Hi
A Pvt ltd company received FDI investment from a foreign company. It is under 100% automatic FDI route - garments company.
However the company alloted shares after 180 days and filed the form 2.
As FEMA provisions - RBI's FDI master circular share alloted within 180 days of receipt of money.
Now, is the statutory auditor required to qualify this in the audit report ?
RBI may order the company to refund the amount or in exceptional cases allow the allotment. It may attract penal provisions.
As per ICAI guidance note on audit of capital and reserves - the auditor is required to check whether applicable laws and regulations have been complied with. FEMA is also applicable in case of FDI. So since the rules have not been comlied with, should it be qualified or just a matter of emphasis paragraph is enough.
Thank
CAclubindia
