Corporate Social Responsibility (CSR) Policy

1. Introduction

1.1. Rittal Philosophy

Since its foundation in 1961, Rittal group has continuously evolved into the world's leading systems provider for enclosures, power distribution, climate control, IT infrastructure and software & services. Today, "Rittal – The System." offers you a perfectly coordinated system platform. It unites innovative productions, pioneering engineering solutions and global service to accommodate the most diverse requirements. It caters to a whole host of industries, from machinery and plant engineering, to the automotive industry, through to information technology. All from a single source, all in top quality. That is what "Rittal – The System, Faster – better – everywhere" is all about.

Rittal India, with a workforce of about 1050, manufactures and develops "Rittal – The System". Tap into synergy potential with our sister concern E-plan, the leading manufacturer of software for cross-disciplinary engineering solutions.

We never lose sight of our responsibility to the environment and society. Our commitments towards Corporate Social Responsibility include but not limited to, promotion of education and healthcare, energy and climate change, and betterment of the society through respect for universal human rights and the environment, acting with integrity and accountability and operating responsibly and sustainably.

1.2. CSR in India

Corporate bodies’ involvement in CSR activities is not a new concept in India. Industrial majors are engaged in social development activities since long back. However, the Companies Act, 2013 has brought it under the legal purview. The concept of CSR is introduced through “Comply-or-Explain” mandate. It mandates qualifying companies to constitute Corporate Social Responsibility Committee to effectively monitor CSR activities of the Company. Further the Companies (Corporate Social Responsibility Policy) Rules, 2014 (hereinafter referred to as “the CSR Rules”) lay down the framework and modalities for carrying out CSR activities which are specified in Schedule VII of the Act.

2. Objective and Scope

2.1. Objective

The main objective of the CSR Policy is to lay down guidelines for Rittal India Private Limited (hereinafter referred to as ‘the Company’) to make CSR as one of the key focus areas to adhere to Rittal’s global interest in environment and society that focuses on making a positive contribution to society through effective impact and sustainable development programs.

This Policy covers the proposed CSR activities to be undertaken by the Company and ensuring that they are in line with Schedule VII of the Act as amended from time to time. It covers the CSR activities which are being carried out in India only and includes strategy that defines plans for future CSR activities.

2.2. Scope & Coverage

The CSR activities of the Company shall include, but not limited to any or all of the sectors/activities as may be prescribed by Schedule VII of the Companies Act, 2013 amended from time to time. Further, the Company will review the sectors/activities from time to time and make additions/ deletions/ clarifications to the above sectors/activities.

3. Corporate Social Responsibility (CSR) Committee

3.1. Constitution

Pursuant to the provisions of Section 135 of the Act, the Board of Directors shall constitute the Corporate Social Responsibility (CSR) Committee. The Members of CSR shall be appointed by the Board of Directors of the Company which must consist of at least two or more Directors. Accordingly, the constitution of CSR Committee formed by Rittal India is as follows:

Sl. No. Name of the member Designation in committee Designation in Rittal India
1 Mr. Armin Peter Federer Chairperson Director
2 Mr. Dieter Heinz Scherz Member Director
3 Mr. Ajay Bhargava Member Managing Director

3.2. Functions and Powers of Committee

To effectively implement the objectives of the Company with respect to CSR, the Committee is vested with the following functions and powers:

  1. Formulate CSR Policy and recommend the same to the Board of Directors of the Company for approval
  2. Recommend CSR activities as stated under Schedule VII of the Act
  3. Approve to undertake CSR activities, if necessary, in collaboration with Rittal group companies/other Companies/firms/NGOs etc., and to separately report the same in line with the CSR Rules
  4. Recommend the CSR Budget
  5. Spend the allocated CSR amount on the CSR activities once it is approved by the Board of Directors of the Company in accordance with the Act and the CSR Rules
  6. Create transparent monitoring mechanism for implementation of CSR initiatives in India
  7. Submit the Reports to the Board in respect of the CSR activities undertaken by the Company
  8. Monitor CSR Policy from time to time
  9. Monitor activities/charter of Internal Working and Monitoring Group (WG) who are authorized to ensure that the CSR activities of the Company are implemented effectively
  10. Authorize executives of the Company to attend the CSR Committee Meetings, if necessary

3.3. Meetings of the Committee

For smooth functioning of the Committee, the members shall meet as below to discuss such matters and to take such decisions as may be necessary;

  1. The CSR Committee shall hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Committee.
  2. The members of the Committee may mutually agree between them regarding time and place for the said meetings.
  3. The quorum for the CSR Committee Meeting shall be one-third of its total strength (any fraction contained in that one-third be rounded off as one) or two members, whichever is higher.
  4. The Members of the Committee may participate in the meeting either in person or through video conferencing or other audio visual means as may be convenient.

4. CSR Spend

The Companies Act, 2013 prescribes that the companies which meet the criteria specified U/s. Sec. 135 shall allocate certain portion of its annual net profits (calculated as per Sec. 198) during the three immediately preceding financial years to be spent on CSR Activities that fall under the categories specified under Schedule VII of the Act.

4.1. CSR Expenditure

Net profit for the purpose of allocation towards CSR means profit more fully described under Rule 2(f) of the CSR Rules. The CSR expenditure shall include all expenditure including contribution to corpus or on projects or programs relating to CSR activities approved by the Board of Directors on the recommendation of its CSR Committee but does not include any expenditure on an item not in conformity or not in line with activities stated under Schedule VII of the Act.

4.2. Expenditure on CSR capabilities

The Company may build CSR capabilities of their own personnel as well as of their Implementing Agencies and such expenditure shall not exceed 5% of the total CSR spend of the Company as stated in the Rules from time to time. Determination of whether a particular expenses fall within this 5% cap can be decided in consultation of the Chief Financial Officer of the Company based on the clarification available from time to time in this regard.

4.3. Failure to spend the CSR Money

If the Company fails to spend the required amount in a particular financial year, it is the duty of the Committee to submit a report in writing to the Board of Directors specifying the reasons for not spending the amount, which in turn shall be reported by the Board of Directors in their Annual Report pertaining to that particular Financial Year.

Surplus, if any, arising out of the CSR projects or programs or activities shall not form part of the business profit of the Company.

5. CSR Initiatives

Pursuant to Schedule VII of the Act and the CSR Rules, the Company shall undertake CSR activities included in its Annual CSR Plan, as recommended by the CSR Committee at the beginning of each year. The Committee is authorized to approve any modification to the existing Annual CSR Plan or to propose any new program during the financial year under review.

5.1. Annual CSR Plan

The Annual CSR Plan is a yearly plan of CSR activities that would be placed before the Board of Directors of the Company based on recommendation of its CSR Committee which outlines inter alia the following aspects of CSR initiatives of the Company:

  • Project Proposals
  • Targeted Beneficiaries and their key needs
  • Alignment with Schedule VII
  • Project Goals and milestones
  • Activities and Timelines including expected closure dates
  • CSR Budget with projections
  • Monitoring mechanism
  • Progress reporting and frequency of reports
  • Risks and mitigation strategies
  • Any other information as may be required by the CSR Committee

5.2. Collaboration

It is expressly allowed under the CSR Rules that the Company may collaborate with any other Company or association formed in this regard subject to approval by CSR Committee, to implement CSR activities and the same shall form a part of the Annual CSR Plan.

5.3. Disqualifying Activities for CSR

  1. The CSR Rules disqualifies the CSR projects and programs that are implemented by the Company for benefit of the employees of the Company and their families.
  2. The CSR activities implemented outside India also fall outside the purview of the Rules and hence CSR expenditure on such activities will not be considered for inclusion in the CSR Report.
  3. Any amount directly or indirectly contributed towards any political party under Section 182 of the Act shall not be considered as CSR Spend.
  4. Activities that are undertaken by the Company in pursuance of its normal course of business will not be considered as CSR activities.

5.4. Monitoring Mechanism

An Internal Working and Monitoring Group (IWMG) comprising of below mentioned employees of the Company will be set up to ensure effective implementation and monitoring of the projects approved by the CSR Committee from time to time.

  1. Mr. Debabrata Sinha – VP, Finance and CFO
  2. Mr. Dinesh A U – DGM, HR and Admin
  3. Mr. Kamal Lochan Nath – Manager, Finance
  4. Leela Gangappa - DGM, Marketing and Communication

The IWMG shall submit reports to the CSR Committee of the Company at least once in six months on the progress of the various projects approved by the Committee and entrusted to the Group for implementation and monitoring.

5.5. Reports

The Internal Working and Monitoring Group shall assist the CSR Committee to prepare reports that are required to be placed before the Board. The format of the Report shall be the format prescribed under the CSR Rules stated hereunder:

                 
Sl.
No.
CSR Project or Activity Identified Sector which the project is covered Project or Programs 1) Local Areas,
2) Specify the state and
district where projects
or programs was undertaken
Budget (Project or Program) Amount spent on Project or Program Cumulative Expenditure Amount Spent Direct or through Agency Target
Date
&
Status
a. Direct Expenditure
b. Overheads
                 

6. Reporting and publication of CSR policy

As per the CSR Rules, the contents of the CSR Policy shall be included in the Directors’ Report and the same shall be displayed on the Company’s website, if any.

7. Policy review and future amendment

The administration of the CSR Policy of the Company and the execution of identified CSR projects, programs and activities under it shall be carried out under the control and overall supervision of an internal monitoring group formed for this purpose. At the time of formation of this policy, the internal monitoring group shall consist of:

  1. Mr. Debabrata Sinha – VP, Finance and CFO
  2. Mr. Dinesh A U – DGM, HR and Admin
  3. Mr. Kamal Lochan Nath – Manager, Finance
  4. Leela Gangappa - DGM, Marketing and Communication

The internal monitoring group shall submit its report at least once in six months to the CSR committee formed under the Act, which shall monitor the CSR policy of the Company from time to time.

Further, the Board of Directors may revise/ amend this CSR Policy based on the recommendations of the CSR committee or to bring the same in line with the guidelines or amendments issued from time to time by Government on the subject.