MCA has enforced the provisions of Section 37 of the Companies (Amendment) Act, 2017 which amended the provisions of Section 135 (i.e. Corporate Social Responsibility) of the Companies Act, 2013 effective from 19th September, 2018.
Major highlights of the changes are:
(a) Eligibility criteria for the purpose of constituting the CSR Committee and incurring expenditure towards CSR is to be calculated based on immediately preceding financial year. Previously this eligibility was decided based on preceding three financial years.
(b) Further where a company is not required to appoint an independent director, it shall have in its CSR Committee two or more directors.
(c) It also empowers the Central Government to prescribe sums which shall not be included for calculating ‘net profit’ of a company under section 135
In the line of aforesaid Notification, MCA has also amended the Companies (Corporate Social Responsibility Policy) Rules, 2014.