TaxTMI 
TaxTMI 
The Cost Audit Report
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.... (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/Proforma of Schedule I, Schedule II or Schedule III of the concerned Cost Accounting Records (** .........) Rules duly audited by me/us are kept in the company. 2. In 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. 3. Based on my/our examination of the records of the company subject to the aforesaid qualifications, if any, I/We give my/our observations and suggestions on the following- (a) the adequacy or....
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....ction 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 paras (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. 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)....
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.... 2. 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 centres/ departments and final absorption to the product under reference, etc., during the current financial year as compared to the previous financial year. 3. Process of manufacture A brief note regarding the process of manufacture along with flow chart covering production, utility and service department of the product. 4. Quantitative details Particulars Current Year 1^st Previous Year 2^nd Previous Year 1. Installed capacity* 2. Capacity enhanced during the year by leasing arrangement, etc. 3. Total available capacit....
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.... (c) 3. Imported: (a) (specify) (b) (c) 4. Total 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 Unit Standard Actuals Current Year 1st Previous Year 2nd Previous Year 1. (specify) 2. 3. Note.-Details should be furnished in respect of major input materials each constituting at least 2% of the total raw material cost for each major type/variety/siz....
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....p; 3. Note.-Details should be furnished in respect of each major type/variety/size, etc. of product under reference. 8. Salaries and wages Particulars Current Year 1st Previous Year 2nd Previous Year A. Quantitative Details: 1. Direct Workers: (a) Average number during the year (b) Man-days available (c) Man-days 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: &nb....
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....sp; 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) Note.-* The impact of re-valuation of assets, if any, shall not be included. 11. Gross Block, Depreciation and Lease Rent Particulars Gross Black Depreciation Lease Rent paid if any Total (b + c) 1st Previous Year 2nd Previous Year a b c d Name of major cost centres/products (a) (specify) (b) Total &....
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.... 14. Royalty and technical know-how charges Particulars Current Year 1st Previous Year 2nd Previous Year 1. Royalty on production/Sales 2. Lump sum payment of royalty, if any 3. Technical know-how charges 4. Others, if any 5. Total amount 6. Amount capitalised/deferred during the year 7. Net amount (5 - 6) 8. Deferred amount of earlier years, if any 9. Amount provided in the financial accounts (7 + 8) 10. Amount absorbed in the cost records 11. Shortfall/Excess, if any 12. Amount paid to related parties ....
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....sp; d3. Value of non-moving stock d4. Percentage of d3 to d2 e1. Total: e2. Closing stock e3. Value of non-moving stock e4. Percentage of e3 to e2 18. (B) Written off stock (during the year) Particulars Current Year 1st Previous Year 2nd Previous Year 1.Direct Materials (Raw Material and Components, etc) 2. Indirect Materials 3. WIP 4. Finished Goods 5. Total 19. (A) Inventory valuation (at the end of the year) Particulars Basis of valuation Current year Previous Years Quantity (unit) Rate (Rs.) Amount (R....
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....unt 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 Sl. No. Particulars Periodicity of verification Shortage Value (Rs.) Excess Value (Rs.) Net (Rs.) 1. Raw material 2 Chemicals, additives, consumables, etc. 3. Stores and Spares 4. Packing Materials 5. Tools and Implements 6. WIP 7. Finished Goods 8. Scrap, Wastage 9. Total 20. Sales of the product under reference Particulars Current year Two Previous Years Qty Rate Amount Qty Rate Amount 1. Purchased goods: &nbs....
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.... 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 Particulars Current Year 1st Previous Year 2nd Previous Year 1. Name of product 2. Estimated demand of the product in the country* 3. Total production in the country* 4. Quantities imported in the country** 5. Total production by the company 6. % age share of the company in total inland production (item 5/item 3) 7. (a) Cost of production per Unit (Inland sale) (b) Cost of Sale per Unit (Inland sale) ....
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....funds as depreciation, etc. 4. Government as taxes (specify) 5. Others, if any (specify) 6. Total 24. Financial position and ratio analysis Particulars Current year* Two Previous Years Separately Product under reference Factory as a whole Company as a whole Product under reference Factory as a whole Company as a whole 1. 2. 3. 4. 5. Capital employed Net Worth Profit Net Sales Operating expenses as a percentage of Net Sales: (a) Material cost (b) Factory overheads (c) Royalty on production, if any (d) Salaries and wages (e) Research and development expenses (f) Quality control (g) Administrative overheads (h) Selling and distribution (i) Interest 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Profit as %age....
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....following particulars may be furnished with regard to related party transactions. Particulars of related party Product/activity Quantity Rate Amount Normal Price 1. 2. 3. 4. etc. Note.-Details should be furnished for sale and purchase transactions separately. 27. Central Excise reconciliation for the product under Reference Particulars Chapter Heading Chapter Heading Chapter Heading A. 1. 2. 3. 4. Quantitative Details: Opening Stock Add: Production Less: Closing Stock Total Sales/Clearances Unit Unit Unit Particulars Assessable Value (Rs.) Rate of Duty Amount of Duty (Rs.) B. &....
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....p; 5. 6. 7. Reconciliation of Duty paid Excise Duty payment as per 'B' Total Excise Duty paid through (a) Cenvat Account - (Inputs) (b) Cenvat Account - (Capital Goods) (c) PLA 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) Particulars Amount (Rs.) E. 1. 2. 3. 4. F. &nbs....
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....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 for 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 ma....
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....erial consumed: (item-wise covering at least 80% of items by value) 1. Purchased (a) Indigenous (specify) (b) Imported (specify) 2. Self-manufactured (specify) 2. Process chemicals (specify) 3. Utilities 1. Purchased (a) Indigenous (specify) (b) Imported (specify) 2. Self manufactured (specify) 4. Direct wages and salaries 5. Consumable stores and spares 6. Depreciation 7. Lease rent, if any 8. Repairs and maintenance: (a) Building (b) Plant and Machinery (c) Others, if any 9. Other works overhead 10. Total Works Overhead (2 to 9) 11.Royalty, if any 12. Technical assistance/ know-how fee 13. Research and development 14. Quality control 15. Administrative overhead (relating to production activities) (a) Salaries and wages (b) Others (specify) (c) Total (a + b) 16. Total (1 + 10 to 15) 17. Adjustment....