Transcript Legal Metrology (Packaged Commodities) Rules, 2011

Corporate Governance
& Role of
Cost and Management Accountants
in the backdrop of
Companies Bill, 2012
CS. Bilu Balakrishnan
6th April, 2013 @ ICAI Cochin Chapter
Corporate Intelligence Education & Research
Coaching – Career Guidance – Knowledge Portals
Corporate Governance
The way how a corporate entity is managed
The culture of managing a corporate entity
The direction of governance
The true spirit of compliance
The respect for shareholders
The accountable board room
Corporate Governance - Elements
Compliance
Disclosure
Transparency
Responsibility
Accountability
Corporate Governance - Defined
Cadbury Committee, UK
“It is a system by which companies are
directed & controlled”
World Bank President
“Is all about promoting fairness,
transparency & accountability”
Role of CMAs in Corporate Governance
•Premier Professional
•Acclaimed with Status
•Code of Ethics
•Part of Top Management
•Cost Audit
•Costing Standards
•Increased role in Companies Bill 2012
Cost and Management Accountants &
Companies Bill 2012
Companies Bill, 2012
Corporate Affairs Minister, Mr Veerappa Moily introduced the Companies Bill, 2011 on Wednesday
the 14th December, 2011 in Parliament Lok Sabha. The Bill was cleared by the Cabinet on
November 24, 2011.
On 18th Dec 2012 the Bill Amendments was presented by Mr. Sachin Pilot, the current
Minster of Corporate Affairs, at the Lok Sabha around by 10.30+ PM, and got it approved.
The New Companies Bill, 2012 have 29 Chapters, 470 Clauses
(Sections) & 7 Schedules
Provisions detailed
Definition:
2(28) “cost accountant” means a cost accountant as
defined in clause (b) of subsection (1) of section 2 of
the Cost and Works Accountants Act, 1959.
2(38) “expert” includes an engineer, a valuer, a
chartered accountant, a company secretary, a cost
accountant and any other person who has the power
or authority to issue a certificate in pursuance of any
law for the time being in force.
Provisions detailed (Cont.)
Incorporation of Companies:
7(1)(b) a declaration in the prescribed form by an
advocate, a chartered accountant, cost accountant or
company secretary in practice, who is engaged in the
formation of the company, and by a person named in
the articles as a director, manager or secretary of the
company, that all the requirements of this Act and the
rules made there under in respect of registration and
matters precedent or incidental thereto have been
complied with. (New Opportunity – Ref. Sec.33(2) of
Companies Act 1956)
Provisions detailed (Cont.)
Internal Audit:
138. (1) Such class or classes of companies as may
be prescribed shall be required to appoint an internal
auditor, who shall either be a chartered accountant or
a cost accountant, or such other professional as may
be decided by the Board to conduct internal audit of
the functions and activities of the company. (New
Opportunity – Ref. CARO)
Cost Audit Provisions
in Companies Bill 2012
Cost Records (Sec.148(1))
148. (1) Central Government may, by order, in respect
of such class of companies engaged in the production
of such goods or providing such services as may be
prescribed, direct that particulars relating to the
utilisation of material or labour or to other items of
cost as may be prescribed shall also be included in
the books of account kept by that class of companies.
(Ref. Sec.209(1)(d) of Companies Act 1956)
Cost Audit (Sec.148(2))
148 (2) If the Central Government is of the opinion,
that it is necessary to do so, it may, by order, direct
that the audit of cost records of class of companies,
which are covered under sub-section (1) and which
have a net worth of such amount as may be
prescribed or a turnover of such amount as may be
prescribed, shall be conducted in the manner
specified in the order. (Ref. Sec.233B of Companies
Act 1956)
Cost Audit (Cont.)
148 (3) The audit under sub-section (2) shall be
conducted by a Cost Accountant in practice who shall
be appointed by the Board on such remuneration as
may be determined by the members in such manner
as may be prescribed:
Provided that no person appointed under section 139
as an auditor of the company shall be appointed for
conducting the audit of cost records:
Provided further that the auditor conducting the cost
audit shall comply with the cost auditing standards.
Cost Audit (Cont.)
(4) An audit conducted under this section shall be in
addition to the audit conducted under section 143.
(5) …It shall be the duty of the company to give all
assistance and facilities to the cost auditor appointed
under this section for auditing the cost records of the
company. Provided that the report on the audit of cost
records shall be submitted by the cost accountant in
practice to the Board of Directors of the company.
Cost Audit (Cont.)
(6) A company shall within thirty days from the date of
receipt of a copy of the cost audit report prepared in
pursuance of a direction under sub-section (2) furnish
the Central Government with such report along with
full information and explanation on every reservation
or qualification contained therein.
(7) ….If, after considering the cost audit report ……the
Central Government is of the opinion that any further
information or explanation is necessary, it may call for
such further information and explanation.
CMAs Role in Other Areas
in Companies Bill 2012
CMAs Role in Mergers & Amalgamation (Sec.232)
232 (7) Every company in relation to which the order is
made shall, until the completion of the scheme, file a
statement in such form and within such time as may
be prescribed with the Registrar every year duly
certified by a chartered accountant or a cost
accountant or a company secretary in practice
indicating whether the scheme is being complied with
in accordance with the orders of the Tribunal or not.
CMAs Role in Liquidation (Sec.291)
291. (1) The Company Liquidator may, with the
sanction of the Tribunal, appoint one or more
chartered accountants or company secretaries or cost
accountants or legal practitioners or such other
professionals on such terms and conditions, as may
be necessary, to assist him in the performance of his
duties and functions under this Act.
CMAs Role in NCLT
409 (3) A practicing CMA having 15 years of
experience are eligible to be appointed as a Technical
Member of NCLT;
432 CMAs can appear before NCLT / NCALT.
Section 143 – a Real Twist in the Role of Trio
Practising CA / CMA / CS
Sub-section 12…..if an auditor of a company, in the
course of the performance of his duties as auditor,
has reason to believe that an offence involving fraud
is being or has been committed against the company
by officers or employees of the company, he shall
immediately report the matter to the Central
Government within such time and in such manner as
may be prescribed.
Sub-section 15…. If any auditor, cost accountant or
company secretary in practice do not comply with the
provisions of sub-section (12), he shall be punishable
with fine which shall not be less than one lakh rupees
but which may extend to twenty-five lakh rupees.
Thank You
999 560 1528
www.facebook.com/csbilub
Copyright 2013 Corporate Intelligence Education & Research (CIER)