HelpIndia Limited was incorporated on 1st April 2022. The balances extracted from its audited financial statement are as given below: Financial Year…

According to section 135 (1) of the Companies Act, 2013, every company 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. Further, according to section 135 (5) , the Board of every company referred to in sub-section (1) , shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. Also, according to sub-section 9, where the amount to be spent by a company under sub-section 5 does not exceed fifty lakh rupees, the requirement for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company. Here, the "Net Profit” shall not include such sums as may be prescribed, and shall be calculated in accordance with the provisions of section 198. In the instant case, 1. Net Profit before tax of HelpIndia Limited for the FY 2023- 24 is 10 crore, hence, HelpIndia Limited is required to constitute a CSR committee during FY 2024- 25 as the Net profit before tax for the FY exceeds 5 crore. 2. Minimum contribution towards CSR will be: 2% of average net profits since incorporation (HelpIndia Limited was incorporated on 1st April 2022.) Average Net Profit since incorporation: (11crore +10 crore)/ 2 = 10.5 crore Minimum contribution towards CSR will be: 2% of 10.5 crore = 0.21 crore or 21 lakh. In the given question, since the amount to be spent by HelpIndia Limited is not exceeding 50lakh, the requirement for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company.