Introduction

The Companies Act 2013 has introduced the concept of Corporate Social Responsibility in the Indian corporate sector w.e.f. 01.04.2014. In addition to the CSR provisions of the Act, the Deptt. of Public Enterprises has also formulated and issued Guidelines on CSR & sustainability on 21.10.2014 which are applicable to Central Public Sector Enterprises.

HPL’s CSR&Sustainability Policy Statement

1. Being one of the oldest CPSEs with modern outlook, HPL is conscious and committed to its responsibilities towards the society, nation and humanity at large.
   
   HPL’s CSR&Sustainability Policy is envisaged as "A commitment to meet its social obligations by playing an active role to contribute towards improving the quality of life of the communities and stakeholders on a sustainable basis."
2. HPL will integrate and align its CSR&Sustainability policies and activities with its goals, plans and strategies, keeping in view the suggested activities as per schedule VII of the Companies Act 2013 (Annexure –I).

CSR provisions and its Applicability

1. The Companies Act 2013 provides that every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall ensure that the company spends, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years. In an eventuality of negative Net Worth in a particular financial year, it shall not be mandated to earmark specific funds for CSR and Sustainability activities.
2. As per the guidelines issued by Department of Public Enterprises on 21.10.2014 for CSR&Sustainability, even if the CPSE is not covered within the eligibility criterion based on the threshold limits of net-worth, turnover and net profit as per the Companies Act, 2013, but it made profit in the preceding year, it would be required to take up the CSR activities as specified in the Act and CSR Rules and such CPSE would be expected to spend at least 2% of the profits made in the preceding year in the CSR activities.
3. The budget allocated for CSR and Sustainability activities for each financial year is expected to be spent within that year. If due to some reason, the budget of a year remains unutilised, the same would not lapse. Instead, it would be carried forward to the next year for expenditure on CSR and Sustainability activities as planned. However as per proviso to section 135 (5) of the Companies Act 2015 , the reasons for not spending the budget within the period has to be disclosed in the Board’s report and every endeavour shall be made to spend the unutilised budget of any year within next financial year for the purpose for which it was allocated. The unspent amount would be transferred to a ‘ CSR & Sustainability Fund’.
4. The expenditure incurred on base-line survey / need assessment study, on capacity building programme such as training, workshops, seminars, conferences etc. and on HPL’s CSR&SUSTAINABILITY POLICY 1 corporate communication strategies for engagement of all the stakeholders whether internal or external to implement the CSR&Sustainability agenda of a company would be accounted for as CSR and Sustainability expenditure from the budget allocated for this purpose. It is also desirable to conduct impact assessment study by the external agencies on the projects undertaken. These expenditure should be within overall limit of 5% of the total CSR expenditure in one financial year as provided in the CSR Rules.

Committee

There will be a two tier CSR & Sustainability Committee in HPL:

i.   CSR & sustainability Committee at Board level

The role of CSR Committee constituted by Board will be as under:

1. Formulate and recommend to the Board, a Corporate Social Responsibility Policy;
2. Recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
3. Monitor the Corporate Social Responsibility Policy of the company from time to time.

ii.   CIn order to facilitate the Board level CSR & sustainability Committee to function properly, there will be a committee at below Board level headed by a senior officer at GM level, who will also function as the nodal officer and other officers. This team shall oversee the implementation of CSR and Sustainability agenda of the company within the organisation and also outside, i.e. covering internal as well as external stakeholders. The nodal officer shall be special invitee to the CSR & Sustainability Committee at Board level.
The designated nodal officer will regularly submit reports regarding the progress in the implementation of CSR and Sustainability activities to the CMD and Board level committee. The Board level committee will, in turn submit the reports to the Board of Directors for their information, consideration and necessary directions.

Powers for approval

1. CSR programmes as identified will be required to be put up to the Board level CSR Committee with due recommendations.
2. For meeting the requirements arising out of immediate & urgent situations, CMD is authorized to approve such proposals with their subsequent ratification by the Board level committee.

Identification of programmes

The programs to be undertaken under CSR Project will be related to activities specified in Schedule VII of the Companies Act 2013, and amendments thereof. The list of activities as specified in Schedule VII is annexed. Further Identification of programmes by Corporate will also be by means of any of the followings :-

1. Need identification studies by professional institutions/agencies.
2. Internal need assessment by cross-functional team at the local level.
3. Receipt of proposals/requests from District Administration/ Local Govt. etc.
4. Discussions and request with local representatives/Civic bodies/Citizen’s forums / voluntary organizations.
5. Proposals as identified by the company in any other manner.

Thrust areas under CSR & Sustainability

The CSR programme of HPL would involve undertaking of the activities as envisaged in schedule VIII of the Companies Act 2013 as amended from time to time. The under-privileged and backward communities/ areas where HPL has its business operations would normally be covered under the policy. The major thrust area of CSR activities would include:

1. Promoting Education;
2. Promoting preventive Healthcare
3. Drinking Water and sanitation;
4. Ensuring Environmental Sustainability;
5. Rural development Projects;
6. Promoting gender equality;
7. Promotion of sports
8. Promotion of Art And Culture;
9. Slum development;
10. Any other activity as may be identified by Board of Directors

The details of the activities under the above-motioned heads are placed as Annexure -II to the Policy.

Implementation

1. CSR & Sustainability activities will be undertaken by Corporate Office/Regional Offices in accordance with the approved policy of HPL.
2. Discussion and interactions with Central and State Govt. officials will be held to identify the areas for undertaking CSR & Sustainability activities to avoid duplicity of the same with the programmes run by Central, State and Local Government. Initiatives of Government and Self Help Groups (SHGs) etc. would be dovetailed / synergized with initiatives taken by HPL.
3. While identifying the CSR & Sustainability activities, emphasis shall be given on the areas where HPL operates.
4. Based on the need analysis survey, prepare a detailed programme report reflecting content, objectives, major milestones, time frame for implementation, budget thereof and implementing agency.
5. Assign the CSR projects to specialized agencies under a MoU/Agreement reflecting the mutual terms and conditions. The Committees should make all efforts to verify the reliability and past track record of the engaged agency and only agencies of good repute may be engaged.

Monitoring

1. The implementation of the CSR programmes shall be monitored by the Group of Officials. The nodal officer shall report progress of CSR programmes to the CMD on a monthly basis.
2. The Board level CSR & sustainability committee will review the progress of the CSR projects on half-yearly basis.
3. HPL Corporate Office/ Regional Offices will obtain feedback from beneficiaries about the programmes. Photographic record will also be maintained.
4. The impact studies may be conducted if necessary for the strategic and high value programmes as recommended by the CSR & sustainability Committee through independent professional third parties/professional institutions.

Reporting of CSR Activities

1. HPL will include a separate paragraph in the Annual Report on the implementation of the CSR & Sustainability activities including physical and financial process.
2. The CSR & Sustainability activities will also be reflected in the Annual accounts of HPL under the head ‘Expenditure under CSR & Sustainability Activities’.
3. The approved policy of CSR & Sustainability of HPL will also be uploaded on the website of the company.

Amendment

In case of any difficulty in interpretation of this policy the matter shall be referred to the CMD for taking a final view.

Any modification/amendment in the CSR & Sustainability policy will be carried out by the Board of directors.

Annexure-I

SCHEDULE VII OF THE COMPANIES ACT 2013
1	Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water:
2	Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;
3	Promoting gender equality, empowering women setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
4	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;
5	Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts:
6	Measures for the benefit of armed forces veterans, war widows and their dependents;
7	Training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports;
8	Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Caste, the Scheduled Tribes, other backward classes, minorities and women;
9	Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
10	Rural development projects.
11	Slum development.

Annexure - ii

I.   Promoting Education

Construction / renovation of class rooms / school buildings including toilets blocks for students preferably girls of backward areas;

1. Providing furniture, electrical appliances, lab instruments to Government schools;
2. Supply of study material like bags, books, stationery etc. to children belonging to the under privileged class of the society;
3. Scholarships or financial support to talented children of backward areas; Providing education and training for differently abled children;
4. Construction of hostels.
5. Taking initiative towards promotion of rural enterprise and livelihood including skill development and vocational training;
6. Organizing customized training programmes for women for vocational courses ;
7. Sponsoring outstanding children in backward areas for training and development by providing scholarships etc;

II.   Promoting preventive Healthcare

1. Organizing health check up camps, with particular focus on women, children, disabled and old age persons;
2. Organizing periodical immunization programmes and health checkup camp including blood donation;
3. Construction or construction of hospital buildings, dispensary, special wards;
4. Mother and child care (emphasis on child mortality rate and mother mortality rate);
5. Organizing programmes to generate awareness about diseases like HIV/AIDS, tuberculosis, leprosy etc;
6. Emphasis on health care of senior citizens;
7. Creating awareness about the evils of society like smoking, alcohol etc; Providing medical equipments to the hospitals;
8. Providing mobile medical vans;

III.   Drinking Water and Sanitation

1. Providing drinking water facility by installing tubewells /pumps / borewells;
2. Digging and renovation of wells;
3. Supply of water tanks to the drought affected areas;
4. Rain water harvesting;
5. Laying of new pipeline / extension of existing water pipeline;
6. Organizing cleanliness and sanitation drive;

IV.   Ensuring Environmental sustainability

1. Promotion of the concept of waste utilization by encouraging recycling and reuse;
2. Plantation of trees including fencing and railing in the project affected area;
3. Organizing programmes for awareness and education on environment, and hazards of pollution and ways to control pollution etc;
4. Promoting forestry programme;
5. Contribution to rehabilitation programmes undertaken due to natural calamities like earthquake, cyclone, drought, floods etc;
6. Providing support for animal care;
7. Any other activity as may be identified under Ministry of Forest and Environment.

V.   Rural development Projects

1. Construction of new pucca roads and repair and maintenance of connecting roads/bridges;
2. Providing electricity and solar lights to the areas in the vicinity of Project areas of HPL;
3. Construction of auditorium educational institutions, community centres, night shelters;
4. Construction / repair / extension of public utilities;
5. Development of playgrounds and sports complexes;
6. Providing support for promotion of irrigation facilities;

VI.   Promoting gender equality

1. Organizing awareness programme on girl education and gender equality;
2. Taking initiative towards care of senior citizens by constructing old age homes.
3. Setting up day care centres and Hostels for working women.

VII.   Promotion of Sports

1. Providing sports equipments to the young talent for promotion of sports;

VIII.   Promotion of Art and Culture

1. Promotion of art and culture by organizing and sponsoring programmes in the field of art, music and dance etc;
2. Sponsoring Cultural events to promote Indian culture;

IX.   Promoting gender equality

1. Providing basic education, healthcare, and recreational facilities to Slum dwellers.
2. Promotion of skill development of slum dwellers to reduce high rate of unemployment;
3. Providing drinking water facility by installing tubewells /pumps / borewells and proper and hygienic sanitation facilities.