Cost Accounting Records Rules 2011
&
Cost Audit Report Rules 2011
A PRESENTATION BY
ATISH KUMAR AGRAWAL
ATISH AGRAWAL & CO.
COST ACCOUNTANTS
9831662685
033-30863147
Historical Background

Relevant Provisions of Company Law (for Cost accounting
and Cost Audit introduced in 1965)

Section 209(1)(d) –
Every company shall keep at its registered office proper books of account
with respect to:---in the case of a company pertaining to any class of companies engaged in
production, processing, manufacture or mining activities, such particulars
relating to utilization of material or labour or to other items of cost as may
be prescribed. If such class of companies is required by the Central
Government to include such particulars in the books of account.
Section 233B – Audit of cost Records.
(1) Where in the opinion of the Central Government it is necessary so to do
in relation to any company required under clause (d) of sub –section (1) of
section 209 to include in its books of account the particulars referred to
therein, the Central Government may, by order ,direct that an audit of cost
accounts of the company shall be conducted in such manner as specified in
the order by an auditor(who shall be a cost accountant within the meaning
of the Cost and Works Accountants Act ……………………)
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Shortcomings of earlier Mechanism
Separate Rules for each industry/product
 Too much emphasis on government mandated form.
Leaving no room for flexibility with the company
management.
 More than one rule for multi product companies
 A compliance view rather than converting it into
management tool
 No mechanism in MCA know all companies presently
covered under CARR
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..contd…Shortcomings of earlier
Mechanism
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Selective and ad hoc approach led to a sense of
discrimination
No cost audit orders in many industries/companies
Companies were required to submit multiple cost audit
reports for each unit and each product separately
Existing Report Rules / Formats – needed simplification
Multiple appointment of cost auditors for a company
having multiple products under audit
Selective coverage did not give any advantage
Notification dated 3-06-2011
Companies (Cost Accounting Record)
Rules 2011
These rules shall apply to every company …..engaged in
production, processing, manufacturing, or mining
activities….
 wherein net worth of the company on the last date of
immediately preceding financial year exceeds five crores
of rupees; or
 aggregate value of the turnover… in preceding year
exceeds rupees twenty crore ; or
 It is a listed company
 All such companies shall keep cost records w.e.f. 01-042011
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…Contd..Notification dated 3-06-2011
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Cost records shall be maintained in accordance with
generally accepted cost accounting principles and cost
accounting standards
Cost records and cost statements, maintained under
these rules shall be reconciled with audited financial
statements for the financial year
Compliance Report for yr. 2011-12 onward,(certified by
cost accountant in XBRL format) attached with FORM
A XBRL to be filed with MCA
Notifications and orders by MCA
11/04/2011- Simplified Procedure for appointment of
cost auditors
 02/05/2011- Cost Audit Order on every company
engaged in bulk drugs, Formulations, Fertilizer, Sugar,
Industrial Alcohol, Electricity, Petroleum,
Telecommunications where
 The aggregate value of net worth exceeds Rs.5 crore,
or
 The aggregate value of the turnover exceeds Rs.20
crores, or
 The company’s equity or debt securities are listed or in
the process of listing on any stock exchange in India or
abroad
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Notifications and orders by MCA
03/05/2011 ammended on 30/06/2011- Cost Audit
Orders on every company engaged in cement, Tyres &
Tubes, Steel, Insecticides ,Paper, Glass, Paints & Varnishes
and Aluminums where
 Where the aggregate value of turnover made by the
company exceeds Rs.100 crores, or
 The company’s equity or debt securities are listed or in
the process of listing on any stock exchange in India or
abroad
 Includes Intermediate or Allied Products
 Products/Activities linked to respective chapters of
Central Excise Tariff Act,1985
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Notifications and orders by MCA

02/05/2011- Industry specific cost audit orders (as it stands today)
Telecommunication Industry
Cost accounting
Records((Telecommunication
Industry) Rules 2011
Petroleum Industry
Cost Accounting Records (Petroleum
Industry) Rules 2011
Electricity Industry
Cost Accounting Records (Electricity
Industry) Rules; 2011;
Sugar Industry
Cost Accounting Records (Sugar
Industry) Rules; 2011
Fertilizer Industry
Cost Accounting Records (Fertilizer
Industry) Rules 2011
Pharmaceutical Industry
Cost Accounting Records
(Pharmaceutical Industry) Rules 2011
Notifications and orders by
MCA

30/06/2011-industry specific cost audit orders
on:
1. Cement
2.Tyres & Tubes
3. Steel
4. Paper
5. Insecticides
6. Glass
7. Paints & Varnishes
8.Aluminum
Chapter 25, 38 and 68
Chapter 40
Chapter 72 and 73
Chapter 47 and 48
Chapter 38
Chapter 70
Chapter 32
Chapter 76
Notifications and orders by MCA
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24/01/2012-industry specific cost audit orders on:
Jute, cotton, silk, woolen or
blended fibers/textiles
2. Edible oil seeds and Oils (incl.
Vanaspati)
3. Packaged food products
1.
4. Organic & Inorganic Chemicals
5. Coal & Lignite
6. Mining & Metallurgy of ferrous
& non- ferrous metals
7. Tractors & other motor vehicles (incl.
automotive components)
8. Plantation Products
9. Engineering machinery (incl. electrical
& electronic products)
Chapters 50 to 63 of CETA
Chapters 12 and 15
Chapters 2 to 25 (except
Chapters5, 6, 14, 23 and 24)
Chapters 28, 29, 32, 38 and 39
Chapter 27
Chapters 26 and 74 to 83
(except Chapters 76and 77)
Chapters 84, 85 and 87
Chapters 8, 9, 21 and 40,
Chapters 84 and 85
Notifications and orders by
MCA
Effect of industry specific cost audit orders issued on
24/01/2012:
 All company specific cost audit orders issued prior to
31/03/2011 stands withdrawn with effect from financial
year commencing on or from 01/04/2012
 All companies who were issued company specific
orders but are covered under dated 02/05/11 or
30/06/11 or 24/01/12 shall comply with industry specific
order
 Companies to which industry specific orders are not
applicable will comply with earlier company specific
order till 31/03/12

Additional Industries covered vide Order dated 06-112012(aplicable w.e.f. financial year starting from 1-01-2013
and onward)
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-Vegetable Saps or Products
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Alcoholic Beverages
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Food Residuals or Prepared Animal Feed
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Unmanufactured or Manufactured Tobacco
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Tobacco Products
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Albuminoidal Substances, Starches, Glues and Enzymes
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Essential Oils
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Personal Care Products
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Explosives
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Fireworks, Matches and Combustible Materials
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Photographic and Cinematographic Goods
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Raw Hides, Skins and Leather
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Leather Products
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Wood and Wood Products
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Footwear and Parts thereof
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Headgear and Parts thereof
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Ceramic Products
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Pearls, Diamonds, Stones and Jewellery Articles
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Railway Rolling Stock
Contd.-2- Additional Industries
Covered vide order dated 06-11-2012
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Parts of Railway Rolling Stock
Railway Track Fixtures and Fittings
Containers
Non-powered Aircraft and parts thereof
Aircraft ,Spacecraft and parts thereof
Parachutes and Roto chutes
Ships and Boats
Floating Structures
Optical Instruments and parts thereof
Photographic and Cinematographic equipments
Measuring Instruments and parts thereof
Surgical or Medical Instruments and parts thereof
Clocks or Watches or parts thereof
Musical Instruments and Parts thereof
Contd..3… Additional Industries
covered vide order dated 6-11-2012
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Medical or Vehicular or other Furniture and Mattress
and Parts thereof
Lights and Fittings
Prefabricated Buildings
Toys, games and sports Equipments
Stationery Items
Miscellaneous manufactured articles
Salient Features of New Structure
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Modified cost audit report & appointment structure
Simplification of complex and bulky reports
Detailed product – wise cost statements to remain with
the company
Unit –wise product-wise reports no longer necessary
Protection of confidentiality and reduction in
compliance cost
Simplified appointment procedure
New Appointment Procedure
A cost accountant defined under Section 2(1)(b) of
CWA Act holding a full- time certificate of practice can
be appointed as cost auditor.
 A firm can also be appointed
 Audit Committee to ensure that cost auditor is free
from any disqualifications specified under Sections
233B(5) OR 226(4) or 266(5)
 Cost auditor to submit:
 Consent letter specifying that he is not disqualified
under Section 224(1-B), and
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He is at arm’s length relationship with the company
..contd…New Appointment
Procedure
 Company
to e-file application for approval of
appointment in Form 23C along with
 Copy of Board Resolution
 Copy of consent letter from cost auditor
 Approval deemed to be granted if no query
received from Government within 30 days of
receipt of appointment letter in Form23D
Due Date of Appointment of Cost
Auditor for the financial year 2013-14
is 30th June 2013 without late fees
In case of delays in filing applications with the Central
Government
 Period of Delay Additional Fee Payable
 Upto 30 days
Two times of normal fee
 30—60 days
Four times of normal fee
 60—90 days
Six Times of normal fee
 More than 90 Nine times of normal fee
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Disclosure by Company in
Annual Report
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Company to disclose in its annual report of each
relevant financial year:
Full particulars of cost auditor
Due date of filling cost audit report
Actual date of filling cost audit report
For companies where constitution of Audit Committee
is not required to be made, the functions to be
discharged by the board
Features of Cost Accounting
Records Rules 2011
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Applicable to every company including a foreign
company engaged production, processing, manufacturing
or mining wherein:
The aggregate value of net worth as on the last date of
the immediately preceding financial year exceeds Rs.5
crore, or
The aggregate value of the turnover made by the
company from all products or activities during the
immediately preceding financial year exceeds Rs.20
crore , or
The company’s equity or debt securities are listed or in
the process of listing on any stock exchange in India or
abroad
Features of Cost Accounting
Records Rules 2011
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Not applicable to body corporate governed by a special
Act
Supersedes 36 Cost Accounting Records Rules out of
44 issued till date
Not applicable to following activities or products
covered under individual Cost Accounting Records
Rules notified on 7th December 2011
Pharmaceuticals
Sugar
Telecommunications
Electricity Industry
Fertilizers
Petroleum Industry
Compliance report under CARR
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Every company to which Companies (Cost Accounting
Records) Rules 2011 shall submit a Compliance Report
From 2011-12 for every financial year commencing on or
after 01/04/2011
To be filed, provided all the products /activities of the
company, excluding the exempted categories, are not
covered under cost audit
Within 180 days from close of financial year
Anexures to be certified by a “Cost Accountant”
Report to be approved by the Board of Directors
Features of Companies (Cost Audit
Report) Rules 2011
Revised Cost Audit Report Rules issued superseding
Cost Audit Report Rules 2001.
 Applies to every company in respect of which cost audit
has been ordered by the Central Government under
section 233B of the Companies Act,1956
 Annexure to cost audit report to be approved by the
Board of Directors before submitting the same to the
central government by the cost auditor.
 Audited Annexure to be signed by the Company
Secretary and at least one Director or two directors in
absence of Company Secretary on behalf of the
company.
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Highlights of recent reform
measures
To ensure uniformity, companies to follow;
 Generally Accepted Cost Accounting Principles, and
 Cost Accounting Standards issued by ICAI to the extent
these are relevant and applicable.
 It entails:
 Understanding the process of manufacture and stages
involved for production of the final product
 Proper identification, allocation and apportionment of
labour and overheads and absorption thereof of
products
 Identification of costs that are directly allocable to each
product/activity or those requiring apportionment.
 Quantitative details of each product/activity
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Highlights of Recent Reform
Measures(1)
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Cost Audit Report Rules,2001 containing very detailed and
complex formats replaced with simplified Report Rules.
Threshold turnover limit for audit of cost records enhanced.
From Rs.10 crores to 20 crores for regulated industries and
From Rs.10 crores to Rs.100 crores for all other industries.
Practice of issuing company by company cost audit orders
dispensed with.
To fulfill the industry’s demand for removal of ad hoc and
discriminatory approach, and
To fulfill the requirement of various Government agencies
and other regulatory bodies.
Highlights of Recent Reform
Measures..contd..(2)
Filing of unit wise and product wise cost audit reports
dispensed with
 Major step in protecting disclosure of confidential cost
details
 Reduces compliance cost
 Reduces size of report
 Industry’s twin issues –(a)confidentiality and (b) cost of
compliance-fully addressed.
 Prior approval procedure for appointment of cost
auditors simplified-automatic approval after 30 days
from the date of filing of Form 23C
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Master Circular 2/2011
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Specified number of companies for the purpose of
section 233(B) read with section 224(IB) of the
Companies Act, 1956 is to be computed for a given
financial year with reference to :
The number of companies wherein he has been
appointed as the cost auditor, including those wherein
he is proposed to be appointed for which he has given
his consent.
The number of companies in respect of which cost
audit reports have not been submitted and have
become overdue shall also be taken into account for
the purposes of ceiling under section 224(1B).
Master Circular 2/2011(contd.)
A cost auditor cannot be appointed as an internal
auditor for the company for the same period he is
conducting cost audit.
 Where the firm is appointed as cost auditor, the cost
audit report has to be signed by any one of the partners
conducting cost audit with his membership number.
 If cost audit is conducted for the first time, cost auditor
to mention that previous years' figures are as provided
by the management.
 A cost auditor would attend meetings of audit
committee as an invitee and shall not be member or
have any voting right.
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Master Circular 2/2011(contd.)
A cost auditor shall be deemed to have concluded his
appointment for the relevant financial year as soon as
he renders a report to the Central Government in
accordance with the Cost Audit Report Rules, as
applicable, with a copy to the company.
 Cost Auditor's obligation to answer queries from the
MCA arising out of review of cost audit reports would
not debar him from accepting another appointment as
cost auditor of a company provided the specified
number of companies contemplated in section 224(1B)
is not exceeded.
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Clarification-General Circular
67/2011
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The new Cost Accounting Records Rules,2011 (common & 6
Industry specific) are not applicable to companies engaged in:
A company yet to commence commercial operation.
Ancillary products/activities of companies incidental to their
main operation (i. e. products
/activities that do not constitute their main line of business)
Where the total turnover from the sale of each such
ancillary products/activities do not exceed 2%of the total
turnover of the company or
Rs.20 crore , whichever is lower
Required details of all such ancillary products/activities to be
maintained under a miscellaneous group and disclosed
appropriately.
Clarification-General Circular
No,67/2011 dated 30.11.2011
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The new Cost Accounting Record Rules,2011(Common
& 6 Industry specific)are not applicable to companies
engaged in:
Wholesale Trading/Retail
Trading/Banking/Financial/Leasing/Investment/Insurance/
Education/Healthcare/Tourism/Travel/Hospitality/Recrea
tion/Transport Services/Professional Consultancy/IT and
IT Enabled Services/Research &
Development/Postal/Courier Services
Clarification- General Circular
67/2011
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Cost Audit Order dated 02/05/2011, 30/06/2011, 24/01/2012,
06/11/2012 not applicable to
Own manufactured products consumed exclusively by the
company for subsequent products/activities subject to cost
audit
Hundred percent Export Oriented Units-no domestic sale
“Intermediate products” mean such product that have
already undergone partial manufacturing /production process
and are used as inputs of the final products of the industries
“articles or allied products thereof” refer to such articles or
allied products that are produced either wholly or
predominantly(not less than 50% by volume)by using the
listed products as their primary inputs.
Clarification- General Circular
67/2011
Coverage for only such items falling under relevant
chapters of CET as constitute intermediate & Allied
Products of the industry mentioned in the Cost Audit
Order and all other items not related to the industry
are not covered. Examples:
 Paints and Varnish Industry (Chapter 32 of CET)tanning or dyeing extracts, tanning & their derivatives,
dyes, pigments & other coloring matters, putty &
other mastics, printing inks, etc.
 Tyres and Tubes industry (Chapter 40 of CET)-natural
or synthetic or reclaimed rubber, compounded
rubber, hard rubber thread or cord , conveyer or
transmission belts , articles of rubber.
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Clarification- General Circular
67/2011
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Examples of Intermediate Products-clinker for
cement , pulp for paper , sponge iron & pig iron
for steel.
Allied Products ofCement: include cement bricks , sleepers , pipes
Paper: include cartons , boxes , bags , registers;
Steel: include ingots blooms, billets, slabs, beams,
angles,tees , channels,
Clarification under general Circular No. 67/2011
applies equally to specific Cost Accounting
Records Rules issued for 6 regulated industries.
Clarification-General Circular
68/2011
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A company having multiple cost auditors for audit of
only one product of the company:
Consolidated cost audit report may be prepared
Contain qualifications, reservations or suggestions if any,
given by all the cost auditors.
Company may designate any one of the cost auditors
responsible for the consolidation and filing the same
with the Central Government.
Clarification-General Circular
68/2011
A company having more than one product under
cost audit and which has appointed either same
or separate cost auditors:
 Individual cost auditors may submit separate cost
audit report for each product group, or
 Submit only one consolidated report containing
details of each product under audit separately for
which Company may designate any one of the
cost auditors or appoint a cost auditor
responsible for the consolidation and filing the
same with the Central Government as per the
procedure provided above
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Clarification- Construction Industry
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General Circular No.67/2011 of 30/11/11-if a company
is engaged in the construction business as a contractor
or a sub-contractor and is paid only for the job work or
conversion charges, then the company will not be
covered under companies (Cost Accounting Records)
Rules,2011
Hence, only such contractors or sub-contractors who
are doing purely labour jobs [i.e. without using own
materials]and are thus paid either the job work charges
or the conversion charges, will remain outside the
purview of the companies (Cost Accounting Records
Rules,2011)
Clarification- construction industry

All companies engaged in the construction business
either as contractors or as sub-contractors, who
undertake jobs with the use of own materials shall
be required to maintain cost records and file a
compliance report.
•All companies engaged in the development of residential,
commercial or industrial estates or engaged in the
construction of any infrastructural facilities would be covered
under the Companies (Cost Accounting Records) Rules,2011
Compliance Report & Cost Audit
Report
Product A:Under Cost Audit
Product B:Under cost Audit
Own Generation of Electricity:100%
Cost audit report to be filed for
Product A and B .
No Compliance Report to be filed
consumed for production of Product A
and B
Product A:Not under Cost Audit
Product B:Not under Cost Audit
Own Generation of Electricity:100 consumed for
production of Product A and B
Compliance report to be filed for the company as
a whole
Product A:Under Cost Audit .
Product B:under Cost Audit.
Own Generation of Electricity:
Generating Plant deemed to be captive generating
plant as per Electricity Rules and part of
generation is sold outside
Cost audit report to be filed for Product A and B
Compliance Report to be filed for the company as
a whole.
Compliance Report & Cost Audit
Report
Product A:under Cost Audit
Product B:Cost Audit is application but
Consumed exclusively for production of
Product A
Own Generation of Electricity:100
Consumed for production of Product A and B
Cost Audit Report to be filed for product A.
No Separate cost audit report for Product
B.
No compliance Report to be filed
Product A:Under cost Audit
Product B:Cost Audit is applicable but
Consumed exclusively for production of Product A
Own Generation of Electricity :
Generating Plant deemed to be captive generating
plant as per Electricity Rules and part of generation is
sold outside.
Cost Audit Report to be filed for Product A.
No separate cost Audit Report for Product B
Compliance Report to be filed for the Company
as a whole
Compliance Report & Cost Audit
Report
Product A: Under Cost Audit
Product B: Under Cost Audit
Own Generation of Electricity :
Generating plant is not a captive
generating plant as per Electricity
Rules.
Cost Audit Report to be filed for
Product A, Product B and
Electricity
Generation Activity.
No compliance report to be filed.
Product A: Under Cost Audit
Product B: Not Under Cost Audit
Own Generation of Electricity :
Generating plant is not a captive
generating plant as per Electricity Rules.
Cost Audit Report to be filed for
Product A and Electricity Generation
Activity.
Compliance report to be filed for
company as a whole.
Some FAQs
Whether separate Form 23C is required to be
filed by a company having two or more
different types of products covered under Cost
Audit?
 The company would be required to file individual
Form 23C for each product under cost audit even if
the same auditor is appointed for all the products.
Whether there is any sequence of filing
compliance report and cost audit report for a
company which is required to file both?
 Compliance Report and Cost Audit Report are
mutually exclusive to each other and it does not
make any difference as to which report is submitted
first.
Some FAQ,s
Can the same individual sign Compliance Report
and/or Annexure to Cost Audit Report, if
otherwise
qualified?
 Company Secretary of a company who is also a Cost
Accountant. ?
 Director of a company who is also a cost accountant
signing as Director as well as Cost Accountant. ?
 The same individual cannot sign the same report in two
different capacities.
Some FAQ,s
A Cost Accountant is in full time employment is
also
holding part time certificate of practice. Whether
he can certify the compliance report of group
companies and other companies?
The Cost Accountant can certify the Compliance
Report of the Company in which he is in full time
employment. He cannot certify the compliance
report of any other company within the same group
or that of any other company.
Annexures to Cost Audit Report

Annexure 1 General Information
1. CIN or GLN of the company
2. Name of the company
3. Registered office address
4. Corporate office address
5. E Mail address of the company
6. Company’s financial year to which the Cost Audit Report Relates
7. Name, address, membership number and e-mail address of the Cost
auditor
8. SRN Number and date of Filing of Form 23C with the Central
government
9. Date of Board of Directors meeting wherein the Annexure to the cost
audit report were approved.
10. No. of Audit Committee meetings held by the company, and attended
by the Cost Auditor during the year.
Cost Audit Report - Disclosures
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Annexure 2.
Cost Accountant Policy covering, inter alia, the following areas:
Identification of cost centres/cost objects and cost drivers.
Accounting for material cost including packing materials, stores and spares etc.,employee
cost , utilities and other relevant cost components.
Accounting, allocation and absorption of overheads.
Accounting for Depreciation/Amortization.
Accounting for by-Products/joint- products, scarps, wastage etc.
Basis for inventory valuation.
Methodology for valuation of inter-unit /inter company and related party transactions.
Treatment of abnormal and non-recurring costs including classification of other non-cost
items.
In case the company has adopted IFRS, variations(if any) in treatment of Cost accounting
arising out of adoption of IFRS in Financial Accounting .
Other relevant cost accounting policy adopted by the company.
Annexure 3 PRODUCT GROUP DETAILS (for the company as a whole)
Sno.
Name of each Product Group
A
Manufactured product groups
1.
2.
Sub Total(A)
B
Services Group
1.
2.
Sub Total(A)
C
Trading Activities(product Group-wise)
1.
2.
Sub Total(A)
D
Other Incomes
E
Total Income as per Audited Annual
Report(A+B+C+D)
Names of
Products/
Activities
included in the
Product Group
Net Sales (net Covered under
of taxes, duties, Cost Audit
etc.) (Rs. Lakh)
(Yes/No)
Annexure 4 QUANTITATIVE INFORMATION
(for each
product group separately)
Particulars
1. Available Capacity
(a) Installed Capacity
(b) Capacity enhanced during the year, if any
(c) Capacity available through leasing arrangements, if any
(d) Capacity available through loan license / third parties
(e) Total available Capacity
2. Actual Production
(a) Self manufactured
(b) Produced under leasing arrangements
(c) Produced on loan license / by third parties on job work
(d) Total Production
4. Production as per Excise Records
4. Capacity Utilization (in-house)
5. Stock Purchased for Trading
(a) Domestic Purchase
Unit
Curren
t Year
Previous
Year
(b) Imports
(c) Total Purchases
6. Stock & Other Adjustments
(a) Change in Stock of Finished Goods
(b) Self / Captive Consumption (incl. samples etc.)
(c) Other Quantitative Adjustments, if any (wastage etc.)
(d) Total Adjustments
7.Total Available Quantity for Sale [2(e) + 5(c) - 6(d)]
8. Actual Sales
(a) Domestic Sales (manufacturing)
(b) Domestic Sales (trading)
(c) Export Sale (manufacturing)
(d) Export Sale (trading)
(e) Total Quantity Sold
Annexure 5. ABRIDGED COST STATEMENT (for each product group separately)
Sn
o.
Particulars
1
Materials Consumed (specify details)
a) Indigenous Purchased
b) Imported
c) Self Manufactured / Produced
2
Process Materials/Chemicals (specify)
3
Utilities (specify details)
4
Direct Employees Cost
5
Direct Expenses
6
Consumable Stores & Spares
7
Repairs & Maintenance
8
Quality Control Expenses
9
Research & Development Expenses
10
Technical know-how Fee / Royalty, if any
11
Depreciation/Amortization
12
Other Production Overheads
13
Total (1 to 12)
Units
Quantit
y
Rat
e
Amount
Rate
C.Y.
Rate
P.Y.
14
Add/Less: Work-in-Progress Adjustments
15
Less: Credits for Recoveries, if any
16
Primary Packing Cost
17
Cost of Production/Operations (12 + 13 to 17)
18
Increase/Decrease in Stock of Finished Goods
19
Less: Self/Captive Consumption (incl. Samples, etc.)
20
Other Adjustments (if any)
21
Cost of Production/Operation of Goods/Services Sold
(17 + 18 to 20)
22
Administrative Overheads
23
Secondary Packing Cost
24
Selling & Distribution Overheads
25
Interest & Financing Charges
26
Cost of Sales (21 + 22 to 25)
27
Net Sales Realization (Net of Taxes and Duties)
28
Margin [Profit/(Loss) as per Cost Accounts] (27 - 26)
Annexure6.OPERATING RATIO ANALYSIS (for each product group separately)
Sno
.
Particulars
Units
Ratio of operating expenses to cost of
sales
%
1
Materials (incl. Process Materials) Cost
%
2
Utilities Cost
%
3
Direct Employees Cost
%
4
Direct Expenses
%
5
Consumable Stores & Spares
%
6
Repairs & Maintenance Cost
%
7
Depreciation / Amortization Cost
%
8
Packing Cost
%
9
Other Expenses
%
10
Stock Adjustments
%
11
Production Overheads
%
12
Administrative Overheads
%
13
Selling & Distribution Overheads
%
14
Interest & Financing Charges
%
15
Total
%
Current
year
Previous
Year-1
Previous
Year-2
Annexure 7.PROFIT RECONCILIATION (for the company as a whole)
Sno.
Particulars
1
Profit or Loss as per Cost Accounting Records
(a) For the audited product groups
(b) For the un-audited product groups
2
Add: Incomes not considered in cost accounts:
(a) (specify)
(b)
3
Less: Expenses not considered in cost accounts:
(a) (specify)
(b)
4
Add: Overvaluation of closing stock in financial accounts
5
Add: Undervaluation of opening stock in financial accounts
6
Less: Undervaluation of closing stock in financial accounts
7
Less:: Overvaluation of opening stock in financial accounts
8
Adjustments for others, if any (specify)
9
Profit or Loss as per Financial Accounts
Current
year
Previous
Year-1
Previous
Year-2
Annexure 8.
VALUE ADDITION AND DISTRIBUTION OF EARNINGS
Sn
o.
Particulars
Value Addition:
1
Gross Sales (excluding returns)
2
Less: Excise duty, etc.
3
Net Sales
4
Add: Export Incentives
5
Add/Less: Adjustment in Finished
Stocks
6
Less: Cost of bought out inputs
(a) Cost of Materials Consumed
(b) Process Materials / Chemicals
(c) Consumption of Stores & Spares
(d) Utilities (e.g. power & fuel)
(e) Others, if any
Total Cost of bought out inputs
Current
year
(for the company as a whole)
Previous
Year-1
Previous Year-2
7
Value Added
8
Add: Income from any other sources
9
Earnings available for distribution
Distribution of Earnings to:
1
Employees as salaries & wages, retirement
benefits, etc.
2
Shareholders as dividend
3
Company as retained funds
4
Government as taxes (specify)
5
Others, if any (specify)
Total distribution of earnings
Annexure 9
FINANCIAL POSITION AND RATIO ANALYSIS (for the company as a whole)
Sn
o.
Particulars
Units
A.
Financial Position
Rs/Lakh
1
Paid-up Capital
Rs/Lakh
2
Reserves & Surplus
Rs/Lakh
3
Loans (secured & unsecured)
Rs/Lakh
4
(a) Gross Fixed Assets
Rs/Lakh
(b) Net Fixed Assets
Rs/Lakh
(a) Total Current Assets
Rs/Lakh
(b) Less: Current Liabilities &
Provisions
Rs/Lakh
(c) Net Current Assets
Rs/Lakh
6
Capital Employed
Rs/Lakh
7
Net Worth
Rs/Lakh
B.
Financial Performance
1
Cost of Production
Rs/Lakh
2
Cost of Sales
Rs/Lakh
5
Current
year
Previous
Year-1
Previous Year-2
3
Net Sales
Rs/Lak
h
4
Value Added
Rs/Lakh
5
Profit before Tax (PBT)
Rs/Lakh
C.
Profitability Ratios
1
PBT to Capital Employed (B5/A6)
%
2
PBT to Net Worth (B5/A7)
%
3
PBT to Net Sales (B5/B3)
%
4
PBT to Value Added (B5/B4)
%
D.
Other Financial Ratios
1
Debt-Equity Ratio
%
2
Current Assets to Current Liabilities
%
3
Valued Added to Net Sales
%
E.
Working Capital Ratios
1
Net Working Capital to Cost of Sales excl.
depreciation
Months
2
Raw Materials Stock to Consumption
Months
3
Stores & Spares to Consumption
Months
4
Work-in-Progress Stock to Cost of Production
Months
5
Finished Goods Stock to Cost of Sales
Months
Annexure 10.
RELATED PARTY TRANSACTIONS (for the company as a whole)
Sno.
1
2
3
4
5
6
7
8
Name &
Address of the
Related Party
Name of
the
Product /
Service
Group
Nature of
Transacti
on (Sale,
Purchase,
etc.)
Quantity
Transfer
Price
Amount
Normal
Price
Basis
adopted
to
determin
e the
Normal
Price
Annexure11
RECONCILIATION OF INDIRECT TAXES (for the
company as a whole)
Particulars
Total Clearances
Domestic
Export
Stock Transfers (Net)
Others, if any
Total
Duties/Taxes Payable
Duties/Taxes Paid
Cenvat/VAT Credit Utilized - Inputs
Cenvat/VAT Credit Utilized - Capital Goods
Assessable
Value
Excise
Duty
Service
Tax
Cess &
Others
VA
T
Cenvat/VAT Credit Utilized - Input Services
Cenvat/VAT Credit Utilized - Others
Total
Paid through PLA/Cash
Total Duties/Taxes Paid
Duties/Taxes Recovered
Difference between Duties/Taxes Paid and Recovered
Interest/Penalty/Fines Paid
FORM -III
Performance Appraisal Report
(Indicative list of areas to be covered in the report)
Capacity Utilization Analysis
Productivity/Efficiency Analysis.
Utilities/Energy Efficiency Analysis.
Key-costs & Contribution Analysis.
Product/Services Profitability Analysis.
Market/Customer Profitability Analysis.
Working Capital & Inventory Management Analysis.
Manpower Analysis.
Impact of IFRS on the Cost structure, Cash-Flows
and Profitability.
11. Application of Management Accounting Tools.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Filing of Cost Audit Report
Cost Audit Report (converted in XBRL
format) duly approved by board has to be
filed (as an attachment with FORM 1
XBRL) with MCA
 Digital signature of director(authorized by
board) as well as digital signature of Cost
Accountant have to be affixed with the
form

ACKNOWLEDGEMENT generated
by MCA(on filing)



Acknowledgement generated by the
system(with specific SRN number and date)
is evidence that the Audit Report has been
filed with MCA on specific date.
Hard copy(as well as soft copy) of this
acknowledgement should preferably be
preserved by the company for future
reference and record.
Hard copy(as well as soft copy) of Form 1XBRL (duly signed)should also preferably be
preserved by the company for future
reference and record.
Thank You
Atish Kumar Agrawal
Atish Agrawal & Co.
Cost Accountants
1, British Indian Street (New Building)
1st Floor, Room No- 104, Kolkata-700 069
Mobile: 9831662685/8481965465
Phone: 033-30863147
E Mail: [email protected]
Associate Office- Delhi