Annexure XX

Based on the audit procedures performed for the purpose of reporting a true and fair view on
the financial statements of the Company and taking into consideration the information and
explanations given to us and the books of account and other records examined by us in the
normal course of audit, and to the best of our knowledge and belief, we report that:1

(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets. 2
Or
The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets, except for (Particulars of Asset) at
(Location), where the records are maintained for a group of similar assets and not for
each individual asset.3
Or
The Company does not have any fixed assets. Accordingly, the provisions of clause
3(i) of the Order are not applicable.
Or
The Company has not maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the year
and no material discrepancies were noticed on such verification. In our opinion, the
frequency of verification of the fixed assets is reasonable having regard to the size
of the Company and the nature of its assets.
Or
The Company has a regular program of physical verification of its fixed assets under
which fixed assets are verified in a phased manner over a period of _________4, which,
in our opinion, is reasonable having regard to the size of the Company and the nature of
its assets. In accordance with this program, certain fixed assets were verified during the
year5 and no material discrepancies were noticed on such verification.

1 (a) The engagement team should consider inserting an EOM/ Other Matter Paragraph or modifying the main report
wherever there are unfavourable comments in the Companies (Auditor’s Report) Order 2016.
(b) Wherever ‘except for’ is used, the engagement team should ensure that the exception does not have a pervasive effect on
the report and the same should be reported on the basis of materiality.
(c) Any alteration to this model audit report requires prior clearance from the NPSG.
(d) The engagement team should refer to Guidance Note (GN) on Companies (Auditor’s Report) Order, 2016 (CARO 2016)
while reporting under CARO 2016.
(e) The engagement team needs to consider the impact of reporting under CARO clauses for reporting on IFCoFR and in the
main audit report, and should consult NPSG and Internal Financial Controls (IFC) team, as required.
2 Indian Accounting Standard (AS) 16,“ Property, Plant and Equipment” defines “Property, plant and equipment” as

“tangible items that: (a) are held for use in the production or supply of goods or services, for rental to others, or for
administrative purposes; and (b) are expected to be used during more than one period”.
3 The instance is just illustrative and should be modified, wherever required.
4 This cannot exceed 3 years, as per the explanation given in the GN. We suggest that the engagement team refer to para 35

(e) of the GN for further guidance in this respect.

5 As per paragraph 35(e) of GN on CARO 2016, “where verification of all assets is not made during the year, it will be

necessary for the auditor to report that fact, but if he is satisfied regarding the frequency of verification, he should also make
a suitable comment to that effect”.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Or
All fixed assets have not been physically verified by the management during the year,
however, there is a regular program of verification once in _______6, which, in our
opinion, is reasonable having regard to the size of the Company and the nature of its
assets. No material discrepancies were noticed on such verification.
Or
The fixed assets have been physically verified by the management during the year and
material discrepancies were noticed on such verification. These have been properly dealt
with in the books of account. In our opinion, the frequency of verification of fixed assets
is reasonable having regard to the size of the Company and the nature of its assets.
Or
The fixed assets have not been physically verified by the management during the year and
we are therefore unable to comment on the discrepancies, if any, which could have arisen
on such verification. In our opinion, the frequency of verification of the fixed assets is
also not reasonable having regard to the size of the Company and nature of its assets. 7
Or
The fixed assets have been physically verified by the management during the year
by engaging the outside expert and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification of the fixed assets is
reasonable having regard to the size of the Company and the nature of its assets. 8

(c) 9 The title deeds of all the immovable properties (which are included under the head
‘Property, plant and equipment’10) are held in the name of the Company.
Or
The title deeds of all the immovable properties (which are included under the head
‘Property, plant and equipment’) are held in the name of the Company except for
the following properties 11 which were transferred as a result of conversion of
partnership firm / Limited Liability Partnership (‘LLP’) into the Company /
amalgamation of companies as stated in note XX to the standalone financial
statements wherein the tittle deeds are in the name of the erstwhile
firm/LLP/company: 12

6 This cannot exceed 3 years, as per the explanation given in GN. We suggest that the engagement team refer to para 35 (e)
of the GN for further guidance in this respect.
7 Also, refer paragraph 54 of the GN - “A question may also arise whether it is necessary for the auditor to include in his

report the management’s explanation for any matter on which he makes an unfavourable comment. Normally, such an
explanation need not be included but there may be circumstances where the auditor feels such inclusion is necessary.
Examples of such circumstances would be:
(a) to make the comment itself more meaningful and complete. For example, physical verification of inventories, though
planned, may not have been carried out because of a strike or a lockout. An unfavourable comment without this explanation
would be misleading;
(b) to explain the fact why in spite of an unfavourable comment, the true and fair view of the financial statements is not
vitiated. For example, physical verification of a part of the inventories at the year-end may not have been carried out, but
there is sufficient other evidence produced by the management which satisfies the auditor regarding the existence, condition
and value of the inventories.”
8 Refer paragraph 35(b) of the GN – “It is not necessary that only the company’s staff should make verification. It is also

possible for verification to be made by outside expert agencies engaged by the management for the purpose.”
9 As per paragraph 36(a) of the GN, “This clause shall cover the immovable properties which are included under the head

Property, Plant and Equipment, as the reporting under Clause 3(i)(a) & 3(i)(b) pertains to Fixed Assets only.”
10 Use as applicable.
11 The list is illustrative only.
12 To be used only if the immovable property is transferred as a result of conversion of partnership firm / LLP into the

Company / amalgamation of companies. Refer Paragraph 36(f) while using this option.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Nature of Total Whether Gross block Net block on Remarks

property Number leasehold as on 31 31 March
of Cases /freehold March 20XX 20XX
Land
Building

Or
The Company does not hold any immovable property (in the nature of ‘fixed
assets’). Accordingly, the provisions of clause 3(i) (c) of the Order are not
applicable.
Or
The title deeds of all the immovable properties (which are included under the head
‘Property, plant and equipment’) are held in the name of the Company except for
the following properties 13 which according to the information and explanation
given to us, are under dispute pending with {mention the court/tribunal} as to the
ownership of the property, as stated in note XX to the financial statement s14.

Nature of Total Whether Gross block Net block on Remarks

property Number leasehold as on 31 31 March
of Cases /freehold March 20XX 20XX
Land
Building

Or
The title deeds of all the immovable properties (which are included under the head
‘Property, plant and equipment’) are held in the name of the Company except for
the following properties: 15

Nature of Total Whether Gross block Net block on Remarks

property Number leasehold as on 31 31 March
of Cases /freehold March 20XX 20XX
Land
Building

(ii) In our opinion, the management has conducted physical verification of inventory at
reasonable intervals during the year and no material discrepancies between physical
inventory and book records were noticed on physical verification/ material
discrepancies noticed on physical verification have been properly dealt with in the
books of account.
Or
In our opinion, the management has conducted physical verification of inventory at
reasonable intervals during the year, except for goods-in-transit and stocks lying with
third parties. For stocks lying with third parties at the year-end, written confirmations
have been obtained by the management. No material discrepancies were noticed on the

13 The list is illustrative only.

14 Refer paragraph 36(i) of GN on CARO 2016 while using this option.
15 The list is illustrative only. Also refer para 36(k) of GN on CARO 2016.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

aforesaid verification/ Material discrepancies noticed on such verification have been

properly dealt with in the books of account.
Or
In our opinion, the management has conducted a physical verification of inventory at
reasonable intervals, except for (____________), which have not been verified during
the year. No material discrepancies between physical inventory and book records were
noticed on physical verification of inventory so physically verified/ Material
discrepancies noticed on physical verification have been properly dealt with in the books
of account. However, in respect of inventories which were not physically verified we are
unable to comment on the discrepancies which could have arisen between physical
inventory and book records.
Or
The Company does not have any inventory. Accordingly, the provisions of clause 3(ii) of
the Order are not applicable.
Or
The Company does not have any tangible inventory. Accordingly, the provisions of
clause 3(ii) of the Order are not applicable. 16
Or
The inventory has not been physically verified by the management during the year and
we are therefore unable to comment on the discrepancies which could have arisen
between physical inventory and book records 17. In our opinion, the frequency of
verification of the inventory is also not reasonable having regard to the size of the
Company and nature of its assets.

(iii) 18 19 The Company has not granted any loan, secured or unsecured to companies, firms,
Limited Liability Partnerships (LLPs) or other parties covered in the register
maintained under Section 189 of the Act. Accordingly, the provisions of clauses
3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.
Or
The Company has granted interest free 20 secured/unsecured 21 loans to
companies/firms/ Limited Liability Partnerships (LLPs)/ other parties 22 covered in
the register maintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans are not, prima
facie, prejudicial to the company’s interest.

16 This response should generally be used for software and service companies where inventories exist due to contract
accounting for fixed price contracts or software development work-in-progress.
17 While using this option the engagement team should consider Paragraph 54 of the GN which deals with giving explanation

for adverse comments in certain circumstances.

18 Clause (iii)(a) covers determination of terms and conditions at the time of the grant of the loan. In this regard, it may be

noted that though the clause uses the term “grant” which would ordinarily be understood to mean loans granted/given during
the year, however, it may be appropriate to include such loans also that were renewed during the year. Clauses (iii)(b) and
(iii)(c) cover the loans granted during the year and also all loans having opening balances. Further, as per paragraph 38(c) of
the GN, the auditor is required to disclose the requisite information in his report in respect of all parties covered in the
register maintained under Section 189 of the Act irrespective of the period to which such loan relates.
19 While examining the loans, the auditor should also take into consideration the loan transactions that have been squared-up

during the year and report such transactions under this clause.
20 Use where applicable.
21 Use as applicable.
22 As the case may be.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Or
we report that the Company has granted interest free/ unsecured loans to
____(number) parties, amounting to _____________(year-end balance
_________)/ the Company has granted loans to ____(number) parties,
amounting to __________ (year-end balance _________)_at an interest rate of
XX% per annum which is lower than market rate of interest, in respect of
which adequate explanation has not been provided to us of any benefit accruing
to the Company for giving such a loan/ In the absence of necessary board
resolution and other relevant records, (therefore) we are unable to comment as to
whether the terms and conditions of grant of such loans are, prima facie,
prejudicial to the interest of the Company. 23
Or
In our opinion the terms and conditions of loans granted by the company to
______ (number) parties amounting to ___ (year-end balance _______) are
prejudicial to the company’s interest on account of the fact that the loans have
been granted at an interest rate of X % per annum which is significantly lower
than the cost of funds to the company and also lower than the prevailing yield
of government security close to the tenor of the loan. 24

(b) the schedule of repayment of principal and payment of interest has been
stipulated and the repayment/receipts of the principal amount and the interest
are regular;
Or
the schedule of repayment of the principal and the payment of the interest has not
been stipulated and hence we are unable to comment as to whether
repayments/receipts of the principal amount and the interest are regular;
Or
the schedule of repayment of principal and payment of interest has been stipulated
and repayments/receipts of the principal amount and the interest are regular, except
for XX cases (including XX cases for interest) with respect to a loan given to
________________ (mention nature of party), wherein the repayment(s)/receipt(s)
of the principal amount and the interest are not regular 25 26;
Or
the schedule of repayment of principal and payment of interest has been stipulated
and repayments of the principal amount (XX cases) and the receipt of interest (YY
cases) are not regular27;

23 This reporting is illustrative and may be modified by the engagement team depending upon the facts and judgment of
engagement team.
24 This reporting is illustrative and may be modified by engagement teams depending upon the facts and judgment of

engagement team.
25 This is illustrative, and to be modified as applicable.
26 As per the GN, “In case where the schedule of repayment of principal & payment of interest is stipulated but repayment of

principal or payment of interest is not regular, then the auditor may report the fact and may give no. of cases and remarks, if
any.”
27 As per the GN, “In case where the schedule of repayment of principal & payment of interest is stipulated but repayment of

principal or payment of interest is not regular, then the auditor may report the fact and may give no. of cases and remarks, if
any.”
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Or
the schedule of repayment of principal has been stipulated wherein the principal
amounts are repayable on demand and since the repayment of such loans has not
been demanded, in our opinion, repayment of the principal amount is regular28;
Or
the schedule of repayment of principal and payment of interest has been stipulated
and the principal amount is not due for repayment currently however, the receipt(s)
of the interest is(are) regular;

(c) there is no overdue amount in respect of loans granted to such companies,

firms, LLPs or other parties 29.
Or
there is no amount which is overdue for more than 90 days in respect of loans
granted to such companies, firms, LLPs or other parties30.
Or
the total amount which is overdue for more than 90 days in respect of loans
granted to such companies, firms, LLPs or other parties 31 is as follows-

Particulars Amount (₹) No. of Cases Remarks, if any

Principal
Interest
Total

In our opinion, reasonable steps have/ have not been taken by the Company for
recovery of such principal amounts and interest.
Or
in the absence of stipulated schedule of repayment of principal and payment of
interest, we are unable to comment as to whether there is any amount which is
overdue for more than 90 days and whether reasonable steps have been taken
by the Company for recovery of the principal amount and interest.
Or
there is no amount which is overdue for more than 90 days in respect of the principal
amount of the loan granted. In our opinion, reasonable steps have been taken by the
Company for the recovery of the interest amounting to ₹____ which is overdue for
more than 90 days.

(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186
of the Act in respect of loans, investments, guarantees and security.
Or
In our opinion, the Company has complied with the provisions of Section 186 in respect
of investments. Further, in our opinion, the Company has not entered into any

28 Use in case of interest free loans, as applicable.

29 Use as applicable.
30 Use as applicable.
31 Use as applicable.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

transaction covered under Section 185 and Section 186 of the Act in respect of loans,
guarantees and security.
Or
In our opinion, the Company has not entered into any transaction covered under
Sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order
are not applicable.
Or
In our opinion, the company has not complied with the provisions of Section 185 of the
Act. {Mention the nature of non- compliances along with following details as
applicable}:

Party Maximum amount Amount Remarks, if any

outstanding during the outstanding as on
year (₹) 31 March 20XX(₹)
i. Directors

ii. Persons in whom

directors are interested
(Specify the relationship
with the director
concerned)

In our opinion, the company has not complied with the provisions of Section 186 of the
Act. The details of the non-compliances are given below:

S. Particulars Name of Amount Balance as on Remarks

No. Company / involved (₹) 31 March
Party 20XX(₹)
1 Investment
through more
than two
layers of
investment
companies32
2 Loan given or
guarantee
given or
security
provided or
acquisition of
securities
exceeding the
limits without
prior approval

32Sub-section 1 of Section 186 which restricts investment through more than two layers of investment companies is
proposed to be deleted by Companies (Amendment) Bill, 2016 which is pending for final approval as on date of issue of this
model report.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

by means of a
special
resolution
3 Loan given at
rate of
interest lower
than
prescribed
4 (Mention any
other default)

(v) In our opinion, the Company has complied with the directives issued by the
Reserve Bank of India, the provisions of Sections 73 to 76 and other relevant
provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as
amended) as applicable, with regard to the deposits accepted. According to the
information and explanations given to us, no 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 this regard.
Or
In our opinion, the Company has not accepted any deposits within the meaning of
Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014
(as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
Or
In our opinion, the directives issued by the Reserve Bank of India, the provisions of
Sections 73 to 76 and other relevant provision of the Act and the Companies
(Acceptance of Deposits) Rules, 2014 (as amended), as applicable, have been complied
with in respect of the deposits accepted, except {mention the non-
compliance}33. According to the information and explanations given to us, no 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 this regard34. 35

(vi)36 We have broadly reviewed the books of account maintained by the Company
pursuant to the Rules made by the Central Government for the maintenance of cost
records under sub-section (1) of Section 148 of the Act in respect of Company’s
products/services 37 and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. However, we have not made a
detailed examination of the cost records with a view to determine whether they are
accurate or complete.

33 In case where the engagement team is of the view that any kind of contravention of Sections 73 to 76 or any other relevant
provisions of the Act or relevant rules or directives from Reserve Bank of India (RBI), if any, has taken place, the
engagement team should state in his report that the provisions of that section(s) and/or relevant rules, as the case may be,
have not been complied with. The engagement team should also report the nature of contraventions.
34 Where any of such authorities has passed an order, the engagement team should examine the steps taken by the company

to comply with the said order. If the company has not complied with the order, the same is to be reported stating therein the
nature of contravention and the fact that the company has not complied with the order issued by the Company Law Board or
National Company Law Tribunal or RBI or any Court or any other Tribunal.
35 The instance is just illustrative and should be modified, wherever required. Any modification under this clause requires

prior clearance from the Regulatory team and NPSG.

36 The engagement team is advised to refer to the Companies (Cost Records and Audit) Rules, 2014 (as amended) to ensure

the applicability of cost records in order to report under this clause.

37 Use as applicable.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Or
The Central Government has not specified maintenance of cost records under sub-
section (1) of Section 148 of the Act, in respect of Company’s products/ services 38.
Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii)(a) The Company is regular in depositing undisputed statutory dues 39 including

provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty
of customs, duty of excise, value added tax, cess and other material statutory dues,
as applicable, to the appropriate authorities. Further, no undisputed amounts
payable in respect thereof were outstanding at the year-end for a period of more
than six months from the date they become payable.
Or
Undisputed statutory dues including provident fund, employees’ state insurance, income-
tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other
material statutory dues, as applicable, have generally been regularly deposited to the
appropriate authorities, though there has been a slight delay in a few cases. Further, no
undisputed amounts payable in respect thereof were outstanding at the year-end for a
period of more than six months from the date they became payable.
Or
Undisputed statutory dues including provident fund, employees’ state insurance, income-
tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other
material statutory dues, as applicable, have not been regularly deposited to the
appropriate authorities and there have been significant delays in a large number of cases.
Further, no undisputed amounts payable in respect thereof were outstanding at the year-
end for a period of more than six months from the date they become payable.
Or
Undisputed statutory dues including provident fund, employees’ state insurance, income-
tax, sales-tax service tax, duty of customs, duty of excise duty, value added tax, cess have
not generally been regularly deposited to the appropriate authorities though the delays in
deposit have not been significant. Further, no undisputed amounts payable in respect
thereof were outstanding at the year-end for a period of more than six months from the
date they become payable.
Or
Undisputed statutory dues including provident fund, employees’ state insurance, income-
tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other
material statutory dues, as applicable, have not been regularly deposited to the
appropriate authorities and there have been significant delays in a large number of cases.
Undisputed amounts payable in respect thereof, which were outstanding at the year-end
for a period of more than six months from the date they became payable are as follows:

Statement of arrears of statutory dues outstanding for more than six months
Name of Nature of Amount Period to Due Date of Remarks,
the the dues (₹) which the Date Payment if any40
statute amount
relates

38 Use as applicable.
39 Includes dues under foreign statute also as per paragraph 42(c) of the GN.
40 As far as demands that have been stayed are concerned, these should be regarded as disputed dues. These should be

disclosed along with a disclosure of the fact of stay under the relevant clause.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

(b) 41There are no dues in respect of income-tax, sales-tax, service tax, duty of customs,
duty of excise and value added tax that have not been deposited with the
appropriate authorities on account of any dispute.
Or
The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs,
duty of excise and value added tax on account of any dispute, are as follows:

Statement of Disputed Dues

Name Nature Amount Amount paid Period to Forum where Remarks,
of the of (₹) under Protest which the dispute is if any42
statute dues (₹) amount pending
relates

(viii)43 44 The Company has not defaulted in repayment of loans or borrowings to any
financial institution or a bank or government or any dues to debenture-holders
during the year.
Or
The Company has no loans or borrowings payable to a financial institution or a bank or
government and no dues payable to debenture-holders during the year. Accordingly, the
provisions of clause 3(viii) of the Order are not applicable.
Or
The Company has not defaulted in repayment of loans or borrowings to any bank or
financial institution or government during the year. The Company did not have any
outstanding debentures during the year.

Or
The Company has (not defaulted in repayment of loans or borrowings/ no loans or
borrowings payable) to any financial institution or bank or government. The Company
has defaulted in repayment of dues to debenture-holders during the year, which is
detailed below:

Particulars Amount of default as Period of default Remarks

on 31 March 20XX45
(₹)

41 As per paragraph 43(a) of the GN, “This clause requires that in case of disputed statutory dues, the amounts involved
should be stated along with the forum where the dispute is pending. Therefore, even minor amounts would be required to be
reported under this clause. The amount should be reported in a manner so that the reader is able to understand the dispute
and the amount involved therein.”
42 As far as demands that have been stayed are concerned, these should be regarded as disputed dues. These should be

disclosed along with a disclosure of the fact of stay under the relevant clause.
43 Here both – the defaults that occurred during the current year and rectified during the current year as well as the defaults

that exist as at the balance sheet date (may belong to earlier years) shall be reported. For the purpose of this clause, defaults
shall include delays.
44 The engagement team may come across a situation where there may be disputes between the company and the

lender on certain issues relating to repayments. In all such situations, the engagement team should give a disclaimer
that since there is a dispute between the company and the lender, they are unable to determine whether there is a
default in repayment of dues to the lender concerned.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Debentures

Or
There are no loans or borrowings payable to financial institutions or government and no
dues payable to debenture-holders. The Company has defaulted in repayment of
loans/borrowings to the following banks:46

Name of the bank Amount of Period of Remarks

default as on 31 default
March 20XX47
(₹)

Or
After receiving the approvals for rescheduling its loan(s) from the bank(s), the Company
has not defaulted in repayment of its loans or borrowings to any bank during the
year. The Company has no loans or borrowings payable to any financial institution or
government and no dues payable to debenture-holders during the year.
Or
The Company has defaulted in repayment of loans and borrowings to the following
banks, financial institutions and government during the year and the Company has also
defaulted in repayment of dues to debenture-holders during the year, which is detailed
below:

Particulars Amount of default as Period of default Remarks

on 31 March 20XX 48
(₹)
i. Name of the
Lenders
In case of:
a. Banks

b. Financial
Institutions

c. Government

ii. Debentures

46This is illustrative; the engagement team may modify as per the facts. In case of defaults to banks, financial institutions,
and Government, lender wise details to be provided.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

(ix) The Company did not raise moneys by way of initial public offer or further public offer
(including debt instruments) and did not have any term loans outstanding during the
year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.
Or
In our opinion, the Company has applied moneys raised by way of initial public offer/
further public offer (including debt instruments) / the term loans for the purposes for
which these were raised49. The Company did not raise moneys by way of initial public
offer/ further public offer (including debt instruments)/ did not have any term loans
outstanding during the year50.
Or
The Company did not raise moneys by way of initial public offer or further public offer
(including debt instruments). The term loans obtained during the year have not been
utilised by the company.
Or
The Company did not raise moneys by way of initial public offer or further public
offer (including debt instruments). In our opinion, the term loans were applied for
the purposes for which the loans were obtained, though idle/surplus 51 funds which
were not required for immediate utilisation have been invested in liquid
investments, payable on demand.
Or
In our opinion and according to the information and explanations given to us, the
Company has applied moneys raised by way of initial public offer, further public offer
(including debt instruments) and term loans during the year for the purposes for which
these were raised except for the following:

Nature of the Details of default Amount (₹) Subsequently

fund raised (Reason/Delay) rectified (Yes/No)
and details

Or
The Company did not raise moneys by way of initial public offer or further public
offer (including debt instruments). In our opinion, the term loans were applied for
the purpose for which the loans were obtained, though idle/surplus 52 funds which
were not required for immediate utilization were temporarily used for the purpose
other than for which the loan was sanctioned but were ultimately utilized for the
stated end-use.
Or
The Company did not raise moneys by way of term loans/initial public
offer/further public offer (including debt instruments) 53. We were unable to verify
the end-use of money raised by way of initial public offer/ further public offer 54 as
disclosed in the Note XX to the financial statements since {Mention reason for

49 Use the combination as applicable.

50 Use the combination as applicable.
51 Use as applicable.
52 Use as applicable.
53 As the case may be
54 As the case may be
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

inability of the auditor}. Consequently, we are unable to comment as to whether

these have been applied for the purposes for which they were obtained.
Or
The Company did not raise moneys by way of initial public offer or further public
offer55. In the absence of any stipulation by the lender regarding the utilization of
term loans obtained during the year, we are unable to comment as to whether these
have been applied for the purposes for which they were obtained.

(x) No fraud by the Company or on the company by its officers or employees has been
noticed or reported during the period covered by our audit.56

(xi) Managerial remuneration has been paid (and)/ provided57 by the company in accordance
with the requisite approvals mandated by the provisions of Section 197 of the Act read
with Schedule V to the Act.
Or
The provisions of Section 197 of the Act read with Schedule V to the Act are not
applicable to the company since the company is not a public company as defined under
Section 2(71) of the Act. Accordingly, provisions of clause 3(xi) of the Order are not
applicable.
Or
The Company has not paid or provided for any managerial remuneration. Accordingly,
the provisions of Clause 3(xi) of the Order are not applicable.
Or
Managerial remuneration has been paid (and)/ provided58 by the company in accordance
with the requisite approvals mandated by the provisions of Section 197 of the Act read
with Schedule V to the Act except for in following cases: /The Company has provided
(and)/paid managerial remuneration which is not in accordance with the requisite
approval mandated by the provisions of Section 197 of the Act read with Schedule V to
the Act. The details of the same are as follows:

S. Payment Amount Amount due Steps taken Remarks (if

No made to Paid/provided for Recovery to secure the any)
in excess of as at 31 recovery of
limits March 20XX the amount
prescribed (₹)
(₹)

Director/
Whole time
Director /
Managing
Director /

55 As the case may be

56 Any modification to this note requires prior clearance from the NPSG.
57 Use as applicable.
58 Use as applicable.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

Manager59

(xii)60 61 62 In our opinion the Nidhi Company has complied with the Net Owned Funds to
Deposits ratio of not more than 1: 20 to meet out the liability and is maintaining
unencumbered term deposits of not less than 10% of the outstanding deposits as
specified in the Nidhi Rules, 2014 to meet out the liability.
Or
In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause
3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177
and 188 of Act, where applicable, and the requisite details have been disclosed in the
financial statements etc., as required by the applicable Ind AS.
Or
In our opinion, the company has not entered into any transactions with the related parties.
Accordingly, provisions of clause 3(xiii) of the Order are not applicable.
Or
In our opinion, all transactions with the related parties are in compliance with Section 188
of the Act, where applicable, and the requisite details have been disclosed in the financial
statements, as required by the applicable Ind AS. Further, in our opinion, the company is
not required to constitute audit committee under Section 177 of the Act.
Or
In our opinion all transactions with the related parties are in compliance with Sections 177
and 188 of Act, where applicable, and the requisite details have been disclosed in the
financial statements etc., as required by the applicable Ind AS except for the following:

Nature of the related party Amount Involved (₹) Details of Non-Compliance

relationship and the
underlying transaction

(xiv) During the year, the company has not made any preferential allotment or private placement
of shares or fully or partly convertible debentures.
Or

59 This is illustrative
60 Applicable in case of Nidhi Company.
61 As per Rule 5(1) of the Nidhi Rules, 2014, “Every Nidhi shall, within a period of one year from the commencement of

these rules, ensure that it has—

(a) not less than two hundred members;
(b) Net Owned Funds of ten lakh rupees or more;
(c) unencumbered term deposits of not less than ten per cent of the outstanding deposits as specified in rule 14; and
(d) ratio of Net Owned Funds to deposits of not more than 1:20.
62 Also refer para 48 (h) of GN in case of shortfall.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

During the year, the company has made preferential allotment/ private placement of
shares/ fully/partly convertible debentures63. In respect of the same, in our opinion, the
company has complied with the requirement of Section 42 of the Act and the Rules
framed thereunder. Further, in our opinion, the amounts so raised have been used for the
purposes for which the funds were raised. During the year, the company did not make
preferential allotment/ private placement of shares/ fully/partly convertible debentures64.
Or
During the year, the company has made preferential allotment/ private placement of
shares/ fully/partly convertible debentures65. In respect of the same, in our opinion, the
company has complied with the requirement of Section 42 of the Act and the Rules
framed thereunder. Further, the amounts raised as above have not been utilized by the
company. During the year, the company did not make preferential allotment/ private
placement of shares/ fully/partly convertible debentures66.
Or
During the year, the company has made preferential allotment/ private placement of
shares/ fully/partly convertible debentures67. In respect of the same, in our opinion, the
company has complied with the requirement of Section 42 of the Act and the Rules
framed thereunder. Further, in our opinion, the amounts so raised were applied for the
purposes for which these securities were issued, though idle/surplus68 funds which were
not required for immediate utilisation have been invested in liquid investments, payable on
demand/ were applied for the purpose for which these securities were issued, though
idle/surplus69 funds which were not required for immediate utilization were temporarily
used for the purpose other than for which the funds were raised but were ultimately
utilized for the stated end-use.
Or
During the year, the company has made preferential allotment/ private placement of
shares/ fully/partly convertible debentures70. In respect of the same, in our opinion, the
company has not complied with the following requirement(s) of Section 42 of the Act and
the Rules framed thereunder:

Nature of securities71 Amount involved (₹) Nature of non-compliance

However, in our opinion, the amounts raised have been used for the purposes for which
the funds were raised. During the year, the company did not make preferential allotment/
private placement of shares/ fully/partly convertible debentures.72
Or

63 Use the permutation and modify as applicable.

64 Use the permutation and modify as applicable.
65 Use the permutation and modify as applicable.
66 Use the permutation and modify as applicable.
67 Use the permutation and modify as applicable.
68 Use as applicable.
69 Use as applicable.
70 Use the permutation and modify as applicable.
71 Nature of securities could be equity shares, preference shares, convertible debentures etc.
72 Use the permutation and modify as applicable.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

During the year, the company has made preferential allotment/ private placement of
shares/ fully/partly convertible debentures73. In respect of the same, in our opinion, the
company has complied with the requirement of Section 42 of the Act and the Rules
framed thereunder. Further, in our opinion, the amounts so raised have been used for the
purposes for which the funds were raised except for the following:

Nature of Purpose for Total amount Amount Unutilised Remarks

securities74 which funds raised / utilised for balance as at
raised Opening the other 31 March
unutilised purpose 20XX (₹)
balance75 (₹) (₹)

During the year, the company did not make preferential allotment/ private placement of
shares/ fully/partly convertible debentures.76
Or
During the year, the company has made preferential allotment/ private placement of
shares/ fully/partly convertible debentures77. In respect of the same, in our opinion, the
company has not complied with the following requirement of Section 42 of the Act and
the Rules framed thereunder:

Nature of securities78 Amount involved Nature of non-compliance

Also, in our opinion, the amounts raised have not been used for the purposes for which
the funds were raised, the details of which are given below:

Nature of Purpose for Total amount Amount Unutilised Remarks

securities79 which funds raised / utilised for balance as at
raised Opening the other 31 March
unutilised purpose 20XX
balance80

73 Use the permutation and modify as applicable.

74 Nature of securities could be equity shares, preference shares, convertible debentures
75 Modify as applicable.
76 Use the permutation and modify as applicable.
77 Use the permutation and modify as applicable.
78 Nature of securities could be equity shares, preference shares, convertible debentures
79 Nature of securities could be equity shares, preference shares, convertible debentures
80 Modify as applicable.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX

During the year, the company did not make preferential allotment/ private placement of
shares/ fully/partly convertible debentures.81

(xv) In our opinion, the company has not entered into any non-cash transactions with the
directors or persons connected with them covered under Section 192 of the Act.
Or
The company has entered into non-cash transactions with one of the directors/ persons
connected with directors, by {mention the nature of the transaction}, which in our
opinion is covered under the provisions of Section 192 of the Act, and in respect of which
the company has complied with the provisions of Section 192 of the Act.
Or
The company has entered into non-cash transactions with one of the directors/ persons
connected with directors, by {the acquisition of assets by assuming directly related
liabilities}82, which in our opinion is covered under the provisions of Section 192 of the
Act, however in respect of the which the company has not complied with the provisions
the aforesaid Section of the Act since {approval has not yet been obtained in a general
meeting of the company}83.

(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of
India Act, 1934.84
Or
The company is required to be registered under Section 45-IA of the Reserve Bank of
India Act, 1934 and such registration has been obtained by the company.
Or
The company is required to be registered under Section 45-IA of the Reserve Bank of
India Act, 1934, however such registration has not been obtained by the company since
(give reasons).

For Walker Chandiok & Co LLP 85

Chartered Accountants
Firm’s Registration No.: 001076N/N500013

ABC 86
Partner
Membership No.: XXXX

Place: (Place of Signature)87

Date: (Report Date)

81 Use the permutation and modify as applicable.

82 Mention the nature of transaction. This is illustrative and should be modified as applicable.
83 Mention the non-compliance. This is illustrative and should be modified as applicable.
84 If the financial statements contain a management note explaining the reasons for the non-requirement of registration, the

engagement team may make a reference to the management note and consult with NPSG.
85 Or Walker, Chandiok & Associates, as the case may be, along with the corresponding FRN.
86 Refer Assurance Practice Bulletin: 2018-04 - Manner of signing of the auditor's report and financial statements.
87 City where the auditor’s report is being signed.
Annexure XX to the Independent Auditor’s Report of even date to the members of
(Name of the Company), on the standalone financial statements for the year ended 31
March 20XX