Applicability of CARO 2004 for Private limited Cos

Hi all

The above condition are in Negative form. the condition give above is for not to apply caro 2004

Hence if any of the condition is full filled caro is applicable.

IF CARO IS APPLICABE TO COMPANY IN  FINANCIAL YEAR 2007-08 THEN IT IS ALSO APPLICABLE IN YEAR 2008-09 AS ON FIRST DAY CO IS NOT SATISFYING ALL CONDITIONS?????

mayur is correct

CARO IS APPLICABLE

whether auditor has to report on  CARO,2003 in case of a manufacturing co. even if conditions of 5 crores & 25 lacs is not satisfied???????

CARO’ is applicable to every company including a foreign company as
defined in section 591 of the Companies Act, 1956 (‘the Act’), except to:
 a banking company,
an insurance company,
a company licensed to operate under section 25 of the Act and
to private company meeting specified criteria:
New exception is added to exclude a private limited company with a paid up
capital and reserves <= Rs.50 lacs and has not accepted any public deposit
and does not have a loan outstanding from any bank or financial institution of
=> Rs.10 lacs and does not have a turnover > Rs.5 crores

pls anyone tell me

what is definition of turnover?

Does it include direct income?

The term, “turnover”, has not been defined by the Order. Part II of Schedule VI to the Act,
however, defines the term “turnover” as the aggregate amount for which sales are effected by the
company. It may be noted that the “sales effected” would include sale of goods as well as services
rendered by the company. In an agency relationship, turnover is the amount of commission earned
by the agent and not the aggregate amount for which sales are effected or services are rendered.
The term “turnover” is a commercial term and it should be construed in accordance with the
method of accounting regularly employed by the company. For ascertaining the limit of rupees five
crores:
(a)
sales tax collected or excise duty collected should not be taken into account if they are
credited separately to sales tax account or excise duty account;
(b)
trade discounts should be deducted from the figure of turnover;
(c)
commission allowed to third parties should not be deducted from the figure of turnover;
(d)
sales returns should be deducted from the figure of turnover even if the returns are from the
sales made in the earlier years. As a corollary, any sales returns etc., in respect of the
sales made during the year under report, if received after the end of that year, would not be
deductible from the figure of turnover of such year; and
(e)
The income received by way of rent or dividend/interest would not form part of “turnover”.
However, Part II of Schedule VI to the Companies Act, 1956 clarifies that in case of
companies rendering or supplying services, gross income derived from services rendered or
supplied, would be shown as turnover. Therefore, in cases where the principal business of
the company is letting out of property of the company or it is an investment company, the
rent or dividend/interest, respectively, would constitute “turnover”.

source:-ICAI website

For more Clarification

Contact

cavikas1985 @ yahoo.co.in

9988251002

Hi        

caro 2004apply to which company. reply me

gajendrarao

 In case of private limited company , CARO is applicable only  if

     1. paid up capital & free reserve exceeds  Rs 50 lakhs 

     2. Loan outstanding from any bank or finanical institution exceeds  Rs 25 lakhs

     3. Turnover excedess Rs 5 crores  in any day during the finanical year.

       Note: 1. if all these condition are not satisfied simultaneousllly  then only CARO will   

                    not applicable.

                 2. Even  one of these condition satisfied then only CARO is aplicable.

What is the definition for reserves in CARO? whether free reserves are to be included with this?

Is interest payable if goes more than 1 lakh to be acounted in audit report CARO 2004???