The Ministry of Corporate Affairs (MCA) amended the Companies (Cost Records and Audit) Rules, 2014 vide notification dated 14th July, 2016 by the Companies (Cost Records and Audit) Rules, 2016. The highlight of same is as under:
Points
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Prior
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Amendment
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Definition
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“Cost
Audit Report” means the report duly audited and signed by the cost auditor
including attachment, annexure, qualifications or observations etc. to cost
audit report;
|
Cost
Audit Report” means the duly signed cost auditor’s report on the cost records
examined and cost statements which are prepared as per these rules, including
attachment, annexure, qualifications or observations attached with or
included in such report
|
Application of Cost Records
|
Rule
3 prescribes lndustry / Sector/ Product/ Services for which cost
records are applicable. The products and services are divided into
Regulated (Table A) and Non Regulated Sector (Table B)
|
Rule
3 is modified thereby making changes in the Regulated and Non Regulated
Sector
Regulated Sector
(Table A)
Inclusion:
1. Telecommunication
Services made available to users
Included- Activities which requires authorisation or
license issued by the Dept. Of Telecommunication, Government of India under
Indian Telegraph Act, 1885 (13 of 1885)
2. Petroleum
Products:
Included activities
regulated by Petroleum and Natural Gas Regulatory Board
Deletion :
1. Company engaged in generation of
electricity for captive consumption through captive generation plant.
Non-Regulated
Sector (Table B)
Inclusion:
1.Explosives
2.Iron
3.Mechanical
Appliances
|
Appointment of
cost Auditor
|
Classes
of Companies prescribed in Rule 6 should appoint cost auditor within
prescribed period
|
The
Cost auditor should provide following before appointment:
1. Written consent
2. A certificate to the effect of the
following-
· Eligible and not disqualified for
appointment under Companies Act, 2013 and the Costs and Works Accountant Act,
1959 and rules and regulations made thereunder
·
Satisfies the Criteria provided in
Section 141 of the Companies Act, 2013;
·
Appointment is within limit as
prescribed by the act; List of proceedings pending with respect to
professional matters of conduct against auditor as disclosed in certificate
is true and correct;
|
Removal of Auditor
|
No
such Provision
|
Proviso inserted
for removal of Auditor:
Removal
of Auditor before expiry of his term
2nd
Proviso Inserted:
·
Intimation of Removal of Auditor to be
filed with Registrar along with intimation of
appointment of another auditor in Form CRA-2 (Copy of Board Resolution
for Removal of Auditor to be enclosed)
|
Approval of
Board on annexures of Cost audit report
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Not
required earlier.
|
The
cost statements including other statements to be annexed to Cost Audit Report
shall be approved by the Board before signing by directors on behalf of
Board, for submission to the cost auditor for his report thereon.
|
Cost Audit
Report
|
Submission
of Cost audit report by the auditor to the Board of Directors for their
Consideration and examination
|
Submission
of duly signed cost audit report to the Board of directors for their
consideration and examination
|
Filing of Cost
Audit Report
|
Submission
of cost audit report with the Central Government in form CRA-4
|
Submission
of Cost audit report in Form CRA-4 in Extensible Business Reporting Language
Format (XBRL).
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Summary:
1. Certain
additions/Deletion in industry/Sector/Product/Services
for which maintenance of cost records is mandatory
2. Cost
Auditor needs to give eligibility certificate at the time of appointment
similar to the statutory auditor
3. Board
of Directors can remove Cost Auditor before the expiry of his term by passing board
resolution after giving reasonable opportunity of being heard and recording the
reasons of such removal in writing
4. Cost
Audit report alongwith annexures/attachments is required to be approved in the
Board meeting
5. Cost
Auditor shall forward duly signed report to the Board within 180 days from the
close of financial year
6. Cost
Audit Report in CRA-4 in now to be filed in XBRL Mode
The said notification can be downloaded
from the following link:
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