Moon Oil Exploration Ltd. (MOEL) was incorporated on 1st June 2007 and the company made a considerable amount of profit in the past years: Financial Year Net Profit 2016-17 ₹25 Crore 2017-18 ₹10 Crore 2018-19 ₹12 Crore.
CS Executive · Company Law · PYQS · December 2019
Moon Oil Exploration Ltd. (MOEL) was incorporated on 1st June 2007 and the company made a considerable amount of profit in the past years: Financial Year Net Profit 2016-17 ₹25 Crore 2017-18 ₹10 Crore 2018-19 ₹12 Crore. The Board of directors authorised a payment to the National Defence Fund too but wanted to not show it in profit and loss account. Is it possible to do so ?
Answer & Explanation:
As per Section 183 of the Companies Act, 2013 the Board is authorised to contribute such amount as it thinks fit to the National Defence Fund or any other fund approved by the Government for the purpose of National Defence. Further, the company is required to disclose in its profit and loss account the total amount or amounts contributed by it during the financial year. Accordingly, it is not possible to avoid the disclosure in the Profit and loss account about the amount of the contribution made to the National Defence Fund.
Topics: Company Law
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