1. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY B.V.S.Prakash B.Com, L.L.B.; FCA. CEO, Nhance CSR HYDERABAD 4 th July, 2014.

2. In India GIVING has been a part of our culture

3. Corporate Philanthropy also called CSR was a voluntary gesture on part of companies and their management. It is for the first time Indian Companies have been driven into CSR through a legislation. INDIA LEADS THE WORLD ONCE AGAIN

4. CSR – Our Understanding Demonstration of - a commitment to society’s values, - contribution to society’s social goals - environmental goals and - economic goals -- through action

5. The Companies Act 2013 was notified in the Gazette of India on 30-08-2013 replacing a near 60 year old Act of 1956. The new Act making regulations more contemporary has 29 chapters, 470 clauses and 7 schedules. A MAJOR REHAUL ! Section 135 : Corporate Social responsibility now a legal obligation. A Historic Mile Stone The Law: SECTION 135

6. Against this backdrop, on 27 February, 2014, the Ministry of Corporate Affairs has notified the Companies (Corporate Social Responsibility Policy) Rules, 2014, which came into force on 1 st day of April 2014. A Host of New Definitions Private company, One person company, Small company, GDR, IDR, accounting standards, Auditing standards etc. This has the potential to be a model of improved corporate governance and enhancing the interests of not only stakeholders but community at large. Ringing in the new

7. having a net worth of Rs 500crores or more having a turnover of Rs 1000crores or above having a net profit of Rs 5crores or above shall be liable to under Section 135 of the new Companies Act to follow the rules laid out under the notification Any Company DOES NOT INCLUDE a) any profit arising from any overseas branch(s), whether operated as a separate company or otherwise and b) any dividend received from other companies in India which are covered under and complying with Section 135 of the Act c) Surplus arising out of CSR activity. Note : No distinction between public and private companies and foreign companies doing business in India Net Profit Means the net profit as per its financial statement prepared in accordance with section 198 of the Act HAVE TO CONTRIBUTE 2% OF THE AVERAGE NET PROFIT FROM THE THREE PRECEDING FINANCIAL YEARS TO CSR INITIATIVES Who is applicable?

8. CSR Committee of the Board members consisting of at least one independent Director. Recommendation By the Committee to the Board a CSR policy including amount to be spent Monitor Committee will then monitor the activity as per the Rules framed. Decide Activity All activity which is not in the normal course of business is permitted to be undertaken through a registered trust or a registered society or a company established by the company or holding or subsidiary or associate company. Else Collaborate If the company decides not to do any of these, it can collaborate with any entity who has at least three years of established track record of doing similar activities. Collaboration with other companies The company can collaborate with any other company in any CSR activity provided both the companies are clearly in a position to report their independent activity. Corporate Social Responsibility initiative You are on. Good Luck Make a positive difference to the society How to implement

9. Has to be in India Not to political parties Not for the exclusive benefit of Employees & their families Not to be Business as usual Dos & Don’ts

10. Companies are permitted to spend on building capabilities or training of its personnel or their implementation agencies ( with 3 year track record ) Such expenditure not to exceed 5% of the CSR spend. Readying for CSR

11. The following activities are approved U/S 135 of the Companies Act 2013 for CSR spend Eradicating hunger, poverty, malnutrition and promoting preventive healthcare and sanitation and making available safe drinking water Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly, and the differently-abled and livelihood enhancement projects Approved activities for CSR

12. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers, and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups. There has been a clarification from the ministry that the company can take up any activity so long as it is approved by the board

13. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up libraries; promotion and development of traditional arts and handicrafts Approved activities for CSR