AUDIT OF COST ACCOUNTS IN CERTAIN CASES - ORDER UNDER SECTION 233B(1)
ORDER [F. NO. 52/26/CAB-2010], DATED 30-6-2011
Consequent upon notification of the Companies (Cost Accounting Records) Rules, 2011 published vide G.S.R. 429(E), dated 3rd June, 2011 and in modification of the earlier Order of even number, dated 3rd May, 2011, the Central Government hereby makes the following Order:
In exercise of the powers conferred by sub-section (1) of section 233B of the Companies Act, 1956 (1 of 1956), the Central Government, being of the opinion that it is necessary to do so, hereby directs that all companies to which the Companies (Cost Accounting Records) Rules, 2011 apply, and which are engaged in the production, processing, manufacturing or mining of the following products/activities, including intermediate products and articles or allied products thereof, and wherein the aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds hundred crores of rupees; or wherein the company's equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India, shall get its cost accounting records, in respect of each of its financial year commencing on or after the 1st day of April, 2011, audited by a cost auditor who shall be, either a cost accountant or a firm of cost accountants, holding valid certificate of practice under the provisions of Cost and Works Accountants Act, 1959 (23 of 1959).
S.No. | Name of the | Relevant Chapter |
1. | Cement | Chapters 25, 38 |
2. | Tyres & Tubes | Chapter 40 |
3. | Steel | Chapters 72 and |
4. | Paper | Chapters 47 and |
5. | Insecticides* | Chapter 38 |
6. | Glass | Chapter 70 |
7. | Paints & | Chapter 32 |
8. | Aluminium | Chapter 76 |
*Includes all classes of Insecticides as defined under clause (e) of section 3 of the Insecticides Act, 1968 (46 of 1968) and included in the schedule annexed to the said Act and as amended from time to time.
2. Every company to which these orders apply shall follow the revised procedure for appointment of cost auditor as laid down vide Ministry of Corporate Affairs' General Circular No. 15/2011 [52/5/CAB-2011], dated 11th April, 2011. For companies covered first time under these modified orders and wherein their financial year has already commenced between the 1st day of April, 2011 and the date of these orders, the period of ninety days for e-filing their applications with the Central Government in the prescribed Form 23C for appointment of cost auditors shall be counted from the date of these orders.
3. The audit shall be conducted in such manner as will enable the cost auditor to prepare the report in accordance with the Companies (Cost Audit Report) Rules, 2011 published vide G.S.R. 430(E), dated 3rd June, 2011. The report of the cost auditor shall be forwarded to the Central Government in the prescribed format within the time stipulated under the said Rules.
4. These orders do not apply to a company which is a body corporate governed by any special Act.
5. All companies covered by these orders and wherein cost audit orders have been issued so far in respect of products/activities covered by any or all of the Cost Accounting Records Rules as they existed before their supersession by the Companies (Cost Accounting Records) Rules, 2011 published vide G.S.R. 429(E), dated 3rd June, 2011 shall continue to comply with the said orders until these orders become applicable on them.
6. If a company contravenes any provisions of these orders, the company and every officer thereof who is in default, including the persons referred to in sub-section (6) of section 209 of the Companies Act, 1956, shall be punishable as provided under sub-section (2) of section 642 read with sub-section (11) of section 233B of the Companies Act, 1956 (1 of 1956).
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