MSR Trust is a not-for-profit entity and it has involved into various charitable and philanthropic activities. Its activities include: (i) Eradicating hunger, poverty, malnutrition and inequality (ii) Promoting education
CS Professional · CSR and Social Governance · PYQS · December 2024
MSR Trust is a not-for-profit entity and it has involved into various charitable and philanthropic activities. Its activities include: (i) Eradicating hunger, poverty, malnutrition and inequality (ii) Promoting education, employability and livelihoods (iii) Supporting social enterprises incubators (iv) Promotion of financial inclusion MSR Trust want to assess whether it would be treated as a Social Enterprise for the purpose of Chapter (IX-A) of SEBI (LODR) Regulations, 2015. Examine the statement.
Answer & Explanation:
In order for MSR Trust to be considered as a Social Enterprise for the purpose of Chapter IX A of the SEBI LODR Regulations 2015, it must meet the requirements of Regulation 292E of the SEBI ICDR Regulations 2018. According to Regulation 292E of the SEBI (ICDR) Regulations, a Not-for-Profit Organization or a For Profit Social Enterprise, to be identified as a Social Enterprise, shall establish primacy of its social intent. In order to establish the primacy of its social intent, such Social Enterprise shall meet the following eligibility criteria: - (a) the Social Enterprise shall be indulged in at least one of the following activities: eradicating hunger, poverty, malnutrition and inequality; promoting health care including mental healthcare, sanitation and making available safe drinking water; promoting education, employability and livelihoods; promoting gender equality, empowerment of women and LGBTQIA+ communities; ensuring environmental sustainability, addressing climate change including mitigation and adaptation, forest and wildlife conservation; protection of national heritage, art and culture; training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports; supporting incubators of Social Enterprises; supporting other platforms that strengthen the non-profit ecosystem in fundraising and capacity building; promoting livelihoods for rural and urban poor including enhancing income of small and marginal farmers and workers in the non-farm sector; slum area development, affordable housing and other interventions to build sustainable and resilient cities; disaster management, including relief, rehabilitation and reconstruction activities; promotion of financial inclusion; facilitating access to land and property assets for disadvantaged communities; bridging the digital divide in internet and mobile phone access, addressing issues of misinformation and data protection; promoting welfare of migrants and displaced persons; any other area as identified by the Board or Government of India from time to time. (b) the Social Enterprise shall target underserved or less privileged population segments or regions recording lower performance in the development priorities of central or state governments; (c) the Social Enterprise shall have at least 67% of its activities, qualifying as eligible activities to the target population, to be established through one or more of the following: at least 67% of the immediately preceding 3-year average of revenues comes from providing eligible activities to members of the target population; at least 67% of the immediately preceding 3-year average of expenditure has been incurred for providing eligible activities to members of the target population; members of the target population to whom the eligible activities have been provided constitute at least 67% of the immediately preceding 3-year average of the total customer base and/or total number of beneficiaries. The activities of MSR Trust are in line with the activities described in a) above. MSR Trust, therefore must verify if the requirements of b) and c) are met i.e., the correct target population and the thresholds in respect of the averages of the last three years. Thus, if requirements of (b) and (c) are met, MSR Trust can be declared a Social Enterprise.
Topics: Social Enterprise
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