Some Additional Disclosures under NEW CARO-2020

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Some Additional Disclosures under NEW CARO-2020

In Earlier CARO 2016, there are 16 clauses which need to be checked by the auditor at the time of doing statutory audit of company. Now on 25th February 2020, a new CARO-2020 is release in which 21 clauses is there.

Following are the new clauses which are newly incorporated in report:

New Clause

Remarks

Matters relating to assets:

 

Inclusion of Intangible Clause Maintaining proper records showing full details of all intangible assets.
Revaluation Clause 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;

 

Report on Benami property  Whether any proceedings have been initiated or pending against the company for holding any Benami property if so, whether the company has appropriately disclosed the details in its financial statements.

Matters relating to inventory

 

working capital limits in excess of Rs. 5 crore Whether during any point of time of the year, the company has been sanctioned working capital limits in excess of Rs. 5 crore, 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.
 

 

 

 

 

 

 

 

 

 

 

 

Matters relating to loans & advances

Matters Relating to transactions recorded in books of account

Matters relating to borrowings

Company has given Loans, made any Investment , provided any guarantee or security to companies, firms, LLPs or any other parties, if so,-

 

– The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to subsidiaries, joint ventures and associates;

-The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to parties other than subsidiaries, joint ventures and associates;

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 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];

 

Loans are granted either repayable on demand or without specifying the terms 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 and related parties.
Undisclosed income in the books offered under any assessment under Income tax Act 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, if so, whether the previously unrecorded income has been properly recorded in the books of account during the year.
-Willful Defaulter

-End use of funds

-Loans taken for Subsidiary

-Loans avails by pledge of securities held in its subsidiaries

1. Whether the company is a declared willful defaulter by any bank or financial institution or other lender;

2. Whether funds raised on short term basis have been utilized for long term purposes, if yes, the nature and amount to be indicated;

3. 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 such transactions and the amount in each case;

4. 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

Matters relating to fraud in the company reporting under section 143(12) – Whether any report under section 143(12) of the Act has been filed by the auditors in Form ADT-4 with the Central Government;

– Whether the auditor has considered whistle-blower complaints, if any, received during the year by the company.

Matters relating to Nidhi company Whether there has been any default in payment of interest on deposits or repayment thereof for any period and if so, the details thereof.
Matters relating to internal audit: Whether          the company has an internal      audit system internal commensurate with the size and nature of its business; Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor

 

Matters relating to Financial Activities Core Investment Company (CIC) – Whether the company has conducted any non-banking financial or housing finance activities without a valid Certificate of Registration from the RBI as per the RBI Act, 1934;

– Whether CIC continues to fulfill the criteria of a CIC, and in case the company is an exempted or unregistered CIC, whether it continues to fulfill such criteria.

– If Group has more than one CIC as part of the Group, if yes then number of CICs which are part of the Group

Matters relating to financial position of the company -Whether Company has incurred Cash losses

– On the basis of financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, audit report should contain 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.

Matters relating to resignation of the statutory auditor Resignation of the statutory auditors -Whether the auditor has taken into consideration the issues, objections or concerns raised by the outgoing auditors
 

 

 

 

 

 

Matters relating to CSR

– Ongoing projects

 

-Whether the company has transferred unspent amount to a Fund specified in Schedule VII to the Act within a period of 6 months of the expiry of the financial year in compliance with section 135(5) of the said Act
– Unspent amount Any amount remaining unspent under section 135(5) of the Act, pursuant to any ongoing project, has been transferred to special account in compliance with the provision of section 135(6) of the Act.
Matters relating to qualification in consolidated financial statements Consolidated Financial Statement 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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