New Delhi: As many as 272 companies have been issued preliminary notices by the Ministry of Corporate Affairs for alleged non-compliance with CSR provisions under the Companies Act, 2013.
This was stated by Minister of State for Corporate Affairs P P Chaudhary in a written reply to the Rajya Sabha during the Monsoon Session of Parliament.
Whenever violation of CSR provision is reported, the Minister said the Registrar of Companies takes action after due examination of records.
The companies law, enacated in August 2013, mandates that certain class of entities have to spend at least 2 per cent of their three-year average net profit towards Corporate Social Responsibility (CSR) activities.
The Ministry of Corporate of Affairs has established Centralised Scrutiny and Prosecution Mechanism (CSPM) on pilot basis for enforcement of CSR provisions.
According to Chaudhary, for the financial year 2014-15 fiscal, his ministry had sanctioned prosecution against 254 companies and out of them, 33 firms filed applications for compounding.
Generally speaking, compounding refers to paying an amount in lieu of prosecution proceedings.