Section A: Reporting on Consolidated Financial Statements (CFS) as per Companies Act, 2013
Compilers’ Note:
Section 143 of the Companies Act, 2013 lays down the reporting requirements by the Statutory Auditor. The said reporting requirements (including those for reporting under CARO, 2015) also apply to audit reports on CFS since preparation of CFS (barring a few exemptions for 2014-15) is mandated by the Companies Act, 2013.
The ICAI has vide Announcement dated 1st May 2015 given guidance on preparation of audit reports on CFS and has also inserted illustrative reports on CFS to SA 700 and SA 705.
Inspite of the above guidance, auditors have been faced with several challenges in reporting on CFS since they have to mainly depend on the information available in the reports issued by the Component Auditors. The challenges also increase since there could be subsidiaries and associates outside India whose auditors follow the reporting requirements of the respective jurisdictions.
Given below are some illustrations on different reporting on “Other legal and regulatory requirements’ in the audit report on CFS for the year ended 31st March 2015.
Housing Development Finance Corporation Ltd .
As required by section 143(3) of the Act, we report, to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements;
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors;
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements;
d) not reproduced …
Bajaj Auto Ltd .
As required by section 143(3) of the Act, we report to the extent applicable, that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements;
(b) In our opinion, proper books of account as required by law maintained by the Holding Company, including relevant records relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and records of the Holding Company. The two subsidiaries and one associate of subsidiary company of the Holding Company are incorporated outside India hence requirement of section 143(3) is not applicable to them;
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement dealt with by this report are in agreement with the relevant books of account maintained by the Holding Company including relevant records relating to preparation of consolidated financial statements. The 2 subsidiaries and 1 associate of subsidiary company of the Holding Company are incorporated outside India hence requirement of section 143(3) is not applicable to them;
(d) not reproduced …
Tata Global Beverages Ltd .
As required by section 143(3) of the Act, we report, to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements;
b) In our opinion, proper books of account as required by law maintained by the Holding Company, its subsidiaries included in the Group, associate companies and jointly controlled entities incorporated in India including relevant records relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and records of the Holding Company and the reports of the other auditors;
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained by the Holding Company, its subsidiaries included in the Group, associate companies and jointly controlled entities incorporated in India including relevant records relating to the preparation of the consolidated financial statements;
d) Not reproduced …
YES Bank Ltd .
As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified u/s. 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
ICICI Bank Ltd .
As required by section 143 (3) of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements as also the other financial information of certain subsidiaries and an associate, consideration of work of the joint auditor of a subsidiary and on consideration of unaudited financial statements of certain associates as furnished by the management as noted in the ‘other matter’ paragraph, we report that:
a) All the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit have been sought and obtained;
b) In our opinion, proper books of account as required by law have been kept by the various constituents of the Group so far as it appears from the examination of those books;
c) The Consolidated Balance Sheet, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d) Not reproduced…
