Non-Ind AS Revised Schedule III Financial Statements for Companies for FY 21-22 Onwards

All sincere efforts have been made to bring the new reporting requirements under the Companies Act 2013 into the attached format of Financial Statements for Micro, Small to Medium Size Companies. ICAI has brought out ‘GUIDANCE NOTE ON DIVISION I – NON IND AS SCHEDULE III TO THE COMPANIES ACT, 2013 (Revised January, 2022 Edition)‘ which provide a valuable information on the subject matter in a very elaborated manner. Revised format of CARO 2020 is also attached here with for the benefit of the readers. Wherever come across with an answer like Yes or NO, see if any further explanatory note is required under the Act or AS and then disclose.

Annexure 1 ( Mandatory to show all the clauses with the observations)

Referred to in paragraph 1 under the heading “Report on Other legal and Regulatory Requirements” of our report of even date.

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment;

(B)The Company has maintained proper records showing full particulars of intangible assets.

(b) According to the information and explanation provided to us and based on our examination of the records of the Company, the Company has a regular programme of physical verification of its Property, Plant and Equipment which, in our opinion, provides for physical verification of all the property, plant and equipment at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c)  According to the information and explanation given to us and based on our examination of the records of the Company, 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

(d)  According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.

(e) According to the information and explanation given to us and based on our examination of the records of the Company no proceedings are seen to 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.

(ii) (a)  The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification by the management is reasonable and the coverage and procedure for such verification is appropriate. No discrepancies of 10% or more in aggregate for each class of inventory (including inventories lying with third parties) were noticed.

(b) As per the information and explanation provided to us and based on our examination of the records of the Company, during any point of time of the year, the Company has not 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. Based on the records examined by us in the normal course of audit of the financial statements, the quarterly returns / statements filed by the Company with such banks are in agreement with the books of accounts of the Company.

(iii) (a) During the year the Company has not made investments in, provided any guaranteeor 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. Accordingly, the requirement to report on clause 3(iii)(a) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, provisions of Section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

(v) According to the information and explanations given to us, the Company has not accepted any deposit from the public nor accepted any amounts which are deemed to be deposits during the year within the meaning of Sections 73 and 76 of the Companies Act, 2013. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vi) According to the information and explanation provided to us provided to us, maintenance of cost records has not been specified by the Central Government under subsection (1) of section 148 of the Companies Act. Hence. Clause 3(vi) of the Order is not applicable to the Company.

(vii)(a) Based on our examination of the books of accounts and according to the information and explanation provided to us to us it is seen that 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.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Goods and Services Tax, provident fund, employees’ state insurance, income-tax, duty of custom, duty of excise, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) The dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues have not been deposited on account of any dispute, are as follows:

(viii) According to the information and explanation provide to us any transactions not recorded in the books of account have not been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) (a) According to the information and explanation provided to us and based on our examination of the books of accounts it is seen that the company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanation provided to us and based on our examination of the records of the Company, the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) According to the information and explanation provided to us and based on our examination of books of accounts the Company has applied the term loans for the purpose for which the loans were obtained.

(d) As per the information provided to us funds raised on short term basis have not been utilised for long term purposes.

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Hence, the requirement to report on clause (ix)(e) of the Order is not applicable to the Company.

(f) The Company does not have any subsidiaries, joint ventures, or associate companies. Hence the requirement to report on clause (ix)(f) of the Order is not applicable to the Company.

(x) (a) According to the information and explanation given by the management, the Company has not raised any money by way of initial public offer/further public offer (including debt instruments) during the year. Hence reporting under clause 3(x)(a) is not applicable to the Company and hence not commented upon.

(b) The Company has not made any preferential allotment or private placement of shares /fully or partially or optionally convertible debentures during the year under audit and hence, the requirement to report on clause 3(x)(b) of the Order is not applicable to the Company.

(xi)(a) Based on our examination of the books of accounts and as per the information and  explanations given to us no frauds by the Company or any fraud on the Company have not been noticed or reported during the year.

(b) During the year any report under sub-section (12) of section 143 of the Companies Act has not been filed by us in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) As per the information and explanation provided by the management no whistle blower complaints were received by the Company during the year.

(xii) According to the information and explanation provides to us, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) (a) to (c) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv)(a) As per the information and explanation given to us by the management, the Company does not have an internal audit system commensurate with the size of the Company and nature of its business.

(b) As the Company does not have an internal audit system, the requirement to report under cluse (xiv)(b) of the Order on whether the report of Internal Auditors for the period under audit were considered by the statutory auditor is not applicable.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of Companies Act, 2013.

(xvi)(a) According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

(b) The Company is not engaged in any Non-Banking Financial or Housing Finance activities. Accordingly, the requirement to report on clause (xvi)(b) of the Order is not applicable to the Company.

(c) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India. Accordingly, the requirement to report on clause 3(xvi) of the Order is not applicable to the Company.

(d) The Group does not have more than one CIC as part of the Group, hence, the requirement to report on clause 3(xvi)(d) of the Order is not applicable to the Company.

(xvii) The Company has not incurred any cash losses in the financial year and in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year accordingly requirement to report on Clause (xviii) of the Order is not applicable to the Company.

(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, our knowledge of the Board of Directors and management plans, nothing has come to our attention which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not 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. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx)  Section 135 of the Companies Act with reference to CSR provisions is not applicable to the Company. Hence the requirement report under clause (a) and (b) of (xx) of the said Order is not applicable to the Company.

(xxi) Provisions relating to consolidated financial statements are not applicable to the Company. Hence the requirements to report as to 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 as per clause (xxi) of the said Order is not applicable to the Company.

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