Goyal Associates Ltd. New Delhi reported net profits of ₹8 crore, ₹10 crore and ₹12 crore in the Financial Years 2016-17, 2017-18 and 2018-19 respectively as per the profit and loss statements prepared by the company in

As per section 135 of the Companies Act 2013, the CSR provision will be applicable to companies which fulfil any of the following criteria during any of the three preceding financial years: Companies having net worth of rupees five hundred crore or more, or Companies having turnover of rupees one thousand crore or more or Companies having a net profit of rupees five crore or more The companies which fulfil the criteria under section 135 are required to spend 2% of the average net profits of the preceding three financial years as CSR expenditure. Moreover, while calculating net profits for any financial year, in case of Indian company, income from dividend received from another Indian company which falls within the criteria of section 135 and complying with the provisions of Section 135 and profits made by the company from its overseas branches will be excluded. Keeping the above facts in consideration- Net profits earned by the company for FY 2016-17 are ₹8 crore Less : amount of dividend received from Indian companies (₹5 lakh) Less : profit earned by its overseas branch (₹1.5 crore) ₹6.45 crore Net profits earned by the company for FY 2017-18 are ₹10 crore Less : amount of dividend received from Indian company (₹1 crore) Less : profits made by its overseas branches (₹1 crore) ₹8 crore Net profits earned by the company for FY 2018-19 are ₹12 crore Less : Profits made by its overseas branches (₹2 crore) ₹10 crore (Note: in point no. (iii) the financial year to which profits of ₹2 crore made by company's overseas branch is not mentioned, hence the question is solved assuming it to be for FY 2018-19) Thus, average net profits of the preceding three years are: (₹6.45 crore + ₹8 crore + ₹10 crore)/3 = ₹24.45 crore/3 = ₹8.15 crore CSR Expenditure of 2% = ₹8.15 crore * 2% = ₹16,30,000 Thus, company has to spend ₹16,30,000 as CSR expenditure for FY 2019-20