18 May 2011
Caro applies to all companies except 1.a banking company as defined in Banking Regulation Act,1949. 2. an insurance company as defined in the Companies act,1956. 3.a company licensed u/s 25 of the CompaniesAct,1956. 4.a private limited company with paid up capital and reserves not more than Rs. 50 lakhs and does not have outstanding loan exceeding Rs. 25 lakhs or more from any bank or financial institution and does not have a turnover exceeding Rs. 5 crores.
As a corollary to the above, the pvt ltd company referred in the querry if not coming under either or all conditions as in clause 4 above, Caro squarely applies to the said company meaning thereby, the auditor has to examine point wise applicability and give his/ her comments on applicable clauses and has to say 'not applicable' for inapplicable clauses while framing the audit report under caro.
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