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Accounting Policies of Bharat Immunological & Biologicals Corporation Ltd. Company

Mar 31, 2016

1. Basis of Accounting:

The financial statements are prepared under historical cost convention on accrual basis. Accounts are being maintained on mercantile basis.

2. Tangible Fixed Assets and Depreciation:

Tangible Fixed Assets are stated at historical cost less accumulated depreciation.

The depreciation is provided on written down value pro-rata basis as on the basis of useful life prescribed under schedule II of companies Act, 2013.

3. Staff retirement benefits:

Retirement benefit. e. gratuity liability is determined based on the percentage of the annual wage bill specified by the Life Insurance Corporation under the Group Gratuity cum Life Insurance Scheme. As regards leave encashment as part of retirement benefit, company is making provision as per actuarial valuation.

4. Inventories:

Valuation of stocks: -

(a) Raw material Raw Material and other supplies used in production are valued at Lower of cost or net realizable value by applying FIFO method.

(b) Stores, spares etc. Lower of cost or net realizable value by applying FIFO method

(c) Finished goods. Lower of cost or net realizable value. Cost being determined by including cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.Net realizable value determined by excluding all payable statutory dues and direct sales expenses.

5. Treatment of Government Grants:

a. Unutilized Grants:-

i) Grants received from the Government, which are not utilized, are reported under Current Liabilities, corresponding amount under Current assets loan & advances.

ii) Interest income earned on un-utilized grant is credited to Grant except TDS on interest deducted by Bank.

iii) Revenue grants (where project is not completed) is shown net of grants Unutilized

b. Utilized Grants: -

i) Government grants related to specific fixed assets are deducted from the gross value of assets acquired in arriving at their Book Value. Where the grant related to a fixed asset equals the gross value of assets, the same is shown in the Balance Sheet at a nominal value.

ii) Revenue Grants are deducted from the related expenses and such expenses are reported net of grants utilized.

6. Income Recognition

All incomes are recognized on accrual basis.

a. Estimated amount of contract remaining to be executed on capital/revenueaccount and not provided for (including revenue commitment of letter of credits, but excluding capital commitment relating to various grants)- Rs.773.99 lacs(PY Rs.3066.20 lacs).and capital commitment on account of Grants Rs. NIL (PY Rs. NIL )

b. Contingent Liabilities:-

Claim against the company not acknowledged as debts are Rs.691.11 lacs (PY Rs.742.52lacs) which includes:-

i. Land Cases:- Liability for the land compensation cases pending the outcome of appeal before Hon’ble High Court, Allahabad. However, decision of District Court, Bulandshahr was against the company and the figures have been computed on the basis of District Court order:Rs.602.00 lacs including interest (PY.Rs.587.54lacs including interest).

ii. Staff Litigations:- Litigation is pending in the cases filed against the company by the then staff i.e. Mr. Bhaskar Gupta & (Col.) V. K. Sethi for the subsistence allowance & salary respectively: Rs.54.83 lacs in total (PY Rs. 40.06lacs in total)

iii. Income Tax: Income tax authority raised the demand of penalty u/s 271 (1)

(c) of income tax act 1961. The company being not agreed with demand preferred an appeal before the appellant authority which is pending on the date of balance sheet. The amount in dispute is Rs. 34.61 lacs excluding interest ( Previous year Rs.34.61 lacs excluding interest)

c. In the opinion of the Management, Current Assets, Loans and Advances shall have the value on realization, in the ordinary course of the business, equal to the amount at which they are stated in the Balance Sheet. The balances of Trade Receivables and Trade Payables are subject to confirmation. The confirmations from the respective parties have been sought, however, the majority of the same are yet to be received.

d. The Ministry of Health and Family Welfare (Trade Receivable) has deducted charges for late delivery amounting Rs.616.95 lacs which has not been accounted for in the books of accounts as the same is not sustainable in the opinion of the management and the company is pursuing the matter with the concerned Ministry for the waiver of these charges.

e. Any gains or loss arising on account of exchange difference either on settlement or on translation is accounted for in the Statement of Profit & Loss, In this regard during the year, company has booked net exchange loss of Rs. 234.21 lacs. (P.Y. loss of Rs.129.10 lacs)

f. Disclosure as per Accounting Standard 15 (Accounting for Retirement benefit in the Financial Statements of Employer) is as under:

The Accruing liability according to the actuarial valuation for the Leave Encashment is Rs.280.95 lacs (PY Rs. 280.66lacs) &half pay leave is Rs.36.37 lacs (PY Rs. 36.62lacs).

Leave Travel Concession:

(i) Rs.2.21 lacs have been paid as LTC (All India) claimed(Previous Year Rs.

5.54lacs).

(ii) Rs.1.54lacs have been paid as LTC (Home Town) claimed(Previous Year Rs.

0.50lacs).

Gratuity: Yearly payment is made to LIC to maintain the Gratuity Account of the Employees with Life Insurance Corporation of India.

g. In compliance of Accounting Standard 17 (AS-17) on “Segment Reporting” as notified under Companies Accounting Standard Rules, 2006, the company has adopted following business segment as the reportable segments:

(i) Oral Polio Vaccine

(ii)Zinc Tablets

There are no geographical segments.

The disclosures of segment wise information is given as per Annexure-A.

h. As per Accounting Standard 18 on “Related party Disclosure “are as follows

1) Dr. M.K Bhan Chairman

2) ShSreeshanRaghavan Managing Director (Past)

3) SmtVeenaTamta Bhatia Managing Director (Past)

4) Sh.Chandra Prakash Goyal Managing Director (Current)

5) Dr. Rajesh Kapur Director

6) Prof. N.K Ganguly Director

7) Prof. Dr. B L Jailkhani Director

8) Dr. Y. K. Gupta Director

9) Dr. Rakesh Kumar Director

Related Party Transactions:

Sitting Fees to Directors Rs. 44,000/

i. In compliance to Accounting Standard 20 on “Earning per share”, the calculation of Earnings Per Share (Basic and diluted) is as under:

j. Deferred Tax:

In compliance of Accounting Standard 22 on “Accounting for taxes on Income” as notified under Companies Accounting Standard Rules, 2006, the company has provided accumulated net deferred tax assets in respect of timing difference as on 31st March, 2016 amounting to Rs. 246.62(Previous year net deferred tax Liabilities Rs. 28.31lacs). Net deferred tax Incomefor the year of Rs. 274.93 lacs (Previous Year net deferred tax expensesRs.42.62 lacs) has been charged to Profit & Loss account. The item-wise details of deferred tax liability and assets are as under.

m. During the year, the company has not identified the parties under Micro, Small and Medium Enterprises Development Act, 2006 (or the “Act”).

n. Governments Grants

(i) Capital Grant for Rs. 311 Lakhs (Rupees Three Hundred & Eleven Lakhs) was sanctioned by Government of India during the year 2006-2007 for setting up manufacturing facilities and infrastructure improvement for manufacture of production of Zinc dispersible Tablets. Interest earned on the grant received for manufacturing facilities and infrastructure improvement for manufacturing of production of Zinc dispersible Tablets has been credited to the Grant account as per terms of Grant. The manufacturing facility completed in June 2009.

Above balance of Rs.18.67 lacs does not include TDS recoverable of Rs.1.35 lacs on interest earned on grant. The same shall be included as and when it is received from Income Tax Department.

(ii) For the advancement of manufacturing facilities and infrastructure improvement for manufacture of production of Zinc dispersible tablets. A further Capital Grant for Rs. 137.04 lakhs is sanctioned by Government of India, out of which Rs 74.86 Lakhs received in 2009-2010, Rs 26.60 lakhs received in 2010-11 and Rs 35.58 lakhs received in 2011-12. Interest earned on the grant received for the advancement of manufacturing facilities and infrastructure improvement for manufacture of production of Zinc dispersible tablets has been credited to the grant account as per the terms of the grant. Details are provided as under:

Above negative balance of Rs.0.42 lacs does not include TDS recoverable of Rs.0.71 lacs on interest earned on grant. The same shall be included as and when it is received from Income Tax Department. The advancement in the facility was completed in September, 2012.

(iii) Company has received capital grant of Rs.101.72 lacs (Rs.58.00 lacs in the financial year 2010 11 and Rs.43.00 lacs in the financial year 2011-12) from Govt, of India for setting up of R&D facilities for trial production of Iron Folic Acid Dispersible tablets. Interest earned on capital grant received for the Iron Folic Acid project has been credited to the grant account as per the terms of the grant. Iron Folic Acid project is under progress and is yet to be commissioned. However, necessary approvals on this part from Govt, of India will be taken after the completion of the project. The company is hopeful for getting the extension for excess amount spent on revenue head. The project was scheduled to be completed up to 28.09.2013. Details of Grant are given as under-:

(iv) Company has received capital grant of Rs.137.84 lacs (Rs.97.21 lacs in the financial year 2010 11 and Rs,40.63 lacs in the financial year 2011-12) from Govt. of India for setting up of R&D facilities for formulation development of Micronutrient - Vitamin mix tablets. Interest earned on capital grant received for the Micronutrient - Vitamin mix project has been credited to the grant account as per the terms of the grant. Micronutrient - Vitamin mix project is under progress and is yet to be commissioned. However, necessary approvals on this part from Govt. of India will be taken after the completion of the project. The project was scheduled to be completed upto29.03.2012.Details of Grant are given as under-:

(v) Company has received capital/revenue grant of Rs. 476.35 lacs (2010-11) from Govt. of India for setting up of manufacturing and infrastructure facility Up gradation for process Optimization and Quality Improvement of Oral Polio Vaccine Formulation Facility. Interest earned on capital grant received for the infrastructure facility Up gradation for process Optimization and Quality Improvement of Oral Polio Vaccine Formulation Facility has been credited to the grant account as per the terms of the grant. Infrastructure facility up gradation for process Optimization and Quality Improvement of Oral Polio Vaccine Formulation Facility project is under progress and is yet to be commissioned. However, necessary approvals on this part from Govt. of India will be taken after the completion of the project. The project was scheduled to be completed by 31st May 2011.

(vi) During the year 2010-11 the Company received capital grant of Rs337.87 lacs from Govt. of India for setting up of pilot plant for Diarrhea Management Kit. Interest earned on capital grant received for the Diarrhea Management Kit has been credited to the grant account as per the terms of the grant. Diarrhea Management Kit is under progress and is yet to be commissioned of the grant. However, necessary approvals on this part from Govt. of India will be taken after the completion of the project. The project was scheduled to be completed by 17.9.2012 the request extension for completion of project shall be made in due course of time. Details of Grant are given as under-:

(vii)During the year 2012-13 the Company received capital grant of Rs.132.30 lacs from Govt, of India for setting up of R&D facilities for trial production of SAM. Interest earned on capital grant received for the SAM project has been credited to the grant account as per the terms of the grant. SAM project is under progress and is yet to be commissioned. Up to 31.03.2014 Expenditure of Rs.5.29 lacs and Rs.3.32 lacs have been incurred over and above the released expenditure of Equipment and Human Resource Development, respectively, however, necessary approvals on this part from Govt, of India will be taken after the completion of the project. The project was scheduled to be completed up to 26.10.2014 as per the letter of extension being issued by the department Details of Grant are given as under-:

(viii) During the year 2012-13 the Company has received capital grant of Rs.513.13 lacs (PY Rs.NIL lacs) from Govt. of India for setting up of R&D facilities for BOPV. Interest earned on capital grant received for the BOPV project has been credited to the grant account as per the terms of the grant. BOPV project is under progress and is yet to be commissioned. However, necessary approvals on this part from Govt. of India will be taken after the completion of the project. The project was scheduled to be completed up to 02.07.2013.Details of Grant are given as under-:

o. Out of amount of Rs. 77.83 lacs shown as Advance Tax/TDS recoverable, the amount of Rs.60.80 lacs pertains to the Income tax refund claimed for the assessment year 2006-07 to 2010-2011. The assessments stand completed up to the assessment year 2013.14.

p. Company has got sanction of Fund based limit (WCL) of Rs.40.00 crores and Non fund based limit (FLC) of Rs.65.00 crores from Canara Bank, Green Park Extn. New Delhi. Company has also got sanction of working capital loan of Rs.20.00 crores fund based (WCL)from Dena Bank, Scope Complex, and New Delhi.

q. Diminution in the value of below detailed assets has been provided:-

Capital Work in Progress - The Administrative-cum-housing complex has been shown under the head Capital Work In Progress. The work has been suspended and has been kept in abeyance. The impairment in the value has been determined on the basis of valuation done by certified valuer as on 31.03.2006 and accounted for accordingly. The management is of the view that there is further impairment which could not be quantified on the date of the Balance Sheet.

In terms of AS 28, the company has not formed a committee to look into the further impairment of the fixed assets during the year.

r. Previous year’s figures have been re-named/re-classified/regrouped/re-arranged wherever considered necessary to make them comparable.


Mar 31, 2014

I) Basis of Accounting:

The financial statements are prepared under historical cost convention on accrual basis.

Accounts are being maintained on mercantile basis. ii) Fixed Assets and Depreciation:

Fixed Assets are stated at historical cost less accumulated depreciation.

The depreciation is provided on written down value pro-rata basis at the rates prescribed under Schedule-XIV of to the Companies Act, 1956.

iii) Staff retirement benefits:

Retirement benefit i. e. gratuity liability is determined based on the percentage of the annual wage bill specified by the Life Insurance Corporation under the Group Gratuity cum Life Insurance Scheme. As regards leave encashment, company is making provision as per actuarial valuation.

iv) Inventories:

Valuation of stocks: -

(a) Raw material Raw Material and other supplies used in production are valued at Lower of cost or net realizable value by applying FIFO method.

(b) Stores, spares etc. Lower of cost or net realizable value by applying FIFO method

(c) Finished goods. Lower of cost or net realizable value. Cost being determined

by including cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value determined by excluding all payable statutory dues and direct sales expenses.

v) Treatment of Government Grants:

a) Unutilized Grants:-

i) Grants received from the Government, which are not utilized, are reported under Current Liabilities, corresponding amount under Current assets loan & advances.

ii) Interest income earned on un-utilized grant is credited to Grant except TDS on interest deducted by Bank.

iii) Revenue grants (where project is not completed) is shown net of grants Unutilized

b) Utilized Grants: -

i) Government grants related to specific fixed assets are deducted from the gross value of assets acquired in arriving at their Book Value.

Where the grant related to a fixed asset equals the gross value of assets, the same is shown in the Balance Sheet at a nominal value.

ii) Revenue Grants are deducted from the related expends and such expenses are reported net of grants utilized.

vi) Income Recognition

All incomes are recognized on accrual basis except interest on security deposit, which are recognized on Cash basis.


Mar 31, 2013

I) Basis of Accounting:

The financial statements are prepared under historical cost convention on accrual basis. Accounts are being maintained on mercantile basis.

ii) Fixed Assets and Depreciation:

Fixed Assets are stated at historical cost less accumulated depreciation.

The depreciation is provided on written down value pro-rata basis at the rates prescribed under Schedule-XIV of to the Companies Act, 1956.

iii) Staff retirement benefits:

Retirement benefit i. e. gratuity liability is determined based on the percentage of the annual wage bill specified by the Life Insurance Corporation under the Group Gratuity cum Life Insurance Scheme. As regards leave encashment, company is making provision as per actuarial valuation.

iv) Inventories:

Valuation of stocks: -

(a) Raw material Raw Material and other supplies used in production are valued at Lower of cost or net realizable value byapplying FIFO method.

(b) Stores, spares etc. Lower of cost or net realizable value by applying FIFO method

(c) Finished goods. Lower of cost or net realizable value. Cost being determined by including cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value determined by excluding all payable statutory dues and direct sales expenses.

v) Treatment of Government Grants:

a) Unutilized Grants:-

i) Grants received from the Government, which are not utilized, are reported under Current Liabilities, corresponding amount under Current assets loan & advances.

ii) Interest income earned on un-utilized grant is credited to Grant except TDS on interest deducted by Bank.

b) Utilized Grants: -

i) Government grants related to specific fixed assets are deducted from the gross value of assets acquired in arriving at their BookValue. Where the grant related to a fixed asset equals the gross value of assets, the same is shown in the Balance Sheet at a nominal value.

ii) Revenue Grants are deducted from the related expenses and such expenses are reported net of grants utilized.

vi) Income Recognition

All incomes are recognized on accrual basis except interest on security deposit, which are recognized on Cash basis.


Mar 31, 2010

I) Basis of Accounting:

The financial statements are prepared under historical cost convention on accrual basis. Accounts are being maintained on mercantile basis.

ii) Fixed Assets and Depreciation:

Fixed Assets are stated at historical cost less accumulated depreciation.

The depreciation is provided on written down value pro-rata basis at the rates prescribed under Schedule-XIV of to the Companies Act, 1956.

iii) Staff retirement benefits:

Retirement benefit i. e. gratuity liability is determined based on the percentage of the annual wage bill specified by the Life Insurance Corporation under the Group Gratuity cum Life Insurance Scheme. As regards leave encashment, company is making provision as per actuarial valuation.

iv) Inventories:

Valuation of stocks:

(a) Raw material Lower of cost or net realizable value by applying FIFO method.

(b) Stores, spares etc. Lower of cost or net realizable value by applying FIFO method.

(c) Finished goods. Lower of cost or net realizable value. Cost being

determined by including cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

v) Treatment of Government Grants:

a) Unutilized Grants:-

i) Grants received from the Government, which are not utilized, are reported under Current Liabilities, corresponding amount under Current assets loan & advances.

ii) Interest income earned on un-utilized grant is credited to Grant.

b) Utilized Grants: -

i) Government grants related to specific fixed assets are deducted from the gross value of assets acquired in arriving at their Book Value. Where the grant related to a fixed asset equals the gross value of assets, the same is shown in the Balance Sheet at a nominal value.

ii) Revenue Grants are deducted from the related expenses and such expenses are reported net of grants utilized.

vi) Income Re cognition

All incomes are recognized on accrual basis except sale of waste material and interest on security deposit, which are recognized on Cash basis.


Mar 31, 2009

I) Basis of Accounting:

The financial statements are prepared under historical cost convention on accrual basis. Accounts are being maintained on mercantile basis.

ii) Fixed Assets and Depreciation:

Fixed Assets are stated at cost of acquisition less accumulated depreciation.

The Company provides depreciation on fixed assets on written down value pro-rata basis at the rates prescribed under Schedule-XIV to the Companies Act, 1956.

iii) Staff retirement benefits:

Retirement benefits to employees are provided for by payments to gratuity and provident fund. The gratuity liability is determined based on the percentage of the annual wage bill specified by the Life Insurance Corporation under the Group Gratuity cum Life Insurance Scheme. As regards leave encashment, company is making provision as per actuarial valuation.

iv) Inventories:

Valuation of stocks: -

(a) Raw material At historical cost by using FIFO formula.

(b) Stores, spares etc. At historical cost by using FIFO formula.

(c) Finished goods. Lower of cost or net realizable value. Cost being determined by including cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

v) Treatment of Government Grant:

Grants received from the Government, which are not utilized, are reported under Current Liabilities, corresponding amount available has been shown under the head current assets loan & advances and for the grants utilized the following procedure is adopted:

a) Grants related to Fixed Assets: -

Government grants related to specific fixed assets are deducted from the gross value of assets acquired in arriving at their Book Value. Where the grant related to a fixed asset equals the whole or virtually the whole, of the cost of the asset, the asset is shown in the Balance Sheet at a nominal value.

b) Grants related to revenue: -

Revenue Grants are deducted from the related expenses and such expenses are reported net of grants utilized.

vi) Income Re cognition

All incomes are accounted for on accrual basis except sale of waste material and interest on security deposit with UPPCL, which are accounted for on actual receipt basis.

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