CARO 2020 and Consolidated Financial Statements

This query is : Resolved

Deepak (Querist)
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06 January 2023 Dear Experts,

There are 2 Companies - "H" is Holding company and "S" is Subsidiary company. As Net Profit of Subsidiary "S" is more than rupees Five Crores during immediately preceeding previous year, Section 135 (CSR Reporting) is applicable to Subsidiary Company. But it has been defaulted in paying CSR amount during the year. So adverse remarks is put in the return. My Query is how to report this point in Audit Report of Consolidated Financial Statements. As CARO 2020 is not applicable to Consolidated Financial Statements but "if there have been any qualifications or adverse remarks by the respective auditors in the CARO reports of the companies included in the consolidated financial statements. If present, Auditor needs to give details of the companies and the paragraph numbers of the CARO report that have the qualifications or adverse remarks". my doubts are 1) where exactly it need to be reported in Audit report of CFS? is it under "Report on Other Legal and Regulatory Requirements"? 2) Note about default in payment of CSR amount was shown in Notes of Subsidiary. Do we need to show that note again in the Notes of CFS?