| 3(i)(a)(A) | Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment; | Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment; | Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment; | |
| (a) | Whether records of Property, Plant and Equipment are maintained showing the following particulars: | | | |
| (i) Sufficient description (distinctive numbers, purchase agreement, documents, records and registration references, etc.) of the asset to make identification possible.
(ii) Classification, that is, the head under which it is shown in the accounts, e.g., plant and machinery, office equipment, etc. component-wise, as applicable.
(iii) Location/situation.
(iv) Quantity, i.e., number of units.
(v) Original cost.
(vi) Year of purchase.
(vii) Date of available for use.
(viii) Residual value.
(ix) Adjustment for revaluation or for any increase or decrease in cost, e.g., on revaluation of foreign exchange liabilities.
(x) Date of revaluation, if any.
(xi) Rate and basis of depreciation, useful life, particulars regarding impairment.
(xii) Depreciation and impairment for the current year.
(xiii) Accumulated depreciation and impairment loss.
(xiv) Particulars regarding sale, discarding, demolition, destruction etc.
(xv) Particulars of Property, Plant and Equipment that have been retired from active use and held for disposal.
(xvi) Particulars of Property, Plant and Equipment that have been fully depreciated or impaired. | | | |
| (b) | Whether aggregate original cost, depreciation to date and impairment loss, if any, as per the register/records agrees with General Ledger balances? If not, note the disagreements in respect of each class of assets. | | | |
| Conclusion: | | | |
| 3(i)(a)(B) | Whether the company is maintaining proper records showing full particulars of intangible assets; | Whether the company is maintaining proper records showing full particulars of intangible assets; | Whether the company is maintaining proper records showing full particulars of intangible assets; | |
| (a) | Whether records of intangible assets are maintained showing the following particulars: | | | |
| Sufficient description (distinctive numbers, purchase agreement, documents, records and registration references, etc.) of the intangible asset to make identification possible along with bifurcation as per:
Self-generated intangible assets to the extent permitted by relevant accounting standards
Acquired intangible assets
Classification, that is, the head under which it is shown in the accounts, e.g.,
Customer-based intangible assets,
marketing-based intangible assets,
contract based intangible assets,
artistic–based intangible assets,
technology-based intangible assets etc. as applicable.
(iii) Location/situation.
(iv) Quantity, i.e., number of units.
(v) Original cost.
(vi) Year of purchase.
Date of available for use.
Residual value.
(ix) Adjustment for revaluation or for any increase or decrease in cost, e.g., on revaluation of foreign exchange liabilities.
(x) Date of revaluation, if any.
(xi) Rate and basis of amortization, useful life, particulars regarding amortisation and impairment of intangible assets.
(xii) Amortisation and impairment for the current year.
(xiii) Accumulated amortisation and impairment loss and / or reversal of impairment loss.
(xiv) Particulars regarding retirement, sale, disposal, cessation etc. (e.g., termination of a license / permit or scrapping of a software)
(xv) Particulars of intangible assets that have been retired / derecognized from active use and held for disposal.
(xvi) Particulars of intangible assets that have been fully amortised or impaired.
(xvii) Particulars of any specific legislation which is applicable to intangible assets (e.g. Copyright Act 1957, Patents Act 1970, Information Technology Act 2000, Designs Act 2000 etc.)
(xviii) Whether aggregate original cost, amortisation to date and impairment loss, if any, as per the register/records agrees with General Ledger balances? If not, note the disagreements in respect of each class of intangible assets. | | | |
| Conclusion: | | | |
| 3(i)(b) | Whether these Property, Plant and Equipment have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account; | Whether these Property, Plant and Equipment have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account; | Whether these Property, Plant and Equipment have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account; | |
| (a) | (i) Whether Property, Plant and Equipment (PPE) were physically verified at any time during the year or earlier years according to a phased program?
(ii) What is the periodicity of physical verification of PPE and whether the same is reasonable?
(iii) Whether PPE physically verified, agreed/ reconciled with book figures?
If not, auditor is to note the discrepancies against each class of assets in terms of value, and state how the discrepancies have been dealt with.
(iv) Instructions to officials for carrying out physical verification to include procedures, timing, competency of team members, count sheets/tags, formats etc. | | | |
| (b) | The auditor may physically verify few items from the PPE register & vice versa. | | | |
| (c) | Whether management representation is obtained confirming that:
items of PPE are physically verified by the company in accordance with the policy of the company.
periodicity of the physical verification of PPE.
details of the material discrepancies noticed during the physical verification of PPE.
if no discrepancies were noted during physical verification, the same should be clearly mentioned. | | | |
| Conclusion: | | | |
| 3(i)(c) | Whether 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) disclosed in the financial statements are held in the name of the company, if not, provide the details thereof in the format below:- | Whether 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) disclosed in the financial statements are held in the name of the company, if not, provide the details thereof in the format below:- | Whether 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) disclosed in the financial statements are held in the name of the company, if not, provide the details thereof in the format below:- | |
| (a) | Does the company have any immovable properties (e.g. land and buildings)?
Has the company identified the land and building on the basis of Property, Plant and Equipment register? | | | |
| (b) | Whether the title deeds of these 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?
Whether the details as per title deeds reconcile with the details in PPE register, if not, is there any material difference to be reported here. | | | |
| (c) | Has the management provided details of immovable properties not held in company's name (for example, location, description, and reasons for not being held in the company's name? | | | |
| In case the title deeds are lost, assess whether the certified copies of such documents are available with the company and what actions have been taken by the management in this regard?
In case the title deeds are mortgaged with the lenders, assess if the confirmation from the lenders is obtained for the same.
In case any litigations / dispute are pending with respect to title of the immovable properties, the auditor is to document and report the details of such litigations and the forum where they are pending.
The discrepancies observed should be reported in the CARO report as under:
In case 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 not held in the name of the company, the auditor has to obtain information and details on the following:
Description of the property (with details of location, area, details of land records/municipal records)
Gross carrying value as in the financial statements.
Held in the name of whom (name of party).
Whether such properties are held in the name of promoter, director or their relative or employee.
The period for which such properties are held in the name of promoter, director or their relative or employee.
Reason for not being held in the name of the company.
Details of dispute, if any.
Auditor may carry out suitable substantive test, external confirmation, and obtain necessary management representation for the purpose of reporting under this clause. | | | |
| Conclusion: | | | |
| 3(i)(d) | Whether the company has revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year and, if so, whether the revaluation is based on the valuation by a Registered Valuer; specify the amount of change, if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment or intangible assets; | Whether the company has revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year and, if so, whether the revaluation is based on the valuation by a Registered Valuer; specify the amount of change, if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment or intangible assets; | Whether the company has revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year and, if so, whether the revaluation is based on the valuation by a Registered Valuer; specify the amount of change, if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment or intangible assets; | |
| (a) | Whether revaluation of Property, Plant and Equipment (including right of use assets) or Intangible Assets has been carried out? | | | |
| (b) | What is the frequency of revaluation usually carried out by the company? | | | |
| (c) | In case the company during the year has revalued its PPE or intangible assets or both, then whether the revaluation is based on the valuation by a Registered Valuer as set out in Section 247 of the Companies Act 2013 read with the Companies (Registered Valuers and Valuation Rules) 2017. | | | |
| (d) | In case a single item of PPE is revalued, whether the entire class of PPE to which that item belongs has been revalued. | | | |
| (e) | Date of revaluation carried out by the company. | | | |
| (f) | Name of the Registered Valuer or firm who carried out the valuation exercise, place and date of Valuation Report (The auditor may also retain a copy of the Valuation Report issued by such Registered Valuer). | | | |
| (g) | Membership / Licence Number of the Registered Valuer (Registered Valuer are to be registered with Insolvency & Bankruptcy Board of India). | | | |
| (h) | If change is 10% or more in the aggregate of the net carrying value of each class of PPE or intangible assets, auditor to specify the amount of change and whether this change is a result of upward or downward revaluation. | | | |
| Conclusion: | | | |
| 3(i)(e) | Whether any proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, if so, whether the company has appropriately disclosed the details in its financial statements; | Whether any proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, if so, whether the company has appropriately disclosed the details in its financial statements; | Whether any proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, if so, whether the company has appropriately disclosed the details in its financial statements; | |
| For the purpose of reporting under this Clause, the term ‘Property’ shall cover the Definition as per the Prohibition of Benami Property Transactions Act, 1988. | | | |
| (a) | Whether proceedings have been initiated under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 by the Initiating Officer (IO) and/ or any proceedings being pending against the Company before the Initiating Officer/ Adjudicating Authority/ Appellate Tribunal/ High Court/ Supreme Court during any of the preceding financial years. | | | |
| (b) | Whether, in case of any proceedings initiated or pending against the company, appropriate disclosures are made in the financial statements. The term ‘Appropriate disclosures’ shall, inter alia include:
The disclosures required by Schedule III to the Act.
consequential impact on the financial statements and/ or the liability that may arise in case the proceedings are decided against the Company. | | | |
| (c) | Whether the liability is required to be disclosed as “Contingent liabilities” or whether provisions are required to be made in the financial statements. | | | |
| (d) | For the purpose of ascertaining whether any proceedings are initiated or are pending: | | | |
| Whether management representation letter is obtained by the auditor under SA 580 in respect of necessary inquiries made with management? | | | |
| Whether review is carried out by the auditor regarding ‘legal fees / expenses’ in the statement of profit and loss to ascertain whether any expenses have been actually incurred by the Company in respect of a proceeding under Prohibition of Benami Property Transactions Act 1988? | | | |
| Whether the auditor reviewed the minutes of meetings of the Board of Directors, Audit Committee, Risk Management Committee, other secretarial records to verify whether any reference to proceedings against the Company under the Prohibition of Benami Property Transactions Act 1988 has been made? | | | |
| Conclusion: | | | |
| 3(ii)(a) | Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether, in the opinion of the auditor, the coverage and procedure of such verification by the management is appropriate; whether any discrepancies of 10% or more in the aggregate for each class of inventory were noticed and if so, whether they have been properly dealt with in the books of account; | Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether, in the opinion of the auditor, the coverage and procedure of such verification by the management is appropriate; whether any discrepancies of 10% or more in the aggregate for each class of inventory were noticed and if so, whether they have been properly dealt with in the books of account; | Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether, in the opinion of the auditor, the coverage and procedure of such verification by the management is appropriate; whether any discrepancies of 10% or more in the aggregate for each class of inventory were noticed and if so, whether they have been properly dealt with in the books of account; | |
| (a) | Has the management physically verified the inventory, as defined in AS 2/Ind AS 2? | | | |
| (b) | Whether evidence of physical verification has been seen and reasonableness of periodicity of physical verification evaluated by verifying following: | | | |
| written instructions issued by the management.
duly authenticated physical verification sheets.
duly authenticated summary sheets/ consolidation sheet.
internal memo, etc., regarding issues arising on physical verification.
any other documents evidencing physical verification. | | | |
| (c) | Whether the original physical verification sheets have been reviewed and selected items traced into the final inventories? (including the more valuable ones as per ABC classification) | | | |
| (d) | Whether the comparison of final inventories with stock has been done? Whether records and other corroborative evidence, e.g. inventory statements submitted to banks? | | | |
| (e) | In case of continuous stock taking method, whether management: | | | |
| (i) maintains adequate and up-to-date stock records;
(ii) has established adequate procedures for physical verification of inventories, so that in the normal circumstances, the programme of physical verification will cover all material items of inventory at least once during the year; and
(iii) checks/examines thoroughly and corrects all material differences between the book records and the physical counts. | | | |
| (f) | Whether stock register is updated and value of inventory extracted from it tally with the books of account. | | | |
| (g) | Whether any discrepancies of 10% or more in aggregate for each class of inventory were noticed (in terms of value) in the stock records/ register as compared to books of account?
If yes, how the same have been dealt with in the books of account as well as in the stock records?
In case discrepancy cannot be determined, state this fact. | | | |
| Conclusion: | | | |
| 3(ii)(b) | Whether during any point of time of the year, the company has been 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; whether the quarterly returns or statements filed by the company with such banks or financial institutions are in agreement with the books of account of the Company, if not, give details; | Whether during any point of time of the year, the company has been 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; whether the quarterly returns or statements filed by the company with such banks or financial institutions are in agreement with the books of account of the Company, if not, give details; | Whether during any point of time of the year, the company has been 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; whether the quarterly returns or statements filed by the company with such banks or financial institutions are in agreement with the books of account of the Company, if not, give details; | |
| (a) | Whether the company has availed/taken working capital limits from banks/financial institutions during the year on the basis of security of current assets. | | | |
| (b) | Whether the sanctioned working capital limits have been checked from the sanction letter issued to the company by banks/financial institutions. | | | |
| (c) | Whether at any point of time during the year, the sanctioned limit (including fresh sanction, limits renewed and due for renewal) exceeds Rs. 5 crores. | | | |
| (d) | Whether fund based and non-fund based working capital limits have been examined by the auditor for determining the limit of Rs. 5 crores. | | | |
| (e) | Whether the register of charges and relevant documents have been examined for charge created on the current assets. | | | |
| (f) | Whether the company files returns/statements with the banks/financial institutions; if so, whether a list of the same has been taken on record by the auditor.
An illustrative list of documents which should be examined by the auditor in this regard are -
i. stock statements
ii. book debt statements
iii. statement on ageing analysis of debtors/other receivables
iv. report/statement of other financial information submitted to the lenders | | | |
| (g) | Whether the terms of sanction expressed in the agreements/other documents and other information relevant to reporting under this clause has been taken on record by the auditor. | | | |
| (h) | Where the company files quarterly returns/statements, whether the same has been taken on record by the auditor and compared with the books of account.
During comparison, the following parameters may be considered -
i. quantity and value of stocks
ii. amount of debtors/creditors
iii. ageing analysis of debtors etc. | | | |
| (i) | Whether any discrepancy arose during such comparison and a list of the same is made by the auditor. | | | |
| (j) | Whether the auditor holds discussion with the management for the reasons and details of such discrepancies; whether the auditor is satisfied with the same; obtain management representation wherever necessary. | | | |
| (k) | Whether the auditor using his professional judgement and considering the impact of the same on the financial statements has dealt with the above discrepancies in his report; and has reported the same in such manner that is understandable to the users of the financial statements. | | | |
| Conclusion: | | | |
| 3(iii)(a) | 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,
(a) 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 -
(A) 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;
(B) 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; | 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,
(a) 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 -
(A) 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;
(B) 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; | 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,
(a) 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 -
(A) 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;
(B) 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; | |
| (a) | Has the company granted any loans/advances in nature of loans (Secured or Unsecured), provided guarantee/security to companies, firms, limited liability partnerships or any other parties? | | | |
| (b) | Where the company has granted any loans/advances in nature of loans to parties and squared off during the year, obtain details of such transactions. | | | |
| Conclusion: | | | |
| 3(iii)(b) | Whether the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in nature of loans and guarantees provided are not prejudicial to the company’s interest; | Whether the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in nature of loans and guarantees provided are not prejudicial to the company’s interest; | Whether the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in nature of loans and guarantees provided are not prejudicial to the company’s interest; | |
| (a) | Whether the terms of the investments, loans/advances in nature of loans, guarantee/security are prima facie prejudicial to interest of the company, due consideration to be given to the factors mentioned below:
terms & condition of the loans/advances in nature of loans like terms and period of repayment, rate of interest, restrictive covenants etc.,
company’s financial standing, its ability to lend, invest, provide guarantee/security and terms thereof,
borrower’s financial standing,
the nature of the security,
prevailing rate of interest etc. | | | |
| (b) | Whether compliance with applicable law has been ensured (this would assist in identification of whether terms are prejudicial to the interest of the company). | | | |
| Conclusion: | | | |
| 3(iii)(c) | In respect of loans and advances in the nature of loans, whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular; | In respect of loans and advances in the nature of loans, whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular; | In respect of loans and advances in the nature of loans, whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular; | |
| (a) | Whether the schedule of repayment of principal and payment of interest has been stipulated in the loan/advances in nature of loan agreements / mutually agreed letter of arrangement at the time of sanction? | | | |
| (b) | Whether repayment of principal amount and interest thereon are received regularly on the due date or immediately thereafter? | | | |
| (c) | If not, the fact and details should be obtained. | | | |
| Conclusion: | | | |
| 3(iii)(d) | 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; | 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; | 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; | |
| (a) | Whether list of overdue amount has been prepared & recorded and reasonable steps taken for recovery of amount of loan which is overdue for more than ninety days? | | | |
| (b) | Following documents may be seen for verification of reasonableness of steps taken by the company for recovery of principal and accrued interest on loan granted:
Facts of each case including amounts involved
Issue of reminder
Sending of advocates or solicitor’s notice
Obtaining enhanced security
In absence of legal steps whether auditor is satisfied that reasonable steps have been taken. | | | |
| (c) | Obtain management representation regarding steps that have been taken for recovery of total amount overdue for more than ninety days. | | | |
| Conclusion: | | | |
| 3(iii)(e) | Whether any loan or advance in the nature of loan granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties, if so, specify the aggregate amount of such dues renewed or extended or settled by fresh loans and the percentage of the aggregate to the total loans or advances in the nature of loans granted during the year [not applicable to companies whose principal business is to give loans]; | Whether any loan or advance in the nature of loan granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties, if so, specify the aggregate amount of such dues renewed or extended or settled by fresh loans and the percentage of the aggregate to the total loans or advances in the nature of loans granted during the year [not applicable to companies whose principal business is to give loans]; | Whether any loan or advance in the nature of loan granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties, if so, specify the aggregate amount of such dues renewed or extended or settled by fresh loans and the percentage of the aggregate to the total loans or advances in the nature of loans granted during the year [not applicable to companies whose principal business is to give loans]; | |
| (a) | Examine whether in respect of loans overdue, fresh loans were granted/extension made/renewal done to settle the overdues of existing loans given to the same parties. | | | |
| Conclusion: | | | |
| 3(iii)(f) | Whether the company has granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment, if so, specify the aggregate amount, percentage thereof to the total loans granted, aggregate amount of loans granted to Promoters, related parties as defined in clause (76) of section 2 of the Companies Act, 2013; | Whether the company has granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment, if so, specify the aggregate amount, percentage thereof to the total loans granted, aggregate amount of loans granted to Promoters, related parties as defined in clause (76) of section 2 of the Companies Act, 2013; | Whether the company has granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment, if so, specify the aggregate amount, percentage thereof to the total loans granted, aggregate amount of loans granted to Promoters, related parties as defined in clause (76) of section 2 of the Companies Act, 2013; | |
| (a) | Examine whether there are instances of such loans/advances in nature of loans vis-a-vis total loans/advances in nature of loans. Further, consider portion of such loans/advances in nature of loans granted to promoters under section 2(69) and related parties under section 2(76) of the Companies Act 2013. | | | |
| (b) | Check the mathematical accuracy of aggregate amount and percentage that needs to be reported upon. | | | |
| Conclusion: | | | |
| 3(iv) | In respect of loans, investments, guarantees, and security, whether provisions of sections 185 and 186 of the Companies Act have been complied with, if not, provide the details thereof; | In respect of loans, investments, guarantees, and security, whether provisions of sections 185 and 186 of the Companies Act have been complied with, if not, provide the details thereof; | In respect of loans, investments, guarantees, and security, whether provisions of sections 185 and 186 of the Companies Act have been complied with, if not, provide the details thereof; | |
| (a) | Where company has given loans to directors etc.: | | | |
| Whether any loans given directly or indirectly to directors or any person in whom any of the director of the company is interested, or given any guarantee or provided any security in connection with any loan taken by directors or such other person? | | | |
| Whether any of the transaction is attracting the provisions of section 185? | | | |
| Whether any of such transactions are covered under the exceptions provided under section 185? If so, obtain the relevant evidence ensuring such exemption. | | | |
| (b) | Where company has made loan/ investment: | | | |
| Obtain the details of loans given and investment made by the company including opening balances. Also obtain the details regarding guarantee given or security provided by the company. | | | |
| Whether the company has made investment through more than two layers of investment companies? | | | |
| Whether the company has exceeded the limit of sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more? | | | |
| If the limit exceeded, whether prior approval by means of a special resolution passed at a general meeting has been obtained? | | | |
| Whether the rate of interest charged is more or at par to the rates specified in sub-section (7) of section 186 of the Act, if not, the reasons thereof. | | | |
| Conclusion: | | | |
| 3(v) | 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 thereunder, 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; | 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 thereunder, 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; | 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 thereunder, 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; | |
| (a) | If the company has accepted deposits or amounts which are deemed to be deposits from the public, state whether: | | | |
| (i) The directives issued by the Reserve Bank of India have been complied with and also that:
(ii) The provisions of Sections 73 to 76 of the Companies Act, 2013 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder have been complied with.
(iii) List out contraventions, if any. | | | |
| (b) | Where an order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of above, examine the steps taken by the company to comply with the order, and if not, report briefly stating therein the nature of contravention and the fact that company has not complied with the order. | | | |
| Conclusion: | | | |
| 3(vi) | Whether maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act and whether such accounts and records have been so made and maintained; | Whether maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act and whether such accounts and records have been so made and maintained; | Whether maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act and whether such accounts and records have been so made and maintained; | |
| (a) | Whether cost records have been prescribed for the company under section 148(1) of the Companies Act, 2013? | | | |
| (b) | If so, examine whether proper cost accounts and records are made and maintained by the Company as specified- Obtain Form CRA-A. | | | |
| Conclusion: | | | |
| 3(vii)(a) | Whether the company is regular in depositing undisputed statutory dues including Goods and Services Tax, provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated; | Whether the company is regular in depositing undisputed statutory dues including Goods and Services Tax, provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated; | Whether the company is regular in depositing undisputed statutory dues including Goods and Services Tax, provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated; | |
| (a) | Whether a list of statutory dues which company is required to deposit regularly has been obtained. | | | |
| Note: Any sum, which is to be regularly paid to an appropriate authority under a statute (whether Central, State or Local or Foreign) applicable to the company, should be considered as a “statutory due”. | | | |
| (b) | In case where there are no arrears on the balance sheet date but the company has been irregular during the year in depositing the statutory dues, the fact should be stated. | | | |
| (c) | Whether the Company has been generally regular in depositing statutory dues or otherwise, indicate the same. | | | |
| Note: A matter is disputed where there is a positive evidence or action on the part of the company to show that it has not accepted the demand for payment of tax or duty, e.g., where it has gone into appeal. | | | |
| (d) | Whether penalty and/or interest levied under the respective law is included under amounts payable? | | | |
| (e) | Ensure that disclosure is restricted to the actual arrears and should not include the amounts which have not fallen due for deposit and have been shown as arrears at the balance sheet date. | | | |
| (f) | Whether the information about arrears of outstanding statutory dues is provided in the format:
Name of the Statute
Nature of the dues
Amount (Rs.)
Period to which amount relates
Due date
Date of Payment | | | |
| (g) | Whether a written representation with reference to the date of the balance sheet obtained from the management:
specifying the cases and the amounts considered disputed;
containing a list of the cases and the amounts in respect of the statutory dues which are undisputed and have remained outstanding for a period of more than six months from the date they became payable;
containing a statement as to the completeness of the information provided by the management. | | | |
| (h) | Whether any register of significant laws with which the company has to comply within its particular industry and a record of complaints in respect of non-compliance been maintained? | | | |
| Conclusion: | | | |
| 3(vii)(b) | Where statutory dues referred to in sub-clause (a) have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (a mere representation to the concerned Department shall not be treated as a dispute); | Where statutory dues referred to in sub-clause (a) have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (a mere representation to the concerned Department shall not be treated as a dispute); | Where statutory dues referred to in sub-clause (a) have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (a mere representation to the concerned Department shall not be treated as a dispute); | |
| (a) | Review internal audit report, minutes of the meeting of the Board of Directors and audit committee. | | | |
| (b) | Ensure that information about arrears of disputed statutory dues is provided in the format:
Name of the Statute
Nature of the dues
Amount (Rs.)
Period to which the amount relates
Forum where dispute is pending | | | |
| (c) | Ensure that disclosure is restricted to the amounts which have not been deposited on account of any dispute, irrespective of the treatment of such disputed amount in accounts. | | | |
| (d) | In case, the company has made the deposit under protest, the fact of such deposit having been made under protest should be stated under this clause. | | | |
| Conclusion: | | | |
| 3(viii) | Whether any transactions not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961), if so, whether the previously unrecorded income has been properly recorded in the books of account during the year; | Whether any transactions not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961), if so, whether the previously unrecorded income has been properly recorded in the books of account during the year; | Whether any transactions not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961), if so, whether the previously unrecorded income has been properly recorded in the books of account during the year; | |
| (a) | Whether financial statements have been obtained and listing of sources of income has been obtained. | | | |
| (b) | Whether details of any proceedings/ assessment made during the financial year under audit obtained. | | | |
| (c) | Whether written representation with reference to the year under audit obtained from the management:
specifying the income which are not recorded in the books of account and have been disclosed/surrendered by the assessee during the year.
containing a year wise listing of amount disclosed/ surrendered.
containing reasons for non-disclosure earlier and source of income.
containing impact of such unrecorded transactions on the financial statements.
containing statement as to completeness of the information provided by the management. | | | |
| Conclusion: | | | |
| 3(ix)(a) | 3(ix)(a) | Whether the company has defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender, if yes, the period and the amount of default to be reported as per the format below: | Whether the company has defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender, if yes, the period and the amount of default to be reported as per the format below: | Whether the company has defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender, if yes, the period and the amount of default to be reported as per the format below: |
| (a) | (a) | Whether all defaults committed during the year and number of days of default are reported irrespective of whether these defaults have been rectified at the balance sheet date? | | |
| (b) | (b) | Whether all defaults existing at the balance sheet date are reported irrespective of when those defaults have occurred? | | |
| (c) | (c) | In case of defaults to banks, financial institutions, and government, whether lender wise details reported? | | |
| (d) | (d) | If application of re-schedulement of loan has been made whether the fact has been stated. Where reschedulement has been approved subsequent to balance sheet date, whether defaults reported? | | |
| (e) | (e) | Whether the disputes between the company and the lender on various issues give rise to disclaimer stating the fact there is a dispute between the company and the lender and accordingly the auditor is unable to determine whether there is a default in repayment of dues to the lender concerned? | | |
| | Conclusion: | | |
| 3(ix)(b) | 3(ix)(b) | Whether the company is a declared wilful defaulter by any bank or financial institution or other lender; | Whether the company is a declared wilful defaulter by any bank or financial institution or other lender; | Whether the company is a declared wilful defaulter by any bank or financial institution or other lender; |
| (a) | (a) | Whether the company has defaulted in repayment of loans and/ or payment of interest? | | |
| (b) | (b) | Does the auditor’s procedures- confirmation from lender or research of information in public domain indicate that the company has been declared a wilful defaulter? | | |
| (c) | (c) | Enquire from the management if the company has been declared a wilful defaulter by any lender as at the date of the balance sheet or on the date of signing of audit report. | | |
| (d) | (d) | Has the company received any show-cause notice in accordance with RBI Master Circular dated July 1, 2015 on Wilful Defaulters? | | |
| | Conclusion: | | |
| 3(ix)(c) | 3(ix)(c) | Whether term loans were applied for the purpose for which the loans were obtained; if not, the amount of loan so diverted and the purpose for which it is used may be reported; | Whether term loans were applied for the purpose for which the loans were obtained; if not, the amount of loan so diverted and the purpose for which it is used may be reported; | Whether term loans were applied for the purpose for which the loans were obtained; if not, the amount of loan so diverted and the purpose for which it is used may be reported; |
| (a) | (a) | Whether the company has taken any term loan? | | |
| (b) | (b) | Examine the terms and conditions subject to which the company has obtained the term loans including purpose for which term loans were sanctioned. | | |
| (c) | (c) | Compare the purpose for which term loans were sanctioned with the actual utilisation of the loans and obtain sufficient appropriate audit evidence regarding the utilisation of the amounts raised. | | |
| (d) | (d) | In case, during a construction phase surplus funds were temporarily invested, however, subsequently the same are utilised for the stated objectives, mention the fact that the funds were temporarily used for the purpose other than for which the loan was sanctioned but were ultimately utilised for the stated end-use. | | |
| (e) | (e) | Where the Company has taken general purpose loans, whether these have been utilized for purposes considered as diversion by RBI Master Circular dated July 1, 2015 on Wilful Defaulters. | | |
| (f) | (f) | Whether the fund flow statement has been reviewed where one to one correlation was not possible. | | |
| (g) | (g) | Whether term loans taken were not applied for stated purpose during the year for any reason? If yes, mention the facts and amount. Also disclose the fact about utilization of term loan of earlier year in current year. | | |
| | Conclusion: | | |
| 3(ix)(d) | 3(ix)(d) | Whether funds raised on short term basis have been utilised for long term purposes, if yes, the nature and amount to be indicated; | Whether funds raised on short term basis have been utilised for long term purposes, if yes, the nature and amount to be indicated; | Whether funds raised on short term basis have been utilised for long term purposes, if yes, the nature and amount to be indicated; |
| (a) | (a) | Whether movement of funds of company can be examined and verified and such movement also be supported by relevant documentation, direct relationship between particular funds and an asset from the balance sheet can be ascertained. | | |
| (b) | (b) | Whether trail is available to show that movement of source and application of funds and a direct relationship between them? If not, determine movement and application of funds on an overall basis. | | |
| (c) | (c) | Whether funds raised on short term basis have been applied for long-term requirements of the company? | | |
| | Conclusion: | | |
| 3(ix)(e) | 3(ix)(e) | Whether the company has taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures, if so, details thereof with nature of transactions and the amount in each case; | Whether the company has taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures, if so, details thereof with nature of transactions and the amount in each case; | Whether the company has taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures, if so, details thereof with nature of transactions and the amount in each case; |
| (a) | (a) | Whether the company has incurred expenses on behalf of its subsidiaries, joint ventures or associates or has paid amounts to others on behalf of its subsidiaries, joint ventures or associates? | | |
| (b) | (b) | Has the company granted loans or advances to subsidiaries, joint ventures or associates? | | |
| (c) | (c) | Whether there is prima facie any evidence of diversion of borrowed funds to subsidiaries, joint ventures, associates based on examination of terms and conditions of borrowed funds? | | |
| (d) | (d) | Based on review of the cash flow statement, whether the company has net positive cash flows in excess of amounts granted as loans/ advances or amounts spent to meet the obligations of its subsidiaries, joint ventures or associates? | | |
| | Conclusion: | | |
| 3(ix)(f) | 3(ix)(f) | Whether the company has raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies, if so, give details thereof and also report if the company has defaulted in repayment of such loans raised; | Whether the company has raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies, if so, give details thereof and also report if the company has defaulted in repayment of such loans raised; | Whether the company has raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies, if so, give details thereof and also report if the company has defaulted in repayment of such loans raised; |
| (a) | (a) | Whether the company has raised any loans during the year from any lender? | | |
| (b) | (b) | Whether the terms and conditions of loan agreement specify the security against loans raised during the year? | | |
| (c) | (c) | Whether any charge has been created in respect of any investment of the company in subsidiaries, joint ventures or associate companies? | | |
| (d) | (d) | Based on (b) and (c) above, whether any loan raised during the year has been so raised on the pledge of securities held in subsidiaries, joint ventures or associate companies? | | |
| (e) | (e) | Whether the company has defaulted in repayment of such loans (principal or interest or both)? | | |
| | Conclusion: | | |
| 3(x)(a) | 3(x)(a) | Whether moneys 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 moneys 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 moneys 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; |
| (a) | (a) | Whether the company raised money by way of initial public offer or further public offer of equity shares, convertible securities or debt securities? | | |
| (b) | (b) | Examine the terms and conditions stated in the offer document subject to which the company has raised the above mentioned money. | | |
| (c) | (c) | Whether the end use of the money raised (as mentioned above) is capable of being determined? If not state the fact. | | |
| (d) | (d) | Whether the said end-use of money disclosed in the financial statements by way of a Note is significantly different from the actual end use? If so, state the fact. | | |
| (e) | (e) | Examine the various documents submitted to SEBI, offer document and also examine the report of board of directors, if available, to find out whether funds raised have been utilized for the purpose for which they were raised. | | |
| (f) | (f) | Whether a representation from the management has been obtained as to the completeness of the disclosures with regard to the end-use of moneys raised by initial public offer and further public offer? | | |
| (g) | (g) | Whether the fund flow statement has been reviewed where one to one correlation is not possible. | | |
| (h) | (h) | In case the moneys raised have not been applied during the year, mention the fact that the moneys raised during the year have not been utilised. | | |
| (i) | (i) | In case during a construction phase surplus funds were temporarily invested, however, subsequently the same are utilised for the stated objectives, mention the fact that the funds were temporarily used for the purpose other than for which they were raised but were ultimately utilised for the stated end-use. | | |
| (j) | (j) | Whether funds raised/obtained were not applied for stated purpose during the year for any reason? If yes, mention the facts and amount. Also disclose the fact about utilization of funds raised during earlier year in current year. | | |
| (k) | (k) | If, for any reason, the auditor is not able to verify the end-use of money raised, the fact that he is not able to comment upon the disclosure along with the reasons which resulted in the inability should be stated. | | |
| (l) | (l) | Consider the implications of non-compliances above also in the auditor’s report on the financial statements. | | |
| | Note: Reporting under this Clause is required also in instances where the amounts have been raised in earlier year(s) and are being utilized during the current year. | | |
| | Conclusion: | | |
| 3(x)(b) | 3(x)(b) | 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; | 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; | 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; |
| (a) | (a) | Has the Company made any preferential allotment or private placement of shares or fully convertible debentures during the year? | | |
| (b) | (b) | Obtain a statement containing the specific terms of offer for private placement, including purpose for which funds were raised, and the details of subsequent application-amounts, dates and the purpose. | | |
| (c) | (c) | Ascertain whether the offer and allotment of securities referred in (a) above are in compliance with the requirements of section 42 and section 62 of the Act. | | |
| (d) | (d) | Based on the understanding so gained, perform a reasonable test check of compliance with the requirements of the Act. | | |
| (e) | (e) | Whether the fund flow statement has been reviewed where one to one correlation is not possible. | | |
| (f) | (f) | In case the moneys raised have not been applied during the year, mention the fact that the moneys raised during the year have not been utilised. | | |
| (g) | (g) | In case during a construction phase surplus funds were temporarily invested, however, subsequently the same are utilised for the stated objectives, mention the fact that the funds were temporarily used for the purpose other than for which they were raised but were ultimately utilised for the stated end-use. | | |
| (h) | (h) | Whether funds raised/obtained were not applied for stated purpose during the year for any reason? If yes, mention the facts and amount. Also disclose the fact about utilization of funds raised during earlier year in current year. | | |
| (i) | (i) | If, for any reason, the auditor is not able to verify the end-use of money raised, the fact that he is not able to comment upon the disclosure along with the reasons which resulted in the inability should be stated. | | |
| (j) | (j) | Consider the implications of non-compliances above also in the auditor’s report on the financial statements. | | |
| | Note: Reporting under this Clause is required also in instances where the amounts have been raised in earlier year(s) and are being utilized during the current year. | | |
| | Conclusion: | | |
| 3(xi)(a) | 3(xi)(a) | Whether any fraud by the company or any fraud on the company has been noticed or reported during the year, if yes, the nature and the amount involved is to be indicated; | Whether any fraud by the company or any fraud on the company has been noticed or reported during the year, if yes, the nature and the amount involved is to be indicated; | Whether any fraud by the company or any fraud on the company has been noticed or reported during the year, if yes, the nature and the amount involved is to be indicated; |
| (a) | (a) | Has SA 240 been complied with? (Attach the checklist for compliance of SA 240 with this checklist also). | | |
| (b) | (b) | Examine the following to ascertain whether any fraud has been reported or noticed by the management: | | |
| | the reports of the internal audit.
the auditor should enquire from the management about any frauds by the company or any fraud on the company that it has noticed or that have been reported to it.
discuss the matter with other employees including officers of the company.
examine the minutes book of the board meeting, audit committee etc., of the company in this regard. | | |
| (c) | (c) | Where any fraud by the company or any fraud on the company has been noticed or reported, determine the nature and amount of frauds and disclose the same. Obtain management representation to this effect. | | |
| | Conclusion: | | |
| (xi)(b) | (xi)(b) | Whether any report under sub-section (12) of section 143 of the Companies Act has 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; | Whether any report under sub-section (12) of section 143 of the Companies Act has 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; | Whether any report under sub-section (12) of section 143 of the Companies Act has 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; |
| (a) | (a) | Whether any fraud has been reported by the auditor during the year and upto the date of issuance of auditor’s report under section 143(12) in Form ADT 4, the same should be reported under this clause. | | |
| | Conclusion: | | |
| 3(xi)(c) | 3(xi)(c) | Whether the auditor has considered whistle-blower complaints, if any, received during the year by the company; | Whether the auditor has considered whistle-blower complaints, if any, received during the year by the company; | Whether the auditor has considered whistle-blower complaints, if any, received during the year by the company; |
| (a) | (a) | Check as to whether the company has an ethics/whistle blower/ hotline process with adequate procedures to handle anonymous complaints (received from inside and outside the company), and to accept confidential submission of concerns about questionable accounting, internal control, or auditing matters. | | |
| (b) | (b) | Evaluate whether whistle blower complaints are investigated and resolved by the company in a timely manner. | | |
| (c) | (c) | In case of a listed company, examine whether vigil mechanism has been established in accordance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In case of unlisted (public or private) companies, examine whether vigil mechanism has been established in accordance with the requirements of the Companies Act, 2013. For other companies, examine whether companies have established a vigil mechanism/whistle blower mechanism on a voluntary basis. | | |
| (d) | (d) | Obtain from the management all whistle blower complaints received through such vigil mechanism/hotline process and review the whistle blower complaints. | | |
| (e) | (e) | Enquire from the management about investigation of all such whistle blower complaints received and the findings, if any. | | |
| (f) | (f) | Consider when whistle-blower complaint is received or have been identified, during the course of the audit, whether fraud assessment done in accordance with Guidance Note on Reporting on Fraud under Section 143(12) of the Companies Act, 2013 issued by ICAI. | | |
| (g) | (g) | Obtain written representation from the Board/ Audit Committee, management for completeness of such whistle blower complaints received by the company. | | |
| | Conclusion: | | |
| 3(xii) | 3(xii) | (a) Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability;
(b) Whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;
(c) Whether there has been any default in payment of interest on deposits or repayment thereof for any period and if so, the details thereof; | (a) Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability;
(b) Whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;
(c) Whether there has been any default in payment of interest on deposits or repayment thereof for any period and if so, the details thereof; | (a) Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability;
(b) Whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;
(c) Whether there has been any default in payment of interest on deposits or repayment thereof for any period and if so, the details thereof; |
| (a) | (a) | Is the Company a Nidhi Company? | | |
| | Assess if the Company is registered as a Nidhi Company as per provisions of Section 406 of the Companies Act 2013 or Section 620A of the Companies Act, 1956. | | |
| (b) | (b) | Check compliance with the following:
a) Whether the net owned funds to deposits ratio is more than 1:20 to meet out the liability as on the date of balance sheet?
b) Examine whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability. | | |
| (c) | (c) | Whether the calculation of net owned funds is done as per Rule 3(1)(d) of Nidhi Rules 2014 which includes equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet.
Assess if the proceeds of issue of preference shares have been included in the net owned funds.
Ensure that ratio is computed by using the figures of net owned funds and deposit liability computed in accordance with as stated under this clause. | | |
| (d) | (d) | Examine the terms and conditions stated in the documents relating to taking of deposits, subject to which the company has raised the deposits, with regard to the amount and due dates of payments of deposits as well as the interest thereon. | | |
| (e) | (e) | Whether all defaults relating to the payment of interest on deposits or repayment of deposits, which existed at any time during the year including those relating to any earlier period and also including those which have been made good during the accounting period, are reported irrespective of the period when those defaults had occurred or the fact that those defaults have been made good subsequently during the accounting period. | | |
| (f) | (f) | If the default of repayment of deposit or the payment of interest on deposits has been made good during the accounting period, whether the fact has been stated. | | |
| (g) | (g) | Whether the disputes between the company and the depositor on issues relating to repayment of deposit or interest thereon, give rise to disclaimer stating the fact there is a dispute between the company and the depositor and the auditor is unable to determine whether there is a default in repayment of the deposit or interest thereon, to the depositor concerned. | | |
| | Conclusion: | | |
| 3(xiii) | 3(xiii) | Whether 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; | Whether 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; | Whether 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; |
| (a) | (a) | Obtain a statement containing details of transactions with related parties. | | |
| | Obtain a list of companies, firms or other parties, the particulars of which are required to be entered in the register maintained under section 189 of the Act.
Please refer the note below
Obtain declarations made by the directors in Form MBP-1 i.e., general notice received from a director under Rule 9(1) of the Companies (Meetings of Board and Power) Rules, 2014.
Verify the entries made in the register under section 189 with such statement from management and declarations received from directors.
Assess the additions/ deletions to such list for appropriateness based on relevant declarations. | | |
| (b) | (b) | Obtain understanding of requirements of section 177 and 188 of the Act in relation to related party transactions. | | |
| (c) | (c) | Perform reasonable check to ascertain completeness and accuracy of details in the statement. | | |
| (d) | (d) | Ascertain the system and procedures of the company to ensure compliance with the provisions of section 177 and 188 of the Act including the assessment of identification of related parties and whether the transaction is at arm’s length and basis of such conclusion. | | |
| (e) | (e) | Based on the understanding so gained, perform a reasonable test check of compliance with the aforesaid requirements of the Act. | | |
| (f) | (f) | Examine minutes of meetings of the audit committee and agreements underlying related party transactions to ascertain audit committee approval for the transactions. | | |
| (g) | (g) | Examine the minutes of Board meetings to ascertain whether requisite approvals of Board is obtained for certain related party transactions as required under section 188 of the Act. | | |
| (h) | (h) | Where shareholders' approval is required, check whether the requisite approvals have been obtained as required under Section 188 of the Act. | | |
| (i) | (i) | Examine whether related party disclosures are made in the financial statements as per the requirements of AS 18 or Ind AS 24 as may be applicable. | | |
| (j) | (j) | Examine whether disclosure related to contracts or arrangements with related parties as mandated by section 188 are made in Board's report. | | |
| | Including the assessment of identification of related parties and whether the transaction is at arm’s length and basis of such conclusion. | | |
| (k) | (k) | Consider the implications of non-compliances above also in the auditor’s opinion on the financial statements. | | |
| | Note: There cannot be a common list in respect of related party transactions. The scope of Ind AS 24 is wider and some persons need to be additionally identified than those mentioned in Section 2(76), Section 2(77) of Companies Act, 2013 e.g. Close members, Dependents of a relative.
Two separate lists are required since some parties are “related” as per Section 188 read with definitions and Rule 4 of Companies (Specification of Definition Details) Rules, 2014 whereas may or may not be “related party” on application of Ind AS 24. | | |
| | Conclusion: | | |
| 3(xiv)(a) | 3(xiv)(a) | Whether the company has an internal audit system commensurate with the size and nature of its business; | Whether the company has an internal audit system commensurate with the size and nature of its business; | Whether the company has an internal audit system commensurate with the size and nature of its business; |
| | Have you considered the following factors to determine whether the internal audit system is commensurate with the size of the company and nature of its business? | | |
| (a) | (a) | Is there an internal audit system in the Company? (Mere internal check should not be considered as internal audit). | | |
| (b) | (b) | Whether the company has appointed internal auditor in compliance with section 138 of the Act and applicable rules? | | |
| (c) | (c) | Has the internal audit been conducted by a separate internal audit department or by external professional firm? | | |
| (d) | (d) | Is the internal audit department sufficient in size and properly manned to perform the internal audit function? | | |
| (e) | (e) | Is the head of the internal audit department a qualified professional? | | |
| (f) | (f) | Is internal audit department independent of the accounting department? | | |
| (g) | (g) | To whom the internal audit department is responsible? | | |
| (h) | (h) | In case of listed companies, whether provisions of SEBI LODR Regulations have been complied with and whether the head of internal audit is present in the audit committee meeting? | | |
| (i) | (i) | Whether the internal auditor has adequate technical assistance to discharge his functions? | | |
| (j) | (j) | Do the Internal Auditors have questionnaires or guide manual? | | |
| (k) | (k) | Whether internal audit work is carried out according to a plan and programme and, if so what are the areas covered in this year? | | |
| (l) | (l) | Whether adequate files and records are maintained by the Internal Auditors? | | |
| (m) | (m) | Do the internal auditors’ reports give:
Conclusions on the audit?
Exceptions to the accounts and records?
Recommendations on the internal control and procedures? | | |
| (n) | (n) | With respect to the internal auditors’ reports:
are they sent to an appropriate operating official?
is corrective/ remedial action initiated?
do internal auditors follow up to see that appropriate action is taken?
do the files indicate that appropriate action was taken? | | |
| | Conclusion: | | |
| 3(xiv)(b) | 3(xiv)(b) | Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor; | Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor; | Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor; |
| (a) | (a) | Whether all the reports of the internal auditors covering upto the end of the financial year under audit are made available sufficiently in advance? | | |
| (b) | (b) | Whether management has taken appropriate action to ensure that all observations/findings in relation to control deficiencies having financial impact are remediated? | | |
| (c) | (c) | Whether to reassess the nature, timing and extent of the audit procedures based on the observations noted by the internal auditor? | | |
| (d) | (d) | Whether the control deficiency identified is a significant deviation or material weakness? | | |
| (e) | (e) | If, for any reason, all or some of the internal audit reports are not available, or do not adequately address the plan and scope required, appropriate disclosure shall be made under this clause. | | |
| (f) | (f) | Implications of control deficiencies / non-compliances above shall be considered in the auditor’s report on the financial statements. | | |
| | Conclusion: | | |
| 3(xv) | 3(xv) | Whether the company has entered into any non-cash transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act have been complied with; | Whether the company has entered into any non-cash transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act have been complied with; | Whether the company has entered into any non-cash transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act have been complied with; |
| (a) | (a) | Obtain a statement containing list of directors of the company, its holding company, subsidiary and associate companies and persons connected with the directors. | | |
| (b) | (b) | Scrutinise the following books of account, records and documents which could provide source of such audit evidence to the auditor as to the existence of such non-cash transactions as well as persons connected with the Directors:
Form No. MBP 1, Notice of Interest by Director, filed pursuant to the Companies (Meetings of Board and Its Powers) Rules, 2014.
Form No. MBP 2, Register of Loans, Guarantee, Security and Acquisition Made by the Company, filed pursuant to the Companies (Meetings of Board and Its Powers) Rules, 2014.
Form No. MBP 4, Register of Contracts with Related Party and Contracts and Bodies etc. in which Directors are Interested, filed pursuant to the Companies (Meetings of Board and Its Powers) Rules, 2014.
Movements in the Property, Plant and Equipment Register.
Minutes book of the General Meeting, Meetings of Directors and Audit Committee Meetings.
Report on Annual General Meeting pursuant to Companies (Management and Administration) Rules, 2014. | | |
| (c) | (c) | Obtain a statement from management containing transactions between the Company and director(s) referred to above. | | |
| (d) | (d) | Perform reasonable check to ascertain non-cash transactions. | | |
| (e) | (e) | Obtain understanding of requirements of section 192 of the Act. | | |
| (f) | (f) | Based on the understanding so gained, perform a reasonable test check of compliance with the aforesaid requirements of the Act. | | |
| (g) | (g) | Consider the implications of non-compliances above also in the auditor’s opinion on the financial statements. | | |
| (h) | (h) | Obtain management representation letter about the nature of transactions executed by the company with Directors and companies in which directors are interested. | | |
| (i) | (i) | Go through business related internet sites like moneycontrol.com to understand about any transactions which are required to be considered for reporting under this clause. | | |
| (j) | (j) | Go through the BSE/ NSE websites (in case of listed companies) for the information reported by the company to the stock exchanges. | | |
| | Conclusion: | | |
| 3(xvi)(a) | 3(xvi)(a) | Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) and if so, whether the registration has been obtained; | Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) and if so, whether the registration has been obtained; | Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) and if so, whether the registration has been obtained; |
| (a) | (a) | Examine whether the company is registered with Reserve Bank of India under Section 45-IA of the Reserve Bank of India Act 1934. | | |
| (b) | (b) | If the company is registered, obtain a copy of the registration certificate issued by Reserve Bank of India and verify the validity of the certificate.
(As an additional measure the RBI’s website can be referred to ascertain whether the name of the company is included in the list of registered companies) | | |
| (c) | (c) | If the company is not registered with Reserve Bank of India, examine the financial statements of the Company and assess whether the company has Financial Activity as the Principal Business.
Note: Financial activity as principal business is when a company’s financial assets constitute more than 50 per cent of the total assets and income from financial assets constitutes more than 50 per cent of the gross income. | | |
| (d) | (d) | If the company has Financial Activity as the Principal Business, examine whether the company has applied to Reserve Bank of India for registration. | | |
| (e) | (e) | If the company has Financial Activity as the Principal Business and has applied to RBI for registration examine whether the company has complied with the requirements of Net Owned Funds and other requirements of registration. | | |
| (f) | (f) | If the company has Financial Activity as the Principal Business and has not applied to RBI for registration examine the reasons and record the same for suitable reporting under this clause. | | |
| (g) | (g) | Examine the steps taken by the company to comply with requirements of the RBI Act, 1934 with respect to registration as a NBFC. Also examine the correspondence and documents filed with the RBI, minutes of the Board meeting. | | |
| (h) | (h) | Consider the implications of non-compliances above also in the auditor’s opinion on the financial statements. | | |
| | Conclusion: | | |
| 3(xvi)(b) | 3(xvi)(b) | Whether the company has conducted any Non-Banking Financial or Housing Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934; | Whether the company has conducted any Non-Banking Financial or Housing Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934; | Whether the company has conducted any Non-Banking Financial or Housing Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934; |
| (a) | (a) | Examine the Financial Statements and other relevant records/information to ascertain whether the Company is conducting any Non-Banking Financial or Housing Finance activities. | | |
| (b) | (b) | If the company is conducting any Non-Banking Financial or Housing Finance Activities, ascertain whether the company is registered with RBI or has the company made an application before the relevant authorities for the registration. | | |
| (c) | (c) | If the company has carried on the activity of Non-Banking Financial or Housing Finance activities and has neither obtained a registration nor applied for registration, ascertain the reasons for the same. | | |
| (d) | (d) | If the company is required to get registered and has not taken suitable steps to do so, ascertain the impact if any on the opinion on the financial statements. | | |
| | Conclusion: | | |
| 3(xvi)(c) | 3(xvi)(c) | 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; | 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; | 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; |
| (a) | (a) | Examine the financial statements and other information/records maintained by the Company to ascertain whether the company is carrying on the business of acquisition of shares and securities. | | |
| (b) | (b) | If the company is carrying on the business of acquisition of shares and securities ascertain the following:
i. it holds not less than 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies
ii. its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies and units of Infrastructure Investment Trust only as sponsor constitute not less than 60% of its net assets as mentioned in clause (i) above
iii. it does not trade in its investments in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment;
iv. it does not carry on any other financial activity referred to in Section 45I(c) and 45I (f) of the Reserve Bank of India Act, 1934 except as provided [refer RBI Master Direction on Core Investment Companies (Reserve Bank) Directions 2016] | | |
| (c) | (c) | If the company satisfies the conditions mentioned above ascertain whether it is a Systematically Important Core Investment Company (CIC-ND-SI)
A CIC-ND-SI is a Core Investment company which has total assets of more than Rs.100 Crores (either individually or along with other CICs in the Group) and which raises or holds public funds. | | |
| (d) | (d) | If the company is a CIC-ND-SI ascertain whether the company has made an application to the RBI for registration. | | |
| (e) | (e) | If the company meets the definition of CIC and having total assets less than Rs. 100 Crores (along with other CICs in the Group), examine the following:
The Company does not has access to Public Funds
Obtain a copy of the Board Resolution stating that it will not in the future access public funds
The company or other CIC in the group does not have overseas investment in the Financial Sector.
If the company has provided guarantee on behalf of the entities in the Group, obtain a confirmation from the company that it will be able to meet the obligation thereunder without access to public funds. (This confirmation needs to be validated based on the information and explanations available on record) | | |
| (f) | (f) | If the company is not in compliance with any of the conditions mentioned in the previous point, ascertain whether the company has taken adequate measure to obtain registration with RBI. | | |
| (g) | (g) | If the company has not complied with any of the conditions of exempted CIC but continues to carry on the business without obtaining registration with RBI, examine the impact of the same on the opinion on the financial statements. | | |
| (h) | (h) | In the case of Core Investment Companies classified as CIC-ND-SI examine whether:
The adjusted net worth is not less than 30% of its aggregate risk weighted assets.
The outside liabilities at no point of time exceeded 2.5 times its adjusted net worth. | | |
| | Conclusion: | | |
| 3(xvi)(d) | 3(xvi)(d) | Whether the Group has more than one CIC as part of the Group, if yes, indicate the number of CICs which are part of the Group; | Whether the Group has more than one CIC as part of the Group, if yes, indicate the number of CICs which are part of the Group; | Whether the Group has more than one CIC as part of the Group, if yes, indicate the number of CICs which are part of the Group; |
| (a) | (a) | Obtain a list of all the entities in the Group along with the representation from management about the CIC in the group (including CICs exempt from registration and CICs not registered) and completeness thereof.
(As an additional measure the auditor can corroborate this list of CICs with the list of registered CICs available in the RBI website.) | | |
| (b) | (b) | Obtain a copy of the registration certificates of CIC-ND-SI in the Group. | | |
| (c) | (c) | Obtain a Management Representation for the CICs exempt from the registration that it continues to be a CIC not requiring registration and has fulfilled the conditions thereof. | | |
| (d) | (d) | In case the auditor is required to communicate to the Component Auditors of other entities in the Group by way of Group Audit Instructions, ensure that compliance of the Directions of RBI with respect to Core Investment Companies is included as part of the Instructions. | | |
| | Conclusion: | | |
| 3(xvii) | 3(xvii) | Whether the Company has incurred cash losses in the financial year and in the immediately preceding financial year, if so, state the amount of cash losses; | Whether the Company has incurred cash losses in the financial year and in the immediately preceding financial year, if so, state the amount of cash losses; | Whether the Company has incurred cash losses in the financial year and in the immediately preceding financial year, if so, state the amount of cash losses; |
| (a) | (a) | Whether the cash losses have been computed by the auditor as per guidance given in Paragraph 82 of this Guidance Note? | | |
| (b) | (b) | Whether the company has incurred cash losses in the current year? | | |
| (c) | (c) | Whether the company has incurred cash losses in the immediately preceding financial year? | | |
| (d) | (d) | Whether effect of qualifications in audit report on cash losses considered? In case qualification is not capable of being quantified, whether the fact is stated in the audit report? | | |
| | Conclusion: | | |
| 3(xviii) | 3(xviii) | Whether there has been any resignation of the statutory auditors during the year, if so, whether the auditor has taken into consideration the issues, objections or concerns raised by the outgoing auditors; | Whether there has been any resignation of the statutory auditors during the year, if so, whether the auditor has taken into consideration the issues, objections or concerns raised by the outgoing auditors; | Whether there has been any resignation of the statutory auditors during the year, if so, whether the auditor has taken into consideration the issues, objections or concerns raised by the outgoing auditors; |
| (a) | (a) | Examine the previous report (audit/review) issued by the outgoing auditor to assess whether any modification was included by the outgoing auditor. | | |
| (b) | (b) | Seek copy of Form ADT-3 / Annexure A (in case of listed company) and copy of letter of resignation from the management/outgoing auditor. | | |
| (c) | (c) | Communicate with outgoing auditor as required under ICAI Code of Ethics, while communicating seek necessary clarification if required in context of audit report/review report issued by outgoing auditor. | | |
| (d) | (d) | Consider the implications of non-compliances considered by outgoing auditor in his audit/review report on audit procedures. | | |
| | Conclusion: | | |
| 3(xix) | 3(xix) | On the basis of the financial ratios, ageing 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, whether the auditor is of the opinion that no material uncertainty exists as on the date of the audit report that company is 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; | On the basis of the financial ratios, ageing 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, whether the auditor is of the opinion that no material uncertainty exists as on the date of the audit report that company is 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; | On the basis of the financial ratios, ageing 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, whether the auditor is of the opinion that no material uncertainty exists as on the date of the audit report that company is 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; |
| (a) | (a) | Whether the management has made a detailed assessment and concluded on going concern based on such assessment? | | |
| (b) | (b) | Whether any disclosure as per AS 1 or Ind AS 1 has been made with regard to the going concern in the financial statements? | | |
| (c) | (c) | Whether sufficient appropriate audit evidence has been obtained w.r.t. going concern in accordance with SA 570(Revised) to conclude that no material uncertainty exists about the entity’s ability to continue as a going concern? | | |
| (d) | (d) | Whether main audit report contains a paragraph on ‘Material uncertainty related to going concern’ or ‘key audit matter on going concern indicators’? | | |
| (e) | (e) | Where the going concern assumption has been considered appropriate due to support letters provided by the holding company, but the company may not be able to meet its liabilities falling due within a period of one year from the balance sheet date, has the auditor evaluated whether the holding company has the ability to discharge the financial liabilities of the company as and when they fall due. Has the fact been reported? | | |
| (f) | (f) | Whether the test of existence of material uncertainty has been made as on a date close to audit report with respect to the liabilities existing at the date of balance sheet considering the subsequent period transactions between the date of balance sheet and the date of audit report. | | |
| (g) | (g) | Whether the necessary financial ratios along with the detailed working, necessary to frame report under this clause have been obtained as on the date of balance sheet and also on a date near to the date of audit report? | | |
| (h) | (h) | Whether the details of liabilities existing at the date of balance sheet along with their expected dates of payments as well as evidence in respect thereto have been obtained to identify those falling due within one year from the balance sheet date. | | |
| (i) | (i) | Whether the ageing and expected dates of realization of financial assets and payment of financial liabilities have been obtained from the management along with the necessary evidence. | | |
| (j) | (j) | Where companies like Non-Banking Financial Companies/ Housing Finance Companies are required to disclose their asset liability maturity (ALM) pattern in the financial statements, whether due consideration to the information furnished in the ALM disclosure has been considered. | | |
| (k) | (k) | Whether the audit procedures in accordance with SA 560 “Subsequent Events” have been carried out to obtain sufficient appropriate audit evidence in respect of events requiring adjustment of, or disclosure in the financial statements. | | |
| (l) | (l) | Whether the status about the subsequent payments of liabilities those existed at the date of balance sheet as on the date nearer to audit report, have been obtained to capture any material deviation. | | |
| (m) | (m) | For the liabilities existing as on the date of balance sheet, which remains unpaid as on the date of audit report or date nearer to audit report, whether the detailed cash flow along with necessary evidence has been obtained ensuring that the liabilities falling due within a period of one year from the balance sheet date shall be duly discharged. Obtain the necessary evidence in the form of the management plan supported with related documentary evidence justifying the capability to pay off the liabilities as and when they fall due for payment within one year from the balance sheet date. | | |
| (n) | (n) | Where the company has given commitments or guarantees on behalf of other entities including its subsidiaries, joint ventures and associates, whether the auditor has evaluated the financial position and plans of those entities to determine whether there would be an outflow of resources from the company which may impair its ability to meet its own liabilities as and when they fall due. | | |
| (o) | (o) | Whether other information accompanying the financial statements including the Director’s Report, Management Discussion and Analysis forming part of the Annual Report of the company have been obtained and analyzed. | | |
| (p) | (p) | Whether the plans of the Board of Directors as well as management plans necessary to frame the audit assessment and audit opinion have been obtained along with relevant evidence? | | |
| (q) | (q) | Whether the documentation considered by the Board of Directors related to review of liability position for those payable within one year from the date of balance sheet and corresponding payment plans has been obtained? | | |
| (r) | (r) | Whether management representation along with sufficient details and evidence has been obtained regarding the ageing and expected dates of realization of financial assets including trade receivables as well as the payment of financial liabilities including payables and statutory liabilities etc. | | |
| (s) | (s) | Whether management representation containing all material events and transactions post balance sheet date but before the date of audit report which could impact the paying capacity of the company and are in the knowledge of the management and the Board have been obtained. | | |
| | Conclusion: | | |
| 3(xx)(a) | 3(xx)(a) | Whether, in respect of other than ongoing projects, the company has transferred unspent amount to a Fund specified in Schedule VII to the Companies Act 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; | Whether, in respect of other than ongoing projects, the company has transferred unspent amount to a Fund specified in Schedule VII to the Companies Act 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; | Whether, in respect of other than ongoing projects, the company has transferred unspent amount to a Fund specified in Schedule VII to the Companies Act 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; |
| (a) | (a) | Whether the provisions of Section 135 of the Act are applicable to the company? | | |
| | Note: In case answer to the above is no, clause 3(xx)(a) and 3(xx)(b) are not applicable to the company. | | |
| (b) | (b) | Examine the various documents such as board approval of CSR policy, agenda and minutes of meetings of CSR Committee, the workings for calculating amount required to be spent etc. to find out the amount proposed to be spent on projects identified as per Schedule VII to the Act. | | |
| (c) | (c) | Whether a representation from the management has been obtained as to the amount spent in respect of projects other than ongoing projects? | | |
| (d) | (d) | Whether quantum of expenditure mentioned in (c) has been verified with appropriate supporting documents? | | |
| (e) | (e) | Whether the amount spent is in accordance with the CSR policy of the company and in accordance with provisions of the Act? | | |
| (f) | (f) | Whether amount unspent in respect of other than ongoing projects has been transferred to a fund specified in Schedule VII to the act within a period of six months of the expiry of the financial year? | | |
| (g) | (g) | Whether the information about amount unspent is provided in the format:
Relevant financial year
Amount identified for spending on CSR activities for “other than Ongoing Projects”
Unspent amount of above
Amount Transferred to Fund specified in Schedule VII to the Act
Due date of transfer to the specified fund
Actual date of transfer to the specified fund
Number of days of delay, if any | | |
| (h) | (h) | Whether the company has recorded a provision as at the balance sheet date to the extent necessary? | | |
| | Note: The non-compliance, if any, of above clause in respect of earlier financial year(s), will have to be reported under this clause. | | |
| | Conclusion: | | |
| 3(xx)(b) | 3(xx)(b) | Whether any amount remaining unspent under section (5) of section 135 of Companies Act, pursuant to any ongoing project, has been transferred to special account in compliance with provision of sub section (6) of section 135 of the said Act; | Whether any amount remaining unspent under section (5) of section 135 of Companies Act, pursuant to any ongoing project, has been transferred to special account in compliance with provision of sub section (6) of section 135 of the said Act; | Whether any amount remaining unspent under section (5) of section 135 of Companies Act, pursuant to any ongoing project, has been transferred to special account in compliance with provision of sub section (6) of section 135 of the said Act; |
| (a) | (a) | Examine the various documents such as board approval of CSR policy, agenda and minutes of meetings of CSR Committee, the workings for calculating amount required to be spent etc. to find out the amount proposed to be spent on projects identified as per Schedule VII to the Act. | | |
| (b) | (b) | Whether a representation from the management has been obtained as to the amount spent in respect of the ongoing projects formulated in pursuance of its CSR Policy? | | |
| (c) | (c) | Whether quantum of expenditure mentioned in (b) has been verified with appropriate supporting documents? | | |
| (d) | (d) | Whether the amount spent is in accordance with the CSR policy of the company and in accordance with provisions of the Act? | | |
| (e) | (e) | Whether the company has any amount unspent in relation to ongoing projects as at the end of the financial year? | | |
| (f) | (f) | Whether any unspent amount as specified in (e) above has been transferred by the company within thirty days from the end of the financial year to a special account earmarked for CSR activity to be opened for this purpose? | | |
| (g) | (g) | Whether the information about non-transfer of amount unspent in respect of ongoing projects is provided in the format:
Relevant financial year
Amount identified for spending on CSR activities for “Ongoing Projects”
Unspent amount of above
Amount Transferred to special account under section 135(6)
Due date of transfer to the account
Actual date of transfer to the account
Number of days of delay, if any | | |
| (h) | (h) | Whether the company has recorded a provision as at the balance sheet date to the extent necessary? Also whether the company has disclosed unspent amounts as commitments in the contingent liabilities and commitments section of the financial statements in accordance with the requirements of Schedule III to the Companies Act, 2013? | | |
| | Note: The non-compliance, if any, of above clause in respect of earlier financial year(s), will have to be reported under this clause | | |
| | Conclusion: | | |
| 3(xxi) | 3(xxi) | Whether there have been any qualifications or adverse remarks by the respective auditors in the Companies (Auditor's Report) Order (CARO) reports of the companies included in the consolidated financial statements, if yes, indicate the details of the companies and the paragraph numbers of the CARO report containing the qualifications or adverse remarks. | Whether there have been any qualifications or adverse remarks by the respective auditors in the Companies (Auditor's Report) Order (CARO) reports of the companies included in the consolidated financial statements, if yes, indicate the details of the companies and the paragraph numbers of the CARO report containing the qualifications or adverse remarks. | Whether there have been any qualifications or adverse remarks by the respective auditors in the Companies (Auditor's Report) Order (CARO) reports of the companies included in the consolidated financial statements, if yes, indicate the details of the companies and the paragraph numbers of the CARO report containing the qualifications or adverse remarks. |
| | 1. Whether there have been any qualifications or adverse remarks by the respective auditors in the Companies (Auditor’s Report) Order (CARO) reports of the companies included in the consolidated financial statements? | 1. Whether there have been any qualifications or adverse remarks by the respective auditors in the Companies (Auditor’s Report) Order (CARO) reports of the companies included in the consolidated financial statements? | 1. Whether there have been any qualifications or adverse remarks by the respective auditors in the Companies (Auditor’s Report) Order (CARO) reports of the companies included in the consolidated financial statements? |
| (a) | (a) | Obtain the list of companies (holding company/subsidiary/associate/joint venture) included in the consolidated financial statements. | | |
| (b) | (b) | For companies included in the consolidated financial statements, has the principal auditor received CARO reports of such companies from the management of the company? If no, whether the principal auditor has mentioned appropriate remarks under this clause mentioning the details of such companies? | | |
| (c) | (c) | Examine the CARO reports obtained from the management/component auditors or available with the principal auditor for respective companies and assess whether the observations and comments as given in the respective CARO reports are in the nature of qualifications or adverse remarks. | | |
| | 2. Indicate the details of the companies and the paragraph numbers of the CARO report containing the qualifications or adverse remarks | 2. Indicate the details of the companies and the paragraph numbers of the CARO report containing the qualifications or adverse remarks | 2. Indicate the details of the companies and the paragraph numbers of the CARO report containing the qualifications or adverse remarks |
| | Conclusion: | | |
