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New CARO 2020 Provision for Statutory Audit

By gkkedia Dt. March 30th, 2020

We report on the matters contained in Paragraph 3 of the Companies (Auditor’s Report) Order, 2020 as follows:

  • The company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment.
  • The Company has maintained proper records showing full particulars of intangible assets.
  • According to the information and explanation given to us, those Property, Plant & Equipment has been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.
  • The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company & disclosed in the financial statements.
  • The company has revalued its Property, Plant & Equipment (including Right of Use assets) or intangible assets or both during the year and the revaluation is based on valuation by a Registered Valuer.
  • According to the information and explanation given to us, no proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 & rules made there under and the company has appropriately disclosed the details in its financial statements.
  • No Proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 & rules made thereunder and the company has appropriately disclosed the details in its financial statements.
  • Inventory has been physically verified by the management at reasonable intervals and in our opinion the coverage and procedure of such verification by the management is appropriate and no discrepancy is noticed by us.
  • The Company has not sanctioned working capital limits in excess of five crore rupees, in aggregate from banks or financial institutions on the basis of security of current assets (debtors) and quarterly returns filed by the company with such banks or financial institutions are in agreement with the books of accounts of the company
  • Whether during the year the company has made investments in, 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, if so,-
  • Whether during the year the company has provided loans or provided advances in the nature of loans, or stood guarantee, or provided security to any other entity [not applicable to companies whose principal business is to give loans, if so, indicate-
  • The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to subsidiaries, joint ventures and associates;
  • The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to parties other than subsidiaries, joint ventures and associates;
  • Investments made, guarantees provided, security given and the terms of loans and advances in nature of loans and guarantees provided are not prejudicial to the company interest.
  • In respect of loans and advances in nature of loans, the schedule of repayment of and payment of interest has been stipulated and the repayments or receipts are regular.
  • If the amount is overdue, state the total amount overdue for more than ninety days, and whether reasonable steps have been taken by the company for recovery of the principal and interest.
  • Loans & advances in nature of loans granted, which has fallen during the year, has been renewed or extended, has not been renewed or extended to settle the earlier loans given to same parties.
  • The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment.
  • The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, Investments, Guarantees and Securities.
  • In respect of deposits accepted by the company or amounts which are deemed to be deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules made there under, where applicable, have been complied with, if not, the nature of such contraventions be stated; if an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not;
  • Maintenance of cost records has not been specified by the central government under sub-section (1) of section 148 of the companies act and therefore such accounts and records have not been so made and maintained
  • According to the information and explanations given to us, in respect of statutory dues:
  • The Company is regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues (Goods and Services Tax) applicable to it with the appropriate authorities and as on 31.03.2020, no amount was outstanding for a period of more than six months from the date they became payable.
  • No dues were required to be deposited on account of any dispute with income tax or sales tax or service tax or duty of customs or duty of excise or value added tax.
  • According to the information and explanations given to us and on the basis of our examination of the books of accounts, no transaction recorded in the books of accounts have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961(43 of 1961).
  • In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of any loans or borrowing from a financial institution, bank, Government or dues to debenture holders.
  • The company is not a declared wilful defaulter by any bank or financial institution or other lender.
  • Term loans were applied for the purpose for which the loans were obtained.
  • Funds raised on short term basis have not been utilised for long term purposes.
  • 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.
  • Company has not raised loans during the year on pledge of securities held in its subsidiaries, joint ventures, or associate companies.
  • Whether money raised by way of initial public offer or further public offer (including debt instruments) during the year were applied for the purposes for which those are raised, if not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported;
  • Whether the company has made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year and if so, whether 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, if not, provide details in respect of amount involved and nature of non-compliance;
  • In our opinion and according to the information and explanations given to us, no fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
  • Report under sub-section (12) of section 143 of the Companies Act has not been filed by the auditors in form ADT-4 as prescribed under rule 13 of companies (audit and auditors) rules, 2014 with the central government.
  • Auditor has not received any whistle blower complaints during the year by the company.
  • Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability;
  • whether the Nidhi Company is maintaining ten percent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;
  • whether there has been any default in payment of interest on deposits or repayment thereof for
  • Any period and if so, the details there of;
  • In our opinion and according to the information and explanations given to us, all related parties’ transactions are in compliance with sections 177 and 188 of the Companies Act, 2013 and the details of same have been disclosed in the financial statements etc., as required by the applicable accounting standards;
  • Company has an internal audit system commensurate with the size and nature of its business.
  • The Report of Internal Auditors for the period under audit has been considered by statutory auditor.
  • Whether the company has entered into any non-cash transactions with director/s or persons connected with him and if so, whether the provisions of section 192 of Companies Act have been complied with;.
  • The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, (2 of 1934).
  • The Company has not conducted any non-banking financial or housing finance activities without a valid certificate of registration from the Reserve Bank of India as per the Reserve Bank of India Act 1934.
  • Whether the company is a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India, if so, whether it continues to fulfil the criteria of a CIC, and in case the company is an exempted or unregistered CIC, whether it continues to fulfil such criteria.
  • The group does not have a CIC as part of the group.
  • The company has not incurred any cash losses in the financial year and in the immediately preceding financial year.
  • There has not been any resignation of the statutory auditors during the year.
  • The auditors is of the opinion that no uncertainty exists as on date of the audit report that the company is capable of meeting its liabilities (falls due within a period of one year from the balance sheet date) existing at the date of balance sheet on the basis of the financial ratios and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, the auditor’s knowledge of the board of directors and management plans.
  • The Company has transferred unspent amount to a fund in respect of other than ongoing projects specified under schedule VII of the Companies Act 2013 within a period of six months of the expiry of the financial year in compliance with second proviso to sub-section (5) of section 135 of the said Act.
  • The Company has transferred remaining unspent amount under sub-section (5) of section 135 of the Companies Act, pursuant to any ongoing project to a special account in compliance with the provision of sub-section (6) of section 135 of the said Act.
  • No qualification or adverse remarks have been considered by the respective auditors in the Companies (Auditor’s Report) Order (CARO) reports of the companies included in the consolidated financial statements.

 
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