As Per Section 135 of the Companies Act, 2013 (“CSR provisions”), every company with net worth of 500 crore, or turnover of INR 1000 crore or more or net profit of 5 crore or more is mandated to spend 2% of average net profit of the preceding three (3) years on social responsibilities/CSR activities.
Vide recent amendments1, item (ix) of Schedule VII has been expanded to include as follows:
Clause (ix)(a) of Schedule VII of the Companies Act necessitates contribution to be provided to incubators in the field of science, technology, engineering and medicine, funded by the Central or the State Government or Public Sector Undertaking or any agency of the Central/State Government. Further, to reduce the ambiguity around permitted projects from technology incubators, some broad buckets of activities have been identified:
- Infrastructure & Facilities: Incubators can list and solicit funding for projects to upgrade or create physical and IT infrastructure. This can also include procurement of equipment, tools and software
- Programs & Partnerships: Incubators can seek CSR support for general program management costs, knowledge building programs for staff and incubatees and other events/ programs/ partnerships consistent with CSR activities mentioned in Schedule VII of the Companies Act
- Technology De-risking: Support for providing material and financial resources to incubatees for starting up, scaling, field trials, pilot orders and other business activities.
iCreate is a not-for-profit technology business incubator recognized and supported by the Department of Science and technology, Govt. of India, Ministry of Electronics and Information and Technology, Govt. of India, Department of Industries and Mining, Government of Gujarat and Ministry of Small and Medium Enterprises, Govt. of India. It thus qualifies for accepting CSR funding from corporations under the provisions of schedule VII of companies act 2013.