Crafting Sustained Social Transformation in India

Education
www.technopak.com
Januar y, 2014

Corporate Social Responsibility

Enayet Kabir, Vice President, Technopak Advisors

About the Outlook

The tradition of businesses contributing to society is a deep-rooted one in India, more so than in the western world. With the advent of modern management ideology and an increasing awareness of, and activism about, environmental and social issues, there is a renewed focus on corporate social responsibility (CSR). In the past few years, this discourse on CSR has reached somewhat of a crescendo with the most powerful business elites across the globe supporting the causes of environment, education, and healthcare. In India, inclusiveness has been a dominant agenda that has shaped government policies, besides influencing the sociopolitical landscape. The new Companies Act, 2013, is a reflection of the sentiment prevailing in our country. There is little disputing that business and society need to cohabit, or that businesses need to give back to the society in order to further their own long-term interests. Businesses need to identify areas that deserve the most attention and make the most optimal use of resources in that direction, in order to achieve maximum impact. CSR should not be an auxiliary activity that companies take up in good times; instead, it should become an integral part of their long-term strategy.

Education Division Services

Business Strategy Assisting in developing value-creating strategies based on consumer insights, competition mapping, and international benchmarking Entry Strategy Organic and Inorganic Growth Strategy Financial and Operational Modeling Marketing Strategy Innovation Strategy Implementation Leveraging operations and industry expertise to commission the concept on a turnkey basis Project Management and Program Coordination Support for setting up Infrastructure Product Conceptualization and Development Support in Hiring Leadership Team Partnerships Identifying and creating national and international partnerships across segments of Education Partnership Structuring Due Diligence of Partners Negotiations for JVs and Management Contracts Capital Advisory Supporting business strategy and execution with comprehensive capital advisory services Due Diligence -Business Fundraising Impact Assessment Assessing and Auditing running programs Assessment of Schemes and Policies Audit of Projects Advisory on course to meet objectives

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INTrODUcTiON

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CSR iN EDUcATiON

03 04

DEFiNiTiON OF CSR

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HOW TEcHNOPAK cAN HELP iN CSR

INTEGrATiNG sOciETY AND BUsiNEss THrOUGH CSR

RELEVANT EXcErPTs FrOM THE COMPANiEs AcT, 2013

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09

SPEND ON CSR BY INDiAN COMPANiEs

ABOUT TEcHNOPAK

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Authors: Enayet Kabir | Vice President Aurobindo Saxena | Associate Director Aditi Pandey| Associate Consultant Design & Development: Arvind Sundriyal | Assistant Manager-Design

Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

Introduction

The discourse on sustainability, in India as well as the rest of the world, is not a new phenomenon. However, this discourse is only becoming more intense with each passing year. Rising concerns about environmental degradation, income inequalities, corporate malpractices, and crony capitalism have raised questions about the interrelationships between businesses and society at large. In the West, there is an unprecedented strengthening of the view that the sustainability of businesses is a primary question that every business must address. In India, the debate has resulted in a change in the legislative framework and will potentially change the way businesses contribute to society. The intensified CSR efforts in the West can be broadly classified into decadal phases, as under:
Exhibit 1

Development of CSR across the Decades

Awareness

Exploration

Building Business Case for CSR

Global Outreach 1

Corporate Ethics

Global Outreach 2

1960s

1970s

1980s

1990s

2000s

2010s

Source: The Business Case for Corporate Social Responsibility: A Review of Concepts, Research, and Practice, Archie B. Carroll and Kareem M. Shabana; Technopak Analysis

In the West, the concepts of sustainability and CSR were not a dominant narrative in the business world prior to the 1950s. During the 1960s, several sociocultural movements erupted in the United States. That decade of change ushered the thoughts of sustainability and CSR into the business and academic worlds. Deeper exploration and enquiry over the next three decades saw the idea of CSR became a global theme in business and academia by the 1990s. In the early 2000s, the business world was preoccupied with a string of scandals and CSR as a theme was overshadowed by concerns about business ethics. In recent years, around 2010, there was a revival of sustainability and philanthropy initiatives backed by western business elites, most notably by Warren Buffett and Bill Gates. Such efforts have generated a renewed awareness of CSR. 1

In the Indian context, CSR has been a part of our social fabric for a long time, whether in the form of building places of religious significance or night shelters for poor, or giving alms to the economically and socially disadvantaged. All the major religions mandated that a part of an individuals income was to be contributed towards social welfare. However, as society evolved and businesses emerged, such contributions took different routes. Exhibit 2 below elaborates on the historical variation in CSR activities.
Exhibit 2

Evolution of CSR in India

Religious Charity and Philanthropy

Socioeconomic Inclusion

Equitable access for all; Laws relating to labor

Debate on Sustainable Business Strategy

Regulated CSR

East India Companys DominanceRuling Dynasties- till till Independence Post-Independenceearly corporatization till late 1980s
Source: Technopak Analysis

Passing of Companies Act, 2013 Opening of Indian Economytill the present

In pre-colonial India, it was largely as an offshoot of culture or religion that Indians performed works of charity. However, with the British Raj slowly bringing about corporatization, the onus shifted to ensuring inclusivity in society. In tandem with Gandhian ideas about the responsibility of businesses towards society, corporate entities of the times committed themselves financially and otherwise. For instance, Jamsetji Tata, the founder of the Tata Group, became a pioneer in the field by setting up the JN Tata Endowment Scheme, for higher education, in 1892. The scheme would later be awarded to such luminaries as former president K.R. Narayanan; one of Indias pioneering women gynecologists, Dr. Freney Cama; and the scientist Raja Ramanna. Following Indias Independence, over nearly three decades, the public sector enterprises gained dominance across various industries. Socialist principles were in currency, and matters like labor activism and distribution of wealth prominent. This was also the time when, broadly speaking, CSR was recognized, and reflected, in the awareness of environmental degradation and sustainability. The next paradigm shift came with the economic reforms thanks to which liberalization, privatization, and globalization became the hallmarks of Indias economy. Another consequence was the transition of CSR efforts towards the adoption of such strategies as might render business sustainable. This marked the beginning of an intense debate on CSR, punctuated by events like the release of CIIs Voluntary Code of Corporate Governance in 1998, the Satyam scandal in 2009, etc. The Companies Act, 2013, signals the start of a new chapter in the history of CSR in India. It is hoped that the effective implementation of this Act will enable a number of companies to work towards CSR, with focus on long-term goals.

Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

Definition of CSR

While it is generally accepted that CSR is vital and growing further in its significance for businesses, there is still a variance in how it is understood, and in how such activities are termed. Many choose to call it CSR, but such nomenclature as Corporate Citizenship, Business Sustainability, and Corporate Responsibility are also prevalent. In terms of the activities themselves, however, there is much uniformity in the essence and direction thereof, with companies now vying on such fronts as governance, philanthropic initiatives, support for human rights and cultures, and promotion of fair trade.

Integrating Society and Business Through CSR

Despite a history of giving back to society, businesses in India have at best made only capricious and sporadic contributions to society. In the past decade or so, the inclusivity and distribution of the gains made through globalization and economic reforms have dominated the sociopolitical discourse in India. There is a general view that India cannot continue to grow and will break apart as a nation unless the poorer, and larger, section of society is given opportunities in terms of education, healthcare, and other key services. Often, justifications for CSR are built upon the social tension that might arise from an absence thereof. It is often ignored that the monies spent on CSR activities would help alleviate poverty via the provision of education and skill development. The beneficiaries of such programs may in turn add to the economic activities of society, and raise the demand for products and services produced by the sponsor companies. Evidence suggests that there are a number of business benefits as well for organizations engaged in CSR with a long-term commitment.

A Business Case for CSR

Traditionally, businesses were largely considered avenues for maximizing profits, or shareholders value. However, the focus has now shifted to the sustainable, in-tandem development of businesses and the economy, thus embracing the symbiosis among stakeholders. Within the business ecosystem, various stakeholders coexist, pursuing activities for the greater good of society as well as businesses. Exhibit 3 below enumerates the stakeholders in the business ecosystem and their interdependence.
Exhibit 3

Technopak Stakeholder Model

Contribute to maximize business returns Provide the right enablers

Investors Employees Business Partners

Shareholders

Business

Customers and Consumers Government and Economy Society and Environment

Businesses provide ROI to investors; incentives, compensations, and benets to employees; and higher prots and added benets to partners
Source: Technopak Analysis

Businesses are held accountable to stakeholders in order to qualify for getting enablers

Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

Taking cognizance of this symbiotic relationship, sustainability or CSR has now become an integral part of the strategic plans of companies worldwide. It is seen as a key driver for success, as it not only contributes to the environment and society, but also to corporations bottom lines. Thus, sustainability, far from being another frontier for forward-thinking companies, has now become a necessity, and hence the need for careful strategizing, planning, and implementation, in order to garner maximum benefits.

Developing a CSR Implementation Framework

Given todays aggressive competition, it becomes imperative for organizations to pursue sustainability or CSR with a long-term commitment. Forward-thinking organizations are finding ways to instill sustainability into their DNA, in order to realize their full potential. A top-down approach, with a defined sustainability framework, needs to be in place to be able to move towards sustainability. Exhibit 4 elaborates on the framework needed to guide and aid the implementation of sustainability and/or CSR initiatives.
Exhibit 4

Top-down Approach for CSR

Dene CSR Goals Senior Management Outline CSR Strategy Prepare CSR Plan at Operational and Process Level Middle Management Dene Key Performance Indicators Follow Focused Approach, with dened Resources and Responsibility Executive

Source: Technopak Analysis

CSR demands a long-term commitment from the organization and therefore, has to be guided by the organizations leaders. It becomes an annual exercise in order to plan and strategize for not just the coming year but the following five years, as is done for a business unit or a business line. Thus, the leadership team, as discussed in Exhibit 4 above, defines CSR goals and strategy in line with the businesss goals. A CSR plan is then prepared, at the operational level, by the middle management, resources are allocated, and key performance indicators defined, discussed, and documented. CSR Implementation follows a structured approach by engaging with human resources at all levels within the organization. The implementation is characterized by following a Strategize-Implement-Review-Realign cycle, with various tasks and outcomes at each step, as shown in Exhibit 5. 5

Exhibit 5

Technopak CSR Implementation Framework

CSR Goals Strategy Approach Measurable Metric Dene Operating Model
ize eg

Im pl

Plan and Execute Project Muster Resources

ent em

Str at

n lig

Evaluate Ecacy of Processes Monitor KPIs

Re v

Correct and Realign Course

Source: Technopak Analysis

Implementing this framework requires the organization to put in place measurable goals, alongside the right strategy, focused approach, defined process changes, delegated responsibilities, and a monitoring and course correction mechanism. Thus, developing a comprehensive yet focused CSR strategy becomes a significant stepping stone to successful CSR implementation.

Developing a CSR Strategy

Developing a CSR strategy is an iterative process which requires a collaborative effort from various stakeholders within the organization with a focused approach from the top. A hands-on understanding of organizational values and of the purpose for which the organization exists is crucial for developing a CSR strategy. This is followed by a demographic and socioeconomic assessment of the society and the unfulfilled needs of its inhabitants. The step-by-step process of developing a CSR strategy is shown in Exhibit 6 below.
Exhibit 6

Technopak CSR Strategy Development Framework

Assess Society Demographic Assessment Socioeconomic Assessment and need -gap analysis in such areas as Education, Healthcare, Skill Development Geographic Assessment to bring synergy with business Dene Quantum and Channels of Investment Annual Quantum of Investment Frequency of outow (monthly, quarterly, etc.) Channels including Cash outow, Capacity building, Buying land Select Implementation Model Third Party Partnership with other stakeholders Foundation Hybrid Dene Operational Plan with KPIs Dene resources Allocated Dene processes with desired outcomes Dene metrics/ KPIs Impact assessment

Assess Business Context Organizations Purpose Long-term Business Strategy Core Competencies

Source: Technopak Analysis

Exhibit 7

CSR Implementation Models

Implementation Models Strategic partnership with the chosen NGO. Finalize intended area of contribution and provide investment plan with desired outcomes and key milestones. Also, define KPIs and conduct impact assessment Various stakeholders including suppliers, business partners, customer organizations, and competitors come together to contribute for a social cause either by partnering with a third party or by setting up a foundation A non-profit entity is formulated by the parent company to provide funds or grants and serve the community in diverse areas including education, healthcare, skill development, womens empowerment, and environmental sustainability A combination of two or more of the above models

Third Party Partnership with other Stakeholders Foundation Hybrid

Source: Technopak Analysis

iew

Re a

Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

Corporate Sustainability Reporting Standards

Sustainability reporting and communication has gained enormous significance in the past few years, with organizations across the world establishing diverse social, economic, and sustainability footprints. For organizations to be accountable for their CSR performance and benchmark against the best practices in order to identify new avenues for intervention and improvement, it becomes critical to have auditable reports in place. Thus, a number of corporate sustainability reporting standards have been developed and accepted globally. Some of these are discussed in Exhibit 8.
Exhibit 8

Corporate Sustainability Standards

Particulars Founded in 1997, it provides a sustainability framework or a reporting system with measurable metrics Founded in 1995, AccountAbility provides principles-based standards for organizations to be more accountable, responsible, and sustainable ISO 26000 provides guidance for organizations to act in a socially responsible manner. However it cannot be certified, unlike other ISO standards Elements to be Included in Report Economic, environmental, and social (including labor practices), decent work, human rights, society, and product responsibility Governance, business model, organizational strategy, sustainability assurance, and stakeholder management Organizational governance, human rights, labor practices, environment, fair operating practices, consumer issues, community involvement, and development

Reporting Standard Global Reporting Initiative

AccountAbilitys AA1000

ISO 26000
Source: Technopak Analysis

Business Benefits of CSR

While establishing a strong correlation between the effective implementation of CSR and actual business outcomes may be difficult due to the myriad variables at play, a large body of examples helps us conclude that CSR yields benefits for business on multiple fronts, including: Improved Reputation Companies committed to CSR are often able to evoke a greater sense of trust, reliability, and quality than companies without a record for such activities. These factors are crucial when engaging with both the customer as well as the larger ecosystem. A leading example in India, the Tata Group has, through its consistent and long term CSR approach, become synonymous with responsible business. Various awards and recognition by various think tanks and the media help companies build and propagate a positive perception about themselves that holds them in good stead over the longer term.

Improved Enabling Conditions Companies that focus on integrating business with society often end up creating improved conditions for conducting their own business. As an illustration, a manpower-intensive company investing in training youth in order to make them employement-ready not only creates an employable pool of youth, it can also utilize talent from this same pool to augment its own workforce. Similarly, if a company uses better technology to reduce emissions, it may not only be avoiding pressure from regulators and activists but may also be championing the cause of the industry. Improved Engagement with the Community CSR can be a potent tool in the hands of businesses wishing to engage with society and understand todays multidimensional and fast-evolving customer. CSR projects can offer opportunities to understand societal trends, aspirations, and challenges; this may not be possible through regular business transactions. The insights from CSR can become inputs for innovation and competitive strategy. CSR as an Engine for Growth CSR projects may not necessarily be cost centers for companies. There are plenty of examples that suggest the scalability and sustainability of CSR projects. Social entrepreneurship has been in the limelight and been encouraged by corporate India to create not only a social impact but also provide long-term value. Several companies in India, for example, took up educational initiatives through CSR and can see long-term, sustainable value creation. Improved License to Operate Responsible corporate citizenship, as reflected through engagement with the society and delivering a social impact, leads to improved stakeholder management. This in turn may result in more enduring and robust social capital. In a country like India where there are severe resource crunches on many fronts, social capital, or the license to operate, can be a key long-term survival strategy. Better Access to Capital There is an emerging yet unmistakable trend that investors are increasingly using social and environmental filters to assess the potential of a business. A business plan that incorporates a CSR approach is not only seen as being more sustainable but also reflects the maturity and vision of the management.

CSR Index
The Corporate Social Responsibility Index has been developed as a reference point for investors to judge and compare the social and environmental footprints of organizations and thereby gauge their overall accountability. It is an endeavor by various stock exchanges and business leaders around the world to define a standard tool to measure, monitor, and benchmark the impact of businesses on the economy, the environment, and society. Such indices help companies in the following way: Identify: the gap for improvement and reinforce good practice Track: progress over time and drive continuous improvement Benchmark: scale against peers and best practices Engage: board members and raise awareness internally In the US, Dow Jones made the pioneering effort and published a Sustainability Index in 1999. Dow Jones was followed by several stock exchanges and other institutions like the London Stock Exchange, the Calvert Social Index, and the KLD Global Sustainability Index. In India, the Indian Institute of Corporate Affairs (IICA) is developing the CSR Index in collaboration with the BSE, the leading stock exchange, to provide a cumulative ranking on the basis of a number of factors including the efforts and spending on social welfare schemes, the impact of the schemes taken together, and the companys economic performance in that fiscal year. However, the index will not be taking into account the sector in which the company functions.

Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

Spend on CSR by Indian Companies

The Companies Act, 2013, however, mandates that organizations spend at least 2% of their net profits on CSR activities, according to the draft rules released by the Ministry of Corporate Affairs. A special tax treatment for spending on CSR is also anticipated, which may be in accordance with the Income Tax Act, 1961. This is suggested by the draft rules; however, a clear guideline will only be available following the notification by the Central Board of Direct Taxes (CBDT). The Companies Act, 2013, is likely to drive a total annual spending on CSR in the range of USD 3-5 billion. This will mean enormous pressure for the existing three million NGOs, of which many face credibility issues. Thus, in order to tackle the humongous task at hand, the availability of skilled talent in the social sector is one of the major concerns that need to be addressed. However, several Indian and multinational companies operating in India have done a stellar job with respect to CSR over the years. With the new Companies Act, it is hoped that other companies will follow these examples. Leading CSR initiatives in education and skill development, undertaken in the Indian scenario, include:

Exhibit 9

Leading CSR Initiatives in Education

Segment Objective Helping illiterate adults learn the 3Rs of the language, viz. reading, writing, and arithmetic Initiative TCS developed a multimedia e-learning software package, Computer-based Functional Literacy (CBFL) Impact Has helped 175,000 adult literates. Also raised social awareness on literacy

Organization

Adult Literacy

Children with Learning Disabilities

Tata Group

Tata Interactive Systems (TIS) funded and Enabling children with learn- strengthened infrastructure ing disorders (LD) to get a of LTMG Hospital in rightful place in the education Mumbai. Established Tata system Learning Disability Forum (TLDF) for creating awareness about LD Tata Steel conceived the education excellence program (TEEP), based on the Baldrige Education Excellence Model, which was benchmarked against the frameworks in US, Europe, Japan, and Australia Taj has set up training centers in partnership with NGOs and ITIs to take up various roles in the hospitality industry Operates 5 computer centers providing training to underprivileged youth Trained women in such skills as tailoring and soft toy making, goat-herding, piggery, and mushroom cultivation for income generation

LD was made a part of the MBBS curriculum in Mumbai University. Brain Teasers, a remedial activity handbook, and various educational techniques were developed

Excellence in School Education

Improving the quality of education; creating a culture of excellence; and nurturing the citizens of tomorrow

The 40 schools which have benefitted cover 2,500 teachers and 100,000 students from the ICSE, CBSE, and other boards

Providing training in hotel Skill-based Training industry processes to underprivileged youth Providing employment-related computer training

3,000 students have been trained and provided employment

Computer Literacy

Trained more than 1,400 students

ONGC Skill Development for Women Providing livelihood opportunities to women

Provided livelihood opportunities for 400 households

Azim Premji University: started with a mission to impart higher education for the betterment of the lives of the disadvantaged in India Teacher Education: imparted training to over 50,000 government school teachers across 8 states Wipro Education Leadership and Management: developed 3,500 educational functionaries in the state of Karnataka by developing subject matter knowledge, competencies, and increasing motivation levels Accelerated Learning Program: 33% improvement in language learning for 56,000 children Reformed the examination system for Classes 1 to 8 across Uttarakhand Developed childrens workbooks for all 78,000 schools of Rajasthan, which was then adapted by Haryana for their government schools Vidya Gyan: K-12 schools enrolling 1,400 students annually in rural areas, in a campus measuring 64 acres HCL Shiv Nadar School: provides education to 960 students annually in a 11-acre campus Shiv Nadar University: imparts higher education to 5,500 students in two campuses of 288 and 228 acres, respectively School and Teacher Education reform in Rajasthan: developed syllabus and reading material, formed educators group and provided training to teachers, supported 100 schools in becoming RTE-compliant, made a pool of state-level trained resources to further provide training for schools in 33 districts Developed textbooks and curriculums for schools in Chhattisgarh, benefitting 4 million studentsCreated the Chhattisgarh Education Resource Center, supporting government institutions in strengthening the quality of elementary education in the state English language training project benefitted 100 elementary schools covering 14,000 students in Assam Provided vocational training programs in Rajasthan encompassing entrepreneurship, beautician training, mobile phone repairing, tailoring, cattle breeding, and vermicomposting Also working to put in place a mechanism for facilitating job placements through industry linkages, support structures for individuals starting their own ventures, and regular follow-ups for people who have completed training
Source: Technopak Analysis

ICICI

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Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

CSR in Education

India suffers from deficits across many fronts including education, healthcare, water, energy, food, land, housing, sanitation, waste management, transport system, etc. As a nation, we most urgently need to overcome all these deficits, as they come in the way of Indias economic growth and prosperity. However, perhaps none of these is as critical as the deficit in education. India has the worlds largest population in the age bracket 5 to 24 years of about 450 million. It also has around 500 million in the 25 to 59 age bracket which constitutes the working population and is expected to continuously increase even as the worlds working population ages and diminishes. This phenomenon should potentially make India a supplier of workforce to the entire world. In the wake of this reality, the Indian education system should therefore be able to produce a workforce which is globally competitive and thus reap its demographic dividend. Exhibit 10 below provides an overview of the current scenario in India as regards the available educational infrastructure and the extant need-gap.
Exhibit 10

Indian Education Infrastructure

Schools (K-12): 1.4 mn Colleges: 35,539 Universities: 700 Government: ~11,000 Private: 25,000 Vocational Training Centers: ~20,000 Government ITIs: 2,271 Polytechnics: 8,350 Private ITIs and Institutions: 9,673

Government:1.1 mn

Private: 0.3 mn

No. of Students: 229 mn Annual Intake: 15 mn Additional Requirement: 100,000 Schools Additional Capacity Required: 100 mn Additional Requirement for Teachers: 4 mn Additional Resources USD 150 bn
Source: Technopak Analysis

No. of Students: 20 mn Annual Intake: 5 mn Additional Requirement Colleges: 35,000, Universities: 700 Additional Capacity Required: 20 mn Additional Requirement for Faculty: 1.7 mn Additional Resources: USD 200 bn

No. of Students: 4.5 mn Annual Intake: 3 mn Additional Capacity Required: 20 mn Additional Requirement for Trainers: 1 mn Additional Resources: USD 100 bn

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Filling this need-gap will require a staggering investment of USD 450 billion (i.e. ~75 billion p.a.), as against the current annual investment of USD 50 billion, including both governmental and private sources of investment. Again, it is evident that all the segments face a huge deficit; this is outlined below. Primary Education: While enrolment numbers and literacy levels have gone up, quality issues still plague our schooling system. As per the ASER report, 2013, more than half the children enrolled in primary schools cannot read age-appropriate texts. If there is no intervention to improve the outcome in our primary schools, these children will become stunted at the very start of their career. Within primary education, the possible areas of intervention may include the following: Building up capacity Creating/augmenting school infrastructure Focusing on nutrition and overall health of children while at school Training and enabling teachers Optimizing learning through technology Improving content and pedagogy Higher Education: While the number of graduates and institutes of higher education has gone up, large numbers of graduates from the higher education system are not employable, again due to quality issues. Thus, we are in dire need of high quality and research-focused higher education institutions. Vocational Education and Training: India currently faces a huge challenge in terms of vocational training capacity. Most of this capacity will be required to train youth at the basic level. Investment in vocational training through CSR can be an important strategy for ensuring a steady supply of industry-ready workforce. Exhibit 11 below shows the possible areas of intervention with an indication of the factors that aid decision making.
Exhibit 11

Possible Areas of Intervention in Education

Investment Asset Light vs. Heavy Regulation Results: Immediate vs. delayed Social Impact

Possible Areas of Intervention Setting up a K-12 School After School Programs Higher Education Vocational Education and Training Ancillary Services Teacher Training Professional Development/ Training Food and Meals Curriculum Development Augmenting School Infrastructure Uniform Transport Services
Source: Technopak Analysis

Low

Medium

High

Very High

The above categorization is indicative of the typical trends witnessed in the respective segments and may vary depending on the needs of an organization.

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Outlook January, 2014 | Corporate Social Responsibility: Crafting Sustained Social Transformation in India

How Technopak can Help in CSR

Technopaks involvement in CSR stems from our understanding and appreciation of your business. Our ongoing engagements with organizations, along with our sustained research in this field, contribute to a robust knowledge base which makes us the perfect partner on your journey towards sustainable growth. Our philosophy of working with our clients through the strategic planning as well as the implementation phases helps us drive the long-term value in your business. Our expertise in the area of CSR includes: Preparing a CSR Roadmap for Organizations We help develop a sustainable corporate footprint which is synergistic with the ethos of the organization as well as larger social needs Defining an Organizations CSR Policy We define the areas of intervention, the set of goals to be achieved, key matrices to be monitored, and the integration of the policy with the companys strategic objectives Audit and Impact Assessment We assess the impact of the resources spent and advice on course correction measures, as required, to meet the desired objectives Identifying and Getting Independent Directors On-board We help in identifying the leading lights from various fields and getting them on board

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Relevant Excerpts from the Companies Act, 2013

The Companies Act, 2013, was cleared by Parliament after almost a decade of deliberation. This new law ushers in the element of corporate social responsibility with which we are concerned in the context of this paper. The key stipulations relating to CSR are as follows: Every company having a net worth of INR 50 crore or more, or a turnover of INR 1,000 crore or more, or a net profit of INR 5 crore or more, during any financial year, shall constitute a Corporate Social Responsibility Committee of the Board, consisting of three or more directors, of which at least one director shall be an independent director. The Corporate Social Responsibility Committee shall: Formulate and recommend to the Board a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company Recommend the amount of expenditure to be incurred on the chosen activities Monitor the Corporate Social Responsibility Policy of the company from time to time The Company shall spend, in every financial year, at least two per cent of the average net profit of the company during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy Activities which may be included by companies in their Corporate Social Responsibility Policies include: Eradicating extreme hunger and poverty Promoting of education Promoting gender equality and empowering women Reducing child mortality and improving maternal health Combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria, and other diseases Ensuring environmental sustainability Enhancing employment-related vocational skills Undertaking social business projects Contributing to the Prime Ministers National Relief Fund or any other fund set up by the Central Government or the State Governments for socioeconomic development and relief, and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities, and women and Such other matters as may be prescribed

CSR Guidelines for Central Public Sector Enterprises

The new bill also provides a separate CSR guideline for public sector enterprises, whose key facets include: CPSEs having a net profit of less than INR 100 crore shall spend 3-5% of their net profit on CSR CPSEs having a net profit in the range of INR 100 crore to INR 500 crore shall spend 2-3% of their net profit (subject to a minimum of INR 3 crore) CPSEs having a net profit of more than INR 500 crore shall spend 0.5-2% of the net profit CPSEs registering losses are not mandated to spend on CSR activities

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About Technopak
Indias leading management consulting firm with more than 20 years of experience in working with organizations across consumer goods and services. Founded on the principle of concept to commissioning, we partner our clients to identify their maximum-value opportunities, provide solutions to their key challenges and help them create a robust and high growth business models. We have the ability to be the strategic advisors with customized solution during the ideation phase, implementation guide through start-up and a trusted advisor overall. Drawing from the extensive experience of more than 150 professionals, Technopak focuses on four major divisions, which are Fashion - Textile & Apparel, Retail, Consumer Products & E-tailing, Education, and Food Services & Agriculture.

Our key services are:

Business Strategy: Assisting in developing value creating strategies based on consumer insights, competition mapping, international benchmarking and client capabilities Start-up Assistance: Leveraging operations and industry expertise to commission the concept on a turnkey basis Performance Enhancement: Operations, industry and management of change expertise to enhance the performance and value of client operations and businesses Capital Advisory: Supporting business strategy and execution with comprehensive capital advisory in our industries of focus Consumer Insights: Holistic consumer and shopper understanding applied to offer implementable business solutions

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Our Other Divisions

Retail, Consumer Products & E-tailing
Technopak aids retailers and consumer product companies in formulating growth strategy and performance enhancement mandates. Over the past two decades, we have worked on various facets such as entry into the Indian market, development of new category, activation of new retail formats, channel development, product extension, region expansion etc. One key reason why Technopak is considered the industry leader is the relentless focus on the Indian Market. We help clients understand the market dynamics in India and help them arrive at the best method to grow business in India. Our Retail and Consumer product expertise helps gain a competitive edge by providing execution capabilities and corporate strategies.

Fashion - Textile & Apparel

With almost 20 years of experience in delivering end-to-end solutions to the entire gamut of the textile industry, right from fibre to retailing, the Fashion division at Technopak assists the textile and apparel organizations in optimizing their profits through enhancement and expansion. Many leading Indian and international Textile manufacturers and Apparel brands have benefited from our offerings in the areas of business planning and strategy, apparel operations, supply chain management and strategic alliances. Our team consists of top calibre advisors who have worked closely with a diverse group of clients comprising textile manufacturers, apparel retailers, garment manufacturers and exporters, apparel sourcing organizations, trade promotion councils, industry associations, international development bodies, and financial institutions as well as central and state governments.

Food Services & Agriculture

Technopaks Food Services & Agriculture team comprises of established domain experts who build and enhance the business performance of organizations which are either working in the segment or are willing to enter it. Our endto-end solutions are customized as per the businesss requirements and capabilities. We continuously strive to create strong industry relationships and work for a global footprint by delivering a wide range of services to organizations that operate or wish to operate in the Food and Agriculture sector, in India as well as internationally.

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For further dialogue, please contact: Vice President enayet.kabir@technopak.com T: +91-9999034360

Enayet Kabir

Associate Director aurobindo.saxena@technopak.com T: +91-9891321279

Aurobindo Saxena

www.technopak.com

Technopak Advisors Pvt. Ltd.

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