Corporate Social Responsibilty And Its Impact on Financial Performance: A Case Study of Dabur Company

Abstract: Corporate social responsibility is a strategy in which business gives emphasis to social responsibility and voluntarily contributes to better society and a cleaner environment. This includes sustainability strategies business employs to ensure that company’s work is carried out ethically. CSR can help improve society and promote a positive brand image for companies. India is the first country to make it compulsory for the companies under special circumstances of companies act sec 135 to contribute in CSR. The provisions of CSR apply to every company which has a net worth of more than Rs. 500 crore, gross revenue cross Rs. 1000 crore and net profit above Rs. 5 crores in the preceding financial year. The companies should contribute in every financial year minimum 2% of its average net profits generated during preceding three financial years. The research paper deals with an understanding of CSR and its importance in the corporate world for long term sustainability and in financial performance of a business. For this purpose, previous research is reviewed from different perspective and accounting-based approach is also used to find the effects of CSR. The method applied to conduct research is regression analysis taking CSR as independent variable and main performance indicators (ROI, ROA, NBT) as dependent variable over a period of time in case of a single business house. Data for the research is collected from company’s annual reports, CSR portals, and moneycontrol.com and from other reliable sources. The result shows almost positive relation between CSR and financial performance. But as the studied is about a single business house the research can differ from business to business working under different condition and a common inference cannot be drawn.