Counterfeit Policy

COUNTERFEIT PARTS PREVENTION & CONTROL POLICY

1. INTRODUCTION
Luthra Industrial Corp. is committed to maintaining the highest standards of quality, authenticity, traceability, transparency and ethical business practices in all products manufactured, purchased, processed, stored and supplied by the Company.

As a manufacturer and exporter of automotive components, including flywheel assemblies, ring gears, brake rotors and related products, the Company recognizes that counterfeit, fraudulent or misrepresented products and materials can adversely affect product safety, customer confidence, business reputation and the integrity of the Company’s supply chain.

Luthra Industrial Corp. therefore maintains a zero-tolerance approach towards the manufacture, purchase, sale, supply, acceptance, use, distribution or intentional release of counterfeit or suspected counterfeit products, materials or components and is committed to preventing their introduction into its manufacturing and supply chain.

All employees, suppliers, contractors, agents, business partners and other persons acting on behalf of Luthra Industrial Corp. are expected to support this commitment.

This policy supplements the Company’s Code of Conduct and quality management practices. The Company’s Code of Conduct requires employees to maintain product quality and safety and prohibits actions that could jeopardize customer confidence in the Company’s products.

2. PURPOSE
The purpose of this policy is to establish requirements and responsibilities for the prevention, identification, control and disposition of counterfeit parts, materials and components.

This policy is intended to ensure that:
1. Only genuine, approved and conforming materials and components are used in Company operations.
2. Materials and components are procured only through approved and controlled sources wherever applicable.
3. Appropriate identification and traceability are maintained throughout the supply chain.
4. Suspected counterfeit parts are immediately identified, segregated and prevented from unintended use or dispatch.
5. Counterfeit or suspected counterfeit material is investigated and appropriately disposed of or controlled.
6. Ensure suspected counterfeit products are not inadvertently used, dispatched or returned to normal stock.
7. Encourage employees and business partners to report suspected counterfeit activity without fear of retaliation.
8. Customers and relevant authorities are informed where required.
9. Lessons learned are incorporated into the Company's procurement, quality and supplier-control processes.

3. SCOPE
This policy applies to:
• All permanent and temporary employees.
• Contractual labor and contractors.
• Suppliers and sub-suppliers.
• Vendors and service providers.
• Distributors, agents and business partners.
• Personnel involved in purchasing, stores, quality, production, engineering, sales, dispatch and logistics.
• All raw materials, components, purchased parts, consumables, packaging materials, labels and finished products handled by Luthra Industrial Corp.
The policy applies to all locations, warehouses, manufacturing facilities and activities undertaken on behalf of Luthra Industrial Corp.

The policy covers, as applicable:
• Raw materials and metals
• Castings
• Ring gears
• Flywheel components and assemblies
• Brake rotors and related components
• Bought-out components
• Machined components
• Packaging and identification materials
• Spare parts and maintenance components
• Tools, dies and other production-related items
• Materials supplied by customers
• Materials supplied through subcontractors or third parties

4. DEFINITION OF COUNTERFEIT PART
For the purpose of this policy, a counterfeit part or material means any product, component, material or item that is intentionally misrepresented as being genuine, approved, specified or manufactured by an authorized source when it is not.

This may include, but is not limited to:
1. Products bearing unauthorized or falsified trademarks, logos, part numbers or identification marks.
2. Components represented as genuine when they are not sourced from an approved manufacturer or supplier.
3. Parts falsely represented as being manufactured by an approved manufacturer.
4. Materials with falsified or misleading certificates, test reports or documentation.
5. Materials or components whose grade, specification, composition, origin or characteristics have been deliberately misrepresented.
6. Parts with altered, removed or falsified identification or traceability markings.
7. Rejected or previously used components represented as new or conforming.
8. Products with altered, removed, duplicated or suspicious serial numbers, batch numbers, heat numbers or traceability information.
9. Materials or components obtained through unauthorized or unapproved channels where authenticity cannot be established.

A product shall be treated as “Suspect Counterfeit” whenever there is reasonable doubt regarding its authenticity, source, specification, traceability or documentation until the matter has been investigated and formally resolved.

5. POLICY STATEMENT
Luthra Industrial Corp. shall not knowingly purchase, manufacture, use, store, sell or dispatch counterfeit or fraudulently represented products, materials or components.

The Company shall establish appropriate controls based on the risk associated with the product, material, supplier and application.

All personnel are required to immediately report any suspected counterfeit product, material, documentation or identification to their immediate supervisor, Quality Department or Management.

No employee shall knowingly bypass inspection, traceability, approval or verification requirements in order to use or dispatch a suspected counterfeit item.

6. SUPPLIER & PROCUREMENT CONTROLS
To minimize the risk of counterfeit materials entering the Company's supply chain:
1. Procurement shall source critical materials and components from approved suppliers wherever applicable.
2. Supplier credentials, manufacturing capability and relevant documentation shall be evaluated before approval.
3. The identity and source of critical materials shall be verified where required.
4. Purchase documents shall clearly specify applicable technical, quality and identification requirements.
5. Suppliers may be required to provide material certificates, inspection reports, test certificates, certificates of conformity or other supporting documentation.
6. Any unauthorized substitution of material, component, manufacturer or source shall not be permitted without appropriate review and approval.
7. Procurement and Quality functions shall exercise additional diligence when sourcing from new, unfamiliar or non-standard sources.
8. Where appropriate, supplier performance and authenticity-related concerns shall form part of supplier evaluation and monitoring.

7. RECEIVING & INSPECTION CONTROLS
Incoming materials and components shall be subject to appropriate verification according to their risk and applicable inspection requirements.

Stores and Quality personnel shall verify incoming materials and components against applicable purchase and technical requirements.

Verification may include:
• Part number and identification.
• Quantity.
• Physical condition.
• Marking and labelling.
• Packaging.
• Batch/lot/heat number.
• Dimensional or visual characteristics.
• Material certificates and other documentation.
• Supplier and manufacturer information.
• Traceability information.

Where required, additional inspection, testing or verification shall be performed before the material is released for production.

Any discrepancy between the physical product and its documentation, identification, specification or approved source shall be investigated.

8. IDENTIFICATION & TRACEABILITY
Luthra Industrial Corp. shall maintain appropriate identification and traceability controls for materials and products wherever required.

Traceability information may include:
• Part number
• Customer reference
• Supplier identification
• Heat number
• Batch or lot number
• Production date
• Inspection status
• Material certificate
• Purchase order reference
• Incoming inspection record
• Production or process identification
• Dispatch information

Identification markings shall not be removed, altered or replaced without authorization. Employees shall remain alert for indications of counterfeit or suspect products, including:
• Unusual or poor-quality markings.
• Incorrect logos or labels.
• Mismatched part numbers.
• Inconsistent packaging.
• Missing or altered identification.
• Unusual physical characteristics.
• Unexpected dimensional differences.
• Inconsistent material properties.
• Suspicious certificates or test reports.
• Unusual supplier behavior.
• Unexplained changes in source or supply chain.
• Products received through unauthorized channels.
• Significant deviation from approved samples or specifications.

Any employee who identifies such a concern shall immediately inform the concerned Department Head and Quality Department and the affected material shall be placed under appropriate control until its authenticity and conformity are established.

9. CONTROL OF SUSPECTED COUNTERFEIT PARTS
When a part or material is suspected to be counterfeit:
1. The material shall be immediately identified, segregated and clearly marked as "HOLD – SUSPECTED COUNTERFEIT".
2. The material shall not be used, reworked, transferred, sold or dispatched without authorized disposition.
3. The Quality Department shall be informed immediately.
4. Relevant purchase, supplier, inspection and traceability records shall be reviewed.
5. The material shall be prevented from being processed, packed or dispatched.
6. The material shall be protected from accidental mixing with approved material.
7. Where appropriate, the supplier shall be notified and corrective action requested.
8. Where customer-supplied material is involved, the customer shall be informed as appropriate.

No employee shall remove the hold status or release the material without authorization from the designated Quality/Management authority.

10. INVESTIGATION
The Quality Department, in consultation with the relevant functional departments, shall investigate suspected counterfeit products.

The investigation may include:
• Review of purchase records.
• Supplier verification.
• Review of certificates and documentation.
• Physical and dimensional inspection.
• Material testing where applicable.
• Review of traceability records.
• Comparison with approved samples or specifications.
• Review of previous supplies.
• Communication with the supplier or original manufacturer, where appropriate.
• Determination of whether other batches or products may be affected.

The investigation shall be documented and retained as part of the Company’s quality records.

11. DISPOSITION OF CONFIRMED COUNTERFEIT PRODUCTS
Confirmed counterfeit products or materials shall not be returned to normal inventory or supplied to a customer as genuine product.

Depending upon the circumstances and applicable requirements:
• Scrap or destroy the material.
• Return the material to the supplier under controlled conditions.
• Initiate supplier corrective action.
• Quarantine related batches.
• Conduct additional inspection or testing.
• Notify the customer where required.
• Notify relevant authorities where legally required or considered appropriate.
• Review the supplier’s approval status.

Any disposition shall be authorized by the appropriate Quality/Management personnel and properly recorded.

12. DOCUMENTATION & RECORDS
Records relating to suspected or confirmed counterfeit material shall be maintained as appropriate.

These may include:
1. Supplier details.
2. Purchase order and delivery documentation.
3. Incoming inspection records.
4. Material certificates and test reports.
5. Photographs or other evidence.
6. Traceability information.
7. Investigation reports.
8. Corrective and preventive actions.
9. Supplier communications.
10. Final disposition records.
11. Customer notifications, where applicable.

Records shall be maintained in accordance with the Company's applicable document and record-control requirements.

13. CUSTOMER REQUIREMENTS & NOTIFICATION
Where a customer identifies or reports a suspected counterfeit component supplied by Luthra Industrial Corp., the matter shall be treated as a priority quality concern.

The Company shall:
1. Acknowledge and investigate the concern.
2. Identify potentially affected batches, lots or shipments.
3. Review production and traceability records.
4. Determine the extent of the issue.
5. Implement containment measures.
6. Provide appropriate information to the customer.
7. Take corrective and preventive action where required.

Any customer-specific requirement relating to counterfeit prevention shall be incorporated into the applicable quality and operational processes.

14. EMPLOYEE RESPONSIBILITIES
Every employee has a responsibility to:
• Follow this policy.
• Remain alert to counterfeit risks.
• Report suspected counterfeit products or activities.
• Never knowingly accept, use, manufacture or release counterfeit products.
• Cooperate with investigations.

Any employee who knowingly introduces, uses, conceals or dispatches counterfeit material may be subject to disciplinary action in accordance with Company policy.

Quality Department - The Quality Department shall:
• Establish appropriate verification and inspection controls.
• Investigate suspected counterfeit products.
• Maintain relevant records.
• Coordinate containment and corrective action.
• Support supplier evaluation and corrective actions.
• Ensure suspect material is not inadvertently released.

Purchase Department - Purchase Department shall:
• Purchase from approved sources wherever applicable.
• Ensure purchase specifications are clearly communicated.
• Obtain required supplier documentation.
• Escalate concerns regarding supplier authenticity or source.
• Support supplier investigation when counterfeit concerns arise.

Stores - Stores personnel shall:
• Verify incoming material identification.
• Maintain segregation and traceability.
• Prevent unauthorized mixing of materials.
• Immediately report suspicious material or documentation.

Production - Production personnel shall:
• Use only approved and released materials.
• Verify identification before use.
• Report unusual or suspicious materials immediately.
• Ensure suspect materials are not used in production.

15. SUPPLIER RESPONSIBILITY
Suppliers are expected to provide genuine and conforming products and materials and to maintain appropriate traceability.

Luthra Industrial Corp. may require suppliers to:
• Confirm the authenticity of supplied products.
• Provide traceability information.
• Provide supporting certificates and records.
• Notify Luthra Industrial Corp. of any suspected counterfeit issue affecting supplied products.
• Cooperate fully with investigations and corrective actions.

Where a supplier is found to have knowingly supplied counterfeit products or deliberately falsified documentation, the Company may take appropriate commercial and corrective action, including suspension or removal from the approved supplier list.

16. MANAGEMENT RESPONSIBILITY
Management shall:
• Provide appropriate resources for implementation of this policy.
• Establish accountability for counterfeit prevention.
• Support investigation and corrective action.
• Take appropriate action against deliberate violations.

17. TRAINING & AWARENESS
Relevant employees shall be made aware of counterfeit risks and the requirements of this policy.

Training and awareness may cover:
1. The risks associated with counterfeit products and materials.
2. Identification of suspicious or unusual components.
3. Importance of traceability.
4. Supplier and source controls.
5. Reporting requirements.
6. Segregation and control of suspected counterfeit material.
7. Applicable customer-specific requirements.

Training shall be provided as considered necessary based on the responsibilities and risk associated with the employee's role.

18. REPORTING & NON-RETALIATION
Any employee, supplier, contractor or business partner who has a genuine concern regarding suspected counterfeit material is encouraged to report the matter promptly to the Management.

No employee, supplier, contractor or business partner should knowingly conceal a suspected counterfeit issue or prevent its investigation.

Luthra Industrial Corp. shall make reasonable efforts to maintain confidentiality of information relating to reported counterfeit concerns and investigations.

No employee, supplier, contractor or business partner shall be subjected to retaliation for reporting a genuine concern in good faith.

Retaliation against a person who reports a suspected violation may result in disciplinary action. This is consistent with the Company’s existing Code of Conduct, which expressly prohibits retaliation against persons making reports or complaints.

19. VIOLATION OF POLICY
Any violation of this policy shall be taken seriously. Any employee who knowingly:
• Purchases counterfeit products;
• Accepts counterfeit material;
• Uses counterfeit material in production;
• Falsifies traceability information;
• Falsifies inspection or quality records;
• Conceals counterfeit activity;
• Knowingly releases counterfeit products; or
• Assists or facilitates counterfeit activity

may be subject to appropriate disciplinary action, up to and including termination of employment, in accordance with Company rules and applicable law.

The Company’s Code of Conduct establishes that failure to comply with its requirements may attract severe consequences, including termination of employment.

20. CONTINUOUS IMPROVEMENT
This policy shall be reviewed one year from the date of ratification and every three years thereafter, or earlier where required due to:
• Significant changes in business operations.
• Customer requirements.
• Regulatory or legal changes.
• Changes in the Company’s supply chain.
• Significant counterfeit incidents.
• Findings from audits or investigations.
• Changes in applicable quality management requirements.

21. POLICY COMMUNICATION
This policy shall be communicated to all relevant employees and persons working on behalf of Luthra Industrial Corp.

Every member of management and every functional head is responsible for ensuring that this policy is understood and implemented within their respective area of responsibility.

The policy shall be reviewed periodically and revised whenever necessary to ensure its continuing suitability and effectiveness.

FOR LUTHRA INDUSTRIAL CORPORATION
MANAGEMENT