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1. INTRODUCTION

Corporate Social Responsibility CSR in India has traditionally been seen as a philanthropic

activity. And in keeping with the Indian tradition, it was an activity that was performed but not

deliberated. As a result, there is limited documentation on specific activities related to this

concept. However, what was clearly evident that much of this had a national character

encapsulated within it, whether it was endowing institutions to actively participating in India’s

freedom movement, and embedded in the idea of trusteeship. As some observers have pointed

out, the practice of CSR in India still remains within the philanthropic space, but has moved

from institutional building (educational, research and cultural) to community development

through various projects. Also, with global influences and with communities becoming more

active and demanding, there appears to be a discernible trend, that while CSR remains largely

restricted to community development, it is getting more strategic in nature (that is, getting

linked with business) than philanthropic, and a large number of companies are reporting the

activities they are undertaking in this space in their official websites, annual reports,

sustainability reports and even publishing CSR reports.

The Companies Act, 2013 has introduced the idea of CSR to the forefront and through its

disclose-or-explain mandate, is promoting greater transparency and disclosure. Schedule VII

of the Act, which lists out the CSR activities, suggests communities to be the focal point. On

the other hand, by discussing a company’s relationship to its stakeholders and integrating CSR

into its core operations, the draft rules suggest that CSR needs to go beyond communities and

beyond the concept of philanthropy. It will be interesting to observe the ways in which this will

translate into action at the ground level, and how the understanding of CSR is set to undergo a

change.

Financial Performance of the company Financial performance exists at different levels of

the organization. Traditionally, financial performance measures are split into the following

categories:

Profitability

Liquidity / working capital

Activity Analysis Ratios

Capital Market Analysis Ratios

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Need for the study

The key components of CSR include the following:

Corporate Governance: Within the ambit of corporate governance, major issues are the

accountability, transparency and conduct in conformity with the laws. Good corporate

governance policy would enable the company to realize its corporate objectives, protect

shareholder rights, meet legal requirements and create transparency for all stakeholders.

Business Ethics: Relates to value-based and ethical business practices. ‘Business ethics

defines how a company integrates core values – such as honesty, trust, respect, and fairness –

into its policies, practices, and decision making. Business ethics also involves a company’s

compliance with legal standards and adherence to internal rules and regulations.’1

Workplace and labor relations: Human resources are most important and critical to a

company. Good CSR practices relating to workplace and labor relations can help in improving

the workplace in terms of health and safety, employee relations as well as result in a healthy

balance between work and non-work aspects of employees’ life. It can also make it easier to

recruit employees and make them stay longer, thereby reducing the costs and disruption of

recruitment and retraining.

Affirmative action/good practices: Equal opportunity employer, diversity of workforce that

includes people with disability, people from the local community etc., gender policy, code of

conduct/guidelines on prevention of sexual harassment at workplace, prevention of HIV/AIDS

at workplace, employee volunteering etc. are some of the good practices which reflect CSR

practices of the company.

Supply Chain: The business process of the company is not just limited to the operations

internal to the company but to the entire supply chain involved in goods and services. If anyone

from the supply chain neglects social, environmental, human rights or other aspects, it may

reflect badly on the company and may ultimately affect business heavily. Thus, company

should use its strategic position to influence the entire supply chain to positively impact the

stakeholders.

Customers: The products and services of a company are ultimately aimed at the customers.

The cost and quality of products may be of greatest concern to the customers but these are not

the only aspects that the customers are concerned with. With increased awareness and means

of communication, customer satisfaction and loyalty would depend on how the company has

produced the goods and services, considering the social, environmental, supply-chain aspects.

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Environment: Merely meeting legal requirements in itself does not comprise CSR but it

requires company to engage in such a way that goes beyond mandatory requirements and

delivers environmental benefits. It would include, but not limited to, finding sustainable

solutions for natural resources, reducing adverse impacts on environment, reducing

environment-risky pollutants/emissions as well as producing environment-friendly goods.

Community: A major stakeholder to the business is the community in which the company

operates. The involvement of a company with the community would depend upon its direct

interaction with the community and assessment of issues/risks faced by those living in the

company surrounding areas. This helps in delivering a community-focused CSR strategy –

making positive changes to the lives of the people and improving the brand-image of the

company. Involvement with the community could be both direct & indirect – through funding

and other support for community projects implemented by local agencies.

Does adopting a CSR policy is benefitting the Company?

Is the financial performance of the company increased?

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2. LITERATURE REVIEW

International Journal of Social Science & Interdisciplinary Research ISSN 2277 3630

IJSSIR, Vol. 2 (6), JUNE (2013)

The pace of increase in knowledge moves towards rapid changes. It grows more and more than

the passage of time. Therefore, a researcher has to be conscious about the changes and

developments in the field of his/her study. For this purpose, the researcher has to survey the

available literature like novels, reports, researches, books, articles, newspapers and journals in

order to add knowledge in its study. Over the past decades, the concept of CSR has become an

important concept in the study of researchers, scholars and industrialists etc. So, the present

researchers have made an effort with this review paper for those researchers, analysts and

industrialists who are connected with CSR (whether social responsibility, social accounting,

social reporting or any other area related to CSR). Windsor (2001), article examined the future

of Corporate Social Responsibility or the relationship between business and society in long

run. The researcher tried to find out that whether the organization and society will come closer

to each other in future or not and what will be the changing phase of CSR. With the help of

history or past trend of CSR, Caroll’s model analysis and in global context, the researcher

found three emerging alternatives of CSR i.e. conception of responsibility, global corporate

citizenship, stakeholder management practices. Nigel Sarbutts (2003), the paper explored the

way of doing CSR by small and medium sized companies. The research depicted that a

structured approach to managing corporate reputation and profit maximization of SME‟s

through CSR. The societal activities of small and medium sized companies is based on their

cost is Benefit Analysis. Small Corporation always struggle for more reputation and

minimization of risk. In such a situation, CSR comes as hope for these companies. Large

companies have so many resources for implementing CSR activities but SME‟s have less

resources. It can be a barrier for them to stay in the market. So, in that situation by imparting

much information, proper utilization of resources, doing well for businesses, SME‟s can

minimize their risk and manage CSR. A speech delivered by Mr. Fredrick Ma, secretary for

financial services, based on Corporate Social Responsibility (2004) organized by the British

consulate. The speaker explored the concept of CSR on the basis of survey of 1500 business

leader attending the world economic forum in bevos. In which 5% leaders said that CSR is

important for the success of business, while 24% said CSR is not important but the

shareholder’s interest is most important for the businesses. But for the speaker, CSR and

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corporate governance are complementary to each other. Corporate governance is a medium of

driving CSR among corporate. Further the speaker also talked about the role of government in

CSR, SME‟s as well as for unlisted companies. It was also included in their views that CSR

should be a part of company’s objective. Moon (2004), paper examined the role of government

in driving corporate social responsibility among the corporate. The study explained that the

drivers of CSR are related with business and society. Business includes its reputation,

corporation itself, employee’s relation knowledge, goals etc. further, the study cleared that

government is driver of CSR by making this relationship true and fair through making through

making policies and regulations. The study also embarked other’s country’s situation that how

their government entered into businesses for driving CSR. Samuel O. Idowu (2007), with their

study of twenty companies in U.K., propounded that the U.K. companies has now become

ethical in the content of social responsibility as companies disclose its CSR with a view of

public benefits, government request and issue information to stakeholders because the

companies think that stakeholders of twenty first century are better educated them past.

Vaaland, Heide (2008), paper based on a case study methodology. The paper purpose was to

handle the CSR critical incidents and utilize this experience in enforcing the CSR activities.

The study concluded that CSR should be managed by handling unexpected incidents, long term

reduction of gap between stakeholders and their expectations and company performance and

finally maintaining relationship with society through interplay between actor, resources and

activities. Gond, Crane (2008), made an analysis on the distortion of corporate social

performance concept. The research analyzed that the past researches and found some reason of

emerging fall in the interest of corporate social performance research among the scholars. The

paper also suggested models on the basis of which the researcher explained that why the CSP

concept has lost its importance and development. Further, the researcher depicted some model

which the researcher can used in their research related to corporate social performance. The

paper argued that tensions and contradictions are the starting point to develop the CSP concept.

CSP has an umbrella of activities which need to measure differently in order to move the

researches from a simple concept to development. Truscott, Bartlett, Trwoniak (2009), paper

“The reputation of Corporate Social Responsibility industry in Australia” in Australian

marketing journal, based on case study methodology. On the basis of the interview of key

persons of industries in Australia, the term CSR has been explained. The industrialist revealed

that CSR increasingly has become significant. They shared their views of CSR in economic,

legal and ethical roles of business in society. Beside this, the industrialist viewed CSR as a

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model of corporate reputation. Shah, Bhaskar (2010), has taken a case study of public sector

undertaking i.e. Bharat Petroleum Corporation Ltd. in their research work. The research has

discussed that there is a broad relationship between the organization and society. Organization

has its existence only with the society. Organization used the resources/inputs of the society

like material and human etc. In reverse, the organization provides services to the society. From

the case study of the BPCL, it was found that company has taken a lot of initiatives in order to

serve the society. Mc William & S. Seigal (2010) provided the importance of CSR as a strategy

of enhancing reputation of companies. The study indicated that firms selling convincing goods

which comes under the umbrella of CSR activities, leads to consumer loyalty and increased

revenue. Further the study also indicated the importance of advertising for providing

information to consumers about the social welfare activities of the firm. Beside this the study

also included the importance of media and T.V etc. in order to aware the consumers about

firm’s activities and increasing as well damaging the reputation. In this way the study

concluded about the reputation of firm through CSR. Hartman (2011), article “Corporate social

Responsibility in the food sector” in European review of agriculture economics journal,

analyzed the importance of CSR in food sector, particularly those companies which have high

brand. CSR is an important part of these companies. But SME’s are less capable in discharging

their obligation towards society. Further, the research found that food sector always tries to

improve the controlling and discharging its services towards consumers. Consumers also prefer

those brands or food firms which give preference to CSR activities and provide good product

and services. Borogonovi, Veronica (2011), article in knowledge@ Wharton, stated that today,

CSR has different meaning for different companies. Some termed CSR in the sense of social

issues while other for environmental issues. But there are not any mandatory guidelines for

CSR so that the problem of areas of CSR can be sort out. In addition to this, the researcher

discussed about various views and plans of government and other authorized institution like

union corporate minister like Mr. Murli Deora, Companies act 1956, Companies bill 2008 and

2009, Dhaval udani (CEO of non-governmental organization), FICCI etc. All these institution

and persons presented their ideas and bills about CSR requirement. The paper also

differentiates the term CSR from other one like Corporate Philanthropy, CSV (creating Share

Value) etc. CSR has defined in such a way that how the businesses are conducting their

activities in society marked at the place. Brammer, Jcakson & Matten (2012), study entitled as

“Corporate Social Responsibility and institutional theory: new perspective on private

governance” in Social economic review depicted that CSR is not only a voluntary action but

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beyond that. In this study, CSR had defined under institutional theory. The institutional theory

stated that corporate social activities are not only voluntary activities but it is a part of interface

between business and society. Regulation/ governance are necessary for enhancing the

corporate performance of businesses through CSR. The theory also suggested that in what form

companies should take its social responsibilities whether historical, political or legal form.

Agunis, glovas (2012), Paper entitled “what we know and don’t know about corporate social

responsibility: A review and research agenda” in Journal of management, based on 588 journal

articles and 102 books. The study provided a framework of CSR actions which affects external

as well as internal stakeholders and outcomes of such actions. The paper also enhanced the

knowledge regarding levels, forms of CSR; need to understand CSR with outcomes etc. further

the researcher also suggested a framework of research design, data analysis and measurement

for future research of CSR. Mallen (2012), In this article the researcher depicted that how the

trends of CSR have changed from last so many years. This change has affected both the society

and business. The researcher explained three basic things about the changes in trend. These

are: Firstly, the relationship between business and society has changed. This is happening

because of social and environmental problem around the world. Because of these conditions,

business and society came closer. Second, the businessman’s strategy of developing business

also affected society a lot. Businesses new ideas, concept, developments also came with CSR

management that reflects in their product and services. Third, the other parties like outside

agencies and firm’s own goals also interfere the firm’s activity. An article published at

knowledge @ Wharton on 23 may 2012, recommended that according to changing generation

CSR importance are also changing. The researcher said that the next generation of business

will give undue importance to the CSR activities while past researchers like Milton Friedman

referred CSR as window dressing for businesses. Further, in this article, with the help of several

examples it has discussed that companies engaged in CSR are more profitable in terms of

money, human capital and other resources. Some companies and researchers termed CSR as

cost saver while some taken it as reputation building activities. Lastly, it was concluded that

CSR is beneficial for the society as well as business. An article published in Tripple Bottom

Line Magazine entitled “Initializing CSR: The top three essential elements” presented CSR

according to changing time period. It has revealed through the article that CSR should be at the

core of business goals. Sometimes, companies escaped because of social activities in which

they engaged but in reality they suffered from financial problem at that time, or may be fraud.

The paper has taken an example of Lehman brothers. The article also suggested some variables

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for initializing CSR. In these variables, it was firstly discussed that CSR can drive through

efficient corporate governance. Secondly, through savings and increase in operating profits, so

that investment in CSR can be upgraded. Thirdly, according to article, corporate volunteers

believe to be an important variable to ensure that corporate responsibility can be fulfilled

through the volunteers strategy. The economic Times (2012), news highlighted the views of

former president Dr. APJ Abdul Kalam in a CSR award function organized by industry body

Assocham. Kalam said that companies should devote some part of its goal to corporate

services. It should make mandatory for all the companies to spend a percentage of its profit on

corporate social responsibility. Kalam also discussed about the proposed bill on corporate

spending on CSR. They assumed greater importance of CSR in building the lives of the

country’s citizens. An article published in The Economic Times named as “CSR: A cloak for

crooks” on 21 Oct. 2012 explored that there are so many companies which have engaged in

Corporate Social Responsibility yet they are suffering from financial crisis , fraud and other

unsocial causes. In this article, an example has been taken about the company Satyam

Computer Services. the company has won several awards in the area of CSR which includes

rural communities commitment and services like healthcare, education and water.

Bhattacharyya & Chaturvedi (2012), article entitled “CSR looks set to emerge as an

independent stream with measurable output” on India CSR site, stated about the proposed bill

of CSR that how the bill will affect the company’s policies. The researchers presented their

views and said that due to this bill, company’s activities will change a lot the companies who

has not engaged in CSR activities till now, will start investing on society. Further, who has

already engaged in these areas will get a strong foundation or bond with the society. An article

presented on IndiaCSR entitled “Is CSR all Bullshit?” depicted that companies neither have a

strong will power to invest in social activities nor they aware about the areas in which comes

under CSR. The reason of this problem is ignorance about the concept of CSR and not any

legal framework. The researcher also presented the solution of this problem that knowledge

should provide in the institutions through training, induction programmes and through other

teaching programmes. If needed, foreign experiences should be used in India for Indian society

welfare. Bibhu Parshed (2012), article presented that CSR is the face of industry face of doing

trade. Bibhu said that today, corporate houses took CSR as a medium fulfillment of profit greed

of corporate houses. Further the article explored that companies today invests in a lot of areas

like child labour, ground water, food, education, employment etc. but nobody is aware about

the essential need of world’s poor. The article suggested that profit earning is a natural fact of

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companies but CSR is beyond the natural and statutory obligation of the companies. At last it

was concluded in the article that sustainable development is the development of society as well

as the company in a balanced way. Bansal, Parida, Kumar (2012), paper entitled “Emerging

trends of Corporate Social Responsibility in India” in KAIM Journal of Management and

Research analyzed 30 companies of 11 sectors listed in the Bombay Stock Exchange with the

help of their annual reports. Some of these sectors were Transport Equipment sector, Finance

and Metal Mining sector, IT & Power, Capital goods, Telecom, Housing, FMCG, Oil & Gas

and Cipla. The paper considered the nature and areas of society in which the companies are

investing. By considering all those areas it was concluded in the paper that today companies

are not working only to earn profit but also have realized the importance of being social

friendly. So, on the basis of the paper it can be said that social responsibility has now started

taking a turn in the new direction. The Economic Times (11 Jan.2013), news highlighted about

the company Dell’s strategy of motivating its employees in initializing CSR. The news

discussed that company’s employees are the power that forced the company to do more for the

society. Company with its employees has engaged in social responsibility activities in the areas

of education, environment and employee’s welfare. Beside Dell Company, the news also

discussed about other companies like Maruti and Gogrej that these companies also provide

induction training to its employees for preparing them for community services. Maruti

Company run a program named e- parivartan for a group of employees to make them aware

about community problem and their solution.

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3. RESEARCH DESIGN AND CONCEPTUAL MODEL

3.1.CONCEPTUAL MODEL

Independent Variable Dependent Variable

CSR Financial Performance

3.2.RESEARCH DESIGN

In view of the objectives of the study an exploratory research is one which largely interprets

the already available information and it lays particulars emphasis on analysis and interpretation

of the existing and available information. It makes use of secondary data.

3.3.SOURCES OF DATA

Generally, we can collect data from two sources, primary sources and secondary sources. Data

collected from primary sources are known as primary data and data collected from secondary

sources are called secondary data.

3.3.1. PRIMARY DATA

Primary data are also known as raw data. Data are collected from the original source in a

controlled or an uncontrolled environment. Example of a controlled environment is

experimental research where certain variables are being controlled by the researcher. On the

other hand, data collected through observation or questionnaire survey in a natural setting are

examples data obtained in an uncontrolled environment.

3.3.2. SECONDARY DATA

The secondary data are those which have already collected and stored. The information has

been collected from namely

https://www.futurescape.in/india-best-companies-for-csr-2015/

http://www.bseindia.com/

http://www.moneycontrol.com/

A team of dedicated professionals from IIM Udaipur, Futurescape and Economic Times have

worked on the CSR study of 2015 and has listed India’s top 100 companies for CSR in the

year. The top 5 companies and the bottom top 4 companies of the list i.e. 95-99 companies will

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be considered. The financial data of those companies will be taken and ratios will be performed,

so that we come to know whether CSR policy has benefited the companies financially or not.

The companies list is as follows.

Mahindra & Mahindra Ltd. (1)

Tata Power Company Ltd. (2)

Tata Steel Ltd. (3)

Larsen & Toubro Ltd. (4)

Tata Chemicals Ltd. (5)

Punjab National Bank (96)

Cadila Healthcare Ltd. (97)

Jain Irrigation Systems Ltd. (98)

Reliance Power Ltd. (99)

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4. DATA ANALYSIS

4.1.Financial performance can be measured using following ratios

4.1.1. Profitability

Profitability ratios compare income statement accounts and categories to show a company's

ability to generate profits from its operations. Profitability ratios focus on a company's return

on investment in inventory and other assets. These ratios basically show how well companies

can achieve profits from their operations.

Return on Assets (ROA)

Net Income

Return on Assets (ROA) = ----------------------------------

Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Return on Equity (ROE)

Net Income

Return on Equity (ROE) = --------------------------------------------

Average Stockholders' Equity

Average Stockholders' Equity

= (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2

Return on Common Equity (ROCE)

Net Income

Return on Common Equity = --------------------------------------------

Average Common Stockholders' Equity

Average Common Stockholders' Equity

= (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2

Profit Margin

Net Income

Profit Margin = -----------------

Sales

Earnings Per Share (EPS)

Net Income

Earnings Per Share = ---------------------------------------------

Number of Common Shares Outstanding

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4.1.2. Liquidity / working capital

Liquidity ratios analyze the ability of a company to pay off both its current liabilities as they

become due as well as their long-term liabilities as they become current. In other words, these

ratios show the cash levels of a company and the ability to turn other assets into cash to pay off

liabilities and other current obligations.

Current Ratio

Current Assets

Current Ratio = ------------------------

Current Liabilities

Quick Ratio

Quick Assets

Quick Ratio = ----------------------

Current Liabilities

Quick Assets = Current Assets – Inventories

Net Working Capital Ratio

Net Working Capital

Net Working Capital Ratio = --------------------------

Total Assets

Net Working Capital = Current Assets - Current Liabilities

4.1.3. Activity Analysis Ratios

Activity ratios measure company sales per another asset account—the most common asset

accounts used are accounts receivable, inventory, and total assets. Activity ratios measure the

efficiency of the company in using its resources. Since most companies invest heavily in

accounts receivable or inventory, these accounts are used in the denominator of the most

popular activity ratios.

Assets Turnover Ratio

Sales

Assets Turnover Ratio = ----------------------------

Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Accounts Receivable Turnover Ratio

Sales

Accounts Receivable Turnover Ratio = -----------------------------------

Average Accounts Receivable

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Average Accounts Receivable

= (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Inventory Turnover Ratio

Cost of Goods Sold

Inventory Turnover Ratio = ---------------------------

Average Inventories

Average Inventories = (Beginning Inventories + Ending Inventories) / 2

4.1.4. Capital Market Analysis Ratios

Capital market analysis ratios indicate a company's ability to win to the confidence of the

stock market.

Price Earnings (PE) Ratio

Market Price of Common Stock Per Share

Price Earnings Ratio = ------------------------------------------------------

Earnings Per Share

Market to Book Ratio

Market Price of Common Stock Per Share

Market to Book Ratio = -------------------------------------------------------

Book Value of Equity Per Common Share

Book Value of Equity Per Common Share

= Book Value of Equity for Common Stock / Number of Common Shares

Dividend Yield

Annual Dividends Per Common Share

Dividend Yield = ------------------------------------------------

Market Price of Common Stock Per Share

Book Value of Equity Per Common Share

= Book Value of Equity for Common Stock / Number of Common Shares

Dividend Payout Ratio

Cash Dividends

Dividend Payout Ratio = --------------------

Net Income

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4.2.Financial Ratios and indicators of the considered companies

Ratios M&M TP TS L&T TC PNB CHL JIS RP

Liquidity

Current Ratio 1.05 1.33 0.62 1.34 1.29 0.02 1.19 0.94 0.57

Ranking 5 8 3 9 7 1 6 4 2

Quick Ratio 0.84 1.64 0.27 1.43 1.20 24.23 1.41 1.78 17.89

Ranking 2 6 1 5 3 9 4 7 8

Profitability

Ratios

Return On

Capital

Employed

18.51 9.22 9.25 15.72 11.88 - 26.04 9.38 1.01

Ranking 8 3 4 7 6 1 9 5 2

Return On

Net Worth

17.25 6.42 9.65 13.63 10.55 8.12 28.08 2.09 0.14

Ranking 8 3 5 7 6 4 9 2 1

Profit Before

Interest And

Tax Margin

8.03 15.85 18.90 9.24 8.23 24.17 10.55 -4.07

Ranking 3 7 8 5 4 1 9 6 1

Management

Efficiency

Ratios

Asset

Turnover

Ratio

1.84 0.34 0.46 1.21 1.15 0.08 0.98 0.82 0.01

Ranking 9 3 4 8 7 2 6 5 1

Debtors

Turnover

Ratio

15.37 5.99 66.21 2.56 4.13 - 5.94 2.63 4.65

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Ranking 8 7 9 2 4 1 6 3 5

Inventory

Turnover

Ratio

16.87 12.97 5.79 26.07 5.71 - 6.67 3.80 -

Ranking 8 7 5 9 4 1 6 3 2

Capital

Market

Analysis

Ratios

Dividend

Payout Ratio

Net Profit

22.44 34.84 12.06 29.87 49.91 20.51 19.32 46.81 -

Ranking 5 7 2 6 9 4 3 8 1

Share price 1206.70 64.95 317.65 1212 378.50 84.50 320.75 60 49.70

Ranking 8 3 5 9 7 4 6 2 1

Pat (Cr.) 3,321.11

1010.29 6439.12 5056.18 637.97 3061.58 1027.10 49.39 25.10

Ranking 7 4 9 8 3 6 5 2 1

Total assets 32944.87

27788.40

1,15677.12

86,903

11868.64

603,333.60

7337.40 7057.45 21594.49

Ranking 6 5 8 7 3 9 2 1 4

Table No.1 Financial Ratios and indicators of the considered companies

The financial ratios of the companies are taken that is the top 5 and the bottom 4 of the CSR

2015 list and rankings are given.

On a scale of 1 to 9

Where 1 indicates Least

And 9 is the best.

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Total 12 parameters are considered and 9 companies. So it equals to total of 108 score.

4.3.Ranks allotted based on the ratios.

Table No.2 Ranks allotted based on the ratios.

Based on table no.1, sorting is done used excel and likewise the ranks are allotted where 1

means the least and the 9 is best. Each ratio of a company with comparison to other gets any

number from 1 to 9. All the parameters are added and the score of each company is decided.

Ratios M&M TP TS L&T TC PNB CHL JIS RP

CR 5 8 3 9 7 1 6 4 2

QR 2 6 1 5 3 9 4 7 8

ROCE 8 3 4 7 6 1 9 5 2

RONW 8 3 5 7 6 4 9 2 1

PBIT 3 7 8 5 4 1 9 6 1

ATR 9 3 4 8 7 2 6 5 1

DTR 8 7 9 2 4 1 6 3 5

ITR 8 7 5 9 4 1 6 3 2

DIV.PAYOUT 5 7 2 6 9 4 3 8 1

SHARE

PRICE

8 3 5 9 7 4 6 2 1

PAT 7 4 9 8 3 6 5 2 1

TOTAL

ASSETS

6 5 8 7 3 9 2 1 4

SUM 77 63 63 82 63 43 71 48 29

Rank 2 4 5 1 6 8 3 7 9

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From the above table Larsen& Toubro Limited has got the highest score in financial

performance and Reliance power limited the least.

4.4.CSR rank and Financial Performance Rank

Name of the Company CSR rank Financial Performance Rank

Mahindra & Mahindra Ltd. 1 2

Tata Power Company Ltd. 2 4

Tata Steel Ltd. 3 5

Larsen & Toubro Ltd. 4 1

Tata Chemicals Ltd. 5 6

Punjab National Bank 96 8

Cadila Healthcare Ltd. 97 3

Jain Irrigation Systems Ltd. 98 7

Reliance Power Ltd. 99 9

Table No.3 CSR rank and Financial Performance Rank

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5. IMPLICATIONS AND MANAGERIAL FINDINGS

The study of Impact of Corporate Social Responsibility On Financial Performance of the

Company has been done.

From the data above we come to know that the companies which have topped in the list of

CSR 2015 are doing well in their financials too.

Larsen & Toubro Ltd. Which is at the 4th place in the CSR list 2015 has got the highest score

of 82, and the one which is at the bottom at a position of 99 Reliance power limited has got

the least Score of 29.

Of the above, only Cadila Healthcare Limited which is at 97th position in CSR list is doing at

financials, remaining all companies are performing bad than that of the Companies which

topped the CSR list.

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6. CONCLUSION

It is clear that the companies which are spending lot on CSR are not really wasting the

shareholder’s wealth but in turn creating value to not only its shareholders but stakeholders

too.

It can be evidently concluded that CSR has positive impact on the financial performance of the

companies.

The companies that enthusiastically engage themselves in CSR practices, definitely have

advantage over other companies in financial perspectives, lenient taxation provisions, ratings

and rankings, brand reputation and last but not the least, customer loyalty and stakeholder trust.

Thus, the CSR initiatives should be strictly followed by all those companies that wish to get a

financial advantage over other firms in the long run.