Corporate Social
Responsibility Policy

Preamble

Corporate Social Responsibility ("CSR") is the Company’s commitment to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical.

Kapco International Limited ("the Company") is committed to undertake CSR activities in accordance with the provisions of Section 135 of the Indian Companies Act, 2013 ("Act") and related rules made thereunder.

This CSR policy ("CSR Policy") covers current as well as proposed CSR activities to be undertaken by the Company and examines their alignment with Schedule VII of the Act, as amended from time to time. It covers the CSR activities which are being carried out in India only and includes strategies that define plans for future CSR activities.

Objectives

The objectives of the CSR Policy are:

• To develop a strategy for the Company's CSR objectives.
• To establish the relevance of potential CSR activities to the Company’s core values and create an overview of activities to be undertaken in line with Schedule VII of the Act.
• To establish a process and mechanism for the implementation and monitoring of the CSR activities of the Company.

Constitution

Pursuant to the provisions of Section 135 of the Act and the regulations in India titled "Companies (Corporate Social Responsibility Policy) Rules, 2014" ("CSR Rules"), the CSR Committee, when required as per the Act, shall be formed.

The Board of Directors hereby authorizes and empowers the Whole Time Director and/or Managing Director of the Company to constitute or reconstitute the CSR Committee ("CSR Committee"). Members of the CSR Committee may be replaced by any other member, subject to the approval of the Whole Time Director and/or Managing Director of the Company.

Meetings of CSR Committee

• The CSR Committee shall meet at least once annually.
• Members of the CSR Committee can mutually agree upon a time and place for the said meetings. A quorum for the meeting should be two. The members of the CSR Committee may participate in the meeting either in person or through telephone conferencing or other audio/visual means in accordance with the provisions of the Act and rules made thereunder from time to time.
• The Board of Directors shall be informed of the progress of various CSR projects at least once a year.

Duties and Responsibilities of CSR Committee

The following are the duties and responsibilities of the CSR Committee:

1. Formulate the CSR Policy and recommend it to the Managing Director of the Company for his approval. Once the CSR Policy is approved by the Managing Director, the same shall be placed before the Board for its approval.
2. Recommend CSR activities as stated under Schedule VII of the Act.
3. Approve the undertaking of CSR activities and report the same in accordance with the CSR Rules.
4. Recommend the CSR Budget, subject to the approval of the Managing Director of the Company.
5. Spend the allocated CSR amount on the CSR activities/projects once it is approved by the Whole Time Director and/or Managing Director of the Company in accordance with the Act and the CSR Rules.
6. Create a transparent monitoring mechanism for the implementation of CSR initiatives in India.
7. Submit progress reports to the Managing Director of the Company and further to the Board of Directors, at least once a year, in respect of the CSR activities undertaken by the Company.
8. Monitor the CSR Policy from time to time.

Responsibilities of the Board of Directors

The following are the duties and responsibilities of the Board of Directors of the Company:

1. Approve the CSR Policy and take note of CSR expenditures on a periodic basis.
2. Ensure CSR spending every financial year of at least 2% of the average net profits made during the immediately preceding three financial years, in pursuance of the CSR Policy.
3. Ensure that CSR activities included in the CSR Policy are undertaken by the Company and that such activities are related to the activities specified in Schedule VII of the Act, subject to the approval of the Whole Time Director and/or Managing Director of the Company.
4. Ensure disclosure of the contents of the CSR Policy on the Company's website.
5. Ensure disclosure in the Directors' Report pertaining to the following:
   • Contents of the CSR Policy and constitution of the CSR Committee.
   • An annual report on CSR in the prescribed format as per Annexure A of this CSR Policy.
   • Reasons for failure, if any, to spend the required amount on CSR activities.
6. Authorize executives of the Company to attend the CSR Committee meetings.

CSR Expenditure

So long as required by law, in every financial year, the Company shall spend a minimum of 2% of its average net profits in the immediately preceding three financial years. Average net profits shall mean the net profit of the Company as per the Profit & Loss Statement prepared in accordance with the Act.

The net profits shall exclude the dividend received from other companies in India.

The CSR activities shall be approved by the Managing Director of the Company on the recommendation of its CSR Committee, but shall not include any expenditure on an item not in conformity with or not in line with the activities stated under Schedule VII of the Act.

CSR expenditure shall not include projects, programs or activities undertaken outside India.

Surplus arising out of the CSR initiatives shall not form part of the business profits of the Company.

CSR Activities

The Company proposes to implement its CSR activities, as determined by the Whole Time Director and/or Managing Director of the Company, in certain sectors stated hereunder, which fall within the purview of Schedule VII of the Act:

1. Eradicating hunger, poverty and malnutrition; promoting health care, including preventive health care and sanitation, including contribution to the Swachh Bharat Kosh set up by the Central Government for the promotion of sanitation; and making available safe drinking water.
2. Promoting education, including special education and employment-enhancing vocational skills, especially among children, women, the 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 backward groups.
4. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining the quality of soil, air and water, including contribution to the Clean Ganga Fund set up by the Central Government for rejuvenation of the 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; and promotion and development of traditional arts and handicrafts.
6. Measures for the benefit of armed forces veterans, war widows and their dependants, Central Armed Police Forces (CAPF) and Central Paramilitary Forces (CPMF) veterans, and their dependants, including widows.
7. Training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports.
8. Contribution to the Prime Minister’s National Relief Fund or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund), or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, Scheduled Tribes, other backward classes, minorities and women.
9. (a) Contribution to incubators or research and development projects in the fields of science, technology, engineering and medicine, funded by the Central Government, State Government, Public Sector Undertaking or any agency of the Central Government or State Government; and
   
   (b) Contribution to publicly funded universities; Indian Institutes of Technology (IITs); National Laboratories; and autonomous bodies established under the 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 the 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).
10. Rural development projects.
11. Slum area development. For the purposes of this item, the term "slum area" shall mean any area declared as such by the Central Government, any State Government or any other competent authority under any law for the time being in force.
12. Disaster management, including relief, rehabilitation and reconstruction activities.

The Company will review the sectors from time to time and make additions, deletions or clarifications to the above sectors.

CSR Initiatives

In line with Schedule VII of the Act and the CSR Rules, so long as required by law, the Company shall undertake CSR activities included in its annual CSR plan ("Annual CSR Plan"), as recommended by the CSR Committee at the beginning of each year. The CSR Committee is authorized to approve any modification to the existing Annual CSR Plan or to propose any new program during the financial year under review.

The Annual CSR Plan is a yearly plan of CSR activities that would be placed before the Whole Time Director and Managing Director of the Company, based on the recommendation of its CSR Committee, which outlines, inter alia, the following aspects of the CSR initiatives of the Company:

• Project proposals.
• Targeted beneficiaries and their key needs.
• Alignment with Schedule VII.
• CSR budget with projections.
• Monitoring mechanism.
• Any other information as may be required by the CSR Committee.

The Company may collaborate with other affiliates or any other company, as may be approved by the CSR Committee, to implement CSR activities, and the same shall form part of the Annual CSR Plan. The Company may form trusts on its own to carry out CSR activities in accordance with the CSR Rules and to administer its CSR activities.

The Company may also collaborate on its CSR activities with other affiliates or any other company, as may be eligible and approved by the Managing Director of the Company. Towards this effort, the Company may jointly, along with other affiliates or any other company, form trusts to administer the CSR activities.

CSR Reporting

The Board of Directors, in its annual report, shall include the details of the CSR activities undertaken in the financial year.

The CSR Committee shall provide a responsibility statement on the implementation and monitoring of the CSR Policy and confirm that it is in compliance with the CSR objectives of the Company. This statement shall form part of the Directors' Report.

Website Display

The Company shall display on its website the contents of its CSR Policy and other information as may be required to be displayed as per the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Monitoring Mechanism

1. The CSR Committee shall be apprised of the implementation of the CSR activities, and the progress shall be monitored twice a year.
2. The Company shall, through its internal controls, monitoring and evaluation systems, implement, assess, document and report the impact of its CSR activities/projects.
3. Records relating to the CSR activities and CSR expenditure shall be accurately maintained.

Policy Review and Future Amendment

The administration of the CSR Policy of the Company and the execution of identified CSR projects, programs and activities under it shall be carried out under the control and overall supervision of the CSR Committee and the Managing Director of the Company.

Further, the Board of Directors may revise or amend this CSR Policy based on the recommendations of the CSR Committee and Managing Director of the Company, or to bring the same in line with the guidelines or amendments issued from time to time by the Government on the subject.

Failure to Spend the CSR Money

If the Company fails to spend the required amount in a particular year, it is the duty of the Committee to submit a report in writing to the Whole Time Director and Managing Director of the Company and to the Board of Directors, specifying the reasons for not spending the amount, which in turn shall be reported by the Board of Directors in their Annual Reports pertaining to that particular financial year.