Electrica S.A.’s policy on sponsorships and donations

Electrica S.A.’s policy on sponsorships and donations

 

CONTENTS:

 

  1. Purpose. 1
  2. Scope. 2
  3. Overview.. 2

3.1 Definitions. 2

3.2 Fields eligible for sponsorships and donations. 3

3.3  Eligible projects. 7

3.4 Noneligible projects. 7

3.5 Sponsorship and donation criteria. 7

3.6 Benefits given to Electrica. 8

3.7 Relevant policies and legislation. 9

3.8 Processes and procedures. 9

3.9 Monitoring Sponsorship/Donations – Evaluation. 12

 

1. Purpose

 

This policy is the approach of Electrica S.A. to the award of sponsorships and donations. Some of the significant issues are:

  • Definition of sponsorships and donations;
  • Eligible and ineligible project proposals;
  • Procedures for authorization of sponsorships and donations;
  • Conclusion pf agreements;
  • Measures to support Electrica S.A.’s good reputation;
  • Its objective is provision of benefits to the community;
  • impartiality in the award of sponsorships and donations, as defined below.

 

Positions involved in sponsorships and donations are:

  • Marketing, PR and CSR Service;
  • Assessment and selection panel;
  • The Board of Electrica S.A.

 

2. Scope

 

This policy applies to Electrica S.A., to all its employees, collaborators, partners and people responsible for decisions on charity contributions, donations and sponsorships, as defined hereinafter. People holding interests in any organization or cause shall not be part of the decision-making process.

 

3. Overview

 

3.1 Definitions

 

Sponsorship: this is the bilateral legal act whereby two parties, the sponsor and the beneficiary, agree on the transfer of title on material property or financial means to support not-for-profit activities developed by the beneficiary, which may be any not-for-profit private individual or legal entity, as per conditions set forth in Law 32/1994 on sponsorship.

 

Based on the sponsorship agreement to be concluded, the sponsor, apart from promotion of the cause supported by the beneficiary, shall have the right to advertise the sponsorship by promoting its image, brand and / or name.

 

The beneficiary is responsible for the management of sponsored project / event and it shall supervise execution of all project’s activities intended to achieve the results expected by it and by Electrica.

 

Electrica may be consulted in the decision-making processes related to actions to be supported under the sponsored project, without such consultation resulting in or being deemed a direct or indirect guidance of beneficiary’s activity.

 

Electrica has the right to be informed periodically on the evolution and results of sponsored projects and to determine methods for the final assessment of the sponsored project, together and in mutual agreement with the beneficiary.

 

None of the provisions above will be deemed to establish a form of control of Electrica on beneficiary’s activity. The beneficiary is responsible for implementation of the sponsored project / event and it has the right to take any decision it may considered fit to successfully complete all project’s activities.

 

A sponsorship is characterized by an agreement which includes a wide range of benefits consequential to a sponsorship, e.g.: promotion of sponsor’s brand / trademark, tickets / right to develop promotional activities, exclusion of sponsor’s direct and indirect competitors, the right to promote / advertise the sponsorship (e.g. “(Official sponsor”).

 

Advertising promotion: characterized by an agreement where the only benefit is the opportunity to promote the logo or any other material that the company may consider fit at that time, place or period – without achieving additional benefits from such sponsorship, e.g. baners displayed on a sports arena.

 

Patronage: this is an act of liberality whereby a private individual or legal entity, referred to as patron, transfers without any direct or indirect consideration, its title on material property or financial goods to a private individual, as a philanthropic and humanitarian activity, for performance of activities in any of the following fields: culture, arts, medicine-sanitary or science – fundamental and applied research.

 

Donation: this is an agreement based on which a party referred to as donator, in order to gratify, irrevocably disposes of a material property or financial means to the benefit of the another party, referred to as grantee. As per legal provisions, donations awarded by Electrica being subject to liens, as the rules on revocation of donation sue to non-performance of obligations by the beneficiary / beneficiaries apply. Electrica may dispose in favour of the beneficiary, in compliance with legal provisions on maximum amount and obligation to remit the respective good, of mobile assets under the form of manual donation.

 

Scholarships and honorary titles: the private scholarship is the agreement-based support for school tuition awarded by Electrica to a beneficiary which may be a pupil, student, doctoral candidate or a student attending a post-graduation training program with an accredited higher education unit, whether domestic or abroad. The private scholarship agreement may include clauses concerning the quantum of private scholarship, beneficiary’s obligations concerning the study program, and all other conditions under which the scholarship is awarded, and it is signed by the beneficiary or, depending on his / her age, by the beneficiary with legal representative’s approval, and by Electrica’s legal representative.

 

Acts assimilated to patronage or donations (including manual donations) may be awarded to scientific researchers with remarkable results, in order to support their activities and to award their exceptional results.

 

Patronage, donations, scholarships and honorary titles shall be collectively hereinafter referred to as “donations” and individually, “donation”. Aforementioned agreements and any other document concluded with beneficiaries under this policy shall be subject to general contract rules, including, without limitation, the parties’ capacity, the contractual subject matter, vices of consent, document nullity, revocation of donations etc.

 

3.2 Fields eligible for sponsorships and donations

 

3.2.1 (1) Beneficiaries of sponsorships and donations may only be part of the following categories of people and institutions in Romania or in other areas where Electrica develops activities (collectively hereinafter referred to as “beneficiaries”):

  • Private individuals, as per Law 32/1994 on sponsorship and as per Guidelines for implementation of Law 32/1994;
  • Non-Government organizations or any other not-for-profit legal entity having head-offices in Romania;
  • Education units (schools, kindergartens, university etc.) having head-offices in Romania;
  • Museums, hospitals and other cultural and health-care institutions having head-offices in Romania.

 

(2) No grant awarded by the company is addressed to, or can be accessed by, any of the following categories of entities:

  • Political parties or organizations developing activities assimilated to those of a political party;
  • Public institutions, other than those mentioned in art. 3.2.1 para. (1);
  • Religious institutions and / or associations, of the like.

 

(3) Benefitting organizations / institutions must NOT be, at any moment, in any of the following situations that cause withdrawal of Electrica’s support, as per this document:

  1. Under or pending legal reorganization, dissolution or liquidation or suspended activity;
  2. Having, themselves or their legal or conventional representatives, final convictions for any crime;
  3. Criminal prosecution was initiated in their names or in the name of their legal or conventional representatives, disregarding whether or not such prosecution was under way upon the award of donation by Electrica;
  4. An investigation was initiated against their legal representatives by any control authorities for serious professional misconduct;
  5. They failed to perform their payment obligations for social security contributions or they have overdue tax payments
  6. They were held in breach of a previous grant and / or donation and / or sponsorship agreement;
  7. They are subject to a conflict of interests;
  8. They intentionally or unintentionally mislead Electrica, by providing untrue information or attempted to mislead the assessment panel during the selection process;
  9. Their declared or undeclared purpose is claiming of political or religious power;
  10. They are for-profit organizations or institutions;
  11. They develop or start developing, during the award of donation, religious propaganda or proselytising activities;
  12. During the award of donation they change the object of activity which was the basis for the award;
  13. They expressed and / or showed, in any manner and by any means, opinions and / or attitudes subjecting defamation of country and nation, call to war and aggression, to national, racial, social hatred, call to discrimination, territorial separatism or public aggression;
  14. They expressed and / or showed, in any manner and by any means, opinions and / or attitudes of obscene nature, contrary to common sense or they injured, through their actions, the dignity, honour or privacy of any individual.

 

(4) Benefitting private individuals must NOT be, at any moment, in any of the following situations that cause withdrawal of Electrica’s support, as per this document:

  1. They are subject to final conviction for any crime;
  2. Criminal prosecution was initiated in their names, disregarding whether or not such prosecution was under way upon the award of donation by Electrica;
  3. An investigation was initiated against their legal representatives by any control authorities for serious, professional or otherwise, misconduct (which may prejudice the smooth development of the project, the image of host organization or of the funding party and of the funding program), which may be proved by any means;
  4. They are subject to serious, official or unofficial claims of plagiarism, violation of one or more copyrights of third parties, breaches of human rights or of any other obligation they may have, in law or as a natural consequence of their activity for which the donation was awarded;
  5. They were held in serious breach of a previous grant and / or donation and / or sponsorship agreement;
  6. They are subject to a conflict of interests;
  7. They develop or start developing, during the award of donation, religious or political or otherwise propaganda or proselytising activities, or their purpose is claiming of political or religious power;
  8. They intentionally or unintentionally mislead Electrica, by providing untrue or incomplete information or attempted to mislead the assessment panel during the selection process;
  9. During the award of donation they change the object of activity which was the basis for the award;
  10. They expressed and / or showed, in any manner and by any means, opinions and / or attitudes subjecting defamation of country and nation, call to war and aggression, to national, racial, social hatred, call to discrimination, territorial separatism or public aggression;
  11. They expressed and / or showed, in any manner and by any means, opinions and / or attitudes of obscene nature, contrary to common sense or they injured, through their actions, the dignity, honour or privacy of any individual.

 

(5) Individuals affiliated to, or having relatives up to the 3rd degree affiliated to, political parties or any other organization having activities assimilated thereto are not eligible to become beneficiaries of donations and sponsorships awarded by Electrica.

 

(6) Assessment of ineligibility resulted from provisions in art. 3.2.1 para. (3), para. (5) and para. (6) apply both to the time when the donation is awarded by Electrica, and also thereafter. The beneficiary that becomes ineligible during performance of the donation agreement must reimburse to the company the entire grant received up to that moment.

 

3.2.2 The fields for which sponsorships may be awarded to beneficiaries are:

  • Culture: development of activities, development of projects and events together with well-reputed cultural organizations and NGOs.
  • Health: development of activities and development of projects together with well-reputed health organizations like public and private hospitals or NGOs.
  • Sport: support and development of activities together with organizations / associations / clubs / NGOs that promote physical exercise and generally a healthy life, and which are legally incorporated and acknowledged by competent public authorities in professional and non-professional sports.
  • Education: support and development of activities and projects together with education institutions, with well-reputed specialized organizations or associations, that develop projects concerning development and improvement of formal and non-formal training (e.g.: schools, universities, kindergartens etc.), including at academic community level.

Society: support and development of activities and projects intended for the benefit of society, of public and development of communities.

Environment: support and development of activities and projects intended for protection of, and raising awareness on, environment.

  • Local communities: support and development of activities and projects intended for sustainable development of community projects and improvement of life.
  • Children: support and development of activities and projects intended for development and education of children and improvement of life.
  • Technology: acts that support / promote technology and technological innovation to the benefit of humanity, especially in energy.
  • Music: musical events / concerts at local, national or international level.

 

3.2.3 Areas where donations can be granted to Beneficiaries:

  • Aid in case of natural disasters: donations aimed at offering immediate support for national/international emergency situations by donating funds.
  • Culture: donations aimed at supporting the national cultural heritage in all its forms: painting, music, cinema, photography, restoration, preservation, museums, etc.
  • Health: supporting renowned health organizations such as public and private hospitals, NGOs who work in this area
  • Children: supporting projects that promote personal or professional development and raising living standards for children in general.
  • Needy people with special needs: Donations given to institutions or NGOs that assist needy people with special needs or health problems, nationally or internationally.

 

3.3  Eligible projects

 

3.3.1 Electrica will support only those projects or organizations which can prove the need but also their efficiency in achieving planned objectives, are well managed and have a stable financial situation.

 

Electrica wants to support renowned projects or non-profit organizations, whose values and goals do not conflict with those of Electrica. The support given is not limited to national non-profit organizations. Electrica can make donations to profitable organizations that are striving to support activities like the ones listed in article 3.2.3, provided that integrity and transparency are ensured.

 

3.3.2 The eligibility of Beneficiaries’ projects will be judged also considering any other eligibility provisions set out in this policy.

 

3.4 Noneligible projects

 

3.4.1 Electrica will not make donations to individuals or private accounts or any persons or organizations that could damage Electrica’s reputation. In addition, Electrica will not make donations to any political organizations or initiatives. Electrica will not sponsor religious organizations if they are not engaged in a significant project beneficial for the community.

 

3.4.2 Sponsorships not accepted

 

Electrica will not sponsor any projects which:

  • Conflict with Electrica’s values or objectives;
  • Do not support or promote Electrica’s values or objectives;
  • Are harmful to health;
  • Are related to tobacco and alcohol or with tobacco/alcohol products or any other products that are harmful to health;
  • Hinder or have the potential to hinder Electrica in conducting its business;
  • Request Electrica to explicitly support or seem to support products and services of the beneficiary of the sponsorship;
  • Do not show real willingness or capacity to fulfil the obligations or expectations of a sponsorship (prior cooperation with that organization/institution/beneficiary is evaluated).

 

3.5 Sponsorship and donation criteria

  • Transparency: The donation/sponsorship has to be transparent, its beneficiary has to be known, and the purpose of such donation/sponsorship should be revealed and verifiable.
  • Purpose: The donated amount shall contribute to a purpose relevant to the sector described above.
  • Cost: The cost needed to implement the project/action under the Sponsorship/Donation shall be justified and detailed.
  • Reputation/trustworthiness of the beneficiary: If possible, the integrity of the beneficiary will be evaluated.
  • Strategic Framework of Donations/Sponsorships: All Donations/Sponsorships must meet Electrica’ strategy.
  • Benefits given to Electrica: The beneficiary must provide visibility and business reciprocity opportunities with financial impact. This criterion does not apply to Donations.
  • Previous relations with Electrica: The previous positive experience influences the evaluation of a new application in a positive manner.
  • Availability: The criteria are valid internationally (possible exceptions: tax deductibility).

 

Note:

Sponsorship is a non-deductible expense for the company. However, the sponsorship amount can be deducted from the due corporate tax if conditions required by tax legislation are cumulatively met.

 

3.6 Benefits given to Electrica

 

3.6.1 Benefits from Sponsorships

 

The beneficiary must provide Electrica with visibility and business reciprocity opportunities with financial impact. Specifically, if Electrica sponsors events, activities, programs, goods or services, some or all of the following benefits should be anticipated:

  • Rights to rename/associate the name;
  • Confirmation as a sponsor, its logo being included in all relevant communications, except when it is forbidden by law;
  • Opportunities to award brand names;
  • BTL activities (that do not involve payments or fees);
  • Invitations/tickets to events for free/reduced price;
  • Advertising opportunities;
  • Exclusive images or footage;
  • Reciprocal links to web sites;
  • Media rights for the transmission of ATL communications (involving payments or fees);
  • Manufacture of products and materials;
  • Promotional Sales;
  • Exclusivity in the respective field.

 

Beyond tangible benefits mentioned above, sponsorships are an opportunity to improve the company’s profile, promote key messages and build new relationships with all shareholders or those concerned.

 

3.6.2 Benefits from Donations

 

Electrica may require the recognition of its donor capacity as the sole benefit resulted from granting a donation.

 

3.7 Relevant policies and legislation

 

Electrica has a number of other policies in the Code of Ethics and Professional Conduct, which may be relevant and should be considered in the decision making process. Each sponsorship or donation shall fully comply with the applicable national and international legislation (laws against bribery, anti-corruption legislation, cultural sponsoring according to specific provisions).

 

3.8 Processes and procedures

 

3.8.1 Donation and sponsorship applications

 

All sponsorship/donation applications must be made in writing and addressed to the Marketing, PR and CSR Service, making sure to include the following details (download “here” the online application form):

 

  • Name of the organization, phone number, address and contact person;
  • The purpose of the action/program/event for which support is requested, including background information;
  • The aimed amount or support type;
  • Results to be obtained through the support given;
  • Benefits which result from the given support;
  • Other possible financing sources.

 

Applications must be received by the company in a reasonable time prior to anticipated completion.

 

3.8.2 The decision making process for donation and sponsorship applications

 

3.8.2.1 Approval of donations or sponsorships (unless support is granted in case of natural disasters)

 

In case of positively evaluated Sponsorships/Donations with the help of the  especially created committee for Evaluation and Selection, Marketing, PR and CSR Service, a proposal that will be signed by the head of department  will be  sent  to the General Manager for approval. If the General Manager approves such sponsorship/donation, a note which will be submitted for approval by the Board of Directors of the company is prepared.

 

The flow process consists of:

  • Positive evaluation from the Marketing, PR and CSR Service, approval by the General Manager/approval by the Board of Directors;
  • A donation or sponsorship contract will be signed irrespective of the value of such donation and sponsorship;
  • Implementation of the donation/sponsorship;
  • Evaluation;
  • Payment, in accordance with the payment terms approved by the competent departments;
  • The budget should be monitored step by step.

 

3.8.2.2 Refusal of Sponsorship/Donation applications

 

In case of negatively evaluated Sponsorships/Donations a refusal letter or email explaining the reasons for rejection will be sent to stakeholders (telephone information is also accepted).

 

3.8.2.3 Applications submitted directly to the General Manager’s office

 

Applications submitted directly to the General Manager’s Office will be redirected to the Marketing, PR and CSR Service in order to be introduced into their normal evaluation process

 

3.8.2.4 The decision making process for granting Support in case of Natural Disasters

 

In case of natural disasters or major events with great relevance to the public (such as tsunamis, fires, terrorist attacks, accidents, floods), decisions on participation and contribution of Electrica to the public activities will be taken rapidly and in a pragmatic manner, taking into consideration an extended action at company level.

 

Decisions related to:

  • Activities regarding the donation;
  • Benefits in kind;
  • Sums of money and services;
  • Financial and value framework ;
  • Recipients of donations;
  • Strategic business areas and
  • Support communications.

 

Decision maker factors:

  • The Board of Directors;
  • General Manager;
  • Head of Marketing, PR and CSR Service;
  • Evaluation and Selection Committee (consisting of the following company representatives: Head of Marketing, PR and CSR Service, representative of Ethics and Sustainability Department, representative of the Legal Department and representative of the Financial Department).

 

3.8.3 Donation and Sponsorship contracts

 

Donation contracts shall be signed each time in order to avoid any breach of the national law. In case of sponsorship, a contract will be prepared and signed in original by the competent person who represents and binds the company, and has the right of signature. As appropriate, contracts may also include further information. Contractual terms and conditions will vary depending on the nature and details of sponsorship. However, in general, this information relates to:

 

  • Names of all parties;
  • Sponsorship description and objectives;
  • Contract period;
  • Contact persons;
  • Statements according to which:
  • Sponsorship does not require the general support from the company for the activities of another party;
  • The Company may submit to vote the content of all materials to ensure that there are no other obligations; the content will not be made public without the appropriate consent of the company;
  • Sponsorship does not hinder nor affect in any way the exercise by the company of regulatory and inspection functions;
  • Personal benefits will not be granted to the employees of the company;
  • Planning for sponsorship management;
  • The benefits of the party that receives sponsorship and of the Company;
  • How the  sponsorship relationship will be used by its beneficiary and the Company;
  • Access to information;
  • Ownership, protection and use of logos and other intellectual property rights;
  • Management, including financial and administrative reporting, responsibility for advertising and promotion, supervision and reprogramming of events (where applicable);
  • Insurance, including public liability and professional insurance corresponding to sponsorship;
  • Payment arrangements;
  • Monitoring, evaluation and audit requirements;
  • Dispute resolution;
  • Privacy;
  • Termination and suspension;
  • Effects of change in policy or legislation;
  • Renewal and renegotiation

 

3.9 Monitoring Sponsorship/Donations – Evaluation

 

The sponsorship or donation is evaluated by the company according to evaluation criteria.

 

  1. The beneficiary must submit a concise report to the Marketing, PR and CSR Service, after completing the Donation/Sponsorship process, noting all tangible results implemented by it.

 

  1. 2. After completing the Donation/Sponsorship an internal evaluation report needs to be prepared. In case of a long-term sponsorship, a concise report has to be transmitted every six months as well as an annual report, both in writing. Such report may be part of the financial report based on a written agreement. The type of report will be set out according to the company needs.

 

3. The company needs to, in general, monitor the following:

 

  • Compliance with the written contract and company policies;
  • Achievement of sponsorship or donation objectives;
  • Good management and record keeping;
  • Timely submission of reports;
  • The benefits to the company and the community;
  • Fulfilment of sponsorship/donation criteria;
  • Safety and risk.

 

If the situation so requires, the Evaluation and Selection Committee will review monitoring reports and issue an evaluation form describing the proper implementation of the donation/sponsorship. Sponsorship or donation will not be renewed unless there is a positive evaluation.