The company was incorporated as a Private Ltd Company on 8/1/2007. The Company was made a public one in the financial year 2008.
First accounts was prepared for a period from 8/1/2007 to 31/3/2008.
Second accounts was for a period from 1.4.2008 to 30.6.2009 (extension of financial year was availed of).
In the financial year 2009-2010, a donation of Rs. 30 lacs was made.
The company had no profits in year 2007-08, 2008-09.
However, year 2009-10 had profits & out of which the said donation was made. The donation was within the limit of 5% of its average net profits during the financial years immediately preceding year of donation. However, the fact is immediate preceding years had losses.
Now, should we get the donation ratified by shareholders in the ensuing AGM by drafting a suitable resolution and simultaneously pass an enabling resolution authorizing the Board to contribute in future u/s 293(1)(e) or we don’t need to do ratify since the amount is within the Board limit. And simply pass an 293(1)(e) enabling resolution.
Or what other escapes are available or how do I set it right if any wrong has been done.
Regards.
Saumen Chatterjee
9007126114
CAclubindia
