MCA notified Companies (Auditor’s Report) Order, 2020 [CARO]
- Preface
Central Government, after
consultation with the National Financial Reporting Authority constituted under
section 132 of the Companies Act, 2013, hereby makes the following Order, namely:
This
Order may be called the Companies (Auditor’s Report) Order, 2020
Order may be called the Companies (Auditor’s Report) Order, 2020
- Commencement
of the order:
Order applies, for the
financial years commencing on or after the 1st April, 2019**
financial years commencing on or after the 1st April, 2019**
**As a relief measure announce by the Ministry, Applicability of Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the year 2019-20 due to Covid-19 pandemic.
**MCA vide order S.O. 4588(E) dated 17th December 2020 further extended applicability of the CARO 2020. As per order CARO 2020 will be applicable from FY 2021-22
- Applicability
of the order:
It shall apply to every company including a foreign company as defined
in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013)
[hereinafter referred to as the Companies Act], except–
in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013)
[hereinafter referred to as the Companies Act], except–
(i)
a banking company as defined
in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
a banking company as defined
in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(ii)
an insurance company as defined
under the Insurance Act,1938 (4 of 1938);
an insurance company as defined
under the Insurance Act,1938 (4 of 1938);
(iii)
a company licensed to operate
under section 8 of the Companies Act;
a company licensed to operate
under section 8 of the Companies Act;
(iv) a One Person Company as
defined in clause (62) of section 2 of the Companies Act and a small company as
defined in clause (85) of section 2 of the Companies Act; and
defined in clause (62) of section 2 of the Companies Act and a small company as
defined in clause (85) of section 2 of the Companies Act; and
(v) a private limited
company, not being a subsidiary or holding company of a public company,
company, not being a subsidiary or holding company of a public company,
having a paid up capital and reserves and surplus not more than one crore rupees as on the balance sheet date
and
which does not have total borrowings exceeding one crore rupees from any bank or financial institution at any
point of time during the financial year
point of time during the financial year
and
which does not have a total revenue as disclosed in Scheduled III to the Companies Act
(including revenue from discontinuing operations) exceeding ten crore rupees during the financial year as per the
financial statements.
(including revenue from discontinuing operations) exceeding ten crore rupees during the financial year as per the
financial statements.
Read full text of the CARO 2020 order: CARO 2020 will be applicable from FY 2021-22
