Cost Audit made mandatory for Many Companies

Dear All

Welcome news to CMA's

The Ministry of Corporate Affairs (MCA), vide its notification Nos. 52/26/CAB-2010 dated May 2, 2011 has issued cost audit orders on “ALL companies” where the Cost Accounting Record Rules u/s 209(1)(d) of the Companies Act 1956 pertaining to Bulk Drugs, Formulations, Fertilizers, Sugar, Industrial Alcohol, Electricity, Petroleum or Telecommunication are applicable and wherein as on the last date of the immediately preceding financial year the aggregate value of net worth exceeds rupees five crores or the aggregate value of the turnover exceeds rupees twenty crores or 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. Link of the Notification

On the same lines, vide notification Nos. 52/26/CAB-2010 dated May 3, 2011 MCA has issued cost audit orders on“ALL companies” where the Cost Accounting Record Rules u/s 209(1)(d) of the Companies Act 1956 pertaining to Cement, Tyres & Tubes, Steel Plant, Steel Tubes and Pipes, Paper or Insecticides are applicable and wherein during the immediately preceding financial year the aggregate value of the turnover exceeds rupees one hundred crores or 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. Link of the Notification

The companies falling under the above categories will be required to get cost audit conducted u/s 233B of the Companies Act 1956 by a cost accountant in practice or a firm of cost accountants for each of the financial year commencing from April 1, 2011.

Cheers

Marking a CO.as having Mgt.dispute by ROCs under MCA-21

In continuation of the further clarification, MCA has issued General Circular No. 19 dated 2nd May, 2011 clarifying the process and the circumstances in which a company can be marked as having management dispute by ROCs. 

Such circular may bring uniformity in practice of the ROC where cases are marked as disputes in Management.

Details of the circular can be accessed here

E-Form No. 32 – CA 1956 – filing of conflicting return by contesting parties

The Ministry had earlier clarified vide Circular dated 04.05.1993 that it is neither desirable nor possible for the Registrar to sit in judgment to ascertain the rightful claims of the Directors in case of a dispute and it is for the parties concerned to settle their disputes by approaching the court. In case conflicting documents are filed by the contesting group of Directors, Registrar may take the document on record, if the same are otherwise in order by informing the parties concerned, (contesting group of Directors), in writing, that the documents have been taken on records without prejudice to the rights of the parties to settle the dispute in the court of competent authority.

2. In order to cut timelines and bring more transparency in the working of office of Registrar of Companies, the Form 32 will also be taken on records under Straight Through Process (STP) mode i.e., the information given in the e-form 32 is being taken on file maintained by the Registrar of Companies through electronic mode on the basis of statement of correctness given by the filing company and further verification by the practicing professional i.e., Chartered Accountants, Cost Accountants and Company Secretaries.

3. The above instructions are being hereby revised to the extent that all particulars filed by the companies in e-form 32 are being placed on records of the Registrar of Companies through the STP process as filed by the company and verified by the practicing professional, without prejudice to the rights of the parties to settle the dispute, if any, in a court of competent jurisdiction.

MCA Approves agency to provide & Supervise for E-Voting

MCA vide its General Circular 21 dated May 2, 2011 -approves for appointment of agency for providing electronic platform for electronic voting under the Companies Act, 1956.

It is further reveals that: 

1. Agency to provide & supervise electronic platform for e-voting shall be duly approved by MCA.

2. At present NSDL & CDSL are identified to provide & supervise electronic platform for e- voting.

A copy of the Circular is enclosed 

Govt withdrawn exemption on service provided by CA, CS, CWA related to representation of client before any statutory authority

Notification No. 25 / 2006-Service Tax

           

G.S.R.   (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services falling under sub-clauses (s), (t) and (u) of clause (105) of section 65 of the Finance Act, provided or to be provided by a practicing chartered accountant, a practicing cost accountant and a practicing company secretary respectively, in his professional capacity, to a client, relating to representing the client before any statutory authority in the course of proceedings initiated under any law for the time being in force, by way of issue of notice, from the whole of service tax leviable thereon under section 66 of the said Finance Act.

F. No. 356/37/2006-TRU

LIMITS ENHANCED TO OBTAIN APPROVAL OF THE CENTRAL GOVERNEMENT FOR PAYMENT OF REMUNERATION TO OFFICE OR PLACE OF PROFIT UNDER SECTION 314 (1B) OF COMPANIES ACT 1956

LIMITS ENHANCED TO OBTAIN APPROVAL OF THE CENTRAL GOVERNEMENT FOR PAYMENT OF REMUNERATION TO OFFICE /PLACE OF PROFIT U/SECTION 314 (1B) OF CA 1956

The Ministry of Corporate Affairs has notified dated 6^th April 2011 enhancement in previous limit of Rs. Fifty thousand per month given under Rule 3 of Director’s Relative (Office or Place of Profit) Rules, 2003 to Rs. Two lakh fifty thousand per month for payment remuneration to relatives or partners of the directors of the Company falling under Section 314(1B) of the Companies Act 1956. By such notification, the amended rules may be called as Director’s Relative (Office or Place of Profit) Amendment Rules, 2011. 

The effect of notification shall require Companies to obtain prior consent of the Company by a Special Resolution and approval of the Central Government under Section 314(1B) of the Companies Act 1956 read with Director’s Relative (Office or Place of Profit) Amendment Rules, 2011, with respect to appointment of: 

1.   Partner or relative of a director or manager; or
2.   Firm in which such director or manager, or relative of either is a partner; or
3.  Private company of which such director or manager or relative of either is a director or  member, 

to any office or place of profit which carries a monthly remuneration exceeding Rs. Two lakh fifty thousand per month.

The notification also redefined the constitution of Selection Committee under Rule 7 of  Director’s Relative (Office or Place of Profit) Amendment Rules, 2011 for purpose of appointment of persons mentioned under Section 314 (1B) of the Act for Listed Companies, Unlisted Public Companies and Private Companies.

LIMITS ENHANCED FOR DISCLOSURE OF PARTICULARS OF EMPLOYEES UNDER 217(2A) OF COMPANIES ACT 1956

Dear Friends

As you aware Section 217 (2A) of the CA 1956 refers  the disclosure of particulars of employees who are earning specified amount as a salary from the company. In continuation of the reforms The Ministry of Corporate Affairs has vide notification dated 31^st March 2011 enhanced the limits for the purpose of disclosure of particulars of employees in Directors Report as requisite under Section 217 (2A) read with Companies (Particulars of Employees) Rules, 1975 from the existing limit of Rs. 24 lakh/ year/ Rs. 2 lakh per month to Rs. 60 lakh per year/ Rs. 5 lakh per month and by such notification also covers Government Companies for such disclosures. By such notification, the amended rules may be called as Companies (Particulars of Employees) Amendment Rules, 2011.

In short, following will be the effect of the notification shall require the Companies including Government Companies to include a statement showing the name of every specified employee of the Company in their Board Report pursuant to Section 217 (2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Amendment Rules, 2011 which provides:

(i) If employed throughout the financial year, was in receipt of remuneration for that year which, in aggregate, was not less than Rs. Sixty Lakh for the year: or

(ii) If employed for a part of the financial year, was in receipt of remuneration for any part, of that year, at a rate which, in the aggregate was not less Rs. Five Lakh per month. 






MCA, vide General Circular No. 23 dated 3rd May, 2011 has clarified that the said notification shall be applicable to all Directors' Reports under section 217 of the Companies Act, 1956 approved by the Board of Directors on or after 1.4.2011, irrespective of the accounting year of the annual account, being approved by the Board.

Notification is enclosed 

happy learning