CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
(APPROVED IN MEETING OF BOARD OF DIRECTORS HELD ON)

CSR Philosophy

S M L Finance Limited  is committed to operate and grow its business as a socially responsible corporate citizen and contribute for possible social, educational and environmental causes on a regular basis.  The Company maintains highest standards of corporate behavior towards its stakeholders, employees and societies in which it operates. Constitution of a Corporate Social Responsibility Committee of the Board and formulation of a Corporate Social Responsibility Policy has become mandatory under the Companies Act, 2013. Accordingly, the Company has formulated this CSR Policy which encompasses its philosophy and guides its sustained efforts for undertaking and supporting socially useful programs.

CSR Vision

To lay down guidelines so as to make CSR an integral part of our corporate culture, that focuses on making contributions to society through integrated and sustainable manner in every possible way.

CSR Objects

The Company will involve communities surrounding its operations to bring about a positive change in their lives through holistic, sustainable and integrated development. The Company endeavors on addressing social, environmental and economic needs of the poor and the marginalized sections of the society. Through this policy, the Company aligns the CSR strategy with Company’s vision for a just and fair society. The Company adopts an approach that integrates the solutions to these problems into the strategies of the Company to benefit the communities at large and create social and environmental impact.

Definition

In this policy, unless the context otherwise requires:

1. “Act” shall mean the Companies Act, 2013 and includes any statutory amendments, from time to time, and any other statutory enactment thereof.

2. “Beneficiaries” shall mean the person(s) or sector of people fructifying the benefits from the CSR activities, and shall include ecology, environment.

3. “Board” shall mean Board of Directors of the Company (S M L Finance Limited).

4. “Committee” shall mean the CSR committee formed by the Board of Directors of the Company.

5. “Company” shall mean the S M L Finance Limited, a Company incorporated under the provisions of the Companies Act, 1956.

6. “CSR” shall mean the Corporate Social Responsibility as defined in the Section 135 of the Act and rules made thereunder.

7. “CSR activities” shall mean the activities as prescribed by the Committee to the Board in cohesion with those enunciated in the Schedule VII of the Act.

8. “CSR Expenditure” shall mean all CSR expenditure as recommended by the CSR Committee and approved by Board of Directors.

9. “Director’s report” shall mean the report under the Section 134 of the Act, by the Company.

10. “Rules” shall mean the Companies (Corporate Social Responsibility) Rules, 2014, including any modifications, amendments or re-enactment thereof.

Committee

The Board has constituted a Committee especially for CSR known as CSR committee. The Committee should constitute of three or more directors. The Board has absolute power to remove and induct any member into the Committee.

1. The members of the Committee should be of not less than 21 years of age.

2. The tenure of the members shall be of 05 (five) years initial term. Thereafter, the members may be re-elected for another continuous term, every 05 (five) years.

3. The Chairman of the Committee shall be elected by the members of the Committee.

Meeting and quorum

1. The Committee members will meet at least once in every financial year.

2. Minimum of 02 (two) members shall form the quorum.

Minutes and resolutions

1. Minutes of the proceedings and resolutions of the Committee meetings shall be signed and confirmed by the Chairman. Minutes so signed and confirmed shall be conclusive evidence of such proceedings and resolutions.

2. Minutes of all Committee meetings will be open for inspection at any reasonable time on reasonable notice by any member of the Board of Directors of the Company.

3. Minutes of the Committee meeting shall be recorded in loose sheets bound and shall be initiated by the Chairman and shall be digital signed by the Chairman.

4. All decisions shall be taken by simple majority. In case of equality of votes on any matter, Chairman shall have a casting vote.

5. The Committee can also pass the resolution by circulation, if the draft resolution along with necessary papers, has been circulated to all the members of the Committee (not being less than the quorum fixed for a meeting of the Committee), then in India and has been approved by such of the members as are then in India, or by majority of such of them, as are entitled to vote on the resolution.

6. The records of all meetings and duly signed minutes of Committee meeting shall be maintained by the Company at a place designated by the Committee.

CSR Funds

1. n every financial year, the Company should spend at least 02 (two) percentage of the average net profits of the Company made during the 03 (three) preceding financial years.

2. Any income arising therefrom.

3. Surplus arising out of activities.

4. Donations received from any sources.

5. Any unspent amount from out of the minimum required CSR expenditure, carried forward from the previous year.

6. However, at the recommendation of the Committee, the Board may decide to spend more amount than the profit as mentioned above.

Expenditures not covered

1. Contributions of any amount, whether directly or indirectly, to any political party or any person associated with a political party.

2. Amount spent, whether directly or indirectly, for the benefit of employees of the Company, its subsidiaries and associates and their families.

3. Expenses incurred by the Company for the fulfillment of obligations any act/ statute of regulations (such as labour laws, land acquisition act etc.).

4. Expenses incurred by the Company for one off events such as marathons/ awards/ charitable contribution/ advertisement/ sponsorships of TV programs etc.

5. Other contributions/ expenses not recognized under the Act/ Rules as amended or modified, from time to time.

Role of Board of Directors

1. Approve CSR policy after considering recommendations of Committee and timely verification of the contents of CSR policy. Ensuring that CSR activities are properly undertaken.

2. In the event, the Company is unable to spend minimum required CSR expenditure in any given financial year, the Board shall specify the reasons for the same in Directors’ report, in terms of Section 134(3)(o) of the Act. The Board is free to decide, to carry forward such un-spent money to next year by depositing it in a separate CSR Fund (Corpus) created by the Company.

3. The Board shall have power to amend the CSR Policy at any point of time after taking recommendation of Committee.

Role and responsibilty of the Committee

1. Recommend the computed amount that shall be spent on CSR.

2. The bifurcation on the recommended amount for the CSR activities.

3. Determine the beneficiaries of the CSR activities.

4. Mode of serving the beneficiaries.

5. Identify the method to verify whether the amount allotted is spent for the beneficiaries.

6. Monitor the implementation of framework of CSR Policy.

7. Audit and assess the CSR activities implemented.

8. Report to the Board and aid in disclosing in Director’s report of the Board under Section 134 of the Act as well as uploading in the web site.

9. Carry out any other function as mandated by the Board from time to time and/or enforced by any statutory notification, amendment or modification, as may be applicable, necessary or appropriate for performance of its duties.

Activities that may be included in CSR policy

As per Schedule VII of the Act, the following are the specified generic category of activities that may be included in CSR Policy:

1. Eradicating hunger, poverty and malnutrition, promoting 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, women, 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, agro forestry, conservation of natural resources and maintaining quality of soil, air and water.

5. Protection of natural 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 widows and their dependants.

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 any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

9. Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

10. Rural development projects.

11. Contribution to the Swach Bharat Kosh set up by the Central Government for the promotion of sanitation.

12. Contribution to the Clean Ganga fund set up by the Central Government for rejuvenation of river Ganga.

Assessment and reporting

1. Accounting on the money spent on CSR.

2. Auditing and submission of activity report for the approval of the Board before the Annual General Meeting.

3. Adhere to volunteer reporting guidelines.

4. Follow the national/ international standard in reporting.

5. CSR Committee shall consider periodic reporting on the CSR activities, execution modalities, implementation schedules etc., in the format which may be amended by the CSR Committee from time to time.

Others

1. Preference shall be to local area and areas around the Company.

2. The Company may spend on CSR activities by way of an organization which is registered as Trust or Section 8 Company or Society or any other form of entity operating within India.

3. The Company may incorporate/registered a separate Trust, Society, Section 8 company, to facilitate CSR activities.

4. CSR activities in India only shall be taken into consideration.

5. Expenditure thereof are eligible for computing CSR spending.

6. Surplus arising out of the CSR activities will not be part of business of the Company.

7. The Company may collaborate or pool resources with other companies to undertake CSR activities.

Implementation process

All projects are identified in a participatory manner, in consultation with the community and gauging their basic needs. The Company recourses to the participatory rural appraisal mapping process. Subsequently, based on a consensus and in discussion with concerned, CSR activities are prioritized.

Computation of net profit for CSR

For the purpose of Section 135, “Average Net Profit” shall be calculated in accordance with the provisions of Section 198 of the Act.