General Circular No. 21/2014

No. 05/01/2014- CSR
Government of India
Ministry of Corporate Affairs
5
th Floor, ‘A’ Wing, 
Shastri Bhawan, Dr. R. P. Marg
New Delhi - 110 001 
Dated: 18th June, 2014
To,
All Regional Director,
All Registrar of Companies,
All Stakeholders
Subject: - Clarifications with regard to provisions of Corporate Social Responsibility under 
section 135 of the Companies Act, 2013.
Sir,
This Ministry has received several references and representation from stakeholders
seeking clarifications on the provisions under Section 135 of the Companies Act, 2013 (herein 
after referred as ‘the Act’) and the Companies (Corporate Social Responsibility Policy) Rules, 
2014, as well as activities to be undertaken as per Schedule VII of the Companies Act, 2013. 
Clarifications with respect to representations received in the Ministry on Corporate Social 
Responsibility (herein after referred as (‘CSR’) are as under:-
(i) The statutory provision and provisions of CSR Rules, 2014, is to ensure that while 
activities undertaken in pursuance of the CSR policy must be relatable to Schedule VII
of the Companies Act 2013, the entries in the said Schedule VII must be interpreted 
liberally so as to capture the essence of the subjects enumerated in the said 
Schedule. The items enlisted in the amended Schedule VII of the Act, are broad-based 
and are intended to cover a wide range of activities as illustratively mentioned in the 
Annexure.
Contd….-2-
(ii) It is further clarified that CSR activities should be undertaken by the companies in 
project/ programme mode [as referred in Rule 4 (1) of Companies CSR Rules, 2014]. 
One-off events such as marathons/ awards/ charitable contribution/ advertisement/
sponsorships of TV programmes etc. would not be qualified as part of CSR 
expenditure.
(iii) Expenses incurred by companies for the fulfillment of any Act/ Statute of regulations
(such as Labour Laws, Land Acquisition Act etc.) would not count as CSR expenditure 
under the Companies Act.
(iv) Salaries paid by the companies to regular CSR staff as well as to volunteers of the 
companies (in proportion to company’s time/hours spent specifically on CSR) can be 
factored into CSR project cost as part of the CSR expenditure.
(v) “Any financial year” referred under Sub-Section (1) of Section 135 of the Act read with 
Rule 3(2) of Companies CSR Rule, 2014, implies ‘any of the three preceding financial 
years’.
(vi) Expenditure incurred by Foreign Holding Company for CSR activities in India will 
qualify as CSR spend of the Indian subsidiary if, the CSR expenditures are routed 
through Indian subsidiaries and if the Indian subsidiary is required to do so as per 
section 135 of the Act.
(vii) ‘Registered Trust’ (as referred in Rule 4(2) of the Companies CSR Rules, 2014) would 
include Trusts registered under Income Tax Act 1956, for those States where 
registration of Trust is not mandatory.
Contd….-3-
(viii) Contribution to Corpus of a Trust/ society/ section 8 companies etc. will qualify as CSR 
expenditure as long as (a) the Trust/ society/ section 8 companies etc. is created 
exclusively for undertaking CSR activities or (b) where the corpus is created 
exclusively for a purpose directly relatable to a subject covered in Schedule VII of the 
Act.
2. This issues with the approval of Competent Authority.
Yours faithfully,
 Sd/-
(Seema Rath)
Assistant Director (CSR) 
Phone No. 23389622
Copy to:
1. PSO to Secretary 
2. PPS to Additional Secretary 
3. PS to DG (IICA)/JS (M) /JS(B)/JS(SP)/DII (UCN)/EA/DII(POLICY)
4. DIR (AK)/DIR (AB)/DIR(NC)/DIR(PS)
5. e-Governance Cell for uploading on website of MCAAnnexure referred to at para (i) of General Circular No. 21/2014 dated 18.06.2014
SI. 
No.
Additional items requested to be included in 
Schedule VII or to be clarified as already 
being covered under Schedule VII of the Act
Whether covered under Schedule VII of the 
Act
1. Promotion of Road Safety through CSR: 
(i) (a) Promotions of Education, 
“Educating the Masses and Promotion 
of Road Safety awareness in all facets 
of road usage,
(b) Drivers’ training,
 (c) Training to enforcement personnel,
(d) Safety traffic engineering and 
awareness through print, audio and 
visual media” should be included.
(ii) Social Business Projects :
“giving medical and Legal aid, 
treatment to road accident victims” 
should be included. 
(a) Schedule VII (ii) under “promoting 
education”.
(b) For drivers training etc. Schedule VII (ii) 
under “vocational skills”.
(c) It is establishment functions of 
Government (cannot be covered).
(d) Schedule VII (ii) under “promoting 
education”.
(ii) Schedule VII (i) under ‘promoting health care 
including preventive health care.’
2.
 
 Provisions for aids and appliances to the
differently- able persons - ‘Request for inclusion 
Schedule VII (i) under ‘promoting health care 
including preventive health care.’
3. The company contemplates of setting up 
ARTIIC (Applied Research Training and 
Innovation Centre) at Nasik. Centre will cover the 
following aspects as CSR initiatives for the benefit 
of the predominately rural farming community:
(a) Capacity building for farmers covering 
best sustainable farm management 
practices.
(b) Training Agriculture Labour on skill 
development.
Item no. (ii) of Schedule VII under the head of 
“promoting education” and “vocational skills” 
and “rural development”.
(a) “Vocational skill” livelihood enhancement 
projects.
(b) “Vocational skill”(c) Doing our own research on the field for 
individual crops to find out the most cost 
optimum and Agri – ecological 
sustainable farm practices. (Applied 
research) with a focus on water 
management.
(d) To do Product Life Cycle analysis from the 
soil conservation point of view.
(c) ‘Ecological balance’, ‘maintaining quality of 
soil, air and water’.
(d) “Conservation of natural resource” and 
‘maintaining quality of soil, air and water’.
4. To make “Consumer Protection Services” 
eligible under CSR. (Reference received by Dr. 
V.G. Patel, Chairman of Consumer Education and 
Research Centre).
(i) Providing effective consumer 
grievance redressal mechanism.
(ii) Protecting consumer’s health and 
safety, sustainable consumption, 
consumer service, support and 
complaint resolution.
(iii) Consumer protection activities. 
(iv) Consumer Rights to be mandated.
(v) all consumer protection programs and 
activities” on the same lines as Rural 
Development, Education etc. 
Consumer education and awareness can be 
covered under Schedule VII (ii) “promoting 
education”.
5. a) Donations to IIM [A] for conservation of 
buildings and renovation of classrooms 
would qualify as “promoting education” and 
hence eligible for compliance of 
companies with Corporate Social 
Responsibility.
b) Donations to IIMA for conservation of 
buildings and renovation of classrooms 
would qualify as “protection of national 
heritage, art and culture, including 
restoration of buildings and sites of 
historical importance” and hence eligible 
for compliance of companies with CSR.
Conservation and renovation of school 
buildings and classrooms relates to CSR 
activities under Schedule VII as “promoting 
education”. 6. Non Academic Technopark TBI not located 
within an academic Institution but approved and 
supported by Department of Science and 
Technology. 
Schedule VII (ii) under “promoting education”, if 
approved by Department of Science and 
Technology.
7. Disaster Relief Disaster relief can cover wide range of 
activities that can be appropriately shown under 
various items listed in Schedule VII. For 
example,
(i) medical aid can be covered under 
‘promoting health care including 
preventive health care.’
(ii) food supply can be covered under 
eradicating hunger, poverty and 
malnutrition.
(iii) supply of clean water can be covered 
under ‘sanitation and making 
available safe drinking water’.
8. Trauma care around highways in case of road 
accidents.
Under ‘health care’.
9. Clarity on "rural development projects” Any project meant for the development of rural 
India will be covered under this.
10. Supplementing of Govt. schemes like mid-day 
meal by corporates through additional nutrition 
would qualify under Schedule VII.
Yes. Under Schedule VII, item no. (i) under 
‘poverty and malnutrition’.
11. Research and Studies in the areas specified in 
Schedule VII.
Yes, under the respective areas of items 
defined in Schedule VII. Otherwise under 
‘promoting education’.
12. Capacity building of government officials and 
elected representatives – both in the area of PPPs 
and urban infrastructure.
No.13. Sustainable urban development and urban 
public transport systems 
Not covered.
14. Enabling access to, or improving the delivery of, 
public health systems be considered under the 
head “preventive healthcare” or “measures for 
reducing inequalities faced by socially & 
economically backward groups”?
 Can be covered under both the heads of 
“healthcare” or “measures for reducing 
inequalities faced by socially & economically 
backward groups”, depending on the context.
15. Likewise, could slum re-development or EWS 
housing be covered under “measures for reducing 
inequalities faced by socially & economically 
backward groups”?
 Yes.
16.
Renewable energy projects 
Under ‘Environmental sustainability, ecological 
balance and conservation of natural resources’,
17.
(i) Are the initiatives mentioned in 
Schedule VII exhaustive? 
(ii) In case a company wants to undertake 
initiatives for the beneficiaries 
mentioned in Schedule VII, but the 
activity is not included in Schedule VII, 
then will it count (as per 2(c)(ii) of the 
Final Rules, they will count)? 
(i) & (ii) Schedule VII is to be liberally 
interpreted so as to capture the essence of 
subjects enumerated in the schedule.
18. US-India Physicians Exchange Program –
broadly speaking, this would be program that 
provides for the professional exchange of 
physicians between India and the United States. 
 No.

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