CARO REPORT

This query is : Resolved

Devendra (Querist)
Follow

27 October 2010 ONE OF MY FRIEND TOLD ME THAT THE PVT. LTD COMPANY HAS TO FULFILL ALL THE THREE CONDITIONS, ONLY THEN THE CARO REPORT WILL APPLY TO THE PVT. LTD. CO. HE ALSO SAID THAT CARO REPORT APPLIES TO PUBLIC LTD. CO. EVEN IF IT FULFILLS ANY 1 CONDITION.

IS HE CORRECT?

REGARDS,
DEVENDRA

CA Navin Jain

CA Navin Jain (Expert)
Follow

27 October 2010 CARO IS MADATORY FOR PUBLIC COMAPNY. IN THE CASE OF PVT CO. ANY ONE CONDITION SHOULD BE FULFILLD

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

27 October 2010 CARO mandatory for public companies and if all the three limits are not crossed by a private limited company then CARO not applicable to the pvt. co.

Upgrade to CAclubindia Pro. Subscribe Now!

Guest

Guest (Expert)

27 October 2010
CARO mandatory for public companies

FINANCIAL YEAR:2009-2010

APPLICABILITY OF CARO, 2003 for Pvt ltd co

Conditions: Yes/No
Amt in Rs.

1 Whether private limited company Yes

2 Paid-up capital and reserves do not exceed Rs. 50 lakh Capital 1000000

Reserves 601620.54
1601620.54

Net worth 1601621 Yes

3 which doesn’t have loan outstanding Term Loan 1876180
exceeding Rs. 25 from any bank or Fin instn
1876180 Yes

4 Turnover does not exceed Rs. 5 crores 44970627.81 Yes

All the conditions are fulfilled. Hence, provisions of CARO, 2003 are not applicable.

at any point of time during the financial year,

all the conditions stated in the order must be satisfied simultaneously.

Conditions to be checked each year.

Ajay Mishra

Ajay Mishra (Expert)
Follow

27 October 2010 Hi

CARO, 2003 and CARO (Amendment), 2004 - A Comparative Analysis
[Submitted by Mr. V.M.V. Subba Rao, B.Com., F.C.A., D.I.S.A(ICA)]
Sl. No. Clause CARO, 2003 CARO (Amend), 2004 Amendments / Remarks
01 Clause (iv)(2) of Para 1 a private limited company with a paid up capital and reserves not more than fifty lakh rupees and has not accepted any public deposit and does not have loan outstanding ten lakh rupees or more from any bank or financial institution and does not have a turnover exceeding five crore rupees. 'a private limited company with a paid up capital and reserves not more than rupees fifty lakh and which does not have loan outstanding exceeding rupees twenty five lakh from any bank or financial institution and does not have a turnover exceeding rupees five crore at any point of time during the financial year. 1. The Pvt. Ltd. Companies cannot legally raise public deposits and hence the clause has been omitted.
2. The loan outstanding limit has been raised from Rs.10 lakhs to Rs. 25 lakhs above.
3. Now a private limited Company, in order to be exempt from the applicability of the Order, must satisfy all the conditions at any point of time during the financial year.

Ajay Mishra

Ajay Mishra (Expert)
Follow

27 October 2010 Hi

pplicability
The auditor is not required to report on issues included in CARO in respect of private limited companies, if they fulfill the following conditions:

* Private limited companies with the paid up capital and reserve not more than Rs 50 lacs and.
* Do not have outstanding loans exceeding Rs 25 lacs from any banks or financial institution and.
* Do not have a turnover exceeding Rs 5 crores at any point of time during the financial year.

It may however be noted that following classes of companies continue to be excluded from the applicability of CARO.

* A banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949.
* An insurance company as defined in clause (21) of section 2 of the Companies Act, 1956.
* A Company licensed to operate under section 25 of the Companies Act, 1956.

Regards