Caro applicability

This query is : Resolved

Jainam Rathod (Querist)
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01 May 2013 Respected Sir,

The company has overdraft facility and year end balance is Rs.18 lakh. Further, The company has taken loan of Rs.15 Lakh for purchase of new asset from bank which is used for business purpose.

Whether CARO will Applicable or not ??

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 May 2013 Applicable because loans from banks or financial institutions are normally in the form of term loans,
demand loans, export credits, working capital limits,
cash credits, overdraft facilities, bills purchased or
discounted. Outstanding balances of such loans should be considered as loan outstanding for the purpose of
of computing the limit of rupees twenty five lakhs.

Courtesy:- Statement on Companies ( Auditor's Report ) Order ,2003.