AUDIT OF PRIVATE LIMITED COMPANIES Presented at ICAI ALAPPUZHA on 18th January 2019, SURI & CO, QUALITY CONTROL WING

Where to begin Planning an Audit Review of Financial Statements Compliance with Accounting Standards Compliance with Auditing Standards Internal Control over Financial Reporting Audit Report Audit Documentations Suri & Co, Quality Control Wing 18-01-2019

Nature of company Private Limited Company One Person Company Small Company Paid-up SC of which does not exceed 50 lakh or such higher not be more than 10 crore and Turnover of which  as per profit and loss account for the immediately preceding financial year does not exceed 2 crore or such higher not be more than 100 crore Suri & Co, Quality Control Wing 18-01-2019

Compliance by management Responsibility Of Management Board Meeting AGM ROC Filing Prepare FS Maintain Records Other Compliance Suri & Co, Quality Control Wing 18-01-2019

Board meeting 7 Days notice 2 or 1/3rd Number for Quorum Min of 4 in a year – Small Co min of 2 Interval shouldn’t exceed 120 days Suri & Co, Quality Control Wing 18-01-2019

Annual general meeting 21 Clear Days notice Within 6 Months from end of FY Preferable at RO Else in the same city Quorum – 2 Auditor to attend all General Meeting Annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance All notices relating to, any general meeting shall be forwarded to the auditor of the company, and the auditor shall, unless otherwise exempted by the company, attend either by himself or through his authorised representative, who shall also be qualified to be an auditor, any general meeting and shall have right to be heard at such meeting on any part of the business which concerns him as the auditor. Suri & Co, Quality Control Wing 18-01-2019

Postal ballot MGT 7 – Annual Return AOC 4 – Filing of FS with ROC MGT 9 – Extract of Annual Return AOC 1 – CFS Attachment AOC 2 – Related Party Disclosure Suri & Co, Quality Control Wing 18-01-2019

Roc filing MGT 7 – Annual Return AOC 4 – Filing of FS with ROC MGT 9 – Extract of Annual Return AOC 1 – CFS Attachment AOC 2 – Related Party Disclosure Suri & Co, Quality Control Wing 18-01-2019

True and fair view Compliance with law Correct and Adequate Disclosures Compliance with Accounting and Auditing Standards Suri & Co, Quality Control Wing 18-01-2019

Financial statement Section 129 Comply with AS and Sch III Consolidation mandatory – Separate Statement of Salient Features to be enclosed Non compliance of AS – Disclosure mandatory Directors to lay FS and CFS at AGM Suri & Co, Quality Control Wing 18-01-2019

Schedule iii Split into 3 Division Non Ind AS Co Ind AS Co NBFC Suri & Co, Quality Control Wing 18-01-2019

Schedule iii Division 1 Part I – Balance Sheet Part II – Statement of Profit and Loss General Instructions for preparation of CFS Suri & Co, Quality Control Wing 18-01-2019

Schedule iii Some Things that we miss out Disclosure of AS mandatory - Sch III Disclosure are in Addition to that Narrative Description or disaggregation of items should be in Notes Each item on the face of the Balance Sheet and Statement of Profit and Loss shall be cross-referenced to any related information in the notes to accounts Once a unit of measurement is used, it should be used uniformly in the Financial Statements. Trade Payables to be split as total outstanding dues of micro enterprises and small enterprises; and total outstanding dues of creditors other than micro enterprises and small enterprises. Suri & Co, Quality Control Wing 18-01-2019

Schedule iii Some Things that we miss out No more Fixed Assets – its PPE Classification of assets to Current and Non Current – Note on how the segregation happened “Operating Cycle” Changes in Accounting Standards Deferred tax and its disclosure Employee benefits and its disclosure Suri & Co, Quality Control Wing 18-01-2019

Records to be maintained Shareholder Register Director Register along with the share holding Disclosure of Interest Charge Register Board Minutes and GM minutes Fixed Asset Register Suri & Co, Quality Control Wing 18-01-2019

Update on companies act Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act CHANGES IN SCHEDULE III FOR NON IND AS FS ROUNDING OFF USED IN FS SHOULD BE UNIFORMLY USED THROUGHOUT FIXED ASSETS CHANGED TO PPE RESERVE AND SURPLUS CHANGED TO SURPLUS FOR IND AS FS TRADE PAYABLE MSMED DISCLOSURE INTRODUCED SECURITIES PREMIUM RESERVE CHANGED TO SECURITIES PREMIUM DISCLOSURE BY WAY OF NOTE FOR EACH RESERVE Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act CHANGES IN SCHEDULE III FOR IND AS FS DETAILED TRADE RECEIVABLE AND LOANS RECEIVABLE DISCLOSURE – SECURED, UNSECURED, INCREASE IN CREDIT RISK AND CREDIT IMPAIRED NEW FS FORMAT FOR NBFC INTRODUCED IN DIVISION III Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act SOME IMPORTANT CIRCULARS / NOTIFICATIONS THE COMPANY TO GIVE PREFERENCE TO THE LOCAL AREA AND AREAS AROUND IT WHERE IT OPERATES, FOR CSR SATISFACTION OF CHARGE FORM REVISED INTRODUCTION OF NFRA AND ITS RULES DIRECTORS REPORT TO INCLUDE POINTS ON COST RECORDS AND COMPLIANCE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act SOME IMPORTANT CIRCULARS / NOTIFICATIONS DIRECTORS REPORT OF OPC AND SMALL CO TO INCLUDE CERTAIN DISCLOSURES PHYSICAL QUORUM PRESENT THEN NO RESTICTION IN APPROVAL OF FS, DIRECTORS REPORT THROUGH VIDEO CONFERENCING RATIFICATION OF AUDITORS APPOINTMENT OMITTED AMENDMENTS TO IND AS RULES MADE Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act SOME KEY CHANGES COMPANIES (AMENDMENT) ORDINANCE 2019 NEW COMPANIES INCORPORATED AFTER THE ORDINANCE – NEW PROCEDURES TO COMMENCE BUSINESS ROC TO HAVE POWERS TO VERIFY THE REGISTERED OFFICE OF CO CONVERSION OF PUBLIC LTD TO PRIVATE WITH C GOVT PERMISSION PENALTY FOR ISSUE OF SHARES AT DISCOUNT PENALTY FOR ALTERATION OF SHARE CAPITAL Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act SOME KEY CHANGES COMPANIES (AMENDMENT) ORDINANCE 2019 CHARGE TO BE REGISTERED WITH IN 60 DAYS SATISFACTION OF CHARGE – RECTIFICATION POWES BY C GOVT REGISTER OF SIGNIFICANT BENEFICIAL OWNERSHIP – TIME LIMIT FOR TRIBUNAL ORDER AND PENALTY FOR OFFICERS PENALTY TO BE LEVYED TO PROMOTORS, DIRECTORS AND KMP FOR NON DISCLOSURE OF INTEREST IN TRANSACTIONS PENALTY OF RS 5000 FOR NON COMPLIANCE OF PROXIES FORM Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act SOME KEY CHANGES COMPANIES (AMENDMENT) ORDINANCE 2019 RESOLUTIONS AND AGREEMENT TO BE FILED – PENALTY REVISED AND FOR CONTINOUS DEFAULT PENALTY INTRODUCED. LISTED CO – PENALTY INCREASED FOR NON FILING OF REPORT ON AGM PENALTY REVISED FOR NON FILIN OF FS WITH REGISTERAR ADDITIONAL PENALTY INTRODUCED FOR AUDITORS FOR CONTIOUS DEFAULT FOR NON FILING OF FORM ADT3 PENALTY REVISED AND FOR CONTINOUS DEFAULT PENALTY INTRODUCED TO CO FOR NON DISCLOSURE OF DIN TO ROC BY CO AND TO DIRECTORS TO CO Suri & Co, Quality Control Wing 18-01-2019

UPDATES on companies act SOME KEY CHANGES COMPANIES (AMENDMENT) ORDINANCE 2019 DIRECTORS EXCEEDING THE LIMIT OF DIRECTORSHIP TO BE DISQULIFIED PENALISED NON COMPLIANCE OF SEC 197 – PENALTY INCREASED TO DIRECTOR AND NEW PENALTY INTRODUCED TO CO PENALTY ENHANCED FOR NON COMPLIANCE OF APPOINTMENT OF KMP PENALTY FOR FRAUD INCREASED TO 50 LAKHS Suri & Co, Quality Control Wing 18-01-2019

AUDIT REQUIREMENTS Suri & Co, Quality Control Wing 18-01-2019

Audit Requirements PHYSICAL VERIFICATION OF ASSETS – ALONG WITH REASONS FOR VARIATION IF ANY PHYSICAL VERIFICATION OF INVENTORY – ALONG WITH REASONS FOR VARIATION IF ANY CONFIRMATION OF BALANCES OF DEBTORS ALONG WITH RECONCILIATION IF ANY CONFIRMATION OF BALANCES OF CREDITORS ALONG WITH RECONCILIATION IF ANY CONFIRMATION OF CREDITORS FOR CLASSIFICATION AS MSMED Suri & Co, Quality Control Wing 18-01-2019

Audit Requirements CONFIRMATION OF BALANCES OF BETWEEN INTER COMPANIES (GROUP CONCERNS) LIST OF RELATED PARTIES ALONG WITH TRANSACTIONS ENTERED WITH THEM CONFIRMATION OF BALANCE OF ALL THE BANK ACCOUNTS AS ON 31ST MARCH 2019. PHYSICAL CASH CONFIRMATION AS ON 31ST MARCH 2019 ALONG WITH COPY OF THE CASH BOOK BALANCE. Suri & Co, Quality Control Wing 18-01-2019

Audit Requirements CONFIRMATION OF BALANCE OF BANK DEPOSIT AND THE INTEREST ACCRUED. COPIES OF BOARD RESOLUTIONS PASSED DURING THE YEAR REGISTERS UNDER COMPANIES ACT 2013 FOR VERIFICATION CONFIRMATION OF BALANCE OF ELECTRICITY DEPOSIT AND THE INTEREST ACCRUED. Suri & Co, Quality Control Wing 18-01-2019

Audit Requirements LIST OF CONTINGENT LIABILITY AS ON 31ST MARCH 2019 CONFIRMATION OF STOCK WITH SUB CONTRACTORS ALONG WITH RECONCILIATION IF ANY RECONCILIATION OF INWARD AND OUTWARD SUPPLY WITH GST RETURN STATE WISE / GSTIN WISE COPIES OF ORDERS RECEIVED DURING THE YEAR – INCOME TAX / VAT / EXCISE / ST LIST OF FIXED ASSETS CAPITALISED DURING THE YEAR Suri & Co, Quality Control Wing 18-01-2019

Thank you CA G Rengarajan Partner Suri & Co, Chartered Accountants Suri & Co, Quality Control Wing 18-01-2019