Coal India Limited(A Govt. of India Enterprises- A Maharatna Company)

"Coa! Bhavan"CSR Department

Premise No. 04, Plot No. AF-l!!

Action Area tA, New Town, Rajarhat,Kolkata -700156 (W.8.)

Phone: 033-23244173, Email : gmcsr.cil@coalindia. in

OFFICE MEMORANDUM

subject: Modified csR policy of coal lndia Limited

CIL Board in its 4L3th meeting held on L4th October 2O2O approved "Modified CSR policy ofCoal lndia Limited". A copy of the approved policy is enclosed for implementation in CIL andits subsidiaries. CIL Board has also authorized subsidiary boards to delegate power to D(P) ofthe concerned subsidiary to approve CSR projects upto a limit.

The modified CSR policy of CIL will supersede previous policy and administrative ordersissued earlier in this regard. The policy shallcome into force with immediate effect.

\h,xtr\,v(S. K. Singh) '

General Manager (HRD, CSR, Welfare & Aviation)

Distribution:

1. D(r)/D(P&tR)/D(F)/D(M), ct L

2. C M D, BCCLI CCL / CM p D I L/ E C L/ M C L/ N C L/S E C L/WC L

3. CVO, CtL

4, D( p)/D( F), BCCL/ CCL/ EC L/M CLIN CLIS EC L/WCL5. D(T/ES), CMPDTL

6. GM/TS to Chairman, CIL

7. G M/H oD (csR), BccL/CcL/cM P Dt L/ECL/McL/NcL/SEcL/wcL8. GM, NEC

9. GM, NDLO

10. GM/HoD,llCM11. HoD (System), CIL - with a request to please upload the same in CIL website forinformation and compliance by all concerned.

Modified Corporate Social Responsibility Policy of CIL

1. INTRODUCTION

The concept of Corporate Social Responsibility (CSR) has gained prominence from all avenues.Organizations have realized that government alone will not be able to get success in its endeavorto uplift the downtrodden of the society. With the rapidly changing corporate environment, Coallndia Limited (ClL) has adopted CSR as a strategic tool for sustainable growth. For CIL in thepresent context, CSR means not only investment of funds for social activity but also integration ofbusiness processes with social processes.

Even much before the issue became a global concern, CIL was aware of its Corporate SocialResponsibility and was fulfilling the aspiration of the society through well-defined "CommunityDevelopment Policy" within the periphery of 8 kilometers of its project sites. This has resulted intoa harmonious relationship between CIL and the peripheral communities.

As per clause 135 of Companies Act 2013, CSR committees of all eligible companies need toformulate and recommend to the Board, a CSR policy which shall indicate the activities to beundertaken by the company as specified in Schedule Vll.

ln the aforesaid backdrop, CSR policy of CIL has been framed after incorporating the features ofthe Companies Act 2013, notifications issued by Ministry of Corporate Affairs (MCA) andDepartment of Public Enterprises (DPE), Govt. of lndia from time to time and Companies(Amendment) Act 2019 and broadly covers guidelines for the following: -

a. Welfare measures for the community at large, so as to ensure the poorer sections of the societyderive the maximum benefitsb.Contribution to the society by way of socialandculturaldevelopment, imparting education,training and social awareness especially with regard to the economically backward classes fortheir development and generation of income to encourage self-employment and dignified livingc. Protection and safeguard of environment and maintaining ecological balance

2. OBJECTIVE

The main objective of CSR policy is to lay down guidelines for CIL and its subsidiaries to make CSRa key business process for sustainable development for the society. lt aims at supplementing therole of the government in enhancing welfare measures of the society based on the immediate andlong term social and environmental consequences of coal mining.

3. AREAS TO BE COVERED

Mines of CIL and its subsidiaries are located in different parts of the country spread in eight states,in relatively isolated areas. lntroduction of any production activity in such areas changes thetraditional lifestyle of the original inhabitants and indigenous communities and also changes thesocio-economic profile of the area. Mining of coal too has profound impact on the people living inand around the areas where the mines are located. Hence, the primary beneficiaries of CSRactivities shall be, Project Affected Areas (PAAs) and those staying within the radius of 25kilometers of the coal mining projects. CIL and subsidiaries shall ensure that the maximum benefitof their CSR activities goes to the underprivileged sections of the society. CSR activities should beundertaken as per Schedule Vll of Companies Act. 2013 and as per DPE guidelines issued fromtime to time.

1lYt*;*

The following guidelines shall be followed in selection of areas for CSR activities

Subsidiaries of CIL shall spend 8Oo/o of the CSR fund of a yeat within the radius of 25kilometers of their Project Sites/Mines/Area HQ/Company HQ and rest 20olo within thestate(s) in which they are operating. The above ratio of 80:20 may be dispensed with bythe subsidiaries for a particular year with the approval of its board through board level CSRcommittee in case the Central Govt. issues any such guidelines/adminlstrative directions,which the company has to otherwise comply with.

b. CIL (HO) shall execute CSR activities in whole of lndia including the areas under subsidiarycompanies.

c. CIL (HO) being the holding company shall also support for execution of CSRprojects/programs where subsidiaries are unable to execute such project due to fund crunch.ln case available CSR budget of any subsidiary company is insufficient to meet the fundrequirements of any govt. mandated CSR activity, the concerned subsidiary may refer theduly approved CSR activityi project/program to CIL (HO) with the recommendation of seekingfinancial assistance after competent authority approvals at the subsidiary level are taken. Allsuch requests would have to be fonnrarded by CSR Dept. of concerned subsidiary afterobtaining approval of its Board/CMD. lf CIL approves the activity/project/programme, theactivity shall be implemented by the concerned subsidiar,y whereas the expenditure will beaccounted

_for by CIL (HO) against its CSR budget. CIL would finance such project subject toapproval of the competent authority at CIL and the same will be treated to be the project ofthe subsidiary whose implementation and monitoring will rest on the concerned subsidiary.

4. ALLOCATION OF FUND

The following guidelines shall be followed for allocation of fund for CSR activities during the financialyear:

a For subsidiaries of ClL, fund for CSR shall be allocated based on whichever is higher of thefollowing two amounts:

b.

i. 2o/o of average net profit of the company for the three immediate preceding financialyears, as per Companies Act 2013 or

ii. Rs. 2.00 per tonne of coal production of immediately preceding financial year

For CIL (HQ), fund for CSR shall be allocated based on whichever is higher of the followingtwo amounts:

i. 2o/o of average net profit ofClL (standalone) for three immediate preceding financialyears, as per Companies Act 2013 or

ii. Rs. 2.00 per tonne of total coal production of immediate preceding financial year ofthose subsidiaries of CIL which had not incurred nei loss in the immediatelypreceding fi nancial year

Example - CSR budget for FY 19-20 has been calculated as per the above provisions and isenclosed as Annexure 1.

The unspent amount of CSR budget in a financial year would be accounted for as per theprovisions of Companies Act 2013, as notified.

c.

/

\

5. SCOPE

CIL and its subsidiaries would undertake select CSR activities out of the themes listed in Schedule-Vll of the Companies Act 2013 as amended from time to time. The themes in the scope of CSRpolicy must be interpreted liberally so as to capture the essence of the subjects enumerated inSchedule Vll of Companies Act, 2013. Any modifications in Schedule Vll of Companies Act 2013 ordirections from DPE or MOC shall also deemed to have been incorporated in the scope of CSRpolicy of CIL from the date of such changes being notified by the Government.

6. INSTITUTIONALARRANGEMENT

CIL and subsidiaries having net worth of Rs. 500 crores or more, or turnover of Rs. 1000 crores ormore, or a net profit of Rs. 5 crores or more during any financial year shall constitute a Board LevelCommittee on CSR consisting of three or more Directors, out of which at least one Director shallbe an lndependent Director. The Committee shall monitor and review the progress ofCSR activitiesfrom time to time.

CSR department at CIL and subsidiaries shall act as nodal department for implementation of CSRactivities in accordance with the CSR policy under the guidance of Director (P&lR), CIL andconcerned Director (P) of subsidiary companies as the case may be.

CIL and subsidiaries shallform inter-disciplinary committees with senior executives from CSR, Civil,Finance, Medical etc. to review the CSR projects scrutinized by the CSR department andrecommend them for approval of competent authority. Based on the recommendation of CSRdepartment, CSR project proposals/programmes/activities shall be deliberated in the meeting ofthese committees who in turn shallexamine and submit its recommendation to competent authorityfor approval through Dir. (P&lR)/Dir. (P), as the case may be. Similar committees may also beformed at area level in subsidiaries.

Delegation of Power (DOP) to approve CSR projects/activities at subsidiaries of CIL shall be asunder:

. Projects/activities to be undertaken by mining areas having value up to Rs. 5.00 lakhs shallbe approved by concerned Area General Managers.

. Projects/activities to be undertaken by mining areas having value more than Rs. 5.00 lakhsbut up to Rs. 1.00 crore and all projects/activities of HQ up to Rs. 1.00 crore shall beapproved by CMD of the subsidiary company.

. P0ects/activities having value more than Rs. 1.00 crore shall be approved by subsidiaryBoard on recommendation of CSR committee of Board.

Delegation of Power (DOP)to approve CSR projects/activities at CIL (HQ) shall be as under:

. Projects/activities having value up to Rs. 2.50 crores shall be approved by Chairman, ClL.

. Projects/activities having value more than Rs. 2.50 crores but up to Rs. 10.00 crores shall

be approved by CSR committee of CIL Board.o projects/activities having value more than Rs. 10.00 crores shall be approved by CIL Board

on recommendation of CSR committee of CIL Board'r For North Eastern Coalfields (NEC), projects/activities having value up to Rs' 5.00 lakhs

shall be approved by General'Manager (UgC). A monthly repo_rt is.to^be sent to Director

(Technicai), ctt- tor his review by NEC. Annual CSR action plan for NEC is to be cleared by

birector (Technical), CIL for inclusion in the annual plan q1d budget for CSR of CIL which

is to be approved 6y CIL Board. Projects/activities of NEC having value above Rs. 5.00

3l$)a'+*

lakhs shall be approved by concerned authorities of CIL (HQ) as per their DOP onrecommendation of GM (NEC) and the functional director concerned.

Chairman, CIL/Subsidiaries are empowered to approve modalities/Standard Operating Proceduresfor implementation of CSR works as per CSR policy,

7. IMPLEMENTATION

The following guidelines/modalities shall be followed while executing/undertaking CSR activities:

1. Around the beginning of every financial year, CSR departments of CIL and Subsidiaries willdesign an Annual Action Plan for the projects to be undertaken during that year taking intoaccount Govt. directives as are applicable (e.9. annual theme, aspirational district), companypriorities, prior-commitments, budgetary limitations, workability of the projects. The AnnualAction Plan would be executed once the same is approved by the Board of the respectiveCompany on the recommendation of the CSR Sub-Committee of the Board.

2. Activities under CSR except those relating to contribution to funds specified in Schedule Vllshall be in project mode and for every project, time framed periodic milestones should befinalized at the outset.

3. As far as possible, the project should be completed within 2yearsfrom the start and in no case,projects with duration exceeding three years from the start date shall be undertaken. The dateof starting of work or release of first instalment, whichever is earlier, shall be considered asproject starting date and that year shall be considered as project start year.

4. Activities identified under CSR shall be implemented either by CIL/subsidiaries departmentallyor through implementing agencies which may include:

a. Trustsb. Societiesc. Section 8 companiesd. Government, semi- government and autonomous organizationse. lnstitutes/Academic organizationsf. Registered community based organizationsg. Registered voluntary/Not for profit organizationsh. Registered self-help groupsi. Contractual agencies for civilworksj. Professionalconsultancyorganizationsetc.

5' lmplementing agencies having only local presence shalt only be considered by small valueprojects.

6' Need and justification of all CSR projects/activities shall have to be ascertained. Needassessment shall be carried out either departmentally using in house expenise or throuthexternal reputed agencies including implementing agencies. Nleed "rr"..r"rt may be basedon already conducted web surveys, indices, r6se"arcn pup"ri-a ilport", census reports,demographic & development stuciy reports, DPE surveys, various il/inistrylcovt. Reports&publications etc' wherever required

'methods ;r.h as household surveys, stakeholderinterviews, participatory research exercises, baseline rrr"y, etc. may also be used.

7 ' The suggestions given by the elected representatives/bodies shall be duly considered while

4l

finalizing the CSR activities

8. Memorandum of Understanding (MoU) shall be signed with all implementing agencies forprojects having value more than Rs.5.00 lakhs.

9. Board level CSR committee of CIL and subsidiaries would decide from time to time, the projectsfor which impact assessment is to be done.

10. CIL and its subsidiaries as per their need and till their internal expertise is developed mayappoint consultants/reputed institutes/paid interns from reputed institutes following dueprocess, for evaluation of proposals reckonable as CSR proposals, need assessment or impactassessment of CSR projects. The expenditure incurred on engagement of consultants for CSRworks may be included in the administrative expenditure, subject to limits as prescribed in theCompanies AcUCSR rules of Min. of Corp. Affairs from time to time.

11. Assets created from CSR funds shall strictly be for the benefit of the intended beneficiaries andmaintenance of such assets shall be the responsibility of the concerned implementingagency/state governmenVlocal body/beneficiary community unless specifically taken up as aproject component by CIL and subsidiaries.

12. The surplus arising out of CSR projects or programmes or activities shall not form part of thebusiness profit of CIL and its subsidiaries.

13. For contribution towards setting up educational institutes, CIL/Subsidiaries should support onlyGovt. Universities / Public Sector lnstitutes and such supports should be through matchinggrants in normal cases and in exceptional cases, Cll/Subsidiary Board may decide to gobeyond matching grant for reasons to be recorded in writing.

8. DATA MANAGEMENT

All the data related to CSR shall be maintained on real time basis with inbuilt mechanism forperiodic report generation, having details of expenditure, project closure, beneficiaries withcategory wise (SC,ST,OBC,PWD), gender wise and age group (Children, Senior Citizens, Others)wise breakup etc. to the extent feasible. There shall be a common formaUdata sheet for allcompanies to maintain the indicators/data. Head of CSR departments at CIL and subsidiaries shallensure the implementation of the information system.

9. MONITORING AND REPORTING

The following guidelines shall be followed for monitoring CSR activities:

1. The CSR Committee of Boards at CIL and its subsidiaries shdll monitor the progress ofwork of ongoing projects from time to time and case to case basis.

2. Utilization Certificate with statement of expenditure duly certified by a PracticingChartered AccountanVAuthorized Auditor shall have to be submitted by the implementingagencies for the CSR fund provided to them as a one-time grant or in installments.

3. CSR departments at CIL and subsidiaries shall monitor the CSR projects/activitiesperiodically and shall prepare the Annual Report on CSR Activities for placing the samebefore the respective Boards through CSR Committee of Board.

5 | T) ;:e ;::t ?:"':

4. Board level CSR committee of CIL and its subsidiaries would decide which of the CSRprojects are to be audited by an external auditor to be appointed with therecommendation of the CSR subcommittee.

5. The expenditure incurred on such audit of CSR activities may be included in theadm inistrative expenditure.

6. Meticulous documentation relating to CSR activities and expenditure shall be preparedand put on the respective websites by CIL and subsidiaries.

7. CIL and subsidiaries shall take CSR mileage by leveraging print, electronic and digitalmedia.

10. DUE DILIGENCE

CIL and its subsidiaries would comply with all statutory provisions on CSR and the amendmentsthereto, as promulgated from time to time. CIL and its subsidiaries would also comply with all rules,regulations, guidelines, orders, directives or any such communication issued by the Central Govt.from time to time.

11. LIMITATION AND AMENDMENT

The CSR policy of company will be governed by provisions under Companies Act, 2013 or anyother act that may be introduced, Government guidelines and any other govt. instructionlapplicable from time to time.

*******

6 l'i::i ,'i i:; :;"1'

Annexure 1- Example: Calculation of CSR Fund allocation for FY 19-20 by CIL and itssubsidiaries as per revised CSR Policy

Subsidiary

NetProfit FY

18-19

(Rs. cr.)

Average ofNet Profit of

FY 16-L7 toFY 18-19

(Rs. cr.)

2 % of Avg.

Net Profit ofFY 16-17 to FY

18-19

(Rs. cr.)

Coal

Production

of FY 18-19

(MT}

Amount as

per Rs. 2 per

tonne ofcoal

production

of FY 18-19(Rs. cr.

CSR Budget

- Higher ofCandE(Rs. cr.)

A B c D E F

ECL L295.23 -52.23 -L.04 50.16 10.03BCCL 557.05 -610.43 -L2.2L 3L.04 6.2LCCL 2692.20 2L36.47 68.72 13.7 4 42.73NCL 6659.16 46L3.32 101.s0 20.30 92.27WCL r93.72 -L237.02 -24.74 53.18 L0.64SECL 5570.67 4L92.7 4 L57.35 3L.47 83.8sMCL 9281.08 7825. L5 L44.15 28.83 156.50CM PDIL 263.82 1s0.06 0.00 0.00 3.00

CIL (Sta nda Ione) 168.00 404.23 8.08 606.89 12r.38

Explanation

1. For CCL, NCL, SECL and MCL

2%o of average net profit of FY L6-17 to FY 18-19 is more than Rs. 2 per tonne of coal productionof FY 18-19, hence the former is taken as their csR fund allocation for Fy 19-20

2.For CMPDIL

It does not have any coal production hence 2Yo of average net profit of FY 76-17 to FY 18-19 has

been taken as its CSR fund allocation for FY 19-20

3. For ECL, BCCL and WCL

Rs. 2 per tonne of coal production of FY 18-19 is more than 2% of pverage net profit of FY 1.6-17

to FY 18-19, hence the former is taken as their csR fund allocation for Fy 19-204. For CIL

All the subsidiaries have made net profit in FY 18-19, hence for calculating Rs. 2 per tonne of coalproduction of FY 18-19, coal production of all the subsidiaries and NEC is considered.

Rs. 2 per tonne of coal production of FY 1-8-19 as calculated above is more than 2% of averagenet profit excluding dividend income of FY 16-17 to FY 18-1-9. Hence the former is taken as itsCSR fund allocation for FY 19-20.

10.03

6.21

42.73gZ,Z7

10.64

r', : .15fi.50

3.00

t.f:f .i}8