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Godavari Pharma Ltd failed to spend part of its CSR amount for FY 2025-26. The unspent sum does not relate to any ongoing project. Which statement correctly describes the Board's duty under section 135(5)?

For unspent CSR money not relating to an ongoing project, the Board must give reasons in its report and transfer the amount to a Fund specified in Schedule VII within six months of the financial year's expiry. The Unspent CSR Account route is only for ongoing projects.

  1. AThe Board must specify reasons in its report and transfer the unspent amount to a Fund specified in Schedule VII within six months of the expiry of the financial yearCorrect
  2. BThe Board must open an Unspent CSR Account within thirty days and spend over three years
  3. CThe Board need only disclose the reasons and may carry the amount forward without transfer
  4. DThe Board must transfer the amount to the Fund within thirty days of the end of the financial year

Explanation

The second proviso to section 135(5) requires the Board to specify reasons in its report under section 134(3)(o) and, unless the amount relates to an ongoing project, transfer it to a Schedule VII Fund within six months of the expiry of the financial year. The Unspent CSR Account route under sub-section (6) applies only to ongoing projects, so the thirty-day and three-year option is wrong.

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