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applicability of CARO 2016 for private limited company

Nithishg (Student CA IPC / IPCC) (28 Points)

13 October 2017

Is it CARO 2016 applicable for a private company which does not have paid up capital more than 1crores and loan from financial institutions less than 1 crores but turnover more than 10 crores????

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Ashiwini Ballodia (Managing Partner at TAXounting) (8737 Points)
Replied 13 October 2017

CARO 2016 is applicable because the turnover exceeds 10CR.

And 1cr is not seen for Share Capital rather it is shown for Paidup Capital+Reserve & Surplus

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Nithishg (Student CA IPC / IPCC) (28 Points)
Replied 13 October 2017

Thank you sir i asked why this doubt is that act says like this

HomepageCompany Law

TG Team in Company LawOn September 13, 2017

CARO 2016- Applicability & Reporting Requirements

Rajat Aggarwal

Background

Section 143(11) of the Companies act, 2013 (2013 Act) requires that the Auditor’s report of specified class of companies should include a statement on the prescribed matters. These reporting requirements have been prescribed under the companies (Auditor’s Report) Order, 2015 (CARO 2015) issued by the Ministry of Corporate Affairs (MCA) 10th April 2015.

New Development

The MCA had setup a committee on 16 September 2015 to examine and recommend matters that should form part of the statement. This statement would be attached with the auditor’s report under section 143(11) for the financial year FY 2015-16 and thereafter.

The committee made the recommendations on the matters to be included in the statement and on the basis of recommendations, MCA issued the draft companies (Auditor’s report) Order, 2016 (CARO 2016) on 9 February 2016.

Applicability of CARO, 2016

Every Report made by the auditor under section 143 of the 2013 would include CARO 2016 and CARO 2016 is applicable for Financial Year 2015-16, Financial Year 2016-17 and subsequent years. It would be applicable to every company (except some companies) including a foreign company defined under section 2(42) of the 2013 Act. The CARO, 2016 would not be applicable to the auditor’s report on consolidated financial statements.

Companies Exempted under the CARO-2016

In these companies the auditor is exempted to comment on matters prescribed under the CARO 2016 with compared to CARO 2015.

Companies not covered under CARO 2016

6. Private company not being a holding or a subsidiary company of a public company:

with a paid a paid up capital and reserves and surplus not more than INR 1croredoes not have total borrowings exceeding INR 1crore from any bank or any financial institution at any point of time during the FY anddoes not have total revenue as defined in schedule III, to the 2013 Act (including revenue from discontinuing operations) exceeding INR 10 crore during the financial year as per the financial statements they are using "and" clause between paragraph so i thought only if all conditions are satisfied it will be applicable

Nithishg (Student CA IPC / IPCC) (28 Points)
Replied 13 October 2017

Read the above starting from point 6 rest is irrelevant

Ashiwini Ballodia (Managing Partner at TAXounting) (8737 Points)
Replied 13 October 2017

Nithishg Ji kindly read the last line of point 6 it is given that 'all conditions are satisfied' in you case you have not satified the last condition i.e Turnover of 10 Cr and that's CARO is applicable to you