Policy on Corporate Social Responsibility

Policy on Corporate Social
Responsibility

1. TITLE.
This Policy on Corporate Social Responsibility (‘CSR’) outlines the CSR Initiative of the Company and the matters connected therewith and incidental thereto.

2. INTRODUCTION
2.1. CSR is a concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives, while at the same time addressing the
expectations of the shareholders and stakeholders.

2.2. CSR is the idea that a company should play a positive role in the community and consider the environmental and social impact of business decisions. It is closely linked to sustainability − creating economic, social, and environmental value – and ESG, which stands for Environmental, Social, and Governance. All three focus on non-financial
factors that companies, large and small, should consider when making business decisions.

2.3. As per the United Nations Industrial Development Organization (UNIDO) CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”).

2.4. Globally, CSR is traditionally broken into four categories: environmental, philanthropic,
ethical, and economic responsibility.

3. OBJECTIVES AND APPLICABILITY.
Pursuant to the provisions of Section 135 of the Act (as defined hereinafter), the following class of Companies are required to undertake CSR Activities, if, in the preceding financial year, it has:

The Company’s Policy on Corporate Social Responsibility outlines its philosophy of CSR activities to be pursued by the Company. Your Company believes that corporate development has to be inclusive and accordingly every corporate has to be responsible for the development of a just and humane society that can build a national enterprise. Your Company commits itself to contribute to the society in ways to make it possible for the organization to fulfill the said commitment.

4. DEFINITIONS

• 1. “Act” means the Companies Act, 2013, read with rules framed thereunder (including any statutory modifications, amendments thereto or re-enactment thereof, the circulars, notifications, regulations, rules, guidelines, if any, issued by the Government of India);
  2. “Board” means the Board of Directors of the Company as constituted from time to time;
  3. “Chairperson” means the chairperson of the CSR Committee;
  4. “Company” means Exotic Innovations Private Limited;
  5. “CSR Activities” means such programs and projects as may be approved by the Board in terms of this CSR Policy.
  6. “CSR Committee’” shall mean a committee of board of directors duly as defined under paragraph 5;
  7. “CSR Expenditure” means the amount recommended by the CSR Committee to be incurred on the CSR Activities in terms of the Act and the Rules and approved by the Board from time to time;
  8. “CSR Policy” means this policy as amended and/or modified or substituted from time to time;
  9. “Director” means a member of the Board of the Company.
  10. “Net Profit” means profits calculated in accordance with the provisions of section 198 of the Act;
  11. “Ongoing Project” means a multi-year project undertaken by the Company in fulfilment of its CSR obligation having timelines not exceeding three years excluding the financial year in which it was commenced, and shall include such project that was initially not approved as a multi-year project but whose duration has been extended beyond one year by the board based on reasonable justification;
  12. “Rules” means the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended and currently in force;

 Any term not defined in this paragraph 4 shall have the meanings assigned to it under the Act and the Rules.

5. CSR COMMITTEE.

• • As required under sub-section (1) to section 135 of the Act, every Company fulfilling the criteria specified therein are required to constitute a Corporate Social Responsibility Committee (‘CSR Committee’) of the Board consisting of three or more Directors, out of which at least one director shall be an independent director. Provided that where a company is not required to appoint an independent director, it shall have in its CSR Committee two or more directors.
  • In line with the requirements of the same, the CSR Committee of the Company with the is duly constituted with following members:

Sl. No.	Name of the Director	Designation
1.	Mr. Balasubramani Krishnappa	Chairperson
2.	Mrs. Lakshmi Padmanabharao Masthi	Member

• • Subject to the Act, the CSR Committee shall meet at such times as it deems fit for the purpose of discharging its’ functions and shall be attended by all the members of the CSR Committee.
  • No member of the CSR Committee shall be personally liable for any decision or action taken in good faith with respect to the CSR Policy.

6. ROLE OF CSR COMMITTEE.

The CSR Committee shall:

1. formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company in areas or subject, specified in Schedule VII, including amendments or modifications thereon from time to time;
2. Prepare an annual action plan in pursuance of its CSR policy, which shall include the following, namely:
   1. 1. the list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;
      2. the manner of execution of such projects or programmes;
      3. the modalities of utilisation of funds and implementation schedules for the projects or programmes;
      4. monitoring and reporting mechanism for the projects or programmes; and
      5. details of need and impact assessment, if any, for the projects undertaken by the company;
3. Perform shall other acts as in accordance with the terms of reference specified in writing by the Board from time to time. In respect of a matter referred to the CSR Committee, the final decision/determination/ interpretation rests with the Board.

7. CSR EXPENDITURE.

• 1. The CSR Committee shall determine and recommend to the Board, the CSR Expenditure, which shall not be less than 2% of the average Net Profits of the Company made during the three immediately preceding financial years to be incurred in a year in accordance with the Act and the Rules.
  2. The Board shall provide all the necessary assistance to the CSR Committee to ensure that the relevant data, including, but not limited to Financial Data are available with the CSR Committee to undertake necessary calculations and recommend the CSR Expenditure.
  3. The Board shall, based on the recommendations of the CSR Committee shall sanction the CSR Expenditure and direct the necessary department and/or personnel of the Company to earmark the amount of CSR Expenditure so approved in pursuance of the CSR Activities of the Company.
  4. The Board shall ensure that the administrative overheads shall not exceed five percent of the CSR Expenditure of the Company for the financial year.
  5. Any surplus arising out of the CSR Activities shall not form part of the business profit of the Company and shall be ploughed back into the same project or shall be transferred to the Unspent CSR Account and spent in pursuance of CSR Policy and /or annual action plan of the Company or transfer such surplus amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.
  6. Where the Company spends amount in excess of the prescribed CSR expenditure, such excess amount may be set off against the requirement to spend up to immediate succeeding three financial years, provided that:
     1. the excess amount available for set off shall not include the surplus arising out of the CSR Activities, if any, as specified in paragraph 5; and
     2. the Board has passed a resolution to this effect.
  7. The amount required to be spent by the Company in pursuance of its’ CSR Activities may be spent for creation or acquisition of a capital asset, which shall be held by –
     1. a company established under section 8 of the Act, or a Registered Public Trust or Registered Society, having charitable objects and having a CSR registration number; or
     2. beneficiaries of the CSR project, in the form of self-help groups, collectives, entities; or
     3. a public authority;

8. IMPLEMENTATION OF CSR ACTIVITIES.

1. The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, directly; or through
   1. 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 section 12A and approved under 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company; or
   2. 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
   3. any entity established under an Act of Parliament or a State legislature; or
   4. 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 section 12A and approved under 80 G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.
2. The Company may engage international organisations for designing, monitoring and evaluation of the CSR projects or programmes as well as for capacity building of their own personnel for CSR.
3. The Company may also collaborate with other companies for undertaking projects or programmes or CSR activities in such a manner that the CSR committees of respective companies are in a position to report separately on such projects or programmes in accordance with the Act and the Rules.
4. The Board shall satisfy itself that the funds so disbursed have been utilised for the purposes and in the manner as approved by it and the Chief Financial Officer, if any or the person responsible for financial management shall certify to the effect.
5. In case of ongoing project, the Board shall monitor the implementation of the project with reference to the approved timelines and year-wise allocation and shall be competent to make modifications, if any, for smooth implementation of the project within the overall permissible time period.

9. ON GOING PROJECTS.

• 1. The Company may undertake an Ongoing Project as may be recommended by the Committee and approved by the Board.
  2. Any CSR Expenditure that relates to an Ongoing Project shall be transferred by the Company within a period of thirty days from the end of the financial year to a special account to be opened by the Company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account (‘Unspent CSR Account’), and such amount shall be spent by the Company in pursuance of its obligation towards the Ongoing Project in accordance with the CSR 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.

10. CSR ACTIVITIES.

1. 1. Subject to the Act, the CSR Activities of the Company shall be should be within the scope of the following activities:
      1. 1. Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation and making available safe drinking water;
         2. Promoting education, including special education and employment enhancing vocation skills especially among children, woman, elderly, and the differently abled and livelihood enhancement projects;
         3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically back ward groups;
         4. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conversation of natural resources and maintaining quality of soil, air and water, including contribution to the Clean Ganga Fund setup by the Central Government for rejuvenation of river Ganga;
         5. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
         6. Measures for the benefit of armed forces veterans, war windows and their dependents, Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows;
         7. Training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports;
         8. Contribution to the Prime Minister’s National Relief Fund or Prime Minister’s Central Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the Central Government for social-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;
         9. (a) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; or
            (b) Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE); Department of Biotechnology (DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information Technology and other bodies, namely Defence Research and Development Organisation (DRDO); Indian Council of Agricultural Research (ICAR); Indian Council of Medical Research (ICMR) and Council of Scientific and Industrial Research (CSIR), engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs); or
            (c) Defence Research and Development Organisation (DRDO), Department of Biotechnology (DBT);
         10. Rural development projects;
         11. Disaster management, including relief, rehabilitation and reconstruction activities;
         12. Such other activities as may be specified under the Act or the Rules from time to time.
   2. While undertaking the CSR Activities, the Board shall ensure that preference is given to the to undertake the CSR Activities in and around the local areas where the Company operates.
   3. The CSR Committee shall recommend the activities from those specified in paragraph 1 that may be undertaken by the Company.
   4. The Board shall, based on the recommendations of the CSR Committee, approve:
      1. 1. The CSR Activities to be undertaken during a year.
         2. The amount to be earmarked towards each activity; and
         3. The manner of implementation of such activities

11. MONITORING.

1. The CSR Committee shall monitor the implementation of CSR Activities from time to time to ensure that objectives of the policy and the requirements of the Act in respect of the CSR Activities are met in an efficient and effective manner.
2. In the event, any of the activities is undertaken through an implementation agency, the Committee shall obtain the relevant information from such agency, including an annual progress report to be submitted to the Board.

12. RECORDS.

1. The Company shall maintain copies of:
   1. 1. minutes of meetings of the CSR Committee;
      2. Progress reports in respect of CSR Activities undertaken through implementation agencies, if any;
      3. Such other documents and information as may be determined by the Board from time to time;
2. The records specified in paragraph 1 shall be maintained at the registered office of the Company or such other place as may be determined by the Board under the custody of a director of the Company duly authorized in this behalf.

12. REPORTING.

1. The Board’s report of the Company shall include an annual report on CSR containing the particulars as may be prescribed from time to time under the Act and the Rules.
2. The contents of the latest and updated version of this Policy are included in the report of the Board;
3. The contents of this policy are also made available on the website of the Company.

14. TRANSFER OF UNSPENT CSR EXPENDITURE.

1. The Company shall transfer any unspent CSR Expenditure to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.

15. AMENDENTS.

1. The Board of the Company may, based on the recommendations of the CSR Committee and subject to Act, at any time alter, amend or modify this CSR Policy as it deems fit to comply with the requirements of the Act to undertake the CSR Activities.