DIFFERENCE BETWEEN TRADITIONAL ECONOMICS AND MANAGERIAL ECONOMICS

Traditional Economics is the social science that is related to production, distribution and consumption of goods and services. It deals with the- individuals, business, firm, government and nations. It makes choices on allocation of resources to satisfy wants and tries to determine how these groups should organize and coordinate their efforts to gain maximum output. 

Managerial Economics refers to the application or use of economic theory and decision science tools (mathematical, econometrics) to find the solutions to managerial decision problems. In simple words, it is the integration of economic theory in business processes. It provides optimal solution to managerial decisions problems.

Traditional Economics has both micro (focusing upon individual consumers) and macro (focuses upon aggregate economy) aspect but, Managerial Economics generally considers micro aspect.

Traditional Economics deals with  positive (objective and fact based- study of what is) as well as normative science (subjective and opinion based- study of what ought to be ) whereas, Managerial Economics deals with normative science.

Traditional Economics deals with theoretical aspect whereas, Managerial economics deals with practical aspect.

Traditional Economics studies the activities of micro and macro position whereas, Managerial Economics studies individual firm or unit.

There are a lot of assumptions in Traditional Economics but there are few assumptions in Managerial Economics.

Traditional Economics studies economic behavior of the situation. but Managerial Economics studies both economic and non-economic behavior of the situations.

Traditional Economics has very wide scope. whereas, Managerial Economics has lower scope then traditional economics.

Traditional Economics is the study of overall subject matter of economics whereas Managerial Economics is the study of application of economics in getting managerial decisions.



Note :

Click on these links for -

•  Managerial Economics or Business Economics
• Characteristics of Managerial economics and Role of Managerial Economics in Business Decision Making 
•  Is Sales Revenue Maximization Model is better than Profit Maximization Model
• Practical approach towards Profit Maximization and Boumol's Sales Revenue maximization Model

• Practical Approach to Accounting Cost and Economic Cost

• Profit and Functions of Profit
• Case Study for Demand Forecasting

ACTIONS AGAINST COMMERCIAL BANK AND FINANCIAL INSTITUTIONS BY NEPAL RASTRA BANK (NRB)

The central bank is the parental bank of the country. The whole financial operations of the entire nations are channelized under the supervision and control of the central bank. Nepal Rastra Bank is the central bank of Nepal. In order to maintain the favorable economic balance within the entire nation, Nepal Rastra bank plays a significant roles.  For more details regarding central bank of Nepal, I have written a separate blog. please refer to the following link : https://managementknowledges.blogspot.com/2016/12/nepal-rastra-bank-and-its-restricted.html.

Banks and financial institutions are given licence to benefit the people.They collect deposits from public and then lends the funds to the industries, factories, businessman and other customers. By doing so, the bank collects interests from the investments and then pays the interest to the depositors. The differences in interest becomes the income of banks. Similarly, the banks and financial institutions also helps its customer by paying the dues on time to the ordered party and collects commission for performing such activities. Banks also perform advisory function, agency function, brokerage functions, underwriting functions and many more. All of these are done for the welfare and development of the society.

However, sometimes banks and financial institutions forgets there basic objective and starts its business operations in the way which is unfavorable to the society. They starts following activities:

• Discriminating customers.

• Cooking books through overstating or understating the Assets and Liabilities.

• Starting unauthorized aligned business.

• Starts dominating the money and capital markets.

• Taking unusual commission.

• Charging unusual interests.

• Charging Unusual fines.

• By not maintaining the Maximum Permissible Banking Finance (MBPF) as per rules.

• By not maintaining sufficient capital as prescribed by the Nepal Rastra Bank.

• By not following the guidelines, provisions, by-laws, directives and Act of Nepal Rastra Bank and so on.

Therefore, being the controller of all the banks and financial institutions, Nepal Rastra Bank makes an eagle view upon the business operations of such banks and financial institutions. The central bank of Nepal not only supervises and controls but also takes a strict actions against such commercial banks and financial institutions. For more details regarding supervision and control of Nepal Rastra Bank of Nepal, i have written a separate blog. please refer to the following link. https://managementknowledges.blogspot.com/2017/01/supervision-and-control-of-nepal-rastra.html

So, I would like to share, the actions of Nepal Rastra Bank which are taken against commercial banks and financial institutions for malfunctioning the business operations and not following the provisions of Nepal Rastra Bank Act, guidelines, provisions, by-laws and directives of Nepal Rastra Bank - which is declared problematic. 

They are as follows:

• Prohibit or limit in collection of deposit, credit supply or investment.

• Prohibit any action carried out illegally by breaching the prevailing law and regulation of the bank that is against the interest of commercial bank or financial institution.

• Prohibit from doing some specific business among the businesses allowed to commercial bank or financial institution for specific time.

• Increase the paid capital by issuing new shares or by receiving due amount of issued capital.

• Suspend the right to vote or other rights of shareholder.

• Stop payment of dividend or any other amount to the shareholders to increase the capital.

• Determine limitation to the amount of bonus, salary, compensation and other expenses for the director and other high level management officials.

• Make necessary arrangement for the corporate governance, internal control and risk management of commercial bank or financial institution.

• Maintain sufficient capital and high proportion of liquidity or prohibit business transaction or determination of other necessary terms.

• Limit transaction of the commercial bank or financial institution or prohibit sale of property or expansion of branch office or close any domestic or international branch.

• Maintain necessary arrangement for reduction of risk of the properties which are materially doubtful or securities without proper evaluation or other properties.

• Receive prior approval of the bank for major capital expenditure, substantial commitments having major liabilities or for the expenditure of contingent liabilities.

• Issue order to remove from the post to single or more director or manager or employee as per the necessity.

• Nepal Rastra Bank can remove the director or manager or employee in case of not discharge of the order made, by respective commercial bank or financial institution.

• Suspend board of director of the commercial bank or financial institution and takeover the management of such commercial bank or financial institution in self control or operate the management and transaction of such commercial bank or financial institution by appointed official.

• Order commercial bank or financial institution, which is listed in Stock.

• Exchange for the application of de-listing.

• Prohibit payment of interest and principal for time bond auxiliary loan without having securities of commercial bank or financial institution.

• Take any other action as bank feels necessity and proper to stablize the economy.

Note:

• Here Appointed Official means any person, firm, company or organization appointed by the Nepal Rastra Bank for the management and operation of transaction of the commercial bank or financial institution.
• Generally, the order issued by the Nepal Rastra Bank remain valid for two years from the date of issue unless it is not renewed.

It will be the expenditure of the respective commercial bank or financial institution to bear all the expenses until - Nepal Rastra Bank takes the control of management of any commercial bank or financial institution and makes arrangement for the management and operation of transaction. 

In case, Nepal Rastra Bank controls any of the commercial bank or financial institution then:-

• The preliminary report
• Annual report 

- prepared by the bank or the officer appointed by the Nepal Rastra Bank is to be submitted to the government of Nepal.

In case of necessity the central bank can revoke or nullify its order issued by issuing another order.  However, Such order will contain the basis,reason and other necessary information regarding the need of issuing such order.

The directors, managers, or employees removed by the bank are not allowed to work or involve in transaction in the same commercial bank or financial institution as director, manager or employee or any other post of any commercial bank or financial institution either directly or indirectly. 

Similarly, the directors, managers, or employees removed by the bank under the suspended member of board of directors are not allowed to receive or claim any remuneration or compensation under the provision of prevailing law or agreement held directly or indirectly from the date of such order.

Determination of the capital and valuation of assets and liabilities of any
problematic commercial bank or financial institution shall be based on the basis, process and standard determined by the bank.

It is to be noted that, a reasonable opportunity of being heard is allowed while removing or suspending the directors, managers or employee of the commercial bank or financial institution from their post.  During the hearing of the action if,

such action does not seems reasonable then Nepal Rastra Bank can annul, change or make necessary decision to the order.

For more details regarding Nepal Rastra Bank, please read the following links:

• https://managementknowledges.blogspot.com/2016/12/money-banknote-and-coins.html
• https://managementknowledges.blogspot.com/2016/12/foreign-exchange-policy-regulation.html
• https://managementknowledges.blogspot.com/2016/12/financial-provisions-of-nepal-rastra.html

Picture Credit : startingahomebusiness.smallbizincubator.com

SUPERVISION AND CONTROL DONE BY NEPAL RASTRA BANK (NRB)

Nepal Rastra Bank is Banker's Bank. For more details regarding central bank of Nepal, i have written a separate blog. please refer to the following link : https://managementknowledges.blogspot.com/2016/12/nepal-rastra-bank-and-its-restricted.html.
It is the prime responsibility of this bank to maintain the harmonious relationships among different banks and financial institutions. For this, proper supervision and controls are required. 

If the Commercial Banks and financial institutions wants to conduct banking and financial transaction then they must obtain license from the central Bank in prescribed manner. While issuing such license the central Bank may fix necessary terms and conditions. Therefore, it is the duty of the licensed bank and financial institution to work within such terms and conditions.

In order to control the deposits and loan, prior approval of Nepal Rastra Bank is required for accepting any type of deposits from the concerned person, firm, company or institution. In this process the central bank may provide terms and conditions. Therefore, it will be the duty of the concerned person, firm, company or institution to abide such terms and conditions. For maintaining the price level, the central bank puts restriction on rate of interest time to time.

Regulatory Powers of Nepal Rastra Bank:

Nepal Rastra Bank has full power to regulate the functions and activities of commercial banks and financial institutions. For this purpose, the Bank frames rules and bye-laws, directives and circulars time to time. Therefore, it shall be the duty of the concerned commercial bank  and financial institution to follow such rules, bye-laws, order, directives and circular. 

For better supervision, the central bank orders other banks and financial institutions to submit the following particulars:-

• Balance sheet accounts.
• Off balance sheet commitments.
• statement of income and expenditures. 
• Ratio among accounts or items.
• Prohibitions, restrictions or conditions concerning specific types or forms of credit or investments, or of credit or investments.
• Forms of commitments of a risk-bearing nature which are not matching as to maturity of assets and liabilities and off-balance-sheet items
• Foreign currency, spot or advance rate of interest.
• Swap, option or similar instruments or access to the payments system through electronic or other means and
• Other particulars and documents  as deems appropriate. 

Nepal Rastra Bank regulate the commercial banks and financial institutions by mobilizing following powers:- 

• Enforcing authority and responsibility of licensing, supervising and regulating the commercial banks and financial institutions and revoking the license.

• Taking over or providing trusteeship to the commercial banks or financial institutions which have been declared insolvent or are on the verge of insolvency

• Investigating, supervising and inspecting the books and accounts, records, documents or register of commercial banks or financial institutions by any official of the Bank or the person designated by the Bank. This is done in order to find whether or not any commercial bank or financial institution has conducted business and transaction in accordance to Nepal Rastra Bank Act,the Rules, bye-laws, order or directive.

• Issuing order to the member of the Board of Directors, official or employee of any commercial bank or financial institution if inspection and supervision is required. 

Note:

• For better credit control, the central bank prescribes the time and amount limit to advance the credit to any commercial banks and financial institutions. 

• If this limit is not followed then, Nepal Rastra Bank fines an amount equal to the interest which a commercial bank or financial institution would have charged for the amount of credit not advanced or advanced less than the prescribed amount from the concerned commercial bank or financial institution.

• All the Commercial Bank and financial institution must furnish the particulars of its transaction and financial position to the Nepal Rastra Bank in the manner prescribed. This may be published with the particulars available if the central bank, if deems appropriate.

The prior approval of Nepal Rastra Bank is required in order to issue any debentures and financial instruments. This may be supported by terms and conditions. If it is so, then it shall be the duty of the concerned commercial bank and financial institution to abide by such terms and conditions.

Inspection and Supervision: 

• Nepal Rastra Bank frames and implements inspection and supervision by keeping an eye on international standards for all the banks and financial institutions. 

• The central Bank, at any time, inspect and supervise any of the offices of commercial banks or financial institutions. Such inspection and supervision is carried out by the deputed official of the Bank or an expert designated by the Bank at their office or demanding to submit detailed particulars and information to the Bank itself. 

• It is the duty of the Directors, officials or employees of such commercial bank and financial institution to submit the statement, data, record, information, particulars necessary for computer and auditing, and other documents to such official, expert or the Bank to review or to examine them within the time limit. 

• The official or expert submits the reports generally within fifteen days upon completion of his works to Nepal Rastra Bank. In case such report is not completed within fifteen days, the Governor of Nepal may extend the time limit for another fifteen days.

• The report submitted is to be presented on the next board meeting of Nepal Rastra bank.

• Then the Board may, after making appropriate decision on matters contained in the report submitted , issue appropriate directions to the Governor about the actions to be taken in the matter. Then, It becomes the responsibility of the Governor to implement or cause to implement such directions.

Note:

1`.For the exchange of mutual cooperation, the central bank may under its supervisory power, 

• Exchange cooperation with foreign supervisory authority on reciprocal basis or,
• Exchange notices or information with concerned foreign supervisory authority on reciprocal basis.

 For this, confidentiality of the information is to be maintained.

2. If any commercial bank or financial institution is in following situations:

• State to get liquidated
• State to get dissolved 
• State of being incapable to pay the debt or 
• State of being materially unable to discharge any or all of its liabilities

- then, such bank must inform to Nepal Rastra Bank for such unfavourable situation.This must be done within fifteen days.

On the basis of information received from any source, report of inspection or supervision, the central bank declares problems of the commercial banks and financial institutions by written notice to it. This is done if following things are found: 

• If any action which is against the interest of the depositors, shareholders, creditors, or general public is found.

• In case of non fulfillment of any financial liabilities.

• In case of not having probability to fulfill any financial liabilities.

•  In case of insolvency or going to fall under insolvency or facing material financial difficulties.

• In case of discredit or breach of the Nepal Rastra Bank Act, prevailing law related to bank and financial institution, other prevailing law, terms of license or regulation, directives or order of bank.

• In case the license obtained on the basis of submitting false, fraudulent, wrong document or data.

• In case of unable to maintain the capital fund as per this Act, prevailing law related to bank and financial institution and directives issued by the bank at time to time.

• In case of the initiation of the process of liquidation or insolvency of any commercial bank or financial institution under the prevailing law.

• In case of delay in the process of voluntary liquidation.

• For the commercial bank or financial institution established with foreign joint venture and such bank is in state of being insolvent or liquidator is appointed for the liquidation or the license of such commercial bank or financial institution is terminated under the provision of the law of respective country or transaction is banned either full or partial.

•  If the bank is convinced that commercial bank or financial institution is unable to pay it’s due or can make negative effect in its liability or duties, which it has to perform.

Picture Credit : nvwsolutions.co.uk

FINANCIAL PROVISIONS OF NEPAL RASTRA BANK (NRB)

Hi,

For those people who is curious to know about the central bank of Nepal, I have written this blog to help you further. 

A ) Capital of the Bank :

In simple language, Capital refers to the amount invested in the business by its owner. It is the liabilities of any business. It is the primitive source of finance that is used to operate any business. 

As per the Nepal Rastra Bank Act, 2002, the prescribed Capital of the Bank prescribed was one billion Nepalese rupees. However, it has been changed to five billion Nepalese rupees . 

The Capital of the Nepal Rastra Bank is received from the Government of Nepal. 

The basic rule regarding this is that, neither this Capital is transferred nor any burden of debt is placed upon it.

However, the Government of Nepal has the power to alter the above capital limit as deems fit.  But, for such alterations, the Government of Nepal consults the Nepal Rastra Bank.

B) How the bank deals with it Net Profit or Net Loss ? 

As we know, each and every business operations has either profits or loss. So, is the case with the central banks. Here, my focus is on the profit and loss account of Nepla Rastra Bank.

Nepal Rastra Bank prepares the account of its net profit and loss in each Fiscal Year. This account is prepared in accordance with the international accounting standard. The main objective is to reflect true and fair view of the books of accounts as per the international norms. 

Note :

• While preparing profit and loss account, the profit made and the loss sustained or the loss yet to be appropriated and the net valuation gains or loss is reconciled.

• Similarly, Bad or doubtful debts and depreciation of property is deducted therefrom.

a ) How the bank deals with its Net Profit ?

Profits are the financial benefits which is remained after settling the revenues against all costs. If the bank makes profit in any fiscal year, then the distribution and use of such profits are made in following priority order :-

• The amount equal to 5 % of the net profit of each fiscal year is to be allocated from the profits earned by the bank. This profits are kept in the monetary liability fund until 5 % of the total monetary liability of the Bank is met. 

• Similarly, an amount prescribed by the Board (not less than 10 % of the net profit of the Bank ) is allocated in the general reserve fund which is established by the Bank.

• While allocating an amount in the general reserve fund, an additional amount is appropriated to cover the capital expenses which is referred in the annual budget of the Bank.

• The amount equal to the revaluation profit is kept in the revaluation reserve fund.

• After the above appropriations, the Board appropriates the remaining profit (if any ) in other funds as thinks fit and pays the balance amount to Government of Nepal.

Note :

• The amount deposited in the monetary liability fund is used only for the purpose of fulfilling the financial liability of the Bank.

• The amount allocated to general reserve fund shall be used only for the purpose of recovering the loss.

b ) How the bank deals with its Net Loss ?

Loss is simply a negative profit. Nepal Rastra Bank may suffer loss. So, in order to sustain net loss in any fiscal year, following allocations are made:-

Case 1 : 

• If the total operation loss and revaluation loss have been included in the net loss, then, the amount of the total operation loss is to be charged to the general reserve fund or to the capital account. However, the amount of revaluation loss is debited to the revaluation reserve fund. 

• While making such allocation, if the revaluation reserve fund is also at loss, then, it will be debited to general reserve fund or the capital account. 

Case 2 : 

• If the net loss is due to accumulation of the total operation loss and the revaluation loss, the amount of such net loss shall be debited to the revaluation fund.

• If the balance of the revaluation reserve fund would be negative after such allocation, then, it will be debited to the general reserve fund or the capital fund.

Note :

• The Government of Nepal will bear the loss that is unable to be adjusted after making the above allocations.

C ) Annual Budget: 

As we know, budget is the quantitative expression of different plans which is set for definite period of time. They are predetermined. All the works are to be made within the funds allocated for particular head. Annual budgets are the yearly set budgets.

The Board of Nepal Rastra Bank approves the estimated budget of incomes and expenditures and also approves the programs for the coming fiscal year. This approval is given prior to the beginning of each fiscal year. 

However, the Board may evaluate and amend the approved budget in each three months. This is done on the basis of actual position and the matters that can be estimated. Such budget is finally sent to Government of Nepal .




( For more details regarding objectives, powers, functions, duties, money, banknote and foreign exchange policies Nepal Rastra Bank, click on the above links )

COMPANIES (AUDITOR'S REPORT) ORDER, 2016

Ministry of Corporate Affairs (MCA) of India has issued Companies (Auditor's Report) Order, 2016 . This order is made applicable for Fiscal Year on or after April 1, 2015.

I believe that a law should be read in the form as if it is drafted in order to understand the real intention of the law maker. The whole law is as follows :

COMPANIES (AUDITOR'S REPORT) ORDER, 2016 - SUPERSESSION OF COMPANIES (AUDITOR'S REPORT) ORDER, 2015

NOTIFICATION SO 1228(E)[F.NO.17/45/2015-CL-V], DATED 29-3-2016

In exercise of the powers conferred by sub-section (11) of section 143 of the Companies Act, 2013 (18 of 2013) and in supersession of the Companies (Auditor's Report) Order, 2015 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), vide number S.O. 990 (E), dated the 10th April, 2015, except as respects things done or omitted to be done before such supersession, the Central Government, after consultation with the, committee constituted under proviso to sub-section (11) of section 143 of the Companies Act, 2013 hereby makes the following Order, namely:-

Short title, application and commencement

1. (1) This Order may be called the Companies (Auditor's Report) Order, 2016.

(2) It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013) [hereinafter referred to as the Companies Act], except—

(i)		a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(ii)		an insurance company as defined under the Insurance Act, 1938 (4 of 1938);
(iii)		a company licensed to operate under section 8 of the Companies Act;
(iv)		a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and
(v)		a private limited company, not being a subsidiary or holding company of a public company, having a paid up capital and reserves and surplus not more than rupees one crore as on the balance sheet date and which does not have total borrowings exceeding rupees one crore from any bank or financial institution at any point of time during the financial year and which does not have a total revenue as disclosed in Scheduled III to the Companies Act, 2013 (including revenue from discontinuing operations) exceeding rupees ten crore during the financial year as per the financial statements.

Auditor's report to contain matters specified in paragraphs 3 and 4

2. Every report made by the auditor under section 143 of the Companies Act, 2013 on the accounts of every company audited by him, to which this Order applies, for the financial years commencing on or after 1st April, 2015, shall in addition, contain the matters specified in paragraphs 3 and 4, as may be applicable:

Provided the Order shall not apply to the auditor's report on consolidated financial statements.

Matters to be included in the auditor's report

3. The auditor's report on the accounts of a company to which this Order applies shall include a statement on the following matters, namely:—

(i)		(a) whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
		(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;
		(c) whether the title deeds of immovable properties are held in the name of the company. If not, provide the details thereof;
(ii)		whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, whether they have been properly dealt with in the books of account;
(iii)		whether the company has granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. If so,

(a)		whether the terms and conditions of the grant of such loans are not prejudicial to the company's interest;
(b)		whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular;
(c)		if the amount is overdue, state the total amount overdue for more than ninety days, and whether reasonable steps have been taken by the company for recovery of the principal and interest;

(iv)		in respect of loans, investments, guarantees, and security whether provisions of sections 185 and 186 of the Companies Act, 2013 have been complied with. If not, provide the details thereof.
(v)		in case, the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder, where applicable, have been complied with? If not, the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?
(vi)		whether maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and whether such accounts and records have been so made and maintained.
(vii)		(a) whether the company is regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated;
		(b) where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute).
(viii)		whether the company has defaulted in repayment of loans or borrowing to a financial institution, bank, government or dues to debenture holders? If yes, the period and the amount of default to be reported (in case of defaults to banks, financial institutions, and government, lender wise details to be provided).
(ix)		whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported;
(x)		whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated;
(xi)		whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not, state the amount involved and steps taken by the company for securing refund of the same;
(xii)		whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;
(xiii)		whether all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;
(xiv)		whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of section 42 of the Companies Act, 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not, provide the details in respect of the amount involved and nature of non-compliance;
(xv)		whether the company has entered into any non-cash transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act, 2013 have been complied with;
(xvi)		whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and if so, whether the registration has been obtained.

Reasons to be stated for unfavorable or qualified answers

4. (1) Where, in the auditor's report, the answer to any of the questions referred to in paragraph 3 is unfavorable or qualified, the auditor's report shall also state the basis for such unfavorable or qualified answer, as the case may be.

(2) Where the auditor is unable to express any opinion on any specified matter, his report shall indicate such fact together with the reasons as to why it is not possible for him to give his opinion on the same.