Implementation guide on Auditor's report


Implementation Guide on Auditor’s Report under Rule 11(d) of Companies (Audit and Auditors) Amendment Rules, 2017 and Amendment to Schedule III to Companies Act, 2013

(Pursuant to Notification No. G. S.R. 307(E) and Notification No. G.S.R. 308(E) dated 30th March, 2017)

Introduction

The Ministry of Corporate Affairs (Ministry) vide its notifications dated 30th March, 2017 has amended Schedule III to the Companies Act 2013 (the 'Act') and Companies (Audit and Auditors) Rule 2014.

The amendment to Schedule III (Division I and Division II) requires every company to disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016 in the specified format. This amendment is effective from the date of its publication in the Official Gazette i.e. 30th March 2017. As mentioned in the notification,'Specified Bank Notes‘ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016. The said notification, defines the term as "bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees".

In addition to amendment to Schedule III, Ministry has amended Rule 11 of the Companies (Audit and Auditors) Rule 2014 vide the Companies (Audit and Auditors) Amendment Rules, 2017 by inserting clause (d) which require auditors to report on whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and if so, whether these are in accordance with the books of accounts maintained by the company. These rules are effective from the date of its publication in the Official Gazette.

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