Hi Sir,
In a private limited company, the turnover is less than 10 lakh and reserves and surplus is more than 100 crore which is due to share premium securities. Whether CARO is applicable to this company.
While going through the CARO applicability, there are exemptions to small company which is defined below, but also there is mention of applicability for private limited companies. I have given the provision below.
In above case, whether it falls in small company and CARO not applicable as per clause (e) below ??
or CARO applicable since reserves & surplus more than 1 crore, so clause (f) is applicable and CARO is applicable???
(e) A small company under Section 2 (85) of the Companies Act, 2013.
(1) As per sec 2(85) of Companies Act 2013 small company means a company, other than a public company:
a) Paid up share capital of which does not exceed Rs. 50 lacs or such higher amount as may be prescribed which shall not be more than Rs. 5 crore, and
b) Turnover of which as per its last profit and loss account does not exceed Rs. 2 crore or such higher amount as may be prescribed which shall not be more than Rs. 20 crore.
(2) The following company shall not qualify as a small company:
a) A holding company or a subsidiary company.
b) A company registered under Section 8 of the Act.
c) A company or body corporate governed by any special act
(f) The auditor of following type of Private Companies are not required to comment on the matter prescribed under CARO 2016:
(1) A private company which is not holding or subsidiary company of a public company, and
(2) A private company having a paid up capital and reserve and surplus not more than Rs. 1 crore as on the balance sheet date, and
(3) A private company which does not have total borrowing exceeding Rs. 1 crore from any bank and financial institution at any point of time during the financial year, and
(4) A private company which does not have total revenue exceeding Rs. 10 crore during the financial year.
Note: Such revenue means revenue as disclosed in scheduled III to the Companies Act, 2013 and includes revenue from discontinuing operation.
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