Who Signs the Annexure to the Cost Audit Report? CRA-3 vs Financial Statements
The Annexure to the Cost Audit Report should be approved by the Board and signed by the Company Secretary and one Director. Only where there is no Company Secretary do two Directors sign.
A question that comes up often at the time of finalising Form CRA-3 is: "Our financial statements were signed without the Company Secretary. Can the Annexure be signed the same way?" The answer is usually no, because the two documents follow different signing rules.
This note sets out who signs what, where each rule comes from, and the situations where practitioners most often get it wrong.
Financial statements: Section 134(1)
Under Section 134(1) of the Companies Act, 2013, the financial statements are first approved by the Board. They are then signed on behalf of the Board by:
the Chairperson, if authorised by the Board, or two Directors, one of whom must be the Managing Director (if there is one); and
the CEO, the CFO and the Company Secretary, wherever they are appointed.
The words "wherever they are appointed" matter. If a company has not formally appointed a Company Secretary, the financial statements are validly signed without one. So a missing CS signature on the balance sheet may be perfectly in order.
It may also signal a gap. A private company with paid-up share capital of ₹10 crore or more must have a whole-time Company Secretary (Section 203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014). If such a company has a CS on its rolls, that CS should be signing the financial statements.
Annexure to the Cost Audit Report (CRA-3)
The Annexure is the company's own statement of cost information, which the cost auditor audits. So the company authenticates it, in two steps:
Board approval. The Board of Directors approves the Annexure. The date of this Board meeting is a mandatory field in Form CRA-4.
Signatures on behalf of the company.
Company Secretary and at least one Director (authorised by the Board); or
if the company has no Company Secretary, at least two Directors.
The cost audit report itself, the auditor's opinion, is signed only by the cost auditor. The company's signatures belong on the Annexure.
Note the difference from Section 134. There, the CS signs in addition to directors only "wherever appointed", and the default signatories are directors. For the Annexure, the CS is a primary signatory: if there is a CS, the CS signs.
Where the rule comes from
It is worth being precise here, because the wording sits in the older rules and is carried forward through practice and ICMAI guidance.
Companies (Cost Audit Report) Rules, 2011, Rule 7. The Annexure had to be approved by the Board before submission. Once audited, it had to be signed by the Company Secretary and at least one Director, or by at least two Directors where there was no CS. The Cost Audit Report Rules, 2001 contained the same requirement.
Companies (Cost Records and Audit) Rules, 2014. Rule 6 deals with appointment of the cost auditor, the CRA-3 report and filing in CRA-4. It does not repeat Rule 7's signing language as a separate rule.
Form CRA-4. It asks for the date of the Board meeting at which the Annexure to the cost audit report was approved. Board approval therefore remains a filing requirement.
ICMAI guidance. ICMAI's study material and suggested answers state that the Annexure in CRA-3 is approved by the Board and signed by the Company Secretary and a Director authorised by the Board.
In short: Board approval is required by the CRA-4 form itself. The "CS plus one Director" signing is the settled practice drawn from Rule 7 and ICMAI guidance.
Who signs what, at a glance
Document | Who signs for the company | If there is no CS | Basis |
Financial statements | Chairperson (if authorised) or two Directors incl. MD; plus CEO, CFO, CS wherever appointed | Valid without CS signature | Section 134(1) |
Cost audit report (CRA-3) | Not signed by the company; signed by the cost auditor | Not applicable | Rule 6, 2014 Rules |
Annexure to cost audit report | Approved by the Board; signed by CS and one Director | Two Directors | Rule 7 of 2011 Rules; ICMAI guidance |
Form CRA-4 (e-filing) | Digital signature of any one: Director, MD, Manager, CEO, CFO or CS | Any one of the others | Rule 6, 2014 Rules; CRA-4 form |
Situations that cause confusion
1. The financial statements carry no CS signature. This does not settle the Annexure question. First check whether a CS is formally appointed. If yes, the CS signs the Annexure along with one Director, even though the CS did not sign the financials.
2. A "CS" who is not formally appointed. Some companies have a qualified CS handling compliance work and even filing forms, without a Board resolution appointing them as Company Secretary (KMP). Check the company's master data on the MCA portal. If no CS appears there, treat the company as having no CS, and have two Directors sign.
3. One person is both CS and Director. One person should not sign twice in two capacities. The purpose of the rule is authentication by two individuals, so add a second Director's signature.
4. The CS and the Director are different people. Both sign: the CS as Company Secretary, the Director as Director. This is the normal case.
5. The company converts from private to public after year-end. This is common before an IPO. The Annexure is signed on a date after conversion, so use the company's current name and CIN, with the former name noted in brackets. Also check whether the converted company now needs a whole-time CS under Section 203.
6. The Board resolution is silent on signatories. Ask the company to name the authorised Director in the resolution approving the Annexure. It avoids questions later and keeps the record clean.
Checklist before signing CRA-3
Confirm from MCA master data whether a Company Secretary is formally appointed
Check whether the company is required to appoint a whole-time CS under Section 203 / Rule 8A
Board meeting held to approve the Annexure; note the date for CRA-4
Board resolution names the Director authorised to sign
Annexure signed by CS and one Director, or by two Directors if there is no CS
Same person is not signing in two capacities
Company name and CIN on the Annexure are current as on the signing date
Cost auditor signs the report and forwards it to the Board within 180 days of the year-end
Company files CRA-4 within 30 days of receiving the report
Closing note
The signing of the Annexure is a small step, but it is the company's formal ownership of the cost information placed before the Government. Getting it right avoids queries at the CRA-4 stage and keeps the audit file clean.
This note is general information based on the provisions and guidance cited below, and is not professional advice for any specific case. Practitioners should also refer to the latest ICMAI Guidance Note on cost audit.
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