rashmi (Student of IPCC Nov 2009) (136 Points)
08 November 2009question he samjh me nahi aaya.
Comment on the following situation:
XYZ Ltd. Co.gave a donation of Rs.50000 each to a charitable society running a school and a trust set up for the service of Blinds during financial year ending on 31st March ,2009.The average net profits of the company for the last three years were 15 Lakhs.
CA.PRAMOD KUMAR PANDA
(Chartered Accountants)
(204 Points)
Replied 09 November 2009
Section 293 states the restriction on the power of the Board of Directors. As per 293(1)(e)the Board of Directors cannot contribute to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees or five per cent of its average net profits as determined in accordance with the provisions of sections 349 and 350 during the three financial years immediately preceding, whichever is greater. In the instant case, the Board has contributed more than 5% of the average net profits as determined in accordance with the provisions of Section 349 and 350 during the last three years, which works out to Rs.75000/- and therefore contravenes the provisions of section-293 of the Companies Act. However, as I know the question asked is out of course of PCC.
rashmi
(Student of IPCC Nov 2009)
(136 Points)
Replied 09 November 2009
| Originally posted by :CA.PRAMOD KUMAR PANDA | ||
| " | Section 293 states the restriction on the power of the Board of Directors. As per 293(1)(e)the Board of Directors cannot contribute to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees or five per cent of its average net profits as determined in accordance with the provisions of sections 349 and 350 during the three financial years immediately preceding, whichever is greater. In the instant case, the Board has contributed more than 5% of the average net profits as determined in accordance with the provisions of Section 349 and 350 during the last three years, which works out to Rs.75000/- and therefore contravenes the provisions of section-293 of the Companies Act. However, as I know the question asked is out of course of PCC. |
" |
thank youu
sheshachala
(Article)
(32 Points)
Replied 09 November 2009
According to SEC 293(1)(e) it states that :
Contribute, after the commencement of this Act, to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed 3[fifty thousand rupees], or five per cent, of its average net profits as determined in accordance with the provisions of sections 349 and 350 during the three financial years immediately preceding, whichever is greater.
https://www.vakilno1.com/bareacts/companiesact/s293.htm
sabita
(Student)
(60 Points)
Replied 09 November 2009
hi.. thank u for the answer... but i dont think this section is mentioned in the institute material also...
BALARAM ROUNIYAR
(CA )
(116 Points)
Replied 09 November 2009
EVERY QUESTION WAS SIMILAR AS THOSE OF PADHUKA'S HANDBOOK.....AND THE ABOVE QUESTION WAS ALSO ASKED IN NOV 07 EXAMINATION...
| Originally posted by :CA.PRAMOD KUMAR PANDA | ||
| " | Section 293 states the restriction on the power of the Board of Directors. As per 293(1)(e)the Board of Directors cannot contribute to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees or five per cent of its average net profits as determined in accordance with the provisions of sections 349 and 350 during the three financial years immediately preceding, whichever is greater. In the instant case, the Board has contributed more than 5% of the average net profits as determined in accordance with the provisions of Section 349 and 350 during the last three years, which works out to Rs.75000/- and therefore contravenes the provisions of section-293 of the Companies Act. However, as I know the question asked is out of course of PCC. |
" |
Good explanation.......But the question asked was not out of the PCC course......
CAclubindia
