Tech.1 - Quote the Matters to be reported under CARO, 2003.

Sunday, August 24, 2008

Hint - Reportable Matters under CARO

1. Fixed Assets
a. Section – 293(1)(a), AS – 10 & 24, AAS – 13 & 16, GN - 13
b. Verification of Records
c. Physical verification
d. Effect of Disposal of Fixed Assets (if any) on “Going Concern Concept.

2. Inventories
a. AS – 2
b. Verification of Records
c. Physical verification
d. Procedure of Verification

3. Loans & Advances from/to Interested Parties
a. Section – 301, AS – 16, GN – 23
b. Registers maintained about Parties and Amount
c. Interest Rate not to be Prejudicial
d. Principal payment to be regular
e. If overdue greater than Rs. 1,00,000/- then steps of recovery

4. Internal Control
a. AAS – 6
b. Adequacy and Correction of weakness

5. Related Party Transactions
a. Section – 301, AS – 18, AAS – 23
b. Proper Register
c. At reasonable Market Price at relevant time (only if Transactions with one party during the year exceed Rs. 5,00,000/-)

6. Public Deposits
a. Section – 58A & AA, AS – 16, GN – 8 & 23
b. As per RBI
c. Orders of CLB/NCLAT/Court/Tribunal

7. Internal Audit
a. AAS – 7
b. Applicable if :-
i. Co. is Listed
ii. Paid-up Capital + Reserves > 50 Lacs (at opening of Financial Year)
iii. Average Turnover > 5 Crore for 3 consecutive years

8. Cost Records
a. Section – 209
b. If specified by Central Govt. then records to be made & maintained.

9. Statutory Dues
a. Section – 205C (Co. Act), 44AB (IT Act), Schedule VI, AS – 4
b. Whether paid within 6 months
c. Amount and Forum of Dispute (if any)
d. Mere representation to department does not constitute dispute

10. Sickness/Loss Making
a. Section – 2(46AA), 424A(2)
b. Co. is Sick/Loss making if :-
i. Registered for more than 5 years
ii. If losses are greater than 50% of net worth
iii. Loss in current year and last year

11. Repayment of dues to FIs/Banks/Debenture-holders
a. Section – 372A (Co. Act), Ch. 10 (SEBI DIP)
b. Defaulting amount and period

12. Loans & Advances
a. Section – 125, 372A & Sch. VI
b. Documents & Records to be maintained, if not so then deficiency to be reported

13. Nidhi/Mutual Benefit funds/Societies
a. Section – 620A
b. Net owed funds to deposit to be greater than 1:20
c. Income recognition (Assets, Standard, Sub-Standard, Loss Assets)
d. Credit appraisal
e. Repayment capacity of Borrower

14. Investment Co.s
a. Section – 49
b. Records maintained
c. Securities to be held in own name

15. Guarantee for Loan
a. Section – 372A
b. Not to be prejudicial to company

16. Term Loan
a. Section – 227(1A)
b. Whether applied to purpose

17. Utilisation of Funds
a. Whether Short-Term Fund applied in Long-Term Investment and Vice-Versa
b. if yes, Nature and Amount

18. Preferential Allotment of Shares
a. Section – 301, SEBI DIP
b. Prejudicial Amount (if any)

19. Security for Debentures
a. Whether created or not

End-Utilisation of Funds
a. Funds contains Equity/Preference Shares, Debentures and others
b. Disclosure of end utilization whether made or not

21. Frauds
a. Nature and Amount (if any)

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