CA DHRUV AGRAWAL D 60, LAXMI NAGAR, DELHI-92 9810425103

1. REPORTING REQUIREMENTS OTHER THAN CARO,2003

2. DRAFTING OF AUDITORS’ REPORT

3. Reporting Requirements Reporting Requirements Statutory Requirements Standards On Auditing Statement of Modifications in Auditor’s Report

4. Statutory Requirements Statutory Requirements Companies Act IRDA Regulations Banking Regulations/RBI Act Others like SCRA, Electricity Act

5. Statutory Requirements - Companies Act Companies Act Section 227(1A) Section 227(4A) Section 227(2) Section 227(3) In case of negative finding Enquiry by Auditor Report by Auditor

6. Statutory Requirements- Companies Act Loans & Advances - Whether Secured - Terms & Conditions, not prejudicial Whether Transactions represented by book entries are not prejudicial In case of Company other than investment or banking Company - Securities sold below the purchase price Section 227(1A) Companies Act

7. Statutory Requirements- Companies Act Whether Loans & Advances - shown as deposits Whether personal expenses charged to revenue account Whether cash received in respect of allotment, if not, whether position in B/S not misleading Section 227(1A) Companies Act

8. True & Fair View State of Affairs Statutory Requirements - Companies Act Section 227 (2) Companies Act Profit or Loss

9. Statutory Requirement- Companies Act He has obtained necessary information & explanations B/S and P & L A/c in agreement with the books of Account etc. Proper books of account has been kept Disqualification of director u/s 274(1)(g) Report of the Branch Auditor received and how dealt with B/S and P & L A/c comply with accounting standards Cess payable u/s 441A has been paid, if not, amount not paid Adverse comment in thick type or italics Section 227(3)

15. Statutory Requirements - Companies Act Section 227(4A) Companies Act Companies (Auditor’s Report) Order, 2003 AS AMENDED IN 2004

17. Standards ON AUDITING SA700 Forming an Opinion and Reporting on Financial Statements WEF 1.04.2011 Report should state that Preparation/Fair Presentation of Financial Statements as per FRF/FPF are the responsibility of the entity’s management Report should describe the scope of the audit stating that audit was conducted in accordance with auditing standards

18. Standards on Auditings SA700 Forming an Opinion and Reporting on Financial Statements WEF 1.04.2011 Report should include a statement that audit was planned and performed to obtain reasonable assurance whether financial statements are free of material misstatement Report should include a statement that the audit provides a reasonable basis for his opinion

20. Standards ON Auditing SA - 700 The Auditor’s Report on Financial Statements Report should clearly indicate the financial reporting framework used to prepare the financial statements and state the opinion on true and fair view. Report should describe the limitation on the scope of Auditor’s work which leads to a Modified Opinion

28. Standards On Auditings Limitation on Scope Modified Opinion “ We did not observe the counting of the physical inventories as at 31st March, 2011 since that date was prior to the time we were appointed auditors of XYZ Ltd. Owing to the nature of the entity’s records, we were unable to satisfy ourselves as to inventory quantities by other audit procedures. In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of such as to physical inventory quantities, the financial statements give a true and fair view……….” adjustments, if any, as might have been determined to be necessary had we been able to satisfy ourselves

29. Standards On Auditings Limitation on Scope Disclaimer of Opinion “………… We were not able to observe all physical inventories and confirm account receivable due to limitations placed on the scope of our work by the entity. Because of the significance of the matters discussed in the preceding paragraph, we do not express an opinion on the financial statements.”

30. Standards On Auditings SA 705 Disagreement with Management Inappropriate Accounting Method INCONSISTENT WITH FRF Inadequate Disclosures AS PER FRF Disagreement on Accounting Policies

32. “ As stated in Note X of schedule …. to the financial statements, hire purchase sales have been treated as outright sales by the entity and contrary to accepted accounting practice, the entire profit thereon has been taken into account. This has resulted in the profit for the year, inventories and reserve and surplus being overstated by Rs….. In our opinion and to the best of our information and according to the explanations given to us, subject to the effect on the financial statements of the mater referred to in the preceding paragraph, the financial statements give a true & fair view .” Disagreement on Accounting Policies - Inappropriate Accounting Method -MODIFIEDOpinion

33. Standards On Auditings “ On 20th December, 2010, ABC Ltd.issued debentures worth Rs. 50 crores for the purpose of financing plant expansion. The debentures agreement restricts the payment of future cash dividends to earnings after 31st March, 2007. In our opinion, disclosure of this information is required by…… In our opinion and to the best of our information and according to the explanations given to us, subject to the omission of the information included in the preceding paragraph, the financial statements give a true and fair view…..” Disagreement on Accounting Policies - Inadequate Disclosure – MODIFIED Opinion

34. Standards ON AUDITINGD - Other Important Requirements As per SA700, an auditor report should : - bear an appropriate title - be appropriately addressed (usually to the appointing authority) - bear the date on which the report expressing opinion is expressed - bear name specific location, where the report has been signed

35. - signed by auditor in personal name - in case of firm's appointment , sign to be in personal name of the auditor and in the name of the firm - mandatory to mention Membership No. & Also Firm Registration Number

37. Modification in Auditor’s Report Subject matter of Qualification NOT SO MATERIAL to affect the truth and fairness of whole of accounts SO MATERIAL that affects the overall truth and fairness It is appropriate for the Auditor to express true and fair view SUBJECT to the qualifications It would not be appropriate for the Auditor to express true and fair view SUBJECT to the qualifications

38. Qualification in Auditor’s Report MATERIALITY NOT SO MATERIAL to affect the truth and fairness of whole of accounts SO MATERIAL that affects the overall truth and fairness Issue Audit Report SUBJECT to qualifications Either Adverion OR Disclaimer of Opinionse Opin

39. Information is Material IF Its Misstatement (I.e. Omission or Erroneous Statement) Could influence the economic decisions of users, taken on the basis of the Financial Information AUDIT MATERIALITY

43. QUALIFICATIONS IN AUDITOR’S REPORT of CORPORATE INDIA

44. DABUR INDIA LIMITED 2004-2005 AUDITORS: G. BASU & CO. Notes to Accounts - Schedule P (Note B4) “ The Company’s investments in the joint venture, M/s Dabon International Pvt. Ltd. have not been accounted for in accordance with AS-27 as the same is being held for disposal in the foreseeable future. Consequently, no provision is deemed necessary for diminution in the value of investments under AS-13.” Auditor’s Report “… .subject to Note No. B(4) in Schedule P , Balance Sheet and Profit & Loss Account have been prepared in due compliances of Accounting Standards referred to in sub section (3C) of Section 211 of Companies Act, 1956.”

45. SALORA INTERNATIONAL LTD 2004-2005 AUDITORS: K. PRASAD & COMPANY Notes to Accounts - Schedule U (Note No. 7) “ The process for ascertainment of impairment of assets pursuant to AS-28 which is applicable first time w.e.f. 1.4.2004 is underway. This being the first year and process requires a lot of exercise and technical evaluation to arrive at conclusion as to which asset that may be impaired. No effect has been given for impairment loss, in the accounts which will not be material according to view of technical experts and management also.” Auditor’s Report “… .In our opinion the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with accounting Standards as referred to in sub section (3C) of Section 211 of Companies Act, 1956 except of AS-28 of Impairment of Assets as given in Note No. 7 in Schedule U of Notes to Account.”

46. ASSAM COTTON MILLS LTD 2004-2005 AUDITORS: SINGHI & CO. Notes to Accounts - Schedule 14 [Note No. IIA (viii)] “ The Company has not provided interest of Rs. 510000/- (till date Rs. 1050000/-) on loan taken from its holding company, Kesoram Industries Ltd. for the year ended 31st March, 2005.”

47. ASSAM COTTON MILLS LTD 2004-2005 AUDITORS: SINGHI & CO. Auditor’s Report “… .Attention is invited to Note No. IIA(viii) of Schedule 14 of Note on Accounts regarding non provision of interest amounting to Rs. 1050000/- upto 31st March, 2005 (for the year Rs. 510000/-) on loan taken from Kesoram Industries Ltd., had the provision been made in the accounts, loss for the year would have been Rs. 2771967/- (as against Rs. 1721967/- shown in the accounts) debit balance in the Profit & Loss Account would have been Rs. 11767705/- (as against Rs. 10717705/- shown in the accounts) and interest accrued and due would have been Rs. 1055688/- (as against Rs. 5688/- shown in the accounts) .” We report that in our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to para ------above, give the information……………………………………….

48. JADOONET LTD. 2004-2005 AUDITORS: S.S. KOTHARI & COMPANY Notes to Accounts - Schedule P (Note No. 4) “ Valuation in respect of accessories has been made based solely on management estimates, since, no active market exists for such inventory.” Auditor’s Report “ In view of the absence of active market of inventory, the valuation of the inventories has solely been made on the management estimates and hence we are unable to verify its responsibility (refer to Note 4 of Schedule P).”

62. Guidance Note on Profit Forecasts and / or Financial Forecasts Accountants’ Report - Inclusions Sources of Information Basis of Forecasts Assumptions Made NOTE: Accountant not to give any impression as if vouching for accuracy of forecasts

63. Guidance Note on Profit Forecasts and / or Financial Forecasts Addressed to Board, unless circumstances Require otherwise Specify Limitation of Scope, if any Accountants’ Report - Requisitions Specify Nature, Scope, and Objectives as agreed Qualification in report on: 1. Disagreement With Management 2. Material Reservation Forewarning Signals, if any, For profit forecasts

64. Guidance Note on Reports in Company Prospectuses S.No Issue / Query Answer 1. Eligibility to make Report Statutory Auditor / Joint Auditors considering Sec. 226(3) 2. Signing of the Report As per SA – 3. Addressee of the Report Board of directors

66. DRAFTING OF NOTES TO ACCOUNTS

68. CA DHRUV AGRAWAL , FCA, CS, LLB 9810425103 Thank You