csr policy

CSR Policy Shahi Exports Private Limited

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Corporate Social Responsibility Policy, 2014-15


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CONTENTS PAGE 1. About Shahi Exports Private Limited 2. Shahi’s approach to CSR 3. CSR under the Companies Act, 2013 4. Shahi’s CSR vision and focus areas 5. CSR expenditure for 2014-15 6. Modalities of execution for CSR projects 7. Governance 8. Monitoring and evaluation 9. Amendments Annexure 1 Project details for 2014-15


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1. ABOUT SHAHI EXPORTS PRIVATE LIMITED Shahi Exports was established in 1974 and is the largest exporter of ready-made garments in India, selling to buyers around the world. Headquartered in Delhi NCR, with a strong base in Bangalore, we operate across 51 factories in six states and produce 135 million garments per year. Over the years we have built a workforce of 1,00,000 who are at the heart of everything we achieve as a company. Our principles/standards reflect our commitment to our people, and the value they bring to our company:

• Integrity and ethics • Respect for human values • Nurturing human talent • Continuous improvement • Customer delight

2. SHAHI’S APPROACH TO CSR 2.1 Since our inception over 40 years ago, Shahi has been committed to being a conscious manufacturer, steadily increasing our corporate responsibility. Over the years we have strived to improve the lives of our workers, their families, the local communities that surround us, and the environment we work in - creating shared value across all our stakeholders. This is reflected in our approach to employment, training, personal development, community interventions and environmentally sustainable innovations. We are also committed to upholding the values of our buyers around the world, and work closely on creating working conditions and a value system that we can be collectively proud of. Some of our most successful programmes have been developed through our buyers and we continue to implement these programmes with ongoing enthusiasm. In recent years we have worked with researchers from world-class academic institutions to better understand the human and business impact of our CSR and responsible business initiatives. It is this constant drive to improve our performance, and to understand the impacts of our actions that underpins Shahi’s attitude to responsible practices. 2.2 The Companies Act, 2013 has set out new parameters for Corporate Social Responsibility (CSR) in India. It is the role of this Policy to align Shahi’s ongoing responsible business initiatives with Section 135 of the Companies Act, 2013 and the rules and notifications issued there under. This CSR Policy is for the financial year 2014-15.

CSR Vision: Championing “conscious manufacturing”

CSR Mission: Create pioneering programs that engage and empower the Shahi community to build a better future


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3. CSR UNDER THE COMPANIES ACT, 2013 Under the Companies Act, 2013 (the Act), companies that meet certain prescribed financial thresholds are required to invest at least two percent of the average net profits of the company during the three preceding financial years in pursuance of its CSR policy. CSR, under the Act, essentially means and includes development programs or projects undertaken by a company in the thematic areas specified under Schedule VII of the Act. The Act also requires companies to constitute a CSR committee, formulate and publish a CSR policy setting out projects undertaken by the company, file an annual report on CSR activities in a prescribed format, and institute a transparent monitoring mechanism for implementation of its CSR projects. 4. SHAHI’S CSR VISION AND FOCUS AREAS 4.1 The apparel industry is the second largest employer in India after agriculture, employing mostly women with little experience and education, and with limited resources to conduct their household activities. Much of our workforce, their families, and their communities fall into the “Economically Weaker Section”. It is this community that guides our focus, and we have undertaken formal quantitative and qualitative research to gather an evidence-based understanding of their needs, in the pursuit of developing a truly co-created CSR strategy for Shahi. As such, our CSR vision and focus areas are informed by the experiences of these workers and the wider communities in which we operate, and on which we depend. In addition, our 300-strong Human Resources team has a wealth of experience in the on-ground realities of the communities in which we operate and the issues faced by them. This knowledge is utilised to constantly refine our focus and activities. 4.2 Focus area: Women’s Empowerment More than 70 percent of Shahi’s factory workers are female, even though India’s urban workforce is made up of only 13.8 percent women in total1. In this context, women’s empowerment and issues of gender have naturally become of critical importance to us, and are perhaps the closest issue to our hearts and our business. Within this focus area we strive to empower women through training, personal development and awareness on social issues most relevant to women. 4.3 Focus area: Vocational Skills Development As a people-powered company, developing skills and providing employment opportunities has became another natural area for our social outreach. With a focus on women, our activities in this area centre on providing technical and life skills to those looking for employment in the garment industry, at no cost. We further strive to create employment opportunities in our own factories wherever possible to close the loop and create long-term livelihood opportunities. 4.4. Focus area: Health and Nutrition

1 Indiastat.com, "Workforce Participation Rate by Sex and Sector in India." 2010


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Listening to the needs of our workers and community, health and nutrition has become an important focus area for Shahi. Food security, access to healthy food, and an understanding of health and hygiene are routinely cited as critical issues by the beneficiaries of our CSR programmes, and so have become critical issues for us too. Under this focus we address key, ongoing health issues such anaemia, we provide food security programmes to disadvantaged communities, and we undertake regular hygiene training sessions. 4.5 Focus area: Environmental Sustainability Manufacturing in any industry has a necessary environmental footprint. With this top of mind, we constantly strive to improve our environmental performance. Water, in particular, is a critical resource in the garment industry and we are striving towards becoming water-positive in the coming years, beginning with the implementation of a major rain-water harvesting programme. 5. CSR EXPENDITURE FOR 2014-15 5.1 Shahi Exports will spend approximately INR 2,00,00,000 on CSR projects (refer to Annexure 1) in 2014-15 in accordance with the Act. In accordance with the provisions under the Act, the following activities are not applicable for inclusion in Shahi’s reported CSR expenditure:

• Projects or programmes or activities that benefit only the employees of the company and their families;

• Any activities undertaken in pursuance of the normal course of business of the company;

• Payments made as part of legal settlements, such as compensation, fines and penalties; and

• Core business activities that may have a community or societal benefit, for example payment of taxes and royalties, and creation of employment.

Also, in accordance with the Act, any surplus arising out of the CSR projects or programs or activities shall not form part of the business profit of Shahi Exports. 5.2 It is recognised by Shahi that some of the ongoing CSR activities we implement in our factories and beyond will not qualify as CSR spend under the parameters of the Companies Act. For reporting purposes, only those that comply with the Act shall be counted within the allocated spend of INR 2,00,00,000. 5.3 Once programmes have been audited and evaluated against the inclusions and exclusions of Clause 135, the final activities eligible for inclusion will be accounted and included in the annual Directors’ Report. This policy commits that any under-spend for the year 2014-15 shown in the annual report will be added to the budget for 2015-16. 5.4 As per the rules laid out in the Companies Act, any over-spend for the year 2014-15 shall not be deducted from, or impact in any way, the budget allocation for 2015-16.


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6. MODALITIES OF EXECUTION FOR CSR PROJECTS Shahi Exports will execute its CSR initiatives through a combination of direct implementation and through credible, non-profit organisations. Directly implemented projects will be led by our HR, Sustainability and CSR teams within a strong strategic and reporting framework. Non-profit partners will have a proven history of success working in our focus areas, strong ties to the communities we work with, and have more than three years of experience in the field. Annexure 1, attached, outlines the specific projects to be undertaken in 2014-15. 7. GOVERNANCE The Board of Directors of Shahi Exports (“SEPL”) has established a Corporate Social Responsibility Committee (the “Committee”) in compliance with Section 135 of the Companies Act 2013. The Committee will consist of at least three SEPL Directors. Independent members may be asked to periodically join the Committee as required.

The Committee will play an assessment and supervisorial role in SEPL’s CSR by following these actions:

• Annual review and approval of the CSR Policy • Six-monthly basis review of the ongoing projects and budget • Suggestion of new projects to take on and partners to collaborate with • Creation of an annual report for the Board

The Board will appoint the Committee and membership will be reviewed annually. For the Financial Year of 2014 - 2015, the Committee will consist of the following members:

• Harish Ahuja • Subhash Tiwari • J.D. Giri

Mr. Paul Ouseph and Mr. Anant Ahuja of the Company have been co-opted to the Committee.

8. MONITORING AND EVALUATION Embedded in Shahi’s commitment to responsible business is the rigorous evaluation of projects, and ensuring these projects have a positive impact on our people, communities and surrounding environment. Our CSR activities are assessed through the following channels:


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I. Tracking of activities to understand if they are in line with project plans, timelines and budgets

II. Monitoring of reach and outcomes to assess whether the short-term goals of the projects have been met

III. Collecting and analysing impact data to understand how projects have benefited the target area or beneficiaries

IV. Periodic external evaluations on some projects, as required, to ensure the broader relevance of our activities and how to better design and implement them

This information is collected through a variety of methods depending on the project, including site visits, MIS, reports, interviews and case studies, on an ongoing basis. Partner NGOs go through a due-diligence process and are also monitored accordingly. Performance and impact data will be aggregated annually, along with budget utilisation, and will be published in the Directors’ Report, in accordance with the Companies Act, 2013. 9. AMENDMENTS This Policy may be periodically reviewed and amended by the CSR Committee with approval from the Board.


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Annexure 1 Project details for 2014-15

Project Name and Modality of Execution

Schedule VII Theme

Project Objective and Beneficiaries

Project Overview and Implementation Schedule

PACE (Personal Advancement and Career Enhancement) - Direct implementation

(iii) Empowering women

Objective: To help women gain advancement in work and life Beneficiaries: Shahi workers, vocational trainees, community members

Starting in 2007, PACE is an ongoing Shahi project that provides life skills training to empower women in their home and work life. PACE also provides a safe environment for women to discuss and gather new information on other issues – from healthcare, home management, money management to violence against women. Results have shown that beneficiaries have improved savings, increased confidence and are better able to manage their home life. Women enrolled in PACE train once a week for 90 minutes. In order to become PACE certified, a total of 72 hours should be completed.

Water Sanitation and Hygiene (WASH) Initiative - NGO Partners WaterAid and Swami Vivekananda Youth Movement

(i) Promoting healthcare and sanitation

Objective: To improve knowledge and promote good health Beneficiaries: Shahi workers, school children, community members

A young initiative that started in November 2014, WASH is an education initiative that takes place within Shahi factories, and in the schools and communities that surround them. By improving knowledge in water, sanitation and hygiene (WASH), Shahi hopes to reduce illness and prevent contamination and disease. WASH training happens on an ongoing basis in 40-minute sessions. A total of 32 hours is required per person to complete the training.

Skill development initiative - Direct Implementation

(ii) Employment enhancing vocational skills

Objective: To enhance the employability of unemployed, rural youth Beneficiaries: Youth in rural communities

Shahi’s skill development initiative began in January 2013, with the aim of linking one member of a rural family to jobs in the organised sector, and reducing poverty. Training includes skills relevant to the garment industry, as well as key life skills that help youth attain, retain and excel in their place of employment. Training lasts for 45 days, upon which youth may choose to join Shahi or other garment manufacturers around the country.

Health awareness and illness prevention - Direct

(i) Promoting healthcare and eradicating malnutrition

Objective: To facilitate a better quality of life through health and nutrition

Shahi regularly holds health camps and awareness campaigns in and around where our factories are located, in order to provide much needed health support. These


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implementation interventions Beneficiaries: Shahi workers, worker families, community members

include vaccination, dental and health check-up camps. Within Shahi’s factories, employees also received iron tablets, as provided by the ESI, to treat anemeia and improve worker health. Interventions happen at regular intervals throughout the year, depending on the need of each area.

Rainwater Harvesting - NGO Partner, Water Literacy Foundation

(iv) Ensuring Environmental Sustainability

Objective: To reduce our fresh water footprint and strive towards a “water positive” status. Beneficiaries: Environmental benefit

In 2104-15 Shahi will implement rainwater-harvesting technologies in two of its units in Karnataka as a trial phase with two more to follow in 2015-16. Through a combination of roof-water collection and bore well recharge we aim to save up to 160% of a unit’s fresh water consumption. On completion of this trial phase, Shahi will roll out similar technologies across additional units.

Food Distribution - Through Shahi’s own NGOs, Shahenshahi Trust & Shri Kamakshi Nitya Annanda Trust

(i) Eradicating Hunger

Objective: To provide access to free, nutritious meals to those in need Beneficiaries: Disadvantaged local communities and pilgrims

Since 2002 Shahi has supported the distribution of free food to those in need in two locations in Tamil Nadu. The project covers the total budget for food distribution centres in each location and the costs associated with preparing and serving meals to approximately 500 visitors daily. In 2014-15 Shahi will continue to support these two locations.

Namagaagi Naave - NGO Partner, Bangalore Medical Services Trust

(iii) Empowering Women (i) Promoting Healthcare

Objective: To reduce gender inequalities and gender-based violence Beneficiaries: Currently trialing amongst Shahi workforce.

Shahi works with Bangalore Medical Services Trust to raise awareness and build individual and collective responsibilities to Gender Inequities, Gender Based Violence, Alcohol Abuse, Sexual & Reproductive Health, and HIV/AIDS. The awareness training includes four topic sessions and involves 38 hours of training per person. This is a trial project for 2014-15, which is to be piloted amongst Shahi’s own workers in three units, before being expanded to the broader community.

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