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Kaveri Auto Ltd failed to spend Rs 25 lakh of its CSR obligation for FY 2025-26. The amount does not relate to any ongoing project. What must the Board do under section 135?

The Board must disclose the reasons for not spending in its report and transfer the unspent amount to a Fund specified in Schedule VII within six months of the end of the financial year, because the amount does not relate to an ongoing project.

  1. ACarry the amount forward and spend it within three financial years
  2. BSpecify reasons in the Board's report and transfer the amount to a Fund specified in Schedule VII within six months of the end of the financial yearCorrect
  3. CTransfer the amount to the Unspent CSR Account within thirty days of the financial year end
  4. DDo nothing, since the shortfall is below Rs 50 lakh

Explanation

For unspent amounts not relating to an ongoing project, the Board must state reasons in its report and transfer the amount to a Schedule VII Fund within six months of the expiry of the financial year. The Unspent CSR Account route with thirty days applies only to ongoing projects, so that option is wrong.

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