187 companies face penal action for flouting CSR norms
In a move that signals continued effort of the government to strictly enforce corporate social responsibility (CSR) norms, the corporate […]
Writuparna Kakati December 19, 2017
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In a move that signals continued effort of the government to strictly enforce corporate social responsibility (CSR) norms, the corporate affairs ministry has given permission for penal action against 187 companies for violating such norms in 2014-15 fiscal, according to union minister P P Chaudhary. In a written reply to the Lok Sabha last Friday, union minister of state for the corporate affairs ministry, P P Chaudhary said, “Ministry of corporate affairs has accorded permission for penal action… for 187 companies for the financial year 2014-15 for violation of the CSR provisions.” Under the Companies Act, 2013, certain classes of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities. The new norms, effective since April 1, 2014 apply to companies with at least Rs 5 crore net profit or Rs 1,000 crore turnover or Rs 500 crore net. Companies shelled out Rs 9,553.72 crore towards CSR activities in 2014-15 while the number of such firms and total money spent rose in the next fiscal. In 2015-16, as many as 7,983 companies incurred CSR expenditure of Rs 13,625.24 crore, as per official data. As per the Act, in case a company fails to spend the specified amount then its board has to provide the specific reasons for the same in the board report. To another query, the minister said the government does not propose to introduce new criteria for CSR.