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CSR related query

04 November 2017

if xyz ltd having profit loss during three py
2014-15 :- not incorporate
2015-16:- 6 crore
2016-17:- 18 crore
according to csr policy how much amount is required to spend as CSR

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6 Replies

Rishab Walia (130 Points)
Replied 05 November 2017

You have to spent atleast 2% of the average net profit of immediately preceding 3 years in every financial year.
So, your company has incorporated before 2 years. As per the provisions you have to wait one more year.Company dont have to give any CSR in this year.

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anchal keshari (CS) (60 Points)
Replied 05 November 2017

thnku so much....and a company whose p/l is
in current year 6 crore nd preceeding two year p/l was 4 crore (loss) & 1 crore (loss) how much CSR create ...plz tell me

Rishab Walia (130 Points)
Replied 05 November 2017

As per the provisions of Companies Act 2013, Company must have to earn consistent profits for the immediate preceding 3 years.
As per your question company has incurred losses from 2 years.
So, the company is not required to create any CSR unless until they earned profits consistently for immediate preceding 3 years.

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Rishab Walia (130 Points)
Replied 05 November 2017

If you want some more clarification then please refer Section-135 of the Companies Act, 2013

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anchal keshari (CS) (60 Points)
Replied 05 November 2017

ok thnku for your kind help....

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Sudhir Todkar (CS Professional) (1021 Points)
Replied 09 November 2017

Dear Friends,

Yes company need to comply with the section 135.
Applicability is different from spending.

Company should send atleast 2% of average profit of preceding 3 financial year.

(0+6+18) ÷ 3 = 8 Crore * 2 ÷ 100 = 16,00000/-

Once the company attracts any one or all threshold limit as prescribed under section 135 company should comply with it or explain with reason for not spending.

If company doesn't falls the under prescribed limit for 3 CONSECUTIVE years. Then Company need to to spend CSR.

For further clarification please let me know..