12 October 2011
Sir, One of my client Private company has secured loan outstanding of Rs. 67 Lacs as on 31.03.2011 so CARO 2003 is applicable but its capital is only 5 Lacs and also turnover is only 70 Lacs.
Then Pls guide whether Internal Audit is applicable or not and if yes what will be the other compliance company has to follow.
27 October 2011
If the private company wants to claim exemption from the CARO, then the conditions(3) for the exemption shall be satisfied cumilatively. Even if one condition is not satisfied, the private company ceases to claim the exemption. Since the Private company said by you has exceed the limit 25 lacks of the secured loan. i.e., 67>25 laks
The company cannot claim the exemption from caro.
Coming to the internal audit, According to clause(vii) of the order, The Company which has the PAID up capital and FREE reserves of more than 50 laks OR
AVERAGe annual turnover the preceeding 3 consecutive financial years exceed rs.5 crs
Then clause (7) is applicable
In the given case the Turnover of the previous year is not enough but, it needs the Free reserves and the Average turnover of the preceeding 3 years
Applicability of Clause 7 cannot be determined with the given data.
CAclubindia
