Tuesday 31 December 2013

Happy New Year

Krishna Dasan.A
A.Krishna Dasan & Co
Cost Accountants
2,DDA Commercial Complex,
C2C Block, Pocket 2, Janak Puri,
New Delhi-110058
Mob:98711-28831
         93111-28831
Email: aknair2002@cmaglobal.net.in
Website: www.cmaglobal.net.in



Monday 30 December 2013

HAPPY NEW YEAR

CMA Krishna Dasan.A
A.Krishna Dasan & Co
Cost Accountants
2,DDA Commercial Complex
C2C Block,Pocket 2,Janak Puri
New Delhi-110058
Mob: 98711-28831,93111-28831
Email: aknair2002@cmaglobal.net.in
Website: www.cmaglobal.net.in

Thursday 5 September 2013

Relaxation of Last date and additional fee in filing Form 23C for FY 2013-14 for appointment of Cost Auditor

 .
As per the General Circular No 14/2013 dated 3rd September 2013 , the MCA has extended the last date for                  filing Form 23C for the FY 2013-14 upto 31st October 2013 with normal applicable Fee

To view copy of circular ,pl click below given link
http://cmaglobal.net.in/OtherpageTheme11024.ASPX?PAGENAME=Cost%20Accounting&CompanyID=1577


By

CMA Krishna Dasan A
A.Krishna Dasan & Co
2,DDA Commercial Complex
C2C Block, Pocket 2
Janak Puri, New Delhi-58
Mob: 98711-28831,93111-28831
Email: aknair2002@cmaglobal.net.in
Website:www.cmaglobal.net.in

Monday 22 July 2013

Cost Records to be maintained by Companies


As per sub rule (2) of Rule 4,of Cost Accounting (Records) Rules , 2011 the companies are required to maintain cost records on regular basis in such manner so as to make it possible to calculate per unit cost of production or cost of operations, cost of sales and margin for each of its products and activities for every financial year on monthly/quarterly/half-yearly/annual basis.

The cost statements are to be prepared for every unit and every product produced, processed, manufactured or mined.

As per sub rule (3), the cost records are to be maintained in accordance with the generally accepted cost accounting principles and cost accounting standards issued by the Institute of cost accountants of india to the extent these are found to be relevant and applicable

These Rules have not prescribed any specific formats for the cost statement.
An illustrative list of Cost Records:
1. Production
1.1. Raw Material consumption register/report;
1.2. Production report;
1.3. Rejections/wastages/scrap report;
1.4. Report on stoppage of machines with reasons;
1.5. Idle time report with reasons;
1.6. Machine utilization report;
1.7. By-Product & Joint Products.
2. Work-in-Progress and Finished Goods
2.1 Process stock register- cost centre-wise and product wise;
2.2 Finished goods stock register- product-wise.
2.3 Daily Stock Accounts (DSA) maintained under Central Excise Law
3. Raw Materials and Stores Accounting
3.1 Goods received register;
3.2 Bin cards;
3.3 Materials/stores ledgers.
3.4 Packing Materials
4. Employee Cost
4.1 Attendance registers/ sheets;
4.2 Wages/salary sheets;
4.3 Leave and gratuity payments.
5. Repairs and Maintenance
5.1 Works order register / card showing material and spares consumed and labour utilized;
5.2 Procedure followed for routine maintenance;
5.3 Details major breakdowns & Repairs;
5.4 Details of Abnormal Repairs & Reconditioning activities.
6. Utilities (Water, Steam, Power, DM Water, Air, Effluent Treatment etc.)
6.1 Records of input and output;
6.2 Record of cost centre-wise allocation of outputs.
7. Overheads
7.1 Details such as production hours, labour hours, machine hours to facilitate distribution of overheads;
7.2 Overheads Keys.
8. Cost Accounts
8.1 Overheads analysis register;
8.2 Cost centre-wise assets register;
8.3 Product ledger;
8.4 Annexures and proformae as per rules, if any;
8.5 Reconciliation of profit/loss as per cost records and financial records. The Reconciliation Statement between cost accounts and financial accounts can also be treated as a Costing Profit & Loss Account. This statement shall normally start with the margin arrived at as per cost accounts and all other items of expenses not considered for determination of cost or incomes not considered for arriving at the margin as per cost accounts would get reflected.
9. Sales
9.1 Product-wise Sales analysis
9.2 Stock Transfer

9.3 Marketing/ Market Research Cost 


Compiled by :
CMA Krishna Dasan A
Mob: 98711-28831
Email: aknair2002@cmaglobal.net.in
Website:www.cmaglobal.net.in

Friday 5 July 2013

FAQ on Cost Accounting (Records) Rules , 2011

Dear All

Though industry wise cost audit comes into existence for more than one year still there are lot of doubts regarding applicability, turnover , manufacturing etc in the minds of stake holders . Clarification for almost all such questions were answered by the Institute of Cost Accountants of India by issuing  a series of FAQ last year itself . Somehow , it is felt this message is not reached all stakeholders and are groping in the dark. 

So to help all stake holders , we posted all these FAQ in our website www.cmaglobal.net.in .
To access FAQ issued by the institue pl click the link given below

FAQ reg CARR by ICAI


compiled by :

CMA Krishna Dasan.A
Mob: 98711-28831, 93111-28831
Email:aknair2002@cmaglobal.net.in
Blog: www.costaudit.blogspot.in

Tuesday 4 June 2013

Last date for appointment of cost auditor for FY 2013 - 14

Dear All

I would like to invite your kind attention to the The Companies (Cost Audit Report) Rules,
2011 dated 3rd june 2011  and General circular No.15/2011 dated 11th April 2011.

As per this notification

Every company as specified in sub-rule (1) shall, within ninety days of the commencement of every
financial year, file an application with the Central Government seeking prior approval for
appointment of the cost auditor, through electronic mode, in the prescribed form, alongwith the
prescribed fee as per the Companies (Fees on Applications) Rules, 1999, and requisite enclosures.

ie. within 90 days from the commencement of financial year , every company which is coming under cost audit has to file Form 23C with MCA along with (1) certified copy of Board resolution proposing appointment of cost auditor and (2) copy of certificate obtained from cost auditor regarding compliance of section 224 (1B) of the companies Act ,1956.

Penalty Clause:
If a company contravenes any provisions of this circular, the company and every officer thereof who is in default, including the persons referred to in sub-section (6) of section 209 of the Act, shall be punishable as provided under sub-section (2) of section 642 read with sub-sections (5) and (7) of section 209 and subsection (11) of section 233B of Companies Act, 1956.

To view the notification 
http://cmaglobal.net.in/OtherpageTheme11024.ASPX?PAGENAME=Cost%20Accounting&CompanyID=1577


compiled by :
CMA krishna Dasan A
98711-28831
aknair2002@cmaglobal.net.in


Thursday 31 January 2013

Last date for filing of Cost Audit Report and Compliance Report in XBRL Mode Extended


MCA extended the last date for filing Cost audit Report and Compliance Report in XBRL Mode upto 28th Fabruary 2013 vide General Circular No.2/2013 dated 31-01-2013.

To view a copy of the circular pl click the below mentioned link:

http://cmaglobal.net.in/OtherpageTheme11024.ASPX?PAGENAME=Cost%20Accounting&CompanyID=1577


Compiled by :

CMA Krishna Dasan.A
Mob: 98711-28831

Thursday 17 January 2013

Industries covered under cost audit for FY 2011-12 & 2012-13

Dear Professional Collegues :

Companies are 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 2011-12.

But still there is confusion in the minds of professional whether their company is covered under cost audit or not and many of them has shown in their report that the company is not coming under cost audit though it is not that . To Here is a list of industries covered under cost audit which are 

INDUSTRIES COVERED UNDER COST AUDIT  for FY 2011-12 & 2012-13
List of Industry/Activity under Cost Audit as on date
Criteria : Effective on all Companies
having turnover of Rs. 20 crores or more
or
having net worth of Rs. 5 crore
or
listed or getting listed in any Stock Exchange

(MCA Order No. F.No.52/26/CAB-2010 dtd 2nd May 2011)  

S.No.
Name of the Industry
Description of Activity and Relevant Chapter Heading of the Central Excise Tariff Act, 1985
Effective from Financial Year commencing
1.
Telecommunication Industry
Act, process, procedure, function, operation, technique, treatment or method employed in relation to telecasting, broadcasting, telecommunicating voice, text, picture, information, data or knowledge through any mode or medium
1st April 2011
2.
Petroleum Industry
Chapter 27 of CETA 1985 or
Production, processing, manufacturing or mining of crude oil, gases [including Natural Gas, Compressed Natural Gas, Liquefied Petroleum Gas and regasified gases, etc. as defined in the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006)] or Biogas or any other petroleum products
1st April 2011
3.
Electricity Industry
Generation of electricity from any source of energy, and includes transformation, transmission, distribution, and/or supply of electricity by any mode, or medium
1st April 2011
4.
Sugar Industry
Chapters 17 and 22 of CETA 1985 or
Production, processing, or manufacturing of any form or grade of sugar, molasses, or alcohol (including ethyl alcohol, rectified spirit, absolute alcohol, denatured alcohol, power alcohol, or solvent blends etc. but excluding potable alcohol) by using any raw materials
1st April 2011
5.
Fertilizer Industry
Chapter 31 of CETA 1985 or
Fertilizers as defined in clause (h) of Section 2 of the Fertilizer (Control) Order, 1985 made under Section 3 of the Essential Commodities Act, 1955 (10 of 1955)
1st April 2011
6.
Pharmaceutical Industry
Chapters 29 and 30 of CETA 1985 or
Production, processing, or manufacturing of bulk drugs or formulations and includes the meaning assigned to them under the Drugs (Prices Control) Order 1995
1st April 2011




List of Industry/Activity under Cost Audit as on date
Criteria :Effective on all Companies
having turnover of Rs. 100 crores or more
or
listed or getting listed in any Stock Exchange
(MCA Order No. F.No.52/26/CAB-2010 dtd 3rd May 2011)

SNo.
Name of the Industry
Description of Activity and Relevant Chapter Heading of the Central Excise Tariff Act, 1985
Effective from Financial Year commencing
7.
Cement
Chapter 25, 38 and 68 of CETA 1985
1st April 2011
8.
Tyres & Tubes
Chapter 40 of CETA 1985
1st April 2011
9.
Steel
Chapter 72 and 73 of CETA 1985
1st April 2011
10.
Paper
Chapter 47 and 48 of CETA 1985
1st April 2011
11.
Insecticides
Chapter 38 (includes all classes of Insecticides as defined under clause (e) of section 3 of the Insecticides Act, 1986 (46 of 1968) and included in the schedule annexed to the said Act and as amended from time to time.
1st April 2011
12.
Glass
Chapter 70 of CETA 1985
1st April 2011
13.
Paints & Varnishes
Chapter 32 of CETA 1985
1st April 2011
14.
Aluminum
Chapter 76 of CETA 1985
1st April 2011

Procedure for Appointment of Cost Auditor:

Step 1:Certificate from Cost Auditor
Obtain Certificate from Cost Auditor regarding compliance of section 224 (1- B) of the Companies Act, 1956.

Step 2: Board Resolution
Pass Board Resolution proposing appointment of cost auditor

Step 3:File Form 23C and Due date of filing Form 23C
The Company shall e-file its application with the  Central Government on www.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 documents as per existing practice i.e.
(i)            certified copy of the Board Resolution proposing appointment 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
However where a company is covered under cost audit for the first time vide cost audit order dated 2nd may 2011 , 3rd may 2011 , 30th june 2011 or 24th jan 2012 , the period of 90 days shall be counted from the date of concerned order. Every company has to follow the procedure prescribed vide MCA Circular No.15/2011 dated April 11 , 2011.

Step 4 : Approval by Central Govt.
Prior approval would be deemed to have been granted if the Central Government does not raise any query within 30 days of filing of Form 23C.
In case the Central Government raises any query within the said period of 30 days, the company would be required to clarify the issues and re-submit the Form 23C. The period of 30 days, in this case, would run from the date of resubmission of Form 23C.

Step 5  Formal letter of appointment to the Cost Auditor
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.

Step 6 File Form 23D by Cost Auditor
The Cost Auditor is required to inform the Central Government within thirty days of receipt of formal letter of appointment from the Company. Such intimation is required to be done in prescribed e-Form 23 D along with a copy of such appointment.

Other Points

(a)  Competent Authority :
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".

(b)  Disclosure to be made by Company in Annual Report:

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.

© Additional Fee for Late filing of Form 23C
Till 6th August 2012 , there were no penal provisions in the companies ( Fees on Applications) Rules, 1999 for delay in filing of Forms but as per MCA  notification dated 7th August 2012 , the penal provisions have been made applicable which are given below.

Period of Delay                                Fee Payable with the Application

Up to 30 days
          Two times of normal fee
More than 30 days and up to 60 days
           Four times of normal fee
More than 60 days and up to 90 days
           Six times of normal fee
More than 90 days
           Nine times of normal fee

(d) Normal Fee as per the Companies (Fees on applications ) Rules , 1999 :

Application made by  :                                                             Amount of Fees to be paid(Rs.)
1              A Company having an Authorised Share Capital of
(a)   Less than Rs.25 Lakh                                                                            500.00
(b)   Rs.25 Lakh  or more but less than Rs.5 Cr                                            1000.00
(c)   Rs. 5 Cr or More                                                                                   2000.00
     2.         A company limited by Guarantee but not having a share capital                   500.00
     3.         By an Association or proposed company for issue of licence
     under section 25 of the Act                                                                           500.00
     4.      By a company having a valid licence issued under section 25 of the Act          500.00
     5.      By a Foreign Company                                                                                   1000.00

PENAL PROVISIONS FOR NON-COMPLIANCE:
NON-COMPLIANCE BY COMPANY
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 sub-section (6) of Section 209 of the Act shall be punishable as provided under sub-section (2) of Section642 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 there under, 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 sub-section (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 ismade by the cost auditor in complying with the aforesaid provisions, he shall be punishable with fine, which may extend to five thousand rupees

compiled by :

CMA Krishna Dasan.A
Mob: 98711-28831
Email: aknair2002@cmaglobal.net.in
Website: www.cmaglobal.net.in