The Ministry of Corporate Affairs has vide General Circular No. 21/2014 dated June 18, 2014 clarified that ‘any financial year’ referred under sub-section (1) of section 135 of the Act read with Rule 3(2) of (CSR Policy) Rules, 2014 implies ‘any of the three preceding financial years’.
As per the clarification, in case of a company which meets the criteria in any of the preceding three financial years (i.e. 2011- 12, 12-13, 13-14) but which does not meet the criteria in financial year 2014-15 will need to constitute CSR Committee and comply with provisions of 135 (2) to (5) in the year 2014- 15.
However, if the company has made profits in the years earlier to 2011-12 but not in the years 2011-12, 2012-13 or 2013- 14, it need not comply with section 135.
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