NPF Ltd. had an average net profit of ₹ 10 crore, consecutively in last three financial years. Complying the section 135 of Companies Act, 2013, company ensured to spend ₹ 20 lakh per annum on CSR activities. NPF Ltd end

Section 135 (1) read with rule 3 of Companies (Corporate Social Responsibility Policy) Rules, 2014, mandates that every company which fulfils any of the following criteria during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director- Companies having net worth of rupees five hundred crore or more, or Companies having turnover of rupees one thousand crore or more or Companies having a net profit of rupees five crore or more. However, Sec 135(9) provides that where the amount to be spent by a company under subsection (5) does not exceed fifty lakh rupees the requirement under subsection (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company. In the present case the amount spent by NPF Ltd. In each of the last three preceding years was less than ₹ 50 lakhs. Hence constitution of the Corporate Social Responsibility Committee shall not be applicable for any of these years. Functions of such committee shall be discharged by the Board of Directors of NPF Ltd.