Treatment of Donation

A public ltd co. can contribute in any financial year to charitable & other funds which are not related directly to its business the highest of the following (without obtaining the consent of shareholders):

1. a maximum of Rs. 50000/- in aggregate or

2. 5% of the avg net profits of the immediately 3 precceding financial years.

As per the inputs provided by you, the avg net profits were Rs. 15 lacs. 5% of which comes to Rs. 75,000/-. Where as the actual amount donated is Rs.1,00,000/-.

As per the provisions the co. can contribute maximum Rs. 75,000/- . If the co. has contributed Rs. 1,00,000/- it should obatin the  consent of the co. in general meeting.