DATE OF SUBMISSION OF COST AUDIT REPORT & COMPLIANCE REPORT ONLY EXTENDED TO 31ST DEC 2012 AND NOT THE DATE OF APPOINTMENT OF COST AUDITOR :
Dear Professional Collegues ,
As per General Circular No. 18/ 2012 dated 26th July 2012 , cost auditors and companies can file their cost audit reports and compliance report for the financial year 2011-12 in the XBRL mode without any penalty upto 31st December 2012.
Here the MCA extended the last date for submission of Cost Audit Report and Compliance Report for FY 2011-12 only . It is silent on last date for appointment of Cost Auditor and regarding appointment of Cost Auditor , the below given general Circular No.15/2011 dated 11th April 2011 is applicable .
Salient Features of the above mentioned General Circular No. 15/2011 dated 11th April 2011.
1.The Company is required to e-file its application with the Central Government on ww.mca.gov.in portal, in the prescribed Form 23C within ninety (90) days from the date of commencement of each financial year, along with the prescribed fee as per the Companies (Fees on Application) Rules, 1999 as amended from time to time and other decuments as per existing practice i.e.
(i) certified copy of the Board Resolution proposing appopintment of cost auditor;
and
(ii) copy of the certificate obtained from the cost auditor regarding compliance
of section 224(1-B) of the Companies Act, 1956
2. After filing the online application by the Company, the same shall be deemed to be approved by the Central Government, unless contrary is heard within thirty (30) days from the date of filing such application.
However, if within thrity(30) days from the date of filing such application, the Central Government directs the Company to re-submit the said application with such addtional information or explanation, as may be specified in that direction, the period of thrity days for deemed approval of the Central Government will be counted from the date of re-submisson of Form 23C by the Company.
3.After obtaining approval of the Central Government (deemed or otherwise), the Company will be required to issue a formal letter of appointment to the cost auditor.
4.Competent Authority to appoint Cost Auditor
As per provisions of section 233B(2), the Board of Directors of a Company can appoint a cost auditor after obtaining prior approval of the Central Government. Under the revised procedure, the first point of reference will be the Audit Committee to ensure that the cost auditor is free from any disqualification as
specified under section 233B (5) read with section 224 and sub-section (3) or sub-section (4) of section 226 of the Companies Act, 1956. The Audit Committee should also ensure that the cost auditor is independent and is at arm's length relationship with the company. After ascertaining the eligibility, the Audit Committee will recommend to the Board of Directors for appointment of the Cost Auditor.
In those companies where constitution of an Audit Committee is not required by law, the functions of the "Audit Committee" as per the procedure will be discharged by the "Board of Directors".
5.The Company is required to disclose full particulars of the cost auditor along with the due date and actual date of filing of the Cost Audit Report by the cost auditor, in its Annual Report for each relevant financial year. Since the notification has made effective from April 1, 2011, companies under cost audit are required to furnish the details in its Annual Report from the financial year
2010-11.
Since the cost audit report of a particular financial year may not have been submitted before publication of the Annual Report, relevant details of due and actual date of filing for the last financial year and the due date of filing for the current year may be published in the Annual Report
6. Obligation of Cost Auditor:
The Cost Auditor is required to inform the Central Government within thrity days of receipt of formal letter of appointment from the Company. Such intimation is required to be done in prescribed e-Form 23 D alongwith a copy of such appointment.
7.penal provisions for non-compliance of any of the provisions of the Act regarding cost audit? Non compliance by Companies:
If a Company contravenes any provision of this circular, the company and every officer thereof who is in default, including the persons referred to in subsection (6) of Section 209 of the Act shall be punishable as provided under sub-section (2) of Section 642 read with sub-section (5) and (7) of Section 209 and sub-section (11) of Section 233B of Companies Act, 1956.
Relevant provisions of Section 209 of the Companies Act, 1956 are as follows:
Sub- section (5) of Section 209 provides that if any of the persons referred to in sub-section (6) fails to take all reasonable steps to secure compliance by the company with the requirements of this section, or has by his own wilful act been the cause of any default by the company thereunder, he shall, in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both:
Provided that in any proceedings against a person in respect of an offence under this section consisting of a failure to take reasonable steps to secure compliance by the company with the requirements of this section, it shall be a defence to prove that a competent and reliable person was charged with the duty of seeking that those requirements were complied with and was in a position to discharge that duty:
Provided further that no person shall be sentenced to imprisonment for any such offence unless it was committed wilfully.
Sub- section (6) of Section 209 provides that the persons referred to in subsection (5) are the following, namely:—
(a) where the company has a managing director or manager, such managing director or manager and all officers and other employees of the company;
and
(d) where the company has neither a managing director nor manager, every director of the company;
Sub- section (7) of Section 209 provides that if any person, not being a person referred to in sub-section (6), having been charged by the managing director, manager or Board of directors, as the case may be, with the duty of seeing that the requirements of this section are complied with makes default in doing so, he shall, in respect of each offence, be punishable with imprisonment for a term which my extend to six months, or with fine which may extend to ten thousand rupees, or with both.
Relevant provision of Section 642 of the Companies Act 1956 is as under:
Sub-section (2) of Section 642 provides that any rule made under sub-section (1) may provide that a contravention thereof shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which such contravention continues.
Non compliance by Cost Auditor
If default is made by the cost auditor in complying with the aforesaid provisions, he shall be punishable with fine, which may extend to five thousand rupees.
Krishna Dasan.A
A.Krishna Dasan & Co.
Cost and Management Accountants
2 & 12(FF), DDA Commercial Complex
C-2-C Block, Pocket 2, Janak Puri,
New Delhi-110058
Mob: 98711-28831, 93111-28831
Email:aknair2002@hotmail.com
No comments:
Post a Comment