RoC Bengaluru Penalises Pace Digitek and Officer for CSR Non-Compliance in FY 2020–21, 2021–22, and 2023–24
BENGALURU (India CSR): Pace Digitek Limited, a Bengaluru-based technology company, has been slapped with a penalty of Rs. 53,26,590 by the Registrar of Companies (RoC) for non-compliance with Corporate Social Responsibility (CSR) obligations across three financial years. Additionally, company officer Venugopal Rao Maddisetty has been fined Rs. 2,66,330 for the same violations.
The adjudication order, issued on October 17, 2025, follows a suo-motu disclosure made by the company on January 8, 2025, admitting lapses in CSR expenditure and transfer of unspent funds for three financial years—2020–21, 2021–22, and 2023–24. The RoC order cites breaches under Section 135(7) of the Companies Act, 2013, which mandates eligible companies to spend at least 2% of their average net profits on CSR activities.
The company, formerly known as Pace Digitek Private Limited and Pace Digitek Infra Private Limited, is headquartered at Plot No. V-12, Industrial Estate, Kumbalgodu, Mysore Highway, Bengaluru – 560074.
Nature of Violations and Company Disclosure
According to the disclosure filed under Regulation 30 of SEBI (LODR) Regulations, 2015, read with SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123, the company acknowledged that it:
- Failed or fell short of spending the mandatory CSR amounts within the prescribed timeframes for FY 2020–21, 2021–22, and 2023–24.
- Did not transfer the unspent CSR amounts to any fund specified in Schedule VII of the Act within six months from the end of the financial year.
For FY 2022–23, the company reported an excess CSR spend, which it adjusted against the next year’s CSR obligation. Hence, no violation or penalty was imposed for that year.
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Registrar’s Findings
The RoC observed the following key points:
- FY 2020–21 and 2021–22: The company had CSR obligations that were not spent in time, constituting a violation of Section 135(5).
- FY 2022–23: The company spent more than its CSR requirement, and the excess was adjusted towards the following year—no violation recorded.
- FY 2023–24: Despite adjusting excess expenditure from the prior year, the remaining shortfall was neither spent nor transferred to Schedule VII funds, resulting in a violation of Section 135(7).
Accordingly, the RoC imposed financial penalties on both the company and its officer in default.
Penalty Breakdown
| Financial Year | Penalty on Company (₹) | Penalty on Venugopal Rao Maddisetty (₹) | Remarks |
|---|---|---|---|
| 2020–21 | 14,79,394 | 73,970 | CSR not spent within time |
| 2021–22 | 17,91,196 | 89,560 | CSR not spent within time |
| 2022–23 | — | — | No violation (excess spent adjusted) |
| 2023–24 | 20,56,000 | 1,02,800 | CSR shortfall not spent/transferred |
| Total | ₹53,26,590 | ₹2,66,330 | — |
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Company’s Statement
In its regulatory filing, Pace Digitek Limited clarified that the penalty has no impact on its financials or operational performance.
“There is no impact on financial or operational activities of the Company on account of the aforesaid order,” the disclosure stated.
The company emphasised that it had voluntarily approached the authorities through a suo-motu application dated January 8, 2025, in an effort to rectify and regularise its CSR obligations before the company’s listing.
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Rs. 16.3 lakhs CSR Spending
The Company has adopted a CSR Policy in accordance with the requirements of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The CSR Policy aims to fulfill the following objectives:
Establishing a guideline for Compliance with the provisions of Act and Rules and regulations thereon to dedicate a percentage of the company’s profits for CSR initiatives. Ensuring the Implementation of CSR initiatives in letter and spirit, appropriate procedures and reporting. During FY 2025, the Company has spent an amount of Rs. 1.63 million in pursuance of its’ CSR Activities.
CSR Committee Composition as on March 31, 2025
| Name of the Director | Designation |
|---|---|
| Mr. Venugopalrao Maddisetty | Managing Director and Chairman |
| Ms. Padma Maddisetty | Whole-time Director and Member |
| Mr. Satishchandra Balkrishna Ogale | Independent Director and Member |
CSR Committee Meetings Held During the Reporting Period
| Sl. No. | Date of Meeting | Number of Committee Members on the Date of Meeting | Number of Committee Members Attending the Meeting |
|---|---|---|---|
| 1 | June 09, 2024 | 2 | 2 |
| 2 | August 01, 2024 | 2 | 2 |
| 3 | January 03, 2025 | 2 | 2 |
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Upcoming Board Meeting and Governance Measures
Pace Digitek has announced a Board Meeting scheduled for October 25, 2025, to review and approve its unaudited financial results for Q2 FY2025–26. The trading window for insiders remains closed since October 6, 2025, in line with SEBI’s Prohibition of Insider Trading Regulations.
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Corporate Governance Implications
This development underscores the increasing regulatory scrutiny over CSR compliance in India. The RoC’s action serves as a reminder to listed entities about the importance of timely CSR spending and fund transfers, as mandated by Section 135 of the Companies Act, 2013.
Non-compliance can attract significant penalties, impacting not only financial statements but also the governance reputation of companies preparing for or maintaining stock exchange listings.
Pace Digitek Limited CSR Non-Compliance 2025
(India CSR)
