Ministry of Corporate Affairs seems to be serious about funding of CSR Money. As all the companies are, now a days, being asked by their concerned Registrar of Companies, by sending notice under section 206, to furnish the information/ documents specifically relating to CSR i.e. spending of CSR Money in various CSR Activities. Companies are being asked to furnish the following information/ documents:
- Published/ Printed Copies of Annual Report consisting of Notice, Director Report, Auditor Report, Balance Sheet and Profit & Loss Accounts along with Notes to accounts for the last Financial Year 2014-15
- Information pertaining to Net Profits, Average Net Profits, of the three immediate proceeding financial years and 2% prescribed budget of average Net Profit under Section 135(5) of the Act including a CALCULATION Sheet of Net Profits as per Section 198 of the Act for the F.Y. 2011-12, 2012-132 AND 2013-14 DULY CERTIFIED BY THE Auditors of the Company
- The complete information of w.r.t. CSR spending during the FY year 2014-15 in the format as provided in the CSR Rules.
Companies are being asked to furnish the information in triplicate along with the data to be put up in floppy or in pen drive.
- Section 135 of Companies Act, 2013 mandates all the companies which come under the ambit of CSR Limit as prescribed under specific section read with concerned rules, to spend the 2% of average profit of last 3 Financial Years.
- In case the companies fail to spend such money, theY require to specify the reasons in its Board Report for that failure as per Second proviso to Section 135(5).
- As no fine/ penalty is being provided under this section on the company which fail to contribute, it has been seen that maximum companies are avoiding spending the money on CSR Activities and giving some reasons in the Board Reports.
- To avoid such failures, these notices seems to be an initiative by the Ministry to encourage the companies to spend the money on CSR Activities by creating a fear among the companies that if they do not spend, the companies shall have to specify the reason not only to Members of the company rather to Registrar of Companies thereby along with complete information of their company at any time, it is being asked by the ROCs.