Question

How is the net worth of a foreign Company calculated for the purpose of Corporate Social Responsibility?

• A. The net worth will be calculated as per section 198 of Companies Act, 2013
• B. It shall be calculated as per section 197 of the Companies Act, 2013
• C. It shall be calculated as per section 197 and section 381 of the Companies Act, 2013
• D. It shall be calculated as per section 198 and section 381 of the Companies Act, 2013

Hint:

For foreign companies, CSR net worth is calculated as per Section 198 + Section 381.

Answer 1

The Correct Option is D

Step 1: CSR applicability.
Under Section 135 of the Companies Act, CSR obligations are based on net worth, turnover, or profit criteria. For foreign companies, Section 381 applies.
Step 2: Calculation method.
Net worth is calculated under Section 198 read with Section 381.
Step 3: Conclusion.
Thus, option (d) is correct.