLIANCE

company with CSR at its core, donates one pair of shoes to a child in need for every pair a
customer purchases.

However, Stevens said companies need to really understand what their core social purpose is
and how that aligns with their stated mission, to create a cohesive CSR strategy.

For example, Stevens said that Kashi, a Kellogg's brand, wants to increase organic farming
and is one of the few certified organic cereals. Since only 1 percent of U.S. farmland is
actually organic, the breakfast brand worked with Quality Insurance International to help
certify new organic farmers across the nation.

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 CSR REPORTING AND COMPLIANCE

WHAT IS CSR REPORTING?

The concept of CSR reporting (CSR means corporate social responsibility ) is almost as
flexible as the concept of CSR itself. Just like every company can define to itself what CSR
means, it can also choose how to communicate its CSR progress in whatever way it finds
suitable. On one hand this lack of uniformity can be pretty exhausting and sometimes even
irritating just think what would have happened if every company decided independently
how to report its financial results. On the other hand, this level of flexibility enables
companies to be creative and come up with a report that has some sort of personality,
reflecting the vision, values and personality of the company.

Take 3M for example. The company, which published its first corporate environmental report
back in 1993, stays ahead of the curve, adopting new measures before almost everyone else,
whether its a release of a fully integrated electronic report (2002) or publishing externally
verified one (2003). Another example is Philips, which is using its report to emphasize the
changes the companies is going through, its R&D capabilities, the importance it gives to
stakeholder engagement and also how it provides an example of the business case for
sustainability.

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 CSR REPORTING AND COMPLIANCE

ANALYSIS AND RESULT

The study focuses on four main criteria, Governance, Disclosure, Stakeholders and
Sustainability. These four criteria are assigned weights of:

Criteria Weight
Governance 20%
Disclosure 15%
Sustainability 35%
Stakeholders 30%

Total score = (Governance * 20%) + (Disclosure * 15%) + (Sustainability * 35%) +

(Stakeholders * 30%)

GOVERNANCE

Company Governance
ITC 98
Godfrey Philip 92
Nestle India 91
Dabur 96
Fortis LTD 91
Cipla LTD 96
Indian Oil 94
Hindustan Petroleum Corporation 93
HDFC 95
ICICI 97

DISCLOSURE

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 CSR REPORTING AND COMPLIANCE

Company Disclosure
ITC 98
Godfrey Philip 95
Nestle India 98
Dabur 95
Fortis LTD 92
Cipla LTD 97
Indian Oil 96
Hindustan Petroleum Corporation 96
HDFC 94
ICICI 96

SUSTAINABILITY
Company Sustainability
ITC 99
Godfrey Philip 98
Nestle India 96
Dabur 96
Fortis LTD 95
Cipla LTD 98
Indian Oil 95
Hindustan Petroleum Corporation 93
HDFC 96
ICICI 94

STAKEHOLDERS
Company Stakeholders
ITC 97
Godfrey Philip 97
Nestle India 95
Dabur 97
Fortis LTD 94
Cipla LTD 95
Indian Oil 97
Hindustan Petroleum Corporation 97
HDFC 95
ICICI 98

TOTAL SCORE

Company Total

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 CSR REPORTING AND COMPLIANCE

ITC 98.05
Godfrey Philip 96.05
Nestle India 95
Dabur 96.15
Fortis LTD 93.45
Cipla LTD 96.55
Indian Oil 95.55
Hindustan Petroleum Corporation 94.65
HDFC 95.2
ICICI 96.1

Thus we can see that ITC Group Ranks at the top with a total score of 98.05 due to its
yearlong CSR activities, independent CSR Committee and proper disclosure.

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 CSR REPORTING AND COMPLIANCE

ANALYTICS

The study takes into consideration the last 5 years spending of the above Organisation on
Advertisement and publicity and bench marks it with the CSR spendings.

Company CSR Expenses (in Crores)

2011- 2012- 2013- 2014- 2015-
12 13 14 15 16
ITC 0.00 82.34
106.63 214.06 247.50
Godfrey Philip 0.00 0.00 0.00 5.00 4.96
Nestle India 0.00 0.00 23.91 15.35 20.61
Dabur 0.00 16.43 20.63 14.71 17.44
Fortis LTD 0.00 0.00 0.00 0.01 3.05
Cipla LTD 0.00 0.00 0.00 13.43 20.66
Indian Oil 78.47 82.88 83.97
117.13 159.62
Hindustan Petroleum 0.00 0.00 23.74 34.07 71.76
Corporation
HDFC 0.00 0.00 0.00
118.55 194.81
ICICI 0.00 0.00 0.00
156.00 171.53

CSR EXPENSES
300.00
250.00
200.00
150.00
100.00
50.00
0.00

2011-12 2012-13 2013-14 2014-15 2015-16

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CSR REPORTING AND COMPLIANCE

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 CSR REPORTING AND COMPLIANCE

Advertising Expenses
Company 2011- 2012- 2013-
2014-15 2015-16
12 13 14

ITC 754.98 871.27
710.09 806.65 795.89

Godfrey Philip 316.14 239.12
274.10 286.61 297.31

Nestle India 445.47 525.21
327.61 355.88 395.48

Dabur
659.50 837.00 999.70 1,124.40 1,242.70

Fortis LTD 163.89 166.44
63.84 90.09 132.37

Cipla LTD 309.67 390.69
139.18 177.74 199.62

Indian Oil 697.20 757.41
494.19 622.94 719.83
Hindustan Petroleum
109.91 148.23
Corporation 82.45 91.91 130.30

HDFC 187.47 248.39
152.48 184.13 143.56

ICICI 161.62 210.97
132.48 189.16 183.40

Advertisment Expenses
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
0.00

2011-12 2012-13 2013-14 2014-15 2015-16

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 CSR REPORTING AND COMPLIANCE

ITC Group
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16
Advertising Expenses CSR Expenses

Godfrey Philip
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Advertising Expenses CSR Expenses

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 CSR REPORTING AND COMPLIANCE

Nestle India
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Advertising Expenses CSR Expenses

Dabur
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Advertising Expenses CSR Expenses

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 CSR REPORTING AND COMPLIANCE

Dabur
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Advertising Expenses CSR Expenses

Cipla LTD
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Advertising Expenses CSR Expenses

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 CSR REPORTING AND COMPLIANCE

Indian Oil
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Advertising Expenses CSR Expenses

CONCLUSION

Thus we can say that all the organisation in picture are working towards following the
mandate under the CSR policy guidelines of Companies Act, 2013.

In respect to the usage of the companies CSR budget with respect to the Advertising Budget,
there is no clear picture so as to whether the spending on CSR is tackling with the publicity
expenses due to lack of data at this stage but can be a study for future analysis.

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 CSR REPORTING AND COMPLIANCE

REFERENCES

Annual Reports from the Company Websites.

Sustainability Reports from Company Website.

Indias Top Companies for Sustainability and CSR 2016, IIM Udaipur.

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