1. Dr. S K Gupta M.Com, FCMA, FCS, Ph.D
CMA & the Companies Act 2013
Dr. S K Gupta
M.Com, FCMA, FCS, Ph.D

2. The Companies Act 2013 Act is a landmark piece of corporate legislation with far- reaching implications that are set to significantly change the manner in which corporates operate in India
Aims to make Indian corporate environment more transparent, robust and globally acceptable

3. The Significant objectives of the Companies Act are :
To accelerate the development of economy by encouraging enterprise efficiency
To bring accountability and transparency in all operations
To enhance standards of Corporate Governance
To protect the interest of all stakeholders
To ensure stricter action against fraud, non-compliance

4. The new Companies Act 2013 has brought a paradigm shift in Corporate Law legislation and widened the ambit and scope of the profession and also expanded the opportunities for the Cost Accountants

5. The role of CMAs is now not confined within the four walls of cost accounting and cost audit but spread across a wider area of governance, legal and compliance The new Companies Act has substantially escalated the role, responsibilities and opportunities for the CMAs

6. CMA Included in the definition of expert Section 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;

7. CMA Authorized to sign Form 18 of RoC
Section 7
There shall be filed with the Registrar a declaration in the prescribed form by an advocate, a chartered accountant, cost accountant or company secretary, in practice, 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;

8. CMA Could be appointed as Internal Auditor Section 138(1)
The new Act provides statutory recognition to CMAs to carry out Internal Audit
…..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.

9. Internal Audit is an independent, objective assurance and consulting activity designed to add value to a company
It helps an entity to accomplish its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of internal controls and governance processes
CMAs have a key role to play in Internal Audit domain as they possess expertise in efficiency and process evaluation

10. CMA - Duty to report fraud Cost Accountant conducting Cost Audit if while performing his duties has reason to believe that an offence involving fraud is being / has been committed against company by its officers / employees, he shall immediately report it to Central Government.

11. Cost Accounting Records and Cost Audit
Welcoming and worth-noting point is that Law has widened the ambit of maintenance of cost records and Cost Audit to include companies engaged in providing services.. 148(1)
Cost Accounting Records and Cost Audit
the 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 utilization of material or labor 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.
Scope and coverage as per Rules

12. CMA Can certify the statement to be filed with the Registrar in case of Compromise or Arrangement under Reconstruction or Merger or Amalgamation.
Section 232(7)
Every company in relation to which an order is made by NCLT 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.
This provision casts an onerous responsibility on CMAs in certifying compliance of the Tribunal’s order

13. CMA Can be appointed as Interim Administrator or the Company Administrator in case of proceedings for Sick Company. Section 259(1)
The interim administrator or the company administrator, as the case may be, shall be appointed by the Tribunal from a databank maintained by the Central Government or any institute or agency authorized by the Central Government in a manner as may be prescribed consisting of the names of company secretaries, chartered accountants, cost accountants and such other professionals as may, by notification, be specified by the Central Government.

14. Powers and Duties
Take a complete inventory of assets and liabilities
All books of accounts and other documents
List of shareholders and creditors
Proforma accounts where up-to-date audited accounts are not available
List of workmen of the company and their dues
Prepare a scheme of revival and rehabilitation
Obtain approval of creditors to the scheme
Place the scheme before the shareholders for approval by way of a special resolution

15. CMA Can be appointed as an Official Liquidator
CMA Can be appointed as an Official Liquidator . Section 275(2) in case of winding up
the Official Liquidator shall be appointed from a panel maintained by the Central Government consisting of the names of chartered accountants, advocates, company secretaries, cost accountants or firms or bodies corporate having such chartered accountants, advocates, company secretaries, cost accountants having at least ten years’ experience in company matters.
The objective is to accelerate the liquidation process and ensure compliance of all statutory provisions relating to liquidation process

16. Scope of powers and Duties
Official liquidator shall be convener of the meetings of winding up committee which shall assist and monitor the liquidation proceedings
OL shall take over assets, examine the statement of affairs, finalize list of creditors, sale of assets, compromise and settlement of claims
OL shall prepare a draft report for consideration and approval of the winding up committee
The final report approved by the winding up committee shall be submitted by the OL to the Tribunal for passing of a dissolution order

17. Official Liquidator may appoint CMA’s to assist him. Section 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

18. A person ordered to be examined under this section—
CMA Can be appointed as Authorized Representative of a person in case of winding up proceedings. Section 300(4)
A person ordered to be examined under this section—
may at his own cost employ chartered accountants or company secretaries or cost accountants or legal practitioners entitled to appear before the Tribunal under section 432, who shall be at liberty to put to him such questions as the Tribunal may consider just for the purpose of enabling him to explain or qualify any answers given by him.

19. CMA can be appointed as Technical Member of National Company Law Tribunal. Section 409(3)(c)
A Cost Accountant in practice is eligible for appointment as a Technical Member if he is in practice as a cost accountant for at least fifteen years

20. CMA can Appear before the Tribunal
Section 432
A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case may be, may either appear in person or authorize one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any other person to present his case before the Tribunal or the Appellate Tribunal, as the case may be.

21. Risk Management under the Companies Act 2013 and the potential role of CMA
Section 134 : The Board of Directors Report must include a statement indicating development and implementation of a risk management policy for the company including identification of elements of risk, if any, which in the opinion of the board may threaten the existence of the company
Section 177 : The Audit Committee shall evaluate risk management systems
Schedule IV : Independent Directors should satisfy themselves that systems of risk management are robust and defensible

22. A CMA has an opportunity to get actively involved in the process of Risk Management
Understand what is risk and its different
dimensions
Assess the probability of an event happening which may de-tour the company plans
Assess the probable impact of that event , if that happens
Develop strategy to cope up with risk
Align risk management with business objectives and strategy

23. Very few companies have a Chief Risk Officer position even there CMA may provide expert assistance in the entire process of risk management so as to ensure that the company has a comprehensive Risk Management system in place CMA needs to up- grade knowledge in Risk Management processes

24. Corporate Social Responsibility
CMA can play a key role in complying with Section 135 of the Companies Act , 2013
CSR needs a rational approach
CSR policy
CSR Committee
Need assessment / Base line survey
Identification of CSR projects

25. Corporate Social Responsibility…
Identification and agreement with implementing NGOs
Planning and monitoring of CSR projects
Post CSR project completion assessment / Social Audit
CMAs have an opportunity to get actively involved in CSR initiatives of the company.
CMAs possess Project management skills to manage CSR projects efficiently and effectively

26. CMA as Independent Director
Section 150 Provides that every listed public company shall have at least one third of total number of directors as independent directors CMAs can contribute significantly in improving corporate governance processes in companies wherein they are appointed as the Independent Directors

27. CMA as Key Managerial Personnel
Section 2 - Managing Director or Chief Executive Officer or manager and in their absence, a whole time director Company Secretary and Chief Financial Officer.
By virtue of qualification and experience a CMA may become a Key Managerial Person in the company by holding the designated position

28. CMA authorized for pre certification of various e – forms prescribed under the Companies Act

29. CMAs .. Awake.. Arise..
The members of the institute need to gear up and leverage their professional edge to seize the opportunities in the new areas opened up by the Companies Act : CMAs need
Up dation of knowledge
Practical and pragmatic approach
Proactive and analytical mindset
Challenge and opportunity to serve the nation in a much greater way in the broader interest of all the stakeholders and the public

30. Thank You You may reach me at cbst. skgupta@gmail
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