News From the MCA

Ministry of Corporate Affairs (MCA) has notified Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020

August 28, 2020

The amendments are detailed as under:

1. 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:

      • 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
      • 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.

2. Rule 4(1): To support the aforesaid amendment in Rule 2(1) (e), in Rule 4(1) - the words, “excluding activities undertaken in pursuance of its normal course of business” have been deleted. Accordingly, post amendment, the companies may undertake any activity as per its stated CSR Policy rules (whether new or ongoing).

3. Rule 6(1): To support the aforesaid amendment in Rule 2(1)(e), in Rule 6(1), the first proviso that “Provided that the CSR activities does not include the activities undertaken I pursuance of normal course of business of a company” has been deleted.

4. Rule 6(1): As first proviso has been deleted, the words “Provided further that” in the 2nd proviso has been replaced with the words “Provided that”.

* 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), 7[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).]

Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015

In order to streamline the operations at IFSC, SEBI has amended the provisions of the SEBI (IFSC) Guidelines as under:

1. Clause 19 is being amended which, inter alia, provides that the entities issuing and/or listing their debt securities in IFSC shall prepare their Statement of Accounts in accordance with IFRS/ US GAAP/ IND AS or accounting standards as applicable to them in their place of incorporation. In case an entity does not prepare its statement of accounts in accordance with IFRS/ US GAAP/ IND AS, a quantitative summary of significant differences between National Accounting Standards and IFRS shall be prepared by such entity and incorporated in the relevant disclosure documents to be filed with the exchange.

The complete notification can be viewed on below link

2. A new clause 8(3) is being incorporated which provides that an entity, based in India or in a foreign jurisdiction, may provide financial services in IFSC, subject to compliance with the applicable regulatory framework/ guidelines for such financial services, as specified by the Board, from time to time.

The complete notification can be viewed on below link

Last Updated: 27th August 2020 This article is contributed by: 

Munesh Gaur Manager, Legal

MBG Corporate Services

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