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Question
Study the following case/situation and express your opinion.
Auto Parts Ltd. is renowned company situated in Chakradharpur, Jharkhand. This company is leading manufacturer of auto parts and also exports to some countries around the world. This company has net worth of Rs.600 Cr. and earned average net profit of Rs.1.20 Cr in last 3 financial years. The company has formed committee of directors to look after the CSR activities of the company.
- Provision of which section is applicable in case company follows CSR activities?
- How much amount company needs to spend on CSR activities?
- How many directors are required to constitute CSR committee?
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Solution
- In case company follows CSR activities, Section 135 of the Companies Act, 2013 is applicable.
- The company needs to spend at least 2% of the average net profits made during the three immediately preceding financial years on CSR activities. Therefore, in this case, it needs to spend ` 2,40,000 on CSR.
- Four directors are required to constitute CSR committee
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