STRICTER CHECKS ON 10K COS AS COST AUDIT TURNS MANDATORY

Operational details of more than 10,000 companies across 14 industries will come under government scrutiny with the Ministry of Corporate Affairs (MCA) making cost audits mandatory from April this year. The Corporate affairs ministry’s communiqué says all companies manufacturing bulk drugs, fertilizers, sugar, industrial alcohol, electricity, petroleum, and telecom equipment and having an annual turnover of more than Rs.20 crore will have to carry out a cost audit. For companies manufacturing cement, tyres, steel, paper and insecticides, the annual turnover threshold has been
fixed at Rs.100 crore. Any company that has its debt or equities listed on stock exchanges, or is in the process of doing so, will also have to carry out a cost audit even if it does not fall within the turnover criteria. These companies will have to file cost audit reports for fiscal 2011-12.