187 companies face penal action for CSR violations: by Honourable Minister P.P Chaudhary

NEW DELHI: The corporate affairs ministry has given permission for penal action against 187 companies for violating CSR norms in 2014-15 fiscal, according to union minister P P Chaudhary.

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.

“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,” the Minister of State for Corporate Affairs said in a written reply to the Lok Sabha last Friday.

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.

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