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    Corporate Social Responsibility

    Posted By : Divya Saluja / Published on : 27-Sep-2018 11:06 PM / View : 428 / Comment : 2

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    Dear Members, Please suggest me whether provision as corporate social responsibility is applicable on my company if net worth in the year 2016-17 is 550 Crore and turnover is 900 Crore and net profit is 4.5 Crore?
    Read more on : responsibility social corporate

    • Hi Divya,

      Section 135 of the Companies Act, 2013, inter alia, provides for companies (Private as well as Public) having net worth of rupees five hundred crore or more or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more in a financial year to spend at least 2% of the average net profits of last 3 years for the company’s Corporate Social Responsibility (CSR) policy.

      In case the said amount is not spent, the reasons for not doing so are to be disclosed in the Board’s Report.

      In your case, as Net Worth crosses the limit of Rs.500 Crore so Provision of CSR will be applicable and the Company has to spend on CSR activities at least 2% of Last 3 Years Average Profit. If the company is formed recently then Average Profit may be calculated from balance period only.

      28-09-2018 / 03:19:20 AM
    • Further, as per Section 198(4)(l) the excess of expenditure over income, which had arisen in computing the net profits in accordance with this section in any year which begins at or after the commencement of this Act, in so far as such excess has not been deducted in any subsequent year preceding the year in respect of which the net profits have to be ascertained;

      It may mean that Losses of Earlier Years will be considered while computing Average Profits.

      28-09-2018 / 03:21:52 AM
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