CA AKASH AGARWAL PROF.

NIKITA OSWAL CMA INTER -AUDIT

CH 9 CARO 2020

APPLICABILITY

Every co including a foreign company as defned in clause (42) of section 2 of the Companies Act, 2013 except
•a) Banking co
•b) Insurance co
•c) Sec 8 co
•d) OPC & small co
•e) Private co, not being subsidiary/holding co of a public co, having a paid up capital & reserves & surplus not more than Rs. 1 crore as on
BS date & which does not have total borrowings exceeding Rs. 1 crore from any bank/FI at any point of time during FY & which doesn't
have a total revenue exceeding Rs. 10 crore during FY

Para 3 of CARO 2020 (Reporting under CARO)

Clause Description
(i)(a) (A) whether co maintaining proper records showing full particulars, including quantitative details and situation of PPE; (B)
whether the co maintaining proper records showing full particulars of intangible assets;
(i)(b) Whether these PPE physically verified by mgt at reasonable intervals; whether any material discrepancies were noticed on such
verification and if so, whether same have been properly dealt with in books of account
(i)(c) Whether title deeds of all immovable properties disclosed in the FS held in the name of the co, if not, provide the details thereof as
follows:- 1. Description of property 2. Gross Carrying Value 3. Held in the name of 4. Whether promoter, director or their relative
or employee 5. Period held–indicate range, where appropriate 6. Reason for not being held in name of co

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CA AKASH AGARWAL PROF. NIKITA OSWAL CMA INTER -AUDIT

(i)(d) Whether co revalued its PPE (including ROU assets) or intangible assets or both during the year and, if so, whether revaluation
is based on 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;
(i)(e) Whether any proceedings initiated or pending against co for holding any benami property under Benami Transactions
(Prohibition) Act, 1988 & rules made thereunder, if so, whether co appropriately disclosed the details in its financial statements;
(ii)(a) Whether physical verification of inventory conducted at reasonable intervals by mgt & whether, in the opinion of auditor, the
coverage & 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
(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 led by the company with such banks or financial institutions are in agreement with the books of account of the
Company, if not, give details;
(iii) Whether during year the co made investments in, provided any guarantee or security or granted any loans or advances in nature
of loans, secured or unsecured, to companies, firms, LLP or any other parties, if so ,
(iii)(a) "Whether during the year the co provided loans/provided advances in 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) aggregate amt during
the year, & balance outstanding at the BS date with respect to such loans or advances and guarantees or security to subsidiaries,
joint ventures and associates;(B) aggregate amt during the year, & balance o/s 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;"
(iii)(b) Whether investments made, guarantees provided, security given & terms and conditions of grant of all loans & advances in the
nature of loans and guarantees provided are not prejudicial to the company’s interest
(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;
(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;
(iii)(e) Whether any loan or advance in nature of loan granted which has fallen due during the year, has been renewed/extended /fresh
loans granted to settle overdues of existing loans given to same parties, if so, specify aggregate amt of dues
renewed/extended/settled by fresh loans & percentage of aggregate to total loans or advances in nature of loans granted during
year

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CA AKASH AGARWAL PROF. NIKITA OSWAL CMA INTER -AUDIT

(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 de ned in clause (76) of section 2 of the Companies Act, 2013;
(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
(v) In respect of deposits accepted by co or amts which are deemed to be deposits, whether the directives issued by RBI & provisions
of sections 73 to 76 or any other relevant provisions of the Companies Act & rules made thereunder, where applicable, have been
complied with, if not, nature of such contraventions be stated; if an order has been passed by Company Law Board or NCLT or
RBI or any court or any other tribunal, whether the same has been complied with or not;
(vi) Whether maintenance of cost records has been specified by CG under sub-section (1) of section 148 of the Companies Act and
whether such accounts and records have been so made and maintained
(vii)(a) Whether co regular in depositing undisputed statutory dues including GST, PF, ESI, IT, sales-tax, service tax, duty of customs,
duty of excise, VAT, 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;
(vii)(b) Where statutory dues referred to in sub-clause (a) have not been deposited on account of any dispute, then amts involved & forum
where dispute is pending shall be mentioned
(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;
(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 follows:-1. Nature of borrowing 2. Name of Lender 3. Amount
not paid on due date 4. Whether Principal or interest 5. No. of days delay or unpaid"
(ix)(b) Whether the company is a declared wilful defaulter by any bank or financial institution or other lender;
(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
(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.
(ix)(e) Whether co taken any funds from any entity/person on account of/to meet obligations of its subsidiaries, associates or JVs, if so,
details thereof with nature of such transactions and the amount in each case;

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CA AKASH AGARWAL PROF. NIKITA OSWAL CMA INTER -AUDIT

(ix)(f) Whether co raised loans during the year on pledge of securities held in its subsidiaries, JVs or associate companies, if so, give
details & also report if the company has defaulted in repayment of such loans raised;
(x)(b) Whether co made any preferential allotment or private placement of shares or convertible debentures (fully, partially or
optionally convertible) during the year & if so, whether requirements of section 42 & 62 of the Companies Act, 2013 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 noncompliance
(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;
(xi)(b) Whether any report under sub-section (12) of section 143 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;
(xi)(c) Whether the auditor has considered whistle-blower complaints, if any, received during the year by the company;
(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;
(xii)(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;
(xii)(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;
(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;
(xiv)(a) Whether the company has an internal audit system commensurate with the size and nature of its business;
(xiv)(b) Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor;
(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;
(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;
(xvi)(b) Whether company has conducted any Non-Banking Financial or Housing Finance activities without a valid Certi cate of
Registration (COR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934;
(xvi)(c) Whether the company is a Core Investment Company (CIC) as de ned 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;

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CA AKASH AGARWAL PROF. NIKITA OSWAL CMA INTER -AUDIT

(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;
(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
(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;
(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;
(xx)(a) Whether, in respect of other than ongoing projects, the co transferred unspent amount to a Fund specified in Schedule VII within
a period of 6 months of the expiry of FY in compliance with 2nd proviso to Sec 135(5)
(xx)(b) Whether any amount remaining unspent under subsection (5) of section 135 of the Companies Act, pursuant to any ongoing
project, has been transferred to special account in compliance with the provision of sub- section (6) of section 135 of the said Act;
(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

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