The Ministry of Corporate Affairs (“MCA”) has by its notification dated August 24, 2020, notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020 (“Amendment Rules”) to amend the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules”).
Earlier, the definition of ‘Corporate Social Responsibility (CSR) Policy’ under the CSR Rules included activities which are undertaken by a company in areas or subjects specified under Schedule VII of the Companies Act, 2013 (“Act”), excluding such activities undertaken in pursuance of normal course of business of a company.
Pursuant to the Amendment Rules, a proviso has been added to the definition of ‘CSR Policy’ which states 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 following conditions:
Further, Rule 4(1) of the CSR Rules has been amended to state that CSR activities shall be undertaken by the company, as per its CSR policy, as programs or activities (either new or ongoing). Prior to the amendment, activities undertaken in pursuance of the normal course of the business of the company were excluded from the scope of CSR activities.
The proviso to Rule 6(1) of the CSR Rules pertaining to the CSR Policy, which stated that CSR activities do not include activities undertaken in pursuance of the ordinary course of business of a company, has been deleted.
Please find a copy of the Amendment Rules here.
This update has been contributed by Aastha (Partner), Kartik Jigyasi (Associate) and Radhika Kothari (Associate).
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