MCA issues ‘preliminary notices’ to 272 cos for non-compliance with CSR norms

Corporate Social Resposibility

The Ministry of Corporate Affairs (MCA) has issued “preliminary notices” to 272 companies for alleged non-compliance with CSR provisions under the Company law.

Under the Companies Act, 2013, certain class of entities is required to spend at least two per cent of their three-year average net profit towards Corporate Social Responsibility (CSR) activities.

The ministry has established Centralized Scrutiny and Prosecution Mechanism (CSPM) for enforcement of CSR provisions. CSPM has been tasked to start with examination of records of top 1,000 companies mandated to spend on CSR. Based on inquiry, preliminary notices have been issued to 272 companies.

Prosecution against defaulting companies has been identified by carrying out due examination of the company’s documents filed on MCA registry, books of account and other records, by following due procedure of law and there is no blind application of provisions of the Act.

Ministry sanctioned prosecution against defaulting companies and out of them few have filed applications for compounding. Generally, compounding refers to paying an amount in lieu of prosecution proceedings.

Ministry said that whenever violation of CSR provision is reported, the Registrar of Companies takes action after due examination of records.

Source: Moneycontrol

Leave a Reply

Your email address will not be published. Required fields are marked *