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, 2013 given below:-
- Listed Companies
- Unlisted Public Companies
- Private Companies having:
- Paid-up Share Capital and Reserve Exceeding Rs 50 Lakhs; or
- Outstanding Loans exceeding Rs 25 Lakhs; or
- Turnover exceeding Rs 5 Crore at any point of time during the financial year.
- If the Trigger of Rs 5 Crore is crossed at ANY point of time during the financial year then that private company has to mandatorily attach a CARO report in its Auditor report given by the Companies Auditor
- Small Companies will not be covered under CARO 2015 unless the outstanding loan EXCEEDS the trigger of Rs. 25 Lakhs.
CARO is NOT applicable to following list of Companies:-
- A Banking Company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 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 2013;
- A One Person Company as defined under clause (62) of section 2 of the Companies Act, 2013 and a Small Company as defined under clause (85) of section 2 of the Companies Act, 2013; and
- A Private Company having:
- Paid-up Share Capital and Reserve NOT Exceeding Rs 50 Lakh; or
- Outstanding Loans NOT Exceeding Rs 25 Lakhs; or
- Turnover NOT Exceeding Rs 5 Crore at any point of time during the financial year.