IIFCL CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

IIFCL CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY I. Background:- Board of Directors in the meeting held on 23 rd October 2012, while approving the Guiding Principles for IIFCL CSR activities, directed that CSR Activities should have a clear and unambiguous institutional linkage and should reflect national development goals and priorities. A revised IIFCL CSR Policy along with Guiding Principles for IIFCL CSR activities, incorporating the directions of the Board is placed at Annex I for consideration of Board of Directors for approval. The revised Guiding Principles for IIFCL CSR activities are drafted considering that the activities are connected to the company s core activities and fruitful in the long run vis-à-vis reflecting the national development goals and priorities adopted by Government of India under United Nations Millennium Declaration as national commitments and articulated in the Government of India s 12 th Five Year Plans. The eight Millennium Declaration Goals (MDGs) include: MDG 1 Eradicate Extreme Poverty and Hunger MDG 2 Achieve Universal Primary Education MDG 3 Promote Gender Equality and Empower Women MDG 4 Reduce Child Mortality MDG 5 Improve Maternal Health MDG 6 Combat HIV/AIDs, Malaria and Other Diseases MDG 7 - Ensure Environmental Sustainability MDG 8 - A Global Partnership for Development II. Principles: The Guiding Principles for undertaking CSR activities by IIFCL are as under: 2.1.Sustainability CSR activities should help in building a positive image of the company in the public perception. CSR projects may be closely linked with the principles of sustainable development, ensure gender sensitivity, skill

enhancement, entrepreneurship development and employment generation by co-creating value with local institutions/people; IIFCL will undertake CSR projects which are closely linked with the principles of Sustainable Development based on the immediate and long term social and environmental consequences of development of Infrastructure in the country. Under CSR initiative, the company will i) Support a precautionary approach to environmental challenges ii) Undertake initiatives to promote greater environmental responsibility iii) Encourage the development of environmentally friendly technologies. iv) IIFCL will endeavour to supplement promotion of sustainable development through supporting of research activities at premier educational institutions like Indian Institutes of Technology, Indian Institutes of Management etc. v) Through CSR, IIFCL will identify projects in urban/rural areas which would improve the quality of life of the population. Such efforts inter-alia could be in the area of provision of potable water, sanitation, street lighting through renewable energy, community development and welfare, health, education and gender equality. 2.2 Accountability CSR initiatives of IIFCL will be guided by National CSR Guidelines issued by DPE, Government of India from time to time. Effective monitoring would be done to ensure that the benefits accruing are as per the expected or envisaged levels. 2.3. Transparency Ensure care for all stakeholders in implementing its core business as well as CSR activities. IIFCL will remain committed to protecting the interests of all its partners and stakeholders including employees, contractual workers, shareholders, suppliers, end users and customers, communities affected by the IIFCL financed projects and the society at large. Undertake ethical business practices building on the existing systems for maintaining transparency and accountability. IIFCL will publicize CSR projects to the extent possible for the purpose of awareness creation,

stakeholder information and brand value enhancement. The company will also incorporate details of CSR activities in its Annual Report. IIFCL CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY Preamble: Corporate Social Responsibility (CSR) is the responsibility of the corporate entity towards the society in consideration of the support given and sacrifices made by the society by sharing part of its profit. IIFCL, a premier Infrastructure Finance Company in the country, is financing infrastructure projects across the country. IIFCL, a Public Sector Undertaking, has taken its obligation to the society and the people in need especially in under developed areas including tribal villages with special emphasis in the surrounding areas of the projects financed by IIFCL. While the States have been carrying out a number of development projects, IIFCL on its part likes to participate/contribute and makes its presence in social, economic, infrastructural, educational, cultural activities etc., development for augmenting the quality of life of people across the country. IIFCL on its part will not only have the satisfaction of being a part of the larger society, which has created it but also to create an environment, which ultimately would be providing IIFCL the much needed resources from an economically productive society including employable people to the projects and the company as well as peace loving community. 1.0 Objectives: The objective of these efforts are not only to help people by providing facilities for health, education, civic amenities etc. but also to create opportunities for development of skills, employment including self-employment, to promote greater environmental responsibilities and encourage the development and diffusion of environmentally friendly technologies for sustainable development. The objectives of IIFCL CSR Policy are broadly reflecting the national development goals and priorities adopted by Government of India under United Nations Millennium Declaration as national commitments and articulated in the Government of India s 12 th Five Year Plan.

The eight Millennium Declaration Goals (MDGs) include: MDG 1 Eradicate Extreme Poverty and Hunger MDG 2 Achieve Universal Primary Education MDG 3 Promote Gender Equality and Empower Women MDG 4 Reduce Child Mortality MDG 5 Improve Maternal Health MDG 6 Combat HIV/AIDs, Malaria and Other Diseases MDG 7 - Ensure Environmental Sustainability MDG 8 - A Global Partnership for Development The objectives as placed below also include the activities which are connected to the company s core activities and fruitful in the long run. 1.1 To identify & help under developed areas especially around the projects and also across the country having predominantly SC/ tribal/ others under privileged population. Some of the areas of focus under CSR includes: i) Literacy/Education/Cultural development. ii) Safe drinking water/health care & Sanitation. iii) Skill development for sustainable income generation & Livelihood iv) Agriculture & Infrastructure development 1.2 Sustainable assistance to handicapped & mentally challenged children and under privileged people in the society 1.3 Promote awareness programmes against social evils such as Alcholism AIDS etc., and to spread the awareness of legal rights and responsibilities. 1.4 Suitable assistance to the victims of natural calamities such as floods, earthquakes, epidemics etc., in any part of the country. 1.5 Promotion of cultural, social and sports activities. 1.6 Any other areas that may need coverage under the CSR policy, depending upon the necessity and circumstances, with the approval of CMD and subsequently to be informed to the board. 2.0 Areas of Focus 2.1 Skill Development for sustainable income generation & Livelihood

a. Skill development training for unemployed youth for better employability & to promote self-employment. b. Vocational/ technical/professional training for youth for ultimate support to the projects for hiring skilled youth. c. Promote enterprise development d. Promote self-help groups 2.2 Literacy / Education a. Construction/repair of school buildings & facilities including boundary walls, separate toilets for boys & girls and provision of drinking water. b. Provision of uniforms, books, stationery, computer & Laboratory equipment etc., to schools. c. Scholarships/fellowships to deserving students to encourage education. d. Promotion of adult education with focus on women s education etc. e. Reducing the drop-out rate of students & absenteeism through counselling & other means. f. Promote computer literacy and technology assisted learning. g. To set up/ promote higher education through special coaching/inputs to bridge the gap. i. To promote Technical/ professional/ medical education by giving financial assistance / opening institutions through Organizations/ infrastructural support. 2.3 Safe Drinking Water /Health care & Sanitation a. Provide safe drinking water by sinking bore wells, tube wells, establishment of water treatment plants etc.. b. Preventive and promote health care through mobile medical vans etc., c. Nutritional supplements to lactating mothers, children, adolescent girls and pregnant women. d. Health awareness campaigns on serious/chronic diseases. e. OP/IP treatment including operations at project hospitals f. Organising periodic health camps g. Offering specialized support services to the physically handicapped and mentally challenged people h. Veterinary medical support i. Promotion of sanitation through proper drainage system and construction of toilets j. Assistance for establishment of Hospitals/Medical Colleges etc. 2.4 Agriculture & Infrastructure Development a. To promote water shed development /water harvesting /water conservation measures.

b. Development of roads, bridges, markets, transport facilities, community welfare centres beautification of towns, cities, other civic amenities etc. c. Promote use of non-conventional energy. d. Electrification of Public buildings in villages. 2.5 The areas of work and the thrust areas under each item as indicated above are only illustrative and not exhaustive. 3.0 Budget a. Each year budget for CSR activities shall be as decided by the board according to the guidelines prescribed by Department of Public Enterprises (DPE) b. The actual budget shall be based on the CSR programmes planned and approved for that year. 4.0 Organizational Mechanism 4.1 CSR Committee of Board of Directors: As per the Department of Public Enterprises (DPE) Guideline 8.7 For proper and periodic monitoring of CSR activities, companies may appoint a CSR committee or a Social Audit Committee or a suitable credible external agency (Copy of DPE Guidelines dated 9 th April 2010 is placed as Annexure I) In view of the above DPE Guidelines the following Board level committee for CSR with the following members was appointed as per approval received in the Board Meeting held on 23 rd April, 2012 vide Board memorandum No 49/51/2106/2012 13(copy attached at Annex A) :- 1) Chairman & Managing Director (CMD) Shri. S.K. Goel 2) Executive Director (ED) - Dr Harsh Kumar Bhanwala 3) Director Shri. H.S. Kumar 4.2 Scope of Work of a CSR Committee of Board of Directors i. All the proposals of CSR projects will be placed before the CSR Committee of Board of Directors for consideration and approval. ii. The committee will recommend the allocation of funds to be included in annual CSR budget as per DPE Guidelines and get the final approval from the Board of Directors for the annual budget of CSR

iii. The committee will review and monitor the progress of the execution of projects and will carry out any other associated activity which the committee may consider appropriate. iv. The committee will meet at least 4 times in a year and the minutes will be placed before the Board for each meeting held. The quorum for the CSR committee of Board of Directors will be 2 members 4.3 CSR Cell : A CSR cell is already working under the Corporate Communications Department as approved in the Board Meeting held on December 1 st 2010 vide Board Memorandum No. 32/39/1530/2010-11. All the proposals for CSR activities will be placed by the CSR cell to the CSR Implementation Committee for consideration and deliberations. On merit, the CSR Implementation Committee will recommend each CSR initiative /scheme for approval by the CSR committee of the Board of Directors. 4.4 CSR Implementation Committee : For implementation of CSR as per the DPE Guidelines it is proposed that a CSR Implementation Committee may be re-formed with the following members as one of the member of the CSR Implementation Committee as formed earlier in accordance with the approval received in the Board Meeting held on 23 rd April, 2012 vide Board memorandum No 49/51/2106/2012 13(copy attached at Annex A) :- with the following members 1) Shri. Sanjeev Ghai, Chief General Manager 2) Dr. Harsh Kumar Bhanwala, Chief General Manager 3) Shri. Anil Taneja Deputy General Manager 4) Shri. K.B. Khurana Deputy General Manager Dr. Harsh Kumar Bhanwala has been elevated to the post of Executive Director of IIFCL and therefore it is proposed that the CSR implementation committee may be reformed as under: 1) Shri. Sanjeev Ghai, Chief General Manager 2) Dr. E.S. Rao, Chief General Manager 3) Shri. Anil Taneja Deputy General Manager 4) Shri. K.B. Khurana Deputy General Manager

The quorum for the CSR Implementation Committee meeting will be 3 members 5.0 Guidelines for consideration of proposal and allotment of funds for CSR projects and activities. The guidelines for consideration of proposals and allotment of funds for CSR projects & activities are detailed in Annexure I 6.0 Implementation Strategy for CSR projects / Actvities The strategy for implementation of the CSR projects / Activities is detailed in Annexure II. 7.0 Monitoring Strategy for CSR projects / Activities The projects shall be monitored as per the strategy detailed in Annexure III. 8.0 Audit: All CSR activities and expenses made thereon will be subject to audit by the Company s auditors. The Company will undertake Social Audit of Projects implemented under its CSR programme through an independent agency after 2-3 years of completion of the project so as to assess the effect of CSR intervention. 9.0 General: a) All administrative expenses including expenditure on wages & salaries, tours and travels, training & development of personnel deputed on CSR activities would be borne from CSR funds. b) If it is observed that any CSR activity taken up for implementation is found not properly implemented, IIFCL at its discretion may discontinue funding the project at any time during the course of implementation. c) On advice of CSR Advisory Committee selected Project may be taken up for evaluation through an outside Agency. d) CMD shall be empowered to amend or modify this policy and such changes shall be placed before the Board for approval.

Annexure I Broad Guidelines for consideration of proposals and allotment of funds for CSR Projects and Activities 1. Individual proposals have to be within the frame work of the CSR Policy. 2. Every CSR proposal has to be projectized. This involves defining activities, time frame, financial requirement, organizational responsibilities, outcome / expected results and sustainable aspects. The CSR department will evaluate the proposals and give its recommendations. 3. The releasing of funds in phased manner shall be clearly defined in the proposal to ensure proper utilization and submission of periodical progress reports before release of instalments. 4. Project proposals can be prepared by IIFCL on its own or through a Consultant as may be necessary. The CSR Projects prepared by State/District Authorities or Local Bodies or reputed NGOs within the purview of CSR policy may also be considered for implementation with the approval of Competent Authority. However, such projects submitted by NGOs shall be approved only after verification of their credentials, capability and preparedness to work in the specified locations.

Annexure-II Implementation Strategy The CSR Projects/ Activities shall be implemented in three ways as below:- A) Directly by IIFCL. B) Through NGOs / Voluntary Organizations/Trusts C) Through concerned State/District Authorities. Every Project will specify the implementation schedule indicating the starting date, date of completion, likely benefits etc., The methodology of implementation shall be as follows:- A) Directly by IIFCL i) The activities which can be implemented by IIFCL either directly or by engaging Contractors for infrastructural development shall be taken up by IIFCL through CSR department. ii) The periodical activities such as conducting medical camps, distribution of uniforms to schools, and also activities like donation of Ambulances/medical equipments to hospitals etc., shall also be taken up by IIFCL. iii) The activities which cannot be taken up by IIFCL because of its nature, size and other limitations, shall be considered for implementation through other alternatives. iv) The CSR works executed through contractors shall adopt the same procedure as followed for award of contracts for other IIFCL works. v) For the purchase of materials connected with CSR activity, a local purchase committee shall be constituted to carry out the purchases as per the purchase procedure depending upon the value of the purchases.

B) Through NGOs / Voluntary Organizations(VOs)/Trusts:- i) The proposals of the CSR Projects of long duration focusing on overall sustainable development in a given time frame requiring a dedicated team and full time attention shall be considered for implementation through reputed NGOs/Voluntary Organizations /Trusts functioning in similar activities. ii) The NGOs/VOs shall be identified based on their credentials and long standing performance in respective fields. NGOs/VOs with proven performance and tax exemption benefit shall be given preference. iii) NGOs may also come forward on their own with specific proposals in the field of their expertise, within the purview of CSR Policy. Such proposals should be complete in all respects and supported by their credentials and capabilities. iv) Every claim/ instalment of NGOs for the work completed should be supported by proper bills and receipts / documents in support of the claim. D) Through Concerned State/District Authorities i) The CSR works which cannot be taken up by IIFCL directly or through NGOs /Voluntary Organizations/Trusts/ Contractors due to various reasons/ constraints shall be carried out with the help of respective State /District Authorities. ii) The State/District Authorities may also submit specific CSR proposals. In such cases, IIFCL may release funds to the respective authorities for initiation and implementation, provided the schemes match with that of IIFCL. iii) Such CSR works implemented through the local bodies/ Agencies nominated by the District Authorities/District or State Authorities the funds shall be released in suitable instalments based on the progress and Utilization Certificate

Annexure-III Monitoring Strategy All CSR Projects/Activities shall be monitored directly or indirectly by I IFCL. The monitoring strategy shall be as below:- A. Projects directly taken up by IIFCL i) The CSR Projects taken up by IIFCL or through Contractors shall be monitored directly by CSR Department. ii) The award of contract for CSR works shall be finalized within the time frame set by the CSR Deptt. for timely initiation of the activity. Release of funds to contractors shall be defined in the work order itself. iii) The on-going activities such as distribution of uniform to schools, medical camps etc., shall be coordinated by CSR Deptt. iv) The CSR Deptt. shall draw a time frame from the date of initiation. Any delay noticed while monitoring the activity, remedial measures may be taken for timely completion of the Project. B) Through NGOs /Voluntary Organizations i) The CSR Projects taken up through NGOs / Trusts shall be evaluated and monitored jointly by CSR group and respective organizations. An evaluation format shall be prepared jointly by both CSR group and Organization for this purpose. ii) The periodicity of joint evaluation shall also be decided by both the parties together. At times, any official from CSR department or any other official may be directed to review the performance by visiting the sites. iii) Release of funds after commencement of the activity shall be invariably linked to the joint evaluation and achievement of results against the targets till date. iv) In case, the progress, as per the joint evaluation is not as per the target and proportionate to the funds released, a higher level committee may be constituted by CMD/ED to review the evaluation and submit the report/recommendations.

v) Release of funds shall be made after fulfilling the targets, proportionate to the funds released earlier. The self-sustainability of the activity shall be established after its implementation in the given time frame. C) Through State/District Authorities at the respective Projectsi) The Projects taken up through State/District Authorities shall be monitored by both IIFCL and the respective departments either jointly or independently. ii) Finance shall be provided by IIFCL in suitable instalments. After release of the first instalment for initiation of the work, further release of fund shall be based on progress of the work /utilization certificate submitted by the respective Agency.