CSR Policy

CORPORATE SOCIAL RESPONSIBILITY POLICY (as amended – February, 2021)

At SML Limited (hereinafter referred to as ‘SML’), we believe in being part of the community where we have our business operations and making a significant and sustainable contribution that makes a meaningful difference to the community. Our vision is to contribute to the social and economic development of the community where we operate. Our CSR activities are guided by the Companies Act, 2013 provisions and rules thereunder.

Scope: This policy will be applicable to all activities undertaken under the Corporate Social responsibility and will be reviewed and updated regularly. This policy aligns with Section 135 of the Companies Act, 2013, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, and amendments made thereunder.

Definitions:

  • “Act” means Companies Act 2013, including any amendment thereto.
  • “Administrative Overheads” means the expenses incurred by the Company for ‘general management and administration’ of Corporate Social Responsibility functions in the Company but shall not include the expenses directly incurred for the designing, implementation, monitoring, and evaluation of a particular Corporate Social Responsibility project or programme.
  • “Company” means “SML Limited”, hereinafter termed as (SML).
  • “Corporate Social Responsibility (CSR)” means the activities undertaken by a Company in pursuance of its statutory obligation laid down in section 135 of the Act in accordance with the provisions contained in the Companies (Corporate Social Responsibility Policy), Rules 2014 (“Rules”) and Schedule VII of the Companies Act, 2013, as amended from time to time.
  • “Net Profit” means the net profit defined under the Companies Act read with Rules.
  • “NGO” means Not for Profit Organisation.
  • “Ongoing Project” means a multi-year project undertaken by a 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;
  • “CSR activities/projects” include such activities as may be permitted under the Companies Act, 2013, read with relevant rules and notifications and circulars, as amended from time to time.

Guiding Principles

A) Selection of CSR activities / Key Focus Areas: Under the framework of this policy, the sectors and issues focused on by the Company shall fall under the purview of activities specified in Schedule VII of the Companies Act, 2013 (as amended from time to time) and those approved by the CSR committee and the Board.

B) Composition of Corporate Social Responsibility (CSR) Committee: The CSR Committee shall comprise a minimum of 3 Directors, of which at least one shall be an independent director.

c) Annual Action plan
The CSR Committee shall formulate and recommend an annual action plan every year for approval of the Board. The annual action plan shall include:-

  • The list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;
  • The manner of execution of such projects or programmes, as specified in sub-rule (1) of rule 4 of the Companies (Corporate Social Responsibility Policy), Rules 2014;
  • The modalities of utilisation of funds and implementation schedules for the projects or programmes;
  • Monitoring and reporting mechanism for the projects or programmes;
  • Details of need and impact assessment, if any, for the projects undertaken by the Company and
  • Empower the Board to alter any plan at any time during the financial year ( based on reasonable justification)

Implementation : SML shall undertake projects/activities approved under Schedule VII of the Companies Act, 2013, read with relevant rules and, notifications, circulars, as may be amended from time to time. CSR Committee, under the Board’s guidance, shall govern and oversee the implementation of the CSR activities. The CSR committee will regularly review the policy and recommend necessary changes in the policy to the Board. In case of an ongoing project, the Board shall monitor the implementation of the project with respect 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 period.

SML Board may decide to implement its CSR activities through

  • The Company itself or
  • A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act,
    1961 (43 of 1961), established by the company, either singly or along with any  other company, or
  • 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
  • Any entity established under an Act of Parliament or a State legislature; or
  • A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.
  • While engaging with partners, SML shall evaluate the credentials of the implementing entities and seek relevant documents, including registration with MCA for undertaking CSR activity.

SML may engage international organisations to design, monitor, and evaluate CSR projects or programmes as per its CSR policy and to build its own personnel’s capacity for CSR. SML may also collaborate with other companies to undertake projects, 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 these rules.

SML Board shall satisfy itself that the funds so disbursed have been utilised for its purposes and in the manner it has approved, and the Chief Financial Officer or the person responsible for financial management shall certify to the effect.

Budget : SML shall allocate the amount specified under sub-section (5) of section 135 of the Act as its Annual CSR Budget. While the Company shall make all efforts to spend the allotted funds on CSR, in the event of any amount of CSR allocation of a particular year remaining unspent/ unutilized shall be dealt in the following manner:

  1. The Board will ensure that the unspent amount not related to ongoing projects will be transferred to a Fund specified in Schedule VII within 6 months of the expiry of the financial year or any other period as may be notified under the provisions of the Act. Further, the unspent amount related to an ongoing project will be transferred to a special account for that financial year called the Unspent Corporate Social Responsibility Account (“Unspent CSR Account”) within a period of 30 days from the closure of the financial year or any other period as may be notified under the provisions of Act.
  2. Any surplus arising out of the CSR activities shall not form part of the business profit 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 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.
  3. n the event of SML spending an amount in excess of the requirement provided under section 135 (5), such excess amount shall be set off against the requirement to spend under section 135 (5) up to the immediate succeeding three financial years, subject to the conditions as provided in the Rules, from time to time.
  4. SML may utilise the CSR amount for the creation or acquisition of a capital asset in the manner provided in the Act /Rules, as amended from time to time.

F) Governance & Monitoring : The CSR Committee shall ensure a transparent mechanism to review and monitor the progress of activities undertaken/completed during any financial year. The Chairperson of the Committee shall submit a Progress report on the various initiatives undertaken to the Board of Directors of the Company. The Committee will also ensure appropriate documentation of CSR Policy, annual CSR activities/ initiatives undertaken, along with details of Project wise expenditure.

G) Reporting : CSR activities and impact assessment reports (if any) shall be reported in the Annual report in the format prescribed in the Act or as per any other statutory reporting requirement, as specified from time to time.

G) Reporting : In the event that the CSR obligation, as derived under section 135 (5) of the Act, is Rs. 10 crores or more in the three immediately preceding financial years, SML shall undertake an Impact assessment through an independent agency, of all such projects which has a budgeted outlay of Rs. 1 crore or more and which have been completed not less than one year before undertaking the impact study. The impact assessment reports shall be placed before the Board and annexed to the Annual Report on CSR.

Management Commitment

Our Board of Directors and Management believe in making a difference in society through positive action. Our Corporate Social Responsibility policy conforms to the Corporate Social Responsibility Guidelines issued by the Ministry of Corporate Affairs.