CARO 2016 Highlights Summary, MCA Order –Companies (Auditors’s Report) Order, 2016 dated 29th March 2016. Highlights of Changes in CARO 2015 Vs. CARO 2016. Hi Friends In this article we provide complete details for Difference Between CARO 2015 and CARO 2016, in this article we provide only highlights of changes in CARO 2016, if you want detailed Information related to CARO 2015 VS CARO 2016 then Please wait for our next article. Now you can scroll down below n check CARO 2016 Highlights Summary
CARO 2016 Highlights Summary
DELETED CLAUSES
No longer reporting is required on the following points:
1) Inventory:
-Procedure of physical verification of inventory
-Maintaining proper records of inventory
2) Internal Control system
3) Reporting amount transferred to investor education & protection fund.
4) Reporting of accumulated losses less than 50 % of its net worth and cash losses.
New Addition in CARO 2016
1) Fixed assets :
It is now required to be reported whether the title deeds of immovable property are held in the name of the Company & if not , details thereof are required to be provided
2) Loans:
It is now required to be reported whether the terms & conditions of grant of loans are not prejudicial to Company’s interest.
3) Loans, Investment and Guarantee:
In respect of loans, investments, guarantee , and security whether provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with. If not, details thereof are required to be provided.
4) Managerial remuneration:
Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act? If not, the amount involved and steps taken by the company for securing refund of the same has to be stated.
5) Nidhi company :
Whether the Nidhi Company has complied with the Net Owned Fund to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining 10%unencumbered term deposits as specified in the Nidhi rules, 2014 to meet out the liability.
6) Related party transactions :
Whether all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc as required by the applicable accounting standards.
7) Preferential allotment/private placement of shares :
Whether the company has made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of Section 42 of the Companies Act, 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not, provide the details in respect of amount involved and the nature of Non-compliance.
8) Non cash transactions with directors :
Whether the company has entered into any non-cash transactions with directors or Persons connected with him and if so, whether provisions of Section 192 of Companies Act, 2013 have been complied with.
9) Registration under RBI Act,1934 :
Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and if so, whether the registration has been obtained.
Amended in CARO 2016
1)Exemption of CARO is withdrawn for a private ltd company which is a Subsidiary or holding of a Public Company
2) Monetary limits and point of time for exemption revised to the following:
i) Paid up capital + R&S ≤ 1Cr ( As at the Balance sheet date)
ii) Total Borrowings ≤ 1 Cr. ( At any Point of time during the FY)
iii) Total Revenue ≤ 10 Cr. ( During the FY as per the Financial Statement)
3) Nomenclature of Loan is replaced by Total borrowings and turnover is replaced by Total Revenue as defined in Schedule III of the Companies act,2013 ( Including revenue from discontinuing operations)
4) It has been Specifically stated that the order shall not apply to the auditors report on Consolidated Financial statements
5) In case of fraud on or by the Company, words ‘ by its officers/ employees’ have been inserted.
6) Under CARO 2016,even money raised by way of public offer( including debt instruments )is covered.( Earlier only term loan was covered) In case these loans are not applied for the purpose for which they were raised , details are now required to be given of the delays/default and subsequent rectification.
7) Under CARO 2016, even the default in repayment of loans or borrowing to Government is covered under the clause 3 ( viii). In case of defaults to banks, financial institutions and Government, lender wise details to be provided.
8) Wealth tax is removed from the list of statutory dues.
9) Under CARO 2016, even the loan granted by the company to the LLP covered in the register maintained under section 189 is required to be reported .In case of loan granted by the company to the parties covered in the register maintained under section 189 of the act, It is now required to be reported if the schedule of Repayment of principal and payment of interest has been stipulated. Earlier reporting for overdue amount was required on the basis of amount involved ,i. e, More than 1 Lakhs . Now, it is based on time ,i.e, More than 90 days.
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