20 July 2010
See there is difference between delay and default. Delay means the same has been paid after due date and default means the same has not been paid for a long period of time.
So for the purpose of CARO delay in payment over a reasonable period say 60 - 90 days should be considered as a default and not every delay in payment of dues.
In the report you could mentioned as under
"In our opinion and according to information and explanation given to us, during the year Company has made some delay in repayment of some dues to financial institutions. However, there were no such dues outstanding as on date of Balance Sheet."
21 July 2010
Thanks,But I need to know as per CARO what is required to be mentioned whether only default needs to be mentioned or even delay is also required to be mentioned.To the best of my knowledge and as per the language of CARO only defalut i.e.account has become NPA as per bank norm needs to be emntioned.Do you have any guidence note as issued by Institute
21 July 2010
I have already visited this link.It says that auditor should report the period and amount of all defaults existing at the balance sheet date.
What does that mean. To me it means only defaults which are existing on the balance sheet date needs to be mentioned and any defaults which have occured during the year but not existing on the balance sheet date is not required to be mentioned.
21 July 2010
The point reads as Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported;
Where it is mentioned it should be existing on the balance sheet date only.
22 July 2010
It states as at the balance sheet date the defaults should be stated which means actual default in payment and which have not been paid should be reported and not delay in payment.
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