2013年会社法に基づく企業の社会的責任（CSR）とその関連事項

We, humans, are an inseparable part of society and the corporates founded by humans impact people with their operations. Therefore, it is of utmost importance to understand the needs of society as a moral obligation. Any action that a company takes to give back to society can fall under the Corporate Social Responsibility (CSR) umbrella.

CSR brings positive change to society and also builds customers’ trust as consumers feel that they are using the product or service of a socially responsible company and they feel attached and become supportive. In India, CSR spending constitutes up to 28% of philanthropic giving which is invested in education, livelihoods support, health sectors, etc.

Though CSR is a moral responsibility that every entity should take toward society, still, it is better to make it mandatory so that no entity can miss it. On the same lines, the Companies Act, of 2013 made it mandatory for specified companies to incur a specified % of net profits on CSR Activities. This write-up discusses various facets of CSR viz. mandatory requirements, activities for CSR, modes of conducting CSR, taxation allowance and CSR, treatment of unspent or excess CSR amount, impact assessment, and disclosures relating to CSR and CSR in COVID times.

1. CSR Committee: Company covered for CSR Provisions

• As per Section 135(1) of the Companies Act, 2013, companies falling under any of the following categories during the preceding immediate financial year are required to form a CSR Committee:
  • Company having a net worth of INR 500 Crores or more; or
  • Company having turnover of INR 1,000 Crores or more; or 
  • Company having a net profit of INR 5 Crores or more 

• CSR Committee shall consist of 3 or more directors out of which one should be an independent director. However, where a company is not required to appoint an independent director under section 149(4) then the CSR Committee shall consist of 2 or more directors.

• The company is required to disclose the composition of the CSR Committee in the Director’s Report.

• Provided that Where the amount to be spent by a company on CSR Activities does not exceed INR 50,00,000 then the Company shall not be required to form a CSR Committee and all the functions of the CSR Committee shall be discharged by the Board of Directors of such company.

2. Expenditure to be incurred on CSR Activities

• Every company, required to form a CSR Committee, shall incur in every financial year at least 2% of the average net profit of the three immediately preceding Financial Years on CSR Activities.

• Where a company has not completed a period of 3 years since incorporation, the average shall be computed of profit of all financial years from incorporation.

3. Computation of Net profit for CSR Activities

• Covered Companies are required to incur 2% of their average Net profit on CSR Activities. 
• For this purpose, Net Profit shall be computed as per Section 198 of the Companies Act, 2013.
• Deductions Allowed:

In computing Net Profits, the following sum shall be deducted:

1. 通常の運営経費
2. 取締役報酬
3. 会社のスタッフまたは会社に雇用された者に対して支払われる、または支払われるべきボーナスやコミッション
4. 超過利益または異常利益に対する税金
5. 特別な理由または特別な状況下で課される事業利益に対する税金
6. 会社が発行した社債に対する利息
7. 会社が締結した抵当権、および固定資産または流動資産を担保とする貸付金や前払金に対する利息
8. 無担保の貸付金および前払金に対する利息
9. 不動産または動産に対する修理費（ただし、資本的支出に該当しないものに限る）
10. 第181条に基づく寄付金を含む支出
11. 第123条に規定される範囲内の減価償却費
12. 各年度に発生した損失の補填。ただし、当該超過分が、純利益を確定すべき年度の前の年度の利益から控除されていない場合に限る
13. 契約違反から生じる責任を含む、法的責任に基づいて支払われるべき補償金または損害賠償金
14. 上記(m)項に言及されるような責任を負うリスクに対する保険として支払われる金額
15. 会計年度中に不良債権とみなされ、償却または調整された債権

• Incomes not to be credited:

While computing net profits, credit shall not be given for the following sums::

1. 投資会社の場合を除き、会社が発行または売却した株式または社債のプレミアムによる利益
2. 没収株式の売却益
3. 事業またはその一部の売却による利益を含む資本的性質の利益
4. 会社の事業が、そのような資産の売買を全部または一部として構成している場合を除き、不動産または資本的性質の固定資産の売却益

However, when the sale value of the fixed asset exceeds the written-down value, credit shall be given for so much of the excess as is not higher than the difference between the original cost of that fixed asset and its written-down value;

• 資産または負債を公正価値で測定した際に、損益計算書の剰余金を含む資本準備金として認識された資産または負債の再評価による損益
• 未実現利益、概念上の利益、または資産の再評価を表す金額

4. Roles of CSR Committee

The Corporate Social Responsibility Committee shall:

1. formulate and recommend to the Board, a Corporate Social Responsibility Policy indicating activities to be undertaken by the company.
2. recommend the amount of expenditure to be incurred on the activities 
3. monitor the Corporate Social Responsibility Policy of the company from time to time.

5. Roles of Board of Directors with respect to CSR Activities

The Board of every company shall,—

1. Considering recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company.
2. Disclose the contents of CSR Policy in its report and also place it on the company's website; and
3. ensure that the activities as are included in the Corporate Social Responsibility Policy of the company are undertaken by the company.

6. Activities covered under CSR Activities

Schedule VII of the Companies Act, 2013, provides a wide range of CSR activities that may be undertaken by corporates in India. The activities to achieve its CSR obligations include:

1. Eradicating hunger, poverty, and malnutrition, promoting health care including preventive health care and sanitation including contributing to the Swach Bharat Kosh set up by the Central Government for the promotion of sanitation and making available safe drinking water.
2. Promoting education, including special education and employment enhancing vocational skills, especially among children, women, the elderly, and the differently abled, and livelihood enhancement projects.
3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, daycare centers, and such other facilities for senior citizens, and measures for reducing inequalities faced by socially and economically backward groups.
4. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources, and maintaining the quality of soil, air, and water including contribution to the Clean Ganga Fund set up by the Central Government for rejuvenation of river Ganga.
5. Protection of national heritage, art, and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional art and handicrafts.
6. Measures for the benefit of armed forces veterans, war widows and their dependents, Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows.
7. Training to promote rural sports, nationally recognized sports, paralympic sports, and Olympic sports.
8. Contribution to the prime minister’s national relief fund or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)] or any other fund set up by the central govt. for socio-economic development and relief and welfare of the scheduled caste, tribes, other backward classes, minorities, and women.
9. Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government and
10. Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE); Department of Biotechnology (DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information Technology and other bodies, namely Defence Research and Development Organisation (DRDO); Indian Council of Agricultural Research (ICAR); Indian Council of Medical Research (ICMR) and Council of Scientific and Industrial Research (CSIR), engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).
11. Rural development projects.
12. Slum area development.
13. Disaster management, including relief, rehabilitation, and reconstruction activities.

Further, as per General Circular No. 21/2014 dated 18th June 2014, activities mentioned above should be interpreted liberally so as to capture the essence. The items listed above are broad-based and are intended to cover a wide range of activities as illustratively mentioned in the Annexure.

Further, as per Section 135(5) of the Companies Act, shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities.

7. Activities not covered under CSR activities

As per General Circular No. 21/2014 dated 18th June 2022, the following activities cannot be included as part of a company’s eligible CSR spend:

1. Projects or programs or activities that benefit only the employees of the company and their families 
2. One-off events such as marathons/ awards/ charitable contributions/ advertisements/ sponsorships of TV programs etc. 
3. Expenses incurred for the fulfillment of any Act/ Statute of regulations (such as Labour Laws, Land Acquisition Act, etc.)
4. Contribution of any amount directly or indirectly to any political party shall not be considered as a CSR activity.
5. Activities incurred in pursuance of its normal course of business.

However, Salaries paid by the companies to regular CSR staff as well as to volunteers of the companies can be factored into CSR project cost as part of the CSR expenditure.

8. Treatment of excess or unspent amount on CSR Activities

8.1 Excess amount spent on CSR Activities during the year

Where a company spends an amount in excess of the required 2% of net profits, such excess amount may be set off against the same requirement to spend up to the immediate succeeding 3 financial years subject to the following conditions:

1. the excess amount available for set-off shall not include the surplus arising out of the CSR activities if any and 
2. the Board of directors shall pass a resolution to that effect.

8.2 Unspent amount for ongoing projects 

進行中のプロジェクトに対してCSR活動の全額を支出できなかった場合、その未支出額は会計年度終了後30日以内に、会社が開設する専用の「未支出CSR口座」へ振り込まなければなりません。

Further, The amount transferred in such a dedicated account must be used within the next three financial years as per CSR policy. 

ただし、何らかの理由で3年経過後もこれらの金額が未支出のまま残っている場合は、第3会計年度終了後30日以内に、会社法（2013年）のスケジュールVIIで指定された基金（PM CARES基金など）へ振り込む必要があります。

8.3 Unspent amount for other projects 

会社がCSR予算の全額を使い切れず、かつ特定のCSRプロジェクトに割り当てられなかった未支出額がある場合は、会計年度終了後6か月以内に、会社法（2013年）のスケジュールVIIで指定された基金へ振り込まなければなりません。

Further, the company shall specify in the board report the reasons for not spending CSR Amount.

9. コンプライアンス違反の結果

As per Section 135(7) of the Companies Act, If a company defaults in complying with the provisions of CSR, the company shall be liable to a penalty of the lower following amount:

1. 会社がスケジュールVIIで指定された基金または未支出CSR口座へ振り込むべき金額の2倍、あるいは
2. 1,000万ルピー

Further, every officer of the company who is in default shall be liable to a penalty of lower following amounts:

1. 会社がスケジュールVIIで指定された基金または未支出CSR口座へ振り込むべき金額の10分の1、
2. あるいは20万ルピーのいずれか低い方。

10. Frequently Asked Questions

CSR活動にかかった費用は所得税の控除対象となるか

As per Explanation 2 to Section 37(1), CSR expenditure in business is not deemed to be an expenditure incurred for business. Therefore, it is not deductible in income tax. However, CSR expenditures which is of other nature described in sections 30 to 36 or 80G like repairs, depreciation, or contribution to specific funds will be eligible for deductions under those respective sections.

指定企業におけるインパクト評価とは何か

The Government has mandated to have an impact assessment for specified companies so that companies can understand and evaluate the impact of their social investments in programs and projects on society. Currently, impact assessment is mandatory for companies with a CSR spend of INR 10 crore or more in three immediately preceding years of all projects with outlays of INR 1 crore or more.An impact assessment must be undertaken by an independent agency and the report of impact assessment shall be placed before the Board and annexed to the annual report on CSR. The cost of impact assessment can be booked towards CSR but the same should not exceed 5% of total CSR for that financial year or INR 50 lakh whichever is less.

コロナ禍におけるCSR活動

MCA has clarified wide Circular No. 09/2021 dated 05 May 2022 that CSR funds incurred on COVID-19-related activities will qualify as CSR expenditure. Spending for creating health infrastructure for COVID care, the establishment of medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment for countering COVID-19 or similar such activities were made eligible CSR activities.Further, companies engaged in R&D activities for new vaccines, drugs, and medical devices in their normal course of business can undertake R&D activity of vaccines, drugs, and medical devices related to COVID-19 as CSR activity. This will qualify only for financial years starting from April 2020 and running till March 2023. But these companies engaged in R&D concerning COVID-19 should do so in collaboration with the institutions mentioned in Schedule VII. Dedicated CSR funds of corporates could be spent for various activities related to COVID-19 under Schedule VII to the Companies Act, 2013.