[TO BE PUBLISHED tN THE GAZETTE OT- INDIA, EXTRAORDINARY' PART II.
SECTTON 3, SUB-SECTION (Dl
Govemlnent oflndia
Ministry of Corporate Affairs
Notification

New Delhi, dated the l4th December, 20l5

C.S.R. (E). - In exercise ofthe powers conferrcd by snb-seclion (12) ofsection l4:l read
wilh sub-section (l) of section 469 ofthe Companies Act' 2013 (18 of2013)' the Central
Covernment hereby mak€s the following rul€s further to amend the Companies (Audit and
Auditors) Rules, 2014 namely:-

l. (l) These rules may bc called the Companies (Audit and Audilors) Amendmenl
20t 5.

(2) They shall come into forc€ on the date oftheir publication in the OfTicial Gazettc'
2. In the Companies (Audit and Auditors) Rules' 2014 (hereinafter referred to as thc
principalrules),-

(i) For rule 13, the following rule shall be substituted' namely:-

"13. Reporting of frauds by auditor and other mattefs: (l) lfan auditor ofa company'
in the cou6e ofthe performance ofhis duties as statutory auditor, has rcason to believe that
an offence of fraud, which involves or is expe0ted to involve individually an amount ot
rupces one crore or above, is being or has becn committed against thc company by lts
officers or employecs, the auditor shall report the mafter to the Ccntral Govemment-

(2) The auditor shall report the mafter to the Central Government as und€r:-

(a) the auditor shall repod the matter to the Board or thc Audit Committee, as the
case may be, immediately but not later than two days ofhis knowledge ofthe fraud'
seeking their reply or observations within forty-five days;

(b) on receipt ofsuch reply or observations, the auditor shall fbnvard his report and
the reply or observations of the Board or the Audit Committee along with his
comments (on such reply or observations ofthe Board or the Audit Committee) to

the Central Covernment within fifte€n days from th€ date of receipt ofsuch reply or
obsefvations;

(c) in case the auditor fails to get any reply or observations from the Board or the
Audit Commiftee within the stipulated period offorty-five days, he shall forward his
report lo the Central Government along with a note containing the details of his
rcport that was earlier forward€d to the Board or the Audit Committ€e for which he
has nol received any reply or observations;

(d) the report shall be sent to the Secretafy. Ministry ofcorporate Afl'aiN in a sealed
cover by Registered Post with Acknowledgement Due or by Speed Post followed by
an e-mail in confirmation ofthe same;

(e) lhe report shall be on the letter-head ofthe auditor containing postal address' email
address and contact tclephone number or mobile number and be signed by the
auditor with his seal and shall indicate his Membership Number; and
(f) the report shall be in the form ofa statem€nt as specified in Form ADT-4
(3) In case ofa fraud involving lesser than the amount specified in sub-rule (l ), the auditor
shall report the matter to Audit Committe€ constituted under section 177 or to the Board
immediately but not later than two days of his knowledge of the fraud and he shall report
the matter specifying the following:-

(a) Nature ofFraud with description;
(b) Approximate amount involved: and
(c) Parties involved.
(4) The following details ofeach ofthe fraud reported to the Audit Committee or the Board
under sub-ntle 13) during the year shalt be disclosed in lhe Board s Repon:-
(a) Nature of Fraud with description;
(b) Approximate Amount involved;
(c) Parties involved, iftemedial action not taken: and
(d) R€medial actions taken.
(5) The provision ofrhis rule shall also apply, mutalir nutandis, to a Cost Audilor ano a
Secretarial Auditor during the performance ofhis duties under section 148 and section 204
respectively.";
(ii) In the principal rules, after .ule 14 and before FORM NO. ADT-I, insert the word
"Annexure";
(iii) In the principalrules, in Forrn No. ADT-4,-

(A) in line 3, for the word, figures and brackets..rule l3(4)',, the word, figures, letter
and brackets "rule 13(2)(0" shallbe substituted; and

(B) in line 25, in item No. (10), for the word, figures and brackets,,rule l3(l),', the
word, figures, letter and brackets "rule l3(2Xa),'shall be substituted.
Joint Secretary 1o the Govenment oflndia

Notei The principal rules were published in the CazEtte of Indi4 Extraordinary, part II,
S€ction 3, Sub-section (i), vtde number C.S.R. 246(E), dat€d the j lst March, 2014 and were
subsequ€ntly amended vriy'e C.S,R. 722(E) dated l4th Octob€r, 2014.