MCA amends Companies (CSR Policy) Rules, 2014 of the Companies Act, 2013



Quick Summary
The Ministry of Corporate Affairs (MCA) has amended the Companies (CSR Policy) Rules, 2014. This change allows companies involved in developing new vaccines, drugs, and medical devices as part of their regular business to use their CSR funds for COVID-19 related research and development. This provision is applicable for the financial years 2020-21, 2021-22, and 2022-23, provided specific conditions are met.

The MCA amends the CSR Policy Rules 2014. Now any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to certain conditions as mentioned below:

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 24th August, 2020

G.S.R. 526(E). - In exercise of the powers conferred by section 135 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Corporate Social Responsibility Policy) Rules, 2014, namely:-

1. Short title and commencement.-

(1) These rules may be called the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Corporate Social Responsibility Policy) Rules, 2014 (hereinafter referred to as the said rules), in rule 2, in sub-rule (1), in clause (e), the following proviso shall be inserted, namely:-

“Provided that any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions that-

(i) such research and development activities shall be carried out in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act.

(ii) details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board’s Report”.

3. In the said rules, in rule 4, in sub-rule 1, the words “excluding activities undertaken in pursuance of its normal course of business” shall be omitted.

4. In the said rules, in rule 6, in sub-rule (1), —
(i) first proviso shall be omitted;
(ii) In the second proviso, the word “further” shall be omitted.

[E- F. No. CSR-07/2/2020-CSR-MCA]
GYANESHWAR KUMAR SINGH, Jt. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3,Sub-section (i), vide number G.S.R. 129(E), dated the 27th February, 2014 and were subsequently amended by notification number G.S.R. 644(E), dated the 12th September, 2014, notification number G.S.R. 43(E), dated the 19th January, 2015, notification number G.S.R. 540 (E), dated the 23rd May, 2016 and notification number G.S.R. 895(E), dated the 19th September, 2018.

FAQ :

The MCA has amended the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Companies engaged in research and development of new vaccines, drugs, and medical devices in their normal course of business can benefit.

The amendment covers research and development of new vaccines, drugs, and medical devices related to COVID-19.

This amendment applies to the financial years 2020-21, 2021-22, and 2022-23.

Companies must carry out such activities in collaboration with institutes or organisations listed in Schedule VII of the Act, and details must be disclosed separately in the Annual Report on CSR.

The amendment removes the exclusion for activities undertaken in the normal course of business from CSR policy rules.




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