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CARO 2016 (Part 2 (Statutory Dues [Clause 3 (vii)] (undisputed statutory…
CARO 2016
Part 2
Statutory Dues [Clause 3 (vii)]
undisputed statutory dues
Whether the company is regular in depositing undisputed statutory dues with the appropriate authorities includingPF, ESI, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess or any other statutory dues.
If the company is not regular in depositing such statutory dues,
the extent of arrears of outstanding statutory dues as at the last day of the financial year concerned for a
period of more than six months (6 MONTHS ) from the date they become payable
, shall be indicated by the auditor.
Disputed statutory dues
In case dues of income tax and sales tax or service tax or duty of custom or duty of excise or value added tax have not been deposited on account of any dispute,
then the amount involved and the forum where dispute is pending shall be disclosed.
Repayment of Loan [Clause 3 (viii)]
Whether the company has
DEFAULTED
in repayment of loans and borrowing to a financial institution, banks,
government or dues to debenture holders. .
If yes, the period and the amount of default to be reported
Utilisation of IPO and further public offer
(IPO,FPO, TERM LOAN)
[Clause 3 (ix)]
Whether money raised by way of
IPO,FPO, TERM LOAN
were applied for the
PURPOSE FOR WHICH THOSE WERE RAISED
If not, the details together with delays and defaults and subsequent rectification, if any, as may be applicable, be reported
Reporting of Fraud [Clause 3 (x)]
Whether any fraud by the company or any fraud on the company by its officers and employees has been noticed or reported during the year:
if yes, the nature and the amount involved is to be indicated.
Approval of managerial remuneration [Clause 3 (xi)
Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provision of Section 197 read with schedule 5 to the Companies Act, 2013.
If not, state the amount involved and step taken by the company for securing refund of the same.
Nidhi Company [Clause 3 (xii)]
Whether the Nidhi company has
COMPLIED WITH NET OWNED FUNDS
to deposit in the ratio of 1:20 to meet out the liability and
whether the Nidhi company is maintain 10% unencumbered term deposit as specified in the Nidhi rules 2014 to meet out the liability
RPT Related Party Transaction [Clause 3 (xiii)]
Whether all transaction with the related party is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been
DISCLOSED
in the financial statement etc., as required by the applicable accounting standard.
Private Placement of Preferential Issues [Clause 3 (xiv)]
Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review
if so, as to whether the requirement of Section 42 of Companies Act, 2013 have been complied with
and and the amount raised has been used for the purpose for which the funds were raised
If not, provide the detail in respect of the amount involved and the nature of noncompliance
Non Cash Transaction [Clause 3 (xv)]
Whether the company has entered into any non-cash transaction with the director or person concerned with his and
if so, whether the provision of Section 192 of Companies Act, 2013 has been complied with.
Register under RBI Act 1934 [Clause 3 (xvi)]
Whether the company is required to be registered under Section 45 IA of Reserve Bank of India Act, 1934 and if so,
whether the registration has been obtained.
Applicability
CARO 2016 applicable to every company INCLUDING A FOREIGN COMPANY as defined in clause (42) of Section 2 of the Companies Act 2013
The following classes of companies are outside the purview of the CARO 2016.
Banking company
Insurance Company
Section 8 companies
one person company (OPC)
small company under Section 2 (85) of the Companies Act, 2013
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auditor of following type of Private Companies are not required to comment on the matter prescribed under CARO 2016:
(1) A private company which is not holding or subsidiary company of a public company, and
(2) A private company having a paid up capital and reserve and surplus not more than ` 1 crore as on the balance sheet date, and
(3) A private company which does not have total borrowing exceeding ` 1 crore from any bank and financial institution at any point of time during the financial year, and
(4) A private company which does not have total revenue exceeding ` 10 crore during the financial year.
Such revenue means revenue as disclosed in scheduled III to the Companies Act, 2013 and includes revenue from discontinuing operation.
Matters included in CARO 2016 are discussed below:
Part 1
Fixed Asset [clause 3 (i)]
(b) Whether these fixed asset have been
PHYSICALLY VERIFIED BY MANAGEMENT
at reasonable interval.
(c) Whether any
MATERIAL DISCREPANCIES
were noticed on such verification and if so, whether the same have been
PROPERLY DEALT WITH IN BOOKS OF ACCOUNTS
(a) Whether the company is maintain proper records showing
FULL PARTICULARS INCLUDING QUANTITATIVE DETAILS AND SITUATION
of fixed asset.
Inventory [Clause 3 (ii)]
(a) Whether
PHYSICAL VERIFICATION OF INVENTORIES
has been conducted at reasonable interval by the management.
(b) Whether any
MATERIAL DISCREPANCIES
were noticed on such verification and if so, whether the same have been
PROPERLY DEALT WITH IN BOOKS OF ACCOUNTS
Loan given by Company [Clause 3 (iii)]
Whether the company has granted any
LOANS
secured or unsecured to companies, firms, LLP or other parties covered in the registered maintained under Section 189 of the Companies Act, 2013. If so,
(a) Whether
TERMS AND CONDITIONS
of the grant of such loan are not prejudicial to the company’s interest.
(b) Whether the
SCHEDULE OF REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST
has been stipulated and whether the repayments and receipts
ARE REGULAR
(c) If the amount is
OVERDUE
, state the total
AMOUNT OVERDUE
, state the total amount overdue for
MORE THAN 90 DAYS
and whether
REASONABLE STEPS
have been taken by the company for recovery of principal.
Loan to director and investment by the company [Clause 3 (iv)]
In respect of loan, investment, guarantees and security whether provision of Sections 185 and 186 of the Companies Act, 2013 has been complied with. If not, provide the details thereof.
Deposits [Clause 3 (v)]
In case, the company has accepted deposits, whether the following has been complied with:
Directives issued by the reserve bank of India
(a) The
provision of sec 73 to 76
or any other relevant provision of Companies Act, 2013 and the rules framed there under, and
(b) If the order has been
passed by company law board (CLB) or National company law tribunal (NCLT) or RBI
or any court or any other tribunal.
(c) However, if any of the above not complied with, the nature of contraventions should be stated.
Cost Records [Clause 3 (vi)]
If Central Government has specified maintenance of cost records under sec 148 (1) of Companies Act, 2013 whether such accounts and records have been made and maintained.
small company under Section 2 (85) of the Companies Act, 2013, means a company, other than a public company:
Paid up share capital of which does not exceed 50 lacs or such higher amount as may be prescribed which shall not be more than ` 5 crore, and
Turnover of which as per its last profit and loss account does not exceed 2 crore or such higher amount as may be prescribed which shall not be more than ` 20 crore
The following company shall not qualify as a small company:
A holding company or a subsidiary company.
A company registered under Section 8 of the Act.
A company or body corporate governed by any special act
SECTION 192 REQUIREMENTS :
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APPROVAL
under this section shall also be required to be obtained by passing a resolution in general meeting of the company/ holding company.
PARTIES INVOLVED
: a director of the company or its holding, subsidiary or associate company or a person connected with him AND company
NOTICE
for approval of the resolution by the company or holding company in general meeting
include the particulars of the arrangement along with the value of the assets involved in such arrangement duly calculated by a registered valuer.
SEC: 45IA Requirement of registration and net owned fund FOR NBFC
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SECTION 42
PRIVATE PLACEMENT
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1.Maximum Members
2.Records
3.Receiving Money
4.Share Allotment
5. Board Resolution
6. Statutory Filing PAS4,PAS5
Section 177 : All RPT require approval from audit committee. Audit committee may make omnibus approval and may specify criteria for omnibus approval after obtaining approval from board of directors.
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Section 188 : RPT transactions provisions (Board or Special resolution)
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Section 197 : Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits
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