COST ACCOUNTING RECORDS (TEXTILES) RULES 1977

MINISTRY OF LAW JUSTICE AND COMPANY AFFAIRS NOTIFICATION

NEW DELHI THE 28TH JUNE 1977

COST ACCOUNTING RECORDS (TEXTILES) RULES 1977

G.S.R.417(E) :- In exercise of the powers conferred by sub-section (1) of section 642 read with
clause (d) of sub-section (1) of section 209 of the Companies Act,1956 (1 of 1956), the
Central Government hereby makes the following rules, namely:-

1. Short title and commencement - (1) These rules may be called the cost Accounting
Records (Textiles )Rules,1977.
(2) They shall come into force on the 1st day of July,1977.
2. Application :-*[These rules shall apply to every company engaged in the production,
processing or manufacturing of any art silk cloth, cloth, cotton yarn or cotton cloth ,
processed yarn and processed cloth , man-made fibre yarn or man made fibre cloth, silk
yarn or silk cloth, wool ,woollen yarn or woollen cloth, yarn or other textiles products:]1

{Provided that these rules shall not apply to such of the above said companies as falling
under the category of small scale industrial undertakings.}2
Explanation : For purpose of this rule the expression "small scale industrial undertaking
"means a company
(a) {{the aggregate value of the machinery and plant does not exceed the limit as specified
for a small scale industrial undertaking under the Industries (Development and
Regulation)Act 1951 (65 of 1951), as on the last date of the preceding financial year
;and}}3
(b) [the aggregate value of the realization made by the company from the sale of supply of
all its products during the preceding financial year does not exceed ten crore rupees. ]4

3. [Definitions.-In these rules, unless the context otherwise requires-

(a) "art silk cloth" means any fabric made wholly from art silk yarn or partly from silk,
yarn and partly from any other yarn provided such fabric 'contains not less than 60
per cent of art silk yarn;

(b)"cloth" has the same meaning as in sub-clause (4) of Clause 3 Textiles (Development
and Regulation) Order, 1993;
(c) “Cotton yarn or cotton cloth” has the same meaning as in sub-clause (6) of clause 3 of
the Textiles (Development and Regulation) Order, 1993;

1 th
Substituted by GSR 29(E) dated 19 January 1994.
2 th
Inserted by GSR 40 dated 5 January,1983
3 rd
Substituted by GSR No.446(E) dated 3 August,1998.
4 th
Inserted by GSR No.322(E) dated 24 March,1993.
 (c) “man made yarn” and “man made fibre cloth” has the same meaining as in sub-
clause(10) of clause 3 of the Textiles (Development and Regulation) Order, 1993;
(d) “other textile products” has the same meaning as in sub-clause(14) of clause 3 of the
Textiles (Development and Regulation) Order, 1993;

(e) “ processed yarn and process of cloth” means and yarn and / or cloth as defined in sub-
clause (b) and (j) of this rule which has undergone one or more of the process such as
bleaching, dying, printing, mercerizing, finishing and the like.
(f) This also includes the cloth processed by “processor” as defined in sub-clause(19) of
clause 3 of the Textiles (Development and Regulation) Order, 1993;
(g) “silk yarn and silk cloth” has the same meaining as in sub-clause(21) of clause 3 of the
Textiles (Development and Regulation) Order, 1993;
(h) “wool” ” has the same meaining as in sub-clause(24) of clause 3 of the Textiles
(Development and Regulation) Order, 1993;
(i) “yarn” ” has the same meaining as in sub-clause(26) of clause 3 of the Textiles
(Development and Regulation) Order, 1993;
(j) “yarn” ” has the same meaining as in sub-clause(27) of clause 3 of the Textiles
(Development and Regulation) Order, 1993;]5A

4. Maintenance of records:- (l) Every company to which these rules apply shall, each of
its financial year commencing on or after the 1st day of July,1977{till the 31st day of
March 2001 or the close of the relevant financial year in 2001}5 keep proper books of
accounts containing inter alia, the particulars specified in Schedule I and II annexed to
these rules relating to utilization of material, labour and other items of cost in so far as
these are applicable to the cotton textiles manufactured by it;

(2) The books of account referred to in sub-rule (1) shall be kept on a regular basis so
as to make it possible to calculate the cost of production and cost of sale of the cotton
textiles at regular intervals, say quarterly, during the financial year, (hereinafter referred
to as the relevant period) as well as for the financial year as a whole, from the particulars
entered therein and every such books of account and the proformae specified in Schedule
II shall be completed within ninety days from the end of the financial year of the
company to which they relate".

["(2A) 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 III
annexed to these rules and Proformae A, B, C, D-1, D-2, D-3 and E mentioned in
the said Schedule relating to the utilization of materials, labour and other items of
cost in so far as they are related to the manufacturing, processing or production of
textiles products:

Provided that if the said company is manufacturing any other product(s)or is

engaged in other activities in addition to manufacture of textiles product, the

5 st
Inserted by GSR693(E) dated 31 August,2000.
5A th
Foot Note: Substituted by GSR 29(E) dated 19 January, 1994
 particulars relating to utilization of materials, labour and other items of cost in so
far as they are related to manufacture of such other products or activities shall not
be included in the cost of textiles products referred to in sub-rule (2) of this rule.

(2B) The books of account referred to in sub-rule (2A), shall be kept on a

regular basis in such manner so as to make it possible to calculate the cost of
production and cost of sales of each type of textiles products manufactured or
produced for every financial year from the particulars entered therein. Every such
books of account and the proformae specified in the said Schedule III, shall be
completed not later than ninety days from the close of the financial year of the
company to which they relate.

(2C) The statistical and other records shall be maintained in accordance with the
provisions of Schedule III, which shall be such as to enable the company to
exercise, as far as possible, control over various operations and costs with a view
to achieve optimum economies in cost. These records shall also provide the
necessary data required by the Cost Auditor to suitably report on all the points
referred to in the Cost Audit (Report) Rules, 1996, as amended from time to
time”]6

(3) It shall be the duty of every person referred to in sub-section (6) and sub-section (7)
of section 209 of the Companies Act, 1956 (1 of 1956), to take all reasonable steps to
secure compliance by the company with the provisions of sub rules [(1) (2),(2A),(2B) and
(2C)]7 in the same manner as he is liable to maintain financial accounts under sub-section
(1) of section 209 of the said Act.

5. 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 (3) of rule
3, shall, subject to the provisions of section 209 of the Companies Act, 1956 (I of 1956),
be punishable with fine which may extend to five hundred rupees and where the
contravention is a continuing one, with a further fine which may extend to fifty rupees for
every day after the first day during which such contravention continues.

SCHEDULE I8
(See rule 3)

1. Materials:
(a) Raw materials: (i) Cotton and man-made fibres. -Proper records shall be maintained
showing all the receipts, issues and balances, both in quantities and cost, of cotton, man-
made fibres and filament yarn from man made fibres used in the manufacture of cotton
textiles. Where cotton or man-made fibres or filament yarn made from man-made fibres,
is obtained from different sources including imports, .records shall be maintained

6
ibid
7 st
Inserted by GSR 693(E) dated 31 August,200
8 st
Applicable upto 31 day of March,2001 or close of the relevant financial year in 2001 vide GSR 693(E)
st
dated 31 August,2000.
 separately for imported and indigenous supplies, variety-wise in such a manner as to
enable the company to determine the quantity and cost of receipts, (including all direct
charges upto mills) issues, and balance of materials. The names and specifications used
for different varieties of cotton/man-made fibre/filament yarn from man-made fibre shall
conform to the nomenclature and specifications as prescribed by the 'Textiles
Commissioner.

The records shall indicate the actual quantity and value of each variety of cotton or other
raw materials mentioned above, used in each mixing prepared for manufacturing different
counts of yarns.

(ii) Waste - (1) Soft Waste:- Proper records shall be maintained to show the quantity and
realisable value of usable soft waste collected from each mixing in each cost center of the
Spinning Department, quantities re-used in each mixing, used in the waste plant, if there
be any, sold out with the sales realisation thereof and the balance lying in stock.

Proper records shall be maintained to show the quantity and realisable value of other soft
wastes such as droppings, sweepings, etc., collected from different cost centres of the
spinning department, re-used in the waste plant, if any, sold out with sales realisation
thereof and the balance lying in stock. The quantity of this waste collected at regular
intervals, say quarterly, during the relevant period shall be reconciled with such waste for
which due credit is afforded to the respective production/on technical basis/past
performance/trial run during the said period.

(2) Hard waste, Proper records shall be maintained to show the quantity and realisable value
of hard waste collected, type wise, such as superfine, fine, medium, coarse etc separately
from spinning department and pre-weaving department reused in the waste plant if any
sold out with the sales realisation thereof and the balance lying in stock. The quantity of
this waste collected at regular intervals, say quarterly, during the relevant period shall be
reconciled with such waste for which due credit is afforded to the respective production on
technical basis/past performance/trial run during the said period.

Any waste cotton purchased for use in the manufacture of yarn shall also be recorded
properly regarding receipts, issues and balances both in quantity and value

(iii) Yarn.-In case the company is purchasing yarn from outside sources for use in the
manufacture of cloth, proper records shall be maintained showing all the receipts, issues
and balances, both in quantity and value. This record shall be kept count-wise, separately
for carded and combed varieties.

(iv) In case the company purchases cloth in grey stage for processing, proper records shall be
maintained showing the quantity and cost of such purchases, issues to processing. and
balance in stock, fabric-wise. Where the company receives cloth in grey stage for
processing only, proper records shall be maintained showing the quantity of such receipts,
issues to processing and balance in stock,
 The records of these raw materials shall be maintained in such a way as may enable the
company to fill up the particulars in Annexure IV, V, VA or VI as the case may be,
specified in this Schedule vis-à-vis cotton/man-made fibre/waste and in Proformae 'E and
'L' of Schedule II for yarn and cloth respectively or in any form as near thereto as
practicable.

(b) Sizing materials.-Proper records shall be maintained to show the receipts, issues and
balances, both in quantities and cost, of each items of sizing materials such as starch,
maize, tallow, gum, etc. used in the different types of sizing solution used for sizing the
warp yarn. The cost shall include all direct charges up to the mills wherever specifically
incurred. In case the issues are made as per "recipes" prepared in advance, a periodic
reconciliation between the actual material consumption and that as per "recipes" shall be
made both in quantity and value. Separate records shall be maintained in such details as
may enable the company to work out the cost of sizing materials required per kilogram of
warp yarn sized. These records are to be maintained in such a way as may enable the
company to fill up the sizing material cost in Proforma 'E' specified in Schedule II or in a
form as near thereto as practicable.

(c) Dyes and chemicals.-Proper records shall be maintained to show the receipts, issues and
balances, both in quantities and cost. of each item of dyes and chemicals used for dyeing and
printing the various yarn and or cloth manufactured and processed. The cost shall include all
direct charges up to the mills or processing house, wherever specifically incurred .The issues shall
be properly identified with the cost centres, departments and ultimately with each sort of cloth
processed as far as practicable . In case the company resorts to the recording of consumption of
these materials as per "recipe" in respect of each fabric , a reconciliation between the actual
consumption and "recipe consumption" shall be made periodically and necessary adjustment for
variations are to be indicated in the cost records. Separate records shall be maintained in such
details as may enable the company to work out the material cost of dyeing or printing each type of
cloth processed so that such cost can be filled up sin Proforma 'L' specified in Schedule II.

(d) Process materials/chemicals: De-sizing, souring scouring, bleaching, finishing, mercerizing

and other materials:- Proper records shall be maintained to show the receipts, issues and
balances both in 'quantities and cost of each item of ' process materials/chemicals, such as
de-sizing chemicals, bleaching chemicals, finishing chemicals, mercerizing chemicals,
tabulizing chemicals etc used in the processing of cloth . The cost shall include all direct
charges up to the mills or processing house wherever specifically incurred . The issues
shall be properly identified with the cost centres, departments and products manufactured .
Separate records shall be maintained in such details as may enable the company to work
out process material /chemical cost in each of the processing costs centres / departments
and to fill in relevant details in Proformae 'G', 'H', 'I' and 'J' specified in Schedule II.

Where any of the dyes and chemicals and processing chemicals are produced by the
company, separate records showing the cost of manufacture of such material indicating the
break-up of raw materials consumed for the production and conversion cost shall be
maintained in such details as may enable the company to determine the actual cost of such
materials produced.
(e) Recoveries of process materials and chemicals:- Proper records shall be maintained
indicating the quantity of materials or chemicals recovered from different processes. In
the case of certain materials or chemicals thus recovered which cannot be re-used in the
process due to lower concentration and are sold, the realizations from such sales shall be
recorded and adjusted against the cost of consumption of the respective materials or
chemicals, if practicable, or otherwise adjusted against the processes concerned on a
reasonable basis. In case further processing is necessary to make these materials or
chemicals useable or saleable, as the case may be, adequate records of cost involved for
such further processing shall be maintained. If such further processing is done by any
outside agency, records to show the quantity sent for processing, quantity processed and
the cost involved thereon shall be maintained in detail.

(f) Consumable stores, small tools, machinery and spares.- (i) Proper records shall be
maintained to show the receipts, issues and balances both in quantities and cost of each
item of consumable stores, small tools machinery spares, bobbins, pirns, shuttles, rollers,
etc. The cost shown shall include all direct charges upto, the mills or processing house
wherever specifically incurred.

(ii) 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 main group of such items.

(iii) The cost of issues of consumable stores, small tools and machinery spares, shall be
charged to the-relevant heads of account such as production, repairs to plant and
machinery and repairs to buildings. Materials consumed on capital works such as
additions to buildings. plant and machinery and other assets shall be shown under the
relevant capital heads.

(iv) Proper records shall be maintained to show the quantity and cost of items which are
not forming part of the machinery and replaced as and when necessary, such as bobbins of
all sizes, pirns, winding cones ,cheeses, reels, sliver drums, rollers in frames, shuttles, etc.,
lying in the shop floor at the end of the relevant year in order to enable the company to
arrive at the actual consumption of such items during the relevant year. The method
followed for charging the cost of the above items and adjusting the income, if any, derived
from the disposal of any of the above items discarded, in the cost of the products
manufactured shall be indicated in the cost record.

(v) Sales realisation of old and discarded stores materials, scrap, etc. shall be identified
wherever possible with respective cost centres and credit given accordingly otherwise it
shall be deducted from the common mill overheads.

(g) Wastages, spoilages, rejections, losses, etc. of materials.-(i) Proper records shall be
maintained showing the quantity and cost of wastages, spoilages, rejection and losses of
raw materials. dyes and chemicals, process materials, consumable stores, small tools and
machinery spares, whether in transit, storage, manufacture or for any other reason. The
method followed for adjusting the above losses as well as the income derived. from the
 disposal of rejected and waste materials including spoilages, if any, in determining the
cost of products shall be indicated in the cost records.

(ii) In the case of cotton and man-made fibre, records of wastage, spoilage, and losses shall be
maintained in such a way as may enable the company to fill up the particulars, for working out the
waste multipliers for each mixing at periodic intervals, in Annexure VII specified in this Schedule
or in any form as near thereto as practicable.

(iii) Necessary records shall be maintained showing the quantity and realisable value of hard
waste derived in different departments, re-used, sold out and balance in stock. Sufficient records
to show the hard and soft waste used both in quantity and value in the waste recovery plant for
yarn of lower counts to be used in the manufacture of waste blankets shall be maintained. The
method followed for adjusting the above wastage as well as the income derived from the sale of
such waste in determining the cost of product shall be indicated in the cost records. The records
shall be maintained in such a way as may enable the company to fill in the particulars in
Annexure VIII(A) of this Schedule.

(iv) Necessary records shall be maintained showing the quantity and cost of wastage in cloth
produced, due to spoilage, etc. in various departments and sold out as waste. The method
followed for adjusting the above wastage as well as any income derived from the sale of such
waste, in determining the cost of the product shall be indicated in the . cost records.

(v) Separate records share be maintained for fents. rags, chindies, etc. arising out of finished
fabrics, group-wise. Such grouping shall be as per the one adopted by central excise authorities.
Such records shall enable the company in determining the incidence on this account in the cost of
fabric and also to fill in such details in proformae E-1 and L-1 specified in Schedule II. The
quantity of fents, rags, etc. formed in the case of each fabric may be determined on technical basis
if actuals are not available. In such cases reconciliation of such waste accounted for in the
production on technical basis and. that actually formed, group-wise, shall be made at regular
intervals, say quarterly, within, the relevant period.

II. Salaries and Wages:

(a) Proper records shall be maintained to show the attendance and earnings of all employees and
the cost centres or departments and the work on which they are employed. The records shall
also indicate separately:
(i) overtime wages earned;
(ii) piece-rate wages earned;
(iii)incentive wages earned, either individually or collectively as production bonus or
under any other scheme based on output;
(iv) earnings of casual labour engaged on casual work under classified headings.

(b) Idle time shall be separately recorded under classified headings indicating the reasons
therefor. This data shall be maintained, as far as possible cost centre-wise, otherwise for principal
costs like ring frame, looms, bleaching, dyeing, printing, warehousing, etc. The method followed
for accounting of idle time payments in determining the cost of the products shall be disclosed in
the cost records.

(c)Any wages and salaries allocable to capital works such as addition or heavy repair works to
plant and machinery, buildings or other fixed assets shall be accounted for under the relevant
capital heads.

III. Service department expenses:

Detailed records shall be maintained to indicate expenses incurred for each service cost centre or
department. These expenses shall be apportioned to other service and production departments on
an equitable basis and applied consistently.

IV. Utilities:

(1) Water: Where water is treated or purified. proper records showing the quantity and cost of
water treated and consumed in different cost centres or departments for the manufacture of
processed fabrics, etc., shall be maintained in such detail as may enable the company to furnish
the necessary particulars in Annexure I to this Schedule. The cost of treated water allocated to the
departments concerned shall be on a 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 in various cost centres or departments for the manufacture of
cotton textiles products shall be maintained in such detail as may enable the company to furnish
the necessary particulars in Annexure II to this Schedule. The cost of steam consumed by the
cotton textiles products and other products or other units of the company, if any, shall be
calculated on a reasonable basis and applied consistently.

Where steam is raised and supplied by any other unit of the company to the textiles unit, the cost
of steam so supplied shall be charged to the textiles unit on a reasonable basis and applied
consistently.

(3) Power:- Adequate records shall be maintained for the quantity and cost of power purchased. If
any expenses are incurred for distribution of the power thus purchased, proper records to show
such expenses shall be maintained.

Where power is generated by the company itself adequate records shall be maintained to show the
cost of power generated and consumed by the different cost centres, departments, etc. of the
textiles unit of the company. in such detail as may enable the company to furnish the. necessary
particulars in Annexure III to this Schedule.

Where power is generated and supplied by any other unit of the company to the
spinning/weaving/processing departments of the textiles unit, adequate records shall be
maintained to assess the quantity and cost of power so supplied. The rate charged by the
supplying unit shall be on a reasonable basis. Necessary records shall be maintained to show the
consumption of power by various cost centres or departments. The cost of power allocated to
products shall, be on a reasonable basis and applied consistently.
(4) Humidification: -Proper records shall be maintained to enable determination of the cost of
humidification and its distribution to different costs and departments.

V. Workshop/repairs and maintenance

(1) Proper records showing the expenditure incurred by the workshop under different heads
and on repairs and maintenance by the various cost centres and departments shall be maintained.
The records shall also indicate the basis of charging the workshop expenses to different cost
centres, departments and units. Wherever maintenance work is done by direct workers of any
production cost centre, the wages and salaries of such men shall be treated as other direct
expenses of the respective cost centre.

Expenditure on major repair works, from which benefit is likely to accrue for more than one
financial year shall be shown separately in the cost records indicating the method of accounting in
determining the cost of various product manufactured during the relevant period.

Expenditure incurred on works of capital nature shall be capitalized. The cost of such jobs shall
include the expenditure on materials, labour and due share of the overheads. The jobs carried out
by the workshop attached to the spinning, weaving or processing departments, for other units of
the company and vice-versa shall be charged on a reasonable basis and applied consistently.

(2) Design studio.--Proper records showing the expenditure incurred by the design studio if
any, shall be maintained. The records shall also indicate the basis of charging the studio expenses
to the different cost centres and departments in the printing section.

(3) Screen making, photo engraving, pentsgraph, chromium plating and rotary screen making:
Proper records showing the expenditure incurred by these departments shall be maintained. The
records shall also indicate the basis of charging the expenses of these departments to the
respective cost centres of the, printing department and ultimately to the products. The basis so
adopted shall be reasonable and applied consistently.

VI. Depreciation:

(a) Proper records shall be maintained showing the cost and other particulars of fixed assets in
respect of which depreciation is to be provided. These records shall inter alia indicate the cost of
each item of assets including installation charges, if any, the date of its acquisition, the date of its
installation and rate of depreciation. In respect of those assets, the original cost of acquisition of
which cannot be ascertained without an unreasonable expenditure or delay, the valuation shown
in the books on the first day of the financial year beginning on or after commencement of these
rules shall be taken as the opening balance.

(b) The basis on which depreciation is calculated. and allocated. to the various cost centres aid
departments and to the products shall be clearly indicated in the records. Depreciation chargeable
to the different cost centres and departments shall not be less than the amount of depreciation
chargeable in accordance with the provisions of sub-section (2) of section 205 of the Companies
Act, 1956 (I of 1956), and shall relate to plant, machinery and other fixed assets. in such cost
centres and departments. In the case of assets or group of assets on which depreciation is written
off at the rate of 100 percent in the relevant year, such depreciation shall be spread over the
number of years during which benefit is derived from such assets or group of such assets. In case
the amount of depreciation charged in the cost accounts in any financial year is higher than the
amount of depreciation chargeable under the aforesaid provisions of the. Companies Act, the
amount so charged in excess shall be indicated clearly in the cost records. The cumulative
depreciation charged in the cost record ,against any individual item of asset shall not, however,
exceed the original cost of the respective asset.

The cost of items like copper-rollers used for printing fabrics, stainless steel frames used for
dyeing .yarn and the like, put into use during the relevant year shall be treated as "deferred
expenses", and spread over the effective life of such items.

VII. Overheads:

Proper records shall be maintained showing the various items of expenses comprising the
overheads. These expenses shall be analyzed, classified and grouped into mills or processing
house (works), administration and selling and distribution overheads. The methods followed for
allocation of the above Categories of overheads to the Cost centres, departments and absorption
by the products shall be indicated in the cost records.

Where the company is engaged in the manufacture of any other products in addition to cotton
textiles, the records shall clearly indicate the basis followed for apportionment of the common
overheads including head office expenses of the, company to the cotton, textiles activity, other
activities and capital works. In case any expense included in the above categories of overheads
can be identified with a particular activity or product, such expense shall be segregated and
charged to the relevant activity or product in the first instance and thereafter the remaining
common expenses under the above categories of overheads shall be allocated on a reasonable and
equitable basis and applied consistently.

The details of administrative, selling and distribution overheads and the amounts applicable to
yarn. cloth and processed cloth shall be maintained in such a manner as to enable the company to
fill up the particulars. in the cost of production and cost of sale statements of each count of
yarn/type of cloth and processed cloth (fabric-wise) in Proformae 'B' and 'C'. 'E' and 'F', 'L' and
'M' specified in Schedule II respectively,

VIII. Expenses on export:

Proper records showing the expenses incurred on the export item of cotton textiles, if any, shall
be separately maintained so that the cost of export sales can be correctly determined for each type
of the product exported.
The expenses incurred on exports as well as any export incentives. such as cash subsidy,
drawback duty and benefit derived out of the import entitlement license issued, etc., if any. shall
be reflected separately in the Cost of sales statements relating to export sales.

IX. Packing.

Proper records shall be maintained showing the quantity and cost of various packing
materials such as Hessian cloth, polythene paper, paper boards, packing boxes. mild steel wires.
hoops and buckles used for different types of packing of yarn, cloth and Processed cloth
separately. In the absence of actual consumption of such materials for each type of packing,
apportionment of material cost shall be made on the basis of quantity requirement as per
standard specifications. In such cases, reconciliation of major material cost as per standards and
that as per actuals shall be made periodically, say quarterly. Records shall also be maintained
showing the other expenses incurred in respect of packing. Where expenses are of a general
nature and cannot be identified directly with the types of packing, apportionment of such
expenses to the different types of packing shall be on an equitable basis and the basis of such
apportionment shall be clearly indicated in the cost records and applied consistently. The records
shall be kept in such a manner as to enable the company to fill up the Particulars in Proforma 'K'
specified in Schedule II.

Separate records for expenses incurred on special packing made for exports of yarn/cloth in Grey
stage processed cloth shall be maintained and exhibited in the relevant. cost of sales statements
for exports.

X. Research and Development expenses:

Proper records showing the details of expenses, if any, incurred by the company for research and
development according to the nature of such research, namely, development of products, existing
and new, processes of manufacture. existing and new, design and development of new plant
facilities, market research for new products, etc. shall be maintained separately. The method of
charging these expenses to the cost of products during any year shall be indicated in the cost
records. Wherever the utility of such research extends over more than one financial year such
expenses shall be treated as "deferred expenses" and charged to the cost of the products on some
equitable basis which is to be followed consistently.

XI Yarn/cloth in grey stage for self-consumption:

Proper records shall he maintained showing the quantity and cost of each item of yarn and cloth
transferred to another department/unit of the company for self-consumption. The rates at which
such transfers are effected shall be at cost.

XII. Work-in-progress and finished goods stock:

Adequate records shall be maintained showing the cost. of work-in-progress in each productive
cost centers of the spinning, weaving and processing departments of the company. Proper records
showing the opening stock, production, issues for further processing/sales and closing stock of all
the finished products like yarn of various counts either carded or combed. cloth of various
constructions and processed and finished cloth of various constructions, designs, etc., shall be
maintained.

The method followed for determining the cost of work-in-progress and finished goods stocks shall
be indicated in the cost records so as to reveal the cost elements that have been taken into account
in such computation. The method adopted shall be followed consistently.

XIII. Cost statements:

(a) Separate cost statements showing conversion cost for each operation/process under spinning,
weaving and processing shall be maintained in order to enable the company to fill in
Proformae 'A', 'D', 'G', 'H’, ‘I’ and 'J’ specified in Schedule II or in forms as near thereto as
practicable.
(b) Cost statements shall be maintained in respect of different counts of yarn produced, carded or
combed separately in Proforma B specified in Schedule II. The cost of sales statements in
respect of different counts of yarn sold, if any, shall be maintained in Proforma 'C' specified in
Schedule II showing the actual cost of sales and the sales realisation thereof.

(c) Cost statements showing the cost of production shall be maintained in respect of different sorts
of cloth in grey stage, manufactured by the company in Proforma 'E' specified in Schedule II.
Cost statements shall be maintained in respect of each sort of cloth, construction-wise in the said
proforma. In case of sales of cloth in grey stage, the cost of sales statement showing the actual
cost of sales of such cloth sold, construction-wise. shall be maintained in Proforma 'F' specified in
Scheduled II.

(d) Cost statements showing the cost of production in respect of all sorts of processed and
finished cloth shall be maintained in proforma 'L' specified in Schedule II. Cost statement shall
be maintained in respect of each sort of cloth construction-wise in the said proforma. The cost of
sales statements in respect of different sorts of processed cloth sold shall be maintained showing
the actual cost of sales and sales realisation thereof in proforma 'M' specified in Schedule II.

(e) In case it is not possible to make such data for all sorts the cost of production and cost of
sales of cloth in grey stage and processed cloth in Proformae 'E', 'F', 'L' and 'M' respectively shall
be maintained in respect of sorts which are predominantly produced and which forms 8 per cent
or more of the monthly production and represent all categories of cloth like sarees, dhoties, voils,
etc. produced by the mill. This data, on an overall basis, shall cover not less than 75 per cent of
the total production/sales during the period. The same data regarding the rest of the sorts of cloth
produced or sold shall be given in total in the above said proformae. Overall reconciliation of
production cost, cost of sales and sales realisation shall be made with financial accounts for the
relevant period. Adequate records shall be maintained to enable the company to fill in the actual
average sales realisation, per unit for each sort covered in Proformae 'F' and 'M'. However, the
mill / company shall keep adequate records showing the quantity of production and sale of each
sort in detail.

In the case of controlled cloth, however, the cost data required shall be given for each sort in
the said proformae.
(f) Export of yarn/cloth/ in grey stage/processed cloth shall be exhibited separately in the
relevant cost statements and the same shall be excluded from the cost statements meant for sale
in the internal market. Value of export incentives, if any, shall be shown in the respective cost of
sales statements.

(g) The transfer of finished product which forms the raw materials for subsequent products
shall be made at the cost of production of such finished products.

XIV. Production records:

Quantitative records of all finished and packed production. issues for further processing,
department-wise, issues for sales and balance in stock both packed and in pre-packed condition
of (1) different counts and types of yarn (both grey and processed); (2) all sorts of cloth in grey
stage (3) all sorts of processed and finished cloth produced shall be maintained by the company.
In the process department., the production of different machines, count group-wise and variety-
wise only need be kept. The cost of all finished and packed production may be kept in detail.
Details of the, quantity of cotton blankets produced, if any, from waste cotton shall also be kept
in the cost records. Adequate records to show the production of yarn/ cloth in grey stage
processed cloth in various stages of production in the respective intermediary productive
departments shall also be maintained.

XV. Reconciliation of cost and financial accounts:

The cost records shall be reconciled preferably periodically with the financial books of
accounts so as to ensure accuracy .Variation if any, shall be clearly indicated and explained.The
period for which such reconciliation is effected shall not exceed the period of the financial year
of the company. The reconciliation shall be done in such a manner that the profitability, of the
products under reference can be correctly adjudged and reconciled with the overall profits of the
company.

A statement showing the total expenses incurred and income received by the Company under
different heads of accounts and the share applicable to cotton textiles activity of the company
shall be made in Proforma 'N' specified in Schedule II giving, therein the basis' of allocation of
the total expenses and income duly reconciled with the financial accounts for the period.

XVI. Adjustment of cost variances:

Where the company maintains cost records on any basis other than actuals, such as Standard
costing ,estimated cost etc., the records shall indicate the procedures followed by the company
working out the cost of products under such system. The method followed for adjusting the cost
variances for determining the actual cost of the products shall be clearly indicated in the cost
records. The cost variances shall be shown against the relevant heads in the respective
proformae of Schedule II. The reasons for the variances shall be detailed in the cost records.
XVII. Records of physical verification:

Records of physical verification shall be maintained in respect of all items held in stock such
as cotton, synthetic fiber, yarn, etc., dyes and chemicals, processing materials, machinery
spares, fuels, finished goods, copper cylinders. printing ,screens, yarn dyeing spools. etc. and
fixed assets. Reasons for shortages/surpluses arising out of such verification and the method
followed for adjusting the same in the cost of the products shall be indicated in the records.

XVIII. Inter-company transactions:

In respect of supplies made or services rendered by the company, to its holding company or
subsidiary or a company in the same management as defined in section 370(IB) of the
Companies Act, 1956, or a company in which a director of the company is also a director in
such companies and vice versa, records shall be maintained showing contracts entered into,
agreements or understanding reached in respect of:

(a) purchase and sale of raw materials, finished products (yarn/cloth in grey stage
processed cloth etc.) process materials, chemicals, dyes and rejected goods including
scrap, etc.

(b) utilisation of plant facilities.

(c) supply of utilities.

(d) administrative, technical, managerial and any other consultancy services.

These records shall also indicate the basis followed for arriving at the rates charged between
them so as to enable determination of the reasonableness of the rates charged or paid for such
services.

XIX. Statistical records:

Particulars of contracts entered into for purchase of cotton and sale of finished goods shall be
maintained in detail indicating separately the percentage of commission, carrying cost, etc.
Data regarding available and actually utilised spindle shifts/loom shifts/machine shifts in the
spinning, weaving and processing departments respectively, as well as related data in sub-
production centres of such departments shall be maintained. The reasons for stoppages and
under utilisation under classified headings shall also be recorded. Records showing yield of
yarn estimated and actually obtained from each type of mixing of Cotton used for yarn
production, production of yarn per spindle shift for each type of mixing for each type of frame
used, production of different Machines count group-wise and variety-wise in the processing
departments speed and efficiency of all the spindles/ looms other machines wherever necessary
for calculation of cloth cost in each production cost centres, etc. shall also be kept. Records
detailing the method of control exercised by the company in respect of efficiency in each
productive department like spinning weaving, processing, etc., losses, rejections, wastages in
process shall also be maintained.
 Such records, as will enable the company to identify, as far as possible, capital employed
separately for yarn/cloth in grey stage/processed cloth, shall be kept. Fresh investments on
fixed assets that have not contributed to the production during the relevant period shall also be
indicated in the records.

Detailed records showing the quantity and sale proceeds realised, for every variety of
yarn/cloth in grey stage processed cloth sold during the relevant period. shall be maintained, as
to enable the company to determine the actual sales realisation per unit of the product sold.

Statistical and other records maintained in compliance with the provisions of this Schedule
and Schedule II shall be such as to enable the company to exercise, as far as Possible, control
over the various operations and costs with a view to achieve optimum economies in costs and
to provide the necessary data required by the cost auditor to suitably report on all the points
referred to in the Cost Audit (Report) Rules, 1968.

The data maintained in the cost records shall be reconciled with the various returns submitted
to the Textiles Commissioner and Central excise authorities, under the various control orders
and notifications issued from time to time in respect of cotton yarn and processed cloth.
 ANNEXURE I
Name of the Company--- --------------------------------------------------- - - - - - - - - - - - - -- ------
Name and address of Mills / Processing House- - - - - - - - - - - - ------------------------------------
Statement showing the cost of water treated/consumed during the year ending---------------------
Quantity of water treated - - - - - - - - - - - - - - - -------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Sl.no. Particulars Qty. Rate/ Amount Cost per
consumed Unit Kilo litre
(Units) of water
treated
Rs. Rs. Rs.
------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
------------------------------------------------------------------------------------------------------------------
1.Water royalty
2.Chemicals
(a)
(b)
(C)
3. Stores
4. Power
5. Salaries and wages
6. Repairs and Maintenance
7. Mill overheads
8. Depreciation

Total

9. Less credits, if any

10. Net Total - - - - - - -

Consumption.for No. of units Amount

(1) Boiler House (Steam) Rs.

(2) Power
(3)Other Service Departments
(4)Sizing
(5)Singeing & de-sizing
(6)Bleaching
(7)Dyeing
(8)Printing
(9)Sing
(10) Mercerising
(11) Others
 (12) ..............

Notes.-(1.) If treated water is supplied to any other outside party , necessary Credits for
recoveries made shall be given against item 9.
(2) Where water meters are not installed consumption of treated water shall be assessed on a
reasonable basis and applied consistently.
(3) Bonus to employees, other than incentive bonus, provision for statutory gratuity and interest
charges shall be shown in cost sheets for final products like yarn/ grey cloth/processed cloth in
proforma 'C', 'F' and 'M’ respectively only.

ANNEXURE-II

Name of the Company---------------------------------------------------------------------------------------

Name and address of the Mill/Processing House---------------------------------------------------------

Statement showing the cost of steam raised, consumed during the year ending -------

No. of Boilers installed and capacity----------------------------------- - No. Tonnes

No. of Boilers used on an average and quantity of steam raised---------No. Tonnes
------------------------------------------------------------------------------------------------------------------
Particulars Qty. Rate Amount Cost per
(Units) Unit tonne
of steam
raised
Rs. Rs. Rs.
------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)" (5)
------------------------------------------------------------------------------------------------------------------
1. Water
2. Fuels
(a) Coal
(b) Fuel Oil
(c) Electricity
(d) Other fuel, if any (to be
specified)
3. Other direct expenses (such as
Boiler Inspection fees, etc.)
4. Consumable Stores
5. Salaries and Wages
6. Repairs and Maintenance
7. Mills overheads
8. Depreciation
 Total --------------------------------------------------------------------------------------
9. Less :
(a) Cost of live steam used by Power House for generating electricity
(b) Other units of the company (Net)
10.Cost of live steam
---------------------------------------------------------------------------------------------------------------------
--------
Consumed in Units Amount
Kg. Rs.

(I) Humidification of spinning and weaving Sections

(2) Bleaching
(3) Dyeing.
(4) Mercerizing
(5) Calendaring
(6)................
------------------------------------------------------------------------------------------------------------------

NOTES.-(I) If steam is supplied to any other outside party, necessary credit for recoveries
shall be given against item No. 9 (b).
(2) Where Meters are not installed, consumption of steam shall be assessed on a
reasonable basis and applied consistently.
(3) Bonus to employees other than incentive/productive bonus provision for statutory
gratuity and interest charges shall be shown in cost sheet for final products like
yarn/ grey cloth / processed cloth in proforma 'C','F' and 'M" respectively.
(4) Where water is treated by the company and then used cost of water shown against
item I should be as per Annexure 1.
-------------------------------------------------------------------------------------------------------------------
 ANNEXURE-III

Name of the Company---------------------------------------------------------------------------

Name and address of mill / Processing House---------------------------------------------------

Statement showing the cost of power generated /purchased and consumed during the year
ending-----------------------------------------------------------------

Number of units generated Kwh

Number of units purchased Kwh

Consumption in power house including other losses Kwh

Net units consumed by other Deptts.

Rate Cost per unit
Particulars Qty. per Amount of power
consumed unit generated/
purchased
Rs. Rs. Rs.
____________________________________________________________________
(1) (2) (4) (5)
_____________________________________________________________________
A.1. (a) Steam (As per Annexure II/Purchased)
(b) Other materials if any (to be specified)
2. Consumable Stores
3. Other Direct charges (such as electricity duty etc).
4. Salaries and wages
5. Repairs and maintenance
6. Overheads
7. Depreciation
Total
S. Less credits: for supply to other units
of the company
9. Net cost of power generated.
.
B.1 Purchased power
Total of A + B
Cost per unit
-------------------------------------------------------------------------------------------------------

Consumed in No. of units Amount

(1) Blow room Kwh. Rs.
(2) Carding
(3) Combing
(4) Drawing
(5) Inter/Roving
(6)Frames
(7) Winding
(8)Warping and sizing
(9) Weaving
(10)Singeing
(11)Shearing
(12) Dyeing
(13) Bleaching
(14)Printing
(15) Calendaring
(I6) Mercerizing
(17) Steam generation
(18) Water treatment
(19) Waste plant
(20) ........
(21) ........
Total ------
---------------------------------------------------------------------------------------------
1.Cost per unit generated shall be worked out with reference to the net unit of power
available for use after deducting consumption in the power house/own generator and
other losses.
(z) The power generated by own generators also should be treated as power generated. Fuel
oil consumption for such generation should be shown against item 1 (b).
(3) Where Meters are not installed consumption of power by the different cost centers,
departments shall be assessed on a reasonable basis-and applied consistently
(4) Bonus to employees other than incentive bonus, provision for statutory gratuity and
interest charges on borrowings including debentures shall be shown in cost sheets for
final products like yarn/grey cloth/processed cloth in proforma, 'C' 'F' &'M
respectively only.
5) Realisation, if any, by sale of Power to outside parties etc. shall be shown separately
against item 8.
 ANNEXURE IV
Name of the Company------------------------------------------
Name and address of the Mill
Statement showing the quantity and value of total cotton /Man-made Fibre issued
for the manufacture of carded or combed yarn manufactured, composition Mix-wise and
corresponding production for the year ending (Refer Annexure'V' ' V-A' and 'VI')
____________________________________________________________________________
S.No. Particulars Mixing A Mixing B Mixing C/D/etc. Total
Qty Rate Amo Qty Rate Amo Qty Rate Amo Qty Rate Amo
in Per unt in Per kgunt In kg Per kgunt In kg Rs unt
Kg Kg Rs Kg Rs Rs Rs

1. I. Composition of mixing Cotton/

Man-made Fibre
(a)
(b)
(c)
(d)
II .Purchased Cotton Waste
(a)
(b)
III. (A) Own Waste (used in same mixing)
(a)
(b)
(B) Own Waste of Higher mixing,
if any
(a)
(b)
IV. Total

2. Distribution
(a) Issued for combed yarn
(b) Issued for carded yarn

Total
3. Description of counts of yarn produced
From different mixing.

A. Warp yarn
(1)Carded
(2) Combed
B. Weft yarn
(1) Carded
(2) Combed if any.
_____________________________________________
 Total
______________________________________________
Notes:- (1) In case own waste is used without routing the same through the waste godown it
should be shown separately.
2) The rates adopted for own waste should be reasonable and basis shall be consistent.
3) The names of mixings given are illustrative only.
4) Nomenclature of variety of cotton used should be as adopted by the Textiles Commissioner.
5) In case the company is having its own ginning units, the cost of ginning and pressing with the
respective sale realisation on cotton seeds shall be separately kept with full details.
6) Where yarn produced is measured in hanks, the quantity both in hanks and kg. shall be
indicated in the proforma . If the same is measured in Kg quantity in hanks need not be
given.

-------------------------------------------------------------------------------------------------------
 ANNEXURE V

Name of the Company________________________________

Name & address of the Mill

Statement showing the input, wastage and output in each processing Cost Centre upto yarn stage,
for carded and combed yarn production for the year ending ------------
(Refer to Annexure VI and VII).
_____________________________
S Particulars Mixing A Mixing B Mixing C Mixing D Mixing E Total
No. Etc

2 % Kgs % Kgs % Kgs % Kgs % Kgs Kgs

1 3 4 5 6 7 8 9 10 11 12 13
1. 1. Blow room
(a) Opening cotton in process
(b) Add. Total cotton etc. issued as per Annex. IV (item IV)
(c) Total
(d) Deduct-total laps produced
(e) " Waste collected : Saleable
Usable
(f) Closing stock in process in blowing room
(g) Balance invisible waste

11. Carding
(a) Opening stock in process in card room
(b) Add. Laps received
(c) Total
(d) Slivers produced in Kg.
(e) Waste Collected,: Saleable
Useable
(f) Closing stock in cards

Ill. Combing
(a) Opening stock in process of combers
(b) Add : Slivers received for combing
(c) Total
(d) Combed slivers produced ] Saleable
(e) Combed waste collected ] Useable
(f) Closing stock in combers
IV. Draw Frame
(a) Opening stock in process in
Draw frames: ]combed
] carded
 (b) Add : (a) Combed slivers received
(b) Slivers received directly from carding.
(c) Total : Combed
Carded
(d) Combed slivers drawn
(e) Carded slivers drawn
(f) Waste collected : Saleable
Usable
(g) Closing stock of combed slivers
(h) Closing stock of carded slivers.

V. Inters:
(a) Opening stock in Inters:
(a) Combed slivers
(b) Carded slivers
(b) Receipts from Draw frames:
(a) Combed
(b) Carded
(c)Total (a) Combed
(b)Carded
(d) Transferred to Roving
(a) Combed
(b) Carded
(e) Transferred to Ring frames
(a) Combed
(b) Carded
(f)Waste Collected: Saleable
Useable
(g) Closing stock in inter
(a) Combed
(b) Carded
VI .Roving:
(a) Opening stock in roving
(a)Combed
(b)Carded
(b)Receipts of combed yarn from Inter/Slubber etc.
(c)Receipt of carded yarn from Inter/ Slubber
(d) Total : Combed
Carded
(e)Closing stock : Combed
Carded
(f) Waste collected : Saleable
Usable
(g)Production transferred to ring frames
(a) Combed
(b) Carded
(h)Production transferred to ring frames
Combed
Carded
VII. Ring frames:
(a) Opening stock
(a) Combed
(b) Carded
(b) Receipts (a) Combed
(b) Carded
(c) Total (a) Combed
(b) Carded
(d) Waste collected: Saleable
Usable
(e) Closing stock : (a) Combed
(b) Carded
(f) Production of finished yarn
(a) Combed
(b) Carded
2. Total waste 'A' (from carded yarn produced)
(a) Total cotton issued as per Annexure IV
(b) Less Total yarn spun " " "
(c) Balance
(d) Adjustment of opening & closing (+)(-)
Cotton /Man-made fibre in process
(e)Total waste
(f)'e' as % on 'b'.
B. From combed yarn production
(e) Total cotton issued as per Annexure IV
(f) Less Total yarn spun " " "
(g) Balance
(h) Adjustment of opening & closing (+)(-)
Cotton /Man-made fibre in process
(e)Total waste
(f)'e' as % on 'b'.

(3)Break up waste collected

(a) Visible
(1) Saleable
(2) Usable
(3) Total Visible
(b) Invisible
(c) Total wastage
(d)'B' as % on 'c'
____________________________________________________________________________
Notes:
(1) Waste collected to be shown against item 3 should include only wastes collected upto
including spinning stage.
(2) The cost centres shown are illustrative only.
(3) On the basis of quantity of waste formed (collected & lost)in each Cost Centre waste
percentages for that Cost Centre on the net input of each Cost Centre shall be calculated and
shown in the respective columns. From these percentages the waste multiplier for each mix
shall be calculated and shown in Annexure VII.
(4) Data regarding saleable and usable waste shown under item 3 shall be collected in such a
manner as will enable to fill in the detail in Annexure VI.
 ANNEXURE V (A)

Name of the Company______________________

Name and address of the Mill___________________

Statement showing the input, wastages and output in the spinning department for yarn
Production for the year ending ______________
(Refer to Annexure VII & Proforma 'B').

S. Particulars Mixing A Mixing B Mixing C Mixing D Mixing E Mixing

No. etc
% Kgs % Kgs % Kgs % Kgs % Kgs % Kgs
1 2 3 4 5 6 7 8 9 10 11 12 13 14

I. (a) Opening work.-in-progress(in all forms)

(b) Add total cotton issued as Per Annexure IV
(c) Total
(d) Consumption
(e) Closing work-in-progress in all forms

2. Waste :

(a) Reusable waste collected from

(i) Blow room
(2) Carding
(3) Combing
(4)Draw frames
(5) Roving
(6) Ring frames

(b) Other wastes collected from -

(i) Blow room
(2) Carding
(3) Combing
(4) Draw frames
(5) Roving
(6) Ring Frames
(c)Invisible waste
(i) Blow room
(2)..........
(3)............
(d)Total waste
(e) Production
 (1) Carded
(2) Combed
(3) Total

(f) Total consumption 2(d) & 2 (e)(3)=I(d)

____________________________________________________________________________

NOTES -(I) Reusable waste collected shall be shown against 2(a)on actual basis mixing wise.
In case of other wastes including invisible waste, if actual waste formed mixing wise is not
available the data may be given on Technical basis / Trial run/past performance. In such cases
reconciliation of total of such waste collected and accounted for periodically shall be shown in
the cost records.
(2) The Cost centres shown are illustrative only .
(3) On the basis of quantity of waste formed (collected and lost) in for each cost centre waste
percentage for each cost centre on the net input shall be shown in the respective column. From
these percentages, the waste multiplier for each mixing shall be calculated and shown in
Annexure VII.
(4) Data regarding waste collected shall be in such a manner as will enable to fill in the
details in Annexure VI.
 ANNEXURE VI

Name of the Company__________________________________

Name & address of the Mill__________________________________________________

Statement showing the net Mix-wise cost for the year ending____________

(Refer Proforma 'B')

S Particulars Mixing A Mixing B Mixing C Mixing D. Total

.No ........etc

Kg Am Kg Am Kg Am Kg Am Kg Am

oun oun oun oun oun

t t t t t

RS RS RS Rs Rs.

1 2 3 4 5 6 7 8 9 10 11 12

1.Total cost of cotton /synthetic fibre

as per Annexure IV-Item i.(IV)
2. Cost per Kg. of the Mix (Gross)
3. Less credit for waste collected as
per Annexure V(V-A).
(A) Waste usable in same Mixing
(a)
(b)
(c)
(B) Waste usable in lower Mixing
(a)
(b)
(C)
(C) Other wastes (Soft)
(a)
(b)
(c)
(D) Other wastes.(Hard)
(a)
(b)
(c)
Total of A, .B, C and D.
4, Adjustment for cost variance
5. Net cost of cotton/ synthetic fibre
consumed
 6. Net cost per Kg. of the Mixing.

NOTES.-(I) The classification of waste shall be according to the usual practice of the company
based on sales realisation
(2) The values adopted for waste shall be reasonable and the basis for adopting such
values shall be followed consistently.
(3) The names of Mixing given are only illustrative.
(4) In case the company is following standard costing the, variation between the
actual and standard cost of, cotton (net) consumed for each Mix is to be adjusted
and such adjustment shown separately under Item 4 in this Annexure to arrive at
the actual net cost per kg. of the Mixing.

(5) Waste collected shall be accounted for, mixing wise on actual basis as far as
practicable. Otherwise the usable soft waste at least shall be counted for mixing
wise on actual basis and other wastes on technical/past performance / trial run
basis.

(6) All usable waste shall be collected and accounted for on actual basis except
when such waste is in the production of the same lot of the same mixing.
------------------------------------------------------------------------------------------------------------
 ANNEXURE VII

Name of the Company--------------------------------------------------------------------------------------

Name and address of the Mill ------------------------------------------------------------------------------
Statement showing waste multipliers for each cost centre Mixing wise for the year ending
---------------------------------------in Spinning Department Refer to Annexure IX)
------------------------------------------------------------------------------------------------------------------
Sl. Department Mixing ‘A' Mixing 'B’
No. -------------------------------------------------------------------------
% on loss Kg. Waste % on loss Kg. Waste
multi- multi-
plier plier
------------------------------------------------------------------------------------------------------------------

1 2 3 4 5 6 7 8
------------------------------------------------------------------------------------------------------------------

1. Blow room

2. Carding

3. Combing

4. Draw frames

5. Inters

6. Roving

7. Ring frames

8. -------------------------------------------------------------------------------------------------------------

----
-
Mixing 'C' Mixing 'D' Mixing Mixing
%on loss Kg. Waste % on Kg. Waste % on Kg. Waste
multi- loss multi- loss multi-
plier plier plier
------------------------------------------------------------------------------------------------------------------
9 10 11 12 13 14 15 16 17
------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
NOTES.-I. In case in any mixing a portion goes through combing and both Inter or Roving or
through only one such operation waste multiplier shall be worked out separate for the
same.
2. % on loss shall be as per annexure V or V(a).
3. Cost centres given above are illustrative only.
4. In the case of companies considering waste on any other basis than actuals
adjustment for overall usage variance shall be shown separately and considered
while calculating the waste multiplier of each cost centre for each mixing.

------------------------------------------------------------------------------------------------------------

ANNEXURE VIII
Name of the Company-
Name & address of the Mill
Statement showing the production in Kg. per Machine shift/spindle shift for each Mixing and
the, respective conversion cost per Kg. for the year ending (Refer Annexure IV).
------------------------------------------------------------------------------------------------------------------
Sl. Departments Mixing 'A' Mixing 'B'
------------------------------------------------------------------------------------------------------------------
Conversion Production Conversion Conversion Production
cost per in Kgs. cost/Kg. cost per in Kgs.
machine per machine Rs. machine per machine
shift/spindle shift/spindle --------------- shift/spindle shift/spindle
shift as per shift Cur- Pre- shift as per shift
Proforma rent vious Proforma
year year 'A'
------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7
------------------------------------------------------------------------------------------------------------------
1. Mixing and blowing
2. Carding
3.Combing
4.Drawing
5.Slubing
6.Inter
7.Roving
8.Ring Frames
9.Total
------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------
Mixing 'C' Mixing 'D/E/F'
------------------------------------------------------------------------------------------------------------------
 Conversion Conversion Production Conversion Conversion Production
cost/Kg. cost per in Kgs. cost/Kg. cost per in Kgs.
Rs. machine per machine Rs. machine per machine
--------------- shift/spindle shift/spindle --------------- shfft/spindle shift/spindle
Cur- Pre- shift as per shift Cur- Pre- shift as per shift
rent vious Proforma rent vious Proforma
year year year year 'A'
------------------------------------------------------------------------------------------------------------------
8 9 10 11 12 13
------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------
Mixing 'D/E/F'
------------------------------------------------------------------------------------------------------------------
Conversion
cost/Kg.
Rs.
---------------
Cur- Pre-
rent vious
------------------------------------------------------------------------------------------------------------------
14 14a
------------------------------------------------------------------------------------------------------------------

NOTES
1) Names of Mixing departments are illustrative only.

2)Piece rate wages wherever paid shall be shown separately under 'Conversion Cost per Kg.' and
the total conversion cost per Kg. shall be taken while filling up Annexure IX.

3)Adequate records shall be maintained to show the production of yarn at various stages
per machine shift/spindle shift for each count in respect of Warp yarn (carded & combed) weft
yarn, separately.

---------------------------------------------------------------------------------------------------------------------
-----
 ANNEXURE VIII (A)

Name of 'the Company____________________________

Name and address of the Mill_______________________
Statement showing hard waste collected in weaving preparatory and Weaving
Departments for the year ending ---------------------(Refer Proforma 'E')

Sl Particulars Winding Reeli Pirn Doub Warp Draw Weav Total %to
No. ng Wind -ling -ing ing ing be
-ing appli
ed in
produ
ction
Kg Kg Kg Kg Kg Kg Kg Kg
1 2 3 4 5 6 7 8 9 10 11

1. Course
2. Medium
3. Fine
4. Superfine
5. Others (to be specified)
6 Total.
7. Input
____________________________________________________________________________

NOTES:.
(1) Appropriate waste percentages shall be adopted while working out the requirement of
yarn and its cost in Proforma 'E'.
(2)Appropriate waste percentage shall be applied while working out the cost of reeling
/winding in Proforma 'C'.
(3)In case of companies adopting technical basis for accounting the hard waste in production
of each type of product reconciliation of such waste account for production
and that actually collected type wise shall be made periodically and shown in cost records.
(4)Departments given are illustrative only.

----------------------------------------------------------------------------------------------------------
 ANNEXURE IX
Name of the Company_____________________________________
Name and address of the Mill___________________________________

Statement showing conversion cost of yarn per Kg count wise for the year ending -----------
(Refer Proforma 'B')

Mixing Counts Hanks Blow Room Carding

Conver Waste Convers Convers Waste Convers
sion Multipli ion cost ion cost Multipli ion cost
cost per er as per per Kg /kg as er as per /kg to
Kg as Annexu to be per Annexu be
per re VII applied Annex re VII applied
Annex. VIII
VIII
4 5 6 7 8 9
1 2 3

Combing Drawing Slubbing

Conver Waste Convers Conver Waste Convers Convers Waste Convers
sion Multipli ion cost sion Multipli ion cost ion cost Multipli ion cost
cost per er as per per kg cost per er as per per kg per kg er as per /kg to
Kg as Annexu to be Kg as Annexu to be as pper Annexu be
per re VII applied per re VII applied Annexu re VII applied
Annex. Annex. re VIII
VIII VIII
13 14 15 16 17 18
10 11 12

Inter Roving Spinning

Conver Waste Convers Conver Waste Convers Convers Waste Convers
sion Multipli ion cost sion Multipli ion cost ion cost Multipli ion cost
cost per er as per per Kg cost per er as per /kg to per kg er as per /kg to
Kg as Annexu to be Kg as Annexu be as per Annexu be
per re VII applied per re VII applied Ann.VII re VII applied
Annex. Annex. I
VIII VIII
24 25 26 27
19 20 21 22 23

Total conversion cost per kg to be applied Previous year total conversion cost per kg
applied
Combed yarn Carded yarn Combed yarn Carded yarn
28 29 30 31

Notes:-
(1) Cost centres mentioned are illustrative only.
(2)Conversion cost per kg shown in columns 4,7,10,etc against different Cost centres in the
annexure shall be as per annexure VIII.
(3)Waste multipliers shown in column 5,8,11 etc against different Cost Centres in the annexure
shall be as per annexure VII.
(4)The conversion cost per Kg in respect of each count /mixing shall be worked out separately if
a portion of the production of the same count/mixing is not passing through all operations.
 [SCHEDULE II]9
(See rule 3)

PROPORMA 'A'
Name of the Company____________________________________

Name & address of the Mill________________________________

Statement showing Cost Centre-wise conversion cost up to and including spinning for
the year ending _________________________________

S.No. Particulars Mixing Card- Comb Draw Slubb Inter Rov Ring .. Total
& Ing Ing -ing -ing ing Fram
Blow- es
ing
1 2 3 4 5 6 7 8 9 10 11 12

A. 1. Machine shifts/Spindle shifts,

(converted 8 Hrs. shifts)
(i) Available
(2) Worked
2. Production in Kgs.
3. Average production in Kg./
Machine shifts/Spindle shifts
B. Expenses
1. Direct wages & Salaries Rs.
(a)Time rate wages
(b) Salaries
2. Utilities
(a) Water
(b) Steam
(c) Power
(d) Others (to be specified)
3.Consumable Stores
4. Bobbins,Pirns etc.
5. Repairs & Maintenance
6. Other direct expenses, if any.
(to be specified)
7- Mill Overheads
8. Depreciation
9. Share of Administrative Over-
heads
10. Research & Development

9 st
Applicable till the 31 day of March,2001 or the close of the relevant financial year in 2001 vide GSR
st
693(E) dated 31 August,2000.
 11.Adjustment for conversion cost
included in opening and closing
W.I.P., if any.
12.Adjustment for cost variances
I3. Total
14. Cost per Machine shift/Spindle
shift
15 Cost per Machine shift for previous year
16. Piece rate wages paid
__________________________________________________________________________
Notes.-(1) While computing Machine shift/Spindle shift cost in each cost centre, piece rate wages.
wherever paid. shall be excluded. Piece rates on the basis of actuals shall be taken into account
while working out the conversion cost to be applied in Annexure IX.
(2)Bonus to employees other than incentive bonus, provisions for statutory gratuity and
interest charges shall be shown in Proforma C/F/M wherever applicable.
(3) Cost centres given are illustrative only.
(4)Item No. 12 is applicable to companies maintaining cost records on standard costing.
.......................

PROFORMA 'B'

Name of the company________________________________________________

Name and address of the Mill ________________________________________

Statement showing the cost of production of yarn count-wise for the year ending

S. Mixing No. of Count Carded Net cost Waste Cost per

No Hanks Or Per kg of Multiplier as Kg of
. Combed Mixing Per Annex.VII Mixing
as per Used
Annex VI (6 x7)
1 2 3 4 5 6 7 8

Conversion Total cost of Qty of yarn Total cost of Cost per kg Total cost per
Cost per kg Production spun(Kg)as yarn spun of mixing for kg for
As per Annx. per kg of per Annex IV previous year previous year
IX yarn spun
(8+9)

9 10 11 12 13 14

A. Warp Yarn
1.
2.
3.
4.
B. Warp Yarn blended
1.
2.
3.
4.
C. Yarn from Man made fibre
1.
2.
3.
4.
D. Weft Yarn
1.
2.
3.
4.
____________________________________________________________________________
Note. If the quantity of yarn produced is measured in Kg. data in column 3 need not be given.

PROFORMA B-I

Name of the Company

Name and address of the Mill
State showing the stock account of yarn for the year ending ---------------(Refer Performa 'C')

Sr. Name of Count Opening Stock Production Total

No Mixing
.
Qty. Value Qty. Value Qty. Value
Kg. Rs. kg. Rs. kg. Rs.

1 2 3 4 5 6 7 8 9

Issued to further processing Issued for sales Closing Stock

Qty. Value Rs. Qty. kg. Value Rs. Qty. Kg. Value Rs.
Kg.
10 11 12 13 14 15

As per Performa 'B'

_________________________________________________________________
 PROFORMA 'C'

Name of the Company --------------------------------------------------

Name & address of the Mill --------------------------------------------

State showing cost of yarn sold during the year ending ------------

Sl. Count Hank Qty. Cost Cost Cost Total Share Sales
No Nos. of of of of cost of of and
. Yarn produc reeling packin packe admini distrib
sold tion /windi g d yarn strativ ution
(kg.) of ng e expens
yarn expens es
sold es
1 2 3 4 5 6 7 8 9 10

Bonus Interest Gratuity Cost of Sales Sales Realisation Margin Previous Year
Total Per kg Total Per Kg Per Kg Cost of Sales
(8 to (14-4) Sales Realisa
13) Per Kg -tion
Per
Kg.
11 12 13 14 15 16 17 18 19 20

(To be filled in by companies selling yarn)

____________________________________________________________________________
Notes : - (I) Quantity and cost of production of yarn in column 4 & 5 of this Performa shall be as
per Performa B-I.
(2) Cost of reeling/winding shown in column 6 of this Performa shall be as per the rate in
Performa 'D'.
(3) Cost of packing shown in column 7 of this Performa shall be as per the rate in Proforma 'K'.
(4) In case yarn is bleached, dyed or processed in any other way conversion cost incurred on
each such process together with the cost of chemicals and dyes used shall be taken into account
while working out the cost of sales of each processed yarn. In such cases the Proforma may be
suitably amended.
5. Necessary adjustment in the cost of yarn, for wastage in reeling/winding etc. if any, shall be
provided.
(6) Adjustment for variances in the selling and distribution and other expenses included in this
Proforma shall be made and such adjustments shown separately in respect of companies
maintaining cost records on standard costing.
(7) Increase in weight, if any, due to Moisture in the case of sale yarn is to be shown clearly in
the cost records.
(8) If quantity of yarn sold is measured in Kg. data in column 3 need not be given.
 PROFORMA 'D'

Name of the company__________________________________________

Name and address of the Mill_____________________________________
Statement showing cost centre-wise conversion cost from winding to weaving for the
year ending ___________________________________________

S. Particulars Winding Reeling Doubling Warping Sizing Drawing

No
.
Con Che
e ese
1 2 3 4 5 6 7 8 9

Looms Total Total for

Previous Year
Automatic Ordinary Spl.Loom
Like
Terry.
10 11 12 13 14

AI. Spindle shift/Machine

shift/Loom shift
(converted 8 hrs. shifts) Available
Worked
2. Production in Kgs./Metres.
3. Average production per
Spindle shift/Machine
shift/Loom shift
B. Expenses
1. Direct Wages and Rs.
Salaries
(a) Time rate wages
(b) Salaries
2. Utilities
(a) Water
(b) Steam
(c) Others (to be specified)
 3. Consumable Stores
4. Sizing Materials
5. Bobbins, Pirns, Shuttles, etc.
6. Repairs & Maintenance
7. Other Direct expenses ,if any
(to be specified)
8. Mills overhead
9. Depreciation
10. Share of administrative Overhead
11. Research & Development
12. Adjustment for conversion cost
Included in opening & closing W.I.P.,if any
13. Adjustment for cost variances.
14. Total
15. Cost per Spindle shift/Machine shift/Loom shift
16. Cost per Spindle (previous year)
17. Cost per kg/Metre
18. Cost per kg/Metre (Previous year)
19. Total piece rate wages paid during the year.

____________________________________________________________________________
Notes;-
(1) In the case of Drawing-in cost centre the unit of production shall be the number of ends
drawn (in 000s).
(2) Adequate records shall be maintained, showing the sizing material consumed for each
type of' sizing, absorbed by the warp yarns and loss in material, Rate per Kg. of sizing
materials absorbed, the percentage of sizing material in Warp yarn for each type of sizing
so that cost of sizing materials per Kg. of Warp. Yarn sized can be worked out. While
arriving at the conversion cost per Machine shift of the sizing department the cost of
sizing materials shall be excluded. While working out the cost of Grey cloth in Proforma
'E' this element shall be treated separately.

(3) More departmentalisation, shall be made in respect of various groups of looms, if

possible, according to width, utility etc., to have further refinement in working out the
cost.

(4) The names of the Costs centres given are illustrative only
(5) Item No. 13 is applicable to companies maintaining cost records on standard costing,
(6) Piece rate wages shall be shown against item 19.
'
 PROFORMA E

Name of the Company______________________

Name & address of the Mill_____________________

Statement showing sort -wise cost of production of grey cloth manufactured during the
year ending_____________

1. Sort No. 7.Reed and Reed space 15.Loom shed efficiency %

2. Description 8. Pick 16. Production/Loom shift

3.Quantity produced in 9.Selvedge 17. Loom shifts taken for the
(a)Metres 10.Tape Length Production
(b)Kgs
(c) .No.of pieces of 11.Tape length allowance % 18. Controlled /non-
Length-Metre controlled / for export

4.Width of the cloth 12. No. of ends of warp yarn 19.Piece rate for weaving
5.Warp 13.Type of looms and R.P.M 20. No. of ends drawn.
6.Weft 14. Loom width

S Particulars Unit Quantity Rate Amount Cost per Cost per

No. Rs Rs Piece/ unit of
Metre Productio
n
previous
Year ,if
any.
Rs
1 2 3 4 5 6 7 8

1. Cost of yarn
(a)Warp
(b)Weft
(c)Selvedge
2. Winding Cost
(a)Warp
(b)weft
3. Warping cost
4. Sizing cost
(a)Material
(b)Other expenses
5. Drawing in cost
6. Loom shed cost
7. Piece rate wages
8. Adj. For opening and closing W I P, if any.
9. Total cost
10. Less credit for waste realisation in pre-weaving and weaving
Departments
11. Net total cost.
____________________________________________________________________________

NOTES.-
(1) If synthetic filament is used in weft the quantity and cost of such filament shall be
shown separately, similarly dyed yarn or any other processed yarn if used as warp or
as weft, the details shall be shown in this Proforma.
(2) Winding charges shall be shown for that particular type of winding like cone, cheese
Roto or Pirn winding as applicable.
(3) If the cloth is subjected to calendaring or any other finishing the conversion cost for
such operation/operations shall be added to the cost.
(4) While calculating yarn requirement adjustments for hard waste in pre-weaving
departments shall be made.

---------------------------------------------------------------------------------------------

POFORMA E I

Name of the Company------------------------------------------------------

Name & address of the Mill-------------------------------------------------
Statement showing the sort-wise stock accounting of Grey cloth for the year ending ---------
------
(Refer Proforma F)

S. Sort Production as Fents,Rags, Good Opening Total

No. No. per Proforma Chindis Production Balance
B (4-6)
Qty Value Qty Realis- Qty Value Qty Value Qty Value
in Rs in able in Rs in Rs In Rs
Mtrs Kg Value Mtr Mtrs Mtrs
s s
1 2 3 4 5 6 7 8 9 10 11 12
-------------------------------------------------------------------------------------
Issued for Issued for sales Issued for Closing stock Goods on
further (including consignment A/c
Processing consignment returned.
A/c)
Qty in Value Qty in Value Qty in Value Qty in Value Qty in Value
Mtrs Rs Mtrs Rs Mtrs Rs Mtrs Rs Mtrs Rs
13 14 15 16 17 18 19 20 21 22

____________________________________________________________________________

Notes
(1) All sorts which are considered in Proforma 'E' shall be accounted for item wise
in this proforma . The rest of the sorts shall be given in total.
(2) Fents, rags and chindis shall be accounted for as per details given in para 1(g)(v)
of Schedule I.
(3) Realisable value for fents, rags, chindis (Cloth) shall be reasonable and the same
shall be deducted while arriving at the cost of good production.

-----------------------------------------------------------------------------------------
 PROFORMA F
Name of the Company----------------------------------------------
Name & address of the Mill/ Process House--------------------------------------------

Statement showing the cost of Sales of cloth sold in grey stage and Sales
realisation during the year ending-----------

S. Sort Contro Qty Cost of Share Selling Bonus Interest Gratuit

No No. lled issued Prod- of and y
. /non for uction Admn distri-
Contro sales in of qty Expens bution
lled Mtrs issued es Expens
for es
sales
Rs. Rs Rs Rs Rs Rs
1 2 3 4 5 6 7 8 9 10
As per Proforma E I
Packin Total Total Cost of Sales Margin Previous Year
g Cost of cost of sales Realisation
expens sales sales per
es (as for qty of qty Metre
per Issued actuall;
Prof.K for y sold
sales
Total Per Total Per Cost of Sales
Meter Meter sales realisat
Per ion per
Meter Meter
Rs Rs Rs Rs Rs Rs Rs Rs Rs Rs
11 12 13 14 15 16 17 18 19 20
(To be fillled in by companies selling cloth at grey stage)

------------------------------------------------------------------------------------------------------------------
Notes:
1. Adjustment for variances in the selling and distribution and other expenses included in
this proforma shall be made and such adjustment shown separately in respect of
companies maintaining cost records on standard costing.
2. In case commission is paid the same shall be shown separately under selling and
distribution expenses.
3. Cloth sent on consignment account which bear expenses connected with sales during the
particular year, as shown in this proforma , if returned, shall not bear similar charges of
subsequent year when such stock is sent again for sales.
----------------------------------------------------------------------------------------
 PROFORMA G

Name of the company--------------------------------------------------------------------------

Name and address of the mill /Processing unit---------------------------------------------
Statement showing Cost centre-wise Conversion cost in
Bleaching Section for the year ending-------------------
(Refer Proforma L)
S. Particulars J.Box Bleaching Open width
No Bleaching
.
Kgs Metr Mach Kgs Metr Mach
es ine es ine
shift/ Shift/
Hrs Hrs.
1 2 3 4 5 6 7 8

Kiers Bleaching Mercerising Others to be specified Total

Kgs Metre Machi Kgs Metre Machi Kgs Metre Machi
s ne s ne s ne
Shift/ Shift/ shift/h
Hours hrs ours
9 10 11 12 13 14 15 16 17 18

A. 1.Cloth Processed in metres

2.Cloth processed in kgs.
3.No. of machine shifts/hours available
4.No of machine shifts /hours worked(in terms of 8 hours)
__________________________________________________________________________

B. Expenses (Rupees)

1. Process chemicals
(a) De-sizing
(b) Souring
(c) Scouring
(d) Bleaching
(e) Wetting agents, etc.
(f) Others (to be specified)
(g) Chemicals for Mercerising.
Total
2. Direct Wages & Salaries
3. Utilities
(a) Water
 (b) Steam
(c) Power
(d) Singeing
(e) Chemical Mixing
(f) Rope Washing
(g) Lye cooling plant
(h) Caustic recovery plant
(i) Others (to be specified)
Total
4. Consumable stores
5. Repairs & Maintenance
6. Other direct expenses if any.
7. Mill/Process house overheads
8. Depreciation
9. Share of Administrative Overheads
10. Research & Development
11. Adjustment for cost variances
12. Adjustment for conversion cost including opening
and closing W.I.P
13. Total

C.1 Cost per Kg /Metre/Machine shift/hour

2. Cost per Kg/Metre/Machine shift/hour(Previous year)

______________________________________________________________________

Notes:
1. Expenses chargeable according to weight of the cloth and length of the cloth and time
taken for the process in each cost centre shall be filled in columns 3,4,5, 6 etc
respectively and the rate for respective unit of production worked out. The rates
separately worked out per Kg/per metre, per Machine shift/hour shall be applied while
working out the cost of processed cloth in Proforma L.
2. The names of Cost centres and type of bleaching given in the Proforma are illustrative
only.
3. In case separate department is doing yarn bleaching, adequate records shall be kept to
work out bleaching cost of such yarn .
4. For special type of bleaching, adequate records shall be kept for the quantity and the cost
of special chemicals used.

5. Item No.11 is applicable to companies maintaining cost records on standard costing.

---------------------------------------------------------------------------------------------------------------------
-
 PROFORMA H

Name of the company-----------------------------------------------------------

Name and address of the Mills/Processing Unit---------------------------

Statement showing the Cost Centre-wise Production cost in the Dyeing Section for the
Year ending ----------------------------------(Refer Proforma L).

S.No. Particulars YARN

Beam Dyeing Cheese Yarn Dyeing
Kg Machine Kgs Machine
Shift/ Shift/
hours Hours
1 2 3 4 5 6

CLOTH Total
Jig Batching & Jig Dyeing Beam Dyeing Others
Kg Metres Machi Kg Metres Machi Kg Metres Machi
ne ne ne
Shift/ Shift/ Shift/
Hours Hours Hours
7 8 9 10 11 12 13 14 15 16

A. 1. Cloth Processed(dyed) in Metres

2.Cloth processed(dyed) in Kgs.
3.Yarn dyed in Kgs
4.No.of machine shifts/hours Available
5.No. of Machine Shifts/Hrs worked (in terms of 8 hrs)
---------------------------------------------------------------------------------------------------------------
B. Other Expenses
1. Process Materials Rs.
2.Direct wages & salaries Rs
3.Utilities
a)Water Rs
b)Steam Rs
c)Power Rs
d)Pigment Padding Rs
e)Naptholating Rs
f)Developing Rs
g)Fast Colouring Rs
h)Soaping Rs
i)Mangling Rs
j)Drying ranges etc. Rs
 Total Rs

4.Consumable Stores
5.Repairs &Maintenance
6.Other direct expenses(if any)
7.Mill/Process House overheads
8.Depreciation
9.Share of Administrative Overheads
10.Research & Development
11.Adjustment for cost variances
12.Adjustment for conversion cost included opening
and closing W.I.P
13.Total

C..1 Cost per Kg /Metre/Machine shift/hour

2. Cost per Kg/Metre/Machine shift/hour(Previous year)

______________________________________________________________________

Notes

1.Expenses chargeable according to the weight of the cloth/ length of the cloth and time taken for
the process in each centre shall be filled in columns 3,4,5, 6 ,7,8,9 etc respectively and the rate
for respective unit of production worked out. The rates separately worked out per Kg, per
Metre, per machine shift/hour shall be applied while working out the cost of processed cloth in
Proforma L and processed yarn in Proforma B.
2.The names of Cost centres and type of dyeing given in the Proforma are illustrative only.
3.In case dyeing of yarn is done in separate department by spinning mills, similar Proforma shall
be prepared for such section/types of dyeing.
4. Cost of Dyes & special chemicals used shall be treated as separate element of cost in the cost
of processed cloth.
5.Item No.11 is applicable to companies maintaining cost records on standard costing.
.

-------------------------------------------------------------------------------------------------------------------
 PROFORMA 'I'

Name of the Company-------------------------------------------------------

Name & address of the Mill/Processing House.-----------------------------------

Statement showing cost cost centre-wise cost in the printing section for the
Year ending ----------------------------------- (Refer Proforma L)

S.No Particulars Roller Printing Screen Pritning

.
Metr Sq Kg Mac Metr Sq Kg Machi
es metr hine es Metr ne
es Shift es shift/h
/hours ours
1 2 3 4 5 6 7 8 9 10

Automatic Screen Printing Rotary printing etc. Total

Metres Sq Kg Machine Metres Sq Kg Machine
.Metres Shift/ Metres Shift/hours
Hours
11 12 13 14 15 16 17 18

A. 1.Cloth Printed in Metres

2.Cloth printed in Sq, metres.
3.Cloth printed in Kg
4.No.of machine shifts/hours Available
5.No. of Machine Shifts/Hrs worked (in terms of 8 hrs)
---------------------------------------------------------------------------------------------------------------

B. Printing dyes & Chemicals

C. Other Expenses
1. Process Materials Rs.
2.Direct wages & salaries Rs
3.Utilities
a)Water Rs
b)Steam Rs
c)Power Rs
d)Ager Rs
e)Soaping Rs
f)Drying Rs
 g)Roller engraving Rs
h)Screen making Rs
i)Design Department Rs
j)Chemical mixing Rs
k)Others (to be specified) Rs
Total
4.Consumable Stores Rs
5.Repairs &Maintenance
6.Other direct expenses(if any)
7.Mill/Process House overheads
8. Cost of Rollers
9.Depreciation
10.Share of Administrative Overheads
11.Research & Development
12.Adjustment for cost variances
13.Adjustment for conversion cost included in opening
and closing W.I.P
14.Total

C..1 Cost per Metre/Sq. Metres/ Kg/Machine shift/hour printed

2. Cost per Metre/Sq. Metres /Kg/Machine shift/hour printed (Previous year)

______________________________________________________________________

Notes:

1.Expenses chargeable according to length of the cloth, area of the cloth printed, weight of the
cloth and time taken for the process in each department shall be filled in columns 3,4,5, 6 , etc
respectively and the rate for respective unit of production worked out. The rates separately
worked out per Metre, Sq. Metre, printed Kg machine shift/hour shall be applied while
working out the cost of processed cloth in Proforma L .
2.The names of Cost centres and type of printing given in the Proforma are illustrative only.
3. Cost of printing dyes and chemicals shall be treated as separate element of cost in the cost of
processed cloth.
4.Item No.12 is applicable to companies maintaining cost records on standard costing.
.

---------------------------------------------------------------------------------------------------------------------
------------
 PROFORMA 'J'

Name of the Company---------------------------------------------------

Name and address of the Mill/Processing House------------------------

Statement showing Department wise cost in the finishing section for the year ending ----------
(Refer Proforma 'L')

S. Particulars Stenter Belt stret- Damping Calender- Sanforis Tabelis

No. ing ching Ing ing Ing
1 2 3 4 5 6 7 8

Resin Others Total

Finishing
9 10 11 12 13 14

------------------------------------------------------------------------------------------------------------------
A. 1. Finished cloth in Metres
2.Machine shifts/Hours Available
3.Machine shifts/Hours worked

B. Chemicals for special finishing Rs.

C. Other Expenses
1. Process Materials Rs.
2.Direct wages & salaries Rs
3.Utilities
a)Water Rs
b)Steam Rs
c)Power Rs
d)Others (to be specified) Rs
Total
4.Consumable Stores Rs
5.Repairs &Maintenance
6.Other direct expenses(if any)
7.Mill/Process House overheads
8. Depreciation
9.Royalty,if any.
10.Share of Administrative Overheads
11.Research & Development
 12.Adjustment for cost variances
13.Adjustment for conversion cost including opening
and closing W.I.P
14.Total

D. 1. Finishing cost per Metre

2 Finishing Cost (Previous )

Notes:
(1) The names of the cost centres /processes given in the Proforma are illustrative only.
(2) Cost of special chemicals used shall be treated as separate element of cost in the cost of
processed cloth.
(3) Item No. 12 is applicable to companies maintaining cost records on standard costing.
(4) Expenses relating to length of the cloth, time taken for the process in each department
shall be segregated separately and the rate for the respective unit of production worked
out and applied while working out the finishing cost of processing cloth.
 PROFORMA 'K'

Name of the company-----------------------------------------------------------

Name & address of the Mill/Processing House-------------------------------

Statement showing the cost of different types of packing made during the year ending ---------

S. Particulars Total Yarn Packing

No.
Full 3/4 1/2 1/4 Full
Bale Bale Bale Bale Package
1 2 3 4 5 6 7 8

Cloth Packing Export

3/4 1/2 1/4 Rollers Bales Others Packing
Package Package Package
9 10 11 12 13 14 15

------------------------------------------------------------------------------------------------------------------
A. Quantity Packed
B. Packing Material Cost Rs
(1)Hussein "
(2)Cheese "
(3)Card Board "
(4)Polythene "
(5)Others "
Total "
C. Expenses
1. Wages and Salaries
(a)Folding/Reeling "
(b)Inspection "
(c)Stamping "
(d)Cutting "
(e)Hemming & Carding "
(f) Baling & Bundling "
Total
2.Consumable Stores Rs
3.Repairs &Maintenance
4.Power
5. Depreciation
6. Mill Overheads
7.Share of Administrative Overheads
8.Total (A+B+C)
 9. *Adjustment for variance
(1) Material
(2) Expenses
D. Cost per pack

*Applicable to companies maintaining cost records on standard costing or any other basis than
actual.
----------------------------------------------------------------------------------------------------------------

Notes: (1) Packing types and department mentioned are only illustrative. Cost shall be worked
for all types of packings made during the year as per specification of the Textiles Commissioner
from time to time.

(2)In the case of export packing (wherever special packing is required),the cost shall be worked
out type-wise separately.

-----------------------------------------------------------------------------------------------
 PROFORMA 'L'

Name of the company----------------------------------------------------

Name & address of the Mill/Processing House---------------------------

Statement showing the cost of different type of packing made during the
Year ending --------------------------------------------------

1. Sort No. 6.Quantity in Kgs produced

2.Trade Name 7.Area printed in Sq.Metres (in case of printed
3.Description Cloth)
4.Quantity of Grey cloth issued 8.Machine shifts/Hours taken (on 8 Hrs
basis)for each processing
5.Quantity in Metres produced 9.Type of bleaching dyeing, printing,
finishing etc adopted.

S. Particulars Unit Qty Rate Amount Cost Per Cost Per

No Metre Metre
(Previou
s Year)
Rs Rs Rs Rs
1 2 3 4 5 6 7 8

1. Cost of cloth in grey stage issued

(as per proforma E - I)
2. Special bleaching chemicals
3. Dyes and chemicals
4. Printing, dyes & Chemicals
5. Special finishing chemicals
6. Conversion cost:
(a) Bleaching Metre
(b) " Kgs
(c) " Hrs
Total (a to c)

(d)Dyeing Metre
(e) " Kgs
(f) " Hrs
Total (d to f)

(g) Printing Metre

(h) " Sq.Metre
(i) " Kg
(j) " hours
 Total (g to j)

(k) Finishing (Stentering ) Metre

(l) " (Resin finishing) "
(m) " (Calendering ) "
(n) " (Sanforising) "
(o)Others (to be specified)
Total (k to o)
7.Adjustment for opening & closing W I P(if any)
----------------------------------------
8 Total
------------------------------------------

____________________________________________________________________________

Notes:
(1)The processes mentioned in the Proforma are illustrative only
(2) This proforma shall be prepared for each sort of cloth processed ,quantities processed for
outsiders and other mills of the same company shall be indicated separately.
(3)The cost of materials for items 2,3,4,5, in the Proforma shall be taken as per respective
'recipe' in case actuals are not available but accurate record showing reconciliation of actual
materials used item-wise and that charged as per the 'recipe 'shall be maintained.

----------------------------------------------------------------------------------------------

PROFORMA L-1

Name of the company--------------------------------------------------------

Name and Address of the Mill /Processing House------------------------
Statement showing sort-wise stock account of processed cloth manufactured during
the year ending-----------------------

S.No. Sort No. Production as per Fents,rags,chindis Net Good Production

Proforma 'L'
Qty Value Rs Qty Realis- Qty Value
able Rs
Value Rs
1 2 3 4 5 6 7 8

Opening Balance Total cloth prepacked

Prepacked Packed
Qty Value (Rs) Qty Value (Rs) Qty Value (Rs)
9 10 11 12 13 (7+9) 14 (8+10)

Cloth packed during the year Total packed cloth

Qty Value Rs Packing Total value Qty Value Rs
charges Rs Rs
15 16 17 18(16+17) 19(11+15) 20(12+18)

Packed cloth issued for sale Closing stock Goods on

consignment
returned
Issued Actually sold Packed Prepacked
Qty Value Qty Value Qty Value Qty Value Qty Value
Rs Rs Rs Rs Rs
21 22 23 24 25(19- 26(20- 27(13- 28(14- 29 30
21) 22) 15) 16)

____________________________________________________________________________
Notes:
(1) All sorts which are considered in proforma 'M' shall be accounted for item wise in
this Proforma or in forms as near thereto as practicable. The rest of the others shall
be given in total.
(2) Fents, rags, chindis etc shall be accounted for as per details given in para 1(g)(v) of
Schedule I.
(3) Realisable value shown in column 6 shall be reasonable and the same shall be
deducted while arriving at the cost of good production.
(4) Packing charges shall be as per Proforma 'K'.

--------------------------------------------------------------------------------------------
 PROFORMA 'M'

Name of the Company----------------------------------------------------------------

Name & Address of the Mill/Processing House--------------------------------------

Statement showing the cost of sale of processed cloth sold and sales realisation during the year
ending ----------------------------------

S.No. Contro Sort Packed cloth Share Selling Bonus Interest Gratuit
lled / No. issued for sale of & y
Non- (as per Proforma Admn. Distri-
Contro L-I) Expens bution
lled es expens
es.
Qty Value Rs Rs Rs Rs Rs
Rs
1 2 3 4 5 6 7 8 9 10

Total Qty Cost of Cost of Sales Realisation Margin Previous Year

Cost of Actuall sales sales/
Sales y sold of qty Metre
Actuall Cost of Sales
y sold sales Realis-
per ation
Total Per Total Per Metre per
Metre Metre Metre
Rs Rs Rs Rs Rs Rs Rs Rs Rs Rs
11 12 13 14 15 16 17 18 19 20

------------------------------------------------------------------------------------------------------------------
Notes:
(1) Adjustment for variances in the selling and distribution and other expenses
included in this Proforma, shall be made and such adjustment shown separately in
respect of companies maintaining cost records on standard costing.
(2) In case commission is paid the same shall be shown separately under selling and
distribution expenses.
(3) Cloth sent on consignment account which bear expenses connected with sales
during the particular year, as shown in this Proforma if returned , shall not bear
similar charges of subsequent year, when such stock is sent again for sales.
(4) If the company is having more than one Mill producing and selling processed cloth,
and having common selling Department this Proforma may be prepared for all Mills
 together. But adequate records shall be maintained to show the details of cloth sold
on account of each mill both in quantity and value.

--------------------------------------------------------------------------------------
 PROFORMA'N'

Name of the Company_________________________________________________________

Name and address of the Mill/Processing House_____________________________________
Statement showing the total expenses and income of the Company and the share
applicable to Textiles activity and other activities for the year ending----------------

S.No. Particulars Total actual Share applicable to

expense
Textiles Activity Other Activities
Rs Rs Rs
1 2 3 4 5

1. Raw Materials consumed

2. Process materials/chemicals consumed
3. Packing materials consumed
Total material
4. Direct salaries & wages
S. Utilities
6. Stores & spares
7. Repairs and Maintenance
8. Other allocated expenses -
9. Mill overheads
l0. Administrative overheads
(i) Mills
(ii) Head Office
11. Depreciation
Total
12. Adjustment for difference between opening and closing
balance of work-in-progress
13. Credits for recoveries
Cotton waste sold
Cloth waste sold
Others
I4. Packing cost
15. Stock adjustments for difference between opening and
closing stock
Total
16. Selling & distribution expenses
Total
17. Annual bonus to employees other than incentive bonus
18. Interest charges
19.Provision for statutory gratuity
20. Other expenses not included in cost (Items to be
specified)
 21.Other income not considered in cost(Item to be specified)

22. Total excluding excise duty

23. Deduct export benefits, if any.

24. Net

25. Net Sales realisation(excluding excise duty)

26.Margin.

------------------------------------------------------------------------------------------------------------------
Note: All items of income and expenditure in this Proforma shall be reconciled with the financial
accounts for the relevant period.

[
 {"SCHEDULE III}10
[See rule 4(2A)]

1. MATERIALS:

(1) The proper records shall be maintained showing all receipts, issues and balances both
in quantities and cost of cotton, man-made fibres and filament yarn made from man-made
fibre, waste cotton, yarn, cloth in grey stage etc. These records shall contain such details
so as to enable the company to determine the quantity and cost of receipt (including all
direct charges up to the works in respect of major raw materials, issues and balances in
quantity as well as value of each item of all such raw materials. The basis on which said
quantities and cost of issue and consumption have been calculated, shall be indicated in
the cost records and followed consistently. In the case of imported raw materials, proper
records shall be maintained showing FOB value, overseas freight, insurance, customs
duty and inland freight charges. If both indigenous and imported materials are
consumed, the records showing details of percentage mix of the same, have to be
maintained for each item. In the case of imported raw material, proper records shall be
maintained showing license-wise allowed quantities, actual quantities imported, actual
quantities consumed, quantities in stock and quantities yet to be imported out of total
licensed quantities.

(2) The proper records shall be maintained separately showing the receipts, issues and
balances both in quantities and cost of each item of dyes, sizing materials and processing
chemicals used in the manufacture of textiles. The cost shall include all direct charges up
to works. The issues, consumption shall be properly identified with the departments, cost-
centres and products manufactured.

(3) The proper records shall be maintained to show the quantity and realizable value of
usable soft waste collected from each mixing in each cost centre of spinning department
and also of hard waste collected, type-wise, blend-wise, and cost centre-wise separately
from spinning department and pre-weaving department, quantities reused in the waste
plant, if any, sold out with sales realization thereof and the balance lying in stock. The
quantity of these wastes collected at regular intervals shall be reconciled with such wastes
for which due credit is accorded to the respective production on technical basis or past
performance or trial run during the said period. In the case of certain by-products
recovered, which cannot be reused in the process and are sold or disposed of without
further processing, the realisation from such sales shall be recorded and adjusted against
the process concerned on a reasonable and equitable basis and applied consistently. In
case further processing is necessary to make the by-products usable or saleable, as the
case may be, adequate records of the cost involved for such further processing shall be
maintained. If such processing is done by any outside agency, records to show the
quantity sent for processing, quantity received after processing and the cost incurred
thereon shall be maintained in detail. The net realisation, if any, shall be adjusted against

10 st
Applicable for each of financial year commencing on or after the 1 day April,2001 vide GSR
st
No.693(E) dated 31 August,2000.
 the major process relating to such by-product. The basis adopted for determining cost of
the by-products shall be equitable and consistent. Records indicating the actual sales
realisation of by-products shall also be maintained.

(4) Where any dyes, sizing materials and processing chemicals are produced by the
company separate records showing the quantity and cost of such materials produced shall
be maintained. The cost of manufacture of such materials shall be charged at cost, on the
basis of actual issues, to the production or process or manufacturing of the product
concerned under sub-rule (2).

(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) The proper records shall be maintained indicating the quantity of chemicals or
materials recovered from different process and sales realization. Appropriate credit
should be given to the respective cost centre or department of such sales realization.

(7) 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.

(8) 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.

(9) The proper records shall be maintained showing the quantity and value of wastage
other than that mentioned in sub-rule 2A, 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 materials including spoilage, if any, in
determining the cost of product, shall be indicated in the cost records. Any abnormal
wastage or spoilage or rejection shall be indicated distinctly and separately along with
reasons thereof. The records shall also be maintained to indicate the value of raw
materials and components, finished and semi-finished, which have not moved for more
than twelve months.

(10) Where any credit under Modified Value Added Tax (MODVAT) or any other
benefit of the nature of MODVAT credit under the Central Excise Act, 1944 (1 of 1944),
are available on any item of material, the cost of such material should be shown after
adjusting such credit or benefits.

(11) If any of the materials purchased is processed by an outside party proper records shall be
maintained for the quantity sent for processing, quantity received after processing, by-
products received, if any, and the cost involved in processing.
2. SALARIES AND WAGES:

(1) The proper records shall be maintained to show the attendance and earnings of all
employees of the cost centres or departments and the work on which they are employed.
The records shall also indicate the following separately for each cost centre or
department:

(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 labour;
(e) bonus or gratuity;
(f) contribution to superannuation scheme; and
(g) any other earning.

(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, B, C ,D-1, D-2, D-3 and E of
Schedule III annexed to these rules. The records may be maintained to book these
expenses cost centre-wise or department-wise under mixing and blow room, carding,
combing, drawing, slubbing, inter, roving, ring frames, winding, reeling, doubling,
warping, sizing, loom, bleaching, dyeing, printing, finishing, packing etc. with reference
to activities relating to the production of Textiles. Where the employees work in such a
manner that it is not possible to identify them with any cost centre or department, the
labour charges shall be apportioned to the cost centres or departments on equitable and
reasonable basis and applied consistently.

(3) The idle labour cost shall be separately recorded under classified headings indicating
the reasons therefor. The method followed for accounting of idle time payments 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 utilised for other
products of the company also, the basis of apportionment of such expenses to any type of
 textiles products and to the other products shall be equitable and reasonable 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 manufacture of any type of textiles
products in different cost centres or departments shall be maintained. The cost of
treated water shall be apportioned to the cost centres or departments concerned on an
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 manufacture of the textiles
products shall be maintained. The cost of steam consumed shall be apportioned to the
textiles plant and other units of the company on an equitable and reasonable basis and
applied consistently. Where steam is raised and supplied by any other unit of the
company to the Textiles plant, the cost of steam so supplied shall be charged to the
Textiles Plant on actual cost basis.

(3) Power:-The proper records shall be maintained for the units and cost of power
consumed for the production of textiles products in different cost centres or departments.
Where power is generated by the company itself, adequate records, showing all elements
of cost shall be maintained to show the cost of power generated and consumed for the
production of the textiles products in different cost centres or departments. The records
shall also indicate installed capacity, number of units generated, losses and consumption
in each cost centre or department separately. Where power is generated and supplied by
any other unit of the company to the Textiles plant adequate records shall be maintained
to indicate the quantity and cost of power so supplied. The cost of power allocated to the
production or manufacture of Textiles products shall be on an equitable and
reasonable basis and applied consistently. The records should state clearly the measures
taken on conservation of energy and its corresponding impact on unit cost of production.

(4) Humidification: The proper records shall be maintained to enable the determination
of the cost of humidification and its distribution to different cost centres or departments

(5) Other Utilities:- The proper records showing quantity and cost shall be
maintained in respect of any other utilities produced or purchased by the company
for the production or manufacture of textiles products.

(6) The cost statement for each utility shall be maintained in Proforma A.
5. WORKSHOP OR REPAIRS AND MAINTENANCE OR TOOL ROOM:

(1) The proper records showing the expenditure incurred by the workshop or tool room
under different heads and on repairs and maintenance in the various cost centres or
departments shall be maintained. The records shall also indicate the basis of 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 utilised for other products also,
the manner of charging a share to such products shall be equitable and reasonable and
clearly indicated in records and applied consistently. In addition to the above, records
should 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 works from which benefit is likely to accrue for
more than one financial year shall be allocated over the period expected to benefit on an
equitable and reasonable basis and applied consistently. Such cost shall be shown
separately and the method of accounting and the basis of the allocation of such costs shall
also be clearly indicated in the cost records.

6. DEPRECIATION:

The basis on which depreciation is calculated and allocated or apportioned to the various
cost centres or departments and absorbed on all products shall be clearly indicated in the
cost records. If depreciation charged or chargeable to the cost centres or 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 (1 of 1956), such amount of excess or lower depreciation shall 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 cost per unit of textiles product. 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 product under reference showing the
various items of expenses comprising the other overheads. These expenses shall be
analysed, classified and grouped according to functions, namely, works, administration,
selling and distribution.

(2) Where the company is manufacturing products other than the textiles product the
records shall clearly indicate the basis followed for apportionment of the common
overheads including head office expenses of the company to such products and textiles
products, including capital works. Where certain expenses forming part of overheads can
 be identified with a particular activity or a product, such expenses shall be first
segregated and charged to the relevant activity or product and thereafter the residuary
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.

8. 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 product 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, to the products shall be indicated in the cost records.

9. 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 product covered under these rules
according to the nature of development of products, existing and new product and
processes, development of process of manufacture, existing and new, design and
development of new plant facilities and market research for the existing and new
products, shall be maintained separately.

(2) The method of charging these expenses to the cost of textiles products and all other
products 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 expenses and charged to the cost of production of the textiles products
and all other products if any, on an equitable and reasonable basis and applied
consistently.

(3) The expenses incurred by the Research and Development Department for providing
technical know-how to outsiders shall be recorded separately and excluded from the cost
of textiles products. The amount recovered for providing technical know-how to outsiders
shall also be indicated separately and excluded from the income arising from the sale of
textiles products.

10. QUALITY CONTROL:

The adequate records shall be maintained to indicate the expenses incurred in respect of
quality control department or cost centre for product under reference. Where these
services are also utilised for other products of the company, the basis of apportionment to
 textiles products and to other products shall be equitable and reasonable and clearly
indicated in the records and applied consistently.

11. INTEREST:

The proper records shall be maintained for interest charges paid. The amount of interest
shall be allocated or apportioned to the product covered by these rules and other activities
on a reasonable and equitable basis and followed consistently. The basis of further
charging of the share of the interest to the various types of such products shall also be
reasonable and equitable and the same shall be followed consistently. The basis of such
allocation or apportionment shall be spelt out clearly in the cost records or statements.

12. EXPENSES OR INCENTIVES ON EXPORTS:

The proper records showing the expenses incurred on the export sales, if any, of the
textiles products shall be separately maintained so that the cost of export sales can be
determined correctly. Separate cost statement shall be prepared for textiles products
exported giving details of export expenses incurred or incentive earned. In case, duty free
import 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.

13. PACKING EXPENSES:

(1) The proper records shall be maintained showing the quantity and cost of various
packing materials and other expenses incurred on packing for marketing of the textiles
products. Where such expenses are incurred in common for other products also, the basis
of apportioning the expenses between the relevant products shall be equitable and
reasonable and applied consistently.

(2) The detailed records of the expenses incurred on export packing, if any, shall also be
kept separately and exhibited in the relevant cost statements for exports.

14. WORK IN PROGRESS AND FINISHED STOCK:

The method followed for determining the cost of work in progress and finished stock of
the textiles products 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 upto 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.
15. COST STATEMENTS:

(1) The cost statement showing details of installed capacity, production, wastage, issues
and sales of the current financial year and previous year shall be prepared for each
process adopted in manufacture or production of textiles products in Proformae A,B,C,D-
1,D-2, D-3 and E.

(2) The product emerging from a process, which forms raw material for a subsequent
process, shall be valued at the cost of production up to the previous stage.

(3) If the company is operating more than one plant or factory, separate cost statements as
specified above shall be prepared in respect of each plant or factory.

(4) The cost statements shall be prepared count-wise or denier-wise or sort-wise for
items whose production is substantial and which constitute eighty five percent or more of
the total value of production and for the remaining items whose production is relatively
negligible and where all such items put together constitute nearly fifteen percent of the
total value of production, combined cost statements shall be prepared for groups of
counts or deniers or sorts.

16. PRODUCTION RECORDS:

Quantitative records of all finished goods, whether packed or unpacked, issues for sales
and balances of different types of the product under reference produced by the company
shall be maintained.

17. RECONCILIATION OF COST AND FINANCIAL ACCOUNTS:

(1) The cost statements shall be reconciled with the financial statements for the financial
year specifically indicating the expenses or incomes not considered in the cost records or
statements so as to ensure accuracy and adjudge the profit of the product under reference
with the overall profit of the company. Variations, if any, shall be clearly indicated and
explained.

(2) A statement showing the total expenses incurred and income received by the company
under different heads of accounts and the share applicable to the products shall be
prepared and reconciled with the financial statement.

18. 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 analysed 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.

19. STATISTICAL RECORDS:

(1) The records regarding available machine hours or direct labour hours in different
production departments and actually utilised shall be maintained for production of
textiles and shortfall suitably analysed. Suitable records for computation of idle time of
machines shall also be maintained and analysed.

(2) The adequate records shall be maintained to enable the company to identify the
capital employed, net fixed assets and working capital separately for the production or
manufacture of textiles products and other products and other activities. Fresh
investments on fixed assets that have not contributed to the production of textiles 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) 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 and
the expenses, if any, incurred to combat the competition arising out of WTO provisions.
Adequate statistical records shall also be maintained to identify the market share of the
product manufactured and the likely impact thereon on account of competitive goods
imported into the country. These records shall indicate, inter alia, the total volume of
imports, names of importers, countries of origin and contain such empirical evidence as
to show whether such imports can be construed as dumping and affecting the market
share of the product. Proper records shall also be maintained, containing such details as
may be necessary to show that the export price of the product is not such as to be
construed as dumping in the importing country, by applying the provisions of WTO
regarding anti dumping measures under Article VI of GATT 94.

20. CAPTIVE CONSUMPTION:

If textiles product is used for captive consumption proper records shall be maintained
showing the quantity and cost of each item of textiles product transferred to other
departments or units of the company for self consumption. The rates at which such
transfers are effected shall be at cost only.

21. POLLUTION CONTROL:

Expenditure incurred by the company on various measures to protect the environment

like effluent treatment, control of pollution of air, water, etc., should be properly
recorded.
22. HUMAN RESOURCES DEVELOPMENT:

Expenditure incurred by the company on the human resources development activity shall
be recorded.
[ 23 INTER-COMPANY TRANSFER:
(1) In respect of related party transactions or supplies made or services rendered by a company to
its holding company or subsidiary or a company termed "related party relationship" as defined
below and vice-a-versa, records shall be maintained showing contracts entered into, agreements
or understanding reached in respect of:
(a) Purchase and sale of raw materials, finished products, process materials, chemicals and
rejected goods including scraps, etc;
(b) Utilization of plant facilities and technical know-how;
(c) Supply of utilities and any other services;
(d) Administrative, technical, managerial or any other consultancy services; (e) purchase and sale
of capital goods including plant and machinery;
(f) Any other payment related to production, processing or manufacturing of product under
reference. These records shall also indicate the basis followed for arriving at the rates charged or
paid for such products or services so as to enable determination of the reasonableness of such
rates in so far as they are in any way related to product 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, of 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 venture 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":
(a) Two companies simply because they have a Director in common, notwithstanding paragraph
(d) or (e) above (Unless the Director is able to affect the policies of both companies in their
mutual dealings);
(b) A single customer, supplier, franchiser, distributor, or general agent with whom an enterprise
transacts a Significant volume of business merely by virtue of the resulting economic
dependence; and
 (c) The parties listed below, in the course of their normal dealings with an enterprise by virtue
only of those dealings (although they may circumscribe the freedom of action of the enterprise or
participate in its decision Making process);
(i) Providers of finance;
(ii) Trade unions;
(iii) Public utilities;
(iv) Government departments and government agencies including government sponsored bodies.
Explanation: -For the purpose of these Rules,
(a) "Related party relationship" mean parties who are considered to be related if at any time
during the reporting period one party has the ability to control the other party or exercise
significant influence over the other party in making financial and/or operating decisions;
(b) "Related party transaction" means a transfer of resources or obligations between related
parties, whether or not a price is charged;
(c) "Control" means
(i) Ownership, directly or indirectly, of more than one-half of the voting power of an enterprise;
or
(ii) Control of the composition of the Board of Directors in the case of a company or of the
Composition of the corresponding governing body in case of any other enterprise; or
(iii) a substantial interest in voting power and the power to direct, by statute or agreement, the
financial and/or operating policies of the enterprise.
(d) "Significant influence" means participation in the financial or operating policy decisions of
an enterprise, but not control of those policies;
(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;
(t) "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 econottlic activity So as to obtain benefits from it;
(h) "Key management personnel" mean 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 connected by blood relationship;. I
(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);
(1) "Fellow subsidiary" means a company is said to be a fellow subsidiary of another company
if both are Subsidiaries of the same holding company;
(m) "State-controlled enterprise" means an enterprise which is under the control of the central
Government or a State Government."]*

*Inserted vide GSR NO . 723(E) dated 28th September,2001

 PROFORMA A

Name of the company

Name and address of the factory

Statement showing the cost of Utility like Power, Steam, Water, etc., produced and
consumed during the year/period

A Quantitative Information :
-----------------------------------------------------------
Serial Particulars Current Year (unit) Previous Year
Number (unit)
1. Installed capacity
2. Quantity produced
3. Capacity utilisation
4. Quantity re-circulated
5. Quantity purchased
6. Consumption including other losses
7. Net units consumed

B Cost Information:
Serial Particulars Quant Rate Amount Cost unit per
Number ity (Rupee (Rupees) (Rupees)
s) (in lacs)
per unit
Current Previous
Year Year
A 1. Materials(specify)
(a)
(b)
(c)

2. Utilities(specify)
(a)
(b)
(c)

3. Consumable stores
4. Salaries and wages
5. Repairs and maintenance
6. Other overheads
7. Depreciation
8. Total
9. Less:Credit,if any
10. Net total
C. Apportioned to
1.
2.
3.
4.

Note 1.-Seperate cost sheet is to be prepared for each utility.

Note 2.-If any of the utilities that are manufactured by the company is sold to outside parties,
proper credit should be given in the cost of production of the respective utility.

---------------------------------------------------------------------------------------------------------------------
------

PROFORMA B

Name of the company

Name and address of the mill
Statement showing the cost of raw material (mix-wise) for the year ending........

Sl.No Particulars Mixing A Mixing B etc..

Quantit Rate Amount Quantity Rate per Amount
y in per (Rupees in Kilogra (Rupees)
Kilogra Kilogra ) Kilogram m
m m (Rupees)
(Rupee
s)
1. Composition of
mixing cotton/ man-
made fibre (variety
wise)
a)
b)
c)
2. Purchased cotton
waste (variety wise)
a)
b)
c)

3. A)Own waste (used

 in same
mixing)variety wise
a)
b)
B)Own waste (of
other/
Higher mixing)
a)
b)
4. Total (1 to 3)
5. Less credit for waste
Collected
A.Waste usable
in the same mixing
a)
b)

B.Waste usable
in the lower mixing

a)
b)
C.Other waste
(soft)
a)
b)

D.Other waste (hard)

a)
b)

Total(A+B+C+D)

6. Adjustment
for stock in work-
in- progress
7. Net cost of
cotton/man- made
fibres consumed
8. Total yarn
production in
kilogram
9. Net cost per
kilogram
Note 1. The rates adopted for own waste should be reasonable and the basis shall be
consistent.
Note 2. The names of mixings given are illustrative only.
Note 3. Where yarn produced is measured in hanks, the quantity both in hanks and kilogram
shall be indicated in the proforma. If the same is measured in kilogram, quantity in
hanks need not be given.
 PROFORMA C

Name of the company

Name and address of the mill

Statement showing input, wastage, output, waste multiplier in each processing centre, mix-wise
for the year ending........

Sl.No Particulars Mixing Mixing

Percentage Kilogra Percentage Kilogram
m

1. Blow Room
a)Opening stock
b)Receipts
c)Transfer from
previous
process
d)Closing stock
e)Consumption
(a+b+c-d)
f)Waste
i)Salable
ii)Re-usable
iii)Invisible
iv)Total(itoiii)
g)Transfer to other/
subsequent process (e-f)
2. Carding
(similar particulars as in
Serial
number 1 above)
3. Combing
(similar particulars as in
serial
number 1 above)
4. Drawing
(similar particulars as in
serial
number 1 above)
5. Inters
(similar particulars as in
serial
 number 1 above)
6. Roving
(similar particulars as in
serial
number 1 above)
7. Ring frames
(similar particulars as in
serial
number 1 above)

8. Any other
Processing centres
(similar particulars as in
serial
number 1 above)

Note 1.- The values adopted for waste shall be reasonable and the basis for
adopting such values shall be followed consistently.
Note 2.- The names of mixing given are only illustrative.
Note 3.- Waste collected shall be accounted for mixing-wise on actual basis as far as
practicable. Otherwise the usable soft waste at least shall be accounted for
mixing-wise on actual basis and other wastes on technical or past performance
or trial run basis.
Note 4.- All usable waste shall be collected and accounted for on actual basis except
when such waste is in the production of the same lot of the same mixing.

--------------------------------------------------------------------------------------------------------------

PROFORMA D-1

Name of the company

Name and address of the mill

Statement showing summary cost of sales, sales realization and margin in respect of each type of
yarn sold for the year ending........

A. Quantitative Information:

Serial Particulars Current Previous

Number Year Year
1. Count and description of yarn
2. Quantity produced and packed (Kgs)
3. Quantity sold (Kgs)
4. Closing stock- Finished goods(Kgs)
5. Opening stock – Finished goods(Kgs)

B. Cost Information:
Serial Particulars Qu Rate Amount Cost Per Kilogram
Num an
ber tit
y
(Rupe (Rupees in Current.Year Previous.Yea
es) lacs) (Rupees) r(Rupees)
1. Material cost
a)raw material
b)process
material
c)purchased
yarn
Sub-total
2. Conversion Cost:
a) mixing and
blow room
b) carding
c) drawing
d) inter
e) ring frame
f) winding
g) others
(specify)
h) outside processing
charges
Sub-total
3. Work-in-progress stock
adjustment
Opening stock
Closing stock
4. Less: Credit for Hard
waste
5. Cost of
Production(1to4)
6. Packing cost:
a)material cost
b)conversion cost
7. Finished goods –
Stock adjustment
 Opening stock
Closing stock
8. Net cost of
Production(5 to7)
9. Selling and distribution
Expenses
(a)salaries and wages
(b)freight and transport
charges
(c)commission to
selling
agents
(d)advertisement
expenses
(e)others
(f)Total(a to e)

10. Cost of Sale

11. Interest
12. Annual Bonus to
employees
a) Minimum
Statutory
Bonus
b) other than statutory
bonus
13. Statutory Gratuity
including provisions

14. Contribution to
superannuation scheme
15. Total cost excluding
excise duty(8 to 14)
16. Total sales realization
excluding excise duty
17. Margin(16 – 15)

Note 1.- Cost centres mentioned against serial No.2 are only illustrative.
Note 2.- Separate proforma shall be prepared for each type of description of
Product.
Note 3.- Separate proforma shall be prepared for the 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.
 Note 4.- Conversion cost shall include expenditure on direct wages, and salaries,
utilities, consumable stores and spares, repairs and maintenance,
depreciation, royalty, research and development, quality control, factory
overheads, administrative overheads, etc.
---------------------------------------------------------------------------------------------------------------------
-------------

PROFORMA D-2
Name of the company
Name and address of the mill

Statement showing summary cost of sales, sales realization and margin in respect of each type of
grey cloth sold for the year ending........

A. Quantitative Information:
In Kilogram
Serial Particulars Current Previous
Number Year Year
1. Description and process of Grey
Cloth with sort number
2. Quantity Produced and packed (metres)
3. Quantity sold (metres)
4. Closing stock- Finished goods (metres)
5. Opening stock – Finished goods (metres)

B. Cost Information:
Seria Particulars Qu Rate Amount Cost Per Metre
l ant
Num ity
ber
(Rupe (Rupees in Current.Year Previous.Yea
es) lacs) (Rupees) r(Rupees)
1. Material cost
a)cost of yarn
b)spindle point excise
duty
c)purchased yarn
2. Conversion Cost:
a) winding
b) warping
c) sizing
(i) material
 (ii) others
d) Drawing
e) Loom
f) Grey checking
g) Others
(Specify)
h) Outside processing
charges
Sub-total
3. Work in progress
Stock adjustment
Opening stock
Closing stock
4. Less: Credit for Hard
waste
and fents, rags and
chindis
5. Cost of
Production(1to4)
6. Packing Cost:
a)material cost
b)conversion cost
7. Finished goods –
Stock adjustment
Opening stock
Closing stock
8. Net cost of
Production(5 to7)
9. Selling and distribution
expenses
(a)Salaries and wages
(b)Freight and transport
charges
(c)Commission to
selling
agents
(d)Advertisement
expenses
(e)Others
(f)Total(a to e)

10. Cost of sales

11. Interest
12. Annual Bonus to
employees
a) minimum
 statutory
Bonus
b) other than
statutory
bonus
13. Statutory gratuity
including provisions

14. Contribution to
superannuation scheme
15. Total cost excluding
excise duty(8 to 14)
16. Total sales realization
excluding excise duty
17. Margin(16 – 15)

Notes:-

Note 1. Cost centres mentioned against serial No. 2 are only illustrative

Note 2. Separate proforma shall be prepared for each type of description of product.
Note 3. Separate proforma shall be prepared for the 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.
Note 4. Conversion cost shall include expenditure on direct wages and salaries, utilities,
consumable stores and spares, repairs and maintenance, depreciation, royalty,
research development, quality control, factory overheads, and administrative
overheads etc.

------------------------------------------------------------------------------------------------------

PROFORMA D-3

Name of the company

Name and address of the mill

Statement showing summary cost of sales, sales realization and margin in respect of each type of
processed cloth sold for the year ending........

A. Quantitative Information:
Serial Particulars Current Previous
Number Year Year
1. Description and process of
Cloth with sort number
2. Quantity produced and packed (metres)
3. Quantity sold (metres)
4. Closing stock- Finished goods (metres)
5. Opening stock – Finished goods (metres)

B. Cost Information:
Seria Particulars Qu Rate Amount Cost Per Metre
l ant
Num ity
ber
(Rupe (Rupees in Current.Year Previous.Yea
es) lacs) (Rupees) r(Rupees)
1. Material cost
a)cost of grey
cloth
manufactured
b) purchased grey
cloth
c) process material
i) bleaching
ii) dyeing
iii) printing
iv) finishing
v) others
(specify)
2. Conversion Cost:
i) bleaching
ii) dyeing
iii) printing
iv) finishing
v) others
(specify)
Sub-total
Outside
processing
charges

4. Work in progress
Stock adjustment
Opening stock
Closing stock
5. Less: Credit for fents,
rags and chindis
6. Cost of production(1to5)
7. Packing Cost:
a)material cost
b)conversion cost
8. Finished goods –
Stock adjustment
Opening stock
Closing stock
9. Net cost of
production(5 to8)
10. Selling and distribution
Expenses
(a)salaries and wages
(b)freight and transport
charges
(c)commission to selling
agents
(d)advertisement
expenses
(e)others
(f)total(a to e)
11. Cost of sales
12. Interest
13. Annual bonus to
employees
c) minimum
statutory
bonus
d) other than
statutory
bonus
14. Statutory
Gratuity including
provisions

15. Contribution to
superannuation scheme
16. Total cost excluding
excise duty(11 to 15)
17. Total sales realization
excluding excise duty
18. Margin(17 – 16)

Notes:-
Note 1. Cost centres mentioned against Serial No.2 are only illustrative.
Note 2. Separate proforma shall be prepared for each type of description of product.
Note 3. Separate proforma shall be prepared for the quantity sold with in 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.
Note 4. Conversion cost shall include expenditure on direct wages, and salaries,
utilities, consumable stores and spares, repairs and maintenance, depreciation,
royalty, research and development, quality control, factory overheads,
administrative overheads etc.”
 PROFORMA E

Name of the company

Name and address of the mill

Statement showing the total production and allocation of total actual expenses and
income of the company between textiles products and other activities for the year
ending.......................................................

A. Production Data:

Serial Particulars Current Previous Current Previous

Number Year Year Year Year

1. Licensed capacity
2. Installed capacity
3. Budgeted capacity
4. Actual utilisation/production
during the year
5. Percentage of (4) to(2)
6. Percentage of (4) to(3)

B. Allocation of total expenses and income for the year ending...

Serial Particulars Total actual Share Share applicable to
Number expenses applicable to textiles activity
other activities
1. Raw-material consumed
2. Process materials/chemicals
consumed
3. Packing materials
4. Salaries and wages
5. Utilities
6. Consumable stores and spares
7. Depreciation
8. Repairs and
 Maintenance
9. Royalty
10. Research and
Development
11. Quality control
12. Other factory overheads
13. Administrative
Overhead
(a)salaries
and wages
(b)others
(please
specify)
(c) Total(a+b)
14 Total(1 to 13)
15. Stock adjustment
(Work - in -
Progress)
16. Less: Credits (from wastages
and by-Products)
17. Cost of production
18. Stock adjustment
(finished products)
19. Net cost of
Production of unpacked
finished goods
20. Less: captive consumption
21. Packing cost
(a) Materials
(b) Others
22. Less: captive consumption in
packed condition
23. Net cost of materials available
for sales

24. Selling and distribution

Expenses
(a)salaries
and wages
(b)freight and
transport
charges
(c)commission
to selling
agents
(d)advertisement expenses
 (e)others
(f)Total(a to e)
25. Cost of Sales
26. Interest
27. Annual bonus to employees
a) minimum
statutory
bonus
b) other than
statutory
bonus
28. Contribution to superannuation
scheme
29. Statutory
Gratuity including provisions
30. Total cost excluding excise
duty
31. Total sales realization
Less:
i)excise duty
ii) export incentives
32. Margin(31 – 30)

Note:- All items of income and expenditure in this Proforma shall be reconciled
with the financial accounts for the relevant period.”

(A.Ramaswamy)
Joint Secretary
Fno.52/3/CAB-99

Foot note:The principal notification was published vide GSR number 417(E) dated 28th
June,1977 and subsequently amended vide

1. GSR 1277 dated 10th September,1979

2. GSR 40 dated 5th January,1983
3. GSR 1206 dated 22nd November,1984
4. GSR 562 dated 22nd July 1989
5. GSR 322(E) dated 24th March,1993
6. GSR 29(E) dated 19th January,1994
7. GSR 344(E) dated 30th March,1994
8. GSR 446(E) dated 3rd August,1998.
9. GSR 693 (E) dated 31st August, 2000
10. GSR 728 (E) dated 28th September,2001