The auditor is not required to report on issues included in CARO in respect of private limited companies, if they fulfill the following conditions:
- Private limited companies with the paid up capital and reserve not more than Rs 50 lacs and.
- Do not have outstanding loans exceeding Rs 25 lacs from any banks or financial institution and.
- Do not have a turnover exceeding Rs 5 crores at any point of time during the financial year.
It may however be noted that following classes of companies continue to be excluded from the applicability of CARO.
- A banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949.
- An insurance company as defined in clause (21) of section 2 of the Companies Act, 1956.
- A Company licensed to operate under section 25 of the Companies Act, 1956.