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TMI BlogCost Accounting Records (Mining and Metallurgy) Rules, 2001X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 (Development and Regulation) Act, 1951 (65 of 1951); and (b) the aggregate value of the turnover made by the company from 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 1st day of April, 2001 keep proper books of account containing, inter-alia, the particulars specified in Schedule I annexed to these rules and Proformae A,B,C,D,E and F, relating to the utilization of materials, labour and other items cost in so far as they are applicable to the mining, production, processing or manufacture of products referred to in rule 2 : Provided that if the said company is engaged in mining or manufacturing of any other product(s) or is engaged in other activities in addition to mining or manufacturing of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gallium 12. Germanium 13. Platinum 14. Molybdenum SCHEDULE I [See rule 3] 1. MATERIALS: (1) The proper records shall be maintained showing separately all receipts, issues and balances both in quantities and cost of each item of raw material required for mining or production of products under reference by way of calcination, oxidation, electrolysis or any other method. Where the company have its own facilities to produce basic raw materials such as minerals from captive mines, ores, electrodes, power, etc., detailed records indicating the break up of raw materials consumed for their production and conversion cost, shall be maintained in such details so as to enable the ascertainment of the cost of these raw materials and intermediates. These records shall contain such details so as to enable the company to determine the quantity, cost of receipt (including all direct charges upto the works in respect of major raw material), issues and balances in quantity as well as value of each item of all such raw materials. The basis on which said quantities and costs of issue and consumption have been calculated, shall be indicated in the cost records and followed consistently. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining cost of the by-products shall be on equitable and reasonable basis and applied consistently. The records indicating the actual sales realization of by-products shall also be maintained. (5) The proper records shall be maintained to show the receipts, issues and balances, both in quantities and cost of each item of consumable stores, other chemicals not covered by sub-rule (2), tools and machinery spares. The cost shall include all direct charges upto works. (6) 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. (7) The cost of consumption of consumable stores, small tools and machinery spares shall be charged to the relevant cost centre or department on the basis of actual issues. (8) The proper records shall be maintained showing the quantity and value of wastage, spoilage, rejections and losses of raw materials, process materials, consumable stores whether in transit, storage, manufacture or at any other stage. The method followed for adjusting the above losses as well as the income derived from the disposal of rejected and waste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in determining the cost of the product shall be disclosed in the cost records. (4) Any wages and salaries allocable to capital works, such as, additions to plant and machinery, buildings or other fixed assets shall be accounted for under the relevant capital heads. 3. SERVICE DEPARTMENT EXPENSES: The detailed records shall be maintained to indicate expenses incurred in respect of each service department or cost centre like laboratory, welfare, transport etc. These expenses shall be apportioned to other services and production departments on equitable and reasonable basis and applied consistently. Where these services are utilized for other products of the company also, the basis of apportionment of such expenses to mining and production activities of products under reference and to the other products shall be on equitable and reasonable basis and applied consistently. 4. UTILITIES: (1) Water:- The proper records showing the quantity and cost of treated or cooling water produced and consumed, if any, for the mining and manufacturing of products under reference in different cost centres or departments, shall be maintained. The cost of treated water apportioned to the cost centre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging the workshop or tool room expenses to different cost centres or departments. Where maintenance work is done by direct workers of any production cost centre or department, the wages and salaries of such workers shall be treated as direct expenses of the respective cost centre or department. If the services are utilized for other products also, the manner of charging a share to such products shall be on equitable and reasonable basis and applied consistently. In addition to the above, 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. (2) The expenditure on major repair work from which benefit is likely to accrue for more than one financial year shall be allocated over the period expected to benefit, on equitable and reasonable basis and applied consistently. Such costs shall be shown separately and the method of accounting alongwith the basis of allocation of such costs shall also be clearly indicated in cost records. 6. RELINING OF POTS: The proper records shall be maintained showing the expenditure incurred in the relining or patching up of pots, where suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged to the relevant activity or product and thereafter the residue expenses under the above categories of overheads shall be apportioned on a reasonable and equitable basis and applied consistently. The overheads chargeable to capital works shall be indicated separately in the cost records. The basis of apportionment or absorption of overheads to the cost centres or departments and products shall be indicated in the cost records. The records shall be maintained in such a manner as to indicate the details of works, administration, selling and distribution overheads. 9. ROYALTY OR TECHNICAL KNOW-HOW FEE: 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 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 royalty amount, including lump sum payment, to the products shall be at point of incidence in accordance with the royalty agreement and shall be indicated in the cost records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and applied consistently. 13. INTEREST: The proper records shall be maintained for interest charges paid. The amount of interest shall be allocated or apportioned to the products covered under these rules and other activities on a reasonable and equitable basis and applied consistently. The basis of further charging of the share of the interest to the various types of products under reference shall also be on a reasonable and equitable basis and applied consistently. The basis of such allocation or apportionment shall be spelt out clearly in the cost records or statements. 14. EXPENSES OR INCENTIVES ON EXPORTS: The proper records showing the expenses incurred on the export sales, if any, of the products under reference shall be separately maintained so that the cost of export sales can be determined correctly. Separate cost statement shall be prepared for products under reference, if exported, giving details of export expenses incurred or incentive earned. In case, duty free imports are made, the cost statements should reflect this fact. If the duty free imports have been made after actual production, the statement should reflect this fact also. 15. PACKING EXPENSES: (1) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement showing the total expenses incurred and income received by the company under different heads of accounts and the share applicable to the other products and the products under reference shall be prepared and reconciled with the financial statement. 20. ADJUSTMENT OF COST VARIANCES: Where the company maintains cost records on any basis other than actual such as standard costing, the records shall indicate the procedure followed by the company in working out the cost of the product under such system. The method followed for adjusting the cost variances in determining the actual cost of the product shall be indicated clearly in the cost records. The cost variances shall be shown against the separate heads and analyzed into material, labour, overheads and further segregated into quantity, price and efficiency variances. The reasons for the variances shall be duly explained in the cost records or statements. 21. STATISTICAL RECORDS: (1) The records regarding available machine hours or direct labour hours in different production departments and actually utilized shall be maintained for production of products under reference and shortfall suitably analyzed. Suitable records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y : Statement showing the cost of Utilities like Power, Steam, Water, etc., produced and consumed during the year/period : A. Quantitative Information: Serial number Particulars Current Year (unit) Previous Year (unit) 1. Installed capacity 2. Quantity produced 3. Capacity utilisation 4. Quantity recirculated 5. Quantity purchased 6. Self-consumption including other losses 7. Net units consumed B. Cost Information : Serial number Particulars Quantity Rate (Rupees) per unit Amount (Rupees) Cost Per Unit (Rupees) Current Year Previous Year A 1. Materials(specify) (a) (b) (c) 2. Utilities (specify) (a) (b) (c) 3. Consumable stores and spares 4. Salaries and wages 5. Repairs and maintenance 6. Other overheads 7. Depreciation 8. Total 9. Less:Credit(if any) 10. Net Total B. Apportioned to various departments/ cost centres: 1. 2. 3. 4. . . n. Note 1.- Separate cost sheet is to be prepared for each utility as well as effluent treatment. Note 2.- If any of the utility, which is manufactured by the company, is sold, proper credit should be given in the cost of generation of that utility. Proforma `B' Name of the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Total(1 to 10) 12. Stock adjustment (Work-in-progress) 13. Less: Credit (for wastage and by-products) 14. Cost of production of Ore (11 to 13) Cost of Sales 15. Packing cost (a)Packing material (b)Direct wages and salaries (c)Other overheads 16. Selling and distribution Expenses (a)Salaries and wages (b)Freight and transport charges (c)Commission to selling agents (d)Advertisement expenses (e)royalty (f)Others (g)Total(a to f) 17. Interest 18. Total cost of sales excluding excise duty (14 to 17) 19. Total sales realization Less :(i)excise duty (ii)export incentives 20. Margin (19 - 18) Note 1.- Separate proforma shall be prepared for the quantity used for captive consumption, quantity sold within the country and the quantity exported. Expenses incurred on export and the incentive earned thereon shall be indicated in the proforma applicable for the quantity produced and exported. Proforma `D' Name of the company : Name and address of the factory : Statement showing the cost of basic metal or non metal produced during the year/period : A. Quantitative Information: Serial number Particulars In MTs Current Year Previous Year 1. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... metal (c) Alloying material (d) Scrap charged (e) Others(specify) (f) Less: credit for scrap generated (g) Net material cost 2. Direct wages and salaries 3. Utilities (a)Power (b)Furnace oil (c)Others (specify) (d)Total(a to c) 4. Cost of dies, where applicable 5. Consumable stores and spares 6. Depreciation 7. Repairs and maintenance 8. Technical assistance fees 9. Research and development 10. Quality control 11. Other works overhead 12. Administrative overhead (a)Salaries and wages (b)Others (specify) (c) Total(a+b) 13. Total(1 to 12) 14. Stock adjustment (Work-in-progress) 15. Less: Credits (from wastage and by-products) 16. Cost of production(13 to 15) 17. Stock adjustment (finished products) 18. Total (16+17) 19. Quantity and cost transferred for : (i) captive consumption (ii) sales 20. Packing Cost (a) Materials (b) Others 21. Selling and distribution Expenses (a) Salaries and wages (b) Freight and transport charges (c) Commission to selling agents (d) Advertisement expenses (e) royalty (f) Other (g) Total(a to f) 22. Interest 23. Total cost of sales excluding excise duty (19 to 22) 24. Total sales realiz ..... X X X X Extracts X X X X X X X X Extracts X X X X
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