THE EXTENT OF CSR PRACTICES IN BANGLADESH: EVIDENCE FROM ENGINEERING AND TEXTILES INDUSTRY

THE EXTENT OF CSR PRACTICES IN BANGLADESH:

EVIDENCE FROM ENGINEERING AND TEXTILES INDUSTRY

Sazzad Hossain

BBA Roll – 16128; MBA Roll – 314

Dept. of Accounting and Information Systems

Faculty of Business Studies

University of Dhaka

Under the supervision of

Sabina Yesmine

Assistant Professor

Dept. of Accounting and Information Systems


University of Dhaka

Date of Submission: July 02, 2015

Internship Report

On

THE EXTENT OF CSR PRACTICES IN

BANGLADESH:

EVIDENCE FROM ENGINEERING AND

TEXTILES INDUSTRY

THE EXTENT OF CSR PRACTICES IN BANGLADESH: EVIDENCE FROM ENGINEERING AND TEXTILES INDUSTRY

i

Letter of Transmittal

July 02, 2015

Sabina Yesmine

Assistant Professor

Department of Accounting & Information Systems


University of Dhaka

Subject: Submission of Internship Report on “The Extent of CSR Practices in

Bangladesh: Evidence from Engineering and Textiles Industry”.

Dear Madam,

This is my humble attempt to inform you that here is the MBA internship report based on the

topic “The Extent of CSR Practices in Bangladesh: Evidence from Engineering and Textiles

Industry”. The CSR activities have been a major issue both in the context of reporting and

regulatory bodies. Thus, this issue has to be explored to achieve a fair and practical knowledge

in the respective area. I have tried my best to represent the vastness and importance of the

area of study. However, as I lack experience in the practical field, this report may contain

some unexpected limitations. I hope you will not treat this kind of mistakes as major.

I would like to thank you for allowing me with such an important topic. I am ready to provide

any further information regarding the report, if necessary.

Sincerely yours

Sazzad Hossain

BBA Roll – 16-128; MBA Roll – 314; Batch: 16th

Department of Accounting & Information Systems


University of Dhaka


ii

Acknowledgement

This paper is based on an extensive research based mainly on disclosures made in the annual

report. Research is, however, a very challenging task. My supervisor, Ms. Sabina Yesmine,

Assistant Professor, Department of Accounting & Information Systems, Faculty of Business

Studies, University of Dhaka has helped me a lot with her experienced advice and instructions.

Without her supervision, co-operation, detailed instructions my research on CSR practices in

the context of Bangladeshi companies would not come to the light. I am very much grateful

to her since she not only gave me instructions but also inspired to work hard and do a wide

range of research with various laws, regulations, articles, journals regarding my research on

CSR practices in the context of Bangladeshi companies. I got the opportunity to do a rigorous

research on my assigned topic “The Extent of CSR Practices in Bangladesh: Evidence from

Engineering and Textiles Industry” to come to a conclusion about the CSR practices in the

context of Bangladeshi companies as evidenced from engineering and textiles industry.

For many limitations like the time limit of 12 weeks along with working as an intern, I could

not work effectively & efficiently on my assigned research area. However, I tried my best to

make the research and the report effective from the perspective of present scenario. I expect

that my teacher will forgive me for any kind of unintentional mistakes.


iii

Abstract

Corporate Social Responsibility (CSR) has been a topic of attention in the recent years. The

extent of CSR activities in the context of Bangladesh is not well studied. CSR activities are

not just philanthropic activities of a company, it is more than that. CSR is performing

responsibilities towards all concerned parties of the company including customers,

employees, suppliers, environment and to the society. This study is focused on the CSR

practices and CSR disclosures of Bangladeshi companies from engineering and textiles

industry. The major area of research have been to sort out the trend of CSR practices and any

specific trend prevailing in the selected industries. To conduct the study a CSR disclosures

checklist was prepared and DSE listed companies’ annual reports from 2009 to 2014 in

engineering and textiles industry were taken into consideration. The study has found that

companies’ CSR disclosure rate is higher when the disclosures are mandatory while the

disclosure rate in lower when companies are not bound to disclose about CSR activities. The

study reveals that the overall CSR practices in Bangladesh as evidenced from engineering and

textiles industry is not satisfactory.


iv

Table of Contents

Particulars Page No.

Letter of Transmittal ................................................................................................................. i

Acknowledgement ................................................................................................................... ii

Abstract .................................................................................................................................. iii

List of Abbreviations .............................................................................................................. vi

List of Tables ......................................................................................................................... vii

CHAPTER I – INTRODUCTION ........................................................................................... 1

1.0 Introduction .................................................................................................................... 2

1.1 Objectives of the Study: ................................................................................................. 3

1.2 Scope and Rationality of the Study: ............................................................................... 3

1.3 Limitations of the Study: ................................................................................................ 4

CHAPTER II – LITERATURE REVIEW .............................................................................. 5

2.0 Literature Review .............................................................................................................. 6

CHAPTER III – METHODOLOGY ..................................................................................... 10

3.1 Research Design ........................................................................................................... 11

3.2 Sample Size and Sources of Information ..................................................................... 11

3.3 Description on CSR Disclosure Index ......................................................................... 12

CHAPTER IV – ANALYSIS & FINDINGS ........................................................................ 13

4.1 Analysis ........................................................................................................................ 14

4.1.1 Item wise Industry Analysis .................................................................................. 14

I. Community Involvement ..................................................................................... 14

Industry Summary: .................................................................................................. 16

II. Environmental Disclosure ...................................................................................... 16


III. Employee Information .......................................................................................... 19



v

IV. Product and Service Information .......................................................................... 21


V. Other Social Responsibility Disclosure ................................................................. 23


VI. Industry Wise Company Specific Scenario .......................................................... 25

a) Engineering Industry ........................................................................................... 25

b) Textiles Industry ................................................................................................. 27

VII. Overall Industry Scenario .................................................................................... 29


4.2 Findings ........................................................................................................................ 31

CHAPTER V – CONCLUSION & RECOMMENDATION ................................................ 37

5.1 Recommendation ............................................................................................................. 38

5.2 Concluding Remarks ........................................................................................................ 39

CHAPTER VI – REFERENCES & APPENDIX .................................................................. 40

6.1 References ........................................................................................................................ 41

6.2 Appendix .......................................................................................................................... 43

6.2.1 CSR Disclosure Checklist ......................................................................................... 43


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List of Abbreviations

Abbreviation Elaboration

CSR Corporate Social Responsibility

T Grand Total of all the CSR Disclosures

T I Total of Community Involvement Disclosures

T II Total of Environmental Disclosures

T III Total of Employee Information Disclosures

T IV Total of Product and Service Information Disclosures

T V Total of Other Social Responsibility Disclosures

T % Grand Total percentage of all the CSR Disclosures

T I % Total percentage of Community Involvement Disclosures

T II % Total percentage of Environmental Disclosures

T III % Total percentage of Employee Information Disclosures

T IV % Total percentage of Product and Service Information Disclosures

T V % Total percentage of Other Social Responsibility Disclosures


vii

List of Tables

Table I : Analysis of Community Involvement ..................................................................... 15

Table II : Industry Summary - Community Involvement ...................................................... 16

Table III : Analysis of Environmental Disclosure ................................................................. 17

Table IV : Industry Summary - Environmental Disclosure ................................................... 18

Table V : Analysis of Employee Information ........................................................................ 19

Table VI : Industry Summary - Employee Information ........................................................ 20

Table VII : Analysis of Product and Service Information ..................................................... 21

Table VIII : Industry Summary - Product and Service Information ...................................... 22

Table IX : Analysis of Other Social Responsibility Disclosure ............................................ 23

Table X : Industry Summary - Other Social Responsibility Disclosure ................................ 24

Table XI : Analysis of Engineering Industry Company Specific Scenario ........................... 25

Table XII : Analysis of Textiles Industry Company Specific Scenario ................................ 27

Table XIII : Analysis of Overall Industry Scenario ............................................................... 29

Table XIV : Industry Summary - Overall Industry Scenario ................................................. 30

Table XV : Disclosure Category Wise Findings - Community Involvement ........................ 31

Table XVI : Disclosure Category Wise Findings - Environmental Disclosure ..................... 32

Table XVII : Disclosure Category Wise Findings - Employee Information ......................... 33

Table XVIII : Disclosure Category Wise Findings - Product and Service Information ........ 34

Table XIX : Disclosure Category Wise Findings - Other Social Responsibility Disclosure ........... 35


1

.

CHAPTER I – INTRODUCTION


2

1.0 Introduction

The Corporate Social Responsibility or CSR has been a much talked issue in the today’s business

arena as well as in the present society. Since the business is not isolated from the society, it has

certain responsibilities and duties towards the society. To work for the betterment of the society,

where it does operate, is the ethical duty and responsibility of the organization. The government,

various activists and social groups have come forward in this particular issue. The CSR is the

corporate citizenship of the companies in the society. Companies also could act like a responsible

citizen in the society – this is the basics of CSR activities. To enhance the living standards, make

contributions to the society in various occasions – are the part of CSR activities. However, the

CSR activities could be found in the financial statements and in the annual reports of the

companies. The extent of CSR practices could be traced out from the annual reports of the

companies as a part of accountability of the CSR activities.

In this study, the CSR activities have been tried to analyze from the published annual reports of

two industries of Bangladesh – engineering and textiles industry. The published disclosures in

the annual reports of the selected companies from Dhaka Stock Exchange (DSE) of engineering

and textiles industries have been analyzed to come to a conclusion as what is the present scenario

and trend of the companies regarding their CSR activities and CSR disclosures in the light of the

prepared checklist on CSR disclosures.


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1.1 Objectives of the Study:

CSR disclosures are the summary of the corporate citizenship of the companies. The major

objectives of this study are:

To assess the trend of CSR practices in Bangladesh in the context of engineering and

textiles industry.

To conduct a comparative analysis of CSR practices between the engineering and textiles

industry in Bangladesh.

1.2 Scope and Rationality of the Study:

The CSR practices in Bangladesh is not new. But the disclosures in the annual reports are not

still organized. This study is based upon the annual reports of latest six years from 2009 to 2014.

Within this time range the disclosures of CSR activities are supposed to be well organized and

in enhanced state following the importance of the CSR activities and awareness of CSR activities

in the society. This study tries to sort that out from the two industries – engineering and textiles

industry. Lots of general studies have been conducted based on CSR activities. However, few

studies have been conducted using the ultimate and authentic data about CSR activities from the

company’s annual reports. This study takes the privilege to conduct that initiative.

The study is limited within the annual reports boundary of companies and analyses the annual

reports against the CSR disclosure checklist to form a comprehensive understanding of the extent

of CSR practices in Bangladesh in the engineering and textiles industry.


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1.3 Limitations of the Study:

This study is based on the checklist and collection of data from the annual reports. The specific

limitations of this study are:

Only six (06) years data have been analyzed. But this is not sufficient to find any trend

in the CSR disclosures and CSR practice by any industry.

In Bangladesh, companies, except from banking sectors, do not bother in developing their

financial reports.

Since there is no concrete definition of CSR, the checklist could be incomplete and omit

crucial factors in CSR practices which could not be found in the annual reports of the

companies.

The annual report basically represents the financial statements and other policy

disclosures of the companies. Thus, the CSR disclosures get few attention among many

other issues of the companies.

There is no guidelines about CSR activities so does the CSR disclosures. As a result, this

study could be incomplete and could omit many material aspects of CSR practices.

The stock market in Bangladesh is not a strong stock market. The market is not properly

information oriented. As a result, information in the annual reports is overlooked. This

leads to the scenario that companies find few rewards and motivation in disclosing better

quality information in the annual reports. Thus, the CSR disclosures found in the annual

reports are incomplete which could affect the study.

The limitations have been kept in consideration while conducting the study. Attempts have been

made to reduce the limitations as far as possible.


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CHAPTER II –

LITERATURE REVIEW


6

2.0 Literature Review

The Corporate Social Responsibility or CSR concept has come mainly from the area of

management. The research of Carroll (1979), Matten & Crane (2005) has indicated that the CSR

activities are closely related to the management of the business activities and it has many

dimensions in the society. The act and initiatives taken by the business organization to make

positive changes and take the level and standard of the society to a better level could be a

dimension of CSR activities. Both of them have tried to establish a conceptual framework from

the theoretical perspective to explain the broadness and importance of the CSR activities.

Timane & Tale (2012) have done their study on the context of India. As they have approached,

they have said that in India the CSR, philanthropic works by the corporate and business houses

have been practiced from a very early age. Their research work has identified mainly the

advantages gained from the CSR activities. They also have identified that the CSR activities are

no more confined to general philanthropic activities, they have taken advanced form to uplift the

lives of the members of the community, society and the earth in a nutshell.

An annual report disclosure based research has been done by Khan, et al. (2013). They have

examined the relationship between corporate governance and the extent of corporate social

responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. They tried to

find correlation between different variables taken into research consideration.

Gray, et al. (1996) defined CSR reporting activities as a process of communicating the impact

that a company’s business has on the stakeholders it interacts with within the society. Taking

this as a base, Grigore & Obeng-Nyarko (2011) have conducted their research work on the most

20 successful companies from Ghana and Romania. Ghana and Romania are developing

countries. The CSR practice in these country are supposed not to be in an organized form.

However, to what extent the CSR activities are organized and constructive and well perceived,

that has been a vital portion of their work. The communication of CSR activities, initiatives have

gained the focal importance in their research. Evidence from both countries have shown that

companies in both countries do not bother about the CSR activities in their reporting. Few

disclosures were made in regards to the employee benefit disclosures. Environmental,

sustainability – these issues have been ignored.

Many studies have demonstrated a positive relationship between CSR and financial performance.

Vilanova et al. (2009) summarized this work and develop a model of how CSR relates to

dimensions of competitiveness including financial performance. Stuebs & Sun (2011)

empirically examined Vilanova et al.’s (2009) hypothesis of positive association between CSR

and corporate reputation. They have used a sample of highly reputable firms from Fortune’s


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2006 Most Admired Companies list along with a sample of matched firms in our empirical

analyses. The analyses consistently support the positive relationship between CSR and reputation

in Vilanova et al.’s (2009) developed model relating to CSR and dimensions of performance

competitiveness. The CSR activities tend to reduce labor and other applicable regulatory

requirements.

Crane, et al. (2008) tried to explain the CSR activities from the global perspective and tried to

identify the characteristics of CSR practice. They have emphasized that in the recent years, the

importance of CSR activities have grown up to a notable stage. This actually has made the

definition of CSR into a tough task and getting a universal definition is not easy. They have

outlined six core characteristics of corporate social responsibility such as voluntary, internalizing

or managing externalities, multiple stakeholder orientation, alignment of social and economic

responsibilities, practices and values, and beyond philanthropy. They have explored the CSR

activities from various perspectives such as from different organizational contexts and different

national contexts.

Since the 1990s in Europe and North America, the corporate social responsibility (CSR)

movement has been in full swing (Florini, 2003). The trend in Asia is a bit different. The context

of CSR activities in Asian countries are not as the same like North American and European

countries. Ong (2008) has studied the context of CSR activities from Singapore perspective. His

article argues that the context in which business operates plays a large role in whether and to

what extent a particular firm adopts CSR. In Singapore, this context is shaped by government,

private sector and civil society relations, partly characterized by pervasive government presence

in all aspects of society including the private sector. The article examines the level of awareness

of CSR issues amongst selected publicly listed or government-owned companies and the extent

to which CSR policies are incorporated into their business practices. The study was concluded

by establishing that the companies in Singapore face top down collaborative pressure to adopt

CSR practices that is distinct from the European and North American experience, where bottom

up pressures from consumers and civil society groups are more prevalent.

The CSR activities have been well studied in the Europe and North America. But as a developed

country, China’s CSR practices have not been studied so far. Kolk, et al. (2010) came forward

to fill that gap up through an exploration of a small sample of large retailers in China, both

Chinese and non-Chinese companies. The analysis of CSR as communicated by these large

retailers in both the Chinese and English language, shows substantial differences between the

Chinese and international contexts. The paper concludes with a discussion of the implications

for research, practice and further study.


8

Anderson & Landau (2006) have studied CSR from the context of Australia. One of the major

strengths of their research is that they have not conducted their study on the basis of the annual

reports. They have conducted their research based on the existing regulations, practices and

practical aspect and implication of CSR activities of Australian companies. In their opinion, the

diversity of the studies conducted in the prior years – particularly in the criteria that they use to

assess the extent of corporate citizenship – makes it very difficult to compare and contrast the

various findings. While there are exceptions, most businesses in Australia have not yet sought to

integrate the precepts of CSR or corporate citizenship into their strategic approach or corporate

culture. Their study would help to solve gradually these shortcomings.

The research paper of Muller & Kolk (2009) reports the results of a survey conducted among

companies in the Mexican auto industry. CSR performance was investigated across three

dimensions: environmental, labor and community, using measures from existing research and

‘Western’ standards of practice, to identify the type of CSR activities and the level of CSR

performance that exist, if at all, in the emerging-market context. Results show that local

companies do engage in the type of CSR activities commonly associated with CSR in developed

countries. To the extent that comparisons could be made, findings also indicate that CSR

activities and levels among the sample are comparable to what is known about CSR in

developed-country settings. Moreover, six of the nine CSR dimensions are interrelated, which

suggests that CSR in the Mexican auto parts industry is more structural than incidental.

Gutiérrez & Jones (2004) study have been concentrated in Latin America. Research on CSR in

this particular area has concentrated on studying specific experiences, working inductively to

generate hypotheses. The research of Gutiérrez & Jones (2004) has been confined basically in

the theoretical context rather than in the practical context. They have identified the motivations

behind CSR, legislative implications, and role of legislation, typologies for CSR practices, and

broadly the extent and practice of CSR in different areas.

The study by Ararat (2008) has identified the recent upsurge of CSR in the Turkish society which

reflects how changes in political, economic environment with an external anchor can affect

corporate behavior. It has been observed that macroeconomic stability induces ethical behavior;

it establishes the moral authority of the governments and improves their law enforcement

capability. On the other hand, economic development accompanied by opening up to

international competition developments may partially neutralize the effect of societal culture that

may be unsupportive of CSR. Despite the recent progress, it will take some time before the

societies will play a significant role in driving CSR in Turkey. The study suggests that there is

more room for a regulatory approach to CSR in an emerging market context. The challenge

would be to balance market based approaches with regulatory schemes as markets become more


9

competitive and efficient. Another driver would be ethics and values which implies a strong role

for secondary education as well as business schools.

Drawing empirical evidence from indigenous firms, study of Amaeshi, et al. (2006) explores the

meaning and practice of CSR in Nigeria. It was found that indigenous firms perceive and practice

CSR as corporate philanthropy aimed at addressing socio‐economic development challenges in

Nigeria. This finding confirms that CSR is a localized and socially embedded construct, as the

‘waves’, ‘issues’ and ‘modes’ of CSR practices identified amongst indigenous firms in Nigeria

reflect the firms’ responses to their socio‐economic context.

In Spain, as in many other European countries, there is a growing movement in favor of corporate

social responsibility (CSR). The study of Mele (2004) has emphasized the case of Spain. Spanish

companies consider corporate reputation, competitive advantage and industry trends to be the

major driving forces of CSR. However, these factors are closely related to other cultural, social

and political influences. The study concluded that the degree of implementation of CSR in Spain

is still moderate, initiatives in this field from some of the country’s most respected companies

augur promising developments in CSR in the near future.


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CHAPTER III –

METHODOLOGY


11

3.1 Research Design

This study is based on a sample survey for the selected two industries of Dhaka Stock Exchange

(DSE) – textiles and engineering industry. The study covers six years observations from 2009 to

2014 of 75 companies. The CSR practices in Bangladesh in recent years has been a matter of

attention. It is observed that many companies have come up to conduct their duties towards the

society. This study has the focus on the emphasis on that fact as evidenced from the financial

reporting perspective of the various companies from engineering and textiles industry to find out

the trend of CSR practices of those companies. The study has been conducted using a checklist

having five (05) major categories of CSR activities. The annual reports have been thoroughly

analyzed to trace out those CSR practices and compare them to understand the existing practices

of CSR activities by the listed companies of DSE. Company specific and industry comparisons

have been conducted to gather understanding and reporting of CSR activities culture in the

textiles and engineering industries.

3.2 Sample Size and Sources of Information

The study is based on the secondary information sources since the CSR disclosures are mainly

found in the annual reports of the companies. From the engineering industry 31 companies and

from the textiles industry 44 companies has been selected which are listed in the Dhaka Stock

Exchange. The listed companies are bound to publish their annual reports regularly. Thus this

study covers six years observations from 2009 to 2014 of 75 companies. The websites of DSE,

Securities & Exchange Commission (SEC) also have been used as sources of information.

The textiles industry and the engineering industry has a lot of public and private companies.

However, very few of these companies are listed in the Dhaka Stock Exchange and the

Chittagong Stock Exchange. Since our focus of this study is to find CSR practices in the textiles

and engineering industry from a reliable source of information, the DSE listed companies have

been selected as the sample unit and all of the listed companies have been taken into

consideration to avoid sample bias. However, what percentage of data has been taken into

consideration could not be reliably measured since the population data could not be reliably

obtained.


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3.3 Description on CSR Disclosure Index

This study is based on a checklist on CSR disclosures. The checklist could be found in the

Annexure. The checklist is divided into five (05) major categories of CSR disclosures. These

are:

I. Community Involvement

II. Environmental Disclosure

III. Employee Information

IV. Product and Service Information and

V. Other Social Responsibility Disclosure

The community involvement disclosures discusses about the participation of companies of

engineering and textiles industry. Under this head, seven (07) items of disclosures have been

analyzed.

In the environmental disclosure category, the initiatives regarding environmental issues,

environmental policies, and environmental scenario have been critically analyzed under eight

(08) point disclosure index. The regulatory aspect was later analyzed to check the reason for

deviation among the industries – engineering and textiles.

In an organization, employees are the main force in the operation of the business. The employee

information head accommodates this aspect from the CSR perspective. This head, thus, has the

highest number of disclosure items – twenty three (23) CSR disclosure items.

The CSR activities also could be extended to the product and service level of the organization.

Thus, a nine (09) item disclosure category has been taken into consideration for the product and

service information category.

Disclosures which could not be fitted directly within the scope of the above four categories have

been included under the other social responsibility disclosure head. This has eleven (11) items

of CSR disclosures.

In fine, last but not the least, in total 58 CSR disclosure items have been selected for the analysis

of CSR practices in Bangladesh. The evidences have been taken from the annual reports of

engineering and textiles industry.


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CHAPTER IV –

ANALYSIS & FINDINGS


14

4.1 Analysis

For the purpose of analysis engineering industry and textiles industry companies listed on DSE

has been selected. However, some companies are of “Z category”, that is, some companies are

traded Over the Counter or OTC. These companies do not hold AGMs regularly and do not

publish annual reports regularly. As a result, these companies have been omitted from the study.

The summary is as follows:

Engineering Industry Textiles Industry

No. of Company Selected: 31

No. of Z category Company: 04

No. of Company Studied: 27

No. of Company Selected: 44

No. of Z category Company: 07

No. of Company Studied: 37

4.1.1 Item wise Industry Analysis

The checklist has major five categories of CSR disclosures. For the analysis purpose, first the

major class of CSR disclosures would be analyzed and compared.


As a part of the society, companies have responsibilities towards the society. The CSR activities

that fall directly towards the betterment of the community, society has been taken into

consideration under this head. Seven (07) items have been considered for this head. The analysis

goes as:


15


TABLE I : ANALYSIS OF COMMUNITY INVOLVEMENT

The above table shows that 33.33% companies (9) from engineering industry and 29.73%

companies (11) from textiles industry do not disclose any community involvement activities.

This indicates that, even though these companies are listed public limited companies, they do

not bother about their community and responsibilities towards the society. In the engineering

Sl Company TI %

1 Anwar Galvanizing 0%

2 Atlas Bangladesh 0%

3 Aziz Pipes 0%

4Bengal Windsor

Thermoplactics0%

5 Deshbandhu 0%

6 Golden Son 0%

7 Monno Stafllers 0%

8 Navana CNG 0%

9S. Alam Cold Rolled

Steels Ltd.0%

10 Aftab Automobiles 14%

11Appollo Ispat

Complex Limited14%

12 Bangladesh Building 14%

13 BD.Autocars 14%

14 Bd.Thai Aluminium 14%

15 Kay & Que 14%

16 National Polymer 14%

17 National Tubes 14%

18 Renwick Jajneswar 14%

19 Bangladesh Lamps 29%

20 Eastern Cables 29%

21 GPH Ispat 29%

22 Olympic Industries 29%

23 Quasem Drycells 29%

24 Rangpur Foundry 29%

25 Singer Bangladesh 43%

26 BSRM Steel 71%

27Ratanpur Steel Re-

Rolling71%

Sl Company TI %

1 Al-Haj Textile 0%

2 Envoy Textile 0%

3 Family tex (BD) Ltd. 0%

4 H.R.Textile 0%

5 Hwa Well Textiles (BD) 0%

6 Maksons Spinning Mills 0%

7 Metro Spinning 0%

8 Prime Textile 0%

9 R N Spinning 0%

10 Stylecraft 0%

11 Zahintex Industries 0%

12 Alltex Ind. Ltd. 14%

13 Anlima Yarn 14%

14 Apex Spinning. 14%

15 Argon Denims 14%

16 BEXTEX Limited 14%

17 CMC Kamal 14%

18 Dacca Dyeing 14%

19 Delta Spinners 14%

20 Desh Garments 14%

21 Dulamia Cotton 14%

22 Generation Next Fashions 14%

23 Hamid Fabrics Limited. 14%

24 Malek Spinning 14%

25 Mithun Knitting 14%

26 Modern Dyeing 14%

27 Mozaffar Hossain Spinning 14%

28 Paramount Textile Ltd. 14%

29 Rahim Textile 14%

30 Safko Spinnings 14%

31 Saiham Cotton Mills 14%

32 Saiham Textile 14%

33 Sonargaon Textiles 14%

34 Square Textile 14%

35 Tallu Spinning 14%

36 Far East Knitting 57%

37 Matin Spinning Mills 57%


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industry, only 1 (14%) CSR activity is disclosed by 33.33% companies (9) and 64.86%

companies (24) from textiles industry disclose only 1 community involvement disclosure items.

Rest of the companies (02) in the textiles industry discloses 57% disclosure items. From

engineering industry, only 1 company discloses 43% disclosure items. From the engineering

industry only two companies disclose 71% disclosure items under the community involvement

disclosure category. This is the highest disclosure rate in the both industries.

Industry Summary:

The above analysis is company wise analysis. Now here is the summary of that analysis for the

whole industry in a nutshell. The summary goes follows:


TABLE II : INDUSTRY SUMMARY - COMMUNITY INVOLVEMENT

The above table shows that the disclosure trend in engineering industry is more by the companies

who tend to disclose of their CSR activities under this head. However, the deviation is less in the

textiles industry. In addition, the standard deviation (SD) data indicates year to year disclosure

has not been changed so far. Companies have disclosed same types of information over the study

periods. Moreover, disclosure rate is very insignificant under this head. Companies disclosed

very few information which indicates that, companies are not that much conscious about their

community.


Environment is the total surrounding in which a business is carried out. This pertains both

controllable and non-controllable elements. For the CSR activities and disclosures, the

environmental disclosures cover both the internal and external factors. To study this head of

disclosure, eight (08) disclosure items have been taken into consideration. The summary goes as

the following analysis:

Mean Median SD

1.25926 1 1.3754

TI

Mean Median SD

1 1 0.88730017

T I

Mean Median SD

18% 14% 20%

T I %

Mean Median SD

13% 14% 13%

T I %


17


TABLE III : ANALYSIS OF ENVIRONMENTAL DISCLOSURE

Both in the engineering and textiles industries, environmental disclosures tend to be less of the

concern which directly indicates that the companies are less attentive to their environment. From

Sl Company TII %



3 Aziz Pipes 0%

4

Bengal Windsor

Thermoplactics0%

5 Deshbandhu Polymer 0%

6 Golden Son 0%


8 Navana CNG 0%

9

S. Alam Cold Rolled

Steels Ltd.0%



12 BD.Autocars 0%


14 Kay & Que 0%









23 GPH Ispat 13%

24

Appollo Ispat Complex

Limited25%


26 BSRM Steel 50%

27

Ratanpur Steel Re-

Rolling75%

Sl Company TII %

1 Al-Haj Textile 0%


3 H.R.Textile 0%


5 Prime Textile 0%

6 R N Spinning 0%

7 Stylecraft 0%


9 Apex Spinning. 0%


11 CMC Kamal 0%




15 Modern Dyeing 0%

16

Mozaffar Hossain

Spinning 0%






22 Metro Spinning 13%



25 Anlima Yarn 25%





30 Dacca Dyeing 38%

31

Generation Next

Fashions 38%





36 Argon Denims 63%

37 Envoy Textile 88%


18

the engineering industry 81.48% (22) companies have no disclosures about the environmental

issues. Following the same, 54.05% (20) companies from textiles industry do not disclose any

environment related information. This is an alarming state that the companies of the both

industries are not aware of their environment. Only 18.52% (05) companies disclosed

environment related information in the engineering industry. In addition, only one (01) company

3.70% disclosed more than 50% disclosure (75% disclosure) in the engineering industry. On the

other hand, 46% (17) companies disclosed environmental disclosures in the textiles industry.

The reason behind this huge deviation among the industries could be the government regulations

and active involvement of interested parties in the textiles industry since this industry has a major

contribution to our national GDP and export. Only 8.11% (03) companies disclosed more than

50% disclosure items in the textiles industry. This still gives the impression that, from the both

of the industries, companies are not that much conscious about their environment.

Industry Summary:

The below table lists the summary of the environmental disclosures of the industry. This gives a

view of the overall industry scenarios in a nutshell. The table goes as:


TABLE IV : INDUSTRY SUMMARY - ENVIRONMENTAL DISCLOSURE

In the engineering industry, the overall disclosure rate is very poor. The median is 0. This, as

evidenced earlier, gives the non-awareness of the companies’ environmental concern. The mean

data is the good evidence of that. In the textiles industry, the situation is a bit better than the

engineering industry. However, in the both companies, the results and awareness of the

companies in the environmental aspect is not satisfactory as well as alarming that they care less

about the environment. The discrepancies could be evidenced from the SD data of both of the

industries.

Mean Median SD

0.59259 0 1.47438

T II

Mean Median SD

1 0 1.7896097

T II

Mean Median SD

7% 0% 18%

T II %

Mean Median SD

16% 0% 22%

T II %


19


Employees are the main force to drive the organization. Without them no production and no

work could be done. To run the organization smoothly, the employees are to be treated very well.

They are to be treated as humans not as a part of production such as machine operating tools.

From the CSR perspective, this employee information class of information is very crucial. The

industry wise disclosures made by the companies have been accumulated as follows:


TABLE V : ANALYSIS OF EMPLOYEE INFORMATION

Sl Company T III %

1 Aziz Pipes 22%

2

Bengal Windsor

Thermoplactics22%

3 Navana CNG 22%


5 BD.Autocars 26%







12 Golden Son 35%


14 GPH Ispat 35%




18 Kay & Que 39%


20

S. Alam Cold Rolled

Steels Ltd.48%

21

Appollo Ispat

Complex Limited48%


23

Ratanpur Steel Re-

Rolling52%




27 BSRM Steel 65%

Sl Company T III %

1 Modern Dyeing 17%

2 CMC Kamal 22%

3 R N Spinning 26%



6 Desh Garments 30%


8 Anlima Yarn 35%


10 Al-Haj Textile 39%




14 H.R.Textile 43%

15 Prime Textile 43%



18 Argon Denims 43%

19 Stylecraft 48%








27 Dacca Dyeing 52%












20

The above table shows that all companies have disclosed information on the employee

information disclosures. The extent of disclosures is varied, but all of the companies from both

the industries have made their CSR disclosures which indicate that the companies are concerned

about their employees. However, the Labor Act 2006, and other applicable laws, rules and

regulations dictate that the companies have to give minimum facilities to its employees. This

could be a reason for such disclosure by all of the companies. The lowest boundary of disclosures

by the engineering industry has been 22% and the highest boundary is 65% disclosure. On the

contrary, the textiles industry’s lowest boundary of disclosure is 17% and highest boundary is

74%. Again the regulations in the textiles, garments could be the reason for such high and low

boundary of disclosures.

Industry Summary:

After the discussion of the company wise analysis, the aggregate industry analysis goes as

follows:


TABLE VI : INDUSTRY SUMMARY - EMPLOYEE INFORMATION

The above table represents that, in the engineering industry though the standard deviation is less,

the disclosure level by the companies are also less. On the contrary, in the textiles industry the

SD is slightly higher than the engineering industry while the average disclosures are higher than

the engineering industry. Most of the companies have disclosed closely near about 50% of the

disclosure items in the textiles industry which is a good indication.

Mean Median SD

8.77778 8 2.92645

TIII

Mean Median SD

11 11 3.1904042

T III

Mean Median SD

38% 35% 13%

T III %

Mean Median SD

46% 48% 14%

T III %


21

IV. Product and Service Information

Products and services are the major concern for the business organizations. CSR disclosures on

the product and service information head measures the company’s responsibilities and awareness

in this aspect. The company specific analysis on this issue is as follows:


TABLE VII : ANALYSIS OF PRODUCT AND SERVICE INFORMATION

Sl Company T IV %

1

Bengal Windsor

Thermoplactics11%

2 Navana CNG 11%





7 Aziz Pipes 33%








15 BD.Autocars 78%

16 Golden Son 78%



19

S. Alam Cold Rolled

Steels Ltd.89%


21 GPH Ispat 100%

22 Kay & Que 100%


24

Appollo Ispat

Complex Limited100%

25

Ratanpur Steel Re-

Rolling100%


27 BSRM Steel 100%

Sl Company T IV %

1 R N Spinning 11%

2 Modern Dyeing 33%






8 H.R.Textile 33%

9 Prime Textile 33%

10 Stylecraft 33%



13 CMC Kamal 44%













26 Dacca Dyeing 89%



29 Anlima Yarn 100%



32 Argon Denims 100%







22

The above table shows that all of the companies have disclosed some information about their

product and service. Since this study is based on the annual reports, companies try to give

minimum information on their products and services to inform of the status and their operations.

This could be a major reasons for all company disclosure of minimum information under this

major head.

Industry Summary:

In analyzing these two industries – engineering and textiles, nine (09) CSR disclosure items were

taken into consideration. The below table summarizes the industry scenario on this category:


TABLE VIII : INDUSTRY SUMMARY - PRODUCT AND SERVICE INFORMATION

From the above analysis, it is observed that engineering industry companies have disclosed more

information on their products and services than the textiles industry. One possible reason could

be that, the engineering company’s products and services have diversifications and are of many

types. As a consequence, this demands proper explanations. However, the products and services

of textiles industry is obvious and have less diversity than the engineering industry. This also

could be evidenced from the deviations on disclosures as the SD is higher in the engineering

industry.

Mean Median SD

5.51852 6 3.03024

TIV

Mean Median SD

5 4 2.5985096

T IV

Mean Median SD

61% 67% 34%

T IV %

Mean Median SD

60% 44% 29%

T IV %


23


The other social responsibility disclosure head includes the rest of the CSR disclosures of the

companies. This head consists of 11 disclosure items. The company wise disclosures are as

follows:


TABLE IX : ANALYSIS OF OTHER SOCIAL RESPONSIBILITY DISCLOSURE

Sl Company TV %

1 Bengal Windsor Thermoplactics 0%


3 Aziz Pipes 9%










13 BD.Autocars 45%

14 Golden Son 45%

15 Navana CNG 55%

16 GPH Ispat 64%



19 S. Alam Cold Rolled Steels Ltd. 82%

20 Kay & Que 82%

21 Appollo Ispat Complex Limited 82%




25 Ratanpur Steel Re-Rolling 91%

26 BSRM Steel 91%


Sl Company TV %

1 R N Spinning 9%




5 H.R.Textile 9%

6 Stylecraft 9%

7 Tallu Spinning 9%

8 Modern Dyeing 18%

9 CMC Kamal 18%













22 Dacca Dyeing 45%







29 Argon Denims 55%






35 Anlima Yarn 82%




24

In this major head of CSR disclosure, one company (3.70%) disclosed 0% disclosures and one

company (3.70%) disclosed 100% disclosures. 48.15% companies of the engineering industry

have disclosed less than 50% of the disclosure items. On the other hand, 48.15% companies have

disclosed more than 50% of the disclosure items in the engineering industry. No companies from

the textiles industry have disclosed 100% or 0% disclosure under this head. However, 67.57%

companies of the engineering industry have disclosed less than 50% of the disclosure items. On

the other hand, 37.43% companies have disclosed more than 50% of the disclosure items in the

engineering industry. In addition, 54.05% companies of the textiles industry have disclosed less

than 30% of the disclosure items. In the engineering industry, 18.52% companies disclosed less

than 30% of the disclosure items. This analysis indicates that disclosures in the engineering

industry under this head is more satisfactory.

Industry Summary:

The industry summary on the other social responsibility disclosures has been identified in the

following table:


TABLE X : INDUSTRY SUMMARY - OTHER SOCIAL RESPONSIBILITY DISCLOSURE

The above table shows that, in the engineering industry the companies have disclosed more

information under the other social responsibility disclosure head than the textiles industry.

Disclosures have been less in the textiles industry – below 50% as shown in the above table in

the whole industry on an average. The deviations are less and most companies have much

similarity under this CSR disclosure head.

Mean Median SD

6.07407 5 3.32735

T V

Mean Median SD

4 3 2.692443

T V

Mean Median SD

55% 45% 30%

T V %

Mean Median SD

37% 27% 24%

T V %


25

VI. Industry Wise Company Specific Scenario

Now, the analysis of the CSR disclosures combining the six years data is to be analyzed. The

below analysis would be done on the industry wise company specific scenario:

a) Engineering Industry

The engineering industry company wise six year summary data has been sorted out and presented

in the following table:

TABLE XI : ANALYSIS OF ENGINEERING INDUSTRY COMPANY SPECIFIC SCENARIO

Sl Company Mean Median SD Mean % Median % SD %

1 Bengal Windsor Thermoplactics 6 6 0 10% 10% 0%

2 Aziz Pipes 9 9 0 16% 16% 0%

3 Anwar Galvanizing 10 10 0 17% 17% 0%

4 Navana CNG 12 12 0 21% 21% 0%

5 Bangladesh Lamps 12 12 0 21% 21% 0%

6 Eastern Cables 14 14 0 24% 24% 0%

7 Monno Stafllers 15 15 0 26% 26% 0%

8 Deshbandhu Polymer 16 16 0 28% 28% 0%

9 Aftab Automobiles 16 16 0 28% 28% 0%

10 Bd.Thai Aluminium 16.33 16 0.577 28% 28% 1%

11 Atlas Bangladesh 17 17 0 29% 29% 0%

12 Renwick Jajneswar 17 17 0 29% 29% 0%

13 BD.Autocars 19 19 0 33% 33% 0%

14 Golden Son 20 20 0 34% 34% 0%

15 Rangpur Foundry 22 22 0 38% 38% 0%

16 National Polymer 23 23 0 40% 40% 0%

17 Bangladesh Building 26 26 0 45% 45% 0%

18 GPH Ispat 27 27 0 47% 47% 0%

19 S. Alam Cold Rolled Steels Ltd. 28 28 0 48% 48% 0%

20 Kay & Que 28 28 0 48% 48% 0%

21 National Tubes 29 29 0 50% 50% 0%

22 Quasem Drycells 29 29 0 50% 50% 0%

23 Appollo Ispat Complex Limited 32 32 0 55% 55% 0%

24 Olympic Industries 35 35 0 60% 60% 0%

25 Singer Bangladesh 35.8 37 2.683 62% 64% 5%

26 Ratanpur Steel Re-Rolling 42 42 0 72% 72% 0%

27 BSRM Steel 43 43 0 74% 74% 0%

Engineering Industry


26

The CSR disclosures were analyzed under 58 items in total. The six year annual report data were

collected and analyzed and then summarized. The above table summarizes those six year

individual company scenario. Among 27 companies, only 7 companies (25.93%) companies

disclosed more than 50% CSR disclosures. In addition, none of the companies disclosed 100%

or at least 80% of the disclosure items. This indicates that the companies are not that much aware

in terms of CSR disclosures in the engineering industry.


27

b) Textiles Industry

The textiles industry company wise six year summary data has been sorted out and presented in

the following table:

TABLE XII : ANALYSIS OF TEXTILES INDUSTRY COMPANY SPECIFIC SCENARIO

Sl Company Mean Median SD Mean % Median % SD %

1 R N Spinning 8 8 0 14% 14% 0%

2 Modern Dyeing 10 10 0 17% 17% 0%

3 CMC Kamal 12 12 0 21% 21% 0%

4 Hwa Well Textiles (BD) 12 12 0 21% 21% 0%

5 Hamid Fabrics Limited. 12 12 0 21% 21% 0%

6 Al-Haj Textile 14 14 0 24% 24% 0%

7 Family tex (BD) Ltd. 14 14 0 24% 24% 0%

8 H.R.Textile 14 14 0 24% 24% 0%

9 Stylecraft 15 15 0 26% 26% 0%

10 Saiham Textile 15.25 15 0.5 26% 26% 1%

11 Desh Garments 16 16 0 28% 28% 0%

12 Prime Textile 16 16 0 28% 28% 0%

13 Tallu Spinning 16 16 0 28% 28% 0%

14 Delta Spinners 18 18 0 31% 31% 0%

15 Saiham Cotton Mills 20 20 0 34% 34% 0%

16 Safko Spinnings 20.25 20 1.258 35% 34% 2%

17 Maksons Spinning Mills 21 21 0 36% 36% 0%

18 Metro Spinning 21 21 0 36% 36% 0%

19 Mithun Knitting 22 22 0 38% 38% 0%

20 Alltex Ind. Ltd. 22.8 23 0.447 39% 40% 1%

21 Generation Next Fashions 23 23 0 40% 40% 0%

22 Dulamia Cotton 23 23 0 40% 40% 0%

23 Mozaffar Hossain Spinning 23 23 0 40% 40% 0%

24 BEXTEX Limited 25 0 0 43% 0% 0%

25 Apex Spinning. 26 26 0 45% 45% 0%

26 Sonargaon Textiles 26 26 0 45% 45% 0%

27 Anlima Yarn 29 29 0 50% 50% 0%

28 Dacca Dyeing 29 29 0 50% 50% 0%

29 Far East Knitting 30 30 0 52% 52% 0%

30 Argon Denims 31 31 0 53% 53% 0%

31 Rahim Textile 31 31 0 53% 53% 0%

32 Zahintex Industries 31 31 0 53% 53% 0%

33 Paramount Textile Ltd. 33 33 0 57% 57% 0%

34 Matin Spinning Mills 34 34 0 59% 59% 0%

35 Malek Spinning 35 35 0 60% 60% 0%

36 Square Textile 35 35 0 60% 60% 0%

37 Envoy Textile 38 38 0 66% 66% 0%

Textiles Industry


28

In the textiles industry, among the 37 selected companies 35.13% (13) companies disclosed less

than 30% disclosure items. In addition, 35.13% companies disclosed less than 50% disclosure

items but more than 30%. Lastly, 29.73% companies disclosed more than 50% of the disclosure

items. In addition, none of the companies disclosed 100% or at least 70% of the disclosure items.

The upper boundary of disclosure by the companies of the textiles industry is 66%. This indicates

that the companies are not that much aware in terms of CSR disclosures in the engineering

industry. Most of the SD is 0. This indicates that the companies have not disclosed more CSR

disclosure items over the year. Few companies did that which could be evidenced from the above

table.


29

VII. Overall Industry Scenario

Total 58 CSR disclosure items were taken to conduct this study. The aggregate scenario of the

companies in the selected two industries goes as follows:


TABLE XIII : ANALYSIS OF OVERALL INDUSTRY SCENARIO

Sl Company T %

1 Bengal Windsor Thermoplactics 10%

2 Aziz Pipes 16%



5 Navana CNG 21%








13 BD.Autocars 33%

14 Golden Son 34%




18 GPH Ispat 47%

19 S. Alam Cold Rolled Steels Ltd. 48%

20 Kay & Que 48%



23 Appollo Ispat Complex Limited 55%



26 Ratanpur Steel Re-Rolling 72%

27 BSRM Steel 74%

Sl Company T %

1 R N Spinning 14%

2 Modern Dyeing 17%



5 CMC Kamal 21%


7 H.R.Textile 24%


9 Stylecraft 26%


















27 Dacca Dyeing 50%

28 Anlima Yarn 50%



31 Argon Denims 53%








30

In the analysis, it has been observed that, the lowest boundary of CSR disclosure has been 10%,

while the highest boundary has been 74%. This is the aggregate scenario for both of the

industries. In addition, this high low boundary is also the high low boundary for the engineering

industry. The lowest boundary for the textiles industry is 14% and highest boundary is 64%. Less

than 30% of disclosure companies in the engineering industry is 44.44% while for textiles this

is 35.14%. More than 30% but less than 50% disclosure items disclosed companies in the

engineering industry is 29.63% while for the textiles industry this is 37.84%. More than 50%

disclosure items disclosed companies in the engineering industry is 25.93% while for the textiles

industry this is 29.73%. This gives the impression that less disclosing companies lie in the

engineering industry while textiles industry companies tend to disclose fair amount of CSR

disclosure information in their annual reports over the years.

Industry Summary:

The aggregate scenario of the engineering and textiles industry goes as follows:


TABLE XIV : INDUSTRY SUMMARY - OVERALL INDUSTRY SCENARIO

On the average, engineering industry companies disclosed more CSR disclosure information

than the textiles industry companies. However, the median and SD information of both of the

industries evidence that textiles industry disclosure information on CSR activities are consistent

and the distribution is more regular than the engineering industry. Deviation is higher in the

engineering industry.

Mean Median SD

22.2222 20 9.99744

T

Mean Median SD

22 22 8.0325913

T

Mean Median SD

38% 34% 17%

T%

Mean Median SD

38% 38% 14%

T %


31

4.2 Findings

The study on the CSR disclosures in engineering and textiles industries using the checklist has

led to several findings about the companies and the industries as well. Moreover, the inherent

limitations from the data source – published annual reports of the companies acted as a form of

advantage in the analysis and subsequent results on the CSR disclosures. The advantage was the

objectivity since the annual reports are from secondary source and does not entail selection bias

which could happen in case of interviewing, questionnaire and other direct communication and

data collection processes. The findings from this study are summarized as follows:

a) The standard deviation in both of the industries for almost all of the companies are zero

(0). This indicates that companies from both of the industries – engineering and textiles

– have not made any initiative to update and enhance their CSR disclosures over the years

(six years as the case in this study) in their annual reports.

b) The deviation value found for a few companies could be reasoned as the companies have

made slight changes over the years under some major disclosure heads. Another reason,

as observed, is that the change of auditors has led to such slight changes. Most of the

companies in Bangladesh do not bother at all about the financial reporting.

c) The analysis was done upon 58 disclosure items under 5 major heads. Within these

disclosure items some items under different heads are more important than other

disclosure items. The findings under different heads are presented below:

Community Involvement Findings

TABLE XV : DISCLOSURE CATEGORY WISE FINDINGS - COMMUNITY INVOLVEMENT

Referring to the CSR disclosure checklist (Appendix) under the community involvement

category the item no. 1, 4, 5, 6 are more important and carry higher weight than other items under

this category. For item no. 1, textiles industry companies disclosed more information than the

engineering industry. Textiles companies made more donations than the engineering companies.

Total % Total Total % Total

1 16 43% 27 73%

2 7 19% 2 5%

3 0 0% 0 0%

4 4 11% 1 3%

5 3 8% 1 3%

6 0 0% 0 0%

7 3 8% 2 5%

Engineering Industry Textiles IndustryItem

No.


32

Item no. 4 (support for education) was less disclosed in both of the industries and textiles industry

disclosure is lesser. This indicates that support for education is not given much importance by

many companies in both industries. Supporting for public health (item no. 5) has been undertaken

by few companies in both of the industries. No companies from the both industries participated

in the governmental social campaigns (item no. 6). In a nutshell except from the donation

activities, companies from the both industries tend not to disclose much information in other

disclosure areas which indicates that companies, in most cases, do not conduct such CSR

activities. As a result, companies from both industries – engineering and textiles – fall short in

terms of their community responsibilities fulfilment.

Environmental Disclosure Findings

TABLE XVI : DISCLOSURE CATEGORY WISE FINDINGS - ENVIRONMENTAL DISCLOSURE

The environmental disclosure category represents the environmental concern, duties and

responsibilities of the companies in the engineering and textiles industries. Few engineering

companies have environmental policies (item no. 8) whereas near about 50%, that is, 43% of the

textiles companies have environmental policies. As we know, in Bangladesh, no specific and

strong environmental policy, act, rules and regulation do not exist. Thus, companies are not

bound to care about the environmental issues. This is reflected in the engineering industry.

However, customers of the textiles industry are mainly foreign buyers. Most of the textiles

products are exported. As a result, the bindings of the export contracts and pre-requisites of

exports, the textiles companies are bound to maintain a minimal level of environmental

disclosures and environment protection initiatives. This is the reason of higher environmental

disclosures by the textiles industry companies. Thus, the highlighted disclosure items are in

higher rank for textiles industry.


8 5 14% 16 43%

9 2 5% 4 11%

10 1 3% 6 16%

11 1 3% 0 0%

12 1 3% 7 19%

13 2 5% 1 3%

14 1 3% 2 5%

15 3 8% 11 30%


No.


33

Employee Information

TABLE XVII : DISCLOSURE CATEGORY WISE FINDINGS - EMPLOYEE INFORMATION

The employee information category entails various employee, work condition, workers’

facilities, women and children related information. Again, in the textiles industry the disclosure

rates by the companies are higher than the engineering industry. Since major companies are

export oriented and foreign buyers put lot of emphasis on the employee welfare, the textiles

companies have disclosed more CSR disclosures than the engineering industry companies.

Employee welfare (item no. 18), training related information (item no. 19 – 22) have higher

weight in the textiles industry. However, none of the companies in any industry disclosed

categories of employee trained (item no. 22). This is an indicator that even if the textiles and

engineering companies disclosed about employee training related information, none of the

companies disclosed specific and detailed information regarding the employee training. Most of

the textiles workers are female and the Bangladesh Government has strict policy and Act for

female workers. Maternity leave, child care, child labor – all these are taken seriously by the


16 11 30% 28 76%

17 9 24% 3 8%

18 23 62% 36 97%

19 13 35% 16 43%

20 1 3% 0 0%

21 7 19% 14 38%

22 0 0% 0 0%

23 26 70% 33 89%

24 18 49% 13 35%

25 8 22% 2 5%

26 24 65% 33 89%

27 22 59% 33 89%

28 10 27% 30 81%

29 5 14% 3 8%

30 0 0% 3 8%

31 2 5% 0 0%

32 3 8% 26 70%

33 3 8% 21 57%

34 4 11% 23 62%

35 2 5% 20 54%

36 7 19% 8 22%

37 24 65% 35 95%

38 7 19% 14 38%


No.


34

Government. This is the reason for higher disclosure in textiles industry regarding child labor,

and health and safety (item no. 29, 30). Workers’ occupational safety is taken seriously by the

engineering industry as Labor Act 2006 directly applies to them (item no. 29). The movement in

the garments sector made it necessary to be aware for factory workers’ welfare. This is why

textiles industry disclosure rate is highest (95%) (Item no. 37). On an average, textiles industry

disclosed more CSR disclosures than the engineering industry.

Product and Service Information

TABLE XVIII : DISCLOSURE CATEGORY WISE FINDINGS - PRODUCT AND SERVICE INFORMATION

Disclosure on product and service information is a crucial indicator that the company is

increasing its quality gradually. Product development and research (item no. 40) activities are

needed more in the engineering industry than in textiles industry. This is the reason for more R

& D activity disclosure in the engineering industry. The textiles industry serves the orders from

the buyers. Buyers give the order, design, and take care of the responsibility of the products at

the first place. As a result, textiles companies have less direct responsibilities in this aspect.

However, the scenario is just reverse in the engineering industry. Engineering companies are

responsible in the first place and have to innovate to sustain in the market. This is the reason that

engineering companies are more caring about customer focus, satisfaction and services (item no.

43) and has product safety practice (item no. 44). Under this category in terms of some aspect

textiles industry companies have disclosed more CSR disclosure items and in other cases

engineering companies have disclosed more CSR disclosures.


39 26 70% 37 100%

40 15 41% 14 38%

41 14 38% 17 46%

42 10 27% 15 41%

43 14 38% 13 35%

44 13 35% 10 27%

45 18 49% 36 97%

46 18 49% 36 97%

47 13 35% 23 62%


No.


35

Other Social Responsibility Disclosure

TABLE XIX : DISCLOSURE CATEGORY WISE FINDINGS - OTHER SOCIAL RESPONSIBILITY DISCLOSURE

The last category of CSR disclosure – other social responsibility disclosure – includes the all

other CSR disclosures that are not included in any of the four heads. The fair business practice

(item no. 48) is very necessary to conduct good business. However, few companies disclosed

such information. One reason could justify this – companies in both of these industries are not

bound to disclose such information and the existing industry practice is not strong enough to

disclose such information to the shareholders and stakeholders via annual reports. Again,

contribution to the national exchequer by the textiles industry is the result of foreign buyers’

requirements (item no. 50). This could be evidenced from more than 50% companies’ disclosure

practice in the textiles industry. The value addition information (item no. 52) is disclosed more

by the engineering industry than the textiles industry. A simple reason is such that, the

engineering companies have more R&D activities. As a natural consequence, the engineering

companies are to add more value than the textiles industry companies. The ethical practice and

disclosures (item no. 54, 55) are not satisfactory in any of the industries. Disclosures are highly

volatile across different companies and the annual report analysis has indicated that no concrete

information on these disclosure items were found. The possible reason is that most of the

companies in the textiles and engineering industry are owned by family. These companies are,

in basic terms, sole proprietorship organizations; but to conduct their business vastly, companies

are registered as public limited companies. This is the practical view of the companies. This has

been strongly evidenced from the board of directors’ information panel. All of the selected

companies’ board of directors belong to the same family. The other CSR disclosures under this

head are to some extent at moderate level.


48 13 35% 11 30%

49 24 65% 37 100%

50 18 49% 19 51%

51 18 49% 9 24%

52 16 43% 14 38%

53 18 49% 17 46%

54 11 30% 15 41%

55 12 32% 10 27%

56 8 22% 2 5%

57 16 43% 15 41%

58 1 3% 0 0%


No.


36

d) The annual report analysis has gave the impression that companies in the engineering and

textiles industry do not tend to disclose CSR disclosures separately rather these

disclosures are embedded under different line items in the financial statements.

e) As discussed earlier and in the literature review section and evidenced from the analysis

that the more disclosure rates under different categories and items of the checklist are the

result of higher regulations by the foreign buyers, government, governmental agencies

and other active and influential interested groups. The less disclosure rates under different

categories and items of the checklist are the result of lack of disclosure requirements by

the mentioned parties.

f) As observed, most of the companies in both industries disclosed same amount of CSR

disclosure items in their annual reports. This is an indication that companies do not bother

much in terms of disclosing CSR activities. As a result, companies in the engineering and

textiles industry have not made much CSR disclosures and the CSR disclosure rates are

lower (overall disclosure rates are less than 50% in both industries).

g) The information obtained from the analysis of the annual reports about the CSR

disclosures indicates that companies have less interest and sense of responsibilities

towards the shareholders and society except the owners of the companies. As a result,

CSR activities and subsequent disclosures have not gained much importance in the

annual reports. The lower disclosure rates are the evidence of such observation.

h) Disclosures from the top management about the CSR activities are very few and less

informative. The less disclosure rates in Other Social Responsibility Disclosure category

evidence this.

In fine, the analysis of CSR disclosures of engineering and textiles industry has enabled the view

towards the disclosure of CSR activities in the annual reports that generally disclose rates of CSR

related information are lower when companies are not obliged to disclose. However, when the

companies are bound to do so, the disclosure rates of CSR information are higher. There are a

few exception to this view that few companies willingly disclosed CSR information. The reason

for this could be the market position and culture and nature of the company.


37

CHAPTER V –

CONCLUSION &

RECOMMENDATION


38

5.1 Recommendation

In this study it has been observed that companies in the engineering and textiles industry the rate

of CSR disclosures are higher when the companies have regulatory requirements to do so.

However, doing for the society, performing the social responsibilities should not be by force.

Rather it should be willingly. If CSR activities are performed willingly, that would be better for

the society as well as companies. Here goes some recommendations for companies in the

engineering and textiles industry that are disclosing CSR disclosures:

Companies should keep a separate portion in the annual reports for CSR disclosures to

give better disclosures and emphasis on CSR activities.

CSR disclosures should be made in details to make the disclosures clear and easily

understandable.

CSR disclosures come from the CSR practices. Companies should practice more CSR

activities to enhance the living standard of the employees and workers and betterment of

the society as a whole.

Top management should actively participate in the CSR activities by sponsoring CSR

activities, taking active role in CSR activities and motivating concerned parties.

Proper balance of CSR activities has to be maintained in performing, disclosing CSR

activities.

To ensure sustainable growth and development, continuing of CSR activities is

necessary. Thus, companies should conduct CSR activities willingly and disclosure CSR

activity disclosures willingly to avoid many hassles and regulations.

In summary, companies should perform CSR activities for the company’s own benefit and

disclosure such CSR activity disclosures accordingly in the proper manner in the annual reports

of the company.


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5.2 Concluding Remarks

The Corporate Social Responsibility or CSR takes companies to the level of social citizenship.

Conducting operations that lead to the betterment of the society is the outcome of CSR activities.

However, this social good and philanthropic activity – CSR has to be reported in the financial

statements of the organizations. The CSR disclosures serve that purpose which has been studied

in this study. The disclosure checklist of CSR has enabled to draw the picture of CSR disclosures

and CSR practices in Bangladesh from the engineering and textiles industry. Having many

limitations, this study has found out that, in Bangladesh (in the engineering and textiles industry)

the CSR practice is not satisfactory level. The rate of CSR disclosures are higher when there are

regulatory requirements. The market status, position, regulations – and many such factors affect

the CSR disclosures. Since this study is based upon six years data and on the annual reports of

the companies of engineering and textiles industry, further study could be conducted to sort out

detailed practices of CSR activities in Bangladesh in the engineering and textiles industry as well

as other industries.


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CHAPTER VI –

REFERENCES &

APPENDIX


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6.1 References

Amaeshi, K. M., Adi, B. C., Ogbechie, C. & Amao, O. O., 2006. Corporate Social Responsibility

in Nigeria: western mimicry or indigenous influences?. Journal of Corporate Citizenship, Issue

24, pp. 83-99.

Anderson, H. L. & Landau, I., 2006. Corporate social responsibility in Australia: a review, s.l.:

Monash U. Department of Business Law & Taxation.

Ararat, M., 2008. A development perspective for CSR: Case of Turkey. Corporate Governance:

The International Journal of Business Society , pp. 1-25.

Bangladesh Securities and Exchange Commission , 2014. Bangladesh Securities and Exchange

Commission. [Online]

Available at: http://www.sec.gov.bd/

[Accessed 3 June 2015].

Carroll, A. B., 1979. A three-dimensional conceptual model of corporate performance. Academy

of management review, 4(4), pp. 497-505.

Crane, A., Matten, D. & Spence, L. J., 2008. CHAPTER 1 : Corporate Social Responsibility:

Readings and Cases in Global Context. In: Corporate social responsibility: Readings and cases

in a global context. London: Routledge, pp. 3-20.

Florini, A., 2003. The Coming Democracy: New rules for running a new world, Washington DC:

Island Press.

Gray, R., Owen, D. & Adams, C., 1996. Accounting and Accountability: Changes and

Challenges in Corporate Social and Environmental Reporting, London: Prentice Hall.

Grigore, G. F. & Obeng-Nyarko, J. K., 2011. Corporate Social Responsibility in Developing

Countries: the Case of most Successful Companies in Romania and Ghana, s.l.: SSRN 1945683.

Gutiérrez, R. & Jones, A., 2004. Corporate social responsibility in Latin America: An overview

of its characteristics and effects on local communities. In: M. E. C. C., ed. Corporate Social

Responsibility in the Promotion of Social Development: Experiences from Asia and Latin

America. s.l.:Inter-American Development Bank (IDB), pp. 151-188.

Khan, A., Muttakin, M. B. & Siddiqui, J., 2013. Corporate Governance and Corporate Social

Responsibility Disclosures: Evidence from An Emerging Economy. Journal of business ethics,

114(2), pp. 207-223.


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Kolk, A., Hong, P. & Dolen, W. V., 2010. Corporate social responsibility in China: an analysis

of domestic and foreign retailers' sustainability dimensions. Business Strategy and the

Environment , 19(5), pp. 289-303.

Matten, D. & Crane, A., 2005. Corporate citizenship: Toward an extended theoretical

conceptualization. Academy of Management review, 30(1), pp. 166-179.

Mele, D., 2004. Corporate social responsibility in Spain: An overview. s.l., IESE Business

School - Universidad de Navarra, Working Paper No. 543.

Muller, A. & Kolk, A., 2009. CSR performance in emerging markets evidence from Mexico.

Journal of Business Ethics, 85(2), pp. 325-337.

Ong, M., 2008. Contextualising corporate social responsibility in Singapore, s.l.: Lee Kuan Yew

School of Public Policy Research Paper No. LKYSPP09-011-CAG004.

Semler, R., 2001. Maverick!: the success story behind the world's most unusual workplace, s.l.:

Random House.

Stuebs, M. T. & Sun, L., 2011. Corporate social responsibility and firm reputation. Journal of

Accounting, Ethics & Public Policy, 12(1), pp. 1-14.

The Dhaka Stock Exchange (DSE), 2011. Dhaka Stock Exchange. [Online]

Available at: http://www.dsebd.org/ilf.php

[Accessed 4 June 2015].

Timane, D. R. & Tale, P. T., 2012. A Study of Corporate Social Responsibility in India.

International Journal of Research in IT & Management, 2(12), pp. 12-17.

Vilanova, M., Lozano, J. & Arenas, D., 2009. Exploring the Nature of the Relationship between

CSR and Competitiveness. Journal of Business Ethics, Issue 87, pp. 57-69.


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6.2 Appendix

6.2.1 CSR Disclosure Checklist

Disclosure Items


1 Disclosure on charitable donations and subscription

2

Sponsoring and advertising (e.g., sponsoring sporting and recreational projects, support

for the arts & culture

3 Donations to the Chief Advisor's/PM's Relief Fund

4 Supporting for education (including any scholarship program)

5 Support for public health

6 Participation in governmental social campaigns

7 Other community activity disclosure


8 Environmental Policies

9 Compliance with international and/or legal laws regarding environment protection

10 Pollution control ( Tannery effluent plant, dust control)

11 Prevention or repair of environmental damage (e.g., tree plantation)

12 Conservation of natural resources and recycling activities (e.g., water treatment)

13 Support for public/private action designed to protect the environment

14 Awards for environmental protection/performance

15 Other environmental disclosure


16 Number of employees/human resources/worker

17 Employee relations/industry relations

18

Employee welfare (e.g., canteen subsidy, medical expense, games, sports & picnic, merit

scholarship, cultural & ceremonial expense, death compensation, uniform & liveries etc.)

19 Information on firm's emphasis on employee education and training

20 Number of employees trained

21 Amount spent on employee training

22 Categories of employees trained

23 The company has established a recognized contributory provident fund scheme

24 Is there a provision for gratuity for the company's permanent employees

25 Is there a group term insurance scheme for the company’s permanent employees

26 The company makes regular allocation (5%) to WPPF and welfare fund

27 Managing agent/officers' remuneration (cash)

28 Managing agent/officers' remuneration (non-cash)

29 Worker's occupational health and safety

30 Company's policy on child labor

31 The company has policies on recruitment & promotion of employees

32 Number of factory worker receiving salaries above Tk. 3000/month

33 Number of factory worker receiving salaries below Tk. 3000/month

34 Number of employees receiving salaries above Tk. 3000/month


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35 Number of employees receiving salaries below Tk. 3000/month

36 Employee appreciation

37

Factory workers' welfare (e.g., canteen subsidy, medical expense, games, sports &

picnic, merit scholarship, cultural & ceremonial expense, death compensation, uniform

& liveries etc.)

38 Other employee disclosure

IV. Product and Service Information

39 Nature of business and types of products produced

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Information on product development and research (research and development

expenditure)

41 Information on product quality and safety

42 Discussion of marketing network

43 Information on the company's focus on customer service and satisfaction

44 Disclosure of consumer/product safety practices

45 Installed production capacity

46 Production capacity used (production efficiency)

47 Other product related disclosure


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Information on fair business practices (e.g., employment & advancement of women,

minorities & other interest groups)

49 Expenditure on energy (fuel, electricity, etc.)

50

Disclosure on the total amount contributed to the national exchequer ( in the forms of

income tax, VAT, import duty, development surcharge and other indirect taxes & duties)

51 Value of imports (foreign currency paid)

52 Value added statement

53

Boards statement on commitment to establishing high level of ethics and compliance

within the organization

54 Existence of a code of business conduct & ethics/core values

55

The contents of a code of business conduct and ethics/Disclosure of statement of ethics

and values, covering basic principles such as integrity, conflict of interest, compliance

with laws and regulations, etc.

56

Dissemination or communication of the statement of ethics & business practices to all

directors and employees and their acknowledgement of the same

57 Management appreciation to different stakeholders (except employees)

58 Information on non-resident shareholders and any dividend paid to them

THE EXTENT OF CSR PRACTICES IN BANGLADESH: EVIDENCE FROM ENGINEERING AND TEXTILES INDUSTRY

Education

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