CIRCULAR NO. 04/01/2018-O/o DGAD dated 23.1.2018

Exporter’s Verification Report  Format

 

Subject: Report for verification of data of cooperating producer/Exporter in the Anti-dumping investigation concerning imports of ‘…………. Product’ originating in or exported from …………… (Country) - Verification at the premises of M/s …………..

 

Investigating Team:

Investigating Officer: Mr./Ms. ………….

Costing Officer: Mr./Ms. …………… Date of Verification:  XX-XX-XXXX

 

1. Introduction: The following persons were present during the verification:

 

S.No.	Name	Designation	Organisation

 

(i) Details regarding revised information/revised formats, if any submitted to the investigation team before initiation of investigations and accepted, if any.

 

(ii) Broad details about the company including date of commencement of commercial production (PUC), number of plants for PUC, installed capacity, production and capacity utilization.

 

(iii) Broad details about the manufacturing process, if different from DI.

 

(iv) Details about major business segments and main shareholders may also be indicated. Whether there is any state ownership in the entity?

 

(v) Details of name changes or change in structure of the company or change in ownership structure in the recent past, if any?

 

(vi) Whether the details about related party entities or associates in other countries (preferably involved in production or selling of PUC) were also verified and in conformity with the reply to the questionnaire.

 

2. Validation of ERP System: Details of validation of genuineness of ERP/SAP system be done by different validation checks like:

 

- Matching of published data like gross sales revenue in a published/ audited balance sheet,

 

- Random check of a historical or latest production data not necessarily of POI picked from log sheet details during onsite plant visit of exporter.

 

- Matching of some export to India Transactions in POI obtained though DG-Systems with entry corresponding in ERS system.

 

Note: ‘ERP’ systems generally capture sales values, (Gross and net), quantity, country, product type etc. other adjustments like ocean freight, Inland freight, bank charges, credit cost etc. are dovetailed in this on the basis of other documents which could be receipts, vouchers. These may be co-related with the transactions of POI both domestic and export. The observations, if any be indicated.

 

3. Appendix 2, 4A, 4B and 4C: Domestic   Sales:

 

(i) Details regarding quantity and value of domestic sales by the exporter including number of customers during POI, if possible.

 

(ii) Details about related customers, if any along with quantity and value.

 

(iii) Details about domestic sales invoices selected at random for verification in the following format:

 

S. No.	Invoice No.	Date of Invoice	Name of the Customer	Total Quantity	Total Amount

 

(iv) Whether the details of the sample invoices verified are in conformity with the information reported in Appendix-1 and found to be correct?

 

(v) Whether the selected domestic sales invoices including shipment records and payment vouchers were taken on record?

 

(vi) The details regarding deductions claimed by the Exporter from the domestic sales i.e., (a) Rebates (b) Inland freight and (c) Credit cost and bank charges etc. and the basis of claim.

 

(vii) Whether the supporting documents relating to various deductions claimed from the domestic sales in respect of sample invoices were taken on record and details of deficiencies, if any noticed.

 

(viii) Domestic selling policy; Type of customers (related, unrelated, trader/end-user), Note: Copies of contract/P. O/invoices may be collected.

 

4. Appendix 2, 3A, 3B and 3C: Export sales to   India:

 

(i) Details regarding quantity and value of Export Sales to India including number of customers during POI, if possible.

 

(ii) Details about related customers, if any along with quantity and value.

 

(iii) Details about Export Sales Invoices selected at random for verification in the following format:

 

S. No.	Invoice No.	Date of Invoice	Name of the Customer	Net Quantity	Net Invoice Value (Currency)

 

(iv) Whether the invoices selected in the sample were found to have been correctly reflected in relevant Appendix?

 

(v) Whether the selected export sales invoices including shipment records and payment vouchers were taken on record?

 

(vi) Whether the details of post invoicing discounts and rebates, if any were also seen along with their reconciliation with the audited records?

 

(vii) Whether the supporting documents relating to various deductions (including post invoicing discount, if any) claimed from the export sales in respect of sample invoices were taken on record and details of deficiencies, if any noticed.

 

Note: The post export discounts may be verified from customer’s sales register (listing from ERP), and also through details of commission/discount in the Balance Sheet of exporter.

 

5. Appendix-1:   Sales Revenue reconciliation:

 

(i) Whether the turnover figures were verified with reference to the audited accounts/ Sales Register or Sales Report generated from XXXXX?

 

(ii) Whether the details verified are in conformity with the information reported in Appendix and Whether the supporting documents in this regard taken on record with details of deficiencies, if any noticed.

 

(iii) Overall reconciliation of data of Domestic Sales, exports to India and to countries other than India be done through ERP system of producer/exporter (SAP, oracle, or any other) wherever it exists.

 

Note:

 

- Generally a sample size of 5% for verification of domestic and export data be considered. However, a smaller sample percentage may be considered, if number of transactions is very high, Similarly, a higher percentage may be selected, if number of transactions are very less.

 

- The basis of choosing sample be month of POI, customer type (related, unrelated, trader/end-user) grade type, etc. so that sample is realistic and representative.

 

- The transaction verification be done for entire Chain beginning proforma invoice/purchase order to realisation. The deficiencies noticed in this regard be indicated.

 

- Genuineness of commercial invoices may also be validated by correlating them with customs declaration filed by exporter for VAT refund. As VAT refund is allowed on FOB, the customs declaration contains Ocean freight and Ocean Insurance as well which could be correlated with details provided on adjustments.

 

- Copies of contracts, purchase order and invoices be collected.

 

- In case the domestic sales are either insignificant or nil or may not be in ordinary course of trade, sample invoices for exports to third country (Appendix 3C) and corresponding adjustments may be verified in detail to ascertain the ex-factory export prices to such countries,

 

6. Appendix 1– Capacity, production and sales (Performance   Parameters):

 

(i) Whether the installed capacity, production and sales were verified and the supporting documents evidencing installed capacity, production and sales were taken on record?

 

(ii) Where the same plant produces more than one product and some of them are N-PUC, the complete details regarding installed capacity and production may need to be verified.

 

(iii) Details of deficiencies, if any noticed.
 

7. Appendix-5 and 6: Raw materials and packing materials consumption and reconciliation:

 

(i) Whether the opening stock, purchases, consumption and closing stock of various raw materials and packing materials reported in Appendix 6 were verified from the records maintained by the company?

 

(ii) Whether packing for export sales is different from the packing for domestic sales. If yes, impact on cost on this account?

 

(iii) Whether the supporting documents in this regard taken on record and details of deficiencies, if any noticed.

 

8. Appendix-6 – Raw materials  consumption:

 

(i) Whether the consumption of raw materials figures for POI reported in Appendix-5 and Appendix-6 was compared and found to be matching with audited records?

 

(ii) Whether the actual consumption of different raw materials for manufacturing of PUC is comparable with the theoretical norms derived from chemical formulae, if any and variations were explained?

 

(iii) Whether the raw material consumption norms are comparable with the DI?

 

(iv) Whether the supporting documents in this regard taken on record and details of deficiencies, if any noticed:

 

9. Appendices 7:  Allocation and Apportionment of Expenditure:

 

(i) Whether the data presented in Appendix-7 was verified with reference to the accounting and costing records?

 

(ii) Whether the information was cross verified with reference to the Audited financial statements and other statements generated from the ERP system?

 

(iii) Whether the perusal of the records shows that the costs had been allocated to the product concerned, wherever required, on a reasonable basis complying with the generally accepted cost accounting principles?

 

(iv) Whether the supporting documents in this regard taken on record and details of deficiencies, if any noticed.

 

10. Appendices - 8:

 

(i) Whether Appendix-8 has been prepared on the basis of information submitted in Appendix- 5 and 7 and the same was verified from the accounting records of the company?

 

(ii) Whether complete details about cost of captive consumption (including utilities and services) was provided?

 

(iii) Whether Appendix-8 were prepared as per the total cost reported in Appendix-5 and 7?

 

(iv) Major reason for variations in cost, if any between Export product and domestically sold product affecting price comparability;

 

(v) Whether complete details about procurements (including services) from related party for PUC provided? Whether the related party procurement is at arm’s length price?

 

(vi) Whether the supporting documents in this regard taken on record and details of deficiencies, if any noticed.

 

11. Appendices - 9:

 

(i) Whether the SGA figures reported in Appendix-9 duly reconcile with the audited records?

 

(ii) Whether the allocation of SGA expenses between PUC and non-PUC has been made on reasonable basis?

 

(iii) Whether the supporting documents in this regard taken on record and details of deficiencies, if any noticed.

 

12. Other issues, if any:

 

(i) Whether a copy of audited/certified accounts for injury period including POI was obtained?

 

(ii) Whether duly signed copies of Appendix-A and Appendix-B are available?

 

(iii) Whether all Appendices are signed by the Company?

 

(iv) Whether Appendix 5, 7, 8, 10,11 are certified by the Practicing Accountant?

 

Source: Manual Of Operating Practices For Trade Remedy Investigations