Section 293(1)(e) restricts the powers of the Board of Directors with regard to contributions to charitable and other funds not directly relating to the business of the company or the welfare of its employees.
1) Limits: Five per cent of its average net profits determined in accordance with the provisions of sections 349 and 350 during the three immediately preceding financial years.
2) Compliance: Contribution shall be made by a company with prior resolution authorizing the making of such contribution passed at a meeting of the members i.e. AGM or EGM.
3) Disclosure: The resolution passed at the AGM should specify the total amount upto which the contribution will be made.
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