corporate philanthropycorporate philanthropy by companies other than plcs. the aim of this report is...

Corporate Philanthropy2015

A Survey of Public Listed, Unlisted and Private Companies in Pakistan

ii Corporate Philanthropy in Pakistan A Survey of PLCs, PUCs & PvLCs 2015.

Foreword

Mr. Zaffar A. Khan, S.I.Chairman, Board of Directors, Pakistan Centre for Philanthropy (PCP)

Among the key players contributing towards development, the role of business sector in Pakistan is crucial in generating resources to effectively meet the chal-lenges of poverty and low human development. Given the fact that the govern-ment with limited resources and small tax base is constrained to provide ade-quate social services for rapidly growing population base, it becomes pertinent to engage the corporate sector in supporting social investments and strengthen-ing corporate social responsibility initiatives.

Pakistan Centre for Philanthropy (PCP) with its mandate to enhance the volume and effectiveness of philanthropy has been regularly conducting studies on Corporate Philanthropy in Pakistan and documented eleven annual reports on the nature and dimensions of corporate giving as a potential resource for social development. Its pioneer study, Corporate Philanthropy in Pakistan: The Case of Public Listed Companies, was launched in April 2006 by the then Prime Minister, Mr. Shaukat Aziz and the last one, 15 Years of Corporate Philanthropy in Pakistan, in November 2015 by Prof. Ahsan Iqbal, Federal Minister for Planning, Devel-opment & Reform, Pakistan which highlighted and recognized the philanthropic contributions of the corporate sector for social development. This year, PCP has examined corporate philanthropy beyond Public Listed Companies, the first-ever attempt to include the two unexplored segments – Public Unlisted Companies and PvLCs – about 99 percent of the corporate universe comprises of later two segments. Collecting information on CSR contributions of companies other than PLCs is quite challenging as, for majority of them, financial reports are not made public. However, this pioneer effort to collect data on a small sample of public unlisted and private companies is the first step to ascertain its potential for philanthropy and identify the gaps. The findings of the present study would be useful in deepening awareness about corporate philanthropy and in present-ing action agenda for PCP, for the government, and other stakeholders who are engaged with social development initiatives.

Philanthropic donations of PLCs, for this year, have increased to nearly Rs.7 billion from previous year’s estimate of Rs. 5.9 billion, which speaks volume of the con-tinued interest and commitment of the business community towards social well-being. In case of a small sample of Public Unlisted Companies (149) and Private Limited Companies (233), it is inspiring to see their total CSR contributions of Rs. 1.8 billion. The total giving by the full universe is likely to be huge. This source of philanthropic giving needs to be fully recorded, appreciated, and encouraged to benefit the society.

PCP hopes that this survey report will make a useful contribution to the grow-ing body of information on corporate philanthropy and provide impetus to the much-needed efforts to further enhance CSR initiatives in Pakistan.

A Survey of PLCs, PUCs & PvLCS 2015. Corporate Philanthropy in Pakistan iii

Acknowledgements

Shazia M. Amjad, Executive Director, Pakistan Centre for Philanthropy (PCP)

This volume on corporate philanthropy marks twelve years of publishing and disseminating annual reports that document the volume and patterns of phil-anthropic donations by the business sector in Pakistan. The completion of this report bears testimony not only to the tireless efforts of the PCP and its research team, but also to the increasingly widespread acceptance of the concept of corporate giving by businesses. The efforts have been special this time as the re-search team has gone an extra mile to gather information on the two unexplored segments of the corporate universe in Pakistan, i.e., public unlisted and private Limited companies. The successful completion of this research endeavor is a collective effort of many, with invaluable contributions from our highest policy making body (BoD), down to the research unit that worked in the field to collect and compile data firsthand. PCP owes its gratitude to many people who made this exercise possible. Firstly, PCP acknowledges and expresses gratitude to the Chairman of the Board, Mr. Zaffar A. Khan and the entire Board of Directors for their assiduous support and encouragement, especially Dr. Attiya Inayatullah, Chair of PCP Board’s Research Committee for guidance and input.

The Centre would especially like to thank to the Securities and Exchange Com-mission of Pakistan (SECP), for their constant support and cooperation in provid-ing access to financial data of companies. We owe special thanks to Ms. Sumaira Siddique, Additional Director of Corporatization and Compliance Department, who provided unconditional cooperation, especially in the case of data collection on Public Unlisted Companies and Private companies. We also owe gratitude to those Telecommunication Companies, though there were not many, who attend-ed to our calls, responded and provided the requisite data on their philanthropic activities. This part of data collection was the most tenuous as majority of the companies did not cooperate in providing their financial data and information on their philanthropic activities.

The collection of data, description of analysis, layout and findings of this report are the result of meticulous efforts by the Research Unit staff, especially Dr. Naushin Mahmood who constantly supervised the project from its initiation to completion and ensured that the write-up and presentation of findings are short, simple and comprehensive. The Centre acknowledges the excellent work done by the research team including Mr. Mohammad Ashraf, Mr. Mohammad Ali, Mr. Ali Jadoon, and Miss Munaal Tanveer. Special thanks are due to other PCP staff members who provided their support in completing this report.

As always, we remain optimistic that the content and findings of this report will serve to inspire the corporate sector in Pakistan and lead to optimize their efforts geared towards giving for social causes to help achieve sustainable development in Pakistan.

iv Corporate Philanthropy in Pakistan A Survey of PLCs, PUCs & PvLCs 2015.

10%

0.7%

Rs. 41bPLCs

Rs. 635m

Top 25PLCs

others

80%

20%

Rs. 0.5b

Rs. 1.3b

33% 35%

2000 2015

Rs. 0.2

3b

Rs. 6.9

b

55%

mobilink

Rs. 54m

0.2 0.3 0.7 2.3 2.2 3.3 4.1 5.9 6.9

2000 2002 2004 2006 2008 2010 2012 2014 2015

Giv

ing

(P

KR

bill

ion

s)

Executive Summary

This report on ‘Corporate Philanthropy in Pakistan: A Survey of Public Listed, Unlisted and Private Limited Companies’ is 12th in the series of corporate philanthropy surveys con-ducted by the PCP. A distinguishing feature of the current volume is the inclusion of information, though very limited, on giving by Public Unlisted Companies (PUCs) and Private Limited Companies (PvLCs), a pioneer attempt to cover corporate philanthropy by companies other than PLCs. The aim of this report is to highlight philanthropic contributions by the business community, recognize and appreciate its endeavours for social development in the country.

This survey on corporate philanthropy also tries to bring to light the trends and patterns of philanthropic donations by various segments of the business sector in Pakistan, i.e., PLCs, PUCs and PvLCs. Information on the latter two seg-ments is limited to only a small sample for which data could be collected from the Securities and Exchange Commission of Pakistan (SECP). Companies in these two categories, unlike PLCs, are not legally bound to submit their financial records to any regulatory authority in the country. The small sample selected, however, represents the most institutional-ized subset as they maintain and regularly file their financial reports to SECP. The information given in this report on giving of PUCs and PvLCs provides the basis to draw infer-ences about the extent and pattern of their participation in philanthropic initiatives.

The findings from the data compiled reveal that the total amount donated by PLCs is nearly Rs. 7 billion in 2015, indicating about 19 percent increase from previous year’s

estimate of Rs. 5.9 billion and about 30 times increase since the year 2000. The increasing trend of philanthropic dona-tions of PLCS is encouraging and presents the best practice model for others to follow. On the other hand, results of the small sample selected of PUCs and PvLCs for 2015 show that about 33 and 35 percent companies, respectively, have participated in philanthropic giving with donations of Rs. 0.5 billion and Rs. 1.3 billion during the same year. This clearly suggests that there is an immense potential of philanthropic donations outside of PLCs that needs to be tapped and directed towards social development initiatives.

The first chapter of this report discusses the context, scope, methodology, and limitations of the study. The second chapter covers giving by PLCs including information on number of PLCs involved in giving, volume and trends of their philanthropic donations, top 25 giving PLCs and their share in total giving amount, and ranking of sub-sectors. The third chapter covers philanthropic donations by PUCs and PvLCs for the selected sample. Chapter four focuses on the telecommunication sub-sector to assess its role in promoting social development initiatives through donations and other activities. The final chapter, five, presents the findings with discussion on the way forward.

A Survey of PLCs, PUCs & PvLCS 2015. Corporate Philanthropy in Pakistan v

10%

0.7%

Rs. 41bPLCs

Rs. 635m

Top 25PLCs

others

80%

20%

Rs. 0.5b

Rs. 1.3b

33% 35%

2000 2015

Rs. 0.2

3b

Rs. 6.9

b

55%

mobilink

Rs. 54m

Key findings

Total corporate philanthropy by Public Listed Companies (PLCs) has increased about 30 fold, from Rs. 0.23 billion in 2000 to nearly Rs. 6.9 billion in 2015

PLCs contributed 0.7% of Profit before Tax (PBT) for social causes during the year

55% of total PLCs are involved in philanthropy

The share of top 25 giving PLCs is 80% of total donations

Total cumulative volume of giving by PLCs during 2000 – 2015 is Rs. 41 billion

Oil and Gas Exploration is the largest contributor sub-sector with an average donation of Rs. 635 million

Public Unlisted Companies (PUCs) donated about Rs. 0.5 billion while Private Limited Companies contributed Rs. 1.3 billion in the year 2015

About 33% of public unlisted and 35% of private companies in the given sample participated in philanthropic activities

Among telecom companies, Mobilink spent the highest amount, Rs. 54 million

vi Corporate Philanthropy in Pakistan A Survey of PLCs, PUCs & PvLCs 2015.

Table of Contents

Context and Criteria Giving by Public Listed Companies

Public Unlisted and Private Ltd. Companies Telecommunication Sector Conclusion and

Way Forward

12 22 28 36 44

The Context Number of PLCs

Sample of Public Unlisted and Private Ltd. Companies Background

12 20 28 36

Scope and Methodology of the Study PLCs Involved in Giving

Patterns of Giving

Corporate Social Responsibility Initiatives in TELECOM Sector

16 20 28 40

The SampleVolume and Trend of PLCs’

Philanthropic Donations Volume of Giving Mobilink

16 21 29 40

Data Collection and AnalysisActual philanthropic

donations vs. 1 percent of PBT Giving as a percentage of PBT Telenor

18 22 32 42

Limitations of the StudyPatterns of PLCs’

Philanthropic Donations

19 23

Individual Ranking

24

Sector-wise Giving

26

A Survey of PLCs, PUCs & PvLCS 2015. Corporate Philanthropy in Pakistan vii

Context and Criteria Giving by Public Listed Companies

Public Unlisted and Private Ltd. Companies Telecommunication Sector Conclusion and

Way Forward

12 22 28 36 44

The Context Number of PLCs

Sample of Public Unlisted and Private Ltd. Companies Background

12 20 28 36

Scope and Methodology of the Study PLCs Involved in Giving

Patterns of Giving


16 20 28 40

The SampleVolume and Trend of PLCs’

Philanthropic Donations Volume of Giving Mobilink

16 21 29 40

Data Collection and AnalysisActual philanthropic

donations vs. 1 percent of PBT Giving as a percentage of PBT Telenor

18 22 32 42

Limitations of the StudyPatterns of PLCs’

Philanthropic Donations

19 23

Individual Ranking

24

Sector-wise Giving

26

viii Corporate Philanthropy in Pakistan A Survey of PLCs, PUCs & PvLCs 2015.

Table 1Number and Type of companies. 201516

Table 9PLCs ranking by average donations of different sub-sectors: 201526

Table 17Ranking of TELCOs by Volume of Donations & as a Percentage of PBT-201538

Figure 8Giving by PUCs 29

Table 2Number of PLCs, PUCs and PvLCs: 2011-201518

Table 10Top 25 PUCs ranked by volume of donation: 2015(PKR million)30

Figure 1Maximizing Philanthropy Values10

Figure 9Giving by PvLCs29

Table 3Number of PLCs in Pakistan: 2000-1520

Table 11Top 25 PvLCs ranked by volume of donation: 2015 (PKR million)31

Figure 2Sustainable Development Model10

Figure 10Percentage Distribution of Top 5 PLCs, PUCs, PvLCs by Thematic areas (PKR million) 36

Table 4Number of giving PLCs: 2000-1520

Table 12Top 25 PUCs ranking as a percentage of PBT: 2015(PKR million)32

Figure 3Composition of Business Sector11

Table 5Donations in Absolute Amount and as % of PBT, 2000-1521

Table 13Top 25 PvLCs ranking as a percentage of PBT: 2015 (PKR million)33

Figure 4Pecentage distribu-tion of all companies with paid-up capita17

Table 6Percentage share of Top 25 Giving PLCs vs. others: 2000-1523

Table 14Selected Indicators on Philanthropic Giving by Type of Company-2015 (PKR million)34

Figure 5Percentage of companies in each category17

Table 7Top 25 PLCs ranked by volume of donation: 201524

Table 15Distribution of Giving of Top 5 PLCs, PUCs, PvLCs by Thematic areas (PKR million) 37

Figure 6Actual Giving vs. 1% of PBT22

Table 8Top 25 PLCs ranking as a percentage of PBT: 201525

Table 16Types of Licenses in Telecom Sectorin Pakistan-201537

Figure 7Giving and Non-giving PUCs and PvLCs - 201528

List of Tables List of Figures

A Survey of PLCs, PUCs & PvLCS 2015. Corporate Philanthropy in Pakistan ix

BoD Board of Directors

CEO Chief Executive Officer

Co. Company

CP Corporate Philanthropy

CPA Corporate Philanthropy Awards

CPS Corporate Philanthropy Survey

CSR Corporate Social Responsibility

FDI Foreign Direct Investment

Ind. Industries

KSE Karachi Stock Exchange

PCP Pakistan Center for Philanthropy

PBT Profit before Taxation

PKR Pakistani Rupee

PLC Public Listed Companies

PPP Public Private Partnership

PSX Pakistan Stock Exchange

PTA Pakistan Telecommunication Authority

PUC Public Unlisted Company

PvLC Private Limited Company

Rs. Rupees

SECP Security & Exchange Commission of Pakistan

SBP State Bank of Pakistan

TELCOs Telecommunication Companies

Acronyms

10 Corporate Philanthropy in Pakistan A Survey of PLCs, PUCs & PvLCs 2015.

Context and Criteria

The Context

There is a general acceptance that Corporate Philanthropy (CP) or Corporate Social Responsibility in broader terms can bring social and economic gains for the society along with enhancing benefits for the businesses themselves. In es-sence, it brings corporate leaders and social entrepreneurs together to foster mutually beneficial partnerships to yield a positive impact on society and that can ultimately lead to sustainable development. CP generally encompasses vol-untary, active, non-reciprocal charitable giving by corpora-tions to communities or non-profit organizations to fulfill an unmet social need, regardless of any specific return.1 This may include direct cash donations, foundation grants, stock donations, employee time, product donations and any other gift in kind aimed at removing the root cause of a problem rather than curing the symptoms.2

Corporate Philanthropy can often be the most cost-effec-tive way for a company to improve its competitive context, enabling companies to leverage the efforts and infrastruc-ture of nonprofits and other institutions to support causes like education, child care, health, religious or community welfare.

CP in its basic sense is an extrapolation of CSR based on the premise that the social responsibility of business encom-passes the economic, legal, ethical and discretionary ex-pectations that society has of organizations at a given point in time. CSR thus is an umbrella term requiring business to build up its relationship with wider society, whether for rea-sons of commercial viability or to add value to society.3

With recent expansion of market economies in develop-ing countries, national and international businesses are increasingly expected to contribute to resolving critical yet apparently sustained social issues. Corporate sector too has recognized the value of investing in the communities it does business with. The Sustainable Development Goals (SDGs) agenda of recent times also recognizes the importance of engaging the corporate sector and philanthropy of all types to ensure the attainment of development goals.

The concept of CSR varies among different countries re-flecting their national, social, and economic priorities in the context of social development and has historically remained a voluntary action on the part of the businesses.4

However, during the last few decades, CSR has evolved to an orthodox and popular concept in the world’s business community and is now almost universally sanctioned and promoted by all the constituents of society: the govern-ment, the corporations, the non-profit organizations, and the individual consumers.5

1 Schwartz, M.S. & Carroll, A.B. (2003). Corporate Social Responsibility: A Three Domain Approach. Business Ethics, 13(4), 515

2 Klaus, M.L., & Schmitt, K. (2006). Corporate Responsibility and Corporate Philanthropy. Basel.

3 See unglobalcompact.org

4 Issue Briefing Note: Perceptions and Definitions of Social Responsibility, International Institute for Sustainable Development May 2004.

5 Lydenberg, S.D. (2005). Corporations and the Public Interest: Guiding the Invisible Hand. San Francisco, CA: Berrett--Koehler

CSR provides answer to the basic question of how busi-nesses would share the responsibility of social development despite the fact that corporations provide employment to thousands of workers, pay millions in taxes to government, and disseminate management and technical innovations leading to sharing the burden of the government in devel-opment activities. Regulators all around the world are now increasingly holding the corporate sector ‘responsible’ for its impact on society, the economy and the environment. This is becoming evident by increased regulatory initiatives to guide companies in driving corporate social responsibil-ity. The concept has evolved to such an extent that today there is at least one country, India, which has legislated to make it an obligation for the corporate sector to contribute towards philanthropic causes. According to Clause 135 of the Companies Bill, 2013 (effective from April 1st, 2014), it is mandatory that all companies in India with revenue greater than $200 million, or profits of $1 million, or net worth of $100 million to spend 2% of the average of the last 3 years’ profits towards CSR activity. Such companies are not only required to constitute CSR committee within the board of directors but also ensure that the budgeted amount is spent on government approved CSR categories.

Keeping in view the best practices around the world, regula-tors in Pakistan have also taken a number of measures to en-courage, motivate and incentivize the private sector to take part in activities of social benefit. The regulations, though voluntary in nature, are expected to increase the number of companies which consider CSR to be part of their business practices. The laws concerning CSR in Pakistan comes from the Security and Exchange Commission of Pakistan (SECP) or the State Bank of Pakistan (SBP), though there are some labour laws that can be included in this category.

In 2009, the SECP issued the Companies’ CSR General Order applicable to all public companies requiring the pro-vision of descriptive as well as monetary disclosures of CSR activities undertaken during each financial year as shown in their annual audited accounts. The SECP has also promul-gated the CSR Voluntary Guidelines, 2013 for streamlining reporting requirements and corporate accountability of the CSR activities by corporate entities. The implementation of these guidelines has shown some improvement in recent years but given the vast and diverse structure of business sector in Pakistan, the complete compliance remains a tall order.

Understanding the ways in which philanthropy creates value highlights how companies can achieve the greatest social and economic impact through their contributions. There are four ways in which charitable organizations can create social value: selecting the best grantees, signaling other funders, improving the performance of grant recipients, and advanc-ing knowledge and practice in the field.6

6 Porter, E.M. Porter & Kramer, M.R.Philanthropy’s New Agenda: Creating Value. Harvard Business Review, retrieved from https://hbr.org/1999/11/philanthropys--new--agenda--creating--value.

A Survey of PLCs, PUCs & PvLCS 2015. Corporate Philanthropy in Pakistan 11

These principles apply to corporate giving, pointing the way for how corporate philanthropy can be most effective in enhancing competitive context and ensuring that corporate donations have greater impact than donations of the same magnitude by individuals

Corporations usually adopt different ways of making their philanthropic donations which include direct giving through cash or other forms of donations; Company Foundation formed as an affiliated charity; and donor affiliation by di-rectly associating with donor to work for any social develop-ment project.

From the government’s perspective, Corporate Philanthro-py is beneficial for the society in terms of obtaining several social development objectives with three main underlying themes, i.e., Social, Economic and Political. Despite the immense potential evident from the intent and donations of the business community towards social causes, gov-ernments generally exhibit lack of political will to tap this opportunity. In Pakistan, government’s limited financial capacity and low policy response to capitalize on available philanthropic resource in corporate sector have resulted in sustained deficit in social sector. In this scenario, collabora-tion between corporations and government to show their commitment towards building socially proactive communi-ties as well as promoting their business, presents a practical option to ultimately move towards sustainable development.

Figure 1: Maximizing Philanthropy Values

So

cial Ben

ifit

Economic Benifit

PureBusiness

PurePhilanthropy

Social and

economic value

created

Selecting

the best

guarentees

Signaling

other funders

Improving

the performance

of grant recipients

Advancing

knowledge

Figure 2: Sustainable Development Model

SocialSecurity

Poverty reduction plansShrink income inequalityEmployment generation

EconomicSecurity

PoliticalSecurity

GOVERNMENT

PUBLICPRIVATE

PARTNERSHIP

CORPORATIONS

Collaboration (PPP) in Social Development Initiatives

ToShare government’s burden

E�ectively promotes Sustainability

Source: The Comparative Advantage of Corporate Philanthropy Michael E. Porter and Mark R. Kramer


Scope and Methodology of the Study

The current survey report covers philanthropic activities of PLCs as well as PUCs and PvLCs which gives an improved coverage and assessment of CSR contributions of business sector in Pakistan. Since its first publication in 2004-05, corporate philanthropy surveys of PCP have focused only on PLCs which represent not more than 1 percent of the whole corporate universe in Pakistan. Figure 3 shows PUCs consti-tute 3 percent while PvLCs constitute about 92 percent of the corporate sector in Pakistan. This report also presents information on philanthropic contributions by Telecommu-nication Companies popularly known as TELCOs under the sub-sector analysis section.

The Sample

As on 31st December 2015, 591 PLCs were listed with the Pakistan Stock Exchange (PSX) formerly known as Karachi Stock Exchange (KSE). Of these, 12 were mutual funds which have been excluded from the survey. Also, some 80 PLCs were not included in the survey as they were either suspended, delisted, merged, not operational, or had failed to publish and submit their annual accounts for the year to concerned authorities. The remaining 499 companies, whose records were found from the available sources, com-prise the final sample for the survey.

Regarding data on PUCs and PvLCs there are two challeng-es: firstly, the number of companies is huge to cover, and secondly, information is not readily available. Cognizant of these limitations, an attempt, however, is made to gather as

Figure 3: Composition of Business Sector

Public Unlisted Companies2322

Public Listed Companies576

SMC’s2079

Private Limited Companies60,758

1%

3%

4%

92%

much information as possible on PUCs and PvLCs from SECP and other sources. Information of some 149 PUCs and 233 PvLCs could be collected from SECP and other sources. Table 1 presents the universe of sample for this study.A further breakdown of all companies, i.e. PLCs, PUCs, and

Table 1: Number and Type of Companies. 2015

Type of Companies Total-2015 (N) Sampled Companies

PLCs 591 499

PUCs 2,322 149

Private Companies 60,758 233

Total 63,582 881


PvLCs, with respective to their paid-up capital for the year 2015 is presented in Figure 4. The figure shows that 89 per-cent of all companies operate on small scale with paid-up capital of Rs. 10 million or less as against 10 percent in the category of Rs. 10-500 million and only 1 percent with cap-ital of Rs. 500 million and above. The percentage distribu-tion of all types of companies in each category of paid-up capital as shown in Figure 5 reveals that about 36 percent of PLCs have paid-up capital of Rs. 100-500 million as against 15 percent of PUCs; 21 percent of PLCs have paid-up of Rs. 1000 million or more against only 5 percent of PUCs. In the case of PvLCs just 1.6% companies have paid-up capital of Rs. 100 million or more. This classification reveals that a significant proportion of companies, especially the PUCs and PvLCs are operating on small scale and do not provide information on PBT and CSR activities to SECP, leaving a large gap in the required information.

Although on a very limited scale, the inclusion of infor-mation on giving by PUCs and PvLCs in the present study would presumably be adequate to reflect the evolved form of corporate philanthropy in Pakistan. Moreover, the lessons learnt from the analysis would be instructive to improve their involvement in philanthropic and CSR contributions in future.

Figure 5: Percentage of Companies in Each Category

Private Companies

PUCs

PLCs

Rs. 1,000m& above

Rs. 500mto 1,000m

Rs. 100mto 500m

0.1%5%

21%

0.1%

1.3%

3%

15%

13%

36%

Figure 4: Percentage Distribution of All Companies with Paid-Up Capital

upto Rs. 10 million

Rs. 10 million - Rs. 500 million

Rs. 500 million & above

Public Listed Company

Its shares are listed on Pakistan stock exchange and financial records filed to SEC

Public Unlisted Company

Shares are not listed, nor trading of its shares is allowed to trade its through stock exchange

Private Limited Company

It restricts the right to transfer the shares if any; prohibits any kind of invitation to general public to subscribe for its shares


Data Collection and Analysis

For PLCs, data on their sales, PBT, and giving was collected, in the first place, from SECP. For companies whose reports were not available with SECP, information was retrieved from their websites. Also, reports of some companies were retrieved from website of PBX.

For PUCs, SECP was the only source of information. Out of a total of 2,322 reports of only 149 companies were available with SECP for the year 2015. In the case of PvLCs, compa-nies with paid-up capital of Rs. 7.5 and above are bound to submit their audited financial accounts to SECP. Though there are some 12,000 companies having capital above the said threshold but only 233 had submitted their financial reports with SECP.

A summary view of the number of PLCs, PUCs and PvLCs for the years 2011-2015 is given in Table 2. It is pertinent to highlight that the increase of PUCs and PvLCs over the years indicates that there has been expansion in private entrepre-neurship over the years. For the sub-sector analysis, basic information on the number of TELCOs operating in the country was obtained from Pakistan Telecommunication Authority (PTA), SECP and Companies’ websites. The major companies such as Mobilink, Telenor, Warid, Ufone, Zong, etc. were contacted through emails, telephone calls, and personal visits to gath-er information on their PBT and volume of donations under their CSR programs. The response of these companies, es-pecially Ufone and Zong, was disappointing as they did not bother to share any information. Alternately, SECP and PTA facilitated in acquiring some information covering only a few companies and that allowed a limited analysis of volume of their giving and pattern of other CSR activities. It may be noted here that some companies in the telecom sector are listed either as public listed, unlisted or private companies

As a second step, data on revenue, PBT, and giving of com-panies was compiled and recorded in worksheets for further analysis through tables, charts and graphs. Also, out of pro-portion or abnormal increases or decreases in figures were verified by contacting the concerned companies through telephone calls, emails, and personal visits where needed. In the third stage, the analysis part was written, highlighting the individual and collective amount of giving, comparing the figures with those of previous years, and bringing to light changes in pattern of giving. As the last step, import-ant findings were presented with concluding discussion and way forward were written.

Table 2: Number of PLCs, PUCs and PvLCs: 2011-2015

Type of Company 2015 2014 2013 2012 2011

PLCs 499 473 488 478 490

PUCs 2,322 2,260 2,213 2,237 2,207

PvLCs 60,758 57,650 55,838 56,335 53,750

Source: SECP Annual Reports

Limitations of the Study

As noted earlier, data availability constraints, especially in case of public unlisted and private companies in Pakistan limit the coverage and scope of this research with the likely underestimation of the volume and patterns of corporate philanthropy. The small sample for unlisted and private companies has been selected based on data availability and may not be fully representative of the two major segments of the business sector in Pakistan.

The report mainly covers the volume and patterns of in-cash giving by different categories of companies in the business sector, while other forms of corporate philanthropy, i.e., in-kind and in-time philanthropy are excluded though they may form substantial part of donations by a company.

The process of eliciting information from corporate sector is quite challenging, especially in compiling information on the amount spent in a specific thematic area or a particu-lar geographic location, thereby limiting the possibility of assessing the flow and channeling of donations in detail. Most of the data is compiled and collected through second-ary sources, relying mostly on SECP and other institutions, missing out qualitative information on certain aspects of corporate philanthropy. This information gap limits the possibility of analyzing and understanding the challenges perceived by the corporate sector in complying with the existing set of rules and the underlying reasons and con-straints in improving effectiveness of corporate philanthropy in the country.


GIVING IN NUMBERS(by PLCs, PUCs and PvLCs)


Giving by Public Listed Companies

Number of PLCs

Table 3 reveals that the number of PLCs in Pakistan in year 2015 is 499 being higher than the number for the previous two years. It is apparent from the table that the number of PLCs has not changed much over time with the highest reported as 565 in 2002 and the lowest at 470 in 2014. It is important to note that the number of PLCs in the years 2000 and 2015 is nearly the same - around 500 with chang-ing number in between. The analysis shows that the small fluctuation in the number of PLCs in various years is rather a result of mergers, delisting, and suspension of some companies by SECP than the creation of new companies. The SECP delists or suspends companies for their non-com-pliance with statutory requirements or non-payment of dues and usually restore their membership once they ensure compliance or pay the dues.

PLCs Involved in Giving

The number of companies involved in philanthropic giving has also varied over the years showing the lowest percent-age at 51 in 2008 and the highest at 60 in 2006. In other years, the percentage of giving companies has ranged between 52 in 2010 to 57 in 2012 (Table 4).

The irregular giving pattern of PLCs appears to be linked more with the incidents and disaster events happening in some years rather than due to change in the number of total companies. For example, in 2006, it is observed that 60 percent of companies - the highest ever proportion - made philanthropic donations which could be the consequence of the 2005 earthquake, but just two years later in 2008, the percentage of giving companies fell to 51 percent, the lowest ever, during the past decade or so with an estimated average of nearly 54 percent over the years. This situation calls for steps to be taken to motivate PLCs to initiate their philanthropic programs and to study in-depth the underly-ing reasons for their non-giving behavior or not reporting if they have some small scale philanthropic activities.

Table 3: Number of PLCs in Pakistan: 2000-15

Year Number of PLCs

2000 500

2002 565

2004 552

2006 546

2008 548

2010 532

2012 478

2014 470

2015 499

Table 4: Number of Giving PLCs: 2000-15

Year nos. of giving PLCs % of the total

2000 263 53

2002 282 50

2004 283 51

2006 329 60

2008 277 51

2010 276 52

2012 271 57

2014 258 56

2015 275 55


Volume and Trend of PLCs’ Philanthropic Donations

The volume of donations and the percentage of (PBT) are the two measures used to gauge the philanthropic contribu-tion and/or the commitment of business sector towards their CSR activities. Table 5 presents the total volume of donations by PLCs and the percentage of PBT for the years 2000 - 15. As we can see, the amount of donations by PLCs has been steadily rising over the years from as low as Rs. 0.23 billion in 2000 to Rs. 2.33 billion in 2006 and 6.9 billion in 2015. The trend shows that the increase has been rapid since the year 2010 with total donations of Rs. 3.27 billion which have more than doubled during last 5 years. Looking at the fig-ures from previous year, total volume of donations has risen from Rs. 5.86 billion to Rs. 6.97 billion in 2015, indicating around 19 percent increase in a year.

In terms of percentage of PBT, the situation has been vola-tile showing a low figure of 0.2 % in 2002, then rising to 0.6 % in 2006 and 2008, 0.8 % in 2010 and then declining to 0.7% in the year 2015 (Table 5).

The fluctuating pattern of donations measured as a percent-age of PBT is reflective of the generous behavior and high impulse of giving among companies in years of disasters and calamities such as earthquake, floods of 2005 and 2010. It is encouraging to note that the giving trend as a percentage of PBT remained unaffected despite economic challenges of the recent past caused by law and order and energy crisis.

Table 5: Donations in Absolute Amount and as % of PBT, 2000-15

Year Total PBT (PKR billion) Total Donations % of PBT

2000 36 0.23 0.6

2002 150 0.34 0.2

2004 227 0.65 0.3

2006 363 2.33 0.6

2008 351 2.24 0.6

2010 411 3.27 0.8

2014 842 5.86 0.7

2015 1,017 6.97 0.7

Philanthropic contributions of PLCs increased from Rs. 0.23 billion in 2000 to Rs. 6.97 billion in 2015

– nearly 30 times growth over the years.


Actual philanthropic donations vs. 1 percent of PBT

Though CSR is a voluntary action of corporations, efforts are underway to encourage companies to play an active role in activities of societal benefit. The promoters of corporate philanthropy and CSR coin the term 1% philanthropy’ with an argument that companies should set aside 1% of PBT, 1% of their equity and 1% of their employees’ hours to be spent in areas of common good.7 India has taken a step further and has promulgated a law that binds companies earning above a certain limit of revenue/income to spend 2% of the average of the last 3 years’ profits on CSR activities. In Pakistan, except for the wishes and desires of government officials as well as social activists, no concrete steps have been taken to motivate the corporate sector to play an effective role in promoting CSR initiatives.

Based on the hypothesis that all companies donated 1% of PBT, the volume of donations would have been quite higher than the actual giving by PLCs. Figure 6 portrays the difference between the actual donations as against expect-ed amount under the assumption of 1% philanthropy by all companies for the years 2000 – 2015.

It can be seen from the figure that except for the year 2009, the actual giving rate as percentage of PBT has remained lower than the 1% philanthropy. This indicates that contri-butions by PLCs never equated or surpassed the threshold level advocated and suggested by CSR promoters. For ex-ample, in 2015, an additional amount of Rs. 3.2 billion would have been generated had all the PLCs contributed just 1% of PBT. This implies for the need to lobby for adopting prac-tice of 1% of PBT.

Patterns of PLCs’ Philanthropic Donations

Given the variation in the amount of donations, Table 6 pres-ents the proportion of top 25 companies involved in giving as against the rest, for the years 2000 - 2015. As we can see, the proportion of top 25 giving PLCs has increased substantially from 69 percent in 2000 to 80 percent in 2015. On the other hand, the relative participation of companies other than those top 25 (250 in number) has corresponding-ly decreased over the years. This implies that only a limited number of PLCs, usually large and financial worth, have remained active in initiatives of societal development and increased their philanthropic spending.

Figure 6: Actual Giving vs. 1% of PBT

2000

2

4

6

8

10

2001 2002 2003 2004 2005

Actual

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

1% of PBT

Table 6: Percentage of Top 25 Giving PLCs: 2000-15

Year Top 25 giving PLCs (%)

2000 69

2002 70

2004 74

2006 73

2008 84

2010 80

2012 79

2014 81

2015 80

7 An interview with Mark Benioff (2000).New Frontiers in Doing Good.LEADERS, 34, 2.


Individual Ranking

The top 25 giving companies are ranked each year, in CPS reports based on two pre-determined criteria; i) the total volume of donations, and ii) the volume of donations as a percentage of (PBT).

Table 7 gives ranking of the top 25 giving PLCs for the year 2015 as per their absolute amount of giving. Companies mentioned in the table reinforce the fact that except for few additions, the list has not changed much in the current year. Interestingly, OGDCL has replaced PPL to get the first place in the ranking by donating Rs. 1,290 million as compared to Rs. 1,090 million by PPL. Another change in the list is the addition of PSO at 9th position which was not included in the list for the last year. Also, ranking of Fatima Fertilizer has improved from 9th in last year to 6th in 2015.

Table 7: Top 25 Plcs Ranked by Volume of Donation: 2015

Rank Company PBT (PKR million) Donations

1 Oil & Gas Dev. Co 127,025 1,290

2 Pak Petroleum 49,441 1,090

3 Habib Bank 60,286 387

4 Lucky Cement 18,426 264

5 Engro Corp 25,785 229

6 Fatima Fertilizer 25,167 226

7 Pak Services Ltd. 1,491 223

8 Fauji Fertilizer 27,653 168

9 P.S.O. 12,034 168

10 United Bank Ltd. 43,447 167

11 Bestway Cement 11,601 166

12 Mari Petroleum 6,552 161

13 Allied Bank 25,776 139

14 Jah. Sidd& Co. 6,789 117

15 Indus Motor Co. 14,133 117

16 ArifHabib Corp. 4,245 100

17 Hub Power Co. 12,161 87

18 EngroFert. 21,068 68

19 JS Bank Ltd 3,768 67

20 HabibMetropol. 12,565 63

21 National Bank. 34,173 60

22 Bank Al-Falah Ltd. 12,657 58

23 Nestle Pak 12,520 52

24 Sitara Chemical 1,112 52

25 Faysal Bank 6,920 50

Other new additions to the top 25 list are Arif Habib Corpo-ration, Engro Fertilizer, JS Bank Limited and Bank Al-Falah Limited. On the other hand, Fauji Fertilizer ranked at 6th position last year has dropped down by two ranking points and stands at 8th position this year.


Table 8: Top 25 PLCs Ranking as a Percentage of PBT: 2015

Rank Company PBT (PKR million) Donations % of PBT

1 Gatron Industries 60.10 14.44 0.24

2 Tata Textile 48.13 8.22 0.17

3 Pak Services 1,490.95 222.97 0.15

4 Kohat Textile 39.43 5.75 0.15

5 TPL Direct Insurance 45.62 5.87 0.13

6 Resham Textile 138.32 15.04 0.11

7 Ados Pakistan 12.24 1.26 0.10

8 Premier Ins. 123.42 12.00 0.10

9 Al-Shaheer Corp 167.43 13.19 0.08

10 Kohinoor Mills 236.62 14.11 0.06

11 Shield Corp. 63.83 3.72 0.06

12 J.K.Spinning 126.78 7.25 0.06

13 Crescent Steel 167.67 8.69 0.05

14 Sitara Chemical 1,112.44 51.75 0.05

15 MithchellsFruit 25.85 1.08 0.04

16 Fazal Cloth 661.42 23.87 0.04

17 Service Ind.Ltd 1,267.01 42.71 0.03

18 Pak Datacom 131.74 4.20 0.03

19 Karam Ceramics 46.98 1.33 0.03

20 Shifa Int.Hosp 716.02 20.00 0.03

21 Bannu Woollen 96.33 2.68 0.03

22 Crescent Cotton 359.92 9.79 0.03

23 Crescent Tex. 359.92 9.79 0.03

24 Sapphire Fiber 1,241.69 31.36 0.03

25 Mari Petroleum 6,551.87 160.91 0.02

The second criterion, donations as percentage of PBT, tries to discount the size and sheer volume factor. Ranking is meant to measure companies’ commitment by comparing their contribution in terms of percentage of PBT. Table 8 pres-ents the ranking of PLCs by this second criterion. But before describing the ranking and changes it must be kept in mind that the list includes only those companies that, i) reported profit for the year, and ii) made philanthropic contribution of more than Rs. 1 million. The aim of this condition is to weed out companies that rank superficially high as they make meager donations, e.g., 5000, out of meagre profits.

The list reveals that the top position is held by Gatron Industries Limited which donated 24 percent of their PBT. This company had ranked third in the preceding year. Kohat Textile ranking 4th in the list was not included among the top 25 in the preceding year. Except for a few companies who regularly appear in the ranking list as per percentage of PBT, majority of names in this ranking table keep changing every year. Ranking for 3 out of 5 companies at the top of the list has improved compared with preceding year; from 3rd to 1st for Gatron Industries, from 6th to 2nd for Tata Textile, from 12th to 3rd for Pak Services. For one company, TPL Direct Insurance, ranking position dropped from 2nd to 5th in current.


Table 9: PLCs Ranking by average Donations of different sub-sectors: 2015

Company name No. of Cos. Average Donation (PKR million) Rank

Oil & Gas Exploration Companies 4 635.3 1

Fertilizer 7 114.2 2

Automobile Assembler 13 65.2 3

Commercial Banks 22 50.5 4

Oil & Gas Marketing Companies 7 28.8 5

Cement 20 25.3 6

Automobile Parts & Accessories 6 13.5 7

Power Generation & Distribution 17 12.5 8

Miscellaneous 20 12.3 9

Leather & Tanneries 5 8.9 10

Tobacco 3 6.9 11

Food & Personal Care Products 18 6.6 12

Inv. Banks / Inv. / Securities Cos. 28 5.2 13

Chemical 27 4.2 14

Textile Composite 43 3.3 15

Glass & Ceramics 10 3.1 16

Textile Weaving 10 3.1 17

Insurance 33 2.8 18

Sugar & Allied Industries 28 2.7 19

Technology & Communication 9 2.6 20

Pharmaceuticals 9 2.5 21

Woollen 1 1.8 22

Engineering 14 1.1 23

Synthetic & Rayon 9 0.7 24

Paper & Board 7 0.5 25

Refinery 4 2.5 26

Textile Spinning 73 3.1 27

Transport 4 3.4 28

Cable & Electrical Goods 7 1.8 29

Leasing Companies 10 3.1 30

Modarabas 27 0.4 31

Sector-wise Giving

The PSX maintains records of companies in 34 categories as sub-sectors. CPS reports have been ranking sub-sec-tors based on their average annual giving to highlight the contributions and commitment of companies in a particular sub-sector. Table 9 shows PLCs ranking by average donations of companies in different sub-sectors for the year 2015.

The figures indicate that pattern has not changed much over the years. For example, based on the average donations, Oil and Gas industry has retained its top ranking for the

past many years, while ranking for other sub-sectors slightly changes each year. KSE/PSX made some changes to the classification of sub-sectors last year which makes the com-parison of the volume of donations by these sectors over successive years a bit difficult. For example, Oil and Gas industry has been divided into two categories, i.e., Oil and Gas Exploration, and Oil and Gas Marketing. As a result, Oil and Gas sub-sector was at 1st position in the previous year with an average giving of Rs. 168 million, but the average giving of Oil and Gas exploration industry for this year is Rs. 635 million. Similarly, Fertilizer industry which was reported as a part of Chemical sector by PSX last year stands second for the current year’s ranking.


Figure 7: Giving and Non-Giving among PUCs and PvLCs - 2015

33% 67%

PvLCs

PUCs

65%35%

Giving Non-Giving

Public Unlisted and Private Ltd. Companies

Sample of Public Unlisted and Private Ltd. Companies

This chapter focuses on giving patterns of PUCs and PvLCs which constitute 3.5 percent and 92 percent of the total business sector, respectively as against 1 percent PLCs. De-spite being large in number information for only 149 PUCs and 233 PvLCs could be gathered from different sources. As stated earlier information on a very small number of companies from PUC and PvLC category may not be a good representative of the entire universe, it may, however, give an idea of how much these companies are spending for so-cietal benefit and what is the pattern. Also, this limited anal-ysis provides the basis to draw inferences about the extent of their participation in philanthropic initiatives and draw lessons for future course of action to address data gaps and improve effectiveness of corporate philanthropy in future.

Patterns of Giving

The pattern of giving among PUCs and PvLCs is relatively more uneven as compared with PLCs. Figure 7 shows that out of companies in the sample about one-third of PUCs are involved in giving, whereas the rest 67 percent have not re-ported any such activity in the year 2015. In case of private companies, the pattern is not much different where only 35 percent have reported involvement in giving.

This pattern of giving by PUCs and PvLCs, on the one hand, indicates the awareness and commitment of a good proportion of companies towards social responsibilities, on the other hand, it also shows that a large majority remains oblivious of the relevance of CSR. It is high time to initiate some policy actions at high level to motivate companies to contribute towards activities that would expedite social development in the country.


Volume of Giving

Figure 8 shows that a total amount of Rs. 466 million was giv-en by 33% of 149 PUCs’ sample. On the other hand, 35% of 233 companies in PvLCs’ sample contributed a total sum of Rs. 1280 million. It is also pertinent to note that in the case of PUCs, top 25 giving companies shared 99% of the total giving amount, remaining 124 companies gave not more than 1 percent. The pattern is not different in case of PvLCs where 95% of total philanthropy came from top 25 giving companies. Figures 8 & 9 present pictorial depiction of the stated figures.

Figure 8: Giving by PUCs (PKR million) Figure 9: Giving by PvLCs (PKR million)

Total Giving Top 25 Top 5 Total Giving Top 25 Top 5

0

466 447

240

12801213

879

1400

33% of 149 PUCscontributed

Rs. 0. 47 billion

35% of 233 PvLCscontributed

Rs. 1.28 billion


Top 25 giving PUCs and PvLCs are also identified and ranked to highlight contributions by individual companies. This ranking list, just like in the case of PLCs, serves as a basis to award the top giving companies in a ceremony to be held later in the year. Table 10 provides ranking of top 25 PUCs for the year 2015.

To further look into the volume of giving, Table 10 provides ranking of top 25 PUCs companies for the year 2015.

Table 10 shows that about half of top 25 PUCs donated Rs. 10 million or more. The highest amount was given by Lucky Textiles Mills Limited, Rs. 93 million, followed by Pakistan Mobile Communications Limited (Mobilink), Rs. 58 million, Fatima Sugar Mills Limited, Rs. 35 million, and Laraib Energy Limited, Rs. 29 million. It is important to note that Mobilink, despite its reported financial losses in the year 2015 ranked at 2nd position which reflects its commitment to cuases of common benefit. On the other hand, few companies such as Descon Engineering Limited, Atlas Power Limited and Lucky Holdings Limited, despite huge reported profits, have donated less than Rs. 20 million in the year 2015.

Table 10: Top 25 PUCs Ranked by Volume of Donation: 2015 (PKR million)

Rank Company Name PBT Donation

1 Lucky Textile Mills Limited 1,865 93

2 Pakistan Mobile Communications Limited (Mobilink) -1,242 58

3 Fatima Sugar Mills Limited 571 35

4 Laraib Energy Limited 3,684 29

5 Zaver Petroleum Corporation Ltd. -32 25

6 Atlas Power Limited 2,289 23

7 Lucky Holdings Limited 2,235 20

8 Descon Engineering Limited 5,819 18

9 Central Depository Company Of Pakistan Limited 665 17

10 Haleeb Foods Limited 1,556 15

11 A. A. Spinning Mills Limited 55 13

12 Fauji Oil Terminal & Distribution Company Ltd. 814 12

13 EngroVopak Terminal Limited 1,820 12

14 Hi-Tech Lubricants Limited 502 11

15 Sapphire Finishing Mills Limited 672 11

16 FaujiKabirwala Power Company Limited 785 10

17 Dubai Islamic Bank Pakistan Limited 712 10

18 Pharmagen Limited 77 6

19 Rupafil Limited 28 5

20 Hassan Limited 71 5

21 Pak-Arab Pipeline Company Limited 3,397 5

22 Wah Industries Limited 599 4

23 Masood Spinning Mills Limited 247 4

24 Ramzan Sugar Mills Limited 172 3

25 Mughal Iron & Steel Industries Limited 724 3

Total 29,359 447


Table 11 provides ranking of top 25 PvLCs based on their absolute amount of giving for the year 2015.

The figures in Table 11 show that giving by top 25 companies ranges from as low as Rs. 6 million to as high as Rs. 649 million. As in the case of PLCs and PUCs, giving does not commensurate with PBT of the companies, i.e., companies with huge profits made small donations and vice versa. For example, Telenor Pakistan and Pepsi-Cola International, despite huge earnings, are ranked at 5th and 15th position, respectively

Table 11: Top 25 PvLCs Ranked by Volume of Donation: 2015 (PKR million)

Rank Company Name PBT Donation

1 Bahria Town (Private) Limited. 2,885 649

2 US.Denim Mills (Pvt.) Limited 875 64

3 Naubahar Bottling Company (Pvt) Limited 831 57

4 K & N’S Foods (Pvt.) Ltd. 1,594 55

5 Telenor Pakistan (Pvt.) Limited 28,240 54

6 Sadiq Poultry (Pvt.) Limited 289 45

7 Klash (Pvt.) Limited 844 45

8 Diamond Paint Industries (Pvt.) Limited 182 39

9 Sefam (Pvt) Ltd 12 29

10 Deharki Sugar Mills (Pvt.) Limited 492 25

11 Javaid International (Pvt) Ltd. 94 21

12 Sadiq Feeds (Pvt.) Limited 245 17

13 Opi Gas (Private) Limited 316 15

14 Mahboob Industries (Pvt.) Limited 217 14

15 Pepsi-Cola International (Pvt) Ltd 7,042 13

16 Azhar Corporation (Pvt.) Limited 360 9

17 Hafeez Ghee And General Mills (Pvt.) Ltd 168 9

18 Micro Tech Industries (Pvt.) Limited. 46 8

19 Niagara Mills (Pvt.) Limited 573 7

20 Tapal Energy (Pvt.) Limited 1,569 7

21 Dewan Petroleum (Pvt.) Limited -557 7

22 JK Dairies (Pvt.) Limited 90 7

23 Bps (Pvt) Ltd 194 6

24 Style Textile (Pvt) Limited 1,203 6

25 Nagra Spinning Mills (Pvt.) Limited -17 6

Total 48,360 1,213


Giving as a percentage of PBT

As has been the practice for CPS studies, the second criteria of ranking, donation amount as percentage of PBT, is also applied to PUCs and PvLCs. Table 12 presents the ranking list.

It is evident from Table 12 that ranking order of PUCs present-ed in preceding table has drastically changed based on the second measure of ranking. For example, A. A. Spinning Mills Limited ranked at 11th position by absolute volume of donations ranks at the top by giving away 23.6 percent of PBT. Similarly, other 5 top ranked companies such as Laraib Energy Limited and Atlas Power Limited are ranked at position 21 and 18 respectively by giving away less than 1 percent of their huge profits (Table 12).

Table 12: Top 25 PUCs Ranking as a Percentage of PBT: 2015 (PKR million)

Rank Company Name PBT Donation % of PBT

1 A. A. Spinning Mills Limited 55 13 23.64

2 Pharmagen Limited 77 6.45 8.38

3 Hassan Limited 71 5 7.04

4 Fatima Sugar Mills Limited 571 35 6.13

5 Lucky Textile Mills Limited 1,866 93 4.98

6 Al-Nasr Textiles Limited 44 2 4.55

7 Punjab Feeds Limited 22 1 4.55

8 Central Depository Company of Pakistan Ltd. 665 17 2.56

9 Sigma Motors Limited 8.70 0.10 1.15

10 Ramzan Sugar Mills Limited 172 3.20 1.86

11 Bunny’S Limited 115 1.80 1.57

12 Sapphire Finishing Mills Limited 672 10.50 1.56

13 Masood Spinning Mills Limited 247 3.80 1.54

14 Highnoon Textiles Limited 17.60 0.20 1.14

15 Fauji Oil Terminal & Distribution Company Ltd. 814 11.90 1.46

16 Dubai Islamic Bank Pakistan Limited 711.72 10 1.41

17 Fauji Kabirwala Power Company Limited 785 10 1.27

18 Atlas Power Limited 2,290 23 1.0

19 Haleeb Foods Limited 1,557 15 0.96

20 Lucky Holdings Limited 2,235 20 0.89

21 Laraib Energy Limited 3,684.84 29 0.79

22 Shujabad Weaving Mills Limited 128.80 0.96 0.75

23 Engro Vopak Terminal Limited 1,820 12 0.66

24 Mughal Iron & Steel Industries Limited 725 3 0.41

25 Crown Tyres Limited Limited 5.80 0.02 0.34


Table 13: Top 25 PvLCs Ranking as a Percentage of PBT: 2015 (PKR million)

Rank Company Name PBT Donation % of PBT

1 Bahria Town (Private) Limited. 2,885 649 22.48

2 Diamond Paint Industries (Pvt.) Limited 182 39 21.28

3 Micro Tech Industries (Pvt.) Limited. 46 8 17.29

4 Sadiq Poultry (Pvt.) Limited 289 46 15.87

5 Wise Communication Systems Limited 10 1 13.62

6 Ravi Exchange Company (Pvt.) Limited 19 2.5 13.14

7 Pearl Real Estate Holdings pvt. Limited 46 5 10.98

8 Seasons Foods (Pvt.) Limited 31 3.4 10.98

9 Hunbul Tex (Private) Limited 58 6 10.35

10 Jk Dairies (Pvt.) Limited 90 7 7.42

11 U.S.Denim Mills (Pvt.) Limited 875 64 7.33

12 Naubahar Bottling Company (Pvt) 831 57 6.86

13 QSA Surgical (Pvt.) Limited 37 2.4 6.71

14 Mahboob Industries (Pvt.) Limited 217 14 6.38

15 Deharki Sugar Mills (Pvt.) Limited 492 25 5.08

16 Hafeez Ghee and General Mills Limited 168 8.5 5.08

17 Opi Gas (Private) Limited 316 15 4.74

18 K & N’s Foods (Pvt.) Ltd. 1,594 55 3.45

19 Bps (Pvt) Ltd 194 6.4 3.31

20 Gas & Oil Pakistan (Pvt.) Limited 13 0.36 2.83

21 Kamran Textiles (Pvt.) Limited 44 1.14 2.60

22 Big Bird Poultry Breeders ( Pvt) Ltd. 62 1.08 1.76

23 Advance Fashion (Pvt.) Limited 30 0.4 1.2

24 Kwick High Tech & Solutions Limited 77 0.89 1.16

25 Lmk Resources Pakistan (Private) Ltd 82 0.63 0.78

Table 13 shows that for PvLCs, giving as a percentage of PBT ranges from 0.78% to 22.4%. Bahria Town Limited sits on top of the list by giving away over 22 percent of its profits for activities of common benefit. The 2nd position goes to Diamond Paint Industries (Pvt) that contributes slightly less than the one at the 1st position. PvLCs ranking at 3rd, 4th and 5th positions are also smaller companies that did not appear in earlier ranking of PvLCs as per absolute volume of donations.


An overall analysis on the volume and pattern of philan-thropic giving by different categories of companies is quite revealing in terms of their commitment to CSR, compliance with financial procedures, and generosity towards social causes. Table 14 presents at-a-glance picture of corporate philanthropy for the year 2015.

Table 14 shows that giving by PLCs is the largest, Rs. 6.9 billion, as against Rs. 0.466 billion for PUCs and Rs. 1.28 billion for PvLCs. However, it is worthy to note that giving as a percentage of PBT is on the higher side, 1.13% for PvLCs followed by 0.75 % for PUCs and 0.68 % PLCs. Keeping in view the huge number of companies in PvLC category it can be inferred that there is a great potential resource for social development that needs to be streamlined and steered in a better way. Taking note of that, the SECP and other

Table 14: Selected Indicators on Philanthropic Giving by Type of Company-2015 (PKR million)

Type of Company (N) PBT Total Donation Giving by Top 25 % of PBT

PLCs 499 1,016,561 6,900 6,100 0.68

PUCs 149 61,967 466 447 0.75

PvLCs 233 113,200 1,280 1,213 1.13

Total 384 1,191,728 8,646 7,760 0.73

Telecom Sector 25 35,531 149 - 0.42

regulatory authorities need to take practical and facilita-tive actions to improve compliance in the first place and to encourage and motivate companies falling in all the three categories to make social responsibility a part of business strategies.

As for the Telecom sector exhibiting the highest growth and expansion with significant profit earnings in recent years has remained quite passive and non-responsive in their CSR contributions, especially a few large multinational compa-nies with huge investments and profits earnings. Of the 25 companies in the telecom sector, volume of donations is only Rs. 0.15 billion with an average of 0.42 % as a percent-age of PBT in 2015.


CORPORATE GIVING BY THEMATIC AREAS(Top 5 Companies)


Where did companies spend their philanthropy in 2015?

Corporate sector (PLCs and the sample of PUCs and PvLCs) contributed a total of Rs. 8.7 billion as corporate philanthropy during 2015, of which top 5 giving companies shared Rs. 4.7 billion (54%). Detail of the amount spent in specific thematic areas is given in table below.

Table 15: Distribution of Giving of Top 5 PLCs, PUCs, PvLCs by Thematic areas8 (PKR million)

Thematic Area PLCs PUCs PvLCs Total Percentage

Health 436 83 265 784 18

Education 461 103 202 766 18

Disaster 793 5 218 1016 23

Environment 164 30 63 257 6

Other 1405 18 131 1554 36

Total 3259 239 879 4377 100

8 Top 5 PLCs: OGDCL, PPL, HBL, Lucky Cement, Engro Corporation

PUCs: Lucky Textiles, Mobilink, Fatima Sugar, Laraib Energy, Zaver Petroleum

PvLCs: Bahria Town, Diamond Paint, Micro Tech Indus, Sadiq Poultry, Wise Communication System

Figure 10: Percentage Distribution of Top 5 Giving Companies by Thematic areas

Health Education Disaster Environment Other

0

18% 18%

23%

6%

36%

50

40

30

20

10


Value of corporate philanthropy

Rs. 8.7 billion Given by PLCs and PUCs/PvLCs sample in 2015 is;

Eight times more than the annual budget (2014-15) for Special Education in Punjab.

80% of Rs. 10.8 billion received as foreign aid for Polio eradication program.

90% of Rs. 9.8 disbursed by Pakistan Poverty Alleviation Fund (PPAF) during 2014-15 on different programs including BISP’s Waseela-e-Haq Program, Prime Minister’s Interest Free Loan, Education,

Health and Nutrition and other programs.

Nearly double of the Zakat disbursement (Rs. 4.7 billion) in the year 2014-15.

The 1% of PBT Philanthropy would have Generated Rs. 10.2 billion which is

88% of the education budget (Rs.11.52 billion) of Balochistan, 82% of the budget (Rs.12.4 billion) of KPK, 68% of the budget (Rs.15 billion) of Sind government in 2014 – 15.

73% of Punjab government’s budget (Rs.14 billion) for higher education in 2014 – 15.

Half of the amount (Rs.20.5 billion) provided to Health sector in Federal PSDP 2014 – 15.


Figure 10: Annual Cellular Subscribers in Pakistan-2015 (PKR million)

Mobilink Ufone CMPak Telenor Warid

0

40

19

25.8

38

10.7

50

40

30

20

10

Source: PTA Annual Report, 2015

Telecommunication Sector

Background

In view of the fact that telecom sector is wide ranging, regulated and rapidly evolving component in the corporate domain, this chapter focuses on the philanthropic giving and CSR input of selected telecom companies operating in Pakistan.

Telecommunication sector is the largest industrial sector in the world accounting for 1.6 percent of the global economy and mobile operators have spent more than $234 billion for building GSM and 3GSM networks since 2002, whereas annual mobile advertising expenditures will be $14 billion in 2011 (Wireless Intelligence, Q4 2007).

In Pakistan, the telecom sector has also exhibited rapid ex-pansion in the last decade making significant contribution to the economy in terms of providing employment opportuni-ties, boosting national exchequer through taxes and attract-ing domestic and foreign investment. In the year 2014-15, total Foreign Direct Investment (FDI) in Pakistan was $ 529 million, of which $ 121 million (23 percent of the total) was invested in telecom sector of Pakistan.9 In 2008, Pakistan was the world’s third fastest growing telecommunication market with key players as: Pakistan Telecommunication Limited (PTCL), Pakistan Mobile Communication Limited (Mobilink), China Mobile Pakistan (Zong), Pak Telecom Mobile Limited (Ufone) and Telenor Pakistan. As a result of the fastest grow-ing infrastructure of the telecom sector, it is estimated that there are more than 134 million cellular users and the sector directly or indirectly provides employment to approximately

1.36 million people (PTA Website).The use of cell phone and internet has become an integral part of our lives as about 95 percent of Pakistan’s population is using mobile phone services (PTA Website).

The progression of Telecommunication accelerated with the enactment of Pakistan Telecommunication Corporation Act, 1991 when Pakistan Telecommunication Corporation (PTC) took over operations and functions from Pakistan Telephone and Telegraph Department. This coincided with the Govern-ment’s competitive and privatization policy resulting in award of licenses for cellular, card operated pay-phones, paging and, lately data communication services. Pursuing a progres-sive policy, the Government in 1991 announced its plan to privatize PTCL which launched its mobile and data services subsidiaries in 2001 under the name of Ufone and PakNet, respectively.

Figure 9 indicates that Mobilink, a subsidiary of the Vimpel-Com Ltd, is Pakistan’s leading cellular and Blackberry service provider with more than 40 million subscribers. Other major competitors are Telenor with 38 million, Zong (China Mobile Company) 25.8 million, Warid 11 million and Ufone19 million. Other major license operators include World Call, Tele-card, Great Bear, Burraq and Wateen. It may be noted that Wireless Local Loop customer base have shown rapid growth since 2001. According to estimates of ISPAK (Association of Pakistani ISPs), there are about 3.5 million internet subscrib-ers all across Pakistan, whereas total users crossed 17 million marks connecting around 3,002 cities to internet in Pakistan. Table 16 shows the type and number of licensed companies 9 Pakistan Telecommunication Authority – August 2016 -

http://www.pta.gov.pk/index.php?Itemid=599


operating in Pakistan. According to Pakistan Telecommuni-cation Authority (PTA), the total number of telecom compa-nies in Pakistan is 699 operating in 14 geographical regions. These telecom companies include: (a) cellular operators - fixed & wireless local loop; (b) long distance & international; and (c) telecom infrastructure provider and telecom tower provider etc.

Table 16: Types of Licenses in Telecom Sector in Pakistan-2015

Type of License Total Licenses

Data Class Value Added Services 274

Voice Class Value Added Services 59

Class Value Added Services Registration 158

Long Distance & International 14

Fixed Local Loop 84

Wireless Local Loop 92

Telecom Infrastructure Provider 10

Telecom Tower Provider 8

Total 699


These telecom companies include: (a) cellular operators - fixed & wireless local loop; (b) long distance & international; and (c) telecom infrastructure provider and telecom tower provider etc.

The Department of Economic Affair, PTA when contacted identified 80 large companies with their CSR program. All these companies were reached out through letters, emails and phone calls to provide the required information on CSR, only 25 companies responded to our request. Table 17 lists these 25 TELCOs together with their donations in absolute amount and as a percentage of PBT.

Table 17: Ranking of TELCOs by Volume of Donations & as a Percentage of PBT-2015 (PKR million)

Rank Company Name PBT/LBT Donation % of PBT

1 Pakistan Mobile Communications Limited (Mobilink) -1,242 58.25 -

2 Telenor Pakistan (Pvt.) Limited 28,240 54.16 0.19

3 Netsol Tech. 148 17.47 11.79

4 Micro Tech Industries (Pvt.) Limited. 46 8.03 17.29

5 Pak Datacom 132 4.20 3.19

6 P.T.C.L. 4,015 3.54 0.09

7 Wise Communication Systems (Pvt.) 10 1.40 13.62

8 Wi-Tribe Pakistan (Pvt) Limited -24 0.85 -

9 Multinet Pakistan (Pvt) Limited 73 0.52 0.71

10 Netsol Connect (Pvt) Limited -2 0.42 -

11 Trg (Pvt.) Limited -3 0.05 -

12 Systems Limited 465 0.004 0.01

13 CMPAK Limited (ZONG) -12,111 - -

14 Supernet Limited 94 - -

15 Wateen Telecom Limited -6,397 - -

16 Linkdotnet Pakistan (Private) Limited 42 - -

17 Micronet Broadband (Pvt.) Limited 705 - -

18 National Communications Serivces Ltd. 479 - -

19 Naya Tel (Pvt.) Limited 486 - -

20 Nokia Solutions And Networks Pakistan -301 - -

21 Trans World Associates (Pvt.) Limited 593 - -

22 Warid Telecom (Pvt.) Limited -7 - -

23 WateenWimax (Pvt.) Limited -3,948 - -

24 Telecard Limited -23 - -

25 TRG Pak Ltd -2,154 - -

The table shows that of the total 25 TELCOs, about half have reported losses before taxation with no participation in CSR donations. It is, however interesting to note that Mobilink, despite its reported loss in income ranks at top position with total CSR donation of Rs. 58 million. Compared to this, Telenor ranked as 2nd with total donations of about Rs. 54 million has made minimal CSR contribution of merely 0.19 as a percentage of their huge profit of Rs. 28 billion. On the other hand, Micro Tech Industries (Pvt.) Ltd. ranked as 4th top giving company has donated 17.3 % PBT followed by Wise Communication Systems (Pvt.) Ltd. with 13.6 % but ranked at 7th position in terms of total volume of dona-tions, and Netsol Tech. Ltd. with 11.79 % of their profits but ranked at 10th position. Some TELCOs operating on large scale business have reported huge losses before taxation, i.e., CMPAK Limited (ZONG), Wateen Telecom Ltd., Wateen Wimax (Pvt.) Ltd., and TRG Pak Ltd. and have indicated no CSR contributions. Overall, only a handful of TELCOs have reported CSR donations of about Rs. 149 million with large companies missing from the scene and reluctant in sharing information on PBT and volume of donations. Of the total 25 companies, the donations coming from top 5 companies are significant as shown in Table 17 above.



Based on the information provided by some companies in the TELECOM sector, a brief description of their activities is provided in the section below.

Mobilink

Registered under Section 42 of Pakistan Companies’ Or-dinance 1984, Mobilink is Pakistan’s leading provider of voice and data services. With over 40 million subscribers, it maintains market leadership with coverage in over 20,000 cities, towns and villages across Pakistan. With an investment of USD 4.3 billion, Mobilink continues to innovate through cutting-edge, state of the art technology, a portfolio of Mo-bile Financial Services, the largest bio-metric SIM verification footprint and the largest network with over 9,000 cell sites. Mobilink established Corporate Giving. Mobilink Foundation www.mobilinkfoundation.org in December 2007 to assist management in deploying a more focused and hands-on approach to Corporate Social Responsibility (CSR). In 2015, Mobilink has contributed a total of PKR 58,253,870 under its CSR portfolio.

Make Your Mark

Mobilink, under the strategic guidance of VimpelCom (Mobilink’s parent company) launched its Flagship program, Make Your Mark in 2015 with a focus on ‘Helping Young Peo-ple Shape Their Future.’ For that matter, Mobilink partnered with three organizations, Lahore University of Management

Sciences, Pakistan Centre for Philanthropy and GuarantCo. Specific details of each initiative are as under:

Mobilink Entrepreneurship Support Initiative

Mobilink partnered with LUMS Center for Entrepreneurship (LCE), an all-inclusive development incubator for budding en-trepreneurs that formalizes the process of scouting, mento-ring and facilitating startup founders. Under the partnership 13 Start- Ups were scouted from across the country.

Partnership with Pakistan Centre for Philan-thropy (PCP)

Mobilink and Pakistan Centre for Philanthropy (PCP) entered into a partnership to support Education in Pakistan. Under this partnership, Mobilink provided state-of-the-art ICT Labs to selected schools adopted by PCP certified Civil Society Organizations (CSO). PCP as the project partner identified and recommends the schools in need of these ICT labs and was responsible for the due diligence of the CSOs by ensur-ing that the recipients are serving marginalized social classes.

SMS based Literacy Program

In 2009, Mobilink developed a pilot scheme with UNESCO to educate rural women. The project started with 250 female learners in rural Punjab, and by the mid of 2016, it has suc-cessfully developed the capacity of 10,000+ women in basic literacy (reading, writing, mathematics) across the country. The program employs a hybrid approach of in-class learning and use of SMS technology to impart basic literacy skills.


Health

The organization’s social investment in 2015 includes partner-ing with credible partners such as Shaukat Khanum Memo-rial Hospital, Sundas Foundation, Social Security Hospital Islamabad and Women Empowerment Group’s Pink Ribbon campaign.

Education In addition to the ‘Make Your Mark initiative’ launched in 2015, the Foundation’s employee volunteers have been frequently visiting educational partners such as JAQ Trust’s Pehli Kiran School System, Greenland School, Master Ayub’s Park school to provide coaching and mentoring to struggling students.

Telenor

Some of the Telenor’s successful CSR initiatives are:

Easy-paisa brings Solar Energy to Thousands of Pakistanis

Easypaisa has collaborated with Roshan Energy to launch a first of its kind Solar Home Solution. The innovative mod-el enables customers to purchase and use reliable solar solutions with an upfront payment of just 15%, whereas the remaining payments can be paid within 18 months through Easypaisa which are as low as PKR1000 per month.

Sehat-Sahara-Pakistan-first and fastest growing mass mar-ket-health insurance. Approximately 63% of Pakistanis bear the financial cost of illness by resorting to utilizing their savings, borrowing money or even selling household assets to overcome major health catastrophes. These survival tech-niques leave households in significant debt, making it very challenging to escape the vicious poverty cycle. In January 2015, Easypaisa launched “EasypaisaSehat Sahara Health Insurance”, Pakistan’s first mass market health insurance product that offers a convenient way of improving access to health care by providing financial assistance for inpatient hospitalization and disability, offering a new innovative meth-od of health financing to those in need.


Disaster Relief

A contribution of over PKR 20 million was made to the flood victims of GilgitBaltistan. In 2015, unusual rain fall, flash floods and land sliding caused extensive damage to both private properties and public infrastructure affecting an esti-mated population of 136,000. A relief package was provided to over 1,876 individuals with both food and nonfood items. In addition, four mobile healthcare units have also been stationed at different locations to provide basic medical aid to flood victims to prevent any outbreak of disease in the flood-hit areas.

Free Basics

Free Basics at www.internet.org was launched in June 2015 as a revolutionary initiative by Telenor Pakistan to offer free internet services for the masses providing FREE basic com-munication and information services to more than 2 million subscribers.

Open Mind Pakistan

Telenor Pakistan takes pride in taking a lead to take up Dis-ability as a priority agenda, but also is the first to implement a program translating ambitions into concrete outcomes. Under Batch III of OMP commenced in Oct 2015, 16 Persons with disabilities were recruited to go through comprehen-sive on job training. So far, 46 PWDs have gone through the program since 2013.

NayaAghaz

With the goal of “empowering women, empowering societ-ies’’, this program aims to provide opportunities for women to work in a corporate environment. The program will lead to the establishment of new ways of attracting and acquiring a talent pool, while providing women with flexible working opportunities in order to manage their work life balance.

Education

During the scale up phase of Schools Rehabilitation and Improvement Project, a total of 44 fully equipped ICT labs in 44 flood affected public elementary schools were established in four worst flood effected districts of Pakistan. Facilities in-cluded Laptops, Solar panels, smart phones along with data SIMs and internet connectivity via Telenor Dongles.


It is widely recognized that corporations in Pakistan have enormous economic power and ability to mobilize resources that can be utilized for productive social investments. The role and potential of Corporate Philanthropy in this respect is colossal; it can address pressing issues in remote regions where government presence is limited; provide support for long term solution to socio-economic problems, and essen-tially, help build and strengthen civil society’s capacity to achieve sustainable development. The recent expansion of the business sector, on the one hand provides new avenues and opportunities to augment economic and social returns and enhance its involvement in CSR initiatives, on the other hand, presents challenges that require policy reforms and actions to improve regulation and compliance to help conduct a systematic and comprehensive analysis of their philanthropic contributions.

The foregoing analysis of corporate philanthropy in Pakistan makes it evident that the business sector donates generous-ly for various social causes, especially in times of disasters. Public listed companies, which are the biggest and most organized segment of the business sector, have donated nearly Rs. 0.7 billion in 2015 compared with Rs. 5.9 billion in the previous year, indicating an increase of about 19 per-cent. It may be noted that these donations have come from 55 percent of the total 499 sampled PLCs with an average donation of 0.8 percent of PBT. It is estimated that if these PLCs had donated 1% of their PBT, the amount would have risen to Rs. 10.2 billion, pointing towards the need for some proactive policy initiative to set a minimum standard of CSR donations as implemented by our neighboring country India in recent years. The rest of 45 percent of PLCS reporting no philanthropic giving also merit attention. First, those com-panies need to be motivated at policy level to participate in CSR activities which would bring larger socio-economic benefits to society and would contribute to developing a relatively more organized and responsible business sector in Pakistan. More importantly, the share of companies ranked as top 25 givers stands at 80 percent of total donations in 2015, whereas the remaining 20 percent donations come from the rest of PLCs. The trend of huge donations coming from the top 25 companies has persisted over the years, im-plying that giving is restricted to a particular group of PLCs who are large in size and sustain their giving practices over time, while the remaining PLCs either make small donations or regularly remain non-participants in philanthropic initia-tives. The underlying reasons for this attitude and practice need to be further explored and understood. For this, a specific purposive sample survey needs to be designed to find out more about the reasons and constraints of the non-giving behavior of PLCs as well as PUCs and PvLCs and the ways to ensure their commitment towards CSR initia-tives.

Measuring and defining corporate philanthropy outside PLCs is quite challenging and problematic as information about a majority of unlisted and private limited companies is simply not available in the public domain. This year, how-ever, an attempt is made to capture some public unlisted and private Ltd. companies which have filed their financial audited accounts with SECP. Based on these records, it is

estimated that there are 2,322 PUCs and 60,758 PvLCs op-erating in Pakistan in 2015. Of these, only 149 PUCs and 233 private companies filed the required information to SECP which represents nearly 6 percent of total PUCs and 0.3 percent of PvLCs. The total giving estimates show that PUCs have donated Rs. 0.47 billion, of which 99 percent comes from top 25 givers and 57 percent from only top 5 giving companies in 2015. Compared with this, Private Limited Companies. have donated about Rs. 1.3 billion, of which 95 percent is given by top 25 companies and 72 percent by top 5 companies in the year 2015, corroborating the fact that only few large and organized companies report their par-ticipation in CSR donations. It is, however, noteworthy that giving as a percentage of PBT is, on average the highest for private Ltd. companies at 1.1 percent compared with 0.75 percent for PUCs and 0.68 percent for PLCs. This implies that a handful of private Ltd. companies donating above 1 percent of their PBT present a huge potential resource that needs to be tapped and more detailed information on their CSR programs is required to assess the nature and impact of philanthropic activities. It may be noted that the sample for PUCs and PvLCs comprised of a limited number of com-panies, hence it is difficult to generalize these results. It can nevertheless, be said that these few companies represent the most organized subset, regularly to file their records to SECP, and are larger in size than the average PUC or PvLC with an annual turnover of Rs. 50 million or above.

In terms of subsector analysis, telecommunication compa-nies (TELCOs) are selected considering its rapid expansion and significant contribution to the economy in terms of providing employment, generating tax revenue and boost-ing domestic and foreign investment. It may be noted that TELCOs consist of PLCs, PUCs and PvLCs with a majority operating as private enterprise. Data collected from various sources reveals that there are 699 telecom companies operating in Pakistan but information on only 25 companies was accessible. Of the selected TELCOs, total volume of donations is only Rs. 0.15 billion with an average 0.42 as a percentage of PBT in 2015.

Data collection on TELCOs has been very challenging and time-consuming with poor response and non-cooperation from even the large multinational companies. Some of the big players such as Mobilink, Telenor and Warid provid-ed limited information after making several requests. It is, however interesting to note that Mobilink, despite its reported loss in income ranks at top position with total CSR donation of Rs. 58 million. Compared to this, Telenor ranked as 2nd with total donations of about Rs. 54 million which is merely 0.19 percent of their huge profit of Rs. 28 billion. Other companies among top 5 have donated small amounts ranging between Rs. 3-10 million only. Among others, the two large telecom companies, Ufone and Zong, appear as non-compliant due to un available information on their CSR contributions.

Although the findings of this study are quite revealing, a limited coverage of a large segment of corporate sector remains a challenge. The representativeness of PUCs and PvLCs covering only 6 percent and 0.3 percent of total

Conclusion and Way Forward


universe, respectively dwindle capturing the complete picture of corporate philanthropy in Pakistan. Among other challenges, government’s lack of interest and feeble policy response to strengthen regulatory laws and promote CSR provide space for non-compliance to file the required infor-mation to relevant authorities. Moreover, CSR donations by the business sector are largely channelized through Corpo-rate Foundations or larger NPOs, while small and medium sized organizations remain passive and unrecognized. To address this challenge, there is need to build connections and partnerships among all relevant stakeholders, and PCP certified CSOs could be helpful in bridging this gap. Also, sensitization of media in raising awareness about the signif-icance of philanthropy and its social impact need to be en-couraged to seek answers to the challenges and constraints in promoting effectiveness of corporate philanthropy in the country.

The data compiled is also limited in terms of assessing the impact of CSR activities of the corporate sector – an aspect important in essence but is beyond the scope of this study. More detailed information is needed to ascertain the focus and direction of CSR funds spent for various causes. Given the fact that rules and regulations regarding CSR are not followed in letter and spirit by companies, perhaps, there is a need to not only develop more explicit policies by regu-latory authorities but also to ensure maximum compliance with them.

The preceding discussion also highlights the need for more research on various dimensions of corporate philanthropy, especially, to further build on this pioneering work on PUCs and PvLCs. Some qualitative research needs to be under-taken to specifically examine the constraints and hurdles in non-participatory behavior of companies outside of public domain.

In the light of the above, it would be justified to say that corporate philanthropy of PLCs, despite its shortcomings, is relatively more comprehensive presenting the ‘best practice model’ for implementing CSR programs. The rest of the business sector demonstrates some degree of participation but the compliance to CSR regulations and management of their giving programs is not encouraging and falls short of the desired level. However, seeking limited information on the available small sample of PUCs and PvLCs is a first step in that direction and provides the basis to draw inferences about huge potential of corporate philanthropy in Pakistan. The limited analysis also reinforces the need to specifically study the philanthropic contribution of this much larger sub-set of the corporate sector for promoting CSR initiatives in the country.


PCP’s Board of Directors

Mr. Zaffar A. Khan, S.I.Chairperson, PCP Board of Directors

Mr. Mueen Afzal, H.I.Former Secretary General, Finance & Economic Affairs, Government of Pakistan

Syed Hyder Ali,Managing Director and CEO, Packages Limited, Lahore

Mr. Arif Habib,President, Arif Habib Securities Limited

Dr. Attiya Inayatullah,Former Federal Minister for Women Development, Special Education, Social Welfare and Population Welfare

Dr. S. Sohail H. Naqvi,Vice Chancellor, Lahore University of Management Sciences

Dr. Sania Nishtar, S.I., FRCS, Ph.DPresident, Heartfile

Mr. Sohail G. Khoja,Member National Council, AKFP.

Mr. Abdul Wajid Rana,Member, Federal Public Service Commission of Pakistan

Mr. Ahsan M. Saleem,Chief Executive, Crescent Steel & Allied Products

Mr. Omar Yaqoob Sheikh,Chairman/Managing Director, Shell Pakistan Ltd.

Mr. Badaruddin F. Vellani,Chairman of Board, Aga Khan Foundation (Pakistan).

Mr. Osman Waheed,President, Ferozesons Laboratories Limited.

Mr. Iqbal Walji,Member, National Council, AKFP.

Mr. Arshad Zuberi,Chief Executive and Editor, Daily Business Recorder.

The Centre is led by Ms. Shazia Maqsood Amjad,Executive Director and Ex-officio member of the BoD.

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Published in December, 2016

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