CORPORATE SOCIAL RESPONSIBILITY ( CSR ) POLICY INDIA 1. PREAMBLE BT Group chooses to invest a portion of our profits before tax each year (usually 1%) to support our strategy to be a responsible and sustainable business leader (our Investment in Society budget). We do this through a mixture of cash, time volunteered and in-kind contributions. This policy reflects our commitment to ethical business through the appropriate and transparent use of this budget. We carry out all CSR initiatives transparently, with use of our Investment in Society budget agreed and managed in line with BT s Anti-Corruption and bribery policy, Charitable Donations and Sponsorships policy and the principles and behaviours set out in The Way We Work. As a result of this approach, BT has for a number of years invested in some CSR projects in India which have been funded by the Group Investment in Society budget in particular Katha, the Hope Foundation and St. Crispin s. Keeping in view the new legal requirements in India which came into effect from 1 st April, 2014, a new governance and funding model for CSR activities is being put in place to ensure we remain compliant, whilst remaining aligned to Group strategy. 2. CSR IN INDIA - Summary of Companies Act, 2013 relating to CSR The new Act together with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (hereinafter referred to as the Rules ): Requires qualifying BT entities in India to invest 2% of its annual Net Profits Before Tax ( PBT ) during the three immediately preceding financial years in CSR activities annually puts a formal and greater responsibility to set out clear framework and process to ensure strict compliance The changes have introduced the concept of CSR to the forefront and through Comply-or-explain mandate it requires the qualifying companies to constitute the CSR Committee to effectively monitor CSR activities of the company in line with the activities specified in Schedule VII of the Act. Each company is required to have constituted a transparent governance structure to oversee the implementation of our CSR Policy, in compliance with the requirements of Section 135 of the Act. Further details of the key elements of the new laws are in Annex A 1
3. CSR COMMITTEE 3.1 Objectives: The committee will be responsible for delivery BT s CSR policy in India - laying down the guidelines to make a positive contribution to the society through sustainable programs, whilst complying with the legal changes. The committee shall cater to: 1. Formulating CSR Policy and recommend the same to the Board of Directors of the company for approval. 2. Defining what CSR means to us and the approach adopted to achieve our Good & Green goals. 3. Identifying broad areas in which the company will undertake projects as stated under schedule VII of the Act. 4. Approve to undertake CSR activities aligned to the BT Group strategy and to report the same in accordance with the Rules. 5. Recommend CSR Budget and ensure that this is appropriately budgeted for in the operational budgets of the impacted BT entities in India on an annual basis. 6. Elucidate criteria for partner implementation agencies. 7. Provide guidance to help execute in accordance with the Act and the Rules. 8. Monitor CSR Policy and projects from time to time. 9. Submit reports to the Board in respect of the CSR activities undertaken by the company. 10. Explain the manner in which the surpluses from CSR projects, if any, will be treated. 11. Annually review its CSR Policy and make suitable changes as may be required and submit the same for the approval of the Board. 12. Preparation of an annual CSR Plan for onward submission to the BT India Board (Annex B outlines what this would encompass). 3.2 Membership: We will establish a single, Board-Level CSR committee that will be ultimately responsible for the CSR projects undertaken in India and cover all the BT entities which are required to comply with the new provisions. The committee will report to the Board of Directors of all the entities in India to which CSR applies. The Committee shall comprise of the following: - Sudhir Narang Pawan Kumar Khandelwal Kevin Taylor Sumit Mitra Anna Easton Namrata Panjwani - Chairman - Secretary (Compliance) 3.3 Proceedings & Periodicity A quorum for the Council meeting is 4 members. A duly convened meeting of the Council at which a quorum is present shall be competent to convene the meeting. 2
The council shall meet atleast once in a quarter. Additional meetings can be scheduled as per operational needs and matters of urgency. 3.4 Minutes The minutes of meetings of the Council be circulated to all members and to nominated recipients as soon as practicable after the meeting. 4. CSR PROJECT PLAN BT Group CSR Policy and Strategy will provide guidance for defining / guiding the areas of CSR investments in line with the Better Future strategy (Annex C) While we are guided by this, the committee shall also consider the social / economic factors and the Govt. policy in India to decide on the CSR investments in India. The projects to be proposed should also be in line with the list of activities outlined under Schedule VII of the act which provided in Annex A. 4.1 Project Assessment / Selection 1. Partner with credible organisations like trusts, foundations etc. including nongovernment organisations. 2. Due Diligence to be conducted by an independent firm on the proposals under the BT CSR selection guidelines. 3. The proposals shall be placed before the committee in the format as prescribed under Annex D to the Policy. 4. Any proposal shall be accepted subject to the unanimous approval of the committee. 4.2 Project Execution Legal Contract A contract duly signed off by legal including, but not limited to, the terms in regard to scope, Deliverables, Criteria, timelines, measurement plan, Governance, etc. shall be executed between the company and the respective selected organisation. 4.3 Project Monitoring Mechanism The monitoring and implementation of the identified CSR projects shall be carried out under the Internal Monitoring Group ( IMG ) formed for this purpose. The IMG shall ensure effective implementation and monitoring of the projects approved by the CSR Committee. The IMG would comprise of: 1. Naveen Rastogi Finance 2. Mridul Srivastava Marketing 3
The IMG shall submit its reports to the CSR Committee on a six monthly basis of the Company on the progress of the various projects approved by the Committee and entrusted to WG for implementation monitoring. 4
Annex A Overview of The Act The Act mandates companies meeting the qualification criteria to allocate 2% of its annual net profits (before tax) during the three immediately preceding financial years to be spent on CSR activities. 1. Net Profit means profit more fully described under Rule 2(f) of the Rules. The CSR expenditure shall include all expenditure including contribution to corpus or on projects or programs relating to CSR activities approved by the Board of Directors on the recommendation of its CSR Committee but does not include any expenditure on an item not in conformity or not in line with activities stated under Schedule VII of the Act. 2. In case the Company fails to spend the above targeted amount in that particular financial year, the Committee shall submit a report in writing to the Board of Directors specifying the reasons for not spending the amount which in turn shall be reported by the Board of Directors in their Directors Report for that particular Financial Year. Surplus arising out of the CSR initiatives shall not form part of the business profits of the Company. 3. In line with Schedule VII of the Act and the CSR Rules, the Company shall undertake CSR activities included in its Annual CSR Plan, as recommended by the CSR Committee at the beginning of each year. The Committee is authorized to approve any modification to the existing Annual CSR Plan or to propose any new program during the financial year under review. 4. Disqualifying Activities for CSR - The Rules prohibit the CSR projects and programs that are implemented by the Company for benefit of the employees of the Company and their families. The CSR activities implemented outside India also fall outside the purview of the Rules and hence CSR expenditure on such activities will not be considered for inclusion in the CSR Report. Any amount directly or indirectly contributed towards any political party under Section 182 of the Act shall not be considered as CSR Spend. Activities that are undertaken by the Company in pursuance of its normal course of business will not be considered as CSR activities. 5. The companies are required to give preference to the local area and areas around where it operates. The projects to be proposed should be in line with the the list of activities outlined under Schedule VII of the act which are as follows: Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water; Promoting education, including special education & employment, enhancing vocational skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects; Promoting gender equality, women empowerment, setting up homes and hostels for women and orphans, setting up old age homes, day care centers 5
and other similar facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward classes; Ensuring environmental sustainability, ecological balance, 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 public libraries, promotion and development of traditional arts and handicrafts; Measures for the benefit of armed forces veterans, war widows and their dependents; Training to promote rural sports, nationally recognized sports, paralympic sports and other sports; Contributions made to the Prime Minister s National Relief or any other fund set up by the Central Government or the State Governments for the socioeconomic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; Contribution or funds provided to technology incubators located within academic institutions which are approved by the Central Government; Rural development projects 6
Annex B Annual CSR Plan The Annual CSR Plan is a yearly plan of CSR activities that would be placed before the Board of Directors of the Company based on recommendation of its CSR Committee which outlines the following aspects of CSR initiatives of the Company: - CSR Budget with projections - Tailor-made CSR projects: Depending upon allocated spend and geographical presence The targeted Beneficiaries & their key needs. Alignment with Schedule VII - Project Assessment / Selection: Partnering agencies/companies/firms - Project Implementation: Project Proposals Execution documentation Project Goals and milestones Activities and Timelines including expected closure dates Process Owners - Project Monitoring mechanism Progress reporting and frequency of reports - Any other information as may be required by the CSR Committee 7
Annex C Better Future Guidelines for CSR and Sustainability Projects At the request of BT Group s Committee for Sustainable and Responsible Business, the pan-bt Better Future programme was in part established to ensure BT develops a much more focused portfolio of CSR and sustainability initiatives. The general principles are: Fewer initiatives, and focus on those that deliver on a scale basis Maintain strong due diligence when assessing partnerships with NGOs/Charities, since the company s reputation is at stake Focus on initiatives which support our 3 priorities: o Connected Society digital inclusion and internet safety o Net Good helping society live within the constraints of the planet through the application of ICT o Improving Lives supporting charities by using our ICT and people assets (e.g. fundraising) Focus on initiatives which maximise the shared value potential. By this we mean there should be a strong environmental/social benefit, but also a commercial benefit for BT (e.g. revenue potential, brand enhancing). Initiatives which create a good opportunity for employee engagement (e.g. through volunteering) Initiatives which have the potential for strong external stakeholder engagement, both in the local region, but potentially to showcase BT to stakeholders globally A recognition that there some occasions where a more straightforward philanthropic donation/approach from BT is still appropriate, but seeking to keep these to a minimum. At a BT Group-level our Investment in Society which we report externally - is achieved through a variety of ways: In-kind donations for example through employee volunteering or a donation/loan of BT assets to not-for-profit organisations. Charitable cash donations. Programmes which deliver social and/or environmental benefits for example our digital inclusion programmes in the UK which are typically carried out in partnership with a not-for-profit organisation(s) and local authorities. Thought leadership, research and expert consultancy which furthers understanding of material issues affecting society and the environment and the role BT can play. Early concept evaluation or funding of a commercial proposition where it has the potential to make a significant social or environmental contribution. For BT India the situation is different in that we need to focus on cash invested, and the guidelines for appropriate investment (Annex A) are different. By having a member of the BT Better Future team sitting on the BT India CSR Board we plan to advise and support the BT India team in staying aligned to the Better Future strategy as far as possible, whilst recognising the need to complying with the new laws. 8
Annex D Business Case Template for Projects Better Future Investment Business Case - one page overview & checklist Project Name Summary of Proposal Start Date End Date - what do you want the money for & why are we doing this? (approx. 100 words) Sponsorship & Ownership - who is involved? Better Future Programme SBLT sponsor Lead (Accountable) - Mandatory Project Lead - Owner - LoB Finance rep (if applicable) Investment proposed k 2014/15 2015/16 2016/17 CSRB funded Was this part of original 2014/15 CSRB budget build? Investment breakdown - Please list what you are spending the money on? Specify project end date Please specify type of spend; eg 3 rd party spend; are they existing BT suppliers or New suppliers any marketing or engagement costs should be separately shown in the breakdown Internal BT costs (approx. 150 words) Benefits - Please specify the top 3-4 benefits/outcomes - How are you going to quantify/ set targets and measure them? - Volunteering days - Why is this value for money? (approx. 100 words) Please complete the checklist over the page as part of the business case 9
As part of your business case, please complete the necessary details below and, where necessary, provide the required additional information Ethics & Legal requirements Does funding request include any donations to a Charity/ NGO? If yes, check BT s charitable donations policy https://intra.bt.com/bt/lgc/compliance/a-cb/charity2/pages/index.aspx Confirm you have complied with it? Is this spend being made overseas? N.B if yes, requires legal higher due diligence as per Shared Value Policy Is this a venture with a charity? N.B - if yes, we will need to have a contract in place contact Lois Paine; lois.paine@bt.com Will this involve setting up or becoming part of another entity? Requires internal authorisation & governance structure) Will this involve collaborating with our competitors? N.B - if yes, potential competition issues to be checked; contact Cecile.plaidy@bt.com Is this project connected with an existing or prospective BT customer? Confirm compliance with BT s Shared Value Policy Have you engaged BT Legal team? if yes, who? Communications Is there any communications spend included in this project? If yes, have you engaged the Better Future Comms teams? Procurement Are you using using a third party supplier/ agency to deliver any of the project work? Are they an existing BT rostered supplier/ agency? If yes, what is the name of the agency/ supplier? Has BT Procurement been involved in any negotiations so far? If yes, who? Does this spend deliver value for money - if so how? Does this project benefit countries outside of the UK? BT internal charges Does this cost include any internal charges? If yes, what for? e.g. TSO development, Catering charges, BT venue hire Response 10