Corporate Social Responsibility Policy

Introduction

The Perfetti Van Melle Corporate Social Responsibility Policy ( PVMI CSR Policy) guides PVMI CSR initiatives in India. At Perfetti Van Melle India, we acknowledge our responsibilities towards our society and stand committed to sustainable and appropriate engagement with our stakeholders.

The PVMI CSR Policy is aligned to the Vision, Mission, and Values of Perfetti van Melle. It guides the selection of CSR projects, action plans, implementation, and monitoring mechanisms to be undertaken by PVMI to execute CSR activities for the benefit of society.

This Policy is framed in consonance with The Companies (CSR Policy) Amendment Rules 2021 and Section 135 of the Companies Act 2013, including any statutory modification(s) amendments or re-enactment.

In case of further statutory modification(s) amendments or re-enactment thereof, The CSR Committee will incorporate the changes and get them approved by the Board appropriately.

The financial component/budgetary spend on CSR and Sustainability projects will be based on the Company’s profitability. It shall be determined by the Net Profit of the Company during the immediately preceding three financial years.

PVMI CSR Policy Objectives:-

1. To engage in fair business activities by demonstrating business leadership on issues of legal compliances, human rights, and environment.
2. To operate in an economically, socially, and environmentally sustainable manner while recognizing the interest of all our stakeholders.
3. To directly or indirectly take up activities that help enhance the quality of life and economic well-being of the local community.
4. To generate community goodwill for PVMI and build a positive, social & environmentally responsible image of PVMI as a corporate entity.
5. To engage and equip all PVMI employees to build sustainability thinking and practices into their everyday work.
6. To ensure legal compliance with applicable Social responsibility regulations.

Scope of CSR Projects

1. Education: We will endeavour to continue to support schools and evaluate how to add value to our endeavors and current commitments by augmenting the existing facilities and infrastructure as per the request of the beneficiaries ( e.g., books, school dress, clean water, sanitation & hygiene, etc.) We will also facilitate soft skill sessions for development of students.
2. Water: We will endeavor, to the extent possible, to find opportunities to extend the provision of water supplies to remote and inaccessible areas, where there is insufficient clean drinking water.
3. Environment:. We will endeavour to continue to support development and maintenance of Green Belts, Public Parks, as also facilitating awareness drives to ensure cleaner surroundings for local communities.
4. Community Support, Skill Development and Livelihood Generation: We will strive to help welfare centers and endeavour to set up essential skilling services to contribute to sustainable development through basic training facilities. The objective is to arm India’s youth with Vocational skills for employment like basic computer training, English speaking courses, vocational training, etc.
5. Nutrition: We will endeavour to work with entities to help promote healthy eating and generate awareness towards promoting nutritious diet and healthy food habits.
6. Any other activity/program/projects as may be permitted by Schedule VII of The Companies Act-2013.

Duration of CSR Projects

1. The Company’s aforementioned projects can be an ongoing project or commence and complete in the financial year it is commissioned, (one year project)
2. An ongoing project shall be defined as in The Companies( Corporate Social Responsibility Policy) Amendment Rules- 2021, including any modification thereof from time to time.
3. The CSR committee shall recognize the project as ongoing or one-time projects when finalizing CSR projects for the financial year.

Implementation of CSR Projects

1. The CSR Committee will consider the following options in implementing its CSR activities – By PVMI CSR Teams, or through Trust or society, or in collaboration with other companies or entities, including group companies.
2. CSR through implementing agencies – The agency should be either a section 8 company or a registered trust or registered society and adhere to the provisions as listed in The Companies ( CSR Policy ) Amendment Rules 2021.
3. Every entity identified by PVMI to implement the CSR Projects shall register itself with the Central Government by filing the form CSR-1 electronically with the Registrar.
4. The implementing agency should have an established track record of at least three years in undertaking similar activities.

Annual Action Plan

1. The list of CSR projects or programs that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act.
2. The manner of execution of such projects or programs.
3. The modalities of utilization of funds and implementation schedules for the projects or programs.
4. Monitoring and reporting mechanism for the projects or programs.
5. Details of need and impact assessment, if any, for the projects undertaken by the Company:

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

CSR expenditure

1. The CSR expenditure shall include all actual expenditures, including contributions, projects, or programs relating to CSR activities recommended by the CSR Committee. It will be approved by the Board of Directors and shall not include any expenditure that does not fall within Schedule VII of the Act’s purview.
2. The CSR expenditure can be either for ongoing or one-time projects.
3. The CSR expenditure may include the administrative overhead (the general management and administration expenses incurred for execution of CSR activities at the Head office ) to the extent provided in Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 – 5% of the CSR Budget or any amendment thereto for any financial year.
4. Surplus/Profits arising out of CSR projects shall be transferred to the ‘Unspent CSR account’ of PVMI or any fund specified in Schedule VII of the Act.
5. The Unspent CSR money can be spent in pursuance of CSR policy and annual action plan as decided by the CSR Committee.
6. For instance, when PVMI has spent in excess of the statutory requirement in any financial year, i.e., more than 2% of average net profits of the last three years, the same shall be set off against the CSR spending of immediately three succeeding years with the prior approval of Board.
7. If in any financial year, PVMI is unable to spend 2% of its average net profits, PVMI shall transfer the equivalent amount in the following manner:
   1. In case of ongoing projects, the funds shall be transferred to the ‘Unspent CSR account’ of the Company within 30 days of the financial year ended.
   2. In the case of one-time projects, the funds shall be transferred to the funds specified in Schedule VII of the Act.

Impact assessment

PVMI will consider an impact assessment of its CSR projects having an outlay of Rs. 1 crore or more when the total CSR budget exceeds Rs. 10 crores during the last three immediately preceding financial year.

Treatment of capital assets

1. PVMI will consider utilizing its CSR funds for the creation or acquisition of capital assets in its CSR projects.
2. The capital asset created by the PVMI supported CSR Projects shall be used to directly or indirectly take up activities that benefit the communities and related to CSR only as per the recommendations of the CSR Committee.

CSR Committee

The CSR Committee of the Board consists of two members namely:

1. Mr. Nikhil Sharma, Chairman
2. Mr. Shridhar Gundu Kulkarni, Member

Meeting of the CSR Committee

The CSR Committee shall hold at least one CSR Committee Meeting in a financial year.

Role of the CSR Committee

1. To formulate and recommend to the Board of Directors the CSR Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of The Companies Act 2013 and the applicable Rules.
2. To formulate a statement containing the approach and direction of CSR.
3. To formulate/amend/alter the annual action plan in pursuance of the PVMI CSR policy.
4. To determine whether the CSR projects to be undertaken by PVMI are ongoing or limited to one financial year.
5. Ensure unspent funds are transferred to specified accounts/funds within the time stipulated in law.
6. Ensure that any profit incurred from CSR activities are not treated as business profits and are either ploughed back into the same project or transferred to specified accounts/funds.
7. To determine whether the surplus expenditure of any financial year has to be set off with the CSR obligation of upcoming years.
8. To obtain certification of utilization from the Finance Head of PVMI.
9. To obtain utilization certificates from the implementing/external agencies executing CSR activities on behalf of PVMI.
10. To recommend CSR activities to be undertaken by PVMI or in collaboration with any other company or any other entity.
11. To recommend the amount of expenditure to be incurred on the CSR activities.
12. To formulate the CSR budget based on the CSR activities planned for the year.
13. To create adequate due diligence and monitoring mechanism for implementation of the approved CSR activities.
14. To submit reports to the Board of Directors in respect of the CSR activities undertaken.
15. To decide on the locations for CSR activities.

Budgets and Expenditures:

1. PVMI shall allocate a budget towards each of the CSR activities falling within the purview of this Policy’s objectives.
2. The CSR expenditure shall include all actual expenditures including contribution, project or programs relating to CSR activities recommended by the CSR Committee and approved by the Board of Directors but shall not have any expenditure that does not fall within the purview of Schedule VII of the Act.
3. The Board will review the Policy from time to time based on the target beneficiaries’ changing requirements and/or amendments in the Act.