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Code of Conduct for all Trusts and Units
of the Auroville Foundation
Whereas, Auroville was founded by The Mother on the 28th day of February 1968
and envisioned by her as a universal township dedicated to Human Unity and
international understanding based on the teachings of Sri Aurobindo;
And Whereas the Mother has laid down the aims and ideals of Auroville in the
Auroville Charter (1968), To Be A True Aurovilian (1970) and in numerous other
messages and writings, such as “A Dream” (1954);
And Whereas the Auroville Foundation Act, 1988, was enacted with a view to
making long-term arrangements for better management and further development of
Auroville in accordance with the Auroville Charter and for matters connected
therewith and incidental thereto;
And Whereas the Secretary of the Auroville Foundation, appointed u/s 15 (1) of the
Auroville Foundation Act, 1988, in exercise of the powers conferred u/s 7(1)(a) of the
said Act has been issuing Office Orders since May 14, 1992, for the creation of new
Units and appointing executives for the said undertakings to carry on, for and on
behalf of the Governing Board of the Auroville Foundation, the management of said
undertakings in keeping with the aims, objectives and voluntary nature of the said
undertakings;
And Whereas the Governing Board of the Auroville Foundation, during their 45th
Meeting held on August 3, 2014, approved the Guidelines between Trusts and Units,
on the recommendation of the Working Committee and the Funds and Assets
Management Committee (FAMC) of the Residents’ Assembly, constituted under the
Auroville Foundation Rules 1997.
And whereas the Office of the Secretary, Auroville Foundation, further to the
approval of the Governing Board discontinued the issue of Office Orders and
authorized the FAMC to issue orders for the creation of new Units under Trusts of
the Auroville Foundation, appointment of Unit executives and closure of Units;
And Whereas the Working Committee and the Funds and Assets Management
Committee of the Residents’ Assembly of the Auroville Foundation consider it
necessary and expedient to replace the aforementioned Guidelines between Trusts
and Units of the Auroville Foundation with a Code of Conduct for Trusts and Units
of the Auroville Foundation;
Now therefore, the Working Committee and the Funds and Assets Management
Committee hereby make the following Code of Conduct for Trusts and Units of the
Auroville Foundation.
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1) PURPOSE OF CREATING TRUSTS AND UNITS
a) To create abundance for the growth of Auroville.
b) To contribute towards building a common collective prosperity.
c) To express beauty and harmony in matter.
d) To build and strengthen a shared economy.
e) To provide a healthy and sustainable environment for the development of
people from Auroville, the Bioregion, India and the World.
f) To develop while maintaining a harmony with nature and environment.
g) To support fair trade practices
h) To support fair and lawful labor relations.
2) GENERAL PRINCIPLES OF CONDUCT
a) All actions as a service and offering to the Divine.
b) A spirit of non-ownership above personal possession.
c) Conduct of stewardship on behalf of all the residents and Humanity as a
whole.
d) Trusteeship on behalf of the collectivity.
e) Adherence to Indian Laws and the Spirit of Auroville.
f) Transparent in representations.
g) Generosity and sharing of resources.
3) DEFINITIONS
a) In this Code of Conduct, unless the context otherwise requires,
i) “Act” means the Auroville Foundation Act, 1988 (54 of 1988);
ii) “Auroville Maintenance” is the unit under which the Office Order for
“Auroville Maintenance” has been issued.
iii) “BoT” (Board of Trustees) means all the Trustees of a Trust of the
Auroville Foundation;
iv) “Code of Conduct Level” means any number embedded in this Code
of Conduct which indicates a number required, a threshold, a specific
time period, etc., and may include any whole number or real number.
v) “Code of Conduct Guideline” means any clause in this Code of
Conduct.
vi) “Executive” means a person appointed by the Funds and Assets
Management Committee of the Auroville Foundation to manage a Unit
under the Trust.
vii) “External Entity” includes any individual, organization, company,
activity, etc. outside of the Auroville Foundation.
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viii) “in writing” may include signed hard copy or email communications
with delivery receipt.
ix) “Internal Entity” includes any individual, group, unit, trust, activity,
etc. that is part of Auroville and is not Auroville Maintenance.
x) “FAMC” means the Funds and Assets Management Committee of the
Residents’ Assembly of the Auroville Foundation;
xi) “Governing Board” means the Governing Board of the Auroville
Foundation.
xii) “Loan” means any amount advanced that is not billed materials or
services.
xiii) “Loan Group” is a sub-group constituted by the FAMC whose primary
responsibility is to review and approve/reject applications for loans to
be issued by Auroville Maintenance as per the guidelines determined
by the FAMC.
xiv) “Register of Residents” means the Register of residents of Auroville
maintained by the Secretary of the Auroville Foundation under the Act;
xv) “Rules” means the Auroville Foundation Rules, 1997;
xvi) “Secretary” means the Secretary of the Auroville Foundation;
xvii) “Trust” means a Trust of the Auroville Foundation;
xviii) “Trustee” means a person appointed to manage a Trust;
xix) “Unit” means an entity under a Trust;
xx) “Working Committee” means the Working Committee of the
Residents’ Assembly of the Auroville Foundation;
b) All other words and expressions used herein and not defined but defined in
the Auroville Foundation Act, 1988 (54 of 1988) shall have the meanings
respectively assigned to them in that Act.
4) ESTABLISHMENT OF AN INTERMEDIARY BODY BETWEEN THE BOARD
OF TRUSTS (BoTs) AND THE FAMC. The BoTs together with the FAMC shall
constitute an Intermediary Body. The Intermediary Body will be an advisory
body that will aid FAMC in its decision-making by making reasoned
recommendations on applications and requests in all matters related to units and
Trusts. The FAMC shall consider these recommendations before making final
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decisions provided the recommendations are provided in an agreed-upon
timeframe.
5) SETTING UP OF A TRUST
a) To create a Trust under the Auroville Foundation an application is made to
the FAMC. The application will contain the objectives of the Trust as well as
the names of its proposed Trustees. The FAMC submits the application and
its approval to the Working Committee.
b) Once both the FAMC and Working Committee have given their approval, the
Working Committee, in accordance with the Act will seek the approval of the
Governing Board for the creation of the Trust.
c) As soon as the Governing Board has approved the creation of the Trust, the
Secretary will execute and the Working Committee will facilitate the
execution and registration of the Trust Deed.
6) SETTING UP OF A UNIT
a) To create a Unit under a Trust of the Auroville Foundation an application is
made to the BoT of the Trust under which the Unit is to be created. The
application will contain the activities and objectives of the Unit as well as the
names of its proposed Executives.
b) The BoT shall submit this application with its recommendation to the FAMC.
c) Once the FAMC has given its approval, the BoT will pass a resolution to
create the Unit.
d) The FAMC will subsequently issue a resolution creating the Unit and
appointing the Executives.
7) ELIGIBILITY FOR BEING TRUSTEE OR EXECUTIVE
a) A resident of Auroville, whose name is entered into the Register of Residents
maintained by the Secretary, is eligible to be Trustee and/or Executive.
b) A person whose name is not in the Register of Residents can not be appointed
Trustee or Executive. However, they can be appointed member of a
Management Committee.
c) Every Trust can establish a management board upon approval by the FAMC
and the Working Committee.
i) The Management Board can be composed of both residents and
non-residents.
ii) Non-residents must be in the minority, not more than one-third of the
members.
iii) The Trust will submit the MB Terms of Reference which includes: time of
office, roles and responsibilities.
8) NUMBER OF TRUSTEES / EXECUTIVES
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a) A Trust has no less than three trustees at any time, one of which is not a
live-in partner or family member of one of the other trustees.
b) A Unit may have no less than two Executives at any time. A unit with an
annual turnover exceeding Rs. 100 lakhs, will have at least three executives,
one of which is not a live-in partner or family member of the other executives.
9) APPOINTMENT AND TERM OF OFFICE OF TRUSTEES / EXECUTIVES
a) Trustees will be appointed / re-appointed jointly by the Working Committee
and the FAMC. The FAMC will consult the BoT and may consult any group
at their discretion on the appointment of a new trustee or the re-appointment
of a trustee.
b) A Trustee holds office for a period of five years and may be reappointed,
except as specified in Section 10), below.
c) Executives will be appointed by the FAMC. The FAMC will review unit
executive appointments during the first 3 years from the initial appointment.
Following a review, the FAMC may permanently appoint, terminate or
reappoint executives for a limited period of time.
10) RESIGNATION, REPLACEMENT, VACANCY, AND REMOVAL OF
TRUSTEES AND EXECUTIVES
a) A Trustee / Executive may resign by giving a written notice to the BoT. The
resignation will be effective from the date as decided by the FAMC. The
FAMC may request a statement of accounts of the Trust / Unit (Trial Balance
& or Balance Sheet) and a recommendation for the replacement for the
resigning Trustee / Executive before approving the resignation request.
b) A recommendation for replacement of the resigning Trustee / Executive may
be made by the BoT and sent to the FAMC. The replacement of new Trustees
/ Executives shall follow Section 9), above.
c) The office of the Trustee / Executive will become vacant when any of the
following events occur:
i) Death of the Trustee / Executive.
ii) The Trustee / Executive has been convicted of a criminal offence under
the Indian Penal Code.
iii) The Trustee / Executive has been removed by the Working Committee
jointly with the FAMC as stipulated in Section 10)d), below
d) The Working Committee jointly with the FAMC may remove a Trustee /
Executive at any time if any one of the following events occur:
i) The Trustee / Executive is mentally or physically incapable of
functioning effectively as Trustee / Executive, as certified by a
qualified medical practitioner.
ii) The Trustee / Executive is absent from Auroville for a continuous
period exceeding 180 days without informing the FAMC in writing
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within the first 3 months of the absence.
iii) The Trustee / Executive is absent from Auroville for a continuous
period exceeding 18 months with or without informing the FAMC.
iv) The name of the Trustee / Executive has been removed from the
Register of Residents maintained by the Secretary, Auroville
Foundation.
v) The FAMC concludes that the Trust or Unit is mismanaged. Before
concluding that a Trust / Unit is mismanaged, the FAMC will give a
fair hearing to the Trustees / Executives and thereafter shall submit its
findings to the Trustees / Executives and the Working Committee.
vi) The FAMC concludes that the Trust / Unit has failed to submit the
annual accounts for two consecutive years in the form stipulated.
vii) Upon closure of the Unit as specified in Section 15) of this Code of
Conduct.
viii) The Working Committee jointly with the FAMC is, after following
established internal processes, of the view that in the larger interest of
the community a change or removal of Trustee / Executive has to be
effected.
e) When the vacancy of a Trustee /Executive occurs, and if the FAMC
determines that any of the remaining Trustees / Executives is not capable of
managing the Trust / Unit, they may, with approval of the Working
Committee, remove such Trustees / Executives, and replace them in
accordance with Section 9) above.
11) OVERALL SUPERVISION OF THE TRUST / UNIT
a) The Trust / Unit is subject to the general superintendence of the Auroville
Foundation and the Trustees / Executives shall abide by all directives that
may be issued from time to time by the Governing Board.
b) The FAMC shall oversee the functioning of the Trusts and Units and may take
any action as is required. The Trustees / Executives shall abide by all
directives that may be issued by the FAMC.
c) The surplus income of the Trust / Unit shall be utilized only to further the
aims and objectives of Auroville.
d) Every Trust can establish a management board upon approval by the FAMC
and the Working Committee. Prior to approval the Trust must submit its
Terms of Reference, including terms of office of members; appoint and
dismissal of board members; and roles, responsibilities, and rights of the
management board.
i) The Management Board can be composed of both residents and
non-residents.
ii) Non-residents must be in the minority, and may not constitute more
than one-third of the members.
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12) GENERAL MANAGEMENT OF THE TRUST / UNIT
a) Except as otherwise mentioned in this Code of Conduct the
Trustees/Executives shall manage the Trust/Unit autonomously.
b) Neither the FAMC nor the Trustees shall normally intervene in the day-to-day
management of the Unit. The FAMC may temporarily intervene if it
determines that the Executives of a Unit require assistance and may appoint a
management committee to assist the unit in the interim. In such a case, the
FAMC will document the reasons, establish a time frame or criteria to be met
to return the unit to autonomous management, and inform the BoT. The
powers and term of the management committee will be determined by the
FAMC.
c) A Unit may only undertake a new activity, which is not specifically
mentioned in the FAMC Resolution for creation of the Unit, after having
received the prior written permission of the BoT and FAMC.
d) Accounting.
i) The Trust/Unit will maintain proper accounts which are open for
inspection at any time by any person so authorized by the FAMC, the
Working Committee, or the Secretary of the Auroville Foundation.
ii) Trusts/Units must keep accounts for income generating services and
sales separate from accounts for non-profit activities, if any.
iii) All Trusts and Units must submit their accounts to the Secretary,
Auroville Foundation as notified by the Auroville Foundation.
iv) Trusts/Units may only declare allowable business expenses as
described in Appendix 3: Allowable Business Expenditure.
e) Bank Accounts.
i) Subject to a Trust resolution of the BoT the Executives are authorized
to open bank accounts for carrying on the activities of the Unit.
ii) Such accounts may be operated by any one Executive or by the
Executives jointly, as specified in the Trust resolution.
iii) Units must inform the Trust of all of the bank accounts they operate,
and provide the following information: bank, branch, account name,
account number, and account holders.
iv) Trusts must maintain a register of bank accounts operated by Units
under the Trust.
v) Bank statements are open for inspection at any time by any person so
authorized by the FAMC, the Working Committee, or the Secretary of
the Auroville Foundation.
f) Donations. The Trust/Unit may receive donations which must be channeled
through the Unity Fund, unless otherwise approved by the FAMC.
g) Loans. A Trust/Unit may request loans or issue loans as per the loan
regulations in Appendix 1: Loan Regulations.
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h) Financial Liabilities. Unit/Trust may create financial liabilities up to 25% of
the capital fund of the Unit/Trust. (Capital fund of the Unit/Trust means the
capital of the Unit/Trust as per the end of the previous financial year and
excludes - in the case of a Trust - the accumulated capital of the Units under
the Trust). This limitation applies to all cumulative liabilities of the
Unit/Trust as represented on its balance sheet. Any creation of liabilities
above this amount requires prior approval of the FAMC.
i) Immovable Assets.
i) The Trust/Unit may acquire immovable assets in the name of the
Auroville Foundation only with the approval of the FAMC and the
Secretary of the Auroville Foundation.
ii) Unit/Trusts are Stewards, not owners, of immovable assets.
iii) Any transfer of the stewardship of immoveable assets from one Trust
to another Trust, or from a Unit of one Trust to another Trust, or from a
Unit of one Trust to a Unit of another Trust shall only be done with the
prior approval of the BoTs of both Trusts and the prior permission of
FAMC. Transfers of immovable assets between Units or between
Trusts must be routed through the Unity Fund.
j) Agreements with External Entities. The Unit Executives may enter into
agreements with external entities under the following conditions:
i) If the total amount of agreements that are simultaneously in effect
create financial liabilities which exceed 50% of last year’s turnover, the
prior approval of the BoT is required.
ii) If the total amount of agreements that are simultaneously in effect
create financial liabilities which exceed 100% of last year’s turnover,
the prior approval of the FAMC approval is required.
k) The Trust/Unit may lease or rent immovable property not owned by the
Auroville Foundation without the approval of the FAMC as long as the
liabilities thus created do not exceed 10% of the turnover. Above 10% the
permission of the FAMC is required.
l) The Trust/Unit may lease or rent out immoveable property owned by the
Auroville Foundation under the following conditions:
i) If the parties belong to the Auroville Foundation, the Trust / Unit must
inform the BoT and submit the agreement to the BoT.
ii) If the parties do not belong to the Auroville Foundation:
(1) A new lease or new rent agreement requires both BoT and FAMC
approval.
(2) A proposal to extend and/or amend an agreement that has been
previously approved must be submitted to the BoT and FAMC for
approval before the extension and/or amendments are put into
effect. If neither the FAMC nor the BoT have rejected the
agreement within three weeks of receipt of the agreement, it may
stand approved.
(3) Units may apply to the FAMC for an exemption from Sections
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12)l)ii)(1) and 12)l)ii)(2).
m) Audits. The FAMC shall arrange for audits of the Trusts/Units, as may be
required.
n) Capital Investments. The Executives may make capital investments below
25% of the capital fund of the Unit without BoT approval. This limitation
refers to all cumulative capital investments done in one financial year of the
Unit as represented in its balance sheet. Any capital investment above this
amount and up to 100% of the capital fund requires prior approval of the BoT,
and the FAMC must be informed. Any capital investment above the value of
the capital fund requires prior approval of the FAMC.
o) Contributions.
i) The Trust/Unit will contribute to the Unity Fund of the Auroville
Foundation as per the contribution guidelines in Appendix 2:
Contribution Guidelines.
ii) Trusts/Units may make contributions to other Trusts/Units subject to
the following conditions:
(1) The Trust/Unit has first fulfilled its obligation to contribute as per
Section 12)o)i).
(2) if the amount is equal to or greater than Rs. 1 lakh and less than
Rs. 10 lakhs per year, the Executives shall obtain prior approval
from the concerned BoT(s), and shall inform the FAMC.
(3) if the amount is equal to or greater than Rs. 10 lakhs per year, the
Executives shall obtain prior approval from the concerned BoT(s)
and the FAMC.
p) Reports. The Executives of Trusts/Units will submit a performance report as
and when requested by the FAMC.
q) Lawsuits and legal proceedings. The Unit Executives will inform the BoT
and FAMC without delay of any lawsuits and other legal proceedings relating
to the Unit.
13)INVESTIGATION AND SUSPENSION OF EXECUTIVES
a) The FAMC, in consultation with the Working Committee, may decide to
order an investigation into the accounts and general management of a Trust
or Unit and suspend the Trustee(s) / Unit Executive(s) pending such
investigation.
b) The FAMC, in consultation with the Working Committee, may decide to
appoint an interim Trustee or Unit Executive and suspend a Trustee/Unit
Executive in case it has reasons to believe that a Unit or Trust is not being
managed properly.
14) DORMANCY OF THE TRUST
A Trust can be made dormant by the FAMC in agreement with the BoT.
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15) CLOSURE OF THE UNIT
a) A Unit may be closed if any one of the criteria below are met:
i) by the FAMC in agreement with the BoT and the Executives.
ii) by the FAMC after consultation with the BoT if the Unit has been
dormant for two financial years.
iii) by the FAMC upon the recommendation of the BoT that the Unit is
heading for insolvency.
iv) by the FAMC and the Working Committee, if, after due process, they
jointly determine that the unit has been mismanaged or is financially
unviable.
v) by the FAMC and the Working Committee if, after due process, they
are jointly of the view that closure of the Unit is in the interest of the
community.
b) When ordering the closure of a Unit, the FAMC may appoint a person not
associated with the Unit as interim Executive to monitor and/or effect closure
proceedings.
c) All assets and liabilities of the Unit shall be turned over to the Trust on the
date the Unit is declared closed.
d) In case of blatant financial mismanagement as assessed by the FAMC the
Executives will be jointly and individually liable for the payment of any of the
Unit’s outstanding liabilities upon the closing of the Unit, and will hold
harmless and indemnify the Trustees for any liability resulting from the
Executives’ mismanagement of the Unit.
e) Upon closure of a unit, stewardship of any land associated with the unit shall
be terminated.
f) Servicing of liabilities, unless otherwise decided by the FAMC, will follow the
following order of priority:
i) Statutory liabilities
ii) Banks
iii) Suppliers (Outside)
iv) Auroville Maintenance, Unity Fund
v) Suppliers (Auroville)
vi) Unsecured loans
vii) Loans from Executives / Trustees
16) DISPUTES
Disputes between Trusts, between Trusts and Units, between Trusts and
Aurovilians, between Units, and between Units and Aurovilians shall be resolved
in accordance with current Auroville Conflict Resolution Policy as approved by
the Residents’ Assembly.
17) AMENDMENTS OF CODE OF CONDUCT LEVELS AND GUIDELINES
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a) Code of Conduct Levels may be amended by the FAMC.
b) A Code of Conduct Guideline, with the exceptions noted in 13 (a) above, may
be amended jointly by the Working Committee and FAMC.
18) CHANGE OF CODE OF CONDUCT
This Code of Conduct may be amended jointly by the Working Committee and
FAMC subject to the final approval of such changes by the Governing Board.
As approved by the Working Committee on ................., 2017.
As approved by the FAMC on .................. 2017.
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Appendix 1: Loan Regulations
1) Documentation. The terms of a loan must be documented and signed. The
terms of a loan must include:
a) Loan Issuer.
b) Loan Receiver.
c) Starting date of the loan.
d) Loan Amount
e) Grace Period
f) Contribution Rate
g) Repayment Schedule including frequency of payments and repayment
period.
h) Signature of the Loan Issuer
i) Signature of the Loan Receiver
j) Collateral provided, if any
2) Loans issued from Auroville Maintenance.
a) Loans less than Rs. 1 lakh can be approved by the executives of Auroville
Maintenance.
b) Loans equal to or greater than Rs. 1 lakh and less than Rs. 5 lakhs must be
approved by the Loan Group, which will have at least one member who is a
representative of Auroville Maintenance.
c) Loans equal to or greater than 5 lakhs must be approved by the FAMC. The
FAMC will consult with Auroville Maintenance before final approval is
given.
3) Loans issued from Internal Entities.
a) The issuance of loans from registered units, trusts, or activities may not
exceed the capital of the loan issuer. The loan itself may not be used to invest
in any financial instrument including but not limited to fixed deposits, mutual
funds, currency or commodity speculation, venture capital, loan kiting, etc..
Such practice may result in the immediate dismissal of the Unit Executive /
Trust Trustee without compensation.
b) Internal Entities may issue loans to other Internal Entities under the following
conditions:
i) the loans are issued in accordance with Appendix 1: Loan Regulations,
Section 3)a).
ii) loans of more than 2 lakhs and less than Rs. 5 lakhs must be approved
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by all of the unit executives in writing prior to the issuance of the loan.
The executives must provide the Trustees and the FAMC with the
signed terms of the loan.
iii) Loans equal to Rs. 5 lakhs and less than Rs. 10 lakhs must be approved
by the BoT. If approved, the BoT must provide the FAMC with the
signed terms of the loan.
iv) Loans equal to or greater than Rs. 10 lakhs must be approved by the
FAMC. The Unit Executives must provide the BoT with the signed
terms of the loan.
v) The FAMC will maintain a register of outstanding loans made between
units and units and trusts.
vi) Loans to employees may be made on the condition that they will be
repaid within 12 months. Extension of time for repayment exceeding 12
months shall be duly communicated in writing to the BoT and such
extension shall be permissible only with prior approval of the BoT.
c) Contribution Rate. Internal Entities may collect a contribution at a rate up to
the one year Fixed Deposit rate as published by the State Bank of India at the
date of the loan issue.
d) Repayment of loans issued by Unit Executives to the Unit:
i) requires the approval of all of the unit Executives, and must be in
accordance with Section 15)f).
ii) is not permissible if it results in the capital account falling below zero.
4) Loans issued by External Entities.
a) Loans less than Rs. 5 lakhs must be approved by the BoT.
b) Loans equal to or greater than Rs. 5 lakhs must be approved by the FAMC.
c) Interest. Loans that exceed the one year Fixed Deposit rate of interest
published by the State Bank of India must be approved by the FAMC.
5) Repayment in Case of Insolvency. In case a unit or trust becomes insolvent,
repayment of loans shall be in accordance with Section 15)f). Repayment of loans
taken that have been given which are not in accordance with these guidelines are
the responsibility of the unit executive of the loan recipient.
Appendix 2: Contribution Guidelines
1) All Trusts, Units, Sub-Units, and Activities that generate revenues shall
contribute a minimum of 33% of net profit to Unity Fund, unless otherwise stated
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in the Contribution Guidelines, “Exceptions to 33% net contribution”.
2) Contributions are not refundable.
3) Overpayment of contributions will be used to cover contribution deficits from
previous years, and may be used to cover contribution dues in the future, if
approved by the FAMC.
4) Schedule of Payment. Contributions are expected to be paid each month based
on estimated annual surplus. Balance contributions, if any, based on the annual
income are to be paid by 30 June of the next financial year.
5) Outstanding contribution payments that are not settled by September 1st are
liable for additional contributions at 1% per month.
6) Maintenance Limit on Contribution Calculation. The total of maintenance and
remunerations to Aurovilians for non-business related expenses that exceed Rs.
20,000 per month are not treated as unit expenses when calculating the
contribution owed and may not be deducted from unit income when calculating
the profit. For example, if Aurovilian X receives Rs. 22,000 in a month, Rs. 2,000
is not treated as an expense and may not be deducted from income when
calculating the unit’s profit.
7) Exceptions to 33% net contribution. Except for the exceptions noted in this
Section all other Contribution Guideline clauses apply.
a) Taxi Services shall contribute 1% of billing.
b) Auroville Eateries shall contribute 5% of billing.
c) Eateries & Other Activities. In the case of units that have both eateries and
other activities, the accounts may not be separated. The contribution shall be
calculated as follows:
i) Eatery shall contributes 5% of billing.
ii) Contribution = Combined profit x 33% of profit less 5% of eatery
billing already contributed. Combined profit = total sales of both
eatery and other activities less total expenses of both.
d) Auroville Learning Activities shall contribute 5% of billing and 33% of profit
adjusted against contributions paid on 5% of billing.
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e) Guest Houses and Home Stays. Guest Houses shall contribute 20% of
billing, and Home Stays shall contribute 25% of billing. Breakfast is included
in the 20% billing calculation. For Guest Houses that provide other meals the
contribution will be 5% on food billing.
f) Exempted Activities. Activities that are exempt from contributions require
FAMC approval to utilize surplus income, and must provide an income and
expense statement to the BCC on a quarterly basis. Quarterly reports are due
before 31 July, 31 October, and 31 January. Each activity must provide an
annual report before 31 April. The following activities are exempt:
i) Activities receiving a recurring budget from City Services, which
covers more than 51% of their annual expenses.
ii) Solar Kitchen
iii) Electrical Service
iv) Telephone Service
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Appendix 3: Allowable Business Expenditure
1) Expenditures are valid business expenditures when they wholly and necessarily
occurred in the commission of the business. Personal, living, or family expenses
are not business expenses.
2) Burden of Proof. If a Unit cannot prove that the expense was business-related,
then it is not allowable. The burden of proof rests with the unit and its executives
and must be documented.
3) Assets have to be found inside the premises of the unit or be otherwise directly
related to the commission of the business. The asset register must indicate where
the assets are normally kept.
4) Transparency Norms. Units will, as part of the balance sheet:
a) provide an itemized asset list (i.e., item by item).
b) list, in a separate schedule the expenses for flight tickets, meals, hotels, and
taxi trips..
5) Flight tickets
a) Units may expense economy class tickets only for business related travel.
b) Any upgrading beyond these guidelines is at the expense of the individual,
not of the unit.
6) Meals. Expenditure for meals must be for business purposes only.
a) Meals during business travel beyond 100 km from Auroville are allowable up
to 3,000 Rs per day on presentation of bills.
b) Business related meals with clients in Auroville and around are allowable.
Vouchers must list the names of the clients and be signed by the unit
executive.
c) Meals with a unit’s management team are allowable once a month only.
d) Social outings with employees are allowable once a year only.
7) Hotels
a) Hotel stays must be directly related to business and the unit must document
that business was conducted throughout the stay. Additional stays must be
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paid from personal funds.
b) Units may deduct up to Rs. 5,000 per day in India and Rs. 10,000 per day
abroad.
8) Taxi Trips. Expenditure for taxi trips are allowable at AC current rate.
9) Vehicles. A unit can only purchase a passenger car and/or motorbike if
demonstrated that the car/motorbike is required for the running of the business.
10) Staff Welfare. Expenditure for staff welfare cannot exceed 10% of all salaries
and wages in a month. Any additional expenditure has to come from the 67% of
net profit.
11) Housing. Contribution for housing can only be made from the 67% part of the
profits before contribution and must be preapproved by the FAMC.
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