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Illustrative Companies Auditors Report Order (CARO 2020)

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Illustrative Companies Auditors Report Order (CARO 2020)
CAGOPALJI AGRAWAL By: CAGOPALJI AGRAWAL
June 17, 2022
All Articles by: CAGOPALJI AGRAWAL       View Profile
  • Contents

Annexure 1 referred to in Paragraph under the heading “Report on other legal and regulatory requirements” of our report of even date on the financial statements of  ABC Private Limited (“The Company”)

In terms of the information and explanations sought by us and given by the company and the books of accounts and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

i)

a)

A)

The company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

   

B)

The company has maintained proper records showing full particulars of intangible assets.

OR

The company has no intangible assets hence the clause is not applicable.

 

b)

 

All property, plant and equipment have been physically verified by the management annually which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

 

c)

 

The title deeds of immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favor of the lessee) are held in the name of the company.

OR

The company does not have any immovable property properties (other than properties where the company is the lessee and the lease agreements are duly executed in favor of the lessee). Accordingly, clause 3 (i) c) of the Order is not applicable to the company.

 

d)

 

The company has not revalued its property, plant and equipment (including right of use assets) or intangible assets during the year ended March 31, 2022.

 

e)

 

No proceedings have been initiated during the year or are pending against the company as at March 31, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988  (as amended in 2016) and the rules made thereunder.

ii)

a)

 

The inventories were physically verified by the management during the year at reasonable intervals. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the management is appropriate having regard to the size of the company and the nature of its operations. No discrepancies of 10% or more in aggregate of each class of inventories were noticed on such physical verification of inventories when compared with the books of accounts.

 

b)

 

The company has not been sanctioned any working capital limit from banks or financial institutions on the basis of security of current assets at any point of time during the year hence reporting under clause 3(ii)(b) of the Order is not applicable.

OR

The company has been sanctioned working capital limit in excess of five crore rupees in aggregate from banks/financial institutions on the basis of the security of the current assets of the company. The quarterly returns/statements filed by the company with such banks/ financial institutions are in agreement with the books of accounts of the company.

OR

The company has been sanctioned working capital limit in excess of five crore rupees in aggregate from banks/financial institutions on the basis of the security of the current assets of the company during the year. The quarterly returns/statements filed by the company with such banks/ financial institutions are in agreement with the books of accounts of the company except for the following:

Quarter

Sanctioned amt

Nature of current assets

Nature of discrepancies

Amount as per returns/ statements

Amount as per books of accounts

Difference

Remarks

               
               

iii)

a)

 

During the year, the company has not made investments, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, firms, limited liability partnerships or any other parties hence clause 3(iii)(a) to 3(iii) (f) is not applicable to the company.

OR

The company has made investments in, provided guarantee or security and granted loans or advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties during the year in respect of which:

 

a)

 

The company has provided loans, during the year as under:

     

Aggregate amount granted/provided during the year (others)

 

Balance outstanding as at the Balance sheet date in respect of above cases

 

The company has not provided any advances in the nature of loans, guarantee and security to any other entity during the year.

 

b)

 

The investments made, guarantee provided, security given and the terms and conditions of grant of all loans and advances in the nature of loans and guarantees provided are, in our opinion, prima-facie, not prejudicial to the company’s interest.

 

c)

 

In respect of loans and advances in the nature of loans, the schedule of repayment of principal and payment of interest has been stipulated and the repayments or receipts of principal and interest have been regular as per stipulation except the following:

Name

Nature

Amount

Due date

Delay period

Remarks

           
 

d)

 

There is no amount overdue fore more than ninety days in respect of the aforesaid loans.

 

e)

 

There is no loan given falling due during the year, which has been renewed or extended or fresh loans granted to settle the over dues of existing loans given to same party.

 

f)

 

The company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms pr period of repayment hence clause 3(iii)(f) of the Order is not applicable.

iv)

   

The company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans granted, investments made and guarantee or securities provided as applicable.

v)

   

The company has not accepted any deposit or amount which is deemed to be deposit. Hence, reporting under clause 3(v) of the Order is not applicable.

OR

The company has not complied with the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the Companies (Acceptance of deposits) Rules 2014, as amended,  with regard to deposits accepted in the nature of advance from customers lying unadjusted over one year.

vi)

   

The maintenance of the cost records has not been specified for the activities of the company by the Central Government u/s 148(1) of the Companies Act, 2013. Hence reporting under clause 3(vi) of the Order is not applicable.

OR

We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of costs records under section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

vii)

a)

 

The company is generally regular in depositing undisputed statutory dues including Goods and Service Tax, provident fund, employees' state insurance, income-tax, duty of customs cess and any other statutory dues applicable to the company with the appropriate authorities. The provisions relating to sales-tax, service tax, duty of excise, value added tax are not applicable to the company. According to the information and explanations given to us[GJA1] , no undisputed amounts payable in respect of these statutory dues were pending at the end of the year for a period of more than six months from the date they became payable.

OR

The following are the arrears of the outstanding undisputed statutory dues on the last day of the financial year or a period of more than six months from the date they became payable:

Statute

Nature of dues

Amount

Period to which the dues relates

Due date

Date of payment

Remarks, if any

             
             
 

b)

 

There is no statutory dues referred in foregoing paragraph vii)  a), which have not been deposited on account of any dispute.

OR

There are no dues in respect of the statutory dues referred in foregoing paragraph vii)  a) which have not been deposited on account of any dispute except the following:

Name of Statute

Nature of dues

Amount (Rs)

Period to which the amount relates

Forum where dispute pending

Remarks, if any

           

viii)

   

There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year. Hence clause 3(viii) of the Order is not applicable to the company.

ix)

a)

 

the Company did not have any loans or borrowings from any lender during the year. Accordingly, clause 3(ix)(a) of the Order is not applicable.

OR

The company has not defaulted in repayment of loans and borrowings or in the payment of interest thereon to any lender during the year.

OR

The company has not defaulted in repayment of loans and borrowings or in the payment of interest thereon to any lender during the year except as under:

Nature of borrowings including debt securities

Name of the lender

Amount not paid on due date

Whether principal or interest

Number of days delay or unpaid

Remarks, if any

           
 

b)

 

The company has not been is a declared wilful defaulter by any bank or financial institution or government or government authority.

 

c)

 

The Company has not taken any term loan during the year and there are no unutilised term loans at the beginning of the year hence the reporting under clause 3(ix) c) is not applicable to the company.

OR

In our opinion and According to the information and explanations given to us, the company has utilised the money obtained by way of term loans during the year for the purposes for which they were obtained except for the following cases:

Nature of the fund raised

Name of the Lender

Amount diverted (Rs)

Purpose for which sanctioned

Purpose for which utilized

remarks

           
 

d)

 

According to the information and explanations given to us and the procedures performed by us, and on an overall examination of the financial statements of the company, we report that no funds raised on short term basis have been used for long term purposes by the company.

OR

According to the information and explanations given to us and the procedures performed by us, and on an overall examination of the financial statements of the company, we report that the company has used funds raised on short term basis aggregating to Rs. ______ for long term purposes.

 

e)

 

The company does not hold any investment in any subsidiary, associates or joint venture (as defined under the Companies Act 2013) during the year ended March 31, 2022. Hence clause 3(ix) ( e ) of the Order is not applicable.

OR

According to the information and explanations given to us and an overall examination of the financial statements of the company, we report that the company has not taken any funds from any entity or person on account of or  to meet the obligations of  its subsidiaries, associates or joint ventures (as defined under the Companies Act 2013) during the year ended March 31, 2022. Hence clause 3(ix) ( e ) of the Order is not applicable

 

f)

 

The company does not hold any investment in any subsidiary, associates or joint venture (as defined under the Companies Act 2013) during the year ended March 31, 2022. Hence clause 3(ix) (f) of the Order is not applicable.

OR

According to the information and explanations given to us and procedures performed by us, we report that the company has not raised loans during the year on the pledge of securities held in its subsidiary, associates or joint venture (as defined under the Companies Act 2013) Hence clause 3(ix) (f) of the Order is not applicable.

x)

a)

 

Being the private limited company, it cannot raise money by way of initial public offer or further public offer (including debt instruments) hence the clause 3(x)(a) of the Order is not applicable.

 

b)

 

According to the information and explanations given to us and on the basis of our examination of the records of the company, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year hence the clause 3(x)(b) of the Order is not applicable.

OR

The Company has made preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year and the requirements of Section 42 and Section 62 of the Companies Act, 2013 have been complied with and the funds raised have been used for the purposes for which the funds were raised.

xi)

a)

 

No fraud by the company or no fraud on the Company has been noticed or reported during the year.

 

b)

 

During the year, no report under sub-section (12) of section 143 of the Act has been filed by secretarial auditor or by us in Form ADT – 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

 

c)

 

The establishment of whistle blower mechanism is not applicable to the company hence reporting under clause 3(xi)( c) is not applicable to the company.

xii)

   

The Company is not a Nidhi Company as per the provisions of the Act. Accordingly, the requirement to report on clause 3(xii) of the Order is not applicable to the Company.

xiii)

   

All transactions with the related parties are in compliance with sections 177 and 188 of Companies Act where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

xiv)

a)

 

In our opinion and based on our examination, the company does not have an internal audit system commensurate with the size and nature of its business and is not required to have an internal audit system as per the provisions of section 138 of the Companies Act, 2013

OR

In our opinion and based on our examination, the company has an internal audit system commensurate with the size and nature of its business.

OR

In our opinion and based on our examination. Though the company is required to have an internal audit system under section 138 of the Companies Act, 2013 but it does not have the same established during the year.

 

b)

 

Since the company is not required to have the internal audit system hence the clause 3(xiv)(b) is not applicable to the company.

OR

We have considered the internal audit report of the company issued till date for the period under audit.

OR

Internal audit reports entirely unavailable or provided at short notice or only partly hence not considered.

xv)

   

In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi)

a)

 

The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi)(a) of the Order is not applicable.

 

b)

 

The Company is not engaged in any Non-Banking Financial or Housing Finance activities. Accordingly, the requirement to report on clause 3 (xvi)(b) of the Order is not applicable to the Company.

 

c)

 

The Company is not engaged in any Non-Banking Financial or Housing Finance activities. Accordingly, the requirement to report on clause 3 (xvi)(c) of the Order is not applicable to the Company.

 

d)

 

There is no group company /Core Investment Company.  Accordingly, the requirement to report on clause 3(xvi) of the Order is not applicable to the Company.

xvii)

   

The Company has not incurred cash losses in the current year and preceding financial year.

OR

The Company has not incurred cash losses in the current financial year however cash losses of INR ______lakhs was incurred in the immediately preceding financial year.

OR

The Company has incurred cash losses amounting to R _______ Lakhs during the financial year covered by our audit and Rs _______ Lakhs in the immediately preceding financial year.

xviii)

   

There has been no resignation of the statutory auditors during the year and accordingly, requirement to report on Clause 3(xviii) of the Order is not applicable to the Company.

OR

There has been resignation of the statutory auditors during the year. We have taken into consideration the issues, objections or concerns raised by the outgoing auditors OR there were no issues, objections or concerns raised by the outgoing auditors.

xix)

   

On the basis of the financial ratios disclosed in notes to the Standalone Financial Statements, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying Financial Statements, our knowledge of the Board of Directors’ and management’s plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx)

   

Since the provisions of Section 135 of the Companies Act, 2013 with regard to corporate social responsibility are not appliable to the company hence clause 3(xx) of the Order is not applicable.

For ABC and company

Chartered Accountants

ICAI Firm Registration number ______

(Name of the partner)

Partner

Membership number

UDIN

Place of Signature

Date

 [GJA1]

 

By: CAGOPALJI AGRAWAL - June 17, 2022

 

 

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