Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Corporate Social Responsibility (CSR)

Vihaan Components Ltd was incorporated two years ago and has completed only two financial years. Its Board is determining the base for the CSR spend under section 135(5). Which base applies?

The base is the average net profit of the two immediately preceding financial years. The Act says that where the company has not completed three financial years since incorporation, the average is taken over the immediately preceding years available, with no zero year added.

  1. AAverage net profit of the two immediately preceding financial years since incorporationCorrect
  2. BNet profit of the latest financial year alone
  3. CNet profit of the current financial year
  4. DAverage net profit of three years, taking the missing year as zero

Explanation

Where a company has not completed three financial years since incorporation, the average is taken over such immediately preceding financial years as exist. The current year is not used, and no zero year is assumed.

Did you get it right without looking?

One question tells you little. A timed set on Corporate Social Responsibility (CSR) shows your real accuracy, how long you take and where you lose marks.

Practise Corporate Social Responsibility (CSR)Free diagnostic mock

More Corporate Social Responsibility (CSR) questions