CARO 2015 For CMA December 2015 Exams. Reporting under Companies (Auditor’s Report) Order, 2015 for CWA/CMA Dec 2015 Exams. Hi Friends ICMAI Issued Notification for CMA December 2015 Exams ans As per ICMAI Notification here we are providing complete details for CARO 2015 For CWA/CMA December 2015 Exams. In this article you can find complete details regarding CARO 2015 like – Applicability of CARO 2015 for CMA Final Dec 2015 Exams, Applicability of CARO 2015 For CMA Inter Dec 2015 Exams, List of Companies Where CARO 2015 is Not Applicable, Select class of Private Companies to which CARO is not Applicable, Details for Small Company under the Companies Act, 2013, Details for “Paid up Capital” under Companies Act, 2013, Details for “Reserves” under Companies Act, 2013 etc. Now you can scroll down below and check complete details regarding CARO 2015 For CMA December 2015 Exams
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CARO 2015 For CMA December 2015 Exams
The Ministry of Corporate Affairs, on 10th April, 2015, notified the Companies (Auditor’s Report) Order, 2015 (CARO, 2015).
(i) Commencement: Financial Year start on or after 01/04/2014
(ii) Companies Exempted from the Applicability of CARO
CARO is not applicable to the following companies:
- Banking Company,
- Insurance Company,
- Section 8 (formerly Section 25) Company,
- Small Company within the meaning of Sec 2(85) of the Companies Act, 2013,
- One Person Company and
- Select class of Private Company.
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(iii) Select class of Private Companies to which CARO is not Applicable
CARO is not applicable to private limited companies which fulfils all the following conditions throughout the reporting period covered by the audit report :
- (i) its paid-up capital and reserves are ` 50 lacs or less;
- (ii) its outstanding loan from any bank or financial institution are ` 25 lacs or less; and
- (iii) its turnover does not exceed ` 5 crores
A private limited company, in order to be exempt from the applicability of CARO, must satisfy all the conditions mentioned above cumulatively. In other words, even if one of the conditions is not satisfied, a private limited company’s auditor has to report on the matters specified in the Order
(iv) Small Company under the Companies Act, 2013
Sec 2(85) of the Companies Act, 2013 defines a small company. As present, It is a private company whose paid-up share capital does not exceed ` 50 lacs and turnover as per its last profit and loss account does not exceed ` 2 crores
Provided that nothing aforesaid shall apply to (A) a holding company or a subsidiary company; (B) a company registered under section 8; or (C) a company or body corporate governed by any special Act.
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(v) “Paid up Capital” under Companies Act, 2013
Sec 2(64) of the Companies Act, 2013 defines the expression paid-up share capital or share capital paid-up to mean such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called;
Paid-up share capital would include both equity share capital as well as the preference share capital. While calculating the paid-up capital, amount of calls unpaid should be deducted from and the amount originally paid-up on forfeited shares should be added to the figure of paid-up capital. Share application money received should not be considered as part of the paid-up capital.
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(vi) “Reserves” under Companies Act, 2013
The term ―reserves‖ has not been defined under the Companies Act, 2013. However, the Guidance Note on Terms Used in Financial Statements issued by ICAI defines the term ―reserve‖ as, ―The portion of earnings, receipts or other surplus of an enterprise (whether capital or revenue) appropriated by management for a general or specific purpose other than provision for depreciation or diminution in the value of assets or for a known liability. The reserves are primarily of two types: capital reserves and revenue reserves‖. One may also refer Para 18 of the Statement on CARO 2003 for further clarification.
(vii) “Turnover” under Companies Act, 2013
The term ―turnover‖ has been defined in Section 2(91) of the Companies Act, 2013 to mean the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year.
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(viii) Applicability of CARO 2015 be illustrated through some examples
|1||Public company (irrespective of size of its paid up capital, reserves & turnover)||Yes||Applicable to all Public Cos except certain categories exempted|
|2||Private company having paid up capital of `25 lacs, Reserves of `50 lacs and Turnover of `1 Crores||No||General exemption to Small Company|
|3||Private company having paid up capital of `51 lacs with no Reserves and Turnover||Yes|
|4||Private Company (a subsidiary of public company) having paid up capital of `25 lacs with no Reserves and Turnover||Yes||Deemed to be a Public Company. Is not a Small Company too|
|5||Private Company (an associate of public company) having Paid up Capital of `25 lacs with Reserves of `1 Crores and Turnover of `2 Crores||No||General exemption to Small Company|
|6||Private Company having Paid up Capital of `25 lacs with Reserves of `26 lacs and Turnover of `3 Crores||Yes|
|7||Private Company which is a holding company having paid up capital of `25 lacs, Reserves of `26 lacs and turnover of not more than `2 crores||Yes||Not a Small Company u/s 2(85|
|8||Private Company which is a subsidiary company having paid up capital & reserves of `20 lacs each and turnover of `50 lacs, outstanding loan of `26 lacs from a bank||Yes||Not a Small Company u/s 2(85)|
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Detailed order of the Ministry of Corporate Affairs, Government of India, dated 10th April, 2015 relating to CARO is Download From below Link –