Posts Tagged ‘Companies’


Appointment of Cost Auditor by Companies 

General Circular No. 36/2012, 52/5/CAB-2011, dated November 6, 2012

To,

The President,

Institute of Cost and Works Accountants of India,

12, Sudder Street,

Kolkata – 700 016.

In continuation of the General Circular No. 15/2011 dated 11th April 2011, Ministry hereby makes the following changes:

(a) The company shall, within thirty days from the date of approval by MCA of the application made to the Central Government in the prescribed Form 23C seeking its prior approval for the appointment of cost auditor, issue formal letter of appointment to the cost auditor, as approved by the Board.

(b) The cost auditor shall, within thirty days of the date of formal letter of appointment issued by the company, inform the Central Government in the prescribed form 23D, alongwith a copy of such appointment.

(c) In case of change of cost auditor caused by the death of existing cost auditor, companies are allowed to file fresh e-form 23C, without any additional fee, within 90 days of the date of death.

The additional fee payable as per the Companies (Fees on Applications) Rules, 1999 [as amended] shall become applicable after expiry of the said 90 days. Accordingly, e-forms 23C and 23D are being modified to capture such details.

(d) In case of change of cost auditor for reasons other than death of the existing cost auditor, companies are required to file fresh eform 23C with applicable fee & additional fee, clearly specifying the reasons of change. In case of change due to resignation of the existing cost auditor, e-form 23C should be accompanied by the resignation letter of the existing cost auditor. In case of change due to the management policy of periodical rotation, then attach a copy of the Board approved rotational policy with the e-form 23C. In any other case, the change should be duly justified and supported with the relevant documents.

(e) In order to ensure compliance of section 224(1-B) of the Companies Act 1956, required changes are being made in the MCA21 system to restrict the number of cost audit approvals to the limits specified in section 224(1-B) through a counter on the membership number of the sole proprietor or partner of the firm. It will be further ensured that in case of a sole proprietor, he has completed the audit and submitted the cost audit report. In case of a partnership firm, the partner so appointed or any other partner of the same firm is allowed to complete the audit & submit cost audit report subject to his total numbers not exceeding the limit specified in section 224(1-B).

2. MCA is regularly receiving requests from the companies and cost auditors for making corrections in the e-forms 23C & 23D in respect of minor typographical errors or other mistakes such as incorrect financial year, incorrect name of the cost auditor or the cost audit firm, incorrect PAN number, incorrect scope of audit, etc. In MCA21 system, no changes are permitted in the approved e-forms. Therefore, all companies and cost auditors are hereby informed to carefully verify all particulars before uploading e-forms 23C or 23D on the MCA21 portal. In any rare case, if still any error/mistake is observed, it should be brought to the notice of MCA well before its approval enabling it to return the said e-form for re-submission after making the required corrections. Else, the companies and cost auditors shall be required to file fresh e-forms 23C & 23D containing correct particulars, alongwith the applicable fee and additional fee.

3. If a company or the cost auditor contravenes any provisions of this circular, the company and every officer thereof who is found to be in default, and the cost auditor in case he is in default, shall be punishable as per applicable provisions of the Companies Act, 1956.

4. The modifications contained in this circular shall be effective from the financial year commencing on or after the 1st day of January, 2013.

5. The Institute is requested to bring this to the general information of all Members in practice, and of the corporate sector.

Click here to download the complete text of the above Circular in PDF Format- General Circular No. 36/2012 dated 06.11.2012.

Source: Ministry of Corporate Affairs.

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Default by the Cost Auditors in filing Form 23D against the corresponding Form 23C 

General Circular No. 35/2012, F. No.52/5/CAB-2011, dated November 5, 2012. 

To,

The President,

Institute of Cost Accountants of India,

12, Sudder Street,

Kolkata – 700 016.

Ministry of Corporate Affairs vide General Circular No. 15/2011, dated April 11, 2011 had prescribed a revised procedure to be followed for appointment of cost auditors. As per the revised procedure, each company is required to e-file its application with the Central Government in the prescribed Form 23C within ninety days from the date of commencement of each financial year, which shall be approved by MCA within 30 days.

2. Upon approval by MCA, the company is required to issue formal letter of appointment to the cost auditor, who shall, within 30 days of receipt of such letter of appointment, inform the Central Government in the prescribed Form 23D alongwith a copy of such appointment.

3. It is, however, observed that since April 1, 2011, though all the appointment applications made by the companies concerned in Form 23C have already been approved by the MCA, a large number of cost auditors have defaulted in filing the required Form 23D within the stipulated time. In many cases, the default period is even more than a year. This has been viewed very seriously by the Ministry.

4. Keeping in view the initial operation of the revised procedure, all the defaulting cost auditors are requested to file their required Form 23D that have already become due till date, by December 16, 2012 positively. In case of any further default, names of such defaulting members shall be sent to the Institute on December 17, 2012 intimating the Institute to initiate Disciplinary Proceedings against them under the relevant provisions of Cost and Works Accountants Act, 1959.

5. In cases where the company concerned, after approval of Form 23C, has failed to issue the formal letter of appointment to the cost auditor, they shall do so within 15 days of the issue of this Circular enabling the cost auditor to file Form 23D within the extended time indicated above. In case of non-compliance, the company and every officer thereof who is found to be in default shall be punishable as per provisions of the Companies Act, 1956.

6. The Institute is requested to circulate this for the information of all concerned.

Click here to download the complete text of the above Circular in PDF Format- General Circular No. 35/2012 dated 05.11.2012.

Source: Ministry of Corporate Affairs.


The Ministry of Corporate Affairs (MCA) has been continuously taking various steps towards promoting good corporate governance, investor education and protection & advocacy for adoption of Corporate Social Responsibility (CSR) by companies for inclusive growth of the Corporate Sector. The Ministry received a number of suggestions from the corporate and investors during the “India Corporate and Investor Meet” held in February 2012 in Kolkata, Chennai, Bangalore, Delhi and Mumbai for empowerment of investors.

2. In the light of suggestions received by the Ministry, it is advised that a company having paid up capital of not less than Rs. 10 crores or having more than 100 members may maintain a functional web-site containing the following basic information about the company as at the close of the previous year stating the date thereof within three months in order to boost investor confidence and to foster economic growth of the country:

i. General information about the company and details of the company’s business including risks & concerns, industry scenario, brand information, how long in the market and core competence and market share in company’s products/services.

ii. Details of the Board of Directors, names & addresses of Directors, details of promoters of the company and their shareholding, Code of conduct for board members & senior management of the company, remuneration of Managing/Wholetime Directors, if any, No. & dates of Board meetings & AGMs held in last three years and attendance of each director at the meetings.

iii. Brief description of the Audit Committee, its reference, composition and the meetings & attendance during last three years.

iv. Financial information about the company: Important financial information/ratios, such as total paid up capital, equity/preferential share, capital, nominal value of shares, total turnover, profit after tax, EPS, P/E ratio and total amount spent on Corporate Social Responsibility (CSR) & its percentage of profits after tax. Comparison of important ratios with industry including EPS, P/E ratio and dividend

v. If there is any subsidiary company, details thereof stating the name of the company, percentage of share holding, total paid up capital, turnover, profit after tax of the subsidiary during last three years

vi. Information about shares issued during last five years, including share price, if listed, shareholding pattern, details of the Registrar & Transfer agents, dates of book closures, date of dividend payment for the previous year, name, designation & contact number of compliance officer and information about company’s IPO/FPO including withdrawn, if any.

vii. Investor’s information like composition of Shareholders Committee/Investors Grievances Committee and its reference, details of shareholder’s complaints during the last three years – received, resolved and pending – and press release, if any for investors/shareholders, auditor’s qualification if any, penalty imposed by any Govt. agency / court, complaints about insider trading transaction in the last three years.

viii. Particulars of shares of the company acquired/sold by the Directors and their relatives during last three years.

ix. Investor’s complaint mechanism – Under investor’s section of website, the company should also have facility for lodging online investor complaint & its follow up till resolution.

x. Details of related parties and transactions with them for the last three years and details of the compliance of mandatory requirements.

xi. Company’s initiatives towards corporate social responsibilities and environment protection with the details of initiative taken and expenditure incurred by the company during the last three years.

xii. Details about important pending litigations likely to affect the financial position and the working results of the company

Source: Ministry of Corporate Affairs.


General Circular No. 31/2012, [F.No. 17/160/2012 CL-V], dated 28.09.2012

All the Regional Directors,

All the Registrar of Companies

The Ministry had issued Circular No. 14 of 2012 whereby the fees was imposed on filing of 23B as per Schedule X of the Act. To ensure smooth filing of the forms 23AC (Non-XBRL) and 23ACA (Non-XBRL) with the approval of the competent authority, the filing of e-form 23B is extended without any additional fees till 23/12/2012 or due date of filing, whichever is later.

Click here to download the complete text of the above Circular in PDF Format- General Circular No. 31/2012 dated 28.09.2012.

Source: Ministry of Corporate Affairs.