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Clauses to be reported under CARO 2016

Fixed Asset [clause 3 (i)]

(a) Whether the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Whether these fixed assets have been physically verified by 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.

(c) Whether the title deeds of immovable property are held in the name of the Company. If not, provide the details thereof;

Inventory [Clause 3 (ii)]

(a) Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies has been noticed on such verification and if so, whether the same has been properly dealt with in the books of account.

Loan given by Company [Clause 3 (iii)]

Whether the company has granted any loans, secured or unsecured to companies, firms, LLP or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. If so,

(a) Whether terms and conditions of the grant of such loan are not prejudicial to the company’s interest.

(b) Whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments and receipts are regular

(c) If the amount is overdue, state the total amount 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.

Loan to director and investment by the company [Clause 3 (iv)]

In respect of loans, investments, guarantees and security whether provisions of section 185 and 186 of the Companies Act, 2013 has been complied with. If not, provide the details thereof.

Deposits [Clause 3 (v)]

In case, the company has accepted deposits, whether the following has been complied with Directives issued by the reserve bank of India and the provision of sec 73 to 76 or any other relevant provision of Companies Act, 2013 and the rules framed there under, where applicable have been complied with?

If not, the nature of such contravention 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?

Cost Records [Clause 3 (vi)]

Whether maintenance of cost records has been specified under sub section (1) of section 148 of Companies Act, 2013 and whether such accounts and records have been made and maintained.

Statutory Dues [Clause 3 (vii)]

(a) Whether the company is regular in depositing undisputed statutory dues with the appropriate authorities including Provident fund, Employees State Insurance fund, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess or any other statutory dues. If not, the extent of arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they become payable, shall be indicated.

(b) Where dues of income tax and sales tax or service tax or duty of custom or duty of excise or value added tax have not been deposited on account of any dispute, then the amount 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).

Repayment of Loan [Clause 3 (viii)]

Whether the company has defaulted in repayment of loans and borrowing to a financial institution, banks, government or dues to debenture holders? If yes,the period and the amount of default to be reported. (In case of defaults to banks, financial institutions, and government, lender wise details to be provided.)

Utilisation of IPO and further public offer [Clause 3 (ix)]

Whether money raised by way of initial public offer or further public offer (including debt instruments) and the term loans 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.

Reporting of Fraud [Clause 3 (x)]

Whether any fraud by the company or any fraud on the company by its officers and employees has been noticed or reported during the year: if yes, the nature and the amount involved is to be indicated.

Approval of managerial remuneration [Clause 3 (xi)

Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provision of Section 197 read with schedule 5 to the Companies Act. If not, state the amount involved and step taken by the company for securing refund of the same.

Nidhi Company [Clause 3 (xii)]

Whether the Nidhi company has complied with the net owned funds to deposit in the ratio of 1:20 to meet out the liability and whether the Nidhi company is maintaining ten percent unencumbered term deposit as specified in the Nidhi rules 2014 to meet out the liability.

Related Party Transaction [Clause 3 (xiii)]

Whether all transaction with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statement etc., as required by the applicable accounting standards.

Private Placement of Preferential Issues [Clause 3 (xiv)]

Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of Section 42 of Companies Act, 2013 have been complied with and the amount raised has been used for the purpose for which the funds were raised. If not, provide the detail in respect of the amount involved and the nature of noncompliance.

Non Cash Transaction [Clause 3 (xv)]

Whether the company has entered into any non-cash transaction with the director or person concerned with him and if so, whether the provision of Section 192 of Companies Act, 2013 has been complied with.

Register under RBI Act 1934 [Clause 3 (xvi)]

Whether the company is required to be registered under Section 45 IA of Reserve Bank of India Act, 1934 and if so, whether the registration has been obtained.

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April 2024