Corporate Social Responsibility Policy

A. PREAMBLE

Finnovation Tech Solutions Private Limited (“Finnovation”, “Company”) understands the responsibility it has against its stakeholders, society, and the public. Through Corporate Social Responsibility (“CSR”), Finnovation shall engage in impactful welfare-driven activities in India which shall contribute towards the betterment of the life of the neighbors in the communities that the Company has presence in.

B. PURPOSE

This CSR Policy establishes the scope, funding priorities and process associated with the CSR goals of Finnovation.This CSR Policy shall operate as the Corporate Social Responsibility Policy of Finnovation for the purposes of Section 135 of the Companies Act, 2013, the Companies(Corporate Social Responsibility) Rules, 2014, as amended and modified from time to time, and other applicable laws and regulations.

C. Definitions

  1. “Act” – Companies Act, 2013, as amended and modified from time to time;

  2. “Board” – Board of directors of Finnovation;

  3. “CSR Activities” - shall be undertaken by Finnovation as stated in this Policy, as projects or programmes or activities (either new or ongoing), in pursuance of its statutory obligation laid down in section 135 of the Act and in accordance with the provisions contained in the Rules, but shall not include the following namely:-

  4. “CSR Committee” – the committee of the Board constituted to implement, supervise and manage the CSR initiatives of Finnovation;

  5. “CSR Corpus” – shall mean the corpus accumulated by Finnovation pursuant to Clause (H) of this CSR Policy for conducting its CSR Activities;

  6. “CSR Partner” – shall mean a potential CSR partner who has received the approval of the CSR Committee to receive Grant(s) from Finnovation in furtherance of Finnovation’s CSR initiatives;

  7. “CSR Policy” – this CSR Policy of Finnovation Tech Solutions Private Limited;

  8. “CSR Proposal” – shall have the meaning ascribed in Clause (G)(3) of this CSR Policy;

  9. “CSR Rules” – the Companies (Corporate Social Responsibility) Rules, 2014 issued by the Ministry of Corporate Affairs, as amended and modified from time to time;

  10. “Grants” – shall mean the disbursements that are made to a CSR Partner pursuant to this CSR Policy, with the prior approval of the Board and the CSR Committee;

  11. “Net Profit” – shall have the meaning ascribed to it in the CSR Rules;

D. AIMS AND OBJECTIVES

1. Areas of Interest

The Company is committed to sustainable development and inclusive growth and shall focus on social issues including but not limited to poverty, healthy living, grass root education, malnutrition and promoting gender equality. In terms of the CSR Rules, the Company will focus on undertaking the project/programs/activities listed below, as specified in Schedule VII to the Act, excluding activities undertaken in pursuance of normal course of business of the Company:

  1. (i) Taking measures to eradicate extreme hunger and poverty;
    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. (ii) Promoting education;
    promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

  3. (iii) Promoting gender equality and empowering women;
    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. (iv) Ensuring environmental sustainability:
    Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water [including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga].

  5. (v) Protection of national heritage, art and Culture:
    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 art and handicrafts;

  6. (vi) Armed forces and their dependents:
    Measures for the benefit of armed forces veterans, war widows and their dependents, [ Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows];

  7. (vii) Sports:
    Training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports.

  8. (viii) PM CARES Fund:
    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 govt. for socio economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women;

  9. (ix) (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; and
    (b) Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE); Department ofBiotechnology (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 Defense 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. (x) Rural development projects.

  11. (xi) Slum area development - For the purposes of this item, the term `slum area' shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.

  12. (xii) Disaster management, including relief, rehabilitation and reconstruction activities.

  13. (xiii).Subscription to zero coupon zero principal instruments on Social Stock Exchange.

Finnovation may, in its sole discretion, update the above list as per Section 135 and Schedule VII of the Companies Act, 2013, as amended from time to time.

E. COMPOSITION OF CSR COMMITTEE

1. The CSR Policy and programs of Finnovation shall be implemented, managed and supervised by the CSR Committee appointed by the Board of Directors of Finnovation.

2. The Company, being a Private Limited Company needs to have at least 2 (Two) members in the CSR Committee. Subject to the requirements of the Act, the Board may increase or decrease the strength of the CSR Committee by passing a resolution.

3. The Company has formed a CSR Committee of the Board of Directors, with such constitution as under:

Name Designation
Mr. Karthikeyan Krishnaswamy Chairman – Director
Mr. Madhusudan Ekambaram Member – Director

4. Invitees to the CSR Committee:

The CSR Committee may, at its discretion, invite such members of senior management of Finnovation from time to time to participate in the meetings of the CSR Committee and assist the CSR Committee in the implementation of the CSR Policy.It is clarified that while the persons nominated in accordance with this Clause(4) shall be entitled to participate in the deliberations of the CSR Committee, such persons shall not be entitled to vote at the meetings of the CSR Committee.

5. The CSR Committee shall institute a transparent monitoring mechanism for implementation of the CSR projects or programmes or activities undertaken by the Company.

F. DECISIONS BY THE CSR COMMITTEE

1. The CSR Committee shall at all times act in a manner that is consistent with the provisions contained in this CSR Policy, the Act and CSR Rules.

2. The CSR Committee shall endeavor to arrive at all decisions by a consensus of all members.However, in the event the CSR Committee is unable to arrive at such a consensus, the Committee may take decisions with the consent of the majority of the members present and entitled to vote; however, such decisions shall need to be ratified by the Board.

3. The CSR Committee shall be responsible to determine the modalities of the implementation of this CSR Policy and actions taken under it.

4. The provisions of section 135(5) of the Companies Act, 2013, prescribes the Company to give preference to the local area and areas around it where it operates, for spending the amount earmarked for CSR. The Company through this committee will thus give preference to the local area and areas around where the Company operates for spending the amount earmarked for CSR activities. However, the Committee may identify such areas other than stated above, as it may deem fit, and recommend it to the Board for undertaking CSR activities.

5. The CSR Committee shall formulate and recommend to the Board of Directors, an annual action plan in pursuance of this CSR policy which includes:-

  1. (i) list of CSR projects to be undertaken;

    (ii) the manner of execution of such projects;

    (iii) the modalities of utilisation of funds and implementation schedules;

    (iv) monitoring and reporting mechanism for the projects or programs; and

    (v) impact assessment, if any for the projects undertaken by the Company.

The Board may alter the annual action plan, at any time during the financial year, as per the recommendation of its CSR Committee, based on reasonable justification to that effect.

G. MEETING OF THE CSR COMMITTEES

1. The CSR Committee shall meet as frequently as it determines necessary.

2. The CSR Committee shall maintain minutes in relation to each of its meetings.

3. The CSR Committee shall review any proposed projects and make recommendations for implementation and funding of approved projects/ activities to the board of directors in accordance with the CSR Policy.

4. The final decision with regarding to the acceptance or rejection of a CSR Proposal shall be with the Board.

H. CSR CORPUS

1. The CSR Corpus of Finnovation shall comprise of the following:

  1. a. 2% (two percent) of the average Net Profits of Finnovation for the last 3 (three) financial years;

  2. b.any income arising from the CSR Corpus; and

  3. c.surplus arising out of CSR activities, if any.

2. The CSR Corpus shall be used exclusively for undertaking the CSR Activities in compliance with the requirements of the Act and CSR Rules.

3. For the avoidance of doubt, it is expressly clarified that the surplus arising out of CSR Activities shall not form part of the business profits of Finnovation.

Finnovation may carry out CSR activities through a zero coupon zero principal instrument, provided that the expenditure incurred for such instrument shall not exceed 10% of the total CSR expenditure of Finnovation for that financial year. Further, upon subscription in a zero coupon zero principal instrument, Finnovation shall be exempted from undertaking impact assessment of any project funded by such an instrument.

I. MONITORING MECHANISM

The Company shall devise a transparent monitoring mechanism for various CSP projects/programs / activities undertaken by the Company. The Chief Financial Officer or the person responsible for financial management shall certify to the fact that CSR funds so disbursed have been utilized for the purposes and in the manner approved by the Board. The Company shall also obtain feedback from various beneficiaries of the CSR Activities undertaken by the Company to measure their benefits.

J. REPORTING MECHANISM

The Board shall furnish a report on CSR Activities(“Report”) pertaining to a financial year, and shall contain the following particulars:

  1. A brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web - link to the CSR Policy and projects and programs;

  2. The composition of the CSR Committee;

  3. Prescribed CSR expenditure(two per cent of the amount as stipulated in clause H(1)(a);

  4. Details of the CSR amount spent during the financial year – with the total amount allocated, the amount that has been unspent, and the manner in which the amount was spent during the financial year;

  5. If the two per cent has not been spent, the Report shall also contain the reasons why it had not been spent; and

K. TO BE PUBLISHED ON WEBSITE

The Board of Directors of Finnovation shall, after taking into account the recommendations of CSR Committee, approve the CSR Policy and disclose contents of such Policy in its report and the same shall be displayed on the Finnovation’s website, if any, as per the particulars specified above.

L. EXCEPTIONS

Any exceptions to this Policy or procedure must be approved in writing in advance by the Chairman of the CSR Committee and the Board.

M. AMENDMENTS

The Board of the Company shall have the power 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, if any.