MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS

(DEPARTMENT OF COMPANY AFFAIRS)

NOTIFICATION

New Delhi, the 27^th December, 2001

G.S.R. 924(E).- In exercise of the powers conferred by sub-section (4) of section 233B, read with sub-section (1) of section 227 and clause (b) of sub-section (1) of section 642, of the Companies Act, 1956 (1 of 1956), and in supersession of the Cost Audit (Report) Rules, 1996, except as respect things done or omitted to be done, before such supersession, the Central Government hereby makes the following rules, namely :-

1. Short title and commencement . –

(1) These rules may be called the Cost Audit Report Rules, 2001.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Definitions .– In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 1956 (1 of 1956);

(b) “Cost Auditor” means an auditor directed to conduct an audit under sub-section (1) of section 233B of the Act;

(c) “Form” means the Form of the Cost Audit Report and includes auditor's observations and suggestions, Annexure and Proforma to the Cost Audit Report;

(d) “Report” means Cost Audit Report duly audited and signed by the Cost Auditor in the prescribed form of Cost Audit Report;

(e) “Product under reference” means the product or activity to which the Report relates;

(f) All other words and expressions used in these rules but not defined, and defined in the Act and rules made under clause (d) of sub-section (1) of section 209 of the Act shall have the same meanings as assigned to them in the Act or rules, as the case may be.

3. Application .– These rules shall apply to every company in respect of which an audit of the cost accounting records has been ordered by the Central Government under sub-section (1) of section 233B of the Act. The Cost Audit Report submitted on or after 1^st October, 2002, irrespective of the financial year of the company to which it relates, shall be in the form prescribed under these rules.

4. Form of the Report .– (1) Every Cost Auditor, who conducts an audit of the cost accounting records of the company shall submit the report (a hard copy and a soft copy) along with auditor's observations and suggestions, Annexure and Proforma to the Central Government in the prescribed form and at the same time forward a copy of the report to the company.

(2) Every Cost Auditor, who submits a report under sub-rule (1), shall also give clarifications, if any, required by the Central Government on the Cost Audit Report submitted by him, within thirty days of the receipt of the communication addressed to him calling for such clarifications.

5. Time limit for submission of Report .- The Cost Auditor shall forward his report referred to in sub-rule (1) of rule 4 to the Central Government and to the concerned company within one hundred and eighty days from the close of the company’s financial year to which the report relates.