Ministry of Corporate Affairs has published companies Auditor’s Report Order or CARO 2015 on 10th April 2015 which will come into force on the date of its publication in official Gazette.
As per Companies Auditor’s Report Order (CARO) 2015, this order will be applicable to companies as stated below for the financial year commencing on or after 1st April 2014. This means, auditor has to include statement as per CARO 2015 in their auditor’s report for the financial year ending 31st March 2015.
CARO or Companies Auditor’s Report Rule 2015 shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2O13 (18 of 2O13), except –
- a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (1O of 1949);
- an insurance company as defined under the Insurance Act,1938 (4 of 1938);
- a company licensed to operate under section 8 of the Companies Act;
- a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and
- a private limited company
- with a paid up capital and reserves not more than Rs 50 lakh and
- which does not have loan outstanding exceeding Rs 25 lakh from any bank or financial institution and
- does not have a turnover exceeding Rs 5 crore at any point of time during the financial year.
In comparison to earlier CARO 2003, one person company has been included in the exception list and loan outstanding limit for a private limited company has been increased from Rs 10 lakhs to Rs 25 lakhs.
Small Companies will not be covered under CARO 2015 unless the outstanding loan crosses the stipulated limits of Rs 25 lakhs.