Caro applicability

Hello,,,

There is a Pvt ltd Co.whose paid-up capital is more than Rs.50 lacs but there is negative balance of reserves and surplus so the net worth becomes less than Rs.50 lacs. Last year also there was the same situation but CARO has been prepared.So can anyone please let me know why was CARO prepared last year???Are there any other provisions for applicability of CARO that if once applicable then how many years it will become applicable???

Thanx For valuable Reply......