Would the treatment be correct in the above case change if instead of net profit of 50 Lakhs in FY 2...........

Companies Act-Phase (I & II) Board-powersandMeetings

Would the treatment be correct in the above case change if instead of net profit of 50 Lakhs in FY 2014-15 the company made net profit of 40 Lakhs.

Yes, as for Charitable fund contribution no consent of Company is required

No, as the Companies Act, 2013 prohibits Charitable fund contribution with or without consent

Yes, as the amount does not exceed 5% of the Avg. N.P of 2 IPFY no approval of Co at GM needed

No, as the amount is equal to or exceeds 5 % of the Avg N.P.of 3 IPFY and hence needs approval of Company at GM

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Explanation:

According to the provisions of sec-186(2) of the Companies Act 2013, No company shall directly or indirectly, give any loan, guarantee, provide any security to a person or other body corporate or make any investment in the securities of any other body corporate, exceeding-
√ 60% of its Paid-up Share Capital + Free reserves + Securities Premium Account;
OR
√ 100% of its Free reserves + Securities Premium Account;
Whichever is more.
The Board of directors of the company can give loan, guarantee, or provide security and make investment within the limits specified u/s 186(2), by passing a board resolution at the meeting of Board of Directors of the company. Contribution(i.e. 5 lakhs)> 5% of AvgNP of 3 Prev FY (i.e. 5%*{(40+150+100)/3}).