The balances extracted from the financial statement of Pacific Limited are as below: Sr. No. Particulars Balances as on 31-03-2023 as per Audited…

CA Intermediate · Corporate and Other Laws · MTP · May 2024
The balances extracted from the financial statement of Pacific Limited are as below: Sr. No. Particulars Balances as on 31-03-2023 as per Audited Financial Statement (₹ in crore) Balances as on 30-09-2023 (Provisional ₹ in crore) 1. Net Worth 100.00 100.00 2. Turnover 500.00 1000.00 3. Net Profit 1.00 5.00 Explaining the provisions of the Companies Act, 2013, you are requested to examine whether Pacific Limited is required to constitute 'Corporate Social Responsibility Committee' (CSR Committee) during the second half of the financial year 2023-24.

Suggested Answer and Working Notes:

According to section 135 (1) of the Companies Act, 2013, every company 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 during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. In the given question, the company does not fulfil any of the given criteria (net worth/ turnover/ net profit) for the immediately preceding financial year (i.e., 1.4.2022 to 31.3.2023). Hence, Pacific Limited is not required to constitute Corporate Social Responsibility Committee for the financial year 2023-24.

Topics: Accounts of Companies

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