A company's net profit calculated under section 198 of the Companies Act, 2013 as per the audited financial statements was as under: Year 2021-22: net profit ₹8 crore. Year 2020-21: net profit ₹5 crore Year 2019-20: net

Every company (including foreign company) having net worth of ₹500 crore or more or turnover of ₹1000 crore or more or net profit of ₹5 crore or more during immediately preceding financial year needs to constitute CSR committee and will attract the provisions of section 135 for compliance. Profits from any overseas branch of the company shall not be included in the computation of the net profits. So also, the dividend received from any Indian company will be excluded. 2% CSR is computed on the average net profits made by the company during the preceding three financial years. The net profit of the company during FY 2021-22 is ₹6 crore (8-1-1). Hence, the company is liable to spend on CSR @ 2% of average net profit of preceding 3 years. As such the average net profit would come to ₹5 crore (i.e. (6+5+4)/3). Hence, the company is required to spend ₹10 lakh (i.e. 2% of ₹5 crore).