Covid 19 Research and Development of new vaccine, drugs and medical devices will be allowed as CSR Activities to Companies

Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020

The Ministry of Corporate Affairs, vide Gazette Notification dated 24th August, 2020, has made Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, supported by the Central Government or State Government or Public Sector Undertaking or any organization of the Central Government or State Government, as a qualified CSR movement.

Likewise, change to the Schedule VII to the Companies Act has been made vide warning dated August 24, 2020. The change has happened from 24th August, 2020..

Post this notice, Schedule VII of the Companies Act explicitly referenced that Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any office of the Central Government or State Government would check towards an organization's CSR commitments.

The text of the MCA Notification dated 24.08.2020, is reproduced below for your information:

MCA amends Schedule VII of Companies Act, 2013 and to remember more substances for occupied with innovative work to whom commitment will be treated as Contribution for Corporate Social Responsibility (CSR) Activities as required under Section 135 of Companies Act, 2013. Same is finished by subbing thing (ix) of Schedule VII of Companies Act, 2013 vide warning No. G.S.R. 525(E) dated 24th August, 2020.

G.S.R. 525(E).— In exercise of the forces gave by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the accompanying further corrections in Schedule VII to the said Act, to be specific:-

In the said Schedule, for item (ix) and the entries thereto, the following item and entries shall be substituted, namely:-

“(ix) (a) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; and

(b) Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE); Department of Biotechnology (DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information Technology and other bodies, namely Defense Research and Development Organisation (DRDO); Indian Council of Agricultural Research (ICAR); Indian Council of Medical Research (ICMR) and Council of Scientific and Industrial Research (CSIR), engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs)”.

MCA notifies following activities as CSR Activity

Given that any organization occupied with research and development(R&D) activity of new vaccine, drugs and medical devices in their ordinary course of business may embrace research and development activity of new vaccine, drugs and medical devices identified with COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions that-

1. Such research and development activities will be done in a collaboration with any of the institute or organisation referenced in thing (ix) of Schedule VII to the Act.
2. Details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board’s Report”.

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. Companies (Corporate Social Responsibility Policy) Rules, 2014

   in rule 2, in sub-rule (1), in clause (e), the following proviso shall be inserted, namely:-

"Given that any organization occupied with research and development activity of new vaccine, drugs and medical devices in their normal course of business may attempt research and development activity of new vaccine, drugs and medical devices identified with COVID-19 for fiscal years 2020-21, 2021-22 and 2022-23 subject to the conditions that-

• 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.
• 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), —
• first proviso shall be omitted;
• In the second proviso, the word “further” shall be Omitted.