Preamble
Kotak Mahindra Bank Ltd. (“KMBL” / “Bank”) recognises the immense opportunity it has to bring about a positive change in the lives of communities through its business operations and Corporate Social Responsibility (“CSR”) initiatives.
KMBL aspires to be a trusted partner and contributes significantly towards the economic, environmental and social growth of the nation and is also committed to contribute towards United Nation’s (“UN”) Sustainable Development Goals (“SDGs”). This CSR Policy sets out the Bank’s vision, mission, governance, and CSR focus areas to fulfill its inclusive growth agenda in India.
Further, CSR at KMBL is implemented collaboratively by the Bank along with its employees through volunteering and engagement activities.
While ensuring that its CSR Policy, projects and programmes are compliant with the CSR mandate as specified under Sections 134, 135 read with Schedule VII of the Companies Act, 2013 (“Act”) along with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules, 2014”), as amended from time to time and in line with the Government of India’s notifications issued from time to time, KMBL also endeavours to align its CSR projects and programmes with Government initiated social development programmes and interventions and last but not the least, the UN’s SDGs.
Vision
To improve the quality of life of communities through positive impact on economic, social and environmental parameters and in alignment with India’s social development objectives and UN’s SDGs.
Mission
To create a lasting value for communities in need by promoting and supporting education, livelihood, healthcare, sports and environmental and sustainable development initiatives and others including to reduce inequalities faced by socially and economically backward groups, relief and rehabilitation, and intervention towards an educated, employed, healthier and a cleaner India, with an aim to serve
communities at large and to transform their lives, in a collaborative manner by working with internal and external stakeholders.
KMBL has defined CSR Focus Areas to make a concerted effort to achieve a meaningful and measurable social impact. On a case-to-case basis, the CSR programs and/or projects which are outside KMBL’s defined six CSR Focus Areas but are eligible CSR activities under Section 135 read with schedule VII of the Act along with the CSR Rules, 2014 as amended from time to time and in line with the Government of India’s notifications issued from time to time, shall be approved by the Corporate Social Responsibility and Environment, Social and Governance Committee (CSR & ESG Committee).
Scope of KMBL’s CSR Policy
The scope of KMBL’s CSR activity shall be within the scope of the CSR mandate as specified under Sections 134(3)(o) and 135 read with Schedule VII of the Act, the CSR Rules, 2014, as amended from time to time and as per the Government of India’s notifications issued from time to time. CSR Projects would be guided by the applicable regulations and would seek to achieve social objectives and impact as envisaged In the CSR mission.
Provided that the CSR activities undertaken by KMBL, as stated above, shall not include the following:
- Activities undertaken in pursuance of normal course of business of KMBL;
- Activities undertaken by KMBL outside India, except for training of Indian sports personnel representing any State or Union Territory at National level or India at an International level;
- Contribution of any amount directly or indirectly to any political party under Section 182 of the Act;
- Activities benefitting employees of KMBL as defined in Clause (k) of Section 2 of the Code on Wages, 2019;
- Activities supported by KMBL on sponsorship bases for deriving marketing benefits for its products or services;
- Activities carried out for fulfillment of any other statutory obligations under any law in force in India.
Statement of Commitment
KMBL, at all times, is committed to:
- Engage with communities to understand their material expectations and concerns, and will consider these material expectations and concerns to design its CSR agenda.
- Implement, monitor, review and evaluate CSR initiatives to achieve the desired outcomes in a transparent manner.
- Undertake projects in the areas of inter-alia promoting education, enhancing vocational skills and livelihood, promoting preventive healthcare, environment and sustainable development, sports and others including reducing inequalities faced by socially and economically backward groups, relief and rehabilitation, and interventions towards a cleaner India with the aim to serve communities at large and to transform their lives.
- Collaborate with governmental agencies, non-governmental agencies (“NGOs”) and/or other institutions to collectively deliver the community development initiatives and support such agencies and institutions with appropriate and necessary resources.
- Ensure that surplus arising out of CSR initiatives is utilised to further augment the CSR agenda and that such surplus does not form part of KMBL’s profits.
- Comply with all legal provisions applicable for CSR and adopt best industry practices, wherever feasible.
Guiding Principle for Implementation of CSR activities
Given the enormity of India’s social development requirement, KMBL will either directly implement its CSR projects and programmes, and /or engage with eligible agencies, meeting the minimum criteria as set out under the heading ‘Implementing Agency ’
Direct CSR Projects
CSR Projects undertaken, executed and implemented by itself (KMBL) under its Direct CSR Projects may include engagement and involvement of all stakeholders including employees, across Indian geography,
and for the purpose of implementation and monitoring, KMBL may also engage third party organisations / consultants etc. However, for KMBL’s Direct CSR Projects, the onus of responsibility on implementing and monitoring rests with KMBL.
CSR Projects with Implementing Agencies
CSR Project Implementing Agency in the CSR context means KMBL engaging an NGO to implement its CSR Projects i.e., KMBL CSR Projects funded by it, thus, KMBL is the CSR funding organisation, and the
project is implemented by / through the implementing agency. Further, it is clarified that KMBL’s responsibility and liability is restricted to impact outcomes of its CSR Projects only and in no manner will
KMBL will be responsible or held liable for any acts of omission and commission, and such other civil and criminal liabilities of its implementing agencies
Implementing Agencies
The Board shall ensure that the CSR activities are undertaken by KMBL directly or through any of the entities registered with the Central Government under the CSR Rules including:
- A company established under Section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of Section 10 or registered under Sections 12A and 80 G of the Income Tax Act, 1961, established by the company, either singly or along with any other company; or
- A company established under Section 8 of the Act, or a registered trust or a registered society, established by the Central Government or State Government; or
- Any entity established under an Act of Parliament or a State legislature; or
- A company established under Section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of Section 10 or registered under Sections 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three (3) years in undertaking similar activities.
Engagement of International Organisations
“International Organisation” means an organisation as defined under Rule 2(g) of the CSR Rules, 2014 . KMBL may engage International Organisation(s) for designing, monitoring and evaluation of the CSR projects or programmes as well as for capacity building of its personnel for CSR.
Monitoring
The CSR & ESG Committee of the Board of Directors of KMBL will ensure a transparent monitoring mechanism for ensuring effective implementation of the projects / programs/ activities proposed to be undertaken by the Bank in pursuance of its CSR obligations.
The CSR & ESG Committee would be responsible for monitoring the approved projects and/or programmes and would ensure that the funds are utilized for the approved purpose to the satisfaction of the Board of Directors of KMBL in the manner approved by it and shall be certified by the Chief Financial Officer or the ‘person’ in charge of financial management.
Monitoring mechanisms may include visits, meetings and progress/status reporting by the project/programme teams. KMBL’s CSR activities will be regularly reviewed by the CSR & ESG Committee.
A system will be put in place to maintain a transparent monitoring and reporting mechanism across all the stakeholders involved in the CSR activities of KMBL, as required under Section 135 read along with Schedule VII of the Act along with the CSR Rules, 2014, as amended from time to time and in line with the Government of India’s notifications issued from time to time.
In case of a multi-year project, having timelines not exceeding three (3) years, excluding the Financial Year in which it was commenced, undertaken by KMBL in fulfillment of its CSR obligations (including projects that was initially not approved as a multi-year project but whose duration has been extended beyond one year by the Board) (“Ongoing Project”), the Board shall monitor the implementation of such CSR project with reference to the approved timelines and year-wise allocation. The Board may also make modifications, for smooth implementation of such project within the overall permissible time period.
CSR Project Expenditure / CSR Funds
The Board shall ensure that in every financial year, KMBL spends at least two (2) % of its average net profits made during the three (3) immediately preceding financial years in pursuance to the provisions of this CSR Policy and in accordance with Section 135 read with Schedule VII of the Act and CSR Rules, 2014, as amended from time to time.
For any CSR funds that remain unspent pursuant to an Ongoing Project, KMBL shall transfer such unspent CSR funds to its Unspent Corporate Social Responsibility Account, within 30 (thirty) days from the end of the Financial Year. Such unspent CSR funds shall then be spent in accordance with the terms of this CSR Policy, within a period of three (3) Financial Years from the date of such transfer, failing which, KMBL shall transfer the same to a Fund specified in Schedule VII of the Act, within a period of thirty (30) days from the date of completion of the third financial year.
As per the applicable law, such Unspent CSR funds, pertaining to Ongoing CSR Projects for the Financial Year, which are transferred to Unspent Corporate Social Responsibility Account will be considered as part of the 2% prescribed CSR requirement for the Financial Year.
For any unspent CSR funds that do not relate to any Ongoing Project, such unspent funds shall be transferred to the Fund specified under Schedule VII of the Act, within a period of six (6) months of the expiry of the financial year.
In case KMBL CSR spends is less than two (2) % of its average net profits made during the three (3) immediately preceding financial years, the Board in its report made under Section 134(3)(o) of the Act, shall specify the reasons for not spending the said amount.
Any surplus arising out of the CSR activities carried on by KMBL, shall not comprise of the business profit of KMBL and shall be dealt with in the following manner:
- Surplus to be ploughed back either into the same CSR project and/or programme; or
- Surplus to be transferred to the Unspent CSR Account and spent in pursuance of this CSR Policy and the annual action plan of KMBL; or
- Surplus to be transferred to a Fund specified under Schedule VII of the Act;
within a period of 6 (Six) months of the expiry of the financial year.
In the event that KMBL spends an amount in excess of the requirement provided under Section 135(5) of the Act, such excess amount may be set-off against the requirement to spend under Section 135(5) of the Act, up to immediate succeeding three (3) financial years subject to the conditions that such excess amount shall not include surplus arising out of the CSR activities and the Board shall pass a resolution to that effect.
The CSR funds may also be utilized for creation or acquisition of capital asset, to be held by either the beneficiaries of the CSR project such as entities, collectives or self-help groups; a public authority; or a company incorporated under Section 8 of the Act or a registered public trust, registered society with a charitable objective and a CSR registration number.
The Board shall satisfy itself that the disbursed funds have been utilized for the purposes and in the manner approved by it and the Chief Financial Officer or the person responsible for financial management shall certify to the effect.
CSR Reporting
The Board’s report pertaining to any Financial Year containing details of the CSR initiatives taken during such Financial Year, would include an annual report on CSR in the form and manner prescribed under Section 135 read with Schedule VII of the Act read along with the CSR Rules, 2014 as amended from time to time and in line with the Government of India’s notifications issued from time to time.
Boundary
While KMBL will endeavour to implement its projects and programmes in and around the geographies where it carries its business and operations, KMBL may also implement its CSR programmes and/or projects either directly or with implementing agencies in any geography but within India to serve and support the needy people and/or towards nation building.
Key Focus Areas
(I) CSR Focus Area: Education & Livelihood
Through its CSR focus area - Education & Livelihood, KMBL will endeavor to enhance accessibility and affordability of quality education including special education for the differently abled children and youth.
KMBL’s programmes and/or projects on Education will focus on providing financial and other resource support to educational institutions comprising infrastructure, buses, scholarships and coaching to children, teachers, headmasters, principals, administrators and trustees and parents and guardians to cater a holistic learning environment for children at school and home. The activities may also include providing mid-day meals and creating relevant infrastructure such as specialized food delivery vans, utensils, kitchens, warehouses etc. and other required nutrition and health related support to the children.
KMBL’s Livelihood programmes and/or projects will work towards imparting vocational skills and development training courses to children, youth, women, war widows, war veterans, elderly, and the differently-abled including school and college dropouts or anyone who never had any formal education
(illiterate) through technical, soft and trade and commerce skills which may help them earn a livelihood and/or enhance their livelihood.
KMBL may also undertake any other programmes and/or projects which would focus on the education sector and/or livelihood sector, as may be approved by the CSR & ESG Committee.
(II) CSR Focus Area: Healthcare
Through its CSR focus area – Healthcare, KMBL will undertake projects and programmes directly and/or through implementing agency working in the healthcare and sanitation domain, including but not limited to improving access to healthcare facilities by providing ambulances, screening vans and mobile health units etc.
KMBL will undertake projects and programmes in the fields of healthcare, sanitation, eradication of hunger and malnutrition, and provision of access to safe drinking water. The CSR projects and/or programmes will aim to provide preventive and curative care , palliative care, health check-up , spread awareness for prevention and cure of diseases like cancer, HIV/AIDS, tuberculosis, malaria, and other communicable and non-communicable diseases and illnesses. KMBL will also undertake projects and
programmes to sensitise communities on personal and community health and hygiene. To give life a fighting chance, KMBL will promote, encourage and implement blood and organ donations.
KMBL may also undertake any other programmes and/or projects which would focus on the healthcare sector, as may be approved by the CSR & ESG Committee.
(III) CSR Focus Area: Environment & Sustainable Development
Through its CSR focus area – Environment & Sustainable Development, KMBL will undertake projects and programmes directly and/or through organisations working in the area of maintaining ecological balance, protection of flora and fauna, animal welfare, agriculture, agro forestry, forestry, conservation of natural resources and maintaining quality of soil, air and water.
KMBL will also invest in projects and programmes for water conservation, rain water harvesting, adopting green technologies, waste reduction and recycling including effluent treatment, and reusing (3Rs) and promote, encourage and use alternate energy and energy conservation. Further, KMBL will undertake projects and/or programmes with implementing agency that are committed to and work in areas of Environmental, Social and Governance (“ESG”), Sustainability, SDGs and CSR either through direct activities or in the form of advisory, policy advocacy and stakeholder awareness programmes either directly or with eligible institutions under the CSR mandate.
KMBL may also undertake any other programmes and/or projects which would focus on the environment and sustainable development sector, as may be approved by the CSR & ESG Committee.
(IV) CSR Focus Area: Relief & Rehabilitation
Corona Virus (COVID-19) has been declared as pandemic by the World Health Organisation (WHO), and Government of India has treated this as a notified disaster. The spread of COVID-19 in India has been widespread. Economic and social impact of the pandemic has been equally significant. Many of these issues require sustained and long term CSR support. Thus, KMBL may undertake and support various relief and rehabilitation activities related to COVID-19 including under item nos. (i) and (xii) of Schedule VII of the Act relating to promotion of health care, preventive health care and sanitation, and disaster management or under such other areas as may be specified by the Ministry of Corporate Affairs from time to time in this regard. Such CSR projects and/or programmes may aim to provide immediate response to reduce or avoid potential spread of disease and losses resulting from same, assure prompt and appropriate assistance to victims of the pandemic or resulting lockdowns. KMBL may also undertake projects and programmes that engage with the community for long-term rehabilitation solutions including
but not limited to focusing on livelihood enhancement, providing shelter and infrastructure for education and health services to achieve rapid and effective recovery.
In case of other calamities, pandemic or a notified disaster, KMBL may commit significant portion of the CSR funds towards disaster management projects and programmes for dealing with humanitarian aspects of emergencies in particular preparedness, response and recovery in order to lessen the impact of disaster either directly and/or through implementing agency working in relief, rehabilitation and reconstruction domain, providing immediate and long term solutions, during and after a disaster with the purpose to avoid a disaster, reduce its impact or recover from its losses including but not limited to providing essential relief material such as safe drinking water, meals, clothes, medical aid & camps, and supply of daily essentials to the affected communities.
KMBL may also undertake any other programmes and/or projects which would focus on the Relief & Rehabilitation -, as may be approved by the CSR & ESG Committee.
(V) CSR Focus Area: Sports
A significantly high percentage of Indian children and youth are from the underprivileged and less privileged segment, where basic education and sports education, including training and coaching is not available. Sport is an activity for children and youth, and is often used as a draw card to recruit children and young people to health and education programmes. Sport development projects that focus on educational outcomes use sport as a means to deliver educational messages to participants and spectators in some cases.
The United Nations is using sport and games related projects and programmes to encourage young people, particularly girls and young women, to attend school within refugee camps across the world. The United Nations Children's Fund (“UNICEF”) also lays strong emphasis on ‘sport’ while campaigning for girls’ education, promoting education through events and other awareness campaigns.
India has a severe dearth of training and coaching facilities for sports. Through its CSR Programme on Sports, KMBL will either directly or with/through implementing agencies impart training and coaching as well as work towards development of infrastructure and training facilities to enable children, youth and adults to take up rural sports, nationally recognised sports, international and world championships, Olympics and Para Olympics.
KMBL may also undertake any other programmes and/or projects which would focus on the sports sector, as may be approved by the CSR & ESG Committee.
(VII) CSR Focus Area: Others
KMBL’s priority will be to implement CSR projects and programmes which come under CSR Focus areas as defined in this CSR Policy statement, but it will not be restricted to these defined CSR focus areas only. On a case to case basis, KMBL may also consider undertaking CSR programmes and/or projects on CSR focus areas which are eligible under Section 135 read with Schedule VII of the Act along with the CSR Rules, 2014 as amended from time to time and in line with the Government of India’s notifications issued from time to time and as may be approved by the CSR & ESG Committee.
KMBL through implementing agency may undertake activities related to financial assistance, technology transfer, technical assistance, field trials, imparting education, promoting awareness and such other interventions that would diversify and intensify practices in conducting research and development in the areas or subjects specified in Schedule VII of the Act
CSR Impact Assessment
Where in any Financial Year, KMBL has an average CSR obligation of Rupees Ten crore or more, KMBL shall undertake impact assessment of its CSR projects and/or programmes having outlays of Rupees One (1) crore or more and which have been completed not less than one (1) year before undertaking the impact assessment, through an independent agency. The impact assessment reports shall be placed before the Board and also annexed to the annual report on CSR. The impact assessment expenditure in any financial year shall not exceed the limit prescribed under the CSR Rules, 2014 as amended from time to time
CSR Administrative Overheads Expenses
As per the provisions of the CSR Rules the Board shall ensure that the administrative overheads (the definition has been set out below) shall not exceed five percent of total CSR expenditure of KMBL for the financial year.
Meaning and scope of ‘Administrative Overheads’ for CSR as defined under the CSR Rules, 2014
“Administrative overheads” means the expenses as defined under Rule 2(b) of the CSR Rules, 2014, as amended from time to time
Governance Framework
KMBL has an established CSR & ESG Committee which is responsible for the overall governance of CSR. The CSR & ESG Committee comprises of three (3) or more directors, out of which at least one (1) is an Independent Director.
While the CSR & ESG Committee will be responsible to review and approve the projects/programmes under KMBL’s CSR Policy (and the approved annual action plan), KMBL’s CSR head and his/her team will be responsible for execution of CSR Projects / Programmes, which at all times will be within the scope of KMBL’s CSR policy, the annual action plan, and the Act.
The CSR & ESG Committee will also be responsible for formulating an annual action plan in consonance with this CSR policy and recommending such annual action plan to the Board. The annual action plan shall include the following information:
- A list of CSR projects or programmes that are approved to be undertaken by KMBL or subjects specified in Schedule VII of the Act;
- The manner of execution of such CSR projects and programmes;
- The modalities of utilization of funds and implementation schedules for the projects or programmes;
- Monitoring and reporting mechanism for the projects or programmes; and
- Details of need and impact assessment, if any, for the projects undertaken by KMBL
Based on the recommendations of the CSR & ESG Committee and reasonable justification, the Board shall approve the Annual Action Plan for KMBL and have the right to alter such annual action plan at any time during a Financial Year.
Information Dissemination
- Appropriate documentation of KMBL’s CSR Policy, annual CSR activities, implementing agencies, and expenditure entailed will be undertaken on a regular basis and the same will be available in the public domain.
- CSR initiatives of KMBL will also be reported in the Annual Report of KMBL.
- This CSR Policy shall be uploaded on KMBL’s website for information of all stakeholders.
Effective date of Policy
This CSR Policy Statement is effective from 29th April , 2023 and supersedes all earlier KMBL’s CSR Policy Statements.
Law to take precedence and Amendments
In the event of any variation or inconsistency between the provisions of this Policy and applicable law, the provisions of the applicable law shall prevail over this Policy and the provisions of this Policy shall be deemed to have been amended so as to be read in consonance with such applicable law.
For Further information, write to [email protected]
29th April , 2023
Mumbai
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