economy-tea companies-audit

New Delhi, Aug 20 (UNI) Leading tea companies Goodricke Group Ltd, Tata Tea and Jayshree Tea&Industries are among 38 tea companies will submit their financial reports for external auditing following government oorders.

The cost audit orders in regard to the 38 tea companies have been issued by the Government under section 233 B of the Companies Act, 1956.

The companies, each with a minimum annual turnover of Rs 10 crore, have been asked to submit cost data relating to production and monetary profitability recorded during 2005-06 to the Institute of Cost and Works Accountants of India (ICWAI).

The audit inquiry will cover about 200 tea gardens from among the 1,600 estates, working out to more than 40 per cent of aggregate acreage under tea.

According to sources, the cost audit will generate transparency by analysing the costs incurred in tea production and effect cost reduction by helping in giving a clear picture.

Independent audit orders have been issued to certain companies belonging to the sectors availing subsidies/incentives.

As per the circular issued by the Company Affairs ministry, the cost audit would be undertaken every financial year.

The 38 companies include Duncan Industries Ltd, Gillanders Arbuthnot&Co Ltd, Goodricke Group Ltd, Jayshree Tea&Industries Ltd, Rossel Tea Ltd, Tamil Nadu Tea Plantation Corp Ltd, Tata Tea Ltd and Teesta Valley Tea Co Ltd.

The tea lobby, through the Consultative Committee of Planters Association and the United Plantation Associations of South India, has frequently claimed that factors such as labour wage including social costs' threaten the commercial viability of tea estates.

Now, these assertions of high social costs will come under the scanner of cost audit, the sources added.

The Government may direct the audit of cost accounts of a company that is required to maintain cost records under section 209 (1)(d) of the Act. The Companies Act, 1956 does not restrict cost audit to only those companies which are receiving subsidies or incentives from the government.

On the lines of Cost Accounting Records (Plantation Products) Rules framed in 2002, Cost Accounting Records Rules have been framed for 43 other sectors.

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