MCA added new activities as Corporate Social Responsibility activities.

The Ministry of Corporate Affairs has amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 and notified the major changes in the activities covered in CSR through the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020 and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021

With notification of these amendment, a couple of fresh activities had been added in SCHEDULE VII (Corporate Social Responsibility Policy) Rules, 2014 in keeping view of novel Corona Virus(COVID-19) in India.

According to the latest amendments, the following activities shall be qualified as CSR Activities:

i) Eradicating hunger, poverty and malnutrition, [“promoting health care including preventive health care”] and sanitation [including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation] and making available safe drinking water.

ii) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

iii) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.

iv) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water [including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga].

v) Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional art and handicrafts;

vi) measures for the benefit of armed forces veterans, war widows and their dependents,

[Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows];

vii) Training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports.

viii) contribution to the prime minister’s national relief fund [or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)] or any other fund set up by the central govt. for socio economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women;

ix) Contribution to incubators funded by Central Government or State Government or any agency or Public Sector Undertaking of Central Government or State Government, and contributions to public funded Universities, Indian Institute of Technology (IITs), National Laboratories and Autonomous Bodies (established under the auspices of Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Council of Scientific and Industrial Research (CSIR), Department of Atomic Energy (DAE), Defence Research and Development Organisation (DRDO), Department of Biotechnology (DBT), Department of Science and Technology (DST), Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).

The Ministry of Corporate affairs dated on 23rd March ,2020 through General circular No. 10/2020 provided that spending of CSR funds for COVID-19 is an eligible CSR Activity:

A new proviso has been added in the “Definitions” in Rule 2 (1)(e), which provides 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 below conditions:

a) That such research and development activities shall be carried out in collaboration with any of the institutes or organisation mentioned in *item (ix) of Schedule VII to the Act; and

b) That details of such activities shall be disclosed separately in the Annual Report on Corporate Social Responsibility CSR policy rules included in the Board’s Report.

Ø In Continuation to MCA’S General Circular no.10/2020 dated on 23rd March ,2020 wherein it was provided that spending of CSR funds for CSR funds for COVID-19 is an eligible CSR activity has further provided clarification on spending of CSR Funds on 22th April, 2021 and 05th May 2021:

· Setting up makeshift hospital and temporary COVID care facilities.

· Creating health infrastructure for COVID care

· Establishment of medical oxygen generation and storage plants.

· Manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19.

Therefore, the above mentioned activities are ELIGIBLE CSR Activities under SCHEDULE VII of the Companies Act, 2013.

The companies (including Government Companies) may undertake such activities, directly by themselves or in collaboration with other companies subject to fulfilment of CSR Rules and guidelines related to CSR issued by MCA