TaxTMI 
TaxTMI 
The Cost Accounting Records (Telecommunications) Rules, 2002
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....sic telephony: - (a) Telephone access (b) Local call (c) Subscriber trunk dialing (STD) (d) International subscriber dialing (ISD) (2) Cellular mobile; (3) Telex; (4) Telegraphy; (5) Voice mail /Audiotex service; (6) Internet operations including gateway service/E-mail; (7) Packet switched public data network (PSPDN) service; (8) Wireless in local loop (WILL) service; (9) Public mobile radio trunk service; (10)Very Small Aperture Terminal service; (11) Global mobile personnel communication services; (12) Leased circuits; (13) Internet ports ; (14) National Long Distance Operator; (15) Internet Telephony; (16) Radio Paging; (17) Any other telecommunication service for commercial use. Provided that these rules shall not apply to a company, - (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 undertaking under the provisions of Industries (Develop....
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.... by the company with the provisions of sub rules (1), (2) and (3) of this rule in the same manner as he is liable to maintain accounts 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 (4) of rule 3 shall be punishable as provided under sub-section (2) of section 642 read with sub-sections (5) and (7) of section 209 of the Companies Act, 1956 (1 of 1956). SCHEDULE [see rule 3] 1. MATERIALS AND SUPPLIES: (1) The proper records shall be maintained showing all receipts, issues and balances both in quantities and values of each item of materials. stores and supplies such as cables, poles, telephone instrument, roust box, dropwire, lines and wires etc, used in the maintenance and operation of different activities such as access network, local switching, local transmission, long distance switching, transmission, and international gateway access, referred to in rule 2. These records shall contain such details so as to enable the company t....
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.... or spares, the cost of such material and/or consumable stores/spares should be shown after adjusting such credit or benefits. 2. SALARIES AND WAGES: (1) The proper records shall be maintained to show the attendance and earnings of all employees activity-wise on which they are employed. The records shall also indicate the following separately for each such activity: (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 for the different services/ and for different ....
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....l be apportioned to telecom activities on equitable and reasonable basis and applied consistently. Where these services are utilized for other products or activities or services of the company also, the basis of apportionment of such expenses to other products or activities or services shall be on equitable and reasonable basis and applied consistently. (2) Common operation and maintenance cost incurred for a number of activities, shall be apportioned to the product/activity benefiting from these services on reasonable and equitable basis and shall be applied consistently. The basis on which such common operation and maintenance cost are apportioned to different products/activities shall be indicated in the cost records. 4. UTILITIES: The proper records showing quantity and cost of purchased or self produced utilities such as power, air conditioning required for any of the activities under reference, shall be maintained by the company. 5. REPAIRS AND MAINTENANCE: (1) The proper records showing the expenditure incurred by the workshop and on repairs and maintenance on various activities shall be maintained. The records shall also indicate the basis of charg....
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....cation of indirect assets to the activities under reference shall be on equitable and reasonable basis and applied consistently. (3) The basis on which depreciation is calculated and allocated or apportioned to various activities and absorbed shall be clearly indicated in the cost records. If depreciation charged or chargeable to the departments is in excess or lower than the depreciation calculated by applying the rates of depreciation prescribed under the provisions of sub-section (2) of section 205 of the Companies Act, 1956, such amount of excess or lower depreciation shall also be indicated clearly in the cost records. The cost records shall also show the effect of such excess or lower depreciation as the case may be, on the per unit cost of activity. The cumulative depreciation charged in the cost records, against any individual item of asset shall not, however, exceed the original cost of the respective asset. 7. OTHER OVERHEADS: (1) The Proper records shall be maintained for the activities under reference showing the various items of expenses comprising the other overheads. These expenses shall be analysed, classified and grouped according to functions,....
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....icence fee payable and its allocation to various telecommunication services. (4) Records relating to Universal Service Organisation shall also be maintained, wherever applicable. (5) If licence fee and royalty payable for usage of radio spectrum, proper records should be maintained indicating frequency allocation, royalty fee paid, spectrum licence fee and the number of users, where applicable. 9. RESEARCH AND DEVELOPMENT EXPENSES: (1) The proper records showing the details of expenses, if any, incurred by the company on the research and development work of the products/activities covered under these rules shall be maintained. (2) The method of charging these expenses to the cost of activities under reference and all other products or activities shall be indicated in the cost records. Where the utility of such research and development work extends over more than one financial year, such expenses shall be treated as deferred revenue expenses and charged to the cost of activities under reference and all other products if any, on equitable and reasonable basis and applied consistently. The detailed criteria on which it has been decided to extend the utility ....
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....ed consistently. The basis of such allocation or apportionment shall be spelt out clearly in the cost records. Net borrowing cost incurred on borrowed money or outlays for projects under execution, shall be capitalized for the period upto the date of commencement of commercial activities. 11. EXPENSES ON INTERCONNECTION: The proper records showing the expenses incurred and revenue received on the interconnection of telecom services provided and received shall be separately maintained indicating the units in terms of time, pulse rate etc. so that the cost of interconnection of services and revenue earned can be determined correctly. Similar cost statement shall also be prepared for international traffic for use of international gateway access for services provided and received and revenue earned thereof. 12. COST STATEMENTS: (1) The Cost statement showing details of installed capacity of each service (activity wise) and all elements of cost of the current financial year and previous year shall be prepared for each revenue earning unit in relation to th....
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....to material, labour, overheads and further segregated into quantity, price and efficiency variances. The method followed for adjusting the cost variances in determining the actual cost of the activities or services shall be indicated clearly in the cost records. The reasons for the variances shall be duly explained in the cost records/statements. 16. STATISTICAL RECORDS: (1) The proper records shall be maintained in respect of locations from where activities are carried out or services are rendered. The records shall show the rated capacity, the practical capacity and capacity actually utilised in terms of appropriate unit of accounting for various resources that are employed like infrastructure, installation of equipments, manpower and its utilisation etc. The records shall also be maintained showing efficiency achieved in terms of attending the customer complaints and keeping the resources under operating conditions (2) The adequate records shall be maintained to enable the company to identify the capital employed, net fixed assets and working capital separately for different activities under reference and other products and activities. Fresh inve....
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....elated to activity under reference. (2) The transactions by the following "related party relationships" shall be covered under sub-rule(1) :- (a) enterprises 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....
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....es; (e) "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) "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" - in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may be connected by blood relationship; (j) "holding company" means a holding company within the meaning of section 4 of the Companies Act, 1956(1 of 1956); (k) "subsidiary" means a subsidiary company within the meaning of Section 4 of the Companies Act, 1956(1 of 1956); (l) "fellow subsidiary" means a company is said to be a fellow subsidiary of another compan....
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.... E Grand Total (A+B+C+D) Notes:- 1. Separate proforma shall be prepared in respect of each Area of Operation or Circle or Secondary Switching Area or District Headquarters . 2. The proforma may be modified suitably to incorporate unit specific special features, if any, indicating reasons thereof. 3. Within each area of operation separate proforma may be used for each service and only those network elements are to be taken which are exclusively used for that particular service. All those equipment which are jointly used in more than one service, the requisite details be given against Sr. No. D of this proforma specifying these services. 4 Details of apportionment of depreciation to respective activity be specified separately in case of Network equipments which are jointly used in more than one service. Proforma 'B' Name of the company : Name and address of the Area of Operation or Circle or Secondary Switching Area or District Headquarters : Statement showing the Cost of Operations for the year ended ............... Serial No. Particulars Quant....
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.... E Apportionment of Cost to various segments/services Segment/Service Basis of apportionment Actual Quantity Equivalent Quantity Value (Rupees) 1) Basic - Local Switching and Transmission 2) National Long Distance 3) International Long Distance 4) Cellular 5) 6) etc. Total Notes:- 1. Separate proforma shall be prepared in respect of each Area of Operation or Circle or Secondary Switching Area or District Headquarters 2. The proforma may be modified suitably to incorporate unit specific special features, if any, indicating reasons thereof. Proforma 'C' Name of the company: Name and address of the Area of Operation or Circle or Secondary Switching Area or District Headquarters : Statement showing the Cost of Service/ Sub-service for the year ended ................. Quantitative Information Serial Number Particulars Unit Current Year Previous year 1. Equipped Capacity - Subscriber ....
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....ice transferred from "Proforma B" B Direct Cost 1) Materials (major items to be specified) 2) Employees Cost: (i) Salaries and wages (ii) Others (specify) (iii) Sub total 3) Utilities (specify) 4) Stores, Spares and Consumables 5) Repairs and Maintenance 6) Other direct expenses, if any 7) Rent, Rates and Taxes 8) Depreciation 9) Amortisation on the fixed component of license fees 10) License Fee paid as revenue share 11) Lease Rent....
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.... P Margin Per Direct exchange line / Channel / Port / Circuit Notes: 1. Separate cost statement shall be prepared for each of the activities or services including value added service indicating the complete details (wherever applicable). 2. The proforma may be modified suitably to incorporate unit specific features, if any, indicating reasons thereof. 3. Interconnection related cost or revenue is to be further segregated and shown under separate heading as Fixed Interconnection Charges or Revenues and Variable Interconnection Charges or Revenue. They are also to be subdivided under charges paid to related companies and others. PROFORMA 'D' Name of the company : Statement showing the allocation or apportionment of total expenses or income between activities covered under rule 2 and other activities during the year ending: Serial Number Particulars Total actual expenses Share applicable to activities covered under rule 2 Share applicable to other activities Basis of allocation Basic telephony Value add....