Is loan taken by a Pvt Ltd company from a bank situated in a foreign country be considered for determining the applicability of CARO?
CA Tushar Singhania
(Asst. Manager Accts & Fin.)
(402 Points)
Replied 06 March 2014
Dear Sir,
CARO will be applicable if
1) Paid up capital is more than Rs 50 Lacs
2) Loan availed is more than Rs 25 Lacs
3) Turnover is more than Rs 500 Lacs
there is no segregation between types of loan, hence if the loan is more than 25 Lacs inclusing forgein bank loan, CARO will apply
Extract of CARO 2003
It shall apply to every company including a foreign company as defined in section 591 of the Act, except the following :—
a Banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
an insurance company as defined in clause (21) of section 2 of the Act;
a company licensed to operate under section 25 of the Act; and
a private limited company with a paid-up capital and reserves not more than fifty lakh rupees and does not have loan outstanding exceeding Rupees Twenty Fivelakhs from any bank or financial institution and does not have a turnover exceeding five crores rupees at any point of time during the financial year
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