caro

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2010 Will u please tell me if the CARO applicable to a private limited co. having a net worth of Rs. 35 lakhs, Turnover exceeding Rs. 5 crores and loan from banks exceeding Rs. 25 Lakhs. Two of the ocnditions for the applicability of CARO are met and one condition regarding net worth is not met. Then CARO is applicable or not?????????

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

04 May 2010 Caro is not applicable to a private limited company with a paid-up capital and reserves not more than fifty lakh and does not have loan outstanding twenty five lakh rupees or more from any bank or financial institution and does not have a turnover exceeding five crore rupees, at any time during the financial year.

The words and are used here and not or. So all conditions needs to be satisfied for its non applicability and if one of the conditions are not satisfied CARO applicable.

ca dipti sharma

ca dipti sharma (Expert)
Follow

04 May 2010 NO CARO WILL NOT BE APPLICABLE IN YOUR CASE SINCE ALL THE CONDITION SHOULD BE FULFILLED SIMULTANEOUSLY.

Upgrade to CAclubindia Pro. Subscribe Now!

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

05 May 2010 Dear Dipti Sharma
I completely disagree with your view.

CARO is not applicable only if all the conditions should be fulfilled.

The exemption is given if all the conditions are satified not otherwise.

The Order exempts from its application a private limited company which fulfils all the conditions throughout the reporting period covered by the audit report.

So CARO will be applicable.

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

05 May 2010 A private limited company, in order to be exempt from the applicability of the Order, must satisfy all the conditions mentioned above cumulatively. In other words, even if one of the conditions is not satisfied, a private limited company’s auditor has to report on the matters specified in the Order.