TaxTMI 
TaxTMI 
The Cost Accounting Records (Pharmaceutical Industry) Rules, 2011
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....nitions and Interpretations, - In these rules, unless otherwise requires,‐‐‐ (a) "Act" means the Companies Act, 1956 (1 of 1956); (b) "bulk drugs" means any pharmaceutical, chemical, biological or plant product including its salts, esters, stereo‐isomers and derivatives, which are used as such or as an ingredient in any formulation and shall include any bulk drug included in any bona fide Allopathic, Ayurvedic, Homeopathic, Sidha or Unani (Tibb) systems of medicine; (c) "compliance report" means the compliance report duly authenticated and signed by a cost accountant in the specified form of compliance report; (d) "Cost Accountant" for the purpose of these rules means a cost accountant as defined in clause (b) of sub‐section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who is either a permanent employee of the company or holds a valid certificate of practice under sub‐section (1) of section 6 and who is deemed to be in practice under sub‐section (2) of section 2 of that Act and includes a firm of cost accountants; (e) "Cost Accounting Standards" means the standard....
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....oducts means a group of homogenous and alike products or services, produced by using similar or same process or inputs, having similar characteristics and common unit of measurement, and having same or similar usage or application; (o) "turnover" means total turnover made by the company from the sale or supply of all products or services during the financial year and it includes any turnover from job work or loan license operations and the subsidies or grants or incentives received but does not include any non‐operational income; (p) all other words and expressions used in these rules but not defined, and defined in the Act and rules made under clause (d) of sub‐section (1) of section 209 of the Act shall have the same meanings as assigned to them in the Act or rules, as the case may be. 3. Application, - These rules shall apply to every company, including a foreign company as defined under section 591 of the Act, which is engaged in the production, processing, or manufacturing of pharmaceutical activities and wherein, the aggregate value of net worth as on the last date of the immediately preceding financial year exceeds five crores of rupees; or w....
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....not less than eight financial years immediately preceding a financial year or where the company had been in existence for a period less than eight years, in respect of all the preceding years shall be kept in good order. (7) Every person, referred to in sub‐section (6) and (7) of section 209 of the Companies Act, 1956 (1 of 1956), shall take all reasonable steps to secure compliance by the company with the provisions of these rules in the same manner as he is liable to maintain accounts required under sub‐section (1) of section 209 of the said Act. 5. Form of the Compliance Report, - Every company to which these rules apply shall submit a compliance report, in respect of each of its financial year commencing on or after the date of this notification, duly certified by a Cost Accountant, along with the Annexure to the Central Government, in the specified form. 6. Time limit for submission of Compliance Report, - Every company shall submit the compliance report referred to in rule 5 to the Central Government within a period of one hundred and eighty days from the close of the company's financial year to which the compliance report relates. 7. Authentication of....
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....on 209 of the said Act, and other relevant records for the period/year ............................. (mention the financial year) and certify as under: 1 I or We have or have not obtained all the information and explanations, which to the best of my or our knowledge and belief were necessary for the purpose of this compliance report. 2 In my or our opinion, proper cost records, as per the Cost Accounting Records (Pharmaceutical Industry) Rules, 2011 prescribed under clause (d) of sub‐section (1) of section 209 of the Companies Act, 1956, have or have not been maintained by the company so as to give a true and fair view of the cost of production or operation, cost of sales and margin of all the products and activities of the company. 3 Detailed unit‐wise and product or activity‐wise cost statements and schedules thereto in respect of the product groups or activities are or are not kept in the company. 4 In my or our opinion, the said books and records give or do not give the information required by the Companies Act, 1956 in the manner so required. 5 In my or our opinion, the said books and records are or are not in conformity with the generally acce....
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.... (c) "compliance report" means the compliance report duly authenticated and signed by a cost accountant in the specified form of compliance report; (d) "Cost Accountant" for the purpose of these rules means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who is either a permanent employee of the company or holds a valid certificate of practice under sub-section (1) of section 6 and who is deemed to be in practice under sub-section (2) of section 2 of that Act and includes a firm of cost accountants; (e) "Cost Accounting Standards" means the standards of cost accounting, issued by the Institute; (f) "cost records" means books of account relating to utilisation of materials, labour and other items of cost as applicable to the production, processing, manufacturing or mining activities of the company; - 1 - (g) "Form-A" means the form specified in these rules for filing compliance report and other documents with the Central Government in the electronic mode; (h) "Form-B" means the form of the compliance report and includes Annexure to the compliance report; (i) "formulations"....
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....ed, and defined in the Act and rules made under clause (d) of sub-section (1) of section - 2 - 209 of the Act shall have the same meanings as assigned to them in the Act or rules, as the case may be. 3. Application, - These rules shall apply to every company, including a foreign company as defined under section 591 of the Act, which is engaged in the production, processing, or manufacturing of pharmaceutical activities and wherein, the aggregate value of net worth as on the last date of the immediately preceding financial year exceeds five crores of rupees; or wherein the aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds twenty crores of rupees; or wherein the company's equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India: Provided that these rules shall not apply to a body corporate governed by any special Act. 4. Maintenance of records, - (1) Every company to which these rules apply, including all units and branches thereof shall, in respect of each of its financial year commencing on o....
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....apply shall submit a compliance report, in respect of each of its financial year commencing on or after the date of this notification, duly certified by a Cost Accountant, along with the Annexure to the Central Government, in the specified form. 6. Time limit for submission of Compliance Report, - Every company shall submit the compliance report referred to in rule 5 to the Central Government within a period of one hundred and eighty days from the close of the company's financial year to which the compliance report relates. 7. Authentication of Annexure to the Compliance Report, - The Annexure to the compliance report shall be approved by the Board of Directors and certified by the Cost Accountant before submitting the same to the Central Government by the company. 8. Penalties, - (1) If default is made by the Cost Accountant in complying with the provisions of these rules, he shall be punishable with fine, which may extend to five thousand rupees. (2) For contravention of these rules, - (a) the company shall be punishable as provided under sub-section (2) of section 642 of the Act; and (b) every officer thereof who is in default, including the persons referred to....
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....ress of the cost accountant or cost accountant's firm (i) Line I Line II (ii) City (iii) State (iv) Country (v) Pin Code (g) *E-mail ID of the cost accountant or cost accountant's firm 5. * Quantitative Information Sno. Name of the Product or Service Group Unit Annual Production (Quantity) Net Sales (Quantity) (Value in Rupees) A Produced or Manufactured Product 1. 2. 3. etc. B Services Groups 1. 2. 3. etc. C Trading Activities (Product Group-wise) 1. 2. 3. etc. D Other Income Total Income as per Financial Accounts Attachments: PART-II 1 Compliance report as per the Cost Accounting Attach Records(Pharmaceutical Industry) Rules, 2011 2 Optional attachments(s) - if any List of attachments Attach - 7 - Remove attachment Verification: To the best of my knowledge and belief, the information given in this form and its attachments is correct and complete. I have been authorised by the Board of directors' dated (DD/MM/YYYY) resolution number to sign and submit this form. I am authorised to sign and submit this form. To be digitally signed by: Managing Direc....
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....and records are or are not in conformity with the generally accepted cost accounting principles and cost accounting standards issued by The Institute of Cost and Works Accountants of India, to the extent these are found to be relevant and applicable. 20 at (mention name of place of signing this report) Dated: this day of SIGNATURE AND SEAL OF THE COST ACCOUNTANT (S) MEMBERSHIP NUMBER (S) NOTES: (i) Delete words not applicable. (ii) If as a result of the examination of the books of account, the cost accountant desires to point out any material deficiency or give a qualified report, he shall indicate the same against the relevant para. (iii) Briefly give your observations and suggestions, if any, relevant to the maintenance of cost accounting records by the company. (iv) Cost accountant may use separate sheet(s) for (ii) and (iii) above, if required. - 9 - ANNEXURE TO THE COMPLIANCE REPORT [See rule 2 and rule 5] 1. GENERAL: a) Name of the company: b) Registered office address: c) Financial year to which the Compliance Report relates. 2. QUANTITATIVE INFORMATION: Sno. Name of the Product or Service Group Unit Annual Production (Qty.)....
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.... Summary Quantitative Details of all Intermediates or Bulk Drugs Processed or Manufactured Name of the Company Name and address of the Factory Drug Licence No. & Date For the period Sno. Particulars Unit Current Year Previous Year 1. i) Installed Capacity ii) Capacity by leasing arrangements etc Total Capacity 2. Production: a. Dedicated Plant b. Multipurpose Equipment or Plant c. Under Loan Licence if any Total 3. Average Working Hours per day 4. Actual Operating Days in a year Particulars Quantity per Unit Quantity per Unit 5. Gross Inputs: Standard Actual Standard Actual a) Intermediate or Ingredient 1: Materials Consumed (specify) Process Chemicals (specify) Utilities ( specify) Total b) Intermediate or Ingredient 2: Materials Consumed (specify) Process Chemicals (specify) Utilities ( specify) Total c) Intermediate or Ingredient 3: Materials Consumed (specify) Process Chemicals (specify) Utilities ( specify) Total Provide details of all Intermediates or Ingredients or Bulk Drugs separately as above under Sno. 5. - 12 - PROFORMA 'B-1' Statement showing Cost of Production of Intermediates or Bulk Drugs P....
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....ad 10. Selling and Distribution Overheads 11. Cost of Sales 12. Interest and Financing charges - 14 - Sno. Particulars Unit Quantity Rate Amount Cost per Unit Rs. Rs. Current Year Rs. Previous Year Rs. 13. Total Cost 14. Net Sales Realisation 15. Margin 16. Add: Export Benefits and Incentives, if any 17. Total Margin (including export benefits) PROFORMA ‘D' Statement showing Cost of Production of Intermediates or Bulk Drug or Formulation processed on Job Charges basis Name of the Company Name and address of the Job Processor Drug Licence No. and Date Name of Ingredient or Intermediate or Bulk Drug For the period I. Quantitative Information: Sno. Particulars Unit Current Year Previous Year 1. Material Sent to Processor (specify details} a) Raw Materials b) Ingredients c) Bulk Drugs d) Packing Materials 2. Opening Stock of Materials a) Raw Materials b) Ingredients c) Bulk Drugs d) Packing Materials 3. Closing Stock of Materials a) Raw Materials b) Ingredients c) Bulk Drugs d) Packing Materials 4. Material Consumed (specify details} a) Raw Materials b)....
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.... Payment To Auditors 13. Traveling and Conveyance 14. Communication Expenses 15. Printing and Stationery 16. Bank Charges 17. Security Force Expenses 18. Sales Promotion Expenses 19. Handling Expenses 20. Miscellaneous Expenses 21. Transportation Charges 22. Quality Control 23. Royalty or Technical Know-how 24. Technical Assistant Fees 25. Other Statutory Levies 26. Lease Rent 27. Research and Development 28. Packing Expenses 29. Borrowing Charges 30. Loss on Assets Sold, Lost or Written Off 18 Sno. Particulars Total Expenses as per Audited Financial Accounts Utilities (separately for each) Production Cost Centres (specify separately) Packing Cost Centres (specify primary or secondary separately) 2 Factory Overheads Administra- tion Overheads Marketing or Selling and Distribution Other Activities Non Cost Expenses 31. Exchange Rate Fluctuations 32. Provision For Doubtful Debts, Advances, Claims and Obsolescence 33. Provision for Contingencies 34. Depreciation or Depletion 35. Total Expenses 36. 37. Allocation of Utilities (specify) Apportionment of Overheads (specify 38. Total 39. Less, Cost of Mate....
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.... Y X Y X Y X Y X Y X Y X Y A. Conversion Cost to Product or Formulations B. Packing Cost to Product or Formulations X = Actual direct labour or machine hours utilized as per actual recording or any other appropriate basis of apportionment. Y = Conversion Cost in rupees 21 PROFORMA 'G' Statement showing Cost of Production, Cost of Sales, Sales Realization and Margin in respect of Formulation Name of the Company Name and address of the Factory Drug Licence No. and Date Name of the Formulation/Drug For the period Sno. Particulars 1 Name of the formulation (with trade mark) manufactured or marketed and its composition 2 Type of Formulations: Plain or Coated Tablet, Soft or Hard or Printed Capsules with or without Band, Sterile or Non sterile Liquid Powder or Ointment or Cream etc. (specify) 3 Type of Packing: Aluminum or Paper or Cellophane or Blister or Stripe or Vials or Ampoule or Bottle or Tin or Jar etc. (specify) 4 Size of Packing (specify) 5 Batch Size (Specify) 6 Production Standard Actual Current Year Previous Year Current Year Previous Year I No. of Batches Charged = No. of Batches....
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....2 Sales Promotion Expenses (a) Wholesalers (b) C and F Agents (c) Retailers (d) Others (specify) S-3 Trade Commission (a) Wholesalers (b) C and F Agents (c) Retailers (d) Others (specify) T Total (R+S1+S2+S3) U Interest and Financing Charges V Other Expenses or Income not included in Cost (give details) W Total Cost of Sales excluding Excise Duty X Net Sales Realization excluding Excise Duty (a) Domestic Sales (b) Export Sales (c) Add: Export Benefits and Incentives (d) Total (a to c) Y Margin( N-M) Z-1 Maximum Retail Price excluding Excise Duty Z-2 Maximum Price under DPCO as applicable Z-3 Assessable Value of the Product Z-4 Excise Duty V X 24 Proforma 'H' Statement showing Activity-wise Capital Cost of Plant and Machinery/Equipment relating to Bulk Drugs, Formulations and Other Common Services & Activities Name of the company: For the Period: (Amount in Rupees) Sno. Particulars Gross Block Depreciation Net Block Cost as at beginning of the year Additions or Transfers during the year Deductions or Transfer during the year Total Cost at the end of the year As at beginning of the....
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....capacity or volume, average fermentation hours and turnaround time; (b) average whole broth volume, whole broth potency and filtered broth potency per batch; (c) stage-wise and overall percentage recovery efficiency of both drug and intermediate from the fermented broth; (d) average batch output and number of batches processed and drained; (e) average potency/purity of the finished drug; and (f) stage-wise annual average quantity consumption of all major raw materials including solvents usage shall be maintained along with quantity produced at each stage. Similarly details of consumption of primary utilities of in respect of the drug shall be maintained. 4 If the drug is manufactured by chemical process, the following details shall also be maintained, namely: - (a) In the case of dedicated facilities, details such as name of the equipment and designed capacity, number of equipments available, position or code number of the equipment, reaction or operation carried out in the equipment, batch size (input or batch and output or batch), occupancy time hour, yield and WIW with respect to main input at each stage and the cumulative yield, by-product or recoveries of ....