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Sunday, June 1, 2008

CARO - Applicability


Applicability
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.

3 comments:

chandni said...

thanks it gave me right and clear info

Uma said...

Its more clear wen u put the applicability in a postive way.!!
It must be like..the auditor needs to report under CARO when the follwing three conditions are fulfilled:
1.paid up capital and reserves are more than Rs.50 Lacs
2.which has loan outstanding exceeding Rs.25 from any bank or Fin instn and
3.has turnover of turnover of Rs.5 crores

Uma said...

Its more clear wen u put the applicability in a postive way.!!
It must be like..the auditor needs to report under CARO when the follwing three conditions are fulfilled:
1.paid up capital and reserves are more than Rs.50 Lacs
2.which has loan outstanding exceeding Rs.25 from any bank or Fin instn and
3.has turnover of turnover of Rs.5 crores