ISLAMABAD, Oct 14: The Securities and Exchange Commission of Pakistan (SECP) has made it mandatory for companies operating in fertiliser and energy sectors to keep accounting records of all their material, labour and other items and provide it to the commission.

The SECP on Tuesday issued the Companies Cost Accounting Records (General Order), 2008, under which companies operating in five areas - fertiliser, thermal energy, petroleum refining, natural gas and polyester fibre - will maintain all such information related to their overall cost in various areas.

This order shall apply to companies engaged in production, processing, manufacturing or mining activities.

The accounting records and their sharing will enable the commission and public at large to assess the overall performance of these companies, including their stock positions, how much they spend on labour and on purchase or import of various items.

However, companies engaged in production of cement, vegetable ghee and sugar shall be needed to comply with the requirements in respect to which a special order has been issued by the commission prior to this notification.

The companies will keep these records as per the Appendix III of the Companies (Audit of Cost Accounts) Rules, 1998, says an official announcement of the commission. The cost accounting records shall be kept in such a manner and in such detail as to make it possible for the auditor to audit the same and to produce his report as required under the law.

Each company, to which this order applies, will be required to have a cost audit conducted at the end of each year, through an independent firm of cost or chartered accountants and produce a reconciliation of the cost accounts with the audited financial accounts.

Each company, which falls within the industry specified above, shall be required to circulate the cost auditor’s report to directors, prescribed in sub-rule (3) of Rule 4 of the Companies (Audit of Cost Accounts) Rules, 1998, together with the Reconciliation, stipulated in 3(b) within six months of the close of the financial year, to members, directors and shareholders of the company, the commission and the registrar concerned.

Such reports may be disseminated to its shareholders by posting the same on the company’s website within six months of the close of financial year. The cost audit report shall not be required to be printed and it shall be permissible to circulate photo-copies thereof.

It shall be the duty of every person referred to in sub-section (7) of section 230 or sub-section (2) of section 246 of the Companies Ordinance, 1984 (XLVII of 1984), to comply with the provisions of this order in the same manner as they are liable to maintain books of financial accounts required under section 230 of the said ordinance.