Page 301 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
institution not required to hold CoR subject to certain conditions Apart from the matters enumerated in (A)(I)
above where a company has obtained a specific advice from the Bank that it is not required to hold CoR from
the Bank, the auditor shall include a statement that the company is complying with the conditions stipulated
as advised by the Bank
Reasons
Reasons to be stated for unfavourable or qualified statements Where, in the auditor's report, the statement
regarding any of the items referred to in paragraph 3 above is unfavourable or qualified, the auditor's report
shall also state the reasons for such unfavourable or qualified statement, as the case may be. Where the auditor
is unable to express any opinion on any of the items referred to in paragraph 3 above, his report shall indicate
such fact together with reasons therefor.
Exception Report
Obligation of auditor to submit an exception report to the Bank
1. Where, in the case of a non-banking financial company, the statement regarding any of the items referred to
in paragraph 3 above, is unfavourable or qualified, or in the opinion of the auditor the company has not
complied with: (Various Regulations)
- The provisions of Chapter III B of RBI Act (Act 2 of 1934); or
- Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016; or
- Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve
Bank) Directions, 2016 and Non-Banking Financial Company - Systemically Important Non-Deposit taking
Company and Deposit taking Company (ReserveBank) Directions, 2016.

2. It shall be the obligation of the auditor to make a report containing the details of such unfavorable or
qualified statements and/or about the non-compliance, as the case may be, in respect of the company to the
concerned Regional Office of the Department of Nonbanking Supervision of the Bank under whose
jurisdiction the registered office of the company is located as per first Schedule to the Non-Banking Financial
Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016.

3. The duty of the Auditor under sub-paragraph (I) shall be to report only the contraventions of the provisions
of RBI Act, 1934, and Directions, Guidelines, instructions referred to in sub-paragraph (1) and such report shall
not contain any statement with respect to compliance of any of those provisions

Compliance with CARO 2020
Refer Ch 7 on Audit Reporting

IMPACT OF IND AS
(CNO—NBFC.340) APPLICABILITY OF INDIAN ACCOUNTING STANDARDS (IND- AS) ON NBFCS
Accounting periods beginning 1 April 2018: Listed and unlisted NBFCs having a net worth of Rs 500 crore or
more and holding, subsidiary, joint venture or associate companies of such NBFCs;

(CNO—NBFC.360) APPLICABILITY OF INDIAN ACCOUNTING STANDARDS (IND- AS) ON NBFCS
Accounting periods beginning 1 April 2019:All other listed NBFCs, unlisted NBFCs having a net worth of Rs
250 crore or more but less than Rs 500 crore and holding, subsidiary, joint venture or associate companies of
such NBFCs.
The net worth shall be calculated in accordance with the standalone financial statements of the NBFCs as on
31st March 2016 or the first audited financial statements for accounting period which ends after that date.

Format for preparation of financial statements by NBFCs under Ind- AS – The Ministry of Corporate Affairs
(MCA) vide notification dated October 11, 2018 introduced Division III under Schedule III of the Companies
Act, 2013, wherein a format for preparation of financial statements by NBFCs complying with Ind-AS has been
prescribed

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