The Institute of Company Secretaries of India

MCA/PD: 2019

06 August, 2019

Shri Injeti Srinivas, IAS
Secretary
Ministry of Corporate Affairs Government of India
Shastri Bhawan
Dr. Rajendra Prasad Road,

New Delhi —110 001

Ref: Amendments regarding CSR provisions in Companies (Amendment) Act, 2019 and its monitoring — Reg.

Sir,

At the outset, we congratulate you and the team MCA for successfully notifying the Companies (Amendment) Act, 2019. We are confident that the amended provisions would ensure accountability, strengthen the corporate governance norms and compliance management in corporate sector as enshrined in the Companies Act, 2013.

The Institute of Company Secretaries of India (ICSI) is committed to be partner in all initiatives of the MCA for successful implementation of Companies Act. Also, the ICSI was given the opportunity to be integral part to the introduction of the Companies Act, 2013 (`Act’) and was involved in formulation of Rules framed under the Act.

Also Read-

CSI suggests introduction of CSR Compliance certificate

ICSI requests introduction of CSR Audit / CSR Review mechanism

Being a part of the High Level Committee on CSR (`Committee’) and providing secretarial assistance, logistical and technical support to the Committee, the ICSI has drafted rules, incorporating therein the changes required as per the amendment to the Companies (Amendment) Act, 2019, given at `Annexure A’.

It is important to note the two major changes in the said amendment viz, transfer of unspent CSR amount to escrow account and Fund specified in Schedule VII. Monitoring the implementation of said amendments is a challenge and would further require compliance mechanism to be put in place to ensure that the amendments are followed in letter and spirit. Therefore, it is proposed that CSR Compliance Certificate, by an independent professional, should he introduced, which should cover all the aspects of CSR provisions as provided under the Act and the Rules. A draft Compliance Certificate covering each and every aspect is given at Annexure B’.

The Company Secretaries being forefront in compliance certification and corporate governance mechanism arc already rendering host of services similar thereto which are given at Annexure C’.

We request you to kindly consider introduction of CSR Compliance Certificate by a Company Secretary in Practice, the independent professional and the reporting thereof in a dedicated format in the form of CSR Compliance Certificate.

We hope that the Companies (Amendment) Act, 2019, shall go a long way in strengthening the positioning of CSR in the Indian Corporate.

We shall be pleased to provide any further information or clarification in this regard on hearing from your good self.

Thanking you,

Yours faithful

(CS Ashok Kumar Dixit)
Officiating  Secretary
The Institute of Company Secretaries of India

Enclosure: as above

‘Annexure A’

2. Definitions

(1) In these rules, unless the context otherwise requires, –

(a) “Act” means the Companies Act, 2013;

(b) “Annexure” means the Annexure appended to these rules;

(c) “Corporate Social Responsibility (CSR)” means and includes but is not limited to :-

(i) Projects or programs relating to activities, (Areas or subjects) specified in Schedule VII to the Act; or

(ii) Projects or programs or relating to activities undertaken by the board of directors of a company (Board) in pursuance of recommendations of the CSR Committee of the Board as per declared CSR Policy of the company subject to the condition that such policy shall /will [include activities, areas or subjects] specified in Schedule VII of the Act.

(d) “CSR Committee” means the Corporate Social Responsibility Committee of the Board referred to in section 135 of the Act.

(e) “CSR Policy” relates to the activities to be undertaken by the [company in areas or subjects] specified in Schedule VII to the Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company; (The companies should be made free to utilise their core competency for CSR activities. Proviso or explanation may be included in this regard.(

(f) Net profit” means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the Act, but shall not include the following, namely :-

(i). any profit arising from any overseas branch or branches of the company, whether operated as .a separate company or otherwise; and

(ii) any dividend received from other companies in India, which are covered under and complying with the provisions of section135 of the Act:

Provided that net profit in respect of a financial year for which the relevant financial -statements were prepared in accordance with the provisions of the Companies Act, 1956 (1 to 1956) shall not be required to be re-calculated in accordance with the provisions of the Act:

Provided further that in case of a foreign company covered under these rules, net profit means the net profit of such company as per profit and loss account prepared in terms of clause (a) of sub-section (1) of section 381 read with section 198 of the Act

(2) Words and expressions used and not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.

3. Corporate Social Responsibility.

(1) Every company including holding or subsidiary, and a foreign company defined under clause (42) of section 2 of the Act having its branch office or project office in India, which fulfills the criteria specified in sub-section (I) of section 135 of [he At shall comply with the provisions of section 135 of the Act and these rules:

Provided that net worth, turnover or net profit. of a foreign company of the Act shall be computed in accordance with balance sheet and Profit and loss account of such company prepared in accordance .with the provisions of clause (a) of sub-section (1) of section 381 and section 198 of the Act

(2) Every company which ceases to be a company covered under subsection (1) of section 135 of the Act for three consecutive financial years shall not be required to –

(a) constitute a CSR Committee; and

(b) comply with the provisions contained in sub-section (2) to (5) of the said section, till such time it meets the criteria specified in sub-section (1) of section 135.

4. CSR Activities

(1) The CSR activities shall be undertaken by the company, as per its stated CSR Policy, as projects or programs or activities (either new or ongoing), excluding activities undertaken in pursuance of its normal course of business.

“(2) The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through a company established under section 8 of the Act or a registered trust or a registered society empanelled with Ministry,of Corporate Affairs.

(a) a company established under. section 8 of the -Act or- a registered trust-or a registered society, established by the company, either singly or  along, with any other company; or

(b) a company established under section 8 of they Act or a registered trust or a registered society, established by the central “Government or State Government or, any entity established under an Act of Parliament or a State legislature

Provided that if, the Board of a company decides to undertake it & CSR activities through a company established under section 8 of the Act or a registered or a registered society, other than those specified in the sub-rule, such company or trust or society shall have an established track record of three years in undertaking similar programs to be undertaken, the modalities of utilisation of fund of such project and programs and the monitoring and reporting mechanism.”

(3) A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR Committees of respective companies are in a position to report separately on such projects or programs in accordance with these rules.

(4) Subject to provisions of sub-section (5) of section 135 of the Act, the CSR projects or programs or activities undertaken in India only shall amount to CSR Expenditure.

(5) The CSR projects or programs or activities exclusively for the benefit only the employees of the company and their families shall not be considered as CSR activities in accordance with section 135 of the Act.

(6) Companies may build CSR capacities of their own personnel as well as those of their Implementing agencies through Institutions with established track records of at least three financial years but such expenditure including expenditure on administrative overheads,”] shall not exceed five percent of total CSR expenditure of the company in one financial year.

(7) Contribution of any amount directly or indirectly to any political party under section 182 of the Act, shall not be considered as CSR activity.

5. CSR Committees.

(1) The companies mentioned in the rule 3 shall constitute CSR Committee as under.-

(i) [a company] covered under subsection (1) of section 185 which is not required to appoint an independent director pursuant to sub-section (4) of section 149 of the Act, shall have its CSR Committee without such director ;

(ii) a private company having only two directors on its Board shall constitute its CSR Committee with two such directors;

(iii) with respect to a foreign company covered under these rules, the CSR Committee shall comprise of at least two persons of which one person shall be as specified under clause (d) of sub-section (1) of section 380 o the ct and another person shall be nominated by the foreign company.

(2) The CSR Committee shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company.

6. CSR Policy

(1) The CSR Policy of the company shall, inter-alia, include the following namely

(a) a list of CSR projects or programs which a company plans to undertake [areas or subjects specified in] of the Schedule VII of the Act, specifying modalities of execution of such project or programs and implementation schedules for the same; and

(b) monitoring process of such projects or programs:

Provided that the CSR activities does not include the activities undertaken in pursuance of normal course of business of a company:

(2) The CSR Policy of the company shall specify that the surplus arising out of the CSR projects or programs or activities and interest thereon, if any, on separate account referred to in proviso-to section 135 shall not form part of the business profit of a company.

Further, any amount kept in the special account referred to in sub-section 6 of section 135, alongwith interest thereon, if any, shall be used in, pursuance to section 135 of the Act.

7. CSR Expenditure

CSR expenditure shall include all expenditure including contribution to corpus, or on projects or programs relating to CSR activities approved by the Board on the recommendation of its CSR Committee, but does not include any expenditure on an item not in conformity or not in line with activities which fall within the [areas or subjects, specified in] Schedule VII of the Act.

Provided that any expenditure on which the company claims income tax benefit shall not be treated towards CSR expenditure.

8. CSR Reporting

(1) The Board’s Report of a company covered under these rules pertaining to a financial year commencing on or after the 1st day of April, 2014 shall include an annual report on CSR containing particulars specified in Annexure.

(2) In case of a foreign company, the balance sheet filed under sub-clause (b) of sub-section (1) of section 381 shall contain an Annexure regarding report on CSR.

(3) For the purpose of sub-section 6 of section 135 of the Act the following conditions shah be fulfilled by.the company

(i) Any amount remainin uns ent in relation to  any ongoing  CSR projects/programmes  being  undertaken by the company but not completed at the end of the relevant financial year shall be duly noted by the Board on the recommendation of the CSR committee and  the same shall also be specified in the Directors’ Report

(ii) Any amount lying in the special account under sub-section 6 of section 135, remaining unspent at the end of three finanacial years from the date of deposit in the special account, which is required to be transferred to the fund, referred in sub-section 6, shall also be specified in the Directors’ Report for such financial year alongwith the confirmation that sub-section 6 of section 135 is complied with the that regard.

(4) A,company covered  under these Rules shall file annual report on CSR in the e-form CSR 1„ within 60  days from date of Annual General Meeting of the company. Further such companies covered under these Rules which are required to spent an amount not less than                  towards its CSR  initiatives in a given financial year shall also attach a Compliance Certificate in the format prescribed in Annexure, to such e-form CSR 1.

9. Display of CSR Activities on its Website

The Board of Directors of the company shall, after taking into account the recommendations of CSR Committee, approve the CSR Policy for the company and disclose contents of such policy in its report and the same shall be displayed on the company’s website, if any, as per the particulars specified in the Annexure.

Annexure B

Draft CSR Compliance Certificate

(For the Financial Year ended ———————–)

[Pursuant to Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014]

To,

The Board of Directors

——————————–

I/We have examined and verified the books, papers, minutes book and other records maintained by …………………………Limited (the company) for the period ended on………………………………………(hereinafter referred to as the “relevant period”) for the purpose of compliance with the statutory provisions related to Corporate Social Responsibility(“CSR”). Based on our verification and the information provided by the Company, its officers, agents, authorized representatives and officials of implementation agency (ies), if any, I/We hereby certify that the Company has complied with the statutory provisions of Section 135 and rules made thereunder read with Schedule VII of the Companies Act, 2013 with respect to the following matters:

(a) CSR Committee was duly constituted and the Committee met…………………times on…………………(dates) during the relevant period;

(b) Board’s Report issued during the relevant period duly contains the requisite disclosures on CSR for the previous financial year;

(c) Corporate Social Responsibility Policy of the Company as recommended by the CSR Committee is duly approved by the Board, in accordance with applicable provisions and hosted on the company’s website, if any;

(d) The CSR committee has recommended an amount of Rs.____ as expenditure to he incurred by the Company on the activities in pursuance of CSR policy during the relevant period;

(e) As against Rs……….., being the amount computed in accordance with section 135(5) towards CSR obligation for the relevant period, the company has spent Rs……………..during the relevant period and an amount of Rs……………………………remained unspent;

(f) An amount of Rs……………….., being the unspent amount out of CSR obligation for the relevant period referred above has been duly transferred to the fund referred to, in sub-section 5 of section 135 within the prescribed period;

8) An amount of Rs. ___________ , being the unspent amount out of CSR obligation for the relevant period, as referred above has been duly transferred to the special account referred to, in sub-section 6 of section 135 within the prescribed period;

h) An amount of Rs ____________ being the unspent amount, lying at the end of the relevant period, in the special account under sub-section 6 of section 135, for the financial year ended ___________ (being FY ended 3 years prior to the end of relevant period) remaining unspent at the end of three financial years from the date of deposit in that special account, has been transferred to the fund, under said sub-section 6;

i) the Company has spent its CSR obligation on the specified activities in ……………………… (geographical area);

j) the company has undertaken its CSR activities directly or through …………………………………… an eligible implementing agency;

k) the company has collaborated with …………………………….. for undertaking projects or programs or CSR activities and have reported on such projects or programs separately;

l) the employees of the company and their families are not the exclusive beneficiaries from the CSR projects or programs or activities;

m) the company has incurred administrative cost on implementation of CSR activities not more than 5% of the total CSR expenditure.

n) On the basis of our assessment and verification, the qualitative and quantitative impact of the projects undertaken during the relevant period are as under —

a)

b)

c)

I/We further report that there are adequate systems and processes in the company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

Place:                                                                                  Signatures

Date:                                                                                  Name of the Practicing Company Secretary

ACS/ FCS No.:

C P No.:

UDIN(if applicable):

Note: Please report specific observations/ qualifications, reservations or adverse remarks in respect of the aforesaid matters relating to the relevant period.

Rule 8 of Companies (CSR Policy) Rules, 2014

CSR Reporting

(1) a company covered under these rules pertaining to a financial year commencing on or after the 1st day of April, 2014 shall file an an annual report on CSR in E form CSR within six months of end of financial year.

(2) Such companies with more than Rs. 25 lakh prescribed CSR expenditure in a financial year shall submit CSR Compliance certificate, given by a company secretary in practice, in specified format.

Annexure C

We understand that in terms of the legal framework on CSR, the intent of the Legislature is to cover the following aspects under CSR Reporting:

A. The requirement as per section 135(1) to 135(4) is achieved relating to CSR Committee, CSR Policy.

B. The report to certify that the requisite prescribed CSR expenditure has been undertaken as per section 135, schedule VII and companies (CSR Policies) Rules, 2014.

C. The company has undertaken CSR activities as per Companies (CSR Policies) Rules, 2014 wherein if it has engage the implementing agencies, then it has complied with rule 4(2) of the companies (CSR Policies) Rules, 2014 and the Board of the company has not absolved with its responsibility as has been provided in section 135(4).

As submitted earlier representations mentioned above, the Company Secretaries in Practice may be assigned the responsibility of carrying out CSR Audit/ Review and issuing the CSR Audit Report. Parawise justification for the above mentioned aspects are stated hereunder:

A. The requirement as per section 135(1) to 135(4) is achieved which relates to CSR Committee, CSR Policy

Section 135(1) to 135(4) of the Companies Act, 2013 involves the requirement to –

– constitute a Corporate Social Responsibility Committee of the Board

– The Board’s report to disclose the composition of the Corporate Social Responsibility Committee

– The CSR Committee to formulate and recommend to the Board, a Corporate Social Responsibility Policy

– The CSR Committee to recommend the amount of expenditure to be incurred on the activities

– The CSR Committee to monitor the Corporate Social Responsibility Policy

– The Board to approve the CSR Policy;

– The Board to ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company

The aforesaid compliances are already reported by the Company Secretaries.

However, since the specific comprehensive audit of CSR is significant, the compliance of CSR provisions be separately independently looked into.

Company Secretaries being forefront in due-diligence and compliance, are the appropriate independent professional for CSR Reporting. The following certifications/due-diligence certificates are presently given by the Company Secretaries in Practice-

a) Regulation 24A under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has mandated a separate Annual Secretarial Compliance Report focusing entirely on the compliance of SEBI Laws, despite their coverage under Form MR-3 setting an illustrious example to mandate a dedicated monitoring mechanism in the form of compliance certificate on areas demanding significant focus and attention.

b) Regulation 34(3) and 53(f) of the SEBI (LODR) Regulations, 2015 provides:

Para (E) of Schedule V (Annual Report) The annual report shall contain the Compliance certificate from the practicing company secretaries regarding compliance of conditions of corporate governance shall be annexed with the directors’ report.

c) Section 7(1)(b) of the Companies Act, 2013 provides that a declaration in the prescribed form , amongst other, by company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made thereunder in respect of registration and matters precedent or incidental thereto have been complied with.

b) Diligence reporting for Banks in case of multiple banking/consortium lending arrangements in terms of the circular issued by RBI. Circular DBOD No. BP.PC 46/08.12.001/2008-09.

B. The report to certify that the requisite prescribed CSR expenditure has been undertaken as per section 135, schedule VII and companies (CSR Policies) Rules, 2014

The CS have also been recognised by Legislature/ Regulators to grant certificate in financial matters as under:

a) In terms of the provisions of sub-section (2) of section 269 of the erstwhile Companies Act, 1956 read with Schedule XIII, Part III, para 2 which deals with managerial remuneration and its calculation, Company Secretary of the company or where the company has not appointed a Secretary, secretary in whole time practice has been recognised to certify that the requirement of section 198are met which includes calculating the amount of net profit.

b) Company Secretaries in practice are recognized to be Registered Valuer for the asset class “Securities or Financial Assets” under the Companies (Registered Valuer and Valuation) Rules, 2017.

c) Regulation 56(1)(d) of the SEBI (LODR) Regulations, 2015 provides that the listed entity shall forward to the debenture trustee promptly, a half yearly certificate regarding maintenance of hundred percent. asset cover in respect of listed non-convertible debt securities, by either a practicing company secretary or a practicing chartered accountant, along with the half yearly financial results;

d) Section 149(1)(d) of the Companies Act, 1956 provides that a declaration by company secretary in whole-time practice that every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription.

e) Company Secretaries are allowed to conduct internal audit under section 138 of the Companies Act, 2013.

f) Company Secretaries are empowered to oversee all the compliances relating to issue of depository receipts and to provide compliance report to be placed at the Board meeting to be held immediately after closure of all formalities of the issue of depository receipts (Rule 4 of the Companies (Issue of Global Depository Receipts) Rules, 2014.

g) Company Secretary are authorised to conduct internal audit of Portfolio managers (SEBI Circular dated 18th November, 2003.

h) Company ecretary has been recognised to issue Certificate in case of the Indian company accepting the investment from a foreign investor, thereby confirming compliance of Companies Act, 2013 and other matters (As per Para 9 (1) (B) (i) of Schedule 1 to Notification No. FEMA 20/2000-RB dated 3rd May 2000)

In addition to the above, the curriculum as well as training provided to the company secretaries capacitate them to fully competent to certify the documents in financial matters.

A Draft Certificate of calculation of Net Profits under section 198 is placed as Annexure C.1.

C. The company has undertaken CSR activities as per Companies (CSR Policies) Rules, 2014 wherein if it has engage the implementing agencies, then it has complied with rule 4(2) of the companies (CSR Policies) Rules, 2014 and the Board of the company has not absolved with its responsibility as has been provided in section 135(4)

Further, we wish to bring to your kind notice that –

i) Company Secretaries are, presently, actively involved in analyzing the impact assessment and implementation of the projects undertaken by the corporates under CSR mandate.

ii) Company Secretaries in Practice are engaged in CSR consultancy and compliance.

iii) Company secretaries are very well conversant with Non- government organizations (section 8 companies), which are assigned with the task of implementing agencies for CSR activities.

Some of the relevant recognitions are as under:

A. Para C. (10) (i) of Schedule V (Annual Report) of the SEBI (LODR) Regulations, 2015 provides that the annual report to contain a certificate from a Company Secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority.

B. Conduct of Internal Audit of the stock brokers / sub brokers under SEBI Circular no. MIR SD/ DPSIII/ Cir-26/ 08 dated 22nd August 2008 and MRD/DMS/Cir-29/2008 dated 21st October 2008.

C. Certification under Regulation 76 of SEBI (Depositories and Participants) Regulations, 2018 for Reconciliation of Share Capital Audit

D. Acting as Compliance Auditor under third party certification/ Audit Scheme (Amendment), 2018 in the State of Haryana.

Submission

In light of the above, we request you to kindly consider the introduction of CSR Audit and issuance of CSR Compliance certificate by an Company Secretary in Practice, independent professional and the reporting thereof in a dedicated format in the form of CSR Compliance Certificate (Annexure B) which shall be attached with the c-form for CSR.

Also, we would like to suggest that initially obtaining the said CSR Compliance Certificate be mandated for companies with more than Rs. 25 lakh of prescribed CSR expenditure.

Annexure C.1

Draft Certificate of calculation of Net Profits under section 198

(For the Financial Year ended_________)

[Pursuant to Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014]

To,

The Board of Directors

_________________

I/We have examined and verified the books, papers, minutes book and other records maintained by …………………………  Limited (the company) for the period ended on……………………………… for the purpose of compliance with the statutory provisions related to Corporate Social Responsibility and the information provided by the Company, its officers, agents, authorized representatives. Based on our verification, I/We hereby certify that the net profit under section 198 of…………….. Limited has been calculated as per its financial statement prepared in accordance with the applicable provisions of the Act.

Calculation under section 198 read with provisions related to CSR

Particulars 1 Financial
Year 1
Financial
Year 2
Financial
Year 3
ADDITIONS:

credit shall be given for the sums specified in sub-section (2), and credit shall not be given for those specified in sub-section (3);

the sums specified in sub-section (4) shall be deducted, and those specified in sub-section (5) shall not be deducted
the bounties and subsidies received from any Government, or any public authority constituted or authorised in this behalf, by any Government, unless and except in so far as the Central Government otherwise directs
income-tax   and   super-tax    payable   by   the company under the Income-tax Act, 1961, or any other tax on the income of the company not falling under clauses (d) and (e) of sub-section (4)
any compensation, damages or payments made voluntarily, that is to say, otherwise than in virtue o7ariabi ity such as is referred to in clause (m) of sub-section (4)
loss of a capital nature including loss on sale of the undertaking or any of the undertakings of the company or of any part thereof not including any excess of the written-down value of any asset which is sold, discarded, demolished or destroyed over its sale proceeds or its scrap value
any change in carrying amount of an asset or of a liability recognised in equity reserves including surplus in profit and loss account on measurement of the asset or the liability at fair value
DEDUCTIONS:

profits, by way of premium on shares or debentures of the company, which are issued or sold by the company, unless the company is an investment company as referred to in clause (a) of the Explanation to section 186

profits on sales by the company of forfeited shares
profits of a capital nature including profits from the sale of the undertaking or any of the undertakings of the company or of any part thereof
profits from the sale of any immovable property or fixed assets of a capital nature comprised in the undertaking or any of the undertakings of

the  company,    unless  the    business     of the company consists, whether wholly or partly, of buying and selling any such property or assets;

Provided that where the amount for which any fixed asset is sold exceeds the written-down value thereof, 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

any change in carrying amount of an asset or of a   liability    recognised    in    equity    reserves including surplus in profit and loss account on measurement of the asset or the liability at fair value
any   amount   representing    unrealised    gains, notional gains or revaluation of assets
any profit arising from any overseas branch or branches of the company, whether operated as a separate company or otherwise; and
any dividend received from other companies in India, which are covered under and complying with the provisions of section135 of the Act as under
all the usual working charges
directors’ remuneration
bonus or commission paid or payable to any member of the company’s staff, or to any engineer, technician or person employed or engaged by the company, whether on a whole-time or on a part-time basis;
any tax notified by the Central Government as being in the nature of a tax on excess or abnormal profits
any tax on business profits imposed for special reasons or in special circumstances and notified by the Central Government in this behalf
interest on debentures issued by the company
interest on mortgages executed by the company and on loans and advances secured by a charge on its fixed or floating assets;
interest on unsecured loans and advances
expenses on repairs, whether to immovable or to movable property, provided the repairs are not of a capital nature
outgoings inclusive of contributions made under section 181;
depreciation to the extent specified in section 123;
the excess of expenditure over income, which had arisen in computing the net profits in accordance with this section in any year , in so far as such excess has not been deducted in any subsequent year preceding the year in respect of which the net profits have to be ascertained
any compensation or damages to be paid in virtue of any legal liability including a liability arising from a breach of contract
any sum paid by way of insurance against the risk of meeting any liability such as is referred to in clause (m);
debts considered bad and written off or adjusted during the year of account
A.  Total Amount
B.   Average Net Profit: F1+F2+F3/3
C.   2%of B

Place:                                                              Signatures

Date:                                                               Name of the Practicing Company Secretary

ACS/ FCS No.:

C P No.:

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