06 September 2013
It shall apply to every company including a foreign company as defined in Sec 591 of the Companies Act, except the following :- (Nov 2011)
1) Banking Company 2) Insurance Company 3) A Company licensed to operate under section 25 of the Companies Act.
4) CARO will not be applicable if all the below conditions are satisfied together:-
· Private limited company · Paid up capital & reserves is 50 lacs or less (Reserve Include Capital Reserve, Revenue Reserve, Revaluation Reserve) Any debit balance of P&L a/c should be deducted from REVENUE RESERVE. If there is no revenue reserve then debit balance in P&L a/c cannot be deducted from capital and any reserves.
Miscellaneous expenditure should not be deducted.
· Outstanding loan from Banks or Financial Institutions is 25lacs or less It includes Term loan, Demand loan, Export credit, Working capital limit, Cash credit, Overdraft facilities, Bill Purchased and Bank Guarantees. Interests accrue and due should be included in loan.
Interests accrue but not due should not include in loan. Loan may be short term or long term, secured or unsecured. Loan taken from a private bank or foreign bank would also be taken in to consideration. · Turnover is 5 crores or less.
Turn Over- It includes sale of goods and services both and commission allowed to third parties.
But it does not include · Trade Discount · Sales Tax/Excise Duty · Sales Return In case of where the principal business of the company is letting out of property or it is an investment company, the rent or dividend/interest would constitute turn over.
All the above limits will be considered at any time during the financial year covered under audit.
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