Csr

As per section 135 Of companies act, 2013 every company falling under prescribed criteria shall form a CSR commitee. Such committee shall be responsible for forming a CSR Policy for the company, indicating the activities to be undertaken (as specified in Schedule VII) and amount to be spent towards such CSR activities. Board shall ensure that the amount spent shall not be less than 2% of the average net profits earned during proceeding 3 F.Ys.
The board shall mention in Board report about
1) Constitution of CSR commitee
2) The details about the amount it spent towards CSR activities.
3) Reasons for not spending or spending less amount than 2% as aforesaid.
On the issue of Carry forward of unspent amount in previous years, MCA has issued FAQs on section 135. Q.17 deals with: can the unspent amount from out of minimum required CSR expenditure be carried forward to next year?
Ans. The board is free to decide whether the such unspent amount is to be carry forward or not. However, carried forward amount should be over and above next year's CSR allocation equivalent to atleast 2% of average net profits earned during proceeding 3 F.Ys.
So it is upto the management whether to carry forward unspent amount or not.
It is interesting to note that no consequences have been prescribed in case of any non compliance.
Board's report should mention the fact of non spending along with reasons.
As far as auditor's responsibility is concerned you have to check whether the compliances have been met or not. For example, you have to mention in Audit report that management has not constituted a CSR commitee and have not spent any amount towards CSR activity as required under the section 135 neither the facts have been mentioned in Board's report as required under section 134. As per my view an "Other Matter Para" shall suffice.

Nice reply Mr. Totla.

Yes in Audit Report/ Notes to account, Auditor need to mention about CSR and its spending. Moreover, no required under the act to carry forward any amount. However, company may spend the money more than the limit of CSR qualifying amount. But no where in act or in rules, it has been prescribed to carry forward the CSR amount or to make any provision in this regard.

CSR is a comply or explain section .... if the company have not spend any amount on CSR .. then BOD should give its disclosure in BOARD REPORT along with a good reason for not spending the required amount .... there is no penalty for Not spending on CSR .. jsut give proper disclosure in Board report ...