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MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS

(Department of Company Affairs)

NOTIFICATION

New Delhi, the 27th December, 2001

G.S.R. 924(E).— in exercise of the powers conferred by sub-section (4) of

section 233B, read with sub-section (1) of section 227 and clause (b) of sub-section

(1) of section 642, of the Companies Act, 1956 (1 of 1956), and in supersession of the

Cost Audit (Report) Rules, 1996, except as respect things done or omitted to be done,

before such supersession, the Central Government hereby makes the following rules,

namely :-

Short title and commencement. -

(1)

These rules may be called the Cost Audit Report Rules, 2001.

(2)

They shall come into force on the date of their publication in the Official Gazette.

Definitions .- In these rules, unless the context otherwise requires, -

(a)

"Act" means the Companies Act, 1956 (1 of 1956);

(b)

"Cost Auditor" means an auditor directed to conduct an audit under sub-section

(1) of section 233B of the Act;

(c)

"Form" means the Form of the Cost Audit Report and includes auditor's

observations and suggestions, Annexure and Proforma to the Cost Audit Report;

(d)

"Report" means Cost Audit Report duly audited and signed by the Cost Auditor

in the prescribed form of Cost Audit Report;

(e)

"Product under reference" means the product or activity to which the Report

relates;

(f)

All other words and expressions used in these rules but not defined, and defined

in the Act and rules made under clause (d) of sub-section (1) of section 209 of

the Act shall have the same meanings as assigned to them in the Act or rules,

as the case may be.

Application .- These rules shall apply to every company in respect of which an

audit of the cost accounting records has been ordered by the Central

Government under sub-section (1) of section 233B of the Act. The Cost Audit

Report submitted on or after 1^st October, 2002, irrespective of the financial year

of the company to which it relates, shall be in the form prescribed under these

rules.

3976 GI/2001—6

Form of the Report .- (1) Every Cost Auditor, who conducts an audit of the

cost accounting records of the company shall submit the report (a hard copy and

a soft copy) along with auditor's observations and suggestions, Annexure and

Proforma to the Central Government in the prescribed form and at the same time

forward a copy of the report to the company.

(2)

Every Cost Auditor, who submits a report under sub-rule (1), shall artso give

clarifications, if any, required by the Central Government on the Cost Audit

Report submitted by him, within thirty days of the receipt of the communication

addressed to him calling for such clarifications.

Time limit for submission of Report .- The Cost Auditor shall forward his

report referred to in sub-rule (1) of rule 4 to the Central Government and to the

concerned company within one hundred and eighty days from the close of the

company's financial year to which the report relates.

Cost Auditor to be furnished with the cost accounting records etc. .-

Without prejudice to the powers and duties the Cost Auditor shall have under

sub-section (4) of section 233B of the Act, the company and every officer

thereof, including the persons referred to in sub-section (6) of section 209 of the

Act, shall make available to the Cost Auditor within one hundred and thirty five

days from the close of the financial year of the company, such cost accounting

records, cost statements, other books and documents, Annexure and Proforma

to the Report, duly completed, as would be required for conducting the cost

audit, and shall render necessary assistance to the Cost Auditor so as to enable

him to complete the cost audit and submit his report within the time limit

specified in rule 5.

Authentication of Annexure to the Cost Audit Report .- The Annexure and

Proforma prescribed with the Cost Audit Report shall be approved by the Board

of Directors before submitting the same to the Central Government by the Cost

Auditor. The Annexure and Proforma, duly audited by the Cost Auditor, shall

also be signed by the Company Secretary and at least one Director on behalf of

the company. In the absence of Company Secretary in the company, the same

shall be signed by at least two Directors.

Penalties.- (1) If default is made by the Cost Auditor in complying with the

provisions of rule 4 or rule 5, he shall be punishable with fine, which may extend

to five thousand rupees.

(2)

If the company contravenes the provisions of rule 6 or rule 7, the company and

every officer thereof who is in default, including the persons referred to in sub-

rule (6) of section 209 of the Act, shall, subject to the provisions of section 233

B of the Act, be punishable with fine which may extend to five thousand rupees

and where the contravention is a continuing one, with a further fine which may

extend to five hundred rupees for every day after the first day during which such

contravention continues.

Saving of action taken or that may be taken for contravention of Cost Audit

(Report) Rules, 1996 - It is hereby clarified that the supersession of the Cost

.Audit (Report) Rules, 1996, shall not in any way affect -

THE GAZETTF. OF INDIA : F.XTRAORDINARY

|PARi 11— Su:. 3(i)[

(i)

any right, obligation or liability acquired, accrued or incurred thereunder;

(ii)

any penalty, forfeiture or punishment incurred in respect of any contravention

committed thereunder;

(iii)

any investigation, legal proceeding or remedy in respect of any such right,

privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and;

any such investigation, legal proceeding or remedy may be instituted, continued

or enforced and any such penalty, forfeiture or punishment may be imposed as if

those rules had not been superseded.

FORM OF THE COST AUDIT REPORT

[See rule 2(c) and rule 4]

I/We,

having been appointed as Cost Auditor(s)

under Section 233B of the Companies Act,

1956 (1 of

1956) of

(mention name of the company) having its registered office

(mention registered office address of the company)

(hereinafter referred to as the company), have examined the books of account

prescribed under clause (d) of sub-section (1) of section 209 of the said Act, and

other relevant records in respect of the unit

(mention name

and location of the unit) for the period/year

(mention the

financial year) relating to

(mention name of the product or activity)

maintained by the company and report, in addition to my/our comments in para 3

relating to auditor's observations and suggestions, that -

1.(i) I/We have/have not obtained all the information and explanations, which to the

best of my/ our knowledge and belief were necessary for the purpose of this

audit;

(ii) proper cost accounting records, as prescribed under clause (d) of sub-section

(1) of section 209 of the Companies Act, 1956, have/have not been kept by the

company;

(iii) proper returns adequate for the purpose of my/our Cost Audit have/have not

been received from the branches not visited by me/us;

(iv) the said books and records give/do not give the information required by the

Companies Act, 1956 in the manner so required;

(v) the cost statements in respect of product or activity under reference as specified

in the Annexures/Proformae of Schedules I, Schedule II or Schedule III of the

concerned Cost Accounting Records (**

) Rules duly audited by

me/us are kept in the company.

~ln my/our opinion, the company's cost accounting records have/have not been

properly kept so as to give a true and fair view of the cost of production, cost of

sales and margin of the product under reference as prescribed under the rules.

Based on my/our examination of the records of the company subject to aforesaid

qualifications, if any, I/We give my/our observations and suggestions on the

following -

„ _ _ _

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC. 3(i)l

(a) the adequacy or otherwise of the cost accounting system including inventory

valuation in vogue in the company and suggestions for the improvement thereof.

The Cost auditor shall also indicate the persistent deficiencies in the system,

pointed out in earlier reports but not rectified;

(b) the adequacy or otherwise of the budgetary control system, if any, in vogue in

the company;

(c)

matters which appear to him to be clearly wrong in principle or apparently

unjustifiable;

(d) cases, where price charged for related party transactions as defined in the

respective Cost Accounting Records Rules is different from normal price, impact

of such lower/higher price on margin of the product under reference shall be

specified;

(e) areas where the company is incurring losses or where there is considerable

decline in profitability, the cost auditor should comment on the reasons thereof

including indicative break-even point. The cost auditor shall also comment on the

default, if any on the payments due to the Government, financial institutions and

banks, penal interest levied thereon and its impact on the cost of sales and

profitability;

(f)

steps required to strengthen the company under the competitive environment

especially with regard to need for protection from cheaper imports, if any;

(g)

export commitments of the company vis-a-vis actual exports for the year under

review. Also comment on comparative profitability and

pricing policy of the

company for domestic and export sales. Give impact of exports benefits/

incentives offered by the Government on export profitability;

(h) the scope and performance of internal audit of cost records, if any, and comment

on its adequacy or otherwise

The Cost Auditor shall suggest measures for making further improvements in the

performance in respect of cost control and cost reduction.

The Cost Auditor may also give his other observations and suggestions, if any,

relevant to the cost audit.

Dated : this — date of

200-

a^t

(mention name of place of signing this report).

SIGNATURE & SEAL OF THE COST AUDITOR(S)

MEMBERSHIP NUMBER

Notes:

(1)

Delete words not applicable.

(2)

**Specify the title of the concerned Cost Accounting Records Rules made under

clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 which

are applicable to the product or activity of the company.

(3)

If as a result of the examination of the books of account, the Cost Auditor desires

to point out any material deficiency or give a qualified report, he shall indicate

the same against the relevant para (i) to (vi) only in the prescribed form of the

Cost Audit Report giving details of discrepancies he has come across.

(4)

The report, suggestions, observations and conclusions given by the Cost Auditor

under this paragraph shall be based on verified data, reference to which shall be

made here and shall, wherever practicable, be included after the company has

been afforded an opportunity to comment on them.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PARI II—SEC. 30)1

ANNEXURE TO THE COST AUDIT REPORT

[See rule 2(c) and rule 4]

1. GENERAL:

(1)

(a) Name and address of the registered office of the company whose accounts

are audited.

(b) Name and address of the place where the cost accounting records are

maintained viz. registered office, head office or factory.

(2)

Name of the product and location of the unit to which the Annexure pertains.

(3)

The Company's financial year to which the Cost Audit Report relates.

(4)

Date of first commencement of commercial production of the product under

reference.

(5)

Location of other sites manufacturing or producing or processing or mining the

product or carrying out the activity under reference.

(6)

Name and address of the Cost Auditor.

(7)

Membership number of the Cost Accountant, In case of firm of Cost

Accountants, name and membership number of all the partners.

(8)

Reference number and date of Government Order under which the Audit is

conducted.

(9)

Reference number and date of the Government letter approving the appointment

of the Cost Auditor.

(10) Date of Board of Directors' meeting wherein the Annexure and Proforma to the

cost audit report were approved.

(11) The number of Audit Committee meetings held by the company, and attended by

the Cost Auditor during the year under reference.

(12) Name, qualification and designation of the officer heading the cost accounting

section or department of the company.

(13) In case of loan license/ job work arrangement by the company, mention the

name of the third party and location of the factory, where the product has been

produced/manufactured.

(14) If there is any foreign technical collaboration for the product under reference, the

RWowing details shall be given:

(aK* ' name and address of the foreign collaborators;

(to) -^{r a} main terms of agreement;

_£7

(c)

amount of royalty, lump sum payment, technical aid fee payable and the

basis of calculating the same;

(d)

whether the technical collaborator has contributed to the share capital. If

so, the paid up share capital so held.

(15) If the company is engaged in other activities besides the manufacture of the

product under reference, the following details in respect of each such product or

activity shall be given:

(a)

list of the products or activities;

(b)

list of the products or activities for which Cost Accounting Records Rules

have been prescribed under section 209(1 )(d) of the Act.;

(c)

whether Cost Audit Order has been issued by the government in respect

of any of the products or activities. If so, number and date of the order.

(16) A printed copy of the Annual Report, containing audited Profit and Loss Account,

Balance Sheet and Auditor's Report in respect of the company's financial year

for which the report is rendered, shall be enclosed with the Cost Audit Report.

COST ACCOUNTING SYSTEM:

(1)

Briefly describe the cost accounting system existing in the company, keeping in

view the requirements of the Cost Accounting Records Rules applicable to the

class of companies manufacturing the product under reference and also its

adequacy or otherwise to determine correctly the cost of production, cost of

sales, sales realisation and margin of the product under reference.

(2)

Briefly specify the changes, if any, made in the costing system; basis of

inventory valuation; method of overhead allocation; apportionment to cost

centers/departments and final absorption to the product under reference etc.,

during the current financial year as compared to the previous financial year.

PROCESS OF MANUFACTURE:

A brief note regarding the process of manufacture along with flow chart covering

production, utility and service department of the product.

QUANITATIVE DETAILS :

Particulars

1. Installed capacity *

2. Capacity enhanced during the

year by leasing arrangement etc.

3. Total available capacity

4. Production during the year:

(a) self manufactured

, ^ (b) third party on job work etc.

•^f

5/Tbtal production quantity

6. Production as per Excise Records

Current

Year

2^na Previous

Year

THE GAZETTE OF INDIA : EXTRAORDINARY

|PAKT II— She. 3(i)|

7. Capacity utilisation percentage

8. Opening stock (finished quantity)

9. Total available quantity

10. Quantity captively consumed

11.Quantity sold:

(a) domestic at controlled price

(b) domestic at market price

(d) export under other obligation

(e) export at market price

(f) total

12. Closing stock (finished quantity)

Notes :

It should be clarified whether the installed capacity is on single shift or multiple

shift basis.

In order to have a meaningful comparisons of production and installed capacity,

wherever necessary these details should also be expressed in appropriate units,

e.g. standard hours or equipment/ plant/ vessel occupancy hours, crushing

hours, . spindle/ loom shifts, equivalent production, production in terms of

standard hours etc.

5(A). MAJOR INPUT MATERIALS / COMPONENTS CONSUMED:

Particulars

1. Indigenous:

(a) (specify)

(b)

(c)

2.Self manufactured:

(a) (specify)

(b)

(c)

3. Imported:

(a) (specify)

(b)

(c)

4. Total

Current Year

Qty.

Rate

Amount

Two Previous Years Separately

Qty.

Rate

Amount

Note : Details should be furnished in respect of major input materials each

constituting at least 2% of the total raw material cost.

5(B). STANDARD/ ACTUAL CONSUMPTION OF INPUT MATERIALS PER UNIT:

Particulars

1. (specify)

Unit

Standard

Actuals

Current

Year

st Previous

Year

2™* Previous

Year

Note : Details should be furnished in respeci. of major input materials each

constituting at least 2% of the total raw material cost for each major type/ variety/

size etc. of product under reference.

BREAK-UP OF COST OF INPUT MATERIALS IMPORTED DURING THE

YEAR:

Particulars

1. FOB Price in foreign currency/

rupees

2. Insurance & freight

3. Customs duty

4. Clearing charges

5. Inland freight

6. Other expenses

7. Total

Current

Year

st Previous

Year

2^nd Previous

Year

Note : Details should be furnished in respect of major input materials each

constituting at least 2% of the total material cost.

7 (A). POWER, FUEL AND UTILITIES :

Particulars

1. Indigenous

(purchased):

(a) (specify)

(b)

(c)

2. Self generated/

produced:

(a) (specify)

(b)

(c)

3. Imported:

(a) (specify)

(b)

(c)

4. Total

Current Year

Qty.

Rate

Amount

Two Previous Years Separately

Qty.

Rate

Amount

>Jcue : Details should be furnished in respect of major items each constituting at

le»^ 2% of the total material cost.

3976 GI/2001—7

5 0

THE GAZETTE OF INDIA: EXTRAORDINARY

fPARTJI—SEC. 3(i)]

7 (B).STANDARD/ ACTUAL CONSUMPTION OF POWER, FUEL AND UTILITIES IN

TERMS OF QUANTITY PER UNIT OF PRODUCTION :

Particulars

1. (specify)

Unit

Standard

Actuals

Current

Year

1" Previous

Year

2^nd Previous

Year

Note : Details should be furnished in respect of each major type/ variety/ size

etc. of product under reference.

SALARIES AND WAGES:

Particulars

Current

Year

st Previous

Year

2^nd Previous

Year

A. Quantitative Details :

1. Direct Workers:

a. Average number during the year

b. Man days available

c. Mandays actually worked for:

(i) own production

(ii job work

d. Reason-wise analysis of idle

man-days (a-b)

i) absenteeism

ii) shortage of raw materials

iii) power shortage/failures

iv) Others (specify)

2. Indirect Workers :

a. Average number during the year

b. Man days available

c. Mandays actually worked for:

(i) own production

(ii) job work

d. Reason-wise analysis of idle

man-days (a-b)

i) absenteeism

ii) shortage of raw materials

iii) power shortage/failures

iv) Others (specify)

B. Cost Detail :

1. Direct labour cost on production

2. Indirect employee costs on

production

3. Employee costs on administration

4. Employee costs on selling and

distribution

5. Other employees costs, if any

(specify)

"5. Total employee costs

REPAIRS AND MAINTENANCE:

Particulars

1. Land and Building

2. Plant and machinery

3. Staff quarters and colony

4 Others (to be specified asset

category-wise)

5. Total amount

6. Amount capitalized/ deferred

during the year

7. Net amount (5-6)

8. Deferred amount of earlier years,

if any

9. Total amount provided in the cost

records (7+8)

Current

Year

1* Previous

Year

2"° Previous

Year

10.

FIXED ASSETS REGISTER AND DEPRECIATION:

Particulars

1.Whether fixed assets

maintained cost centre-wise

2. Method of providing depreciation

3.Amount of depreciation under

section 205(2) of the Companies

Act, 1956 or any other relevant

Act, as the case may be

4. Amount of depreciation provided

in the financial records

5. Amount of depreciation absorbed

in the cost records *

6. Shortfall / Excess, if any (3 and 5)

Current

Year

1" Previous

Year

2^m Previous

Year

Note : The impact of re-valuation of assets, if any, shall not be included.

11.

GROSS BLOCK, DEPRECIATION AND LEASE RENT:

Particulars

[Vame of major cost

centers/ products:

(S) (specify)

Gross

Block

Depre-

dation

Lease

Rent paid,

If any

Total

(b+c)

8I Previous

Year

2™ Previous

Year

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART II—SEC. 3(i)l

(b)

Total

Note : Excluding gross block of assets given on lease, if any.

12.

OVERHEADS:

Particulars

1. Factory Overheads

a) (specify)

2. Administration OHs

a) (specify)

3. Selling Overheads

a) (specify)

4.Distribution OHs

a) (specify)

Current Year

for the

product under

reference

for factory

as a whole

Two Previous Years Separately

for the

product under

reference

for factory

as a whole

Note :The break-up under each head should be furnished in respect of major

items constituting at-least 80% of the overhead cost under each head

13. RESEARCH AND DEVELOPMENT EXPENSES:

Particulars

1. Process development and

improvement

2. Existing product development

3. New product development

4. Others, if any

5. Total amount

6. Amount capitalized/ deferred

during the year

7. Net amount (5-6)

8. Deferred amount of earlier

years, if any

9. Total amount provided in the

cost records (7+8)

10 Amount oaid to related Darties

Current

Year

st Previous

Year

2^nd Previous

Year

14. ROYALTY AND TECHNICAL KNOW HOW CHARGES:

Particulars

Royalty on production/ Sales

tump sum payment of royalty,

if any

Current

Year

st Previous

Year

2^nd Previous

Year

12.

Technical know how charges

Others, if any

Total amount

Amount capitalized/ deferred

during the year

Net amount (5-6)

Deferred amount of earlier

years, if any

Amount provided in the

financial accounts (7+8)

Amount absorbed in the cost

records

Shortfall/ Excess, if any

Amount paid to related parties

Note : The details should be furnished in respect of each agreement separately.

15. QUALITY CONTROL EXPENSES:

Particulars

1. ISO number, if any

2. Name of certifying agency

3. Salaries & Wages

4. Other direct expenses

5. Others, if any (specify)

6. Total amount

Current

Year

st Previous

Year

2^nd Previous

Year

16. POLLUTION CONTROL EXPENSES:

Particulars

1 Effluent treatment

2. Control of air pollution

3. Control of ash pound/

ash mound

4. Penalty, if any

5. Others, if any

6. Total amount

Current

Year

st Previous

Year

2^nd Previous

Year

17. ABNORMAL NON-RECURRING COSTS:

Particulars

(specify)

Total

Current

Year

9t Previous

Year

2^nd Previous

Year

5 4

THE GAZETTE OF INDIA: EXTRAORDINARY

JPARF II—SEC. 5(i)l

18.(A) NON-MOVING STOCK (at the end of the year):

Particulars

Total direct material

consumption

Closing

stock

direct

material

Value of non-moving stock

Percentage of a3 to a2

Total

indirect

material

consumption

Closing

stock

indirect

material

Value of non-moving stock

Percentage of b3 to b2

Work-in-progress

Closing stock

Value of non-moving stock

c4. Percentage of c3 to c2

.Finished Goods

.Closing stock

.Value of non-moving stock

Percentage of d3 to d2

Total:

.Closing stock

e3.Value of non-moving stock

e4.Percentage of e3 to e2

Current

Year

2^nu Previous

Year

18.(B) WRITTEN OFF STOCK (during the year):

Particulars

Direct Materials

(Raw

Material & Components etc)

Indirect Materials

WIP

Finished Goods

Total

Current

Year

st Previous

Year

2^m Previous

Year

19.(A) INVENTORY VALUATION (at the end of the year):

•(')

Particulars

Input material:

Purchased

- Indigenous

Imported

(iflSelf manufactured

Basis

valuation

Current Year

Quantity

(unit)

Rate

(Rs)

Amount

(Rs.)

Previous Year

Quantity

(unit)

Rate

(Rs)

Amount

(Rs.)

2. Chemicals, additives

and consumables

3. Stores and spares

4. Packing materials

5. Tcols and implements

and Jigs, Dies and

Fixtures.

6. Work-in-progress:

(i) material cost

(ii) conversion cost

(details to be given)

7. Finished goods:

(i) unpacked

(ii) packed

8. Scrap/wastage

9. Others, if any

lO.Total value of inventory

as per cost accounts

11. Total value as per

financial accounts

12, Reasons for major

differences, if any

Notes :

(1) In respect of item at Sr. No. 1 and 6 details be furnished in respect of each

major input material constituting at least 2% of the total material cost.

(2) In respect of items at Sr. No. 2 to 5, total amount be given without any

quantitative details.

(3) Give in brief the method of inventory valuation system indicating the

elements of cost included therein and the extent thereof.

(4) Capital work-in-progress to be shown separately

19.(B) PHYSICAL VERIFICATION OF INVENTORY :

Sr.

Particulars

Raw material

Chemicals, additives,

consumables etc.

Stores & Spares

Packing Materials

Tools & Implements

WIP

Finished Goods

Scrap, Wastage

Total

Periodicity

verification

Shortage

Value

(Rs.)

Excess

Value

(Rs.)

Net(Rs)

THE GAZETTE OF INDIA : EXTRAORDINARY

| P-\KT II—Sue. 3(0]

20.

SALES OF THE PRODUCT UNDER REFERENCE:

Particulars

1. Purchased goods :

a) (specify)

2. Loan license basis:

a) (specify)

3. Own manufactured:

a) (specify)

4. Total sales

Current Year

Qty.

Rate

Amount

Qty.

Rate

/ear

Amount

Notes:

(1) Above details shall be furnished for major product groups/ varieties.

(2) Separate details shall be furnished for indigenous sales and export sales.

21.

MARGIN PER UNIT OF OUTPUT:

Particulars

1. Purchased goods:

(a) (specify)

(b)

(c)

2. Loan license basis :

(a) (specify)

(b)

(c)

3.Own manufactured:

(a) (specify)

(b)

(c)

Current Year *

Cost of

Sales

reali-

sation

Margin

(Rs.)

Two Previous Years

Separately

Cost of

Sales

reali-

sation

Margin

(Rs.)

Notes

(1) Above details shall be furnished for major product groups/ varieties.

(2) Separate details shall be furnished for margin on indigenous sales and export

sales. Where the product (such as sugar, bulk drugs, formulations, etc.) is

sold at different prices in accordance with government policy, sales

realisation and margin on such product at different prices shall be shown

separately alongwith quantity and value.

22.

COMPETITIVE MARGIN AGAINST IMPORTS:

9.F

Particulars

Name of product

Estimated demand of the product in the country *

Total production in the country *

Quantities imported in the country **

Total production by the company

%age share of the company in total inland

production (item 5/ item 3)

a. Cost of production per Unit (Inland sale)

b. Cost of Sale per Unit (Inland sale)

c. Cost of production per Unit (Export sale)

d. Cost of Sale per Unit (Export sale)

Quantity of the product imported by the company **

"OB value of quantity imported by the company **

Weighted average FOB rate for quantities

imported by the company (item 9/ item8) **

FOB value of quantity imported in the country **

Weighted average FOB rate of quantities

imported in the country (item 11/ item4) **

Competitive margin (item 12 less item 7(A)) **

Major exporting countries (other than those

listed in item 4 above)

(A) Total import duty paid by the company

(net of CENVAT)

(B) Weighted average rate of import duty paid by

the company (net of CENVAT) (item 15(A)/

item 8)

Bound rate of duty under WTO agreement

Current

Year

Notes :

(1) *

Indicate the source of information.

(2) ** Country-wise details should be furnished in respect of major countries

covering at-least 80% of the total and balance should be shown under the

head "Others".

23. VALUE ADDITION AND DISTRIBUTION OF EARNINGS :

Particulars

.Value Addition (for the product

under reference).

Gross sales

^excluding returns)

i,e'ss excise duty etc.

Net sales

Adjustments in stocks

Current

Year

st Previous

Year

2^nd Previous

Year

3976 GI/2001—8

THE GAZETTE OF INDIA : EXTRAORDINARY

[PAKI II—SE(\ 3(i)

5. Less; cost of bought out materials

and services

6 Value added

7. Add: income from any other

sources

8. Earnings for distribution

B. Distribution of earnings to:

1. Employees as salaries and wages,

retirement benefits etc.,

2. Shareholders as dividend

3. Retained funds as depreciation etc.

4. Government as taxes (specify)

5. Others, if any (specify)

6. Total

24.

FINANCIAL POSITION AND RATIO ANALYSIS :

U^3_

L_ ..

Particulars

Capital employed

Net Worth

Profit

Product

under

reference

Current Year

Factory a

a whole

Net Sales

Operating expenses as a

Company

as a whole

percentage of Net Sales:

(a)

Material cost

(b)

Factory overheads

(c)

Royalty on

production, if any

(d)

Salaries & wages

(e)

Research and

development

expenses

(f)

Quality control

(g)

Administrative

overheads

(h)

Selling & distribution

(i)

Interest

Profit as %age of capital

employed

7 | Profit as %age of net worth

Two Previous

Separate

Product

under

reference

Profit as %age of net sales

Profit as %age of value

addition

Value addition as a %age

of Net Sales

Current assets to current

liabilities

Net working capital in terms |

of number of months of cost

of sales excl. depreciation

Factory

as a

whole

Years

Company

as a

whole

Debt-equity ratio

Raw materials stock in

terms of number of months

of consumption

Stores & spares stock in

terms of number of months

of consumption

Work-in-progress stock in

terms of number of months

of cost of production

Finished goods stock in

terms of number of months

of cost of sales.

...

Notes

(1) Figures given for the company as a whole against serial number 1, 2, 3 and

4 shall be, duly reconciled with the financial accounts of the company

(2) The figures given for the product against serial number 1, 2, 4 and 5 shall

be, duly reconciled with the cost accounts of the company

(3) Figures given for the factory as a whole against serial number 1, 3, and 4

shall be. duly reconciled with the financial accounts of the company

25.

CAPITALISATION OF REVENUE EXPENDITURE:

Particulars

Current

Year

sT Previous

Year

Raw Materials

;

(a) Purchased

(

- Indigenous

•- Imported

;

(b) Self manufactured

Direct wages & salaries

Consumable stores

Repairs & maintenance

Depreciation

Factory overheads

.....

2"^a~Previous

Year

—

Administration overheads

[____

Other expenses (specify)

Total

| '

Capitalisation - Excisable

value

]

Capitalisation - Non Excisable !

value

THE GAZETTE OF INDIA • EXTRAORDINARY

[P ,. 11—S

MI)]

26.

RELATED PARTY TRANSACTIONS:

Briefly describe the transfer pricing policy, followed by the company >n respect of

"related party relationship" as defined in the relevant cost accounting records

rules made under clause (d) of sub-section (1) of section 209 of the Act The

following particulars may be furnished with regard to related party transactions

Particulars of

-related party

4. etc.

Product/

activity

Quantity

Rate

Amount

Normal

Price

Note :

(1) Details should be furnished for sale and purchase transactions separately

27.

CENTRAL EXCISE

RECONCILIATION

FOR THE PRODUCT

UNDER

REFERENCE:

Particulars

QUANTITATIVE DETAILS :

Opening Stock

Add : Production

Less: Closing Stock

Total Sales / Clearances

Chapter

Heading —

Unit

Chapter

Heading -

Unit

Chapter

Heading -

Unit

Particulars

DETAILS OF CLEARANCES

Total Clearances (Chapter heading-wise)

Less : Duty Free Clearances (factory)

Excisable Clearances (factory)

Penalty / Fine / Interest payable if any

Total Duty Payable (total 3 & 4 )

Assessable | Rate of

^alue (Rs.) | Duty_

Amount of

Duty (Rs.)

Particulars

SUMMARY OF CENVAT CREDIT

Opening Balance

Add : Availed During the year

Add Refunds received during year

Less : Closing Balance as per Excise

Records

Total Cenvat credit utilised during the

Inputs

Capital

Goods

Total

()l

year (1+2+3-4)

Closing Balance as per Annual Accounts

Difference between 4 - 6

(State amount and reasons for

difference)

Particulars

RECONCILIATION OF DUTY PAID

Excise Duty Payable as per 'B'

Total Excise Duty paid through

a) Cenvat Account -(Inputs )

b) Cenvat Account -( Capital Goods )

c) P.L.A.

Total (a+b+c)

Difference between (1-2)

(State amount and reasons for difference)

Excise Duty as per RT - 12

Difference between (2-5)

(State amount and reasons for difference)

RECONCILIATION OF DUTY PAID AND RECOVERED :

Excise Duty paid as per P & L A/c

Excise Duty Recovered as per P & L A/c

Difference between duty paid and recovered

(State amount and reasons for difference)

RECONCILIATION OF TURNOVER

Turnover as per RT 12

Turnover as per Annual Accounts (Net off Duties & Taxes)

Difference between (1 - 2 )

(State amount and reasons for difference)

Amount (Rs.)

28.

PROFIT RECONCILIATION:

Particulars

1. Profit or Loss as per cost

accounting records

2. Add: Incomes not considered

in cost accounts:

(a) (specify)

(b)

(c)

3. Less: Expenses not considered

in cost accounts:

(a) (specify)

(b)

(c)

Current

Year

2^ncrPrevious

Year

3976 GI/2001—9

<V2

THE GAZETTE OF INDIA : EXTRAORDINARY

|I³VNI II -Si-. . l(i)\

Add: Overvaluation of closing

stock in financial accounts

Add: Under-valuation of opening

stock in financial accounts

Less: Under-valuation of closing

stock in financial accounts

Less- overvaluation of opening

stock in financial accounts

Adjustment for others, if any

(specify)

Profit or Loss as per financial

accounts

Explanation:- for the purpose of these rules,-

(a)

"CAPITAL EMPLOYED" means average of fixed assets at net book values

(excluding intangible assets, effect of revaluation of fixed assets, capital works-

in-progress) and current assets minus current liabilities and provisions existing at

the beginning and close of the financial year

(b)

"NET WORTH" means share capital plus reserves and surplus (excluding

revaluation reserve) less accumulated losses and intangible assets.

(c)

"PROFIT" means operating profit after providing for depreciation and all other

expenses except interest on borrowings including debentures but before

providing for taxes on income

(d)

"NET SALES" means sales excluding sales returns, excise duties, sales tax

octroi,

other

local

taxes

and

expenses

refundable/recoverable

from

buyers/customers

(e)

"VALUE ADDITION" means the difference between the net output value (net

sales adjusted for work-in-progress and finished goods stock) and cost of bought

out materials and services for the product under reference

(f)

"NON MOVING STOCKS" means value of raw materials and components

finished and semi-finished which have not moved foi more than twelve months

The period shall be twenty four months in case of consumable stores and spare

used in workshop, tool rooms or repairs and maintenance

(g)

"NORMAL PRICE" means price charged for comparable and similar products in

the ordinary course of trade and commerce where the price charged is the sole

consideration of sale and such sale is not made to a related party

NOTES :-

(1)

If there is any change in the share capital due to merger, acquisition buy back of

shares, bonus issue etc. during the year under reporting, special mention may

be made with the reasons therefor

(2)

The profit arrived at for the factory, company and the product shall not include

interest and dividend received on investments outside the business capital

gains, and any other income which is neither normal nor of recurring nature.

The profit so arrived shall be the normal operating profit earned during the

current financial period of the company.

(3)

Wherever, there is any significant variation in the current year's figure over the

previous year's figure, reasons thereof shall be given.

(4)

If the company has more than one factory producing the product under

reference, separate details shall be indicated in the prescribed annexures in

respect of each factory.

(5)

If the factory is engaged jn the production of the product under reference and

any other activities, separate details shall be indicated in the prescribed

annexure for the factory as a whole and for the product under reference.

(6)

Figures shall be given for the year under audit and for the two preceding years in

respect of paragraphs 4 to 26

Signature

Name

Cost Auditor

Seal

Date

Signature

Name

Company Secretary

Stamp

Date

Signature

Name

Director

Stamp

Date

(>4

THE GAZETTE OF INDIA

EXTRAORDINARY

|PM,I II—SD;. 3(])\

Proforma

Name of the company

Name and address of the factory .

Name of the product:

Statement showing the cost of production, cost of sales, sales realisation and margin in

respect of the product(s) under reference produced during the year/period :

Quantitative Information:

Sr. No.

7 " "

Particulars

(i) Installed capacity

(ii) Capacity enhanced during the year by

leasing arrangement etc.

Actual production / output :

(i) Self,

(n) third parties, if any,

Production as percentage of installed capacity

(unit of measurement to be

specified)

Current

Year

;

Year

Captive consumption, if any

Quantity sold

(a)Domestic

JbJExport

Closing Stock (finished goods)

Opening Stock (finished goods)

. _—

Cost Information:

- No

4 __

. .. J

Particulars

Material consumed .

(item-wise covering at least 80% of

items by value)

1 Purchased .

(a) Indigenous (specify)

(b) Imported (specify)

2. Self manufactured (specify)

Process chemicals (specify)

Utilities

1 Purchased •

(a) Indigenous (specify)

*(b) Imported (specify)

2. Self manufactured (specify)

Direct wages and salaries

<5c>nsumable stores and spares

Depreciation

Quan-

tity

unit

Rate

per

unit

(Rs)~

Amo-

unt

~"(Rs.)

Cost per unit

Current Previous

Year

Year(Rs)

(RsJ,

•

~^~

10. J

11.

12.

13.

14.

15.

Ihe

! 19.

Lease rent, if any

Repairs and maintenance:

(a) Building

(b) Plant and Machinery

(c) Others, if any

Other works overhead

Total Works Overheads ( 2 to 9 )

Royalty, if any

Technical assistance/ know-how fee

Research and development

Quality control

Administrative overhead

(relating to production activities)

(a)Salaries and wages

(b)Others (specify)

Total (1+ 10 to 15)

Adjustment for variances (where

standard costing system is followed)

Add Opening stock

Less, Closing Stock

(Work-in-progress)

Less: Credits (from wastage and by-

products) / Recoveries, if any

Packing cost Primary

(a)Materials

(b)Others

Cost of production (16 to 20)

Finished Goods purchased, if any_

Opening Stock

Closing Stock

(finished products}

Total (21+22+23)

1 Quantity and cost transferred for •

(i) captive consumption, if any

(n)sales

(m)others, if any

Packing cost Secondary

(a)Materials

(b)Others

Other expenses:

(a) Administrative overheads (others)

(b) Others (specify)

Selling and distribution expenses

(a) Salaries and wages

(b) Freight and transport charges

, (c) Commission to selling agents

(d) Advertisement expenses

(e) Royalty on sales, if any

—

.— _

THE GAZETTE OF TNDIA EXTRAORDINARY

|P i- II—Si

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

(f) Warranty expenses after adjusting

income from chargeable services

(g) Others

(h) Total(a to g)

Interest and finance charges :

(a) for manufacturing activity

(b) others

Total cost of sales (excluding excise

duty) of packed quantity sold

(24 to 29)

Sales realisation

Less: Excise duty and other statutory

levies

Net sales realisation

Margin(33 - 30)

Add: export benefits and incentives, if

any

Total margin (including export benefits)

Ex-factory price (excluding sales tax

etc.)

Maximum retail price (excluding sales

tax etc.)

Maximum retail price, if any,

prescribed by the Government/

statutory/regulatory body etc.

Notes:

Separate proforma shall be prepared for each type/variety/ description of

product(s) under reference,

Separate proforma shall be prepared for the quantity used for captive

consumption, quantity sold within the country and the quantity exported.

Expenses incurred on export and the incentive earned thereon shall be indicated

in the proforma applicable for the quantity produced and exported.

Separate proforma shall be prepared for any related party/inter-unit transfer of

intermediate/finished product(s) under reference.

The administrative overheads shall be included in the cost of production only to

the extent they contribute in putting the goods produced to their present location

and condition. The balance of administrative overheads, if any, shall be included

in the cost of goods sold. The proforma may be amended accordingly, if

required.

The proforma may be suitably modified to cover the special features, if any, of

the product under reference on the basis of proforma prescribed for working out

cast of sales, margin, etc. of the said product in the relevant Cost Accounting

Records Rules.

__67

Indicate whether the prices of the product under reference are ex-factory prices,

F.O.R prices, door delivery prices or any other terms. In case of ex-factory

prices, whether cost of dispatch packing materials, freight, insurance and

delivery charges are recoverable from the customers separately

Signature

Name

Cost Auditor

Seal

Date

Signature

Name

Company Secretary

Stamp

Date

Signature

Name

Director

Stamp

Date

[F. No, 52/10/CAB-2001]

A. RAMASWAMY, Jt, Secy.

Note.-

The principal rules were published vide G.S.R. number 511(E), dated the

4^th November, 1996. '

IVinled hy the Man.tgor, Clovl. nf India Press. Ring

RO.RI. M.n.ipun. \ c u Delhi-1 I OOM

tind Published by the Controller <>l Publications. Ddln-1100M