CSR – covid drugs

MCA has vide its notification dated 24th August, 2020 amended Schedule VII of the Companies Act, 2013 to include the following .

The amendment has been carried out in Rule 2(1)(e) – the rule presently reads as under:

e) “CSR Policy” relates to the activities to be undertaken by the 3[company in areas or subjects] specified in Schedule VII to the Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company;

Now vide this amendment, a proviso has been added to this rule, as follows:

“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”.

So basically companies in pharma business undertaking research and development into covid drugs, trials etc. can take that expenditure as CSR expenditure provided they are collaborating with one of the institutes or organisations mentioned in item (ix) of the said schedule. And details of such activity has to be disclosed separately in the annual report in the item on CSR.

These institutes are : 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).

Leave a comment

Filed under company law

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s