Beruflich Dokumente
Kultur Dokumente
By Vijay Maniar
MCA issued the Companies (Auditors Report) Order, 2016 (CARO 2016) on
March 29, 2016
Title deeds of immovable properties whether held in the name of the company
Compliance with Sections 185 & 186 in case of loans, investments, guarantees
and security
Compliance with Sections 177 & 188 in case of transaction with related parties.
Requirement to obtain registration under Section 45-IA of the RBI Act, 1934.
Fraud reporting fraud by others on the company has been omitted and only
frauds on the company by the officers/employees and fraud by the company is
to be reported.
Adequate internal control system for the purchase of inventory and fixed assets
and for the sale of goods and services.
Reporting on the accumulated losses not less than fifty per cent of the net worth
of the company.
Guarantee for loans taken by others from banks or financial institutions, the
terms and conditions whereof are prejudicial to the interest of the company.
Title deeds
Exemption (subject to the condition that the loan is used by the subsidiary for its principal
business activity):
- Loan given by holding company to wholly owned subsidiary
- Guarantee or security provided by holding company for loan taken by wholly owned
subsidiary
- Guarantee or security provided by holding company for loan taken from banks or
financial institutions by the subsidiary.
Section 186:
Understanding requirements of section 186 how is it different from section 185
Special resolution not required if loan, guarantee or security is provided to wholly owned
subsidiary or JV, or for acquiring securities of the wholly owned subsidiary
Whether approval is required if the loan, investment, guarantee, etc. is less than the limit
prescribed in section 186?
Other
person in whom
director is interested
Director of the Director of the holding Firm in which the such Private company in
company or his company or his director or his relative which such director is
partner or his relative partner or his relative is a partner a director or member
Securities covered
Schedule V
Amount involved and steps taken by the company for securing refund
Noncash transactions
Court Scheme
50-50 test
Deposits are taken and lending are done only to the members
Net Owned funds as per last balance sheet = Paid up share capital (+) free
Reserves (-) accumulated losses (-) Intangible Assets (-) Proceeds from issue
of preference shares
Demands stayed
Dues for multiple years can be aggregated to provide stage wise summary of the
disputed dues
All defaults existing on the balance sheet date has to be reported irrespective of the
period in which the default has occurred
For loans from banks/FI/Government only principal amount has to be considered. For
debenture holders both principal and interest o/s has to be considered
Clause (ix): Whether moneys raised by way of initial public offer or further
public offer (including debt instruments) and term loans were applied for
the purposes for which those are raised. If not, the details together with
delays or default and subsequent rectification, if any, as may be applicable,
be reported;
What has changed from the requirements of CARO 2015?
- Utilization of monies raised via IPO/FPO has been added
- Delays or default and subsequent rectification has been added
Since the order is silent term loans raised from persons other than bank /
financial institution has also to be considered.
End use for which the funds are raised should be verified from the offer
document or from the loan agreement.
Cost records means details relating to utilisation of materials, labour and other
items of cost applicable to production of goods or provision of services.