CORPORATE SOCIAL RESPONSIBILITY - A CASE STUDY OF TATA MOTORS - Technical ...

 
CORPORATE SOCIAL RESPONSIBILITY – A CASE STUDY OF
                   TATA MOTORS
              Jaspreet Singh1, Dr. Jaskaran Singh Dhillon2, Dr.Dharminder Singh Ubha3
                        1
                          Research Scholar, I.K.G.P.T.U., Jalandhar (PB.) India.
                 2
                   Professor, S.G.G.S.World University, Fatehgarh Sahib (PB.) India.
                     3
                       Principal, G.S.S.D.G.S. Khalsa College, Patiala (PB.) India.

Abstract                                                the firm and are affected by the firm’s decisions.
Tata Motors formerly known as TELCO                     The shareholders being one of the constituencies
(Tata      Engineering   and     Locomotive             of stakeholders should actively participate in the
Company) is an Indian multinational                     decision making process of implementing CSR
automotive       manufacturing     company              programs, while the firm should ensure the
established in 1945 by Tata group. Tata                 continuity of their contribution through
Motors is India’s largest automobile                    commitment to pay dividends and increase share
company. Different Tata companies have                  value (Ramesh & Goel, 2012).
been actively involved in various social                One of the areas of Corporate Social
activities and Tata Motors is doing social              Responsibility research which remain untouched
work since its existence. Corporate Social              in the competitive country like India is the role of
Responsibility is becoming an important                 CSR in family operated business. Large numbers
activity to businesses nationally and                   of companies are running business these days but
internationally. In the light of this                   very small numbers of companies are spending
background, the objective of the study is to            amount on CSR activities in education. Tata
analyse the Corporate Social Responsibility             Group is among the best companies in India. The
activities performed by Tata Motors from                Tata group is operated by Tata family since its
2009 to 2015 towards activity as specified in           establishment.
Schedule VII to the 2013 Act.                            The history of Tata group springs from a small
Key words: Corporate social responsibility,              trading company established in 1868. Since then,
rural areas, Tata, Tata Motors                           the business has evolved into a well-established
                                                         company with a wide distribution network and
 Introduction                                            wholesale operations. He was the only son of
The globalization of the economy and the                 Nusserwanji Tata, a Parsi family of the close-knit
emergence of a boundary-less environment, make           Zoroastrian community. He was working in his
such a phenomenon even more dramatic.                    father’s banking firm and established a trading
Companies are more and more scrutinized and put          company. In 1887 Jamsetji Tata formed a
under pressure by consumers associations and             partnership firm, Tata & Sons with cousin
political lobbies (Ramesh & Goel, 2012).The              Ratanji Dadabhoy Tata and his elder son Sir
main motive of CSR is to define a social contract        Dorabji Tata, Rattan Tata, this was the start of
to maximize the welfare of all the concerned             the core business. This start-up could be
parties. Welfare maximization should be                  described as entrepreneurship, changed to
considered as both short term and long term, in          partnership and become family links between the
order to meet present expectations and needs             brothers and son played a considerable role in the
without endangering the opportunities and the            start-up. Tata Motors was started by Tata group
resources of the coming generations (Ramesh &            in 1945 by this group.
Goel, 2012).The stakeholders of the organization         This study deal with the areas in which the CSR
contribute to firm’s activities, and have a stake in     work has been done by Tata Motors company.

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The areas of CSR activities given in the schedule           responsibilities programmes perfo rmed by
VII of the companies Act 2013 is taken as a base            various companies like Tata group of companies
to undertake the study. These areas include                 extended a wide spectrum including rural
poverty & hunger eradication, education, women              development, community development and
empowerment,        child    mortality,    health,          social welfare, family initiatives, tribal
environmental sustainability, vocational skills,            development and water management. The study
social projects, contribution to funds and others.          analysed the different drivers of CSR by using a
The study is done year wise from 2009 to 2015.              comparative diagram and analysed the areas of
Each year of study is taken in tabular form to              CSR addressed in corporate policies of
bring a more reliable result out of it. For the             companies.
purposes of this item, the term slum area shall
mean any area declared as such by the Central               Zhang (2008) gave an overview of the issues
Government or any State Government or any                   surrounding CSR that should be kept in mind
other competent authority under any law for the             while discussing the emerging markets. The
time being in force.                                        study was to frame the background of CSR in
                                                            emerging markets, inform the actual seminars
Review of Literature                                        and prepare points for debate throughout the
Ranganathan (2003) attempted to describe CSR                course of the project and to find this the project
practices in Tata group. It also reiterated need for        with Foreign Policy Centre in association with
replication of the Tata model on holistic                   Coca-Cola Great Britain was launched. The
development through CSR from its inception to               study examined the impact of MNCs’ businesses
till date. The study discussed the people who led           on the workplace, the marketplace, and the
their visionary leadership spearheaded the Tata             environment, and explored how well-designed
group and the core values of the Tata Group                 CSR practices could contribute to economic,
which was to improve the quality of life of the             social, and environmental progress in emerging
communities it served and Social Initiatives of             economies. In case of workplace, the study
the Tata Group. The study discussed the Tata                undertook Nike, Coca - Cola Company.
Index for sustainable human development                     However, in marketplace an example of HLL
prepared by TCCI to benchmark the                           and Unilever and Vodafone was considered and
contributions of Tata companies towards social              in case of environment, Atlantic operating in
development and protection of the environment.              aviation and general motors a leading company
The study also reiterated need for replication of           in automobile industry was considered.
the Tata Model on holistic development through
CSR. It was concluded that Tata group was                   Tomar & Gupta (2008) examined the way,
performing CSR activities not for propaganda or             reasons and to what extent corporate social
visibility but they were doing it wilfully.                 responsibility was being implemented in leading
                                                            family owned businesses in India. The study
Prema & Singla (2003) highlighted the lessons               aimed to develop a framework that integrated the
from India which were relevant to businesses                intention and the concern of an organization
seek endorsement as good corporate citizens                 towards corporate social responsibility and the
through      corporate     social     responsibility        degree to which these activities were operational.
initiatives. The researchers saw repercussions in           The study addressed the two key challenges in
various companies of the world out of which                 social responsibility management i.e. firstly how
India had also seen some repercussions. In India,           to measure corporate social performance and
it was traditionally linked to spirituality while           secondly what capabilities an organization
respect in the corporate world was treated on a             should have to be socially responsible. The
par with the bottom line. The research inferred             research found the impact of the philosophy of
that the CEO’s reputation was a key factor in a             Tata family on CSR policies and practices of
company’s reputation. Respect was considered                TISCO. Tata Steel provided many examples of
an intrinsic part of Indian culture. The study also         how business-community relations were
discussed the criteria for ranking India’s most             approached by the private sector in India in the
respected companies and corporate social                    present time. Tata Steel also commenced

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employee volunteering whereby employees were              could be understood in isolation from contextual
not only made aware and communicated                      factors. The ensuing comparative analysis based
properly but also participated actively in CSR            on QCA gave a concise illustration of the
activities.                                               importance of context when trying to capture the
Norhayah, Haslida, Zakiah & Dalilawati (2009)             mechanisms behind a company’s CSR
tried to explore CSR in family business in                engagement. The study suggested that CSR
Malaysia, in terms of firm practices towards CSR          strategies could not necessarily be transferred
and disclosures of information related to CSR.            successfully from one company to another
The research explored the approach of the family          irrespective of context.
businesses in responding towards CSR. The                 Jedrzej & Frynas (2009) analysed CSR’s
study presented the first phase of the research,          potential and limitations for contributing towards
which included CSR initiatives and activities of          wider societal challenges. The article
the family businesses. A multiple-case study              investigated the key areas of CSR policies where
consisting of five Malaysian family businesses            oil companies were expected to make a positive
those topped on board of listed companies in              contribution, improvements in environmental
2009 was conducted in Malaysia. Of the five               performance, development and governance. It
companies, one company engaged in commercial              was the culmination of more than 10 years of
and retail banking and its related subsidiaries;          researching the oil and gas sector and the author
two companies involved in plantation, one                 had 100s of conversations with oil company
company was into investment holding and                   staff, civil society advocates, government
management while the fifth company engaged in             officials, consultants, development specialists,
power investments and energy market. Only one             journalists and local people around these issues.
company was chaired by Malaysia while the                 In addition to interviews with oil company staff
other companies were chaired by Chinese. The              and insiders, the findings were based on the
study provided the information on the current             analysis of 20 social and environmental reports
practices of family businesses in Malaysia                of selected oil and gas companies. The evidence
towards CSR. The findings had some policy                 suggested that CSR had the greatest potential for
implications on disclosure requirements related           addressing environmental challenges. Corporate
to disclosure of CSR and on drafting incentives           reporting on the environment was steadily
from government and its institutions to promote           improving, new environmentally friendly
greater CSR amongst family businesses and                 technologies were being developed and tangible
provided a basis for further suggestion on how            improvements were being made by some
companies could contribute to the society and             companies. The limitations of CSR did not imply
environment through CSR.                                  that oil companies should do nothing about
Gjolberg (2009) explored the relative importance          societal issues. Firms were pressured to engage
of global forces and national political economic          with the social and environmental aspects of
institutions for companies’ willingness and               their operations and they might benefit from the
ability to engage in corporate social                     opportunities that CSR offers.
responsibility. The globalist hypothesis                  Reinhardt & Stavins (2010) examined the
postulated that a company’s CSR efforts were a            concept of firms sacrificing profits in the social
function of the dictates of the global market             interest within the environmental realm, with
place: strong anti-globalization and anti-                particular focus on the case of the United States.
corporate sentiments generated a need for a               Their starting point for examining the first
positive reputation to obtain a ‘social license to        question was the prevailing view among
operate’. The institutionalist hypothesis                 economists and business scholars that corporate
postulated that a company’s CSR efforts were a            directors had a fiduciary duty to maximize
function of institutional factors in the national         profits for shareholders.US corporate law was
political-economic system: companies based in             consistent with the shareholder primacy model,
political economic systems with strong                    but as long as managers claimed some plausible
institutions for social embedding of the economy          connection to future profitability, the business
had comparative institutional advantages for              judgement rule granted them the way to commit
success in CSR. The study concluded that CSR              corporate resources to projects that benefit the

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public. The process of economic survival of the            Scope of the study
fittest suggested that firms which engaged in              The study is based on secondary data which was
unsustainable CSR found themselves being                   extracted from various published sources like
pushed out of business. The study revealed that            annual reports, sustainability report various
the firms that engaged in CSR were often active            business magazines, journals newspapers &
in markets that were imperfect or distorted by             other relevant private and public publications.
government intervention, so that they were                 The values of variables considered for the study
protected from Friedman’s evolutionary                     were taken as the values that existed as on 31st
imperatives. Secondly, principal–agent problems            March every year during a period 2009-2015.
led managers to make decisions that commited               The sample size of the study is restricted to Tata
the firm to short-term CSR actions, even if those          Motors and was selected as per non-probabilistic
activities would not be continued in the long run.         convenience sampling.
The study suggested that most firms view
socially responsible actions in the same way that          Limitations of the Study
they viewed more traditional business activities.             1. The CSR activities towards other
Instead of altruistically sacrificing profits, they              important internal stakeholders such as
engaged in a more limited but more profitable set                investors have not been covered. Some
of socially beneficial activities that contributed               external stakeholders such as civil
to their financial goals.                                        society groups, other companies are also
3.1 Importance of the study                                      not part of the study.
It is apparent from the literature that CSR plays             2. The activities performed once are
an indispensable role in the development of a                    sometimes not repeated next year which
country. The study endeavoured to study the                      result in demoralization of the
work done by Tata Motors. CSR came into light                    beneficiaries who are working for these
in India with the coming up of voluntary                         activities or one getting benefit of these
guidelines on CSR in 2009, voluntary guidelines                  activities.
on CSR got revised in 2011 and later on became                3. One of the major limitations of the study
an Act known as Companies Act 2013.The                           was the paucity of time and financial
Companies Act, 2013 introduced the idea of CSR                   resources.
to the forefront and through its disclose-or-                 4. As the study was conducted on a single
explain mandate, is bolstering greater                           firm ie the Tata motors thus the results
transparency and disclosure.          Ministry of                could not be generalized to other groups
Corporate Affairs had notified Section 135 and                   and remained limited to the study only.
Schedule VII of the Companies Act as well as the              5. The study included a small number of
provisions of the Companies (Corporate Social                    statistical observations and various other
Responsibility Policy) Rules, 2014(CRS Rules)                    variables were left for future research.
which has come into effect from 1 April 2014.                 6. The study covered the time period 2009-
The present research is exploratory in nature and                2010 to 2014-15, thus period prior to
will explore the possibilities of social                         2009 and future period was ignored.
responsibility done by Tata Motors. A plethora                7. The study focused on the level of CSR
of empirical studies have been conducted in                      with respect to stakeholders as a whole
India on CSR but no proper research has been                     but CSR towards individual stakeholder
undertaken to examine the CSR activities                         was not the part of study.
performed by the family run business of Tata                  8. The reliability of the CSR data is also an
Group. Thus, the present study has been                          important issue, as data from different
undertaken to fill the gap.                                      sources have significant differences
                                                                 regarding how to evaluate the CSR
                                                                 performance of a firm.

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  Results and Discussions
Areas         2009-10            2010-11        2011-12              2012-13         2013-14    2014-15
Poverty &     training in        irrigation      Milk Collection     Land
hunger        farm               facility        System              levelling
eradication   development,
              irrigation
              facility
Education     Teacher            Scholarships   mobile science       e-learning      collabor   Coaching of IIT-
              training,                         lab, students        programs,       ation      JEE, financial help
              Co-curricular                      drop-in centres,    creative        with       to student,
              activities,                       school building      materials,      schools    coaching of
              Scholarship,                      renovated            scholarships,              student,
              desks and                         students,            coaching                   scholarship to
              benches made                      providing desks      classes,                   students,
              from packing                      & benches            facility up                special coaching,
              wood                                                   gradation,                 infrastructure in
              distributed,                                           Teacher                    school,
              school ground                                          training                   cocurricular
                                                                                                activity

Women         Women              women          Mahila Sharan        opportunity
Empowerme     training           SHGs                                for rural
nt                               formed                              women
Child         snacks to tribal   Health         health services      Parivar                    Child malnutrition
Mortality     children,          check-ups      to malnourished,     Kalyan
              malnutrition                      Food, medical,       Sansthan,
              prevention                        children             Malnutrition
                                                immunized,           prevention
                                                malnourished
                                                children
                                                checkup camp
Health        Mobile health,     health          patients treated,   JANEEV                     drinking water
              awareness          check-ups,     community            Program,                   project,
              camp, men          Sanitation,    health care          health care,               Health awareness
              health care,       Anaemia        services, Health     health check-              females,
              eye operation,     treatment      check-up,            ups, health                Preventative
              Health Care,                      Health               awareness,                 health services
              sanitation                        awareness            eye-camp
              toilet, drinking                  programs
              water                             Anaemia
                                                treatment to
                                                women, Eye-
                                                camp program,
                                                Malaria
                                                prevention
                                                program ,
                                                Children with
                                                special abilities,
                                                blood donation
                                                camp, drinking
                                                water solution

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Environmen      installed         rainwater       environment          biogas unit     trees       Awareness to
tal             smokeless         harvesting,     protection plan,     installed,      planted     student,
Sustainabilit   chullas, trees    trees planted   infiltration well     zero waste                 Solar lamp,
y               planted,                          created              discharge                   Tree plantation
                people                                                 plants,
                sensitized on                                           tree
                environment                                            plantation,
                issues                                                 environment
                                                                       conservation
Vocation al     trained           workshop to     computer skill       students        Technica    Signed MOU for
skills          wireman           teachers,       training             training,       l           employment and
                plumbing,         volunteers,                          Industrial      training    training,
                girls training,   Vehicle                              training        to youth    Driver training,
                Driving           training,                            centres                     training non auto
                training,         employment                                                       trade, agriculture
                Technical and     training,                                                        Training
                vocational        Technical
                training          and
                                  vocational
                                  training
Social          waste             Renovation      inter-farm roads,    Driver          Provided
Projects        collection cart   of Primary      farmers, Driving     training,       relief
                                  School          Training             sanitation      material,
                                                  Sanitation Drive     drive,          packing
                                                  Safe drinking        safe drinking   wood for
                                                  water Toilet         water,          underpri
                                                                       training &      vileged
                                                                       support of      people
                                                                       entrepreneurs
Contribution    Donated one
to Funds        day salary

  2009-10                                                      donating one day salary to the victims of
  If we see the poverty and hunger eradication Tata            tsunami, 26/11 terror attack and flood.
  Motors had focused on agriculture in different               2010-11
  ways like training in farm. In case of education,             To remove poverty & hunger eradication, Tata
  company provided teacher training, co-curricular               Motors provided irrigational facility to 2000
  activities, scholarship, prepared school ground                families and contributed in development of
  and 3000 desks and 730 benches made from                       441.5 acres of land. In the field of education,
  packing wood in 20 schools. In women                           Tata Motors provided scholarship to 278
  empowerment, Tata Motors provided training to                  students. To empower women Tata Motors
  women. In case of child mortality, they provided               found 150 women’s SHG. In case of child
  snacks to tribal children for the prevention of                mortality health check up camp were organized
  malnutrition prevention. In case of health,                    in 2390 schools by Tata motors. In
  company provided mobile health care, awareness                 environment sustainability, Tata Motors
  camp, men health care, eye operation, toilet and               established 200 rain water harvest locations
  portable drinking water. In environmental                      and planted 100000 trees. Tata Motors
  sustainability, Tata Motors installed 200                      provided vocational skills by organising half
  smokeless chullas, planted trees and sensitized                day workshop for teachers by 50 volunteers,
  people on environment issues. In vocational                    vehicle training to 170 and trained 1467
  skills, Tata Motors provided training in wireman,              persons, 354 sc students trained for
  plumbing, driving and girls in computers. In                   employment, 7000 benefitted through
  social projects they provided waste collection                 technical and vocational training. In social
  cart. Tata Motors contributed to employees by                  projects company renovated primary school.

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  Tata Motors had not provided any information               events for 6276 persons, SC/ST scholarships
  regarding contribution to funds.                           provided to 971 students, coaching classes for
2011-12                                                      3350, infrastructure and facility up-gradation
 To remove poverty & hunger eradication Tata                 for 15597 people and teacher training to 374
  Motors started milk collection system in which             teachers. In women empowerment, Tata
  15 youth were engaged. In education,Tata                   Motors provided opportunity for 912 rural
  Motors organized 14 drop-in centres in which               women. To reduce child mortality Tata Motors
  139 students of villages participated, benefitted          organized parivar kalyan sansthan in which
  3700 students by renovating school building,               400 participated, 317 prevented through
  provided desks, benches for 1,700 students,                malnutrition prevention drive. In health,Tata
  mobile science lab for 1,500 students. To                  Motors janeev program benefitted 157 people,
  empower women Tata Motors provided                         community health care services helped 84243
  training to 465 women and mahila sharan to                 people, 2595 benefitted through health check-
  200 women. To reduce child mortality,                      ups in schools, 10214 benefitted through health
  company provided health services to100                     awareness programs, 2758 benefitted through
  malnourished children, food and medicine to                eye camp, 165000 helped through a survey for
  300 children, immunization to 6800,                        leprosy detection.Tata Motors installed 5
  malnourishment benefit for 576 children and                biogas units in 2 villages, zero waste discharge
  checkup camp for 723 children. In health Tata              plants, planted 233760 trees in 245 acres,
  Motors treated 3800 patients, 72874 treated                awareness on environment conservation to 150
  through community health care services, health             students in environmental Sustainability area.
  check-ups in 5431 schools, health awareness                In Vocational skills, Tata Motors provided
  programs in 10557,972 women given anaemia                  students training and Industrial Training
  treatment, 5242 treated through eye-camp                   Centre.Tata motors provided driver training,
  program,1659 prevented through malaria                     sanitation drive, safe drinking water and
  prevention program. Tata Motors helped                     training & support of entrepreneurs in social
  children with special abilities, organized blood           projects.
  donation camp and established 13 drinking                2013-14
  water solutions. Tata Steel treated 150 patients          No contribution of Tata Motors is found in
  under operation smile, primary health service              poverty & hunger eradication, women
  to 289517 persons, HIV/AIDS Awareness to                   empowerment field, child mortality and health.
  310000 persons, family planning services to                In education, Tata Motors collaborated with
  7198, khushi clinic medical chech up of 4864               schools to promote learning which led to
  patients, mobile medical units benefitted,                 participation of more than 328000 students in
  outdoor and indoor patients treated and awared             UK. In environmental sustainability company
  HIV. In case of environmental sustainability               planted 164000 trees. In vocational skills, Tata
  company benefitted 10000 people by creating                Motors trained 125 enrolled apprentices in
  infiltration wells and environment protection              imperial technical training and trained 12 local
  plan. In vocational skills, Tata Motors                    youth. In social projects, Tata Motors provided
  provided computer skill training to 35 persons.            relief material to 500 families and used packing
  In social projects, Tata Motors constructed                wood of the vehicle used underprivileged
  inter-farm roads benefitting 1875 farmers,                 people.Tata Motors didn’t show any
  driving training to 4880, benefitted 4098                  contribution to Funds.
  through sanitation drive, safe drinking water to          2014-15
  32889 and provided toilets to 4098.                       Tata Motors had not provided any contribution
2012-13                                                      in poverty reduction & hunger eradication,
 To reduce poverty & hunger eradication Tata                 social projects and women empowerment. In
  Motors levelled 3809 acres of land. In                     education, they provided coaching of IIT-JEE,
  education,Tata Motors provided e-learning                  financial help to IIT student, coaching of X
  programs which helped 5739 persons, more                   student in 146 schools of Mumbai, scholarship
  than 22,000 school children, provided creative             to 1502 students, special coaching to
  material to 295 children, organized various                24784,infrastructure in 12175 school and co-

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INTERNATIONAL JOURNAL OF CURRENT ENGINEERING AND SCIENTIFIC RESEARCH (IJCESR)
   curricular activities for 8314 students. Tata          done work in different nature and in different
   Motors addressed 1102 cases of child                   areas which has led to the benefit of people of
   malnutrition to reduce problem in small                different areas and in different sence. In general
   children.Tata Motors provided 330 drinking             the CSR policies of Tata Motors cover the
   water projects including 34 new project for            general topics mentioned in the CSR frame of
   96200 persons, health awareness to 9385                reference, i.e. labour, environment and more
   females and preventative health services to            economic related issues. A comparison between
   98083 persons. Tata Motors provided                    the CSR frame of reference and the practice of
   environmental awareness to 15263 students,             Tata Motors in India shows a small gap between
   solar lamp for 8500 students and planted 85140         them as the comparative table has shown that
   saplings. Tata Motors provided vocational              almost every variable in the sample companies is
   skills by signing a MOU with director general          covered. Study has showed large number of
   of employment and training, driver training to         people benefitted by these work in this study.
   22171, motor mechanic vehicle training to 754,         Future study can be performed by analyzing the
   training of non auto trade to 1410, training           amount of fund spended by Tata Motors in these
   agriculture and allied trades to 1837 persons.         areas.
Findings and suggestions of the Study
Many activities for instance tree plantation           Reference
drives, philanthropic activities and charitable       1. Ranganathan,           N.,       (2003),“Holistic
donations to CSR which exhibits that they                 Development and CSR: The Indian Model,”
understand CSR and follow guidelines as laid              ICIRD 2011, 19-20 May, Bangkok. [online]
down by Companies Act, 2013 prior to their                Available at http://www.icird.org/2011/files/
implementation by government.                             Abstracts/ICIRD_2011_Abstract88.pdf
In certain cases, some CSR initiative has been        2. Prema, S., and Singla, A., (2003),“Trust and
extremely successful, especially in the spread of         Corporate Social Responsibility: Lessons from
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are notified by government in 2013 but the                http://www.google.co.in/url?sa=t&rct=j&q=
company is performing these activities prior to           &esrc=s&source=web&cd=7
government notification. The study found the              &ved=0CFQQFjAG&url=http%3A%2F%2Fi
different type of work done by company and the            congfesr2011.tolgaerdogan.net%2Fdocument
benefits provided to the society. Company has             s%2Finternatonal_presantations%2FKIN21.p

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INTERNATIONAL JOURNAL OF CURRENT ENGINEERING AND SCIENTIFIC RESEARCH (IJCESR)
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