07 August 2009
It shall apply to every company including a foreign company as defined in section 591 of the Act, except the following:-
(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 in clause (21) of section 2 of the Act;
(iii) A company licensed to operate under section 25 of the Act; and
(iv) 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.
(3) It shall come into force on the 1st day of July, 2003.
It should be noted that unlike MAOCARO, 1988, the Companies (Auditor?s Report) Order, 2003 has done away with the concept of ?engages or proposes to engage?. The Order, therefore, does not require that the companies covered by it should be engaged or propose to engage in one or more of the following activities, namely:
(a) manufacturing, mining or processing;
(b) supplying and rendering services;
(c) trading; and
(d) the business of financing, investment, chit fund, nidhi or mutual benefit societies.
The Order is applicable to all companies except those as mentioned in paragraph 13 of the Statement. The Order, unlike MAOCARO, 1988, has not been divided into sections containing additional reporting requirements in case of a service company, a trading company or a chit fund, investment, nidhi or a mutual benefit company. However, it may be noted that paragraph 2 of the Order, containing the definitions of certain terms used in the Order, still contains definitions of the terms like investment company, service company, manufacturing company, etc.
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