Draft CARO Report for FY 2023-24:

Draft CARO Report for FY 2023-24 CARO stands for Company Auditor's Report Order. It is an order issued by the Ministry of Corporate Affairs (MCA) under Section 143(11) of the Companies Act, 2013. It is a set of recommendations provided by the Indian government that specifies the standards for the auditor's report of specific types of companies. CARO applicability refers to the companies covered by these standards. Auditors are required to include particular information about the company's financial statements and other important details in their audit reports. The directive intends to improve audit quality and offer stakeholders a better knowledge of the company's financial status. Here we are presenting the Draft CARO Report for FY 2023-24 in this article.

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 under the ‘Report on Other Legal and Regulatory Requirements’ section of our report to the members of ABC Private Limited of even date) (i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and the situation of Property, plant and equipment. (B) The Company has maintained proper records showing full particulars of Intangible assets.

(b) All Property, plant and equipment have been physically verified by the management at a regular interval of time (normally once a year). No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (other than immovable properties where the company is the lessee and the lease agreement are duly executed in favour of the lessee) disclosed in the financial statement are held in the name of the Company.

(d) The Company has not revalued its property, plant and equipment (including right-to-use assets) or Intangible assets or both during the year.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, No proceedings have been initiated during the year or are pending against the Company as of March 31, 2024, for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) (a) The inventory has been physically verified by the management during the year except for inventories lying with third parties. In our opinion, the frequency of verification by the management is reasonable and the coverage and procedure for such verification is appropriate. Inventories lying with third parties have been confirmed by management as of 31st March 2024. No discrepancies were noticed on verification between the physical stock and book records that were 10% or more in aggregate for each class of inventory. (b) The Company has not been sanctioned working capital limits in excess of Rs.5 crore, in aggregate, at any points of time during the year, from banks or financial institutions on the basis of security of current assets and hence reporting under clause 3(ii)(b) of the Order is not applicable. (iii) The Company has made investments in, provided any guarantee and security and granted any loans and advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year. (a) The Company has provided loans and advances in the nature of loan during the year:

(A) The Company has provided loans and advances aggregate amounting to Rs.1,00,000 during the year to Subsidiaries, Joint Ventures and Associates and the balance outstanding at the balance sheet date is Rs.50,000.

(B) The Company has provided loans and advances aggregate amounting to Rs.1,00,000 during the year to other than Subsidiaries, Joint Ventures and Associates and the balance outstanding at the balance sheet date is Rs.50,000.

(b) In our opinion, the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in the nature of loans and guarantees provided, during the year are, prima facie, not prejudicial to the Company’s interest. (c) In respect of loans and advances granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and repayment or receipts are regular. (d) In respect of loans and advances granted by the Company, there are no overdue amounts remaining outstanding as on the balance sheet date. (e) There are no loans granted by the Company which has fallen due during the year and have been renewed and extended. Hence, reporting under clause 3(iii)(e) is not applicable. (f) The Company has not given any loans either repayable on demand or without specifying any terms or period of repayment. (iv) The Companies has complied with the provisions of sections 185 and 186 of the Companies Act in respect of loans, investments, guarantees, and security provided, as applicable. (v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits. Therefore, the reporting of clause 3(v) of the Order is not applicable to the Company. (vi) The maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 for the business activities carried out by the Company. Hence, reporting under clause(vi) of the order is not applicable to the company. (vii) (a) According to the information and explanations are given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income-tax, Sales-tax, Service tax, duty of Customs, duty of Excise, value added tax and cess and any other statutory dues to appropriate authority have generally been regularly deposited during the year by the Company. According to the information and explanations given to us, no undisputed amounts payable in respect of Goods and Service Tax, Provident Fund, Employee’s State Insurance, Income-tax, Sales-tax, Service tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess and other statutory dues were in arrears, as at March 31, 2024 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us and the records of the Company examined by us, as of March 31, 2024, there are no dues of Goods and Service Tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any dispute. Details of dues of Income Tax which has not been deposited as of March 31, 2024, on accounts of disputes are given below:

Name of Statute	Nature of Dues	From where a dispute is pending	Period to which the amount relates	Amount involve (Rs.)
Income Tax Act 1961	Income Tax	High Court	F.Y. 2010-2011	1,00,000/-

(viii) According to the information and explanations given to us and the records of the Company examined by us, as at March 31, 2024, there were no such transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961). (ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender. (b) The Company has not been declared a willful defaulter by any bank or financial institution or government or any government authority. (c) The Company has not taken any term loan during the year and there are no outstanding term loans at the beginning of the year and hence, reporting under clause 3(ix)(c) of the Order is not applicable. (d) On an overall examination of the financial statements of the company, the company has not raised any funds on a short-term basis. (e) On an overall examination of the financial statements of the Company, the Company has taken Inter Corporate Deposit from the holding company on account of or to meet the obligations of its subsidiaries. (f) The Company has not raised any loans during the year and hence reporting on clause 3(ix)(f) of the Order is not applicable. (x) (a) The Company did not raise money by way of an initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable. (b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable. (xi) (a) No fraud by the Company and on the company has been noticed or reported during the year. (b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report. (c) As informed, the Company has not received any whistle-blower complaints during the year and upto the date of this report. (xii) The company is not a Nidhi company, therefore the provisions of paragraph 3(xii) of the order is not applicable. (xiii) In our opinion, the Company is in compliance with sections 177 and 188 of the Companies Act,2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. (xiv) In our opinion and based on our examination, the Company does not have an internal audit system and is not required to have an internal audit system as per the provisions of the Companies Act 2013. (xv) The Company has not entered into any non-cash transaction with directors or persons connected with him and therefore the provisions of section 192 of the Companies Act 2013 are not applicable to the Company. (xvi) (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi)(a) & (b) of the Order is not applicable. (b) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(c) & (d) of the Order is not applicable. (xvii) The Company has incurred cash losses of Rs 1,00,000 during the financial year covered by our audit and the Rs 1,00,000 immediately preceding the financial year. (xviii) There has been no resignation of the statutory auditors of the Company during the year. (xix) On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating 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. (xx) The provision of Sec 135 of the Companies Act 2013 is not applicable to the company, accordingly reporting under clause 3(xx)(a) and (b) is not applicable. (xxi) There is no consolidation of financial statements, accordingly reporting under clause 3(xxi) is not applicable For XYZ and Company Chartered Accountants FRN: CA SG (Partner) M.No.: Place: New Delhi Date: August 2024 UDIN: As shared by CA Sumit Garg via CASA NGO