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CSR Policy

Effective on July 28, 2025

1. Objective and Scope

1.1 Kovai seeks to be compliant to the Companies Act 2013 (hereinafter referred to as the “Act”) and Companies (Corporate Social Responsibility Policy) Rules, 2021 (“CSR Rules 2021”) which mandates Companies to spend the prescribed amount on recognised Corporate Social Activities as laid down by the Act.

1.2 The Policy also lays down guidelines for Kovai to help it focus its corporate social responsibility commitment on activities that make a positive contribution to society through high impact, sustainable programs.

1.3 The policy describes how the Company must implement and monitor Corporate Social Responsibility activities as well as for the formulation of the annual action plan.

1.4 This Policy covers current as well as proposed corporate social responsibility activities to be undertaken by the Company and examining their alignment with the Act as amended from time to time.

1.5 The Company proposes implementing its CSR activities in various sectors as provided under the Act.

2. Responsibilities of the Board of Directors

2.1 Following the CSR Rules 2021 and section 135 of the Act (as amended), the constitution of a CSR Committee is optional for Companies whose annual CSR obligation is less than INR 50 Lacs. Accordingly, the Board of Directors assumes direct responsibility for ensuring implementation of CSR activities. The Chief Operating Officer, Chief People Officer and Manager Finance and Operations of the Company will assist the Board with the implementation of this policy.

2.2. Following are the responsibilities of the Board of Directors:

  1. Monitor and review this CSR policy from time to time.
  2. Choose CSR activities as stated under Schedule VII of the Act for implementation.
  3. Formulate an Annual Action plan for implementing the CSR activity chosen.
  4. Ensure that the implementing agencies through which the CSR activities may be undertaken are registered with the Central Government by filing Form CSR 1 electronically. And that the implementing agencies should have registered themselves under Section 12A and Section 80G of the Income Tax Act, 1961.
  5. Submit an annual budget and get the annual budget approved by the Board of Directors. Any expenditure over and above the approved budget would need subsequent Board approval.
  6. Ensure that the minimum CSR spend shall be as per the Act and the CSR rules. In case the Company spends an amount in excess of the minimum during the given financial year, the excess amount spent can be set off with the spending requirement in the three subsequent financial years.
  7. Review the progress and implementation of CSR initiatives/ projects and give directions and recommendations thereof and record and maintain the minutes of meetings.
  8. Submit the Reports to the Board in respect of the CSR activities undertaken by the Company.
  9. Satisfy itself that the funds disbursed have been utilised for the purposes and in the manner as approved by it and the Chief Operating Officer and or Chief People Officer of the Company and the person responsible for financial management of the Company who shall certify to that effect.
  10. Annex the CSR Annual Report to the Board’s Report. A new detailed format of annual report has been introduced in the CSR Rules 2021 (as Annexure II). Annual report must be signed by a Company director and the Board Chairman.
  11. Disclose the CSR Policy and Projects approved by the Board on their website, if any, for public access.

2.3 The Board of Directors shall meet at least once every quarter. The quorum for the meeting should be a minimum of 50% of the Board of Directors, or where the Board of Directors consists of two directors, both the directors must be present at the meeting of the Board of Directors.

3. Areas of Focus

Companies are permitted to opt for specific areas of interest drawn from a wide range of permitted activities as provided in schedule VII of the Act. Kovai has elected to focus its attention and funds on a narrow sub-set of available options, in order to deliver the most impact. Kovai’s focus will therefore be on one or more of the following:

3.1 Poverty, health, and sanitation:

  • Eradication of poverty, hunger, and malnutrition.
  • Promotion of healthcare, including sanitation and preventive healthcare.
  • Contributions to the Swachh Bharat Kosh and ensuring access to safe drinking water.

3.2 Education and employment:

  • Improvement of education, special education, and vocational skills for children, women, the elderly, and the differently abled.
  • Livelihood enhancement projects.

3.3 Gender equality and support for vulnerable groups:

  • Promoting gender equality and setting up homes and hostels for women and orphans.
  • Empowering women and establishing facilities for senior citizens and disadvantaged groups.

3.4 Environmental sustainability:

  • Initiatives for environmental sustainability, ecological balance, and conservation of natural resources.
  • Support for projects like river Ganga rejuvenation and agroforestry.

3.5 Support for educational institutions:

  • Contributions to public-funded universities, IITs, and national research bodies like DRDO, ICAR, and CSIR.

3.6 Rural development projects:

  • Initiatives focused on the development of rural areas.

3.7 Slum area development:

  • Development of slum areas as declared by the government.

3.8 Disaster management:

  • Activities related to disaster relief, rehabilitation, and reconstruction.

4. CSR Budget

4.1 The total budget for the CSR projects in each financial year will be decided by the Board of Directors in accordance with the applicable provisions of the Act and the CSR Rules. The Company will distribute the budget among the Areas of Focus or such of them as the Company may deem fit in each financial year, in such proportion and in a manner that meets the objectives of the CSR Policy.

4.2 If, for any reason, the Company is unable to follow the allocation agreed on in any of the Areas of Focus described above, the same shall be utilised in such other Areas to Focus as may be approved by the Board of Directors, with the reasons documented.

4.3 In case the Company fails to spend the targeted amount in that particular financial year, the Board of Directors shall specify the reasons for not spending the amount which in turn shall be reported by them in their Directors’ Report for that Financial Year.

4.4 In case the Company has not spent the CSR allocated budget in full, the Board shall have to transfer such unspent amount to an account specified in Schedule VII (ex: PM CARES, PM National Relief Fund) of the Act, within a period of six months of the closure of the financial year of the Company.

4.5 It is noted that in case the Company defaults in transfer of funds to the fund specified in Schedule VII or transfer the unspent amount to unspent CSR Account, the Company and every officer of the Company will be penalised as specified in the Act.

5. Implementation Process

5.1 The Board will ensure that Kovai will contribute and spend an amount at least equal to the minimum sum prescribed under the Act and computed in accordance with any method or logic determined therein. As at the date of this Policy, the minimum sum so prescribed is 2.0% of the average net profits of Kovai made during the three immediately preceding financial years.

6. Annual Action Plan

6.1 The Company shall formulate and recommend to the Board an Annual Action Plan which shall include the following:

  1. The list of CSR Programs to be undertaken in the areas specified in Schedule VII of the Act.
  2. The manner of execution of the projects i.e. (either on its own or through an implementing agency).
  3. Monitoring and reporting mechanisms for the CSR Programs.
  4. Details of need and impact assessment, if any for the projects undertaken by the Company.

6.2 In line with the provisions of the Act the Company shall undertake CSR activities included in its Annual Action Plan, as recommended by the Board of Directors, at the beginning of each year. The Board of Directors is authorised to approve any modification to the existing Annual Action Plan or to propose any new CSR Program during the financial year under review.

6.3 Disqualifying Activities for CSR

  1. Activities that are undertaken by the Company in pursuance of its normal course of business.
  2. activities benefiting employees of the Company as defined in Section 2(k) of the Code on Wages 2019.
  3. Any amount directly or indirectly contributed towards
  4. any political party under Section 182 of the Act.
  5. Any activity undertaken by the Company outside India which except for training of Indian sports personnel representing a stage or union territory at national level
  6. Activities supported by the Company on sponsorship basis for deriving marketing benefits for its products or services.
  7. Activities carried out for fulfilment of any other statutory obligations under any law in force in India.

7. Objective and Scope

7.1 Any surplus generated from CSR projects undertaken will be tracked and credited to the CSR corpus. These funds will then be applied only towards the development of further CSR projects and activities and will not be added to the normal business profits.

8. Objective and Scope

8.1 Any requirement to deviate from this policy must be recommended by the Company and approved by the Board.

9. Objective and Scope

9.1 The Board of Directors shall review its CSR Policy from time to time and make suitable changes as may be required to comply with the requirements of the Act and CSR rules and submit the same for the approval of the Board.