Corporate Social Responsibility

 CORPORATE SOCIAL RESPONSIBILITY POLICY – NETWORK TECHLAB (INDIA) LIMITED

 Table of Contents

 

1. Introduction
2. Purpose
3. Scope
4. Governance
5. Roles and Responsibilities
6. Programs
7. CSR Expenditure
8. Quantum of CSR Investment
9. Exclusion from CSR Activities
10. Impact Assessment
11. Amendments to the CSR Policy

Annexure 1

1. Introduction

Network Techlab India Limited will contribute to the society to improve the quality of life of people by focusing on social causes. Network Techlab will take up projects, programmes or activities as it may consider appropriate from time to time. These activities may be from Education, Health, Relief to poor, Disaster management or other social causes. These activities may be executed by partnering with some Organisation or doing it by itself.

Corporate Responsibility Principles

We are committed to following corporate responsibility principles:

Product responsibility: Ensuring products are safe, reliable and have minimal environmental impact throughout their life cycle.

Employee welfare: Providing safe working conditions, fair wages and opportunities for professional development to employees.

Ethical sourcing: Sourcing components and materials from suppliers that adhere to ethical and environmental standards.

Data privacy and Security: Protecting the privacy and security of customers’ data and ensuring responsible use of technology.

About the Policy

The Policy (CSR Policy) has been formulated by CSR Committee, in pursuance of Section 135 of the Companies Act, 2013 and approved by Board at its meeting held on 23^rd March 2022.

2. Purpose

In conformity with requirements laid down under Section 135 of the Companies Act, 2013 (“Act”) and the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules”) and circulars issued by the Ministry of Corporate Affairs (“MCA”), a “CSR Policy” of the Company was adopted by the Board of Directors at their meeting held on 28th June 2019. Subsequently, to conform to the notifications issued by MCA over a period of time, the Board adopted revised CSR Policies, as recommended by its CSR Committee.

Consequent to amendments made by MCA to the Act, vide the Companies (Amendment) Act, 2020 and CSR Rules vide the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, the Board adopted this Policy on 7^th February 2021 based on the recommendation of its CSR Committee. The Policy shall be governed by the Companies Act, 2013, read with Rules made thereunder, as may be in force for the time being or such other Rules / Regulations, as may be notified by MCA/ ICAI/ SEBI from time to time.s

The objective of this Policy is to lay down guidelines and act as a tool for the Company to conduct and fulfil its social responsibility in making a meaningful and measurable impact by supporting initiatives aimed at creating conditions suitable for sustainable growth.

It mainly defines Company’s CSR focus areas, implementation strategy, guidelines for partner engagement, along with CSR governance structure.

It would function as a self-regulating mechanism for Company’s CSR activities and enable adherence to laws, ethical standards and international practices in this regard.

3. Scope

 The Policy is applicable to all programs/projects undertaken by the Company as a part of its corporate social responsibility activities and will be developed, reviewed and updated in line with the governing law, codes of corporate governance and international standards or best practices.

4. Governance

 The company has established an accountable, robust and transparent governing mechanism to manage the operations under its CSR policy in compliance with the requirements of section 135 of the Companies Act, 2013. 

5. Roles and Responsibilities

 The Board

The Board of Directors of the company will be responsible for:

• To approve of the CSR Policy of the Company;
• To disclose the content of the Policy in its report and place the Policy on the Company’s website in such a manner as prescribed under Section 135 of the Companies Act 2013 read with the CSR Rules;
• To ensure that the social projects included in the Policy are undertaken by the Company;
• To ensure that the Company spends, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in pursuance of the Policy;
• To ensure that the Company gives preference to the local areas around its operations for spending the amount earmarked for CSR projects;
• To ensure that it specifies the reasons in its report for not spending the earmarked amount in case the Company fails to spend such an amount.

1. CSR Committee:

The Corporate Social Responsibility (CSR) Committee of the Company shall be constituted in accordance with the applicable laws. The CSR Committee shall be responsible for initiating, monitoring, recommending and reviewing CSR activities of the Company undertaken by it from time to time.

1. The composition of CSR Committee is as follows:

The Board of Directors shall constitute the Corporate Social Responsibility (CSR) Committee. The Members of CSR shall be appointed by the Board of Directors of the Company which must consist of at least two or more Directors. The first CSR Committee of the Company shall be comprised of the following Directors:

S. No.	Name	Designation	Role in CSR Committee
1	Haresh J.Gada	Director	Member
2	Atul H. Gosar	Director	Member
3	Sanjeet P Shah	Director	Member

1. Responsibility of the CSR Committee – The Board may define a separate charter for the Committee, at its discretion; Committee’s role will be but not limited to the followings:

• To formulate the Company’s CSR strategy, policies, goals, annual plans and budget;
• To monitor the Company’s CSR Policy and performance;
• To review the CSR projects/initiatives from time to time;
• To ensure legal and regulatory compliance in accordance with CSR rules;
• To ensure reporting and communication to stakeholders on the Company’s CSR projects/initiatives.

The Committee may identify appropriate organizations / persons engaged in the activities that may be proposed to be undertaken by the Company as a part of the CSR projects and shall formulate the appropriate modes to implement the same. The Committee may engage external agencies to evaluate the CSR projects and monitor its progress, as appropriate.

The Committee will periodically review and submit reports to the Board indicating the followings:

• Details of the CSR projects/programs/activities undertaken during the period;
• Impact assessment with key indicators;
• Details of CSR outlay, stating the budgeted and actual amount spent during the period and reasons of variance, if any;
• Achievements or impacts or improvements recorded in the society due to the CSR initiatives of the Company during the period.

Based on the periodic reports, the Board shall recommend and ensure that the projects/ programs and activities included in the CSR Policy of the Company are undertaken accordingly.

Committee Meeting – For smooth functioning of the Committee, the members shall meet as below to discuss such matters and to take such decisions as may be necessary:

• Meet as and when required. Members of the Committee can agree mutually regarding time and place for the meeting;
• The quorum for the CSR Committee Meeting shall be one-third of its total strength of directors or two members, whichever is higher;;
• If CSR activities are outsourced to any external organization, a representative from such organization may be invited to attend a meeting of the CSR Committee;
• Members from senior management may attend the Committee meetings as may be appropriate;
• The Members of the Committee may participate in the meeting either in person or through video conferencing or other audio visual means as may be convenient; The proceedings of the Meetings of the CSR Committee must be minuted and signed by the Chairperson of the Committee at the subsequent Meeting.

 CSR Implementation Team

S. No.	Name	Designation	Role in CSR Committee
1	Mr. Sanjeet Shah	Director	Executor
2	Mr. Suneesh Varghese	Manager	Executor
3	Mr. Prakash Jha	Manager	Executor
4	Mr. Meet Pasad	Executive	Executor

• To act as central coordinating point for the delivery of CSR activities;
• To coordinate with the implementing departments for project design and implementation of CSR programs in compliance with section 135 of the Companies Act and the CSR Rules;
• To plan annual budgets for CSR projects in coordination with the implementing departments and make a proposal to the CSR Committee;
• To identify and manage partners to implement programs as required;
• To report to the CSR Committee the progress on CSR projects and status of CSR expenditure once in each quarter;
• To document and report all CSR activities of the Company in pursuit of the Companies Act and the CSR Rules;
• Any other activities that may be required to effectively deliver the CSR programs of the Company.

6. Programs

 

1. Intervention Areas

Pursuant to Schedule VII of the Companies Act, 2013, the Committee has approved the

following activities as “CSR Activities” to be undertaken under the CSR policy of the Company. The Board of Directors has reviewed the said activities and expressed its consent to the Committee to pursue the said activities under CSR policy of the Company under section 135 of the Companies Act, 2013, Schedule VII and other applicable rules, regulations, notifications etc., issued/to be issued from time to time., and any amendment(s) thereof, the CSR activities of the Company will have the following thrust areas:

• Promoting preventive healthcare and sanitation to the public;
• Promoting education, including primary, secondary and higher secondary education, as well as special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects;
• Projects, Activities, Programmes relating to conservation of natural resources including renewable energy sources;
• Projects, Activities, Programmes relating to water conservation and maintaining quality of soil, air, and water;
• Promoting Gender equality and empowerment of women
• Community Health- Innovation projects to meet local needs. Reaching out with basic health care to all (bridging the gap).
• Sustainable livelihood Projects – Holding hands of all marginalized group to improve livelihood opportunity, thus improving their quality of life.
• Rural Infrastructure Development- Need based quality infrastructure to improve quality of life.
• In addition to the above, Company may also undertake specific activities, which will be in accordance with Schedule VII, Section 135 of the Companies Act 2013.

1. Implementation

The Company shall implement the identified CSR activities by the following means:

• The Company may itself implement the identified CSR activities presently within the scope of the Thrust Areas as defined in the Policy;
• The Company may also implement identified CSR activities presently through its Trust which is involved in CSR activities within the scope of the Thrust Areas as defined in the Policy;
• The Committee may undertake the CSR activities through any other foundations, trusts, or a section 8 company (or erstwhile Section 25 company) or any other form of entity with a track record of at least three years in carrying out activities in related areas. While engaging with partners, the Company to evaluate the credentials of the implementing entity and seek relevant documents, information and details as per Annexure 1.
• The Company may collaborate with other companies including its Group Companies if required for undertaking the projects or programs or activities of CSR subject to the conditions.
• The Company may engage the international organizations as notified by Central Government for designing, monitoring and evaluation of the CSR projects or programs as per its CSR policy.

1. Monitoring and Reporting

•  The CSR activities will be driven by a dedicated project team under the guidance and support of the CSR Committee and the Board.
• The CSR Committee will play a significant role in ensuring that the CSR policy is embedded across the company’s operations and the CSR initiatives are in line with this policy.
• The CSR Committee will be responsible for monitoring approved projects and fund disbursals for such projects.
• The CSR Committee will put in place a transparent monitoring and reporting mechanism for ensuring effective implementation of the projects, programs and activities proposed to be undertaken by the Company.
• The Member of the CSR Committee shall be responsible for monitoring the expenditure on CSR activities with respect to the plan and submission of the same to the CSR Committee;

The CSR Committee will submit a report to the Board at the end of the year as per the format prescribed under Companies Act, 2013 and applicable law. The Board will report CSR performance in its report of Board of Directors.

7. CSR Expenditure

•  The annual CSR budget would be approved by the Board on the recommendations of the CSR Committee, subject to the provisions of the Act and Rules made thereunder as amended from time to time.
• Based on the total approved budget, funds would be allocated for different projects on the basis of identified CSR plan on yearly basis.
• The average net profit for the purpose of determining the spending on CSR activities is to be computed in accordance with the provisions of section 198 of the Act and will also be exclusive of the items given under rule 2(1)(h) of the Companies (CSR Policy) Rules, 2014.
• Section 198 of the Act specifies certain additions / deletions (adjustments) to be made while calculating the net profit of a Company (mainly it excludes capital payments / receipts, income tax, set-off of past losses)

 Quantum of CSR Expenditure

•  In pursuant to the provisions of Section 135(5) of the Act, the CSR Committee of the Company shall ensure that the Company 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 on the CSR activities of the Company specified under Schedule VII of the Act.
• If the Company fails to spend such amount which is not related to any ongoing projects, the Board shall in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount and transfer such unspent amount to a Fund specified under Schedule VII within a period of six months of the expiry of the financial year.
• In case the unspent amount relates to any ongoing projects, subject to fulfilling of prescribed conditions, unspent amounts to 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”. Such amount shall be spent by the Company in pursuance of its obligation towards the 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.
• The administrative overhead upto five percent of total CSR expenditure of the Company for the financial year is permitted.
• Any surplus arising out of CSR activities shall be prohibited to form part of business profits 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 the CSR policy or transfer such surplus amount to a Fund specified in Schedule VII of the Act within a period of six months of the expiry of the financial year.
• If the Company spends an amount in excess of requirement, such excess amount may be set off against the CSR spending requirement up to immediate succeeding three financial years subject to the conditions that the excess amount available for set off shall not include the surplus arising out of the CSR activities.

 

9. Exclusions from CSR Activities

• The following activities are specifically excluded from being considered as eligible CSR activity and shall not form part of the CSR activities of the Company:
• Any CSR activities undertaken in pursuance of normal course of business of a Company except research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22, 2022-23 subject to the conditions;
• Any CSR activities which benefit only the employees of the Company and their families as defined in section 2(k) of the Code on Wages, 2019;
• Any CSR projects/programs undertaken outside India except for training of Indian sports personnel representing any State or Union Territory at national level or India at international level;
• A contribution of any amount directly or indirectly to any political party under section 182 of the Act or any funds directed towards political parties or political causes;
• Any sponsorship activities for deriving marketing benefits for products / services;
• Any activities for fulfilling statutory obligations under any law in force in India.

10. Impact Assessment

If the Company having average CSR obligation of Rs. 10 Crores (Rupees Ten crores) or more in pursuance of subsection (5) of section 135 of the Act, in the three immediately preceding financial years, the Company will undertake impact assessment (through an independent agency) for CSR projects that have outlays of Rs. 1 crore or more and have been completed atleast one year before undertaking the impact study and the impact assessment reports will be placed before the Board and disclosed as per the Act and CSR Rules.

11. Amendments To The CSR Policy

• The Board of Directors of the Company shall have the powers to revise / modify / amend this Policy from time to time, as the Board may think fit, based on the recommendations to be made by the CSR Committee.
• Any subsequent amendment / modification in the CSR Rules made by the MCA, under the Act and / or any other laws in this regard shall automatically apply to this Policy.

Annexure 1

 

An indicative list of aspects to be considered while engaging with other entities

1. Due diligence of the implementing agency would be conducted to check the credentials of the organization. The following information from the interested implementing agencies would be sought, as relevant:

• Memorandum/Article of Association or Constitution;
• Registration Certificate;
• Registration Certificate under Section 12A;
• Audited Accounts of last three years;
• IT Exemption Certificate under Section 80G; (Lifetime validity)
• Pan Card;
• IT Exemption Certificate under Section 35(i), if available;
• Acknowledgement of Income Tax Return along with IT Return filed (last three years);
• FCRA Certificate (if any) and latest copy of FCRA Return FC-3, if available;
• Description of the project.

5. Ensure that the project/ programme is consistent with list of activities in Schedule VII.
6. The team may visit and/or meet the representatives to assess the organization (as required).
7. Quarterly reporting on the progress in implementation of the projects/ programmes and utilization of the amounts.
8. Reserving the rights, to be exercised at its sole discretion, of stopping the funding at any stage of the project, if the program is not being implemented as per program objectives and goals.