OVER 530 FIRMS MAY FACE ACTION FOR CSR NORM VIOLATIONS

NEW DELHI: More than 530 firms have come under the scanner of the government for violating CSR spending norms under the companies law and may face action. The violations pertain to 2014-15 and reports to this regard have been submitted by Registrar of Companies (Rocs) concerned to the Corporate Affairs Ministry, sources said. Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities in a particular fiscal.

In case of non-spending, the company concerned has to clarify for the same to the Ministry. The norm came into effect from April 1, 2014. Sources said more than 530 companies have violated the CSR norm as instances of “non-compliance” as well as “non-disclosure” have been detected for the 2014-15 fiscal -- which was also the first year of implementation of the norm.

These companies are located in different states including Maharashtra, Odisha, Madhya Pradesh and Gujarat, sources added. In this regard, various Rocs have submitted their reports to the Ministry, which is implementing the Companies Act.

Under the Act, prosecution can be initiated against the erring companies while a final decision in this respect is yet to be taken, sources said. After finding discrepancies in CSR spending data, the Ministry, had last year, issued show cause notices to companies asking them to furnish details about social welfare activities undertaken by them under the Act. Last year, government informed Rajya Sabha that an assessment of CSR expenditure of 7,334 companies for 2014-15 showed that 4,195 companies did not incur any CSR expenditure.