Subject NOT available

click here for IIIF manifest

REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART II—Section 3—Sub-section (i)

PUBLISHED BY AUTHORITY

No. 341] NEW DELHI, TUESDAY, DECEMBER 30,1975/PAUSA 9, 1897

Separate paging is given to this Part in order that it may be filed as a separate compilation

MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS (Department of Company Affairs)

NOTIFICATION

New Delhi, the 30th December 1975

Draft Cost Accounting Records Rules for the Class of Companies Manufacturing

Industrial Alcohol

COST ACCOUNTING RECORDS (INDUSTRIAL ALCOHOL) RULES, 1975

G.S.R. 594(E).—In exercise of the powers conferred by sub-section (1) of section 642 read with clause (d) of sub-section (1) of section 209 of the Com- panies Act, 1956 (1 of 1956), the Central Government hereby makes the follow- ing rules, namely:

1. Short title and commencement.-—(1) These rules may be called the Cost Accounting Records (Industrial Alcohol) Rules 1975.

(2) They shall come into force on the 1st da of January, 1976.

2. Application.—They shall apply to every company engaged in the produc- tion, processing or manufacturing of industrial alcohol which includes any grade or grades in the following categories, namely:

(i) Absolute Alcohol (ii) Rectified Spirit (iii) Denatured and special denatured spirit (iv) Power Alcohol

(2493)

3, Maintenance of records.—(1) Every company to which these rules apply shall, in respect of each of its financial year commencing on or after the com- mencement of these rules, keep proper books of account containing inter alia the particulars specified in Sch.edu1.e3 I and II annexed to these rules relating to the utilisation of materials, labour and other items of cost in so far as they are applicable to industrial alcohol.

Providled that if the said company is manufacturing any other products or engaged in other activities in addition to industrial alcohol, the particulars relating to utilisation of materials, lalbour and other items of cost in so far as they are applicable to auch other products or activities shall not be included in the cost of industrial alcohol.

(2) The books of account referred to in sub-rule (1) shall be kept in such a way as to make it possible to calculate the cost of production and coat of sale of each category of industrial alcohol during a financial year (hereinafter re- ferred to as the relevant period) from the particulars entered therein. Such books of account and the proformae specified in Schedule II shall be completed within ninety days from the end of the financial year of the company,

(3) It shall be the duty of every person referred to in sub-section (6) and sub-section (7) of section 209 of the Companies Act, 1956 (1 of 1956), to take all reasonable steps to secure compliance by the company with the provisions of 'oub-rules (1) and (2) in the same manner as they are liable to maintain finan- cial accounts as; required under sub-section (1) of section 209 of the said Act.

4. Penalty.—If a company contravenes the provisions of rule 3, the company and every officer thereof who is in default, including the persons referred to in sub-rule (3) of rule 3, shall be punishable with fine which may extend to five hundred rupees and, where the contravention is a continuing one, with a further fine which may extend to fifty rupees for every day after the first during which such contravention continues.

SCHEDULE I

(See rule 3)

1. Materials:

(a) Raw materials—Molasses.— (i) Proper records shall be maintained show- ing separately the quantity and cost of different grades of molasses procured from the sugar factory of the company and from other sources, if any.

(ii) These records shall contain such details as to enable the company to deter- mine the quantity and cost of receipts (including all direct charges incurred upto the works), issues and balances. The basis on which the said quantities and costs have been calculated shall be clearly indicated in the cost records,

(b) Process Materials,—Proper records shall be maintained to show¹ •fae re- ceipts, issues and balances both in quantities and cost of each item of the pro- cess materials such as sulphuric acid, caustic soda, ammonium sulphate, urea, yeast, de-hydrants and denaturants. The costs shall include all direct charges upto works, wherever specifically incurred. The issues shall be properly identi- fied with the departments and products manufactured.

(c) Consumable stores. Small tools. Machinery spares), etc-—(i) Proper re- cords shall be maintained to show the receipts, issues and balances both In quantities and cost of each item of consumable stores, small tools, and machinery spares. The costs shown shall include all direct charges upto works, wherever specifically incurred.

(ii) In the case of consumable stores and small tools the costs of which are insignificant, the company, if it so desires, maintain such records for the main groups of such items.

(iii) The cost of issues of consumable stores, small tools and machinery spares,

(d) Wastages, svoilages, rejections, losses etc. of materials.—Proper records .shall be maintained showing the quantity and cost of wastages, spoilages, rejec- tions and losses of raw materials, process materials, consumable stores, small tools and machinery spares, whether in transit, storage, manufacture or for any -other reasons. The method followed for adjusting the above losses as well as the income derived from the disposal of rejected and waste materials including .spoilage, if any, in determining the cost of the product under reference shall be indicated in the cost records,

II. Salaries and Wages;

(a) Proper records shall be maintained to show the attendance and earning* of all employees and the departments or cost centres and the work on which they are employed. The records shall also indicate separately;

(i) Overtime wages earned; (ii) Incentive wages earned, either individually or collectively as produc-

tion bonus or under any scheme based on output;

(iii) Earnings of casual labour.

(b) Idle time shall be separately recorded under classified headinga indicat- ing the reasons therefor. The method followed for accounting of idle time pay- ments in determining the cost of the products shall be disclosed in the cost records.

(c) Any wages and salaries allocable to capital works such as additions to plant and machinery, buildings or other flixed assets shall be accounted for under the relevant capital heads.

JII. Expenses of Service Departments:

Detailed records shall (be maintained to indicate the expenses directly incurred lor each service department or cost centre. These expenses shall be apportioned to other service and production departments on an equitable basis.

IV. Utilities:

(a) Steam,—Where steam is raised by the distillery, -proper records showing the quantity and cost of steam raised and consumed for the production of indus- trial alcohol shall be maintained in such detail as may enable the company to tfurnish the necessary particulars in Annexnre I to this Schedule. The cost of •steam consumed by the distillery and other units of the company shall be cal- culated on a reasonable (basis and applied consistently.

Where steam is generated and supplied by any other unit of the company t" the distillery, the cost of steam so supplied shall be charged °n a reasonable basis and applied consistently.

Where power is generated and supplied by any other unit of the company to the distillery, adequate records shall be maintained to assess the quantity and cost of power so supplied. The rate charged shall be on a reasonable basis and applied consistently. Necessary records shall also be maintained to show the •consumption of power by the various departments or cost centres. The cost of power allocated to the respective departments ^iall be on a reasonable basis and applied consistently,

V. Workshop/Repairs and Maintenance:

Proper records showing the expenditure incurred by th^ workshop under diffe- rent heads and on repairs and maintenance by the various departments and cost centres shall be maintained. The records shall also indicate the basis by charging Lthe workshop expenses to different department departments, cost centres and unitfr

Expenditure on major repair works from which benefit ig likely to accrue for mtfre than one financial year shall be shown separately in the cost records indicating the method of accounting in. determining the cost of industrial alcohol manufactured during the relevant period,

Expenditure incurred on works of a capital nature shall be capitalised. The cost of such jobs shall include the expenditure on material, labour and a share of the overheads. The jobs carried out by the workshop of any other unit of the: company to the distillery and vice versa shall be charged on a reasonable basis, and applied consistently.

VI. Depreciation:

(a) Proper records shall be maintained showing the cost and other particulars- of fixed assets in respect of which depreciation is to be provided. These records shall inter alia indicate the cost of each item of asset including installation charges,. if any, the date of its acquisition and the rate of depreciation. In respect ot those assets, the original cost of acquisition of which, cannot be ascertained without an: unreasonable expenditure or delay, the valuation shown in the books on the first. day of the financial year beginning on or after the commecement of these rules shall be taken as the opening balance,

(b) The basis on which depreciation ls calculated and allocated to the various departments and cost centres and to the products shall be clearly indicated in the records. Depreciation chargeable to the different departments and cost centres shall .mot be less than the •amount of depreciation chargeable in accordance with the provisions of sub section (2) of section 205 of the Companies Act, 1956 (1 of 195b) and shall relate to plant and machinery and other fixed assets utilised in such departments and cost centres. In case the amount of depreciation charged in the cost records in any financial year is higher than the amount of depreciation charge- able under the aforesaid provisions of the Companies Aet, the amount so charged In excess shall be Indicated clearly In the cost records. The cumulative deprecla. tion charged in the cost records against any individual item of assets shall not, however, exceed the original cosif of the respective asset

VII. Overheads©

Proper records shall be maintained showing the various items of overhead expenses. These expenses shall be analysed, classified and grouped into works, administration and selling and distribution overheads. Where the company Ss engaged in the manufacture of any other products in addition to industrial alcohol; the records shall clearly indicate the basis followed for the apportionment of the common overheads including head office expenses of the companv to the- manufacture of industrial alcohol^ other activities and capital works. The basis- followed for appointment of the overheads shall be equitable. The overheads relating to the distillery together with the share of head office and other common overheads applicable thereto shall be allocated to the different categories of indust- rial alcohol manufactured on a reasonable basis. Details of .selling and distribution: expenses and the share thereof applicable to Industrial alcohol manufacturing- activity and as between the different categories of alcohol shall also be maintained..

Records showing the expenses incurred on export of industrial alcohol, if any, shall be separately maintained, so that the cost of export sales can be determined' correctly. The expenses incurred on exports as well as any export incentives earned shall be reflected in the cost statements relating to export sales.

VIII. By Products:

Proper records shall be maintained for each item of by-products such as fuels oil recovered, showing the receipts, Issues arid balances both in quantity and value. The basis adopted for valuation of the by.-products shall b" equitable and consis- tent. Records indicating the actual sales realisation of by products shall be main- tained.

IX. Industrial Alcohol Transferred for Captive Consumption:

Proper records shall be maintained showing the quantity and cost of industrial alcohol transferred to other department/unit of the company for self-consumption. The rate at which such transfers are effected shall be disclosed in the cost records^

X- Packing

Proper records shall be maintained showing the quantity and cost of packing materials, wages and other expenses incurred, if any, in respect of different catego- ries of industrial alcohol packed. Detailed records of the expenses incurred on export packing shall be kept separately and exhibited in the relevant cost state- ment for exports.

XI. Work in Progress and Finished Goods:

The method followed for determining the cost of work-in-progresg and finished goods stock shall be indicated in the cost records so as to reveal the cost elements that have been taken into account in such computation. The method adopted shall be followed consistently,

XII. Cost Statements:

Statements showing the actual costs of molasses as well as production and marketing of industrial alcohol shall be maintained in proformae 'A', 'B' and 'C -of Schedule II or in a form as near thereto, as practicable. If a company is ope. rating more than one distillery, separate cost statements shall be maintained in respect of each distillery.

Exports of industrial alcohol, if any, shall be exhibited in separate cost state- ments and the same excluded from the Cost Statements of industrial alcohol sold In the internal market.

XIII. Reconciliation of cost and Financial Accounts:

The cost records shall be reconciled preferably periodically with the financial books of accounts so as to ensure accuracy. Variations, if any, shall be clearly indicated and explained. The period for which such reconciliation is effected shall not exceed the period of the financial year of the company. The reeoncilation shall be done in such a manner that the profitability of the product under reference can be correctly adjudged and reconciled with the ovorhall profits of the company.

A statement showing the total expenses incurred by the company and the share applicable to industrial alcohol shall be maintained in Proforma lD' of Schedule II duly reconciled with the financial accounts.

XIV. Adjustment of Cost Variances:

Where the company maintains cost records on any basis other than actuals such as standard costing, the records shall clearly indicate the procedure followed" by the company in working out the cost of the product under such procedure and the method followed for adjusting the cost variances in determining the actual cost ^f the product. The cost variation shall be shown against item 10 of Proforma 'B' of Schedule II. The reasons for the variances shall be detailed in the cost records.

XV. Records of Physical Verification:

Records of physical verification shall be maintained in respect of all items held in stock such as molasses, process materials, packing materials, consumable stores machinery spares, fuels, finished goods and fixed assets. Reasons for shortages/ surpluses arising out of such verification and the method followed for adiustint? thi same in the cost of the product shall be indicated in the records. Jual-J"g "ie

XVI. Inter-Company Transactions:

In respect of supplies made or services rendered by the company to its holding company or a subsidiary or a company in the same group or a company in which a Director of the company is also a Director in such companies and viZ-vlrsa records shall be maintained showing contracts entered Into, agreements o-trader standings reached, in respect of:

A unaer-

(a) purchase and sale of raw materials and process materials- (b) utilisation of plant facilities; (c) supply of utilities; and

(d) administrative, technical, managerial and any other consultancy services.

These records shall indicate the basis followed in arriving¹ at the rates charged between them so as to enable determination of the reasonableness of the rate* charged/paid for such services,

XVII. Statistical Records:

Data such as plant utilisation, the period run for different categories of industrial alcohol, the quantity of each category and grade of industrial alcohol produced, plant stoppages under classified headings indicating the reasons, quantity of by. products obtained, various operating efficiencies and recovery efficiencies shall be kept.

Recordsi as will enable the company to identify, the capital employed separately for the industrial alcohol manufacturing activity shall also be maintained. Fresh investments on fixed assets that have not contributed to the production during the- relevant period shall also be indicated in the records,

Statistical and other records maintained in compliance with the provisions of this Schedule and Schedule II shall be such as to enable the company to exercise, as far as possible, control over the various operations with a view to achieve optimum economies in costs and to provide the necessary data required by the cost auditor to suitably report on all the pointy referred to in the Cost Audit (Report) Rules, 1968.

The data maintained in the coat records shall be reconsiled with the periodical returns submitted by the company to the excise and other authorities.

ANNEXURE I

[See Paragraph IV (a) ]

,.

Name of the Compary . •—> •—• — Name and address of the distillery —• •—• •

Statement shiwlrg the cost of stern] raistd tnd Ccrsvmed t'.urirg (he year —

Particulars

Quantity (Units)

Amount Ra.

Rate Rs.

61. No.

(3)

(4)

(5) d)

i

2

Water Fuels

(a) Coal (b) Furnace Oil (c) Fire-wood (d) Other fuels

(to be specified)

Consumable stores Salaries and Wages

Repairs and Maintenance Other direct expenses

3 4 5 6

(such as Boiler inspection fees etc.)

Depreciation

7

TOTAL

L"w Credits, if any

8

TOTAL

Less :(a) Coat of live ateam used by Power House

for generating electricity (Annexure II item i)

(b) Other units of the company

Quantity and Cost of live steam

10

( I)

( 2)

(3) (4)

Total at item 10 allocated to:

GO Distillery (b) Other products of the company

(to be specified)

TOTAL

NOTES -—'(I) Realisation, if any, by sale of steam to outside parties ami waste products such as Boiler ash shall be shown separately against item R.

(2) Wi'.ri rrvt-rs art not insl.iU-r!, consumption of steam shall be assessed on a reasonable basis and applied cor.sistcr.tly.

(3) B n us to employees other thin incentive bonus, provision for statutory gra- tnity unH interest charges shall be show.i in proforma 'C orly and not in ar.y other proforma.

ANNEXUKE II

[See Paragraph IV (b)]

Name of the Company ,—, r—.—*-—^-.—^-—,—.—,——.—, ,—,—,

Name and address of the distillery 1 •—. ^~ .— >—. , . .

Statement showing the cost of power generated/purchased and consumed durirg the yc"

No. of units generated : KWH . • . ~. . , .—.——, , .—.

No. of units purchased I KWH ——• . _______ ^_™

Consumption in Power House

including other losses ] KWH • • •—1 •—•— ———.—. , .

Net units consumed t K W H— • .———• . ,—,—^—~-,

Amount

Quantity (Units)

Rs.

Particulars

SI. No.

Rate per units Rs.

(3)

(4)

(5) 1

(2)

ci;

Steam, [item 9 (a) of Anncxure I]

1

2 Consumable stores Salaries and wages Repairs and Maintenance Other direct expenses Duty on Electricity

3 4 5 6

_ , 7

Depreciation TOTAL

Less credits for other units of the Co.

8

Net cost of power generated

9

• . . .

10 Cost of power purchased Total net cost of power

11

Cost per unit

12

(2)

(3) (4) Cs) w

Total

i

2

at item 11 allocated to : Distillery Other departments of the distillery Other products of the company

3

(to be specified)

TOTAL CONSUMPTION

NOTES :— (i) Realisation, if any, by sdc of piwer to outside parties etc. shill be shown separately against item 8.

(2) Cost p^r unit shall b; w irk-d out with reference to the net uriis of power available for use after deducting consumption in the power house and other losses.

(3) Where m:trrs are not installed, coTSumption of power shall be asscsed on a reasonable basis and applied consistently.

(4) Bonus to employees other than incentive bonus, provision for statutory gratuity and interest charges shall be shown in Proforma 'C only and not in any other Proforma.

SCHEDULE II (See rule 3)

PROFORMA 'A'

Name of the Company—:— Nam; and address of the distillery

•

• ~-

Industrial Alcohol during the year.—.—.—.——<

Statement showing the CJst of MMas'ies procured and consumed for the manufacture of •—

CJst pi :r tonne Particulars

Quantity

Rite Rs.

Cost Rs.

SI. No.

Previous Year

Current Year

Rs.

Rs.

(7)

(4)

(6)

( 2)

(5)

( 1)

(3)

I

2

Opening Stock (a) Quantity transferred from ow*i sugar factoryj if any.

(b¹) Purchases

(to be given grade wise)

Transport and handling charges

3

4 Excise duties, if any Other expanses including taxes,

5

fees (to be specified)

TOTAL

Less : fO Transit Losses

6

(ii) Storage losses (lii) Other losses^ if

any,

—1—.—"—

(to be Specified)

_ f—_

TOTAL

.

Less: Closing Stock Consumption

1 8

(transferred to proforma 'B')

NoTii : Abn0:1ml losses of Milass:s5if any, shall be indicated both in quantity and cost in a separate statement.

PROFORMA 'B'

•Name of the Company . • .— • 1 —.—" • •Name a rd address of the distillery ——< 1 • • • ——•

Statement shwing the cost of IITI istrial A'coh^l irmifacturvd during th? year ' •

Previous year

Current year

I '.

2

Licensed Capacity Installed capacity (a) Actual quantity of alcohol produced

3

(Kilo litres)—.(Alcohol content %)

(b) Converted in terms of 100% Alcohol '.

(Kilolitres)

4

5 6

1 %

9

Total sugar % in Molasses Total fermentable sugars % in Molassej Possible recovery of Alcohol % Actual recovery of Alcohol % Fermentation efficiency % Distillation efficiency % OveralletBciency %

10

Qty.

Particulars

Rate

Cost per Kilolitre

Total

SI. LNo.

Cose

Current Year

Previsious Year

Rs.

Rs.

Rs.

Rs.

Rs.

(3)

(5)

(6)

(2)

(4)

W

(7)

1 Raw Materials Molasses (Proforma 'A')

2 Process piateriah

(i) Sulphuric Acid (ii) Caustic Soda (iii) Amrmnium Sulphate (iv) Uica (v) Ycnst (vi) Others

3

4

Consumable Stores (a) Direct salaries and wages (b) Salaries of excise staff, if

any.

Vnlitiei

5

(a) Streana (Annexure I) (b) Power (Annexure II)

6

7 8

Other works Overheads Repairs ard Maintenarce Depreciation Administration overheads

•) *Adjustment for costvarianc

9 K

:es,

if any (where standard t osiing i

s

adopted)

(a) Materials (b) Labour (c) Overheads

TOTAL

fan."

(I ) (2) (3)

(4) (5) (6) (7)

II I.css Credits for recoveries (net) (to be specified)

Adjustment for difference

b:tweer opining ard closing balance of yrork-in-progress

Net Total

13

NOTES :—. (1) Similar cost statements shall be maintained separately in respect of each.

atcgnry/grade of industrial alcohol produced, taking into account the extra costs incurred for further qrocessing.

(2) The basis or wViich the realisable value for by-products is determined shall be clearly indicated.

(3) The apportionment of head office expenses and other common overheads to the product under reference in the case of multi-product companies shall be equitable

(4) Bonus to employees other than In centivc bonus, provision for statutory gratuity and interest charges shall be shown in Proforma 'C only arid not in any other proforma.

•(;) Applicable only to companies maintaining records on standard costing system.

(6) Repairs and maintenance should include stores used therein.

PROFORMA 'C

Hameofthe Company , . . - ,. „ _, .,—, , , „ — , _, , . , ,_,

Name and address of the distillery^ ,__,—__„ ,- - . , , . , . ,_ ,_ Statement showing the cost of Industrial Alcohol sold during the year—•^——>——• . •

Current year Previous year

1 Quantity produced % Quantity used for captive

consumption, if any.

3 Quantity sold

Total Cost per Kilo litre Particulars

Qty.

Cost -

Rate K.L.

SI. No.

Current Year

Previous Year

Rs.

Rs.

Rs.

Rs.

(6)

(3)

(5)

(4)

(7) (2)

( i)

Cost of Industrial Alcohol

1

(Proforma 'B')

2

^

Stock adjustments : Add : Opening Stock - Less : Closing Stock:

TOTAL

Less: Self Consumption

3

TOTAL

Packing cost, if any.

4

(Major items to be Specified) Selling and distribution ex-

5

m_^ penses

(6)

(4)

(5)

(7)

(3)

( I)

(2)

Total cost including selling and

6

distribution expenses

7 8

Interest charges Annual bonus to employees (other than incentive bonus)

9 Provision for statutory Gratuity Any other experses not io-

10

cluded in Cost

, „_

^

,—

_

,

(to be specified)

TOTAL

11 Less other in comes rot consi-

dered in cost

(items to be specified)

12 Total expenses excluding excise duty for quantity sold in the internal market.

13 Total Sales realisation excluding excise duty for quantity sold in the internal market

Margin

14

NOTES:— (1) Similar cost statements Shall be miantaincd separately in respect of each category/

grado of Industrial Alcohol.

(2) The apportionment of common selling & distribution expenses in case of

multi-product units shall be equitable.

(3) Bonus to employees (Other than incentive borus), provision for Statutory gratuity and irtercst charges shall be shown separately ir this profoima only and not in any other proforcna.

(•;) If my iniistrial alcohol is exported to other countries, separate cost statements shall be maintained in respect or each category ar-d grade. Expenses ircuircd on exporting and incentives earned thereon shall be shewn in the relevant cof.t statements.

PROFORMA ' D'

Name of the Compary • Name anO address of the distillery •

Statement showing the allocation of total expenses of the Company between industrial

alcohol manufacturin g activity and other activities for the year

Shate applicable to

P a r t i c u l a rs

Other

Total Expenses

SI. No.

Industrial Alcohol activities

activity Rs.

Rs.

(4)

( 2)

(3)

(5) (1)

1.

2.

R aw M a t e r i a ls c o n s u m ed . . .. P r o c e ss M a t e r i a ls c o n s u m ed . . .. C o n s u m a b le s t o r es D i r e ct s a l a r i es a n d ^ ' w a g es . . .. U t i l i t i es . R e p a i rs a nd M a i n t e n a n ce . . .. O t h er w o r ks o v e r h e a ds . . . .. D e p r e c i a t i on . . . . .. A d m i n i s t r a t i on O v e r h e a ds . . ..

3. 4- 5. 6. 7. 8. 9.

TOTAL

(3) (4) (5)

10. . Adjustment for difference between opening and

closing babnee of work-in-progress

T O T AL . . ..

I I. L-ss : Credits for recoveries :

( i) B y - p r o d u c ts . . . .. ( i i) O t h e rs

,12,

L e ss : C a p t i ve C o n s u m p t i on 1 . . ..

T O T AL . . ..

Stock adjustment for difference between opening

and closing stock of fiiished goods. .

Packing Cost including packing materials

Silling and Distribution expenses

TOTAL . . ..

16. Interest charges

Ainual bonus to etmloyjes other than Incentive

17.

bonus

18. Provision for statutory gratuity.

Other expenses not included in cost

19.

(items to hi specified)

TOTAL .

2 0, Less : Other income not consideredin cost

(items to b; specified)

2 1. Total excluding excise duty ,

Deduct export benefits, if a ny

2 2.

NET TOTA,L .

Net sales realisation excluding excise duty .

2 3.

2 4. •Margin

All itemi of iticam; and expenditure in this Proforma shall be reconciled with the financial acaau'us for the relevant period.

[No. 52/ 39/73-CAB.J

[P. B. MENOH, Joint Secy.