COST ACCOUNTING RECORDS (PHARMACEUTICAL INDUSTRY) RULES, 2011
7th December,2011
Cost Accounting Records (Pharmaceutical Industry) Rules, 2011
Form A Form for filling Compliance Report and other documents with the Central
Government (Pursuant to section 209(1)(d), 600(3)(b) of the Companies Act,1956
and Rule 2 of the Cost Accounting Records (Pharmaceutical Industry) Rules,2011
Part I – General Information
Part II - Attachments
Form B Form of Compliance Report [ Rule 2 and Rule 5]
Annexure to the Compliance Report [ Rule 2 and Rule 5]
Schedules [Rule 4]
Proforma ‘A’ – Statement showing Cost of Utilities like Water or Power, etc.
Proforma ‘B’ – Statement showing Summary Quantitative Details of all Intermediaries
or Bulk Drugs Processed or Manufactured
Proforma ‘B-1’ – Statement showing Cost of Production of Intermediate or Bulk
Drugs Processed or Manufactured
Proforma ‘C’ – Statement showing Cost of Sales, Sales Realization and Margin in
respect of Intermediates or Bulk Drug Processed or Manufactured and Sold
Proforma ‘D’ – Statement showing Cost of Production of Intermediates or Bulk
Drugs or Formulation processed on Job Charges basis
Proforma ‘E’ – Statement showing Allocation and Apportionment of Total Expenses
and Conversion and Packing Cost for various Cost Centres
Proforma ‘F’ – Statement showing Apportionment of Conversion Cost and Packing
Cost for various Products
Proforma ‘G’ – Statement showing Cost of Production, Cost of Sales, Sales
Realization and Margin in respect of Formulation
Proforma ‘H’ – Statement showing Activity-wise Capital Cost of Plant and
Machinery/Equipment relating to Bulk Drugs, Formulations and Other Common
Services & Activities
Proforma ‘I’ – Statement of Profit Reconciliation ( for the company as a whole)
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION-3, SUB-SECTION (i)]
MINISTRY OF CORPORATE AFFAIRS
Notification
New Delhi dated the 7th December, 2011
G.S.R. No. 874(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), and in supersession of the
Cost Accounting Records (Bulk Drugs) Rules, 1974 vide G.S.R. 130(E), dated the 14th March, 1974 and
Cost Accounting Records (Formulations) Rules, 1988 vide G.S.R. 452, dated the 22nd April, 1988, except as
respects things done or omitted to be done before such supersession, the Central Government hereby
makes the following rules, namely: -
1. Short Title and Commencement, – (1) These rules may be called the Cost Accounting Records
(Pharmaceutical Industry) Rules, 2011.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions and Interpretations, – In these rules, unless otherwise requires,---
(a) “Act” means the Companies Act, 1956 (1 of 1956);
(b) “bulk drugs” means any pharmaceutical, chemical, biological or plant product including its
salts, esters, stereo-isomers and derivatives, which are used as such or as an ingredient in any
formulation and shall include any bulk drug included in any bona fide Allopathic, Ayurvedic,
Homeopathic, Sidha or Unani (Tibb) systems of medicine;
(c) “compliance report” means the compliance report duly authenticated and signed by a cost
accountant in the specified form of compliance report;
(d) “Cost Accountant” for the purpose of these rules means a cost accountant as defined in
clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of
1959) and who is either a permanent employee of the company or holds a valid certificate
of practice under sub-section (1) of section 6 and who is deemed to be in practice under
sub-section (2) of section 2 of that Act and includes a firm of cost accountants;
(e) “Cost Accounting Standards” means the standards of cost accounting, issued by the Institute;
(f) “cost records” means books of account relating to utilisation of materials, labour and other
items of cost as applicable to the production, processing, manufacturing or mining activities
of the company;
(g) “Form-A” means the form specified in these rules for filing compliance report and other
documents with the Central Government in the electronic mode;
(h) “Form-B” means the form of the compliance report and includes Annexure to the compliance
report;
(i) “formulations” means any medicine processed out of or containing one or more bulk drugs
with or without the use of any pharmaceutical aids for internal or external use for or in the
diagnosis, treatment, mitigation or prevention of disease in human beings or animals and shall
include any medicine included in any bona fide Allopathic, Ayurvedic, Homeopathic, Sidha
or Unani (Tibb) systems of medicine;
(j) “Generally Accepted Cost Accounting Principles” means the principles of cost accounting
issued by the Institute;
(k) “Institute” means the Institute of Cost and Works Accountants of India constituted under the
Cost and Works Accountants Act, 1959 (23 of 1959);
(l) “pharmaceutical activities” means production, processing, or manufacturing of bulk drugs
or formulations and includes the meaning assigned to them under the Drugs (Prices Control)
Order 1995 as amended from time to time, or included under Chapters 29 and 30 of the Central
Excise Tariff Act, 1985 (5 of 1986), and further includes the intermediate products and articles
or allied products thereof;
(m) “product” means any tangible or intangible good, material, substance, article, idea, know-how,
method, information, object, service, etc. that is the result of human, mechanical, industrial,
chemical, or natural act, process, procedure, function, operation, technique, or treatment
and is intended for use, consumption, sale, transport, store, delivery or disposal;
(n) “product group” in relation to tangible products means a group of homogenous and alike
products, produced from same raw materials and by using similar or same production process,
having similar physical or chemical characteristics and common unit of measurement, and
having same or similar usage or application; and in relation to intangible products means a
group of homogenous and alike products or services, produced by using similar or same process
or inputs, having similar characteristics and common unit of measurement, and having same
or similar usage or application;
(o) “turnover” means total turnover made by the company from the sale or supply of all products
or services during the financial year and it includes any turnover from job work or loan license
operations and the subsidies or grants or incentives received but does not include any nonoperational
income;
(p) all other words and expressions used in these rules but not defined, and defined in the Act and
rules made under clause (d) of sub-section (1) of section 209 of the Act shall have the same
meanings as assigned to them in the Act or rules, as the case may be.
3. Application, – These rules shall apply to every company, including a foreign company as defined
under section 591 of the Act, which is engaged in the production, processing, or manufacturing of
pharmaceutical activities and wherein, the aggregate value of net worth as on the last date of the
immediately preceding financial year exceeds five crores of rupees; or wherein the aggregate value
of the turnover made by the company from sale or supply of all products or activities during the
immediately preceding financial year exceeds twenty crores of rupees; or wherein the company’s
equity or debt securities are listed or are in the process of listing on any stock exchange, whether
in India or outside India:
Provided that these rules shall not apply to a body corporate governed by any special Act.
4. Maintenance of records, – (1) Every company to which these rules apply, including all units and
branches thereof shall, in respect of each of its financial year commencing on or after the date of
this notification, keep cost records and the books of account so maintained shall contain, inter-alia,
the particulars specified in Proformae A to I mentioned in the Schedule annexed to these rules.
(2) The cost records referred to in sub-rule (1) shall be kept on regular basis in such manner so
as to make it possible to calculate per unit cost of production or cost of operations, cost of
sales and margin for each of its products and activities for every financial year on monthly or
quarterly or half-yearly or annual basis.
(3) The cost records shall be maintained in accordance with the generally accepted cost
accounting principles and cost accounting standards issued by the Institute; to the extent these
are found to be relevant and applicable and the variations, if any, shall be clearly indicated
and explained.
(4) The cost records shall be maintained in such manner so 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 utilization of resources and these records shall also provide necessary data which
is required to be furnished under these rules.
(5) All such cost records and cost statements, maintained under these rules shall be reconciled
with the audited financial statements for the financial year specifically indicating expenses
or incomes not considered in the cost records or statements so as to ensure accuracy and
to reconcile the profit of all product groups with the overall profit of the company and the
variations, if any, shall be clearly indicated and explained.
(6) All such cost records, cost statements and reconciliation statements, maintained under these
rules, relating to a period of not less than eight financial years immediately preceding a financial
year or where the company had been in existence for a period less than eight years, in respect
of all the preceding years shall be kept in good order.
(7) Every person, referred to in sub-section (6) and (7) of section 209 of the Companies Act, 1956
(1 of 1956), shall take all reasonable steps to secure compliance by the company with the
provisions of these rules in the same manner as he is liable to maintain accounts required under
sub-section (1) of section 209 of the said Act.
5. Form of the Compliance Report, – Every company to which these rules apply shall submit a
compliance report, in respect of each of its financial year commencing on or after the date of
this notification, duly certified by a Cost Accountant, along with the Annexure to the Central
Government, in the specified form.
6. Time limit for submission of Compliance Report, – Every company shall submit the compliance
report referred to in rule 5 to the Central Government within a period of one hundred and eighty
days from the close of the company’s financial year to which the compliance report relates.
7. Authentication of Annexure to the Compliance Report, – The Annexure to the compliance report
shall be approved by the Board of Directors and certified by the Cost Accountant before submitting
the same to the Central Government by the company.
8. Penalties, – (1) If default is made by the Cost Accountant in complying with the provisions of these
rules, he shall be punishable with fine, which may extend to five thousand rupees.
(2) For contravention of these rules, -
(a) the company shall be punishable as provided under sub-section (2) of section 642 of the
Act; and
(b) every officer thereof who is in default, including the persons referred to in sub-section (6)
of section 209 of the Act, shall be punishable as provided under sub-sections (5) and (7)
of section 209 of Companies Act, 1956 (1 of 1956).
9. Savings, – The supersession of the Cost Accounting Records (Bulk Drugs) Rules, 1974 and Cost
Accounting Records (Formulations) Rules, 1988, shall not in any way affect-
(a) any right, obligation or liabilities acquired, accrued or incurred thereunder;
(b) any penalty, forfeiture or punishment incurred in respect of any contravention committed
thereunder; and
(c) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation,
liability, penalty, forfeiture or punishment as aforesaid, and; any such investigation, legal
proceeding or remedy may be instituted, continued or enforced and any such penalty,
forfeiture or punishment may be imposed as if those rules had not been superseded.
7th December,2011
Cost Accounting Records (Pharmaceutical Industry) Rules, 2011
Form A Form for filling Compliance Report and other documents with the Central
Government (Pursuant to section 209(1)(d), 600(3)(b) of the Companies Act,1956
and Rule 2 of the Cost Accounting Records (Pharmaceutical Industry) Rules,2011
Part I – General Information
Part II - Attachments
Form B Form of Compliance Report [ Rule 2 and Rule 5]
Annexure to the Compliance Report [ Rule 2 and Rule 5]
Schedules [Rule 4]
Proforma ‘A’ – Statement showing Cost of Utilities like Water or Power, etc.
Proforma ‘B’ – Statement showing Summary Quantitative Details of all Intermediaries
or Bulk Drugs Processed or Manufactured
Proforma ‘B-1’ – Statement showing Cost of Production of Intermediate or Bulk
Drugs Processed or Manufactured
Proforma ‘C’ – Statement showing Cost of Sales, Sales Realization and Margin in
respect of Intermediates or Bulk Drug Processed or Manufactured and Sold
Proforma ‘D’ – Statement showing Cost of Production of Intermediates or Bulk
Drugs or Formulation processed on Job Charges basis
Proforma ‘E’ – Statement showing Allocation and Apportionment of Total Expenses
and Conversion and Packing Cost for various Cost Centres
Proforma ‘F’ – Statement showing Apportionment of Conversion Cost and Packing
Cost for various Products
Proforma ‘G’ – Statement showing Cost of Production, Cost of Sales, Sales
Realization and Margin in respect of Formulation
Proforma ‘H’ – Statement showing Activity-wise Capital Cost of Plant and
Machinery/Equipment relating to Bulk Drugs, Formulations and Other Common
Services & Activities
Proforma ‘I’ – Statement of Profit Reconciliation ( for the company as a whole)
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION-3, SUB-SECTION (i)]
MINISTRY OF CORPORATE AFFAIRS
Notification
New Delhi dated the 7th December, 2011
G.S.R. No. 874(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), and in supersession of the
Cost Accounting Records (Bulk Drugs) Rules, 1974 vide G.S.R. 130(E), dated the 14th March, 1974 and
Cost Accounting Records (Formulations) Rules, 1988 vide G.S.R. 452, dated the 22nd April, 1988, except as
respects things done or omitted to be done before such supersession, the Central Government hereby
makes the following rules, namely: -
1. Short Title and Commencement, – (1) These rules may be called the Cost Accounting Records
(Pharmaceutical Industry) Rules, 2011.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions and Interpretations, – In these rules, unless otherwise requires,---
(a) “Act” means the Companies Act, 1956 (1 of 1956);
(b) “bulk drugs” means any pharmaceutical, chemical, biological or plant product including its
salts, esters, stereo-isomers and derivatives, which are used as such or as an ingredient in any
formulation and shall include any bulk drug included in any bona fide Allopathic, Ayurvedic,
Homeopathic, Sidha or Unani (Tibb) systems of medicine;
(c) “compliance report” means the compliance report duly authenticated and signed by a cost
accountant in the specified form of compliance report;
(d) “Cost Accountant” for the purpose of these rules means a cost accountant as defined in
clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of
1959) and who is either a permanent employee of the company or holds a valid certificate
of practice under sub-section (1) of section 6 and who is deemed to be in practice under
sub-section (2) of section 2 of that Act and includes a firm of cost accountants;
(e) “Cost Accounting Standards” means the standards of cost accounting, issued by the Institute;
(f) “cost records” means books of account relating to utilisation of materials, labour and other
items of cost as applicable to the production, processing, manufacturing or mining activities
of the company;
(g) “Form-A” means the form specified in these rules for filing compliance report and other
documents with the Central Government in the electronic mode;
(h) “Form-B” means the form of the compliance report and includes Annexure to the compliance
report;
(i) “formulations” means any medicine processed out of or containing one or more bulk drugs
with or without the use of any pharmaceutical aids for internal or external use for or in the
diagnosis, treatment, mitigation or prevention of disease in human beings or animals and shall
include any medicine included in any bona fide Allopathic, Ayurvedic, Homeopathic, Sidha
or Unani (Tibb) systems of medicine;
(j) “Generally Accepted Cost Accounting Principles” means the principles of cost accounting
issued by the Institute;
(k) “Institute” means the Institute of Cost and Works Accountants of India constituted under the
Cost and Works Accountants Act, 1959 (23 of 1959);
(l) “pharmaceutical activities” means production, processing, or manufacturing of bulk drugs
or formulations and includes the meaning assigned to them under the Drugs (Prices Control)
Order 1995 as amended from time to time, or included under Chapters 29 and 30 of the Central
Excise Tariff Act, 1985 (5 of 1986), and further includes the intermediate products and articles
or allied products thereof;
(m) “product” means any tangible or intangible good, material, substance, article, idea, know-how,
method, information, object, service, etc. that is the result of human, mechanical, industrial,
chemical, or natural act, process, procedure, function, operation, technique, or treatment
and is intended for use, consumption, sale, transport, store, delivery or disposal;
(n) “product group” in relation to tangible products means a group of homogenous and alike
products, produced from same raw materials and by using similar or same production process,
having similar physical or chemical characteristics and common unit of measurement, and
having same or similar usage or application; and in relation to intangible products means a
group of homogenous and alike products or services, produced by using similar or same process
or inputs, having similar characteristics and common unit of measurement, and having same
or similar usage or application;
(o) “turnover” means total turnover made by the company from the sale or supply of all products
or services during the financial year and it includes any turnover from job work or loan license
operations and the subsidies or grants or incentives received but does not include any nonoperational
income;
(p) all other words and expressions used in these rules but not defined, and defined in the Act and
rules made under clause (d) of sub-section (1) of section 209 of the Act shall have the same
meanings as assigned to them in the Act or rules, as the case may be.
3. Application, – These rules shall apply to every company, including a foreign company as defined
under section 591 of the Act, which is engaged in the production, processing, or manufacturing of
pharmaceutical activities and wherein, the aggregate value of net worth as on the last date of the
immediately preceding financial year exceeds five crores of rupees; or wherein the aggregate value
of the turnover made by the company from sale or supply of all products or activities during the
immediately preceding financial year exceeds twenty crores of rupees; or wherein the company’s
equity or debt securities are listed or are in the process of listing on any stock exchange, whether
in India or outside India:
Provided that these rules shall not apply to a body corporate governed by any special Act.
4. Maintenance of records, – (1) Every company to which these rules apply, including all units and
branches thereof shall, in respect of each of its financial year commencing on or after the date of
this notification, keep cost records and the books of account so maintained shall contain, inter-alia,
the particulars specified in Proformae A to I mentioned in the Schedule annexed to these rules.
(2) The cost records referred to in sub-rule (1) shall be kept on regular basis in such manner so
as to make it possible to calculate per unit cost of production or cost of operations, cost of
sales and margin for each of its products and activities for every financial year on monthly or
quarterly or half-yearly or annual basis.
(3) The cost records shall be maintained in accordance with the generally accepted cost
accounting principles and cost accounting standards issued by the Institute; to the extent these
are found to be relevant and applicable and the variations, if any, shall be clearly indicated
and explained.
(4) The cost records shall be maintained in such manner so 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 utilization of resources and these records shall also provide necessary data which
is required to be furnished under these rules.
(5) All such cost records and cost statements, maintained under these rules shall be reconciled
with the audited financial statements for the financial year specifically indicating expenses
or incomes not considered in the cost records or statements so as to ensure accuracy and
to reconcile the profit of all product groups with the overall profit of the company and the
variations, if any, shall be clearly indicated and explained.
(6) All such cost records, cost statements and reconciliation statements, maintained under these
rules, relating to a period of not less than eight financial years immediately preceding a financial
year or where the company had been in existence for a period less than eight years, in respect
of all the preceding years shall be kept in good order.
(7) Every person, referred to in sub-section (6) and (7) of section 209 of the Companies Act, 1956
(1 of 1956), shall take all reasonable steps to secure compliance by the company with the
provisions of these rules in the same manner as he is liable to maintain accounts required under
sub-section (1) of section 209 of the said Act.
5. Form of the Compliance Report, – Every company to which these rules apply shall submit a
compliance report, in respect of each of its financial year commencing on or after the date of
this notification, duly certified by a Cost Accountant, along with the Annexure to the Central
Government, in the specified form.
6. Time limit for submission of Compliance Report, – Every company shall submit the compliance
report referred to in rule 5 to the Central Government within a period of one hundred and eighty
days from the close of the company’s financial year to which the compliance report relates.
7. Authentication of Annexure to the Compliance Report, – The Annexure to the compliance report
shall be approved by the Board of Directors and certified by the Cost Accountant before submitting
the same to the Central Government by the company.
8. Penalties, – (1) If default is made by the Cost Accountant in complying with the provisions of these
rules, he shall be punishable with fine, which may extend to five thousand rupees.
(2) For contravention of these rules, -
(a) the company shall be punishable as provided under sub-section (2) of section 642 of the
Act; and
(b) every officer thereof who is in default, including the persons referred to in sub-section (6)
of section 209 of the Act, shall be punishable as provided under sub-sections (5) and (7)
of section 209 of Companies Act, 1956 (1 of 1956).
9. Savings, – The supersession of the Cost Accounting Records (Bulk Drugs) Rules, 1974 and Cost
Accounting Records (Formulations) Rules, 1988, shall not in any way affect-
(a) any right, obligation or liabilities acquired, accrued or incurred thereunder;
(b) any penalty, forfeiture or punishment incurred in respect of any contravention committed
thereunder; and
(c) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation,
liability, penalty, forfeiture or punishment as aforesaid, and; any such investigation, legal
proceeding or remedy may be instituted, continued or enforced and any such penalty,
forfeiture or punishment may be imposed as if those rules had not been superseded.
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