In a move that is expected to bring cheers on the faces of Cost Accountants, the Ministry of Corporate Affairs (MCA) has accepted the recommendations sent by ICWAI to discontinue the existing system of ordering Cost Audits on a company to company basis in the same Industry. The Ministry of Corporate Affairs vide Notification no. dated 2nd May 2011 has issued Mandatory Cost Audit orders on All Companies engaged in:- 1)Bulk Drugs 2)Formulations 3)Fertilizers 4)Sugar 5)Industrial Alcohol 6)Electricity 7)Petroleum 8)Telecommunication
Companies operating in any of the above Industries and falling in the Criteria specified below shall mandatorily get their Cost Audits done if during the immediate previous financial year: - Aggregate value of Net Worth exceeds 5 Crores or Aggregate value of Turnover exceeds 20 Crores or Company’s Equity or Debt Securities are Listed or are in the process of Getting Listed whether in India or outside India On the same lines, the Ministry issued another notification on 3rd May 2011 mandating compulsory Cost Audits for All Companies engaged in: -
1)Cement 2)Tyres and Tubes 3)Steel Plant 4)Steel Tubes and Pipes 5)Paper or Insecticides
Companies operating in any of the above Industries are required to get their Cost Audits done only if during the immediate previous financial year: - Aggregate Value of Turnover exceeds 100 Crore Company’s Equity or Debt Securities are Listed or are in the process of Getting Listed whether in India or outside India.
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.
18 July 2011
But as per notification of 3rd june 2011, No.-233, under processing activity, construction of building is comes under maintaning cost records. the same can checked on google with search title - cost record rules 2011
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