From the following information in respect of two companies viz. ZYX Limited and CBA Private Limited, compute the amount the companies are required to spend on account of Corporate Social Responsibility (CSR): Financial Y

Section 135(1) read with section 135(5) of the Companies Act, 2013 provides that every company having net worth of ₹500 crore or more, or turnover of ₹1,000 crore or more or a net profit of ₹5 crore or more during any financial year shall ensure that the company spends, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years. In the given case, in case of ZYX Limited, the net profit for financial year 2016-17 is ₹18 crore. The average net profit for preceding 3 financial years is ₹(0+6+18) crore/3 = ₹24 crore/3 = ₹8 crore. It is to be noted that though the company was not incorporated in the financial year 2014-15, yet that year is to be considered for calculation of average net profit. Accordingly, the company has to spend 2% of ₹8 crore, i.e., ₹0.16 crore towards CSR activities. In case of CBA Private Limited, the net profit for financial year 2016-17 is ₹6 crore. The average net profit for preceding 3 financial years is ₹((-4)+(-1)+6) crore/3 = ₹1 crore/3 = ₹33.33 Lakh. It is to be observed that though the company suffered losses in 2 years 2014-15 and 2015-16, yet those 2 years are to be considered for calculation of average net profit. Accordingly, the company has to spend 2% of ₹33.33 Lakh, i.e., ₹0.67 Lakh towards CSR activities.