CARO Applicability?





Is CARO applicable to

a) A private company which is a subsidiary of a public company

b) A public company which has converted itself into a private company before the end of the FY



Please give your answer assuming that the company is within the CARO prescribed threshold limits

of capital, borrowings and turnover, and has not accepted deposits from the public





Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com)

CARO Is applicable to a) A private company which is a subsidiary of a public company


Caro is applicable to;

A private co which is a subsidiary of public co 

a public co which has converted it self to pvt co provided the pvt co has capital & reserves of more than Rs 50 lakhs and / or has a turnover exceedind 5 cr and / or loan of more than Rs 25 thousand  from bank or FI.

CA in Practice

Where in CARO it is written that it is applicable to a private company which is a subsidiary of a public company? it just says it is not applicable to a private limited company with a paid up capital and reserves not more than rupees fifty lakh and which does not have loan outstanding exceeding rupees twenty five lakh from any bank or financial institution and does not have a turnover exceeding rupees five crore at any point of time during the financial year.

A private limited company, in order to be exempt from the applicability of the Order, 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. There is no condition that if it is a subsidiary of a public limited company then CARO is applicable.

And for the second question i think it should be applicable as the limits are to checked at any time during the year and hence the order will be applicable.


CARO is applicable in 1st case i.e (a)

CA in Practice

yes CARO applicable in first case as i forgot the defination of public company which includes a private company which is a subsidiary of a company which is not a private company


CARO is aplicble in 1st case only...


hmm... friends, still divided opinion on case 2?

CA in practice

agreed with kumar

Senior Auditor


CARO is applicable on all companies who are accepts public deposits. and CARO shall be apply on private companies which fulfills all following condintions.....

1. Having paid up share capital >= 50 lacs

2. Turnover more than 5 crore in any year

3. Taken Loan >= 25 lacs at any time during the year








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