The Ministry of Corporate Affairs (‘MCA’) has, from time to time, notified certain provisions of the Companies (Amendment) Act, 2017 for amending the provisions of the Companies Act, 2013 (‘Companies Act’). Pursuant to recent MCA notifications dated July 5, 2018, July 31, 2018, August 7, 2018 and September 12, 2018, amendments to Section 42 (relating to private placement of securities), Sections 73 and 74 (relating to acceptance of deposits by companies) and Section 197 (dealing with managerial remuneration) of the Companies Act have been notified. Please refer to our Client Update dated April 9, 2018 available at https://www.azbpartners.com/bank/the-companies-amendment-act-2017/), for a detailed summary of the Amendment Act, as well as June 2018 edition of Inter Alia… for a summary of the commencement notifications issued on May 7, 2018 (available at https://www.azbpartners.com/bank/commencement-of-certain-provisions-of-the-companies-amendment-act-2017/).
Pursuant to the MCA notification dated September 19, 2018, Section 135 of the Companies Act has been amended to clarify that for determining whether the threshold for constituting a corporate society responsibility (‘CSR’) committee has been met, the net worth / turnover / net profit of ‘the immediately preceding financial year’ is to be considered. Further, the requirement of appointing at least one independent director on the CSR Committee has been relaxed to provide that a company which is not required to appoint an independent director under Section 149(4) of the Companies Act does not need to appoint an independent director on its CSR Committee, and instead, must have two or more directors on its CSR Committee.