1.

INTRODUCTION

KPMG in India is one of the leading providers of risk, financial & business advisory, tax &
regulatory services, internal audit, and corporate governance. With a global approach to service
delivery, the firm responds to clients' complex business challenges with a broad range of
services across industry sectors and national boundaries.

KPMG was established in India in September 1993, and has rapidly built a significant
competitive presence in the country. The firm operates from its offices in Mumbai, Pune, Delhi,
Kolkata, Chennai, Bangalore, Hyderabad, Kochi, Chandigarh and Ahmedabad, and offers its
clients a full range of services, including financial and business advisory, tax and regulatory,
and risk advisory services.

In India, KPMG has a client base of over 2700 companies. The firm's global approach to service
delivery helps provide value-added services to clients. The firm serves leading information
technology companies and has a strong presence in the financial services sector in India while
serving a number of market leaders in other industry segments.

Our differentiation is derived from a rapid performance-based, industry-tailored and

technology-enabled business advisory services delivered by some of the leading talented
professionals in the country. KPMG professionals are grouped by industry focus and our clients
are able to deal with industry professionals who speak their language. Our internal information
technology and knowledge management systems enable the delivery of informed and timely
business advice to clients.
 2. HISTORY

KPMG was formed in 1987 with the merger of Peat Marwick International (PMI) and Klynveld
Main Goerdeler (KMG) and their individual member firms. Spanning three centuries, the
organization's history can be traced through the names of its principal founding members -
whose initials form the name "KPMG."
K stands for Klynveld. Piet Klynveld founded the accounting firm Klynveld Kraayenhof & Co.
in Amsterdam in 1917.
P is for Peat. William Barclay Peat founded the accounting firm William Barclay Peat & Co.
in London in 1870.
M stands for Marwick. James Marwick founded the accounting firm Marwick, Mitchell & Co.
with Roger Mitchell in New York City in 1897.
G is for Goerdeler. Dr. Reinhard Goerdeler was for many years chairman of Deutsche
Treuhand-Gesellschaft and later chairman of KPMG. He is credited with laying much of the
groundwork for the KMG merger.
 3. THE INDIA LEADERSHIP TEAM

Richard is the Chief Executive Officer of KPMG in India. He has over 28 years of multi
layered, multi sectoral, top-of-the-pyramid post qualification experience behind him.
Richard was appointed as the Deputy Chief Executive Officer and Head of the Advisory
practice in November 2009 and held the position of the Chief Operating Officer for KPMG in
India from June 2006 to November 2009. Richard served as the Head of the Risk Advisory
Servces Practice in KPMG in India from April 2004 till June 2006.

Richard has serviced clients across sectors including advertising, oil and gas, industrial and
consumer markets and specifically in the pharmaceuticals, technology, manufacturing and
retail domains. He comes with real time extensive experience coupled with detailed
understanding of corporate governance, enterprise risk management, internal audit and
business processes re- engineering.

Richard has affiliations with leading business enterprises worldwide, is a member of the
Institute of Chartered Accountants of India and an active member of various Industry
associations and trade bodies. He is on the National Council of CII and chairs their Northern
Region Economic Affairs and Taxation Committee. He is a member of the National Executive
Committee of CII for Corporate Governance and the prestigious American Chambers of
Commerce (AMCHAM). He is currently on the Board of AMCHAM. Richard was recently
appointed as the Chairman of Enactus India, which is an international non-profit organisation.
Richard is also a member of the EMA and Global Board for KPMG International.

Richard is an articulate and eloquent speaker, contributing at several public forums while
providing thought leadership through articles in leading newspapers and magazines on diverse
topics - corporate governance/risk management, leadership and the economy.
 4. SERVICES

KPMG in India provides tax and advisory services and industry insights to help organizations
negotiate risks and perform in the dynamic and challenging environments in which they do
business.

1. Tax and Regulatory

Enhancing a shareholder's value is a fundamental concept which drives every management
effort in the modern business environment. Progressive and bottom-line focused managements
have realized that taxes (both direct and indirect, domestic and international), should be viewed
as a dynamic item of cost rather than a passive charge on the profits.
Indeed, an effective tax-cost management provides a distinct competitive advantage. This
requires the application of appropriate tax strategies proactively identified and surgically
implemented.
We have developed a total tax management capability which encompasses the entire spectrum
of direct, indirect and personal taxes. Our approach to tax planning is multi-jurisdictional. We,
together with other member firm's offices spread across the globe, can provide quality national
and international tax advice.
Our professionals are drawn from a wide variety of backgrounds. Industry specialization,
service line specialization, international exposure and advanced training equip them to work
with our clients and be their advisors in a wide spectrum of their business processes.

2. Domestic Tax Services

Sound business decisions need to be backed by the right tax advice. Rapid globalization, has
led to intense competition. Corporate entities have realized that progressive tax strategies and
proper planning can reduce the tax incidence and provide the much needed cutting edge over
competitors.
3. CORPORATE AND BUSINESS TAX ADVISORY
Taxes may not be totally avoidable, but upfront tax planning provided by us, parallel to the
decision making process, helps our clients attain the desired results. Our professionals are
guided by a single, strong underlying philosophy - "helping our clients attain their business
objectives".
 Dove-tailing tax approaches into business plans

 Structuring the entire business transaction, including preparation of structured tax

approach tailored to meet business objectives

 Tax modelling, which would involve validation of tax assumptions built into financial
and business models.

 On-line tax advisory and planning for positions to be adopted in the tax return
Transaction advisory including planning for achieving mergers, acquisitions corporate
re-organizations.

 An approach that seeks to reduce tax.

4. ADVISORY
With the world constantly and rapidly changing, the future is full of realigned priorities. At
KPMG in India, we press on looking for sustainable growth, staying in shape and preparing for
a new landscape. Partnering with our clients, we develop tailored and thorough
recommendations in collaboration with sector and technical experts, bringing among the best
minds from across the vast KPMG network.
By working in multi-disciplinary teams, we deliver holistic thinking and insights helping
clients in transforming their organization, no matter what their primary challenges are - from
improving performance, to optimizing risk, to restructuring their operations or seizing new
opportunities.
5. KPMG GLOBAL SERVICES
KPMG Global Services (KGS) is a joint venture between KPMG in the US, UK and in India.
Set up as a global capability platform, KGS provides professional services to KPMG member
firms globally.
With its broad portfolio of services and cross-functional capabilities, KPMG Global Services
delivers on both immediate and long-term business imperatives for the global member firms
by harmonizing its core Advisory services with the various Centers of Excellence to provide
services using a flexible delivery model. Our high performing teams work together to respond
to complex business challenges facing our clients by offering informed perspectives, and
delivering clear results.
By working with us KPMG member firms have successfully driven business value through
acquisition of new capabilities, increased competitive strength, and an expanded global
footprint.
Services range from highly complex and diverse advisory engagements like shared services
design, financial transformation, sourcing strategy, financial due diligence and information
protection, to research based solutions like benchmarking and competitive landscape analysis,
and advisory support activities like project management, bid and administrative support.
 5. CORPORATE SOCIAL RESPONSIBILITY: TOWARDS A
SUSTAINABLE FUTURE

The role of corporates by and large has been understood in terms of a commercial business
paradigm of thinking that focuses purely on economic parameters of success.

As corporates have been regarded as institutions that cater to the market demand by providing
products and services, and have the onus for creating wealth and jobs, their market position has
traditionally been a function of financial performance and profitability.

However, over the past few years, as a consequence of rising globalization and pressing
ecological issues, the perception of the role of corporates in the broader societal context within
which it operates, has been altered.

Stakeholders (employees, community, suppliers and shareholders) today are redefining the role
of corporates taking into account the corporates’ broader responsibility towards society and
environment, beyond economic performance, and are evaluating whether they are conducting
their role in an ethical and socially responsible manner.

As a result of this shift (from purely economic to ‘economic with an added social dimension’),
many forums, institutions and corporates are endorsing the term Corporate Social
Responsibility (CSR).

They use the term to define organization’s commitment to the society and the environment
within which it operates.

The World Business Council on Sustainable Development’s (WBCSD) report was titled
Corporate Social Responsibility: Making Good Business Sense and the OECD Guidelines for
Multi-National Enterprises which includes a discussion on how CSR is emerging as a global
business standard.
 6. EVOLUTION OF CSR IN INDIA

Responsibility in India Poll”, a survey conducted by Tata Energy Research Institute (TERI),
the evolution of CSR in India has followed a chronological evolution of 4 thinking approaches:

Ethical Model(1930 –1950):

One significant aspect of this model is the promotion of “trusteeship” that was revived and
reinterpreted by Gandhiji. Under this notion the businesses were motivated to mange their
business entity as a trust held in the interest of the community. The idea prompted many family
run businesses to contribute towards socioeconomic development. The efforts of Tata group
directed towards the well being of the society are also worth mentioning in this model.

Statist Model (1950 –1970s):

Under the aegis of Jawahar Lal Nehru, this model came into being in the post-independence
era. The era was driven by a mixed and socialist kind of economy. The important feature of
this model was that the state ownership and legal requirements decided the corporate
responsibilities.

Liberal Model (1970s –1990s):

The model was encapsulated by Milton Friedman. As per this model, corporate responsibility
is confined to its economic bottom line. This implies that it is sufficient for business to obey
the law and generate wealth, which through taxation and private charitable choices can be
directed to social ends.

Stakeholder Model (1990s – Present):

The model came into existence during 1990s as a consequence of realization that with growing
economic profits, businesses also have certain societal roles to fulfill. The model expects
companies to perform according to “triple bottom line” approach. The businesses are also
focusing on accountability and transparency through several mechanisms.
 7. CONCEPT OF CSR

In the absence of a universally accepted definition for CSR, there are some myths that surround
the concept:

 Myth # 1:
Businesses invest the money, therefore they decide the modus operandi of the CSR
initiative. There is a notion that since businesses invest money in society, they are the
one who will be deciding upon the modus operandi of the CSR initiative. However this
is not true. CSR driven by the mandate of an enterprise alone may not generate desired
results. Stakeholders must be involved from the onset in defining an initiative to make
it successful. Corporates must not assume that they understand the needs of a
community by taking them at face value; stakeholder’s needs must be considered within
the local context and culture.

 Myth # 2:
Financial resources alone can meet CSR needs of an enterprise.
In fact, financial resources are only part of the equation. Besides financial resources, it
is equally or even more important for the CSR programs to be well defined and well
accompanied by adequate human resources if they are to meet the intended objectives.

 Myth # 3:
CSR is interchangeable with corporate sponsorship, donation or other philanthropic
activities.
The focus of responsible business practices in the profit sector is hitherto largely
confined to community charity-based projects.
While this may have been relevant for the historical context in the mid-90s when
Carroll’s definition was coined, the current thinking of CSR has moved beyond
philanthropy to in fact encompass all internal and external segments of business
operations: employees, market environment and community.
 8. CORPORATE SOCIAL RESPONSIBILITY IS NOT CHARITY

The originally defined concept of CSR needs to be interpreted in the broader conceptual
framework of how the corporate embed their corporate values as a new strategic asset, to build
a basis for trust and cooperation within the wider stakeholder community.

Though there have been evidences that record a paradigm shift from charity to a long-term
strategy, yet the concept still is believed to be strongly linked to philanthropy. There is a need
to bring about an attitudinal change in people about the concept.

By having more coherent and ethically driven discourses on CSR, it has to be understood that
CSR is about how corporates place their business ethics and behaviors to balance business
growth and commercial success with a positive change in the stakeholder community.

Several corporates today have specific departments to operationalize CSR. There are either
foundations or trusts or a separate department within an organization that looks into
implementation of practices.

Being treated as a separate entity, there is always a flexibility and independence to carry out
the tasks.

But often these entities work in isolation without creating a synergy with the other departments
of the corporate. There is a need to understand that CSR is not only a pure management
directive but it is something that is central to the company and has to be embedded in the core
values and principles of the corporate.

Whatever corporates do within the purview of CSR has to be related to core business. It has to
utilize things at which corporates are good; it has to be something that takes advantage of the
core skills and competencies of the companies. It has to be a mandate of the entire organization
and its scope does not simply begin and end with one department in the organization.
While conceptualization and implementation seem firmly underway, evaluation is still taking
a back seat. There is a need to incorporate an evaluation plan, which along with presenting a
scope of improvement in terms of fund utilization and methodology adopted for the project,
measures the short and long term impact of the practices.

While there have been success stories of short term interventions, their impact has been limited
and have faded over a period of time. It is essential for corporates to adopt a long term approach
rather than sticking to short term interventions, involving the companies and employees in the
long-term process of positive social transition.

A clearly defined mission and a vision statement combined with a sound implementation
strategy and a plan of action firmly rooted in ground realities and developed in close
collaboration with implementation partners, is what it takes for a successful execution of CSR.

An area that can be looked upon is the sharing of best practices by corporates. A plausible
framework for this could be benchmarking. While benchmarking will help corporates evaluate
their initiatives and rank them, it will also provide an impetus to others to develop similar kind
of practices. Credibility Alliance, a consortium of voluntary organizations follows a
mechanism of accreditation for voluntary sector. Efforts have to be directed towards building
a similar kind of mechanism for CSR as well.

Sustainable development, like building a successful business, requires taking the long-term
view. The KPMG International Survey of Corporate Responsibility Reporting 2005 showed
that voluntary reporting on sustainability is on the increase across all the countries.
Sustainability Reporting is emerging as a key vehicle to implement CSR and measure its
progress in organizations.

As we move forward, increasing numbers of companies are expected to issue Sustainability

Reports, with the scope of issues broadening from purely environmental reporting to a more
comprehensive coverage of the environmental, social and economic dimensions.

There is a strong corporate initiative on joining the Global Compact Society in India, as well,
with 43 Indian companies having already joined Global Compact as of January 2008.
 9. CONCLUSION

Corporate Social Responsibility is not a fad or a passing trend, it is a business imperative that
many Indian companies are either beginning to think about or are engaging with in one way or
another.
While some of these initiatives may be labeled as corporate citizenship by some organizations,
there basic message and purpose is the same.
A successfully implemented CSR strategy calls for aligning these initiatives with business
objectives and corporate values thereby integrating corporate responsibility across the business
functions and enhancing business reputation.
The challenge for us is to apply fundamental business principles to make CSR sharper, smarter,
and focused on what really matters.

This can be done by:

 Focusing on priorities
 Allocating finance for treating CSR as an investment from which returns are expected
Optimizing available resources by ensuring that efforts are not duplicated and existing
services are strengthened and supplemented
 Monitoring activities and liaising closely with implementation partners such as NGOs
to ensure that initiatives really deliver the desired outcomes
 Reporting performance in an open and transparent way so that all can celebrate progress
and identify areas for further action.
A long term perspective by organizations, which encompasses their commitment to both
internal and external stakeholders will be critical to the success of CSR and the ability of
companies to deliver on the goals of their CSR strategy.
 10. REFERENCES

1. ASOCIO policy paper on Corporate Social Responsibility, June 2004.

2. Theory of Corporate Social Responsibility: It’s evolutionary path and the road
ahead, by Boli and Hartsuikar, 2001.

3. A brief history of social reporting, article from Business Respect, issue number 51,
9 March 2003.

4. Why do Companies Engage in Corporate Social Responsibility? Background,

Reasons and Basic Concepts, by Dirk Matten: In The ICCA Handbook on
Corporate Social Responsibility.