CSR

Under section 135 of the Companies Act, 2013, (the ‘Act’) it is necessary for the Corporate Social Responsibility Committee (‘CSR Committee’ or the ‘Committee’) to formulate and recommend to the Board of Directors, a Corporate Social Responsibility Policy (‘CSR Policy’ or the ‘Policy’), encompassing the activities mentioned in Schedule VII of the Act.

1. Context

Eka Software Solutions Private Limited (‘Eka’) is committed to maintain Social, Environmental, Economical, Human rights, Ethical and Governance standards for the benefit of all its Stakeholders.

Further, Corporate Social Responsibility is focused on enhancing the lives of the local community in which it operates. This takes shape by way of providing new skills and in general, creating a better quality of life for the people in the communities in which the company operates. We strongly believe in contributing towards the betterment of society and endeavor to create a positive impact, while achieving our business goals.

1.1 In the light of Companies Act 2013

Pursuant to Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 every Company having net worth of Rs. 500 Crores or more or turnover of Rs. 1,000 Crores or more or net profit of Rs. 5 Crores or more during the immediately preceding financial year shall constitute Corporate Social Responsibility Committee (‘CSR Committee’) and the CSR Committee shall:

a) formulate and recommend the CSR Policy which shall indicate the activities to be undertaken by the Company as prescribed,
b) recommend the amount of expenditure to be incurred on the activities referred to in
clause (a),
c) monitor the CSR Policy of the Company from time to time.

This Policy on Corporate Social Responsibility (CSR Policy) has been formulated by the CSR Committee and then was recommended to the Board of Directors of the Company (‘Board’) for its approval and amendment thereto.

Section 135 of the Act read with the Companies Rules, 2014 states that the Company´s CSR activities shall be restricted to the projects or programs relating to activities in the Schedule VII to the Act.

The Companies Act, 2013 further provides that the Board of every company referred to in which Section 135(1) applies, shall ensure that the Company spends, in every financial year, at least two percent, of the average net profits of the Company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy; Provided that the Company shall give preference to the local area and areas around it operates, for spending the amount earmarked for CSR activities;

Provided further that, if the Company fails to spend such amount, the Board shall, in its report made under clause (o) of the sub- section (3) of the section 134, specify the reasons for not spending the amount and, unless the unspent amount relates to any ongoing project, transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.

Provided also that if the Company spends an amount in excess of the requirements provided under this sub-section, such company may set off such excess amount against the requirement to spend under this sub-section for such number of succeeding financial years and in such manner, as may be prescribed.

Further, Ministry of Corporate Affairs (‘MCA’) had notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 on 22 January, 2021. Accordingly, the Board of Directors at its Meeting held on 29 April, 2021, adopted this amended Policy pursuant to amended CSR Rules.

1.2 Objectives of the Policy

This Policy shall be read in line with Section 135 of the Companies Act, 2013, the Companies (Corporate Social Responsibility Policy) Rules, 2014 and such other rules, regulations, circulars, amendments and notifications (collectively referred hereinafter as ‘Regulations’) as may be applicable and as amended/notified from time to time and will, inter-alia, provide for the following:

• Establishing a guideline for compliance with the provisions of the Regulations to dedicate a percentage of the Company’s profits for CSR activities.
• Ensuring the implementation of CSR initiatives in letter and spirit through appropriate procedures and reporting and monitoring of activities as well as formulation of the annual action plan.
• Creating opportunities for employees to participate in socially responsible initiatives.

1.3.Definitions

In this Policy unless the context otherwise requires:

•  ‘Act’ means the Companies Act, 2013;
•  ‘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 program;
• ‘Corporate Social Responsibility’ means Corporate Social Responsibility (CSR) as defined in Section 135 of the Companies Act, 2013 and Companies Corporate Social Responsibility Policy) Rules, 2014;
• ‘CSR Policy’ means a statement containing the approach and direction given by the board of a Company, taking into account the recommendations of its CSR Committee, and includes guiding principles for selection, implementation and monitoring of activities as well as formulation of the annual action plan;
• ‘Ministry’ means the Ministry of Corporate Affairs
• ‘Net Profit’ means net profit as defined in Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 as set out below:

Net Profit as per financial statements prepared in accordance with the applicable provisions of the Act, but shall not include the following, namely:

1. any profit arising from any overseas branch or branches of the Company, whether operated as a separate company or otherwise; and

2. any dividend received from other companies in India, which are covered under and complying with the provisions of Section 135 of the Act; Provided that in case of a foreign company covered under these rules, net profit means the net profit of such company as per profit and loss account prepared in terms of clause (a) of sub-section (1) of Section 381, read with Section 198 of the Act;

• “Ongoing Project” means a multi-year project undertaken by a Company in fulfillment 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.

Words and expressions used in this CSR Policy and not defined herein but defined in the Act shall have the meaning respectively assigned to them in the Act.

1.4.CSR Activities

The Policy recognizes that Corporate Social Responsibility is not merely compliance; it is a commitment to support initiatives that measurably improve the lives of underprivileged by one or more of the following focus areas as notified under Schedule VII of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as may be amended from time to time. Eka’s CSR activities, amongst others, will focus on:

i. Eradicating hunger, poverty & malnutrition, promoting preventive health care & sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation & making available safe drinking water;

ii. Promoting education, including special education & employment enhancing vocation skills especially among children, women, elderly & the differently- abled & livelihood enhancement projects;

iii. Promoting gender equality, empowering women, setting up homes & hostels for women & orphans, setting up old age homes, day care centers & such other facilities for senior citizens & measures for reducing inequalities faced by socially & economically backward groups;

iv. Ensuring environmental sustainability, ecological balance, protection of flora & fauna, animal welfare, agro-forestry, conservation of natural resources & maintaining quality of soil, air & water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga;

v. Protection of national heritage, art & culture including restoration of buildings & sites of historical importance & works of art; setting up public libraries; promotion & development of traditional arts & handicrafts;

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

vii. Training to promote rural sports, nationally recognized sports, Paralympic sports & Olympic sports;

vii. Training to promote rural sports, nationally recognized sports, Paralympic sports & Olympic sports;

viii. Contribution to the Prime Minister’s National Relief Fund or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) any other fund set up by the Central Government for socio-economic development & relief & welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities & women;

ix. a) Contribution to incubators or research and development projects in the fields 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 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 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).

x. Rural development projects

xi. slum area development

xii. disaster management, including relief, rehabilitation and reconstruction activities.

1.5.Annual spends / Allocation of Funds

1.5.1 The Company shall spend not less than 2% of the average Net Profits of the Company made during the three immediately preceding financial years calculated as per Regulation 135 of the Act read with applicable CSR Rules. The amount would be calculated as per the Regulations. All reasonable efforts will be made to ensure that the annual CSR allocation is fully utilised in the respective year. However, if the Company fails to spend such amount, the Board of Directors shall, in its report under clause (o) of sub-section (3) of section 134 of the Act, shall specify the reasons for not spending the amount and, unless the unspent amount relates to any ongoing project referred to in sub-section (6) of section 135 of the Act as stated in clause 1.5.2. below, transfer such unspent amount to a Fund specified in Schedule VII of the Act as stated in Clause 1.4 “CSR Activities” within a period of six months of the expiry of the financial year.

1.5.2 Further, any amount remaining unspent under sub-section (5) of section 135 of the Act, pursuant to any ongoing project, fulfilling such conditions as may be prescribed, undertaken in pursuance of its CSR Policy, shall 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, and such amount shall be spent by the company in pursuance of its obligation towards the Corporate Social Responsibility 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.

1.5.3 The tax treatment of CSR spend will be in accordance with the Income Tax Act, 1961 as may be notified by Central Board of Direct Taxes (CBDT).