Background

Section 135 of the Companies Act, 2013 provides that every company which either has a net worth of Rs.500 Crore or a turnover of Rs. 1,000 Crore or net profit of Rs.5 Crore, during the immediately preceding financial year, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility activities as set out in Schedule VII to the said Act.

Scope of Corporate Social Responsibility Policy

• The policy would pertain to all activities undertaken or proposed to be undertaken by the Company towards fulfilling its corporate social responsibility objectives. The policy would also ensure compliance with Section 135 of the Companies Act, 2013 and the relevant rules and schedules, made thereunder, including any amendment from time to time.

CSR Vision and Guiding Principles

• ISEC’s CSR Vision is to work for the welfare and sustainable development of the community in and around its areas of operation and other parts of the country.
• The Company shall endeavour to adopt best practices and integrate them into its business strategies and operations.

CSR Activities

The Company shall undertake and execute programmes under all or any of the following CSR activities.

• Eradicating hunger and poverty;
• Promotion of education;
• Employment enhancing vocational skills;
• Promoting gender equality and empowering women;
• Ensuring environmental sustainability, ecological balance, animal welfare, conservation of natural resources and maintaining quality of soil, air and water.
• Promoting healthcare including preventive healthcare

Over and above the above mentioned activities, the CSR Committee may identify additional CSR activities that fall under Schedule VII of Companies (Corporate Social Responsibility) Rules, 2014 from time to time.

Resources

• Annual CSR Budget
  In alignment with The Companies Act, 2013 and amendments made thereunder, the Company shall earmark as CSR Budget of at least 2% of the average of net profits of the Company made during the three immediately preceding financial years.
• Administrative Expenses
  The administrative overheads shall not exceed five percent of total CSR expenditure of the Company for the financial year.
• Surplus if any arising out of CSR activities
  Surplus if any arising out of CSR activities shall not form part of the business profit of Company and be spent on CSR activities (either on the same project or in pursuance of CSR policy and annual action plan of the Company), or otherwise transfer such surplus amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.
• Funding & Allocation
  For achieving its CSR objectives ISEC will implement meaningful and sustainable CSR programmes. ISEC shall endeavour to allocate the following as its Annual CSR Corpus:
  1. For achieving its CSR objectives ISEC will implement meaningful and sustainable CSR programmes. ISEC shall endeavour to allocate the following as its Annual CSR Corpus:
  2. Any income arising therefrom; and
  3. Surplus arising out of CSR activities.

Implementation

• CSR programmes, projects or activities, will be implemented through one or more of the following methods:
  1. Directly by ISEC;
  2. 1. a company established under Section 8 of the Act, or a registered public trust or a registered society, registered under Section 12A and 80G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company; or
     2. a company established under Section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government; or
     3. any entity established under an Act of Parliament or a State legislature; or
     4. a company established under Section 8 of the Act, or a registered public trust or a registered society, registered under Section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities
  3. In collaboration with any other organization
• The allocated CSR budgets / Corpus will be utilized for CSR activities undertaken within India:
  1. which are not exclusively for the benefit of employees of the Company or their family members; and
  2. which are not undertaken in pursuance of normal course of business of the Company.
• The time period for implementation of the programme will depend on its nature, extent of coverage and the intended impact of the progamme.
• The Company will identify CSR activities projects and provide funds on requirement basis.

Governance Structure

• CSR Committee
  The Corporate Social Responsibility Committee (CSR Committee) is the governing body that will define the scope of CSR activities for the Company and ensure compliance with the Policy.
  The CSR Committee shall:
  1. Identify and recommend any CSR project to the Board;
  2. Formulate the CSR policy and recommend to the Board and any amendments there to;
  3. Indicate the activities to be undertaken by the Company as specified in the Act;
     Formulate and recommend to the Board an annual action plan in pursuance of its CSR policy, which shall include the following, namely: -
  4. 1. the list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;
     2. the manner of execution of such projects or programmes as specified in sub-rule (1) of rule 4;
     3. the modalities of utilisation of funds and implementation schedules for the project or programmes;
     4. monitoring and reporting mechanism for the projects or programmes; and
     5. details of need and impact assessment, if any, for the projects undertaken by the company:
        Provided that Board may alter such plan at any time during the financial year, as per the recommendation of its CSR Committee, based on the reasonable justification to that effect.
  5. Monitor the CSR activities and compliance with the CSR policy from time to time; and
  6. Review and implement, if required, any other matter related to CSR initiatives.
• Board of Directors
  The Board of Directors shall:
  1. Approve the CSR Policy and any amendments thereto based on the recommendation of the CSR Committee;
  2. Approve the CSR activities and annual CSR plan and CSR Budget based on the recommendation of the CSR Committee; and
  3. Review the CSR Policy and CSR activities.

Monitoring and Feedback

• The CSR Committee will monitor all CSR projects / programmes. Broadly, the following procedure will be adopted by the CSR Committee:
  1. Specific projects with locations, budgets and time schedules shall be recommended by the CSR Committee in the beginning of every financial year to the Board for their approval.
  2. The CSR Committee would meet on quarterly basis to take note of initiated CSR activities and funds utilization and to compare with budgeted funds and timelines.
  3. The Board of Directors shall review the progress of CSR activities at least annually.
  4. In case of ongoing project, the Board of a Company shall monitor the implementation of the project with reference to the approved timelines and year-wise allocation.
  5. The Managing Director & CEO shall be responsible for monitoring expenses on CSR activities, on a quarterly basis.
• An outside Assessing and Rating Agency may be appointed to assess and rate the implementation agencies/NGOs and to conduct due diligence on effectiveness of implementing agencies before appointment of any implementing agency/NGO who will seek to partner with the Company to execute CSR activities. The rating agency shall also monitor the funds disbursed towards CSR projects /programmes
• The Rating Agency will conduct impact studies on a periodic basis.

Disclosure / Reporting

• The Board’s Report of the Company shall include an annual report on CSR, containing particulars specified in Annexure II of the Company’s (CSR) Rules, 2014 as amended from time to time.