Govt issues preliminary notices to 272 companies for not complying with CSR spending requirements
Piyush Goyal said Centralised Scrutiny and Prosecution Mechanism (CSPM) has been tasked to examine the records of top 1,000 companies obliged to spend on CSR
New Delhi: The government on Tuesday said it has issued preliminary notices to as many as 272 companies for not complying with corporate social responsibility (CSR) spending requirements under the companies law.
Under the law, certain class of profitable entities is required to shell out at least 2 percent of their average three-year annual net profit towards CSR activities in a financial year.
In case of not spending the requisite amount, the firms concerned have to provide reasons for the same.
In a written reply to Rajya Sabha, Corporate Affairs Minister Piyush Goyal said Centralised Scrutiny and Prosecution Mechanism (CSPM) has been tasked to examine the records of top 1,000 companies obliged to spend on CSR.
"Based on scrutiny, preliminary notices have been issued to 272 companies. This is a continuous process and prosecution is filed gainst companies that have not complied with CSR spend requirements and also not furnished any valid reasons for not spending or underspending," he added.
CSPM was set up by the Ministry of Corporate Affairs in April 2018 to keep a tab on entities' compliance with CSR obligations.
The Registrar of Companies initiates action against non-compliant companies after due examination of records.
"For 2014-15, prosecutions against 254 were sanctioned of which 33 companies have filed applications for compounding," the minister said.
Of 6,286 companies, as many as 2,203 firms spent more than the prescribed amount towards CSR during April-November period of 2016-17, while 3,718 companies spent less than the required amount and 346 firms did not spend any amount towards such activities.
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