TaxTMI 
TaxTMI 
The Cost Accounting Records (Petroleum Industry) Rules, 2002
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....sp; (a) the aggregate value of the machinery and plant installed wherein, as on the last date of the preceding financial year, does not exceed the limits as specified for a small scale industrial undertakings under the provisions of Industries (Development and Regulation) Act, 1951 (65 of 1951); and (b) the aggregate value of the turnover made by the company from the sale or supply of all its products during the preceding financial year does not exceed ten crore rupees. 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 1^st day of April, 2003 keep proper books of accounts relating to the utilisation of materials, labour and other items of cost in so far as they are applicable to any of the products or activities referred to in rule 2. The books of account, so maintained shall contain, inter-alia, the particulars specified in Schedule annexed to these rules and Proformae A to I mentioned in the said schedule: Provided that if the said company is manufacturing any other product(s)or is engaged in other activities in addition to th....
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....include all direct charges up to supply base or refinery. The basis on which the cost of issue and consumption has been calculated shall be indicated in cost records and followed consistently. In the case of consumable stores and small tools the cost of which are insignificant, the company may, if it so desires, maintain such records for the group of such consumable stores and tools. The cost of materials, consumable stores, casings and other tubular items, chemicals, drilling bits, tools and spares etc. shall be properly identified and charged to the relevant departments, cost centres or activities, on equitable and reasonable basis and applied consistently. (2) Where joint products or more than one product of equal economic importance arises from a process, the cost up to the point of separation of products shall be apportioned to such joint products on reasonable and equitable basis and shall be applied consistently. The basis on which such joint costs are apportioned to different products arising from the process or processes shall be indicated in the cost records. The basis of the apportionment of common selling and distribution expenses to the product in the case of multip....
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....or work centre or department in line with the accepted Standards and Practices. (a) piece rate wages (wherever applicable); (b) incentive wages, either individually or collectively as production bonus or under any other scheme based on output; (c) overtime wages; (d) earnings of casual or contractual labour; (e) bonus or gratuity, statutory as well as other; (f) contribution to superannuation scheme; and (g) any other earning of the nature specified in (a) to (f) above. (2) The records shall be maintained in such a manner as to enable the company to furnish necessary particulars under this head in Proformae A to I of Schedule annexed to these rules. Where the employees work in such a manner that it is not possible to identify them with any specific cost or work centre or department, the labour charges shall be apportioned to the....
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....ately in Proforma 'A'. Wherever such utility is functionally independent and not forming part of a composite unit. (1) Water: - Proper records showing the quantity and cost of treated or cooling water produced and consumed, if any, for production, processing and manufacturing of the products or activities referred to in rule 2 in different cost centres or departments shall be maintained. The cost of treated water apportioned to the cost centers or departments concerned shall be on equitable and reasonable basis and applied consistently. (2) Steam: - Where steam is raised by the company, proper records showing the quantity and cost of steam raised and consumed for the production, processing or manufacturing of the products or activities referred to in rule 2 shall be maintained. The cost of steam consumed by various units like the petroleum, refining etc., and by other units of the company shall be apportioned on equitable and reasonable basis and applied consistently. Where steam is raised and supplied by any other unit of the company to the referred plant, the cost of steam so supplied shall be charged to the ....
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....s are utilised for other products or activities also, the manner of charging a share to such products or activities shall be on equitable and reasonable basis and applied consistently. (2) The records shall indicate the amount and also the proportion of closing inventory of stores and spare parts representing items, which have not moved for over 24 months. (3) The expenditure on major repair works from which benefit is likely to accrue for more than one financial year shall be deferred over the period expected to benefit on a reasonable and equitable basis and applied consistently. Such cost shall be shown separately and the method of accounting along with the basis of allocation of such costs shall also be clearly indicated in cost records. 6. FIXED ASSETS AND DEPRECIATION. - (1) The proper and adequate records shall be maintained for assets used for exploration for and production, processing and manufacturing of the products or activities referred under rule 2 in respect of which depreciation has to be provided for. These records shall inter alia, indicate grouping of ass....
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....ecords shall contain details of expenses incurred such as salaries and wages, explosives and detonators, stores and spares, repair and maintenance, contractual payment if any, depreciation etc so as to enable the company determine the cost of survey as per respective Proforma. The records shall also indicate the treatment of survey cost. 8. EXPLORATIONS AND DEVELOPMENT DRILLING COST. - (1) The Proper records shall be maintained for the expenses incurred in exploration and development of area covered by a petroleum exploration license or a mining lease for exploration for or production of crude oil and natural gas. These details shall be prepared for onshore and offshore separately. The cost incurred for acquisition of exploration license or mining lease and acquisition of properties shall be treated as deferred revenue expenditure and charged off on a reasonable and equitable basis. Adequate records shall also be maintained as per respective Proforma showing details of exploratory drilling/development expenses incurred on preparatory cost, rig operation cost, transport, well maintenance, other services and depreciation etc. The records shall indicate details of....
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....tails of other overheads for exploration, production, transportation, refining, administrative and marketing and distribution etc, as applicable. 10. ROYALTY OR TECHNICAL KNOW-HOW FEE OR LEASING CHARGES. - (1) The adequate records shall be maintained showing the royalty and/or technical know-how fee including other recurring or non-recurring payments of similar nature if any, made for the products or activities under reference to collaborators or technology suppliers in terms of agreements entered into with them. Such records shall be kept separately in respect of each such collaborator or supplier. The basis of charging such amount, including lump sum payment and its treatment shall be indicated in the cost records. (2) In the case of leasing arrangements, proper records shall be maintained showing details of terms and conditions, leasing charges paid or payable as well as received or receivable. 11. RESEARCH AND DEVELOPMENT EXPENSES. - (1) The Proper records showing the details of expenses, if any, incurred by the company for the research and development work on the produc....
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....all also be indicated separately and excluded from the income arising from the sale of output under reference. 12. QUALITY CONTROL. - The adequate records shall be maintained to indicate the expenses incurred in respect of quality control department or cost centre for products or activities under reference. Where these services are also utilised for other products of the company, the basis of apportionment to products or activities under reference and to other products shall be equitable and clearly indicated in the records and applied consistently. 13. TRANSPORTATION EXPENSES. - The proper records shall be maintained showing quantity transported, distance covered and cost incurred for transporting of crude oil and gas referred to in rule 2 by any of the modes of transport such as pipeline, ocean tankers and rail or road from the Central Tank Farm, Oil Collecting Stations and oil dispatch points, Gas Collecting Stations and gas dispatch points, or Process Platforms etc., as the case may be. The record shall also indicate the capacity of pipeline, throughput handled, its maintenance and security personnel cost etc. The record shall also indicate the cost of flow im....
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....tion shall be capitalised for the period up to the date the project is ready to commence commercial activities. However, capitalisation of borrowing costs should be suspended during extended periods in which active development is interrupted. 18. WORK IN PROGRESS AND FINISHED STOCK. - The method followed for determining the cost of work in progress and finished stock of the outputs shall be indicated in the cost records so as to reveal the cost element that have been taken into account in such computation. The appropriate share of conversion cost up to the stage of completion shall be taken into account while computing the cost of work in progress. The method adopted for determining the cost of work in progress and finished goods shall be followed consistently. 19. COST STATEMENTS. - (1) The Cost statement showing details of exploration, finding, production, refining and transportation etc. and all elements of cost of current financial year and previous year shall be prepared for the process and adopted for producing....
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....er activities to the extent such elements are separately identifiable. Non-identifiable items shall be allocated on a suitable and reasonable basis to different products, activities and other products and other activities. Fresh investments on fixed assets that have not contributed to the production or processing of products or activities under reference during the relevant period shall be indicated in the cost records. The records shall, in addition, show assets added as replacement and those added for increasing existing capacity. (3) In the case of new major projects for product or activity referred to under rule 2, proper records shall be maintained indicating the funds raised from different sources, their utilization, stage-wise cost incurred and progress of the project as per the project report. Cost and time over run shall also be analysed with reference to the cost of services or activity and profitability of the company. (4) Whenever WTO provisions are attracted, proper records shall be maintained to identify the competitiveness of the product in the domestic as well as global market. Adequate statistical records shall also be maintained to identify the m....
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....es that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries); (b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture; (c) individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual; (d) key management personnel and relatives of such personnel; and (e) enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise. However, the following shall not be deemed as "related party relationships": - ....
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.... participation in the financial and/or operating policy decisions of an enterprise, but not control of those policies; (e) "an Associate" means an enterprise in which an investing reporting party has significant influence and which is neither a subsidiary nor a joint venture of that party; (f) "a Joint venture" means a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control; (g) "joint control" means the contractually agreed sharing of power to govern the financial and operating policies of an economic activity so as to obtain benefits from it; (h) "key management personnel" means those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise; (i) "relative" means in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may be connected by blood relationships; (j) "holding company" means a company having one or more subsidiaries; &nbs....
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....sp; 10. Less: Credit, if any 11. Net Total B. Apportioned to cost centre/activity 1. 2. 3. 4.etc. Notes:- 1. Separate cost sheet is to be prepared for each major utility having significant impact on cost, whenever such utility is functionally independent and not forming part of composite unit. 2. If any of the utilities, which are manufactured by the company, is sold to outside parties, proper credit should be given in the cost of production of the respective utility. 3. The Proforma may be modified suitably including for method of accounting followed e.g. successful effort method or full cost method to incorporate unit specific features, if any, indicating reasons thereof. 4. Delete items not applicable. PROFORMA 'B' Name of the company: ........................... Statement showing the details of Survey Cost during the year ending:................................ I Cost Information: Serial Number Particulars ....
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....nbsp;Hydrocarbon Bearing (e) Service Wells II Cost Information Sl.No. Particulars Amount (Rs.) Brought forward Current Year Total 1. Preparatory Cost (a) Land (b) Approach Road (c) Civil Work (d) Others (To be specified) (e) Total Preparatory Cost 2. Drilling - cost of Rig/or Drill ship Operation (a) Material Cost (i) (to be specified) (ii) (iii) Total (b) Salaries and Wages (c) Administrative Overhead (d) Repair and Maintenance (e) Others (to be specified) Total 3. Production Testing Cost 4. Other direct expenses (a) Cementing (b) Logging (c) Others(to be specified) 5. Well Materials 6. Depreciation (a) Rigs (b) Casing (c) Tubing (d) Drill Pipes (e) Well Head (f) Others (to be specified) 7. Royalty or Technical know-how 8. Lease rent, i....
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....Rupees in lacs) Previous. Year (Rupees in lacs) Current. Year (Rupees) Previous. Year (Rupees) 1. Survey Cost (From Proforma B) 2. Exploration Drilling Cost (From Proforma C) 3. Development Drilling cost (From Proforma C) 4. Others (to be specified) 5. Total Finding Cost Notes: - 1. The Proforma may be modified suitably including for method of accounting followed e.g. successful effort method or full cost method to incorporate unit specific features, if any, indicating reasons thereof. 2. Delete items not applicable. PROFORMA 'E' Name of the company: .......................... Statement showing the Cost of intermediate-activities like Lifting, Conveying, Treating and Transportation of Crude Oil and Natural Gas during the year ending:.................................. I Quantitative Information: Serial Number Particulars Unit ....
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....p; Current. Year (Rupees) Previous. Year (Rupees) Current. Year (Rupees) Previous. Year (Rupees) 1. Salary and Wages 2. Consumables Demulsifier and Desalter 3. Other Stores and spares or chemicals 4. Logistic Services or Transport Allocation 5. Repairs and Maintenance 6. Power and Fuel 7. Allocation 8. General Administration Overheads 9. Depreciation 10. Others to be specified 11. TOTAL COST OF CONVEYING and TREATING C. Cost of Transportation of Crude Oil or Natural Gas Serial Number Particulars Amount Cost per Unit Current. Year (Rupees) Previous. Year (Rupees) Current. Year (Rupees) Previous. Year (Rupees) 1. Salary....
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........ I. Quantitative Information: Serial Number Particulars Unit Current Year Previous Year 1. Gross Production 2. Used for Mining Operation 3. Transit Loss 4. Net Production 2. Cost Information Serial Number Particulars Amount Cost per Unit Cost per Unit Current Year(Rupees in lacs Previous Year(Rupees in lacs) Current. Year (Rupees) Previous. Year (Rupees) 1. Finding Cost (From Proforma D) 2. Lifting Cost (From Proforma E) 3. Cost of Conveying and Treatment (From Proforma E) 4. Cost of Exploratory or Development Drilling -Charged off , if any. 5 Cost of transportation, if any (from Proforma E) 6. Cost of Survey charged off, if any 7.....
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....nbsp; *MMTPA: - Million Metric Tone Per Annum II Cost Information: Serial Number Particulars Quantity Rate (Rupees per tonne) Amount (Rupees in lacs) Cost per Unit Current Year Previous Year A 1. Material (a) Cost of captive crude oil or gas power transferred . i) (Oil field to be specified) ii) iii) (b) Transportation Cost, if any. (c) Others (specify) (d) Total 2. Crude oil or gas Purchased (i) Indigenous (ii) Imported 3. Process material, Consumable stores and spares 4. Utilities (a) Water (b) Steam (c) Power (d) Others (specify) (e) Total 5. Wages and Salaries 6. Repair and Maintenance 7. Depreciation 8. Royalty or technical Know-how or Lease rent ....
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....e of the product): ..................... I QUANTITATIVE INFORMATION Serial Number Particulars Unit Current year Previous year 1. Opening Stock 2. Gross Quantity Produced 3. Quantity purchased 4. Loss 5. Net availability 6. Used for mining operation 7. Captive Consumption 8. Quantity sold 9. Closing Stock II COST INFORMATION Sr.No. Particulars Unit Qty Rate Total cost Rs (Lakhs) Cost per unit Current Year (Rs) Previous Year (Rs) 1. Cost of captive Production 2. Cost of purchases 3. Stock Adjustment Add: Opening stock Less: Closing stock 4. Packing cost ,if any ....
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....oduced and exported. 4. The Proforma may be modified suitably including for method of accounting followed e.g. successful effort method or full cost method to incorporate unit specific features, if any, indicating reasons thereof. 5. Delete items not applicable. PROFORMA 'I' Name of the company:.............................. Statement showing the allocation or apportionment of total expenses or income of the company between service or activities covered under rule 2 and other activities during the year ending............................. Serial Number Particulars Total expenses as per audited financial accounts. Share applicable to activities covered under rule2 Share applicable to other activities Basis of allocation Exploration Refining 1. Direct Material 2. Process materials 3. Utilities (a) Power (b) Fuel (c) Steam (d) Effluent Treatment (e) Other (specify) 4. Salaries and wages &....