INTRODUCTION:

 This policy is framed in terms of Section 135 of the Companies Act, 2013 (the Act) indicating the policy of the company with respect to undertaking certain specified activities by the company towards fulfillment of Corporate Social Responsibility (CSR) of the company.

 BROAD OBJECTIVES:

The aim of this policy is to lay down the parameters within which the company can apply allocated funds as per budget towards CSR activities. The subsidiary aim of this policy is to ensure that while meeting those objectives, the company is able to comply with the statutory scheme of the Act so far as it pertains to the Corporate Social Responsibility. In this process, the company aims to carry out certain activities involving budgeted financial outlay for the purpose of promoting the broad social welfare and development of the environment and wellbeing of people. In accordance with the statutory scheme of the Act, it is necessary to ensure that no amount allocated for CSR Activities are directed to provide exclusive benefits to the employees of the Company. Further the CSR Activities shall be undertaken as far as may be possible for the benefit of people in the local areas. Local areas need not be confined to be areas in and around the factories and units of the Company and it could be extended to cover all areas within the State of Tamilnadu without prejudice to accidental or incidental benefit of such activities accruing to people of other States of India. While undertaking CSR Activities the Company shall ensure that there is no discrimination on the basis of caste, creed, rank, race, religion or any other such narrow factors between the beneficiaries who are entitled to avail the benefits of the CSR Activities. The target segment for receiving benefits of any CSR Activity shall be the underprivileged and economically weaker sections of the society. No part of the amount earmarked / allocated for undertaking CSR Activities shall, directly or indirectly, be of any benefit to any political parties or to their cadres exclusively.

CSR ACTIVITIES:

The CSR activities to be pursued by the company are intended to be confined initially to the areas broadly specified hereunder. The CSR committee is entitled to recommend suitable changes from time to time to this policy depending upon changes to the statutory scheme of the Act and other relevant grounds.

Education:

• Formal Schools for Elementary and Primary Education
• Pre-Schools for Child Care.
• Educating Girl children
• Skill Development of Rural Youth

Health care:

• Primary health care centre
• Mother and Child care projects
• Immunization programs with a thrust on polio eradication
• Health care for visually impaired, and physically challenged
• Preventive health care
• Blood Donation, Dental & Eye Checkup Camps, Health Check up Camps, AIDs awareness camps; Camps for educating the masses on food habits, living style and other traditional methods for healthy and long life.

 Sustainable Livelihood:

• Formation of Self Help Groups for women empowerment
• Vocational training through our Machine Shop and thereby creating
• Employment Opportunity
• Watershed development
• Partnership with Industrial Training Institutes

 Basic Infrastructure Development:

• Basic infrastructure facilities (Laying Roads)
• Safe drinking water
• Sanitation & hygiene
• Renewable sources of energy (Tree Plantation, Solar Lights etc.)

 Other Thrust Areas:

While undertaking CSR activities, the company may Endeavour to apply funds allocated for CSR purposes in promoting a hospital for the underprivileged and economically weaker sections of the society and also aim to provide a low cost housing project aimed towards slum redevelopment or rehabilitation. The company may also undertake subject to budgetary allocation, innovative programs for rural development and conservation of natural resources. The company may also undertake skill development projects aimed to develop the skills of rural educated youth without any preference or partiality in order that such rural youth are able to gain a way of life with dignity and respect. Any activity undertaken by the company in this respect shall be aimed at harnessing the talents of the rural youth towards the agricultural sector and the MSME sector.

OPERATION OF THE POLICY:

The Company shall contribute towards the social and economical development of the Community

The policy shall apply to all CSR initiatives and activities to be undertaken by the Company.

CSR COMMITTEE:

The CSR Committee of the Company shall be constituted comprising of three or more Directors if mandatory under the provisions of the Companies Act, 2013 and the rules thereunder. The Board of director The Committee shall undertake the following obligations:

• Formulate and recommend to the Board a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company
• Provide perspective and guidance to the Board of Directors on matters relating to CSR.
• Formulation of the Annual Action Plan
• Recommend the amount to be spent on the CSR activities
• Ensure that CSR Activities are undertaken directly or through registered Implementation Agencies who meet the eligibility criteria prescribed under the CSR Policy Rules
• Monitor the Company’s CSR policy from time to time
• Ensure legal and regulatory compliance relating to CSR as provided under the Act and the Rules
• Provide guiding principles for selection, implementation and monitoring of projects
• Periodically review the effectiveness of CSR spend.

 GOVERNANCE:

• Approving of the CSR Policy and overall governance of CSR will the responsibility of the Board of Directors of the Company
• CSR Committee may recommend one or more employees/ officers of the company for the purpose of implementation, administering and executing of CSR activites in accordance with and in adherence to the terms of this Policy.

 CSR BUDGET, CSR IMPLEMENTATION AGENCIES, ANNUAL PLAN FOR CSR EXPENDITURE

•  The overall amount to be committed to CSR projects in each financial year in accordance with the provisions of the Act as approved by the Board.
• Within the overall budget, specific CSR initiative /project will be identified and by CSR Committee of the Board.
• The Company can also allocate a sum higher than the statutory minimum in terms of the Act and the Rules as regards the CSR budget.
• The Act provides that CSR expenditure shall include all expenditure including contribution to corpus for projects or programmes relating to CSR activities approved by the CSR Committee, except the expenditure on an item not in conformity or not in line with activities under purview of Schedule VII. Hence, all the expenditure including the establishment expenses of the manpower that are engaged full time in CSR activities has to be reported under CSR.

FORMULATION OF ACTION PLAN:

• The CSR Committee shall formulate and recommend an Action Plan for carrying out CSR Activity inter alia the following:
• The Board may alter the Action Plan at any time during a financial year, as per the recommendation of the CSR Committee.

CSR PROGRAMS/PROJECTS PROPOSALS

The CSR Committee recommend proposed projects including implementation year, modalities of execution in the areas/sectors chosen, implementation schedules for the same etc based on the following guidelines:

• The Projects and Programmes relate to the core themes specified in this Policy.
• The Implementation Agencies meet the eligibility criteria and are capable of carrying out the projects proposed to be assigned to them.
• The programs/projects will be implemented within the country and preferably in areas where the Company has its presence.
• Programs/Projects should not be exclusively for the benefit of employees of the company or their family members.
• Projects or Programmes shall not be anything done by the Comapny in its normal course of business.
• Projects or Programmes shall not involve any direct or indirect objectives for business development.

 CSR IMPLEMENTATION

Company may undertake CSR Activities directly or through registered Implementation Agencies.

• Company must identify the CSR Projects or Programmes and categorise them whether the projects or programmes fall within the meaning of “Ongoing Projects” and if so assign a identification number for such projects and programmes so as to keep a record of such projects, facilitate proper accounting, compliances, disclosures, audits, and assessments.
• Company may collaborate with other companies for undertaking projects or programmes or CSR activities provided CSR Committee is in a position to report separately on such projects or programmes. Further, the Board of Directors shall ensure that the funds disbursed for CSR Projects or Programmes in general and for such projects or programmes undertaken in collaborative model are properly accounted, and utilised for the purposes and in the manner as approved by the CSR Committee and the Chief Financial Officer or the person responsible for financial management shall certify to the effect and present such certificates for all the CSR Projects or Programmes of a size not less than Rs.50 Lakhs and irrespective of its size for all Projects or Programmes undertaken under the collaborative model.
• Company may, in consultation with CSR Committee build internal capacity for identifying, recommending, undertaking, supervising, monitoring, assessing the impact of CSR Projects or Programmes undertaken / being undertaken by the Company. Company may engage international experts for designing, monitoring and evaluation of CSR Projects or Programmes or for guiding the capacity building initiatives of the Company.
• In case of Ongoing Project, the CSR Committee may review every such project mandatorily at every meeting and members of CSR Committee may even undertake a physical visit to the project site to review of progress, functioning, impact and any other aspect the Committee may deem fit.
• The Board of Directors shall monitor and review the implementation of every Ongoing Project with reference to the approved timelines and year-wise allocation and if so deemed fit, the Board may require any modifications to be made to any such project for the purpose of smooth implementation of the project within the overall permissible time period.

IMPLEMENTATION AGENCIES

• The implementation agencies, whether established by the Company itself or those which have established track record and have proper registrations under Section 12A and 80G of the Income tax Act, 1961 as well as duly registered with the Ministry of Corporate Affairs as prescribed under the Rules.
• Every Implementation Agency, unless it is established by the Company itself, shall have not less than three years of established track record in undertaking activities similar to the CSR Projects or Programmes for the undertaking of which an agency is being short-listed by the CSR Committee.
• The CSR Committee shall carry out requisite due diligence and ensure that such agencies have not only sufficient track record in undertaking similar activities but also the said track record shows that they are capable of undertaking such activities of the size proposed to be entrusted to them by the Company.
• The CSR Committeee may engage legal and other advisors for such due diligence so as to ensure that such agencies have well established systems and processes with sufficient resources at their disposal in order to be able to carry out such activities in the State / District where such CSR activities are proposed to be undertaken.
• The CSR Committee shall ensure that the Company enters into proper contracts with clearly specified scope of work, definition and description of the specific projects and programmes, time lines, schedule of release of payments, reporting systems, supervision and monitoring aspects and proper scope for audits and impact assessment, consequences of breach of terms and dispute resolution.
• Such implementing agencies shall be mandatorily required to provide reports on the progress of the project at the end of every quarter.
• No CSR Project or Programme shall be undertaken directly by the Company if the outlay for a chosen CSR Project or Programme is not less than Rs.50 Lakhs or if it is an “Ongoing Project”.

CSR EXPENDITURE:

•  The Company shall ensure that it spends in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years.
• The Board may approve CSR Projects or Programmes that involves an outlay of more than the amount mandatorily required to be spent in a financial year and such excess may be carried forward towards the amounts required to be spent in succeeding three financial years, provided such amounts shall not include any surplus generated out of the project and further such carrying forward and setting off shall be approved by the Board of Directors.
• Any surplus generated on account of or from any CSR Activity shall be ploughed back and spent on CSR Projects or Programmes. Any such surplus shall not form part of the business profits of the Company.
• The administrative overheads shall not exceed 5% of the total CSR expenditure of the Company as stated in the Rules from time to time. All expenditure towards the programs to be diligently documented

 SURPLUS AND UNSPENT CSR OBLIGATIONS

• If in a financial year there remains unspent CSR amount due to non-commencement of the project or for any other operational reason and if the CSR project is such that the implementation of which will be a multi-year project, then the Company has to deposit such unspent amount in a separate account tilted Unspent CSR Account of the Company before the expiry of thirty days from the date of close of a financial year.
• The CSR Committee shall ensure that any project which has been classified as an “Ongoing Project” is a multi-year project undertaken or proposed to be undertaken by the Company and it does not have timelines exceeding three years excluding the financial year in which the project has commenced or is scheduled to be commenced.
• Amount lying in the Unspent CSR Account should be utilised and spent for the multi-year project earmarked for that purpose by the Company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year or such other period specified from time to time.
• If the Board of Directors upon recommendation of the CSR Committee is of the opinion that there being no identifiable projects for CSR spend or due to such justifiable reason that the Annual Action Plan and the budget set forth could not be implemented then the amount which are unspent have to be transferred to the specific fund notified by the Government or until then to a fund included in Schedule VII within a period of six months of the expiry of the financial year or such other period specified from time to time.
• If any surplus generated on account of or from any CSR Activity could not be ploughed back into the same project, it shall be transferred to the Unspent CSR Account and spent in pursuance of CSR objectives of the Company as per the Annual action Plan of the Company or transfer it to the fund specified in Schedule VII, within a period of six months of the expiry of the financial year or such other period specified from time to time.

MONITORING, ASSESSMENT & REPORTING MECHANISM

• The CSR Committee shall institute a transparent monitoring mechanism for implementation of CSR projects or programs or activities undertaken by the Company. A time frame shall be fixed for all CSR projects/ activities for their timely completion with suitable milestones.
• The CSR Committee shall be responsible for submitting to the CSR Committee, at every meeting of the CSR Committee, a detailed report on every CSR Projects or Programmes undertaken by the Company, whether directly or through any Implementation Agency, the date of commencement, duration, date of completion / stage of completion, amount actually earmarked / amount spent as on the date of such report, location of the project, agency engaged for undertaking the project, issues, hindrances, obstacles, delays, deficiencies encountered while carrying out the project and any other information that may be required to be furnished by the CSR Committee from time to time.
• Expenditure incurred on every CSR Project or Programme shall be verified and authenticated by the Chief Financial Officer (CFO) / Head of Finance of the Company. The CFO / Head of Finance shall submit a certificate to the CSR Committee on the expenditure incurred on the CSR Activities undertaken by the Company and any amount remaining unspent, and classify such unspent amounts between those pertaining to “Ongoing Projects” and those pertaining to other projects and ensure that statutory compliances with respect to such unspent amounts are properly carried out.

ASSET CREATION AND TRANSFER

 If the CSR Project or Programme undertaken by the Company requires creation of capital asset, it shall be ensured that such assets are created in the name of either the Trust established by the Company as an Implementing Agency for carrying out CSR Activities or in the name of any public authority specified under the CSR Policy Rules.

 CSR IMPACT ASSESSMENT

The Company shall undertake impact assessment impact if applicable in a financial year as per the rules applicable from time to time

BOARD OF DIRECTORS TO DO THE WORK OF CSR COMMITTEE:

All the activity to be done by the CSR Committee shall be carried by the Board of Directors of the Company if the constitution of the CSR Committee is not mandatory as per the provisions of the Companies Act, 2013 and the rules there.

CSR REPORTING AND DISCLOSURE REQUIREMENTS

• The Board shall disclose the composition of CSR Committee in the Board’s Report.
• CSR Committee of the Board or the Board of Directors will periodically consider the progress report on the various CSR initiatives taken up by the Company.
• Details of the CSR activities undertaken by Company and amounts spent along with reasons for spends below budgeted levels, if any, shall also be reported in Company’s Annual Report under Directors’ Report as per the format specified in the Rules and displayed on the website of the Company. If the Company in any year fails to spend the budgeted amount, it shall be disclosed in the Board’s report along with the reason.
• Further the composition of the CSR Committee if any and the CSR Policy shall also be displayed on the website of the Company.

The Policy will be reviewed annually and if necessary, the Policy may be reviewed at any time to meet any particular need.

Amendments to the Policy as approved by the Board of Directors at their meeting held on 18/12/2021. These changes to come into effect with immediate effect.