Non applicability of Cash flow statement

1. One Person company as defined under section 2(62) of the 2013 Act

2. It is a Dormant Company as per Section of the Companies Act, 2013

3. It is a Small Company as defined under Section 2(85) of Companies Act, 2013. Here Small Company means a company who’s paid up capital is less than 50 Lacs and has turnover less than 2 Crores during the Financial Year. But such exemptions are not available to Subsidiary of a Holding company which has applicability to mandatory preparation of CFS.

Non Applicability of CARO

Companies not covered under CARO 2016

1. Banking Companies as defined under section 5(c) of the Banking Regulation Act, 1949

2. Insurance Company as defined under the Insurance Act, 1938

3. Companies Incorporated with Charitable objects etc, i.e. companies licensed to operate under section 8 of Act 2013

4. One Person company as defined under section 2(62) of the 2013 Act

5. Small Company as defined under 2(85) of the 2013 Act

6. Private company not being a holding or a subsidiary company of a public company:-

  • with a paid a paid up capital and reserves and surplus not more than INR 1crore
  • does not have total borrowings exceeding INR 1crore from any bank or any financial institution at any point of time during the FY and
  • does not have total revenue as defined in schedule III, to the 2013 Act (including revenue from discontinuing operations) exceeding INR  10 crore during the financial year as per the financial statements.

Non applicability of Internal Financial Controls

a. It is a one person company or a small company,

b. Small Companies

c. It has a turnover of less than INR 50 crore as per the latest audited financial statements Or

d. the borrowings of such a company from banks or financial institutions or any body corporate at any point of time during the FY is less than INR 25 crore.

In short, any company which does not fall in the above criteria, then the relevant provision would be applicable to that Company.

Please refer all the relevant section, rules, notifications, amendments as applicable. The Author is not responsible for any losses incurred. Content is merely for sharing knowledge. Author can be reached at or 9819244185

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Category : Company Law (3997)
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Tags : Companies Act (2462) Companies Act 2013 (2235)

2 responses to “Applicability of CARO, Internal Financial Controls & Cash Flow Statement”

  1. srinivas kyatham says:

    whether cash flow applicable for unlisted private limited company
    please discuss urgently if possible – 9769523230

  2. A Dsouza says:

    Can you post the format of auditors report in case all three are not applicable?

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