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Notes to Accounts of Bharat Immunological & Biologicals Corporation Ltd.

Mar 31, 2015

A. Estimated amount of contract remaining to be executed on capital/revenue account and not provided for (including revenue commitment of letter of credits, but excluding capital commitment relating to various grants) - Rs.3066.20 lacs (PY Rs.3174.49 lacs).and capital commitment on account of Grants Rs. NIL (PY Rs. 6.26).

b. Contingent Liabilities:-

Claim against the company not acknowledged as debts are Rs.742.52 lacs (PY Rs. 720.64 lacs) 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.587.54 lacs including interest (PY. Rs. 573.08 lacs including interest).

ii. Administrative-cum-Housinq Complex:- Case is filed by M/s. Uppal Engineering Co. Pvt. Ltd. against civil work awarded for Administrative-cum-Housing Complex before Arbitrator. Arbitrator decided in favor of appellant. Company has filed an appeal before the competent court against Arbitration award figures have been computed on the basis of award Rs 80.31 lacs including interest (PY. Rs. 74.12 lacs including interest).

iii. 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.40.06 lacs in total (PY Rs. 38.83 lacs in total).

iv. 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 Board of Directors, Current Assets, Loans and Advances shall have the value on realization, in the ordinary course of the business at least equal to the amount at which they are stated in the Balance Sheet.

d. Request for confirmation of balances of Trade Receivables and Trade Payables were sent. Confirmation of balances received from few cases. These confirmations are subject to reconciliation and consequential adjustment which in the opinion of management is not material.

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 gain of Rs. (-129.10) lacs. (P.Y. Rs. 273.03 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.280.66 lacs (PY Rs. 253.97 lacs) & half pay leave is Rs.36.62 lacs (PY Rs. 29.71 lacs).

Leave Travel Concession:

a. Rs.5.54 lacs have been paid as LTC (All India) claimed (Previous Year Rs. 5.42 lacs).

b. Rs.0.50 lacs have been paid as LTC (Home Town) claimed (Previous Year Rs. 0.42 lacs).

Gratuity: Yearly payment is made to LIC to maintain the Gratuity Account of the Employees with Life Insurance Corporation of India. BIBCOL has no Gratuity Trust so the Actuarial Valuation has not been made

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

Dr. M.K Bhan Chairman

Sh.Sreeshan Raghavan Managing Director

Dr. Rajesh Kapur Director

Prof. N.K Ganguly Director

Prof. Dr. B L Jailkhani Director

Dr. Y. K. Gupta Director

Dr. Rakesh Kumar Director

There is no related party transaction during the year.

i. 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 liability in respect of timing difference as on 31st March, 2015 amounting to Rs. 27.601 lacs (Previous year net deferred tax asset Rs. 14.31 lacs). Net deferred tax Expense for the year of Rs. 41.91 lacs (Previous Year Rs. 460.32 lacs) has been charged to Profit & Loss account. The item-wise details of deferred tax liability and assets are as under.

j. Provision for current year's Income Tax as well as Minimum Alternative Tax (MAT) u/s 115 JB of Income Tax Act, 1961 has been made for want of taxable/book profit.

k. The company has initiated the process of identifying the parties and obtaining information with respect to parties, if any, covered under the Micro, Small and Medium Enterprises Development Act, 2006 (or the "Act"). The Company would account for significant interest obligations subsequently, if any. Accordingly required disclosures in this regard have not been given in the current year.

l. 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.

(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:

-(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 upto 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 upto 29.03.2012 Details of Grant are given as under-:

(vi) During the year 2010-11 the Company received capital grant of Rs 337.87 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 upto 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. Upto 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-:

m. Out of amount of Rs. 71.23 lacs shown as Advance Tax/TDS recoverable, the amount of Rs.60.80 lacs pertains to the Income tax refund claimed and pending for the assessment year 2006-07 to 2010-2011. The assessments stand completed up to the assessment year 2012-13.

n. On 20 January, 2014, the company was sanctioned working capital loan of Rs. 70.00 crores and foreign letter of credit limit of Rs.80.00 crores by Canara Bank, Green Park Extn., and New Delhi. The working capital loan has been sanctioned at interest rate of 13.95% p.a. (base rate 10.20% 3.75%) (secured by way of first pari-passu charge on all fixed assets, both present and future (excluding Land & Building and Vehicles), stocks and book debts, whether now lying loose or in cases or which are not lying or stores in or whether in course of transit.

o. 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 further impairment is to be determined.

p. In terms of AS 28, the company is in the process of forming a committee to look into the further impairment of the fixed assets.

q. The company is in process to forming a policy in regard to identifying of slow/non moving/obsolete items. Necessary entries will be made of the time of the identification.

r. The company has adopted RBI Reference Rates of foreign exchange as on 31.03.2015 for the valuation of the imported raw material and packing material as well as gain/ loss on account of exchange rate variation.

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


Mar 31, 2014

A) Estimated amount of contract remaining to be executed on capital/revenue account and not provided for (including revenue commitment of letter of credits, but excluding capital commitment relating to various grants) - Rs.3174.49 lacs (PY Rs.958.58 lacs).and capital commitment on account of Grants Rs. 6.26 lacs (PYRs. NIL)

b) Contingent Liabilities (excluding cases pending before authorities of income tax and sales tax etc):-

Claim against the company not acknowledged as debts are Rs.686.03 lacs (PY Rs. 657.38

lacs) which includes:- i. Land Cases:- Liability for the land compensation cases pending the outcome of appeal before Hon''ble High Court, Allahabad. However, deci sion of District Court, Bulandshahr was against the company and the figures have been computed on the basis of District Court order: Rs.573.08 lacs including interest (PYRs. 558.62 lacs including interest). ii. Administrative-cum-Housinq Complex:- Case is filed by M/s. Uppal Engineering Co. Pvt. Ltd. against civil work awarded for Administrative-cum-Housing Complex before Arbitrator. Arbitrator decided in favor of appellan t. Company has filed an appeal before the competent court against Arbitration award figures have been computed on the basis of award Rs 74.12 lacs including interest (PY. Rs. 67.93 lacs including interest)

iii. Staff Litigations:- Litigation is pending in the cases filed againstthe company by the then staff i.e. Mr. Bhaskar Gupta & (Col.) V. K. Sethi for the subsistence allowance & salary respectively: Rs.38.83 lacs in total (PY Rs. 30.83 lacs in total)

c) In the opinion of the Board of Directors, Current Assets, Loans and Advances shall have valued on realization, in the ordinary course of the business at least equal to the amount at which they are stated in the Balance Sheet.

d) Request for confirmation of balances of Trade Receivables and Trade Payables were sent. Confirmation of balances received from few cases. T hese confirmations are subject to reconciliation and consequential adjustment which in the opinion of management is not material.

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 gain of Rs. 273.03 lacs. (PY Rs. 35.59 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.253.97 lacs (PY Rs. 227.61 lacs) & half pay leave is Rs.29.71 lacs (PY Rs. 23.28 lacs).

Leave Travel Concession:

a. Rs.5.42 lacs have been paid as LTC (All India) claimed (Previous Year Rs. 3.35 lacs).

b. Rs.0.42 lacs have been paid as LTC (Home Town) clai med (Previous Year Rs. 0.30 lacs).

Gratuity: Yearly payment is made to LIC to maintain the Gratuity Account of the Employees with Life Insurance Corporation of India. BIBCOL has no Gratuity Trust so the Actuarial Valuation has not been made

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.KBhan Chairman

2) Sh.Sreeshan Raghavan Managing Director

3) Dr. Rajesh Kapur Director

4) Ms. Anuradha Mitra Director

5) Prof. N.K Ganguly Director

6) Prof. Dr. B L Jailkhani Director

7) Dr.Y. K.Gupta Director

8) Dr. Rakesh Kumar Director

9) Sh. K. Sreenivasulu Director

There is no related party transaction during the year.

i) In compliance to Accounting Standard 20 on "Earning per share", the calculation of Earning 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, 2014 amounting to Rs. 14.31 lacs (Previous year net deferred tax asset Rs. 474.63 lacs). Net deferred tax Expense for the year of Rs. 460.32 lacs (Previous Year Rs. 185.79 lacs) has bee n charged to Profit & Loss account. The item- wise details of deferred tax liability and assets are as under.

I) Provision for current year''s Income Tax as well as Minimum Alternative Tax (MAT) u/s 115 JB of Income Tax Act, 1961 has been made for want of taxable/book profit.

m) The company has initiated the process of identifying the parties and obtaining information with respect to parties, if any, covered under the Micro, Small and Medium Enterprises Development Act, 2006 (or the "Act"). The Company would account for significant interest obligations subsequently, if any. Accordingly required disclosures in this regard have not been given in the current year

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 T D.S. recoverable for 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 infrastucture improvement for manufacture of production of Zinc dispersible tablets has been credited to the grant account as per the terms of the grant. Deta''ls are provided as under:

Above Negative balance of Rs. 0.42 lacs does not include T.D.S. recoverable for 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. Upto 31.03.2014 Expenditure of Rs.0.21 lacs and Rs.30.59 lacs have been incurred over and above the released expenditure of Contingency 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 company is hopeful for getting the extension for excess amount spent on revenue head. The project was scheduled to be completed upto 28.09.2013 the request extension for completion of project shall be made in due course of time. Details of Grant are given as under-:

Above balance of Rs. 4.55 lacs include T.D.S. recovered on interest earned on Grant on receipt of the T.D.S. from the Department.

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. Upto 31.03.2014 Expenditure of Rs.13.684 lacs has been incurred over and above the released expenditure of Human Resource Development, 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 upto 29.03.2012 the request extension for completion of project shall be made in due course of time. Details of Grant are given as under-:

Above balance of Rs.66.18 lacs include T.D.S. recoverdon interest earned on Grant on receipt of the T.D.S. from the Department.

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 forprocess Optimization and Quality Improvement of Oral Polio Vaccine Formulation Facility project is under progress and is yet to be commissioned. Upto 31.03.2014 Expenditure of Rs.1.44 lacs and Rs.9.60 lacs have been incurred over and above the released expenditure of Contingency and Overheads, 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 upto 31st May 2011 the request extension for completion of project shall be made in due course of time.

Above balance of Rs. 355.09 lacs include T.D.S. recovered on interest earned on Grant on receipt of the T.D.S. from the Department.

vi. During the year 2010-11 the Company received capital grant of Rs 337.87 lacs from Govt, of India for setting up of pilot plant for Diarrhea Management Kit. Interest earned on capital grant received forthe 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. Upto 31.03.2014 Expenditure of Rs.80.94 lacs has been incurred over and above the released expenditure of Human Resource Development, 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 upto 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-:

Above balance of Rs. 226.34 lacs include T.D.S. recovered on interest earned on Grant on receipt of the T.D.S. from the Department.

vii. During the year 2012-13 the Company received capitalgrant 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. Upto 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 upto 26.04.2014 the letter of extension has been issued by the department on 07.07.14 for six month. Details of Grant are given as under-:

Above balance of Rs. 38.80 lacs include T.D.S. recovered on interest earned on Grant on receipt of the T.D.S. from the Department.

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. Upto 31.03.2014 Expenditure of Rs.5.10 lacs, Rs.17.12 lacs and Rs.37.19 lacs have been incurred over and above the released expenditure of Accessories, Human Resource Development and Consumables, 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 upto .02.07.2013 therequest extension for completion of project shall be made in due course of time. Details of Grant are given as under-:

Above balance of Rs 77.82.lacs include T.D.S. recovered on interest earned on Grant on receipt of the T.D.S. from the Department.

o) An amount of Rs. 71.49 lacs has been shown as Advance Tax/TDS for the financial years 2005-06 to 2013-14 relevant to assessment years 2006-07 to 2014-2015. The assessments stand completed up to the financial year 2010-11 relevant to assessment year 2011-12. However, a sum of Rs. 71.49 lacs still stand in the books of account for the financial years 2005-06 to 2009-10. In the absence of required information & documents, the effect on Balance Sheet cannot be ascertained.

p) On 20 January, 2014, the company was sanctioned working capital loan of Rs. 70.00 crores and foreign letter of credit limit of Rs.80.00 crores by Canara Bank, Green Park Extn., and New Delhi. The working capital loan has been sanctioned at interest rate of 13.95% p.a. (base rate 10.20% 3.75%) (secured by way of first pari-passu charge on all fixed assets, both present and future (excluding land & Building and Vehicles), stocks and book debts, whether now lying loose or in cases or which are not lying or stores in or whether in course of transit.

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 further impairment is to be determined.

r) In terms of AS 28, the company is in the process of forming a committee to look into the further impairment of the fixed assets.

s) The company is in process to forming a policy in regard to identifying of slow/non moving/obsolete items. Necessary entries will be made of the time of the identification.

t) The company has adopted RBI Reference Rates of breign exchange as on 31.03.2014 for the valuation of the imported raw material and packing material as well as gain/ loss on account of exchange rate variation.

u) Company had made the provision towards the Liquidated damages of Rs.1,01,81,411/- and Rs. 1,49,13,471/- (Total Rs.2,50,94,882/-) in the financial year 2007-2008 and 2012-2013, respectively. These liquidated damages were provisioned as bad & doubtful debts and liquidated damages in the year of provisioning for amounts receivable against sales to Ministry of Health & Family Welfare, Govt, of India.

Ministry of Health & Family Welfare is not making the payment of liquidated damages despite best efforts. The company has decided to write off the bad debts of Rs. 358.42 lacs (including provision made towards LD) in the books and claimed as allowable expenditure for the purpose of income tax.

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

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF BHARAT IMMUNOLOGICALS AND BIOLOGICLAS CORPORATION LIMITED FOR THE YEAR ENDED 31 ST MARCH 2014.

The preparation of financial statements of Bharat Immunologicals and Biologicals Corporation Limited for the year ended 31st March 2014 in accordance with the financial reporting frame work prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory Auditors appointed by the Comptroller and Auditor General of India under section 619(2) of the Companies Act, 1956 are responsible for expressing opinion on these financial statements under section 227 of the Companies Act, 1956 based on the independent audit in accordance with the Standards on Auditing prescribed by their professional body the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated 27.10.2014.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 619(3)(b) of the Companies Act, 1956 of the financial statements of Bharat Immunologicals and Biologicals Corporation Limited for the year ended 31 March 2014. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examiniation of some of the accounting records.

Based on my supplementary audit, nothing significanthas come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditor''s report under Section 619(4) of the Companies Act, 1956.


Mar 31, 2013

A) Estimated amount of contract remaining to be executed on capital/revenue account and not provided for (excluding capital commitment relating to various grants) - 958.58 (PY Nil).

b) Contingent Liabilities (excluding cases pending before authorities of income tax and sales tax etc):- Claim against the company not acknowledged as debts are Rs.675.38 lacs (PY Rs. 780.20 lacs) 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.558.62 lacs including interest (PY. Rs. 544.16 lacs including interest).

ii. Administrative-cum-Housing Complex:- Case is filed by M/s. Uppal Engineering Co. Pvt. Ltd. against civil work awarded for Administrative-cum-Housing Complex before Arbitrator. Arbitrator decided in favor of appellant. Company has filed an appeal before the competent court against Arbitration award figures have been computed on the basis of award Rs 67.93 lacs including interest (PY. Rs. 61.74 lacs including interest)

iii. Staff Litigations:- Litigation is pending in the cases filed againstthe company by the then staff i.e. Mr. Bhaskar Gupta & (Col.) V. K. Sethi for the subsistence allowance & salary respectively: Rs.30.83 lacs in total (PY Rs. 9.87 lacs in total)

c) In the opinion of the Board of Directors, Current Assets, Loans and Advances shall have valued on realization, in the ordinary course of the businessat least equal to the amount at which they are sta ted in the Balance Sheet.

d) Request for confirmation of balances of Trade Receivables and Trade Payables were sent. Confirmation of balances received from few cases. These confirmations are subject to reconciliation and consequential adjustment which in the opinion of management is not material.

e) In previous financial year 2011-12 accounting policy IV (a) reads as "lower of cost or net realizable value by applying FIFO method i.e. the net realizable value or other similar valuation, dominated in foreign currency and exchange fluctuation be considered as per the value of foreign currency on the balance sheet date, against which the payment liability is outstanding which is changed in this year to read Raw Material and other supplies used in production are valued at Lower of cost or net realizable value by applying FIFO method, this change in the accounting policy has affected an increase in the value of closing stock by Rs. 8.24 lakh and consequently the profit has increased in the statement of profit & loss by the same amount i.e. Rs. 8.24 lakh P. Y. (36.08 lakh).

f) 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 gain of Rs. 35.59 lacs. (PY Rs.46.41 lacs)

g) 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.227.61 lacs (PY Rs. 177.23 lacs) & Half pay leave is Rs.23.28 lacs (PY Rs. 18.21 lacs). Leave Travel Concession:

a. Rs.3.35 lacs has been paid as LTC (All India) claimed (Previous Year Rs. 0.55 lacs).

b. Rs.0.30 lacs has been paid as LTC (Home Town) cl aimed (Previous Year Rs. 0.26 lacs).

Gratuity: Yearly payment is made to LIC to maintain the Gratuity Account of the Employees with

Life Insurance Corporation of India. BIBCOL has no Gratuity Trust so the Actuarial Valuation has not been made

h) 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.

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, 2013 amounting to Rs. 474.63 lacs (Previous year Rs. 660.42 lacs). Net deferred tax expenses for the year of Rs. 185.79 lacs (Previous Year deferred tax income Rs. 660.42 lacs) has been charged to Profit & Loss account. The item-wise details of deferred tax liability and assets are as under.

k) Provision for current year''s Income Tax as well as Minimum Alternative Tax (MAT) u/s 115 JB of Inc ome Tax Act, 1961 has been made for want of taxable/book profit.

l) The company has initiated the process of identifying the parties and obtaining information with respect to parties, if any, covered under the Micro, Small and Medium Enterprises Development Act, 2006 (or the "Act"). The Company would account for significant interest obligations subsequently, if any. Accordin gly required disclosures in this regard have not been given in the current year

m) 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.

Above balance of Rs. 18.67 lacs does not include T.D.S. recoverable for 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 ablets 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 T.D.S. recoverable for Rs. 0.71 lacs on interest earned on Grant. The same shall be included as and when it is received from Income Tax Department.

iii. Company has received capital grant of Rs. 58.72 lacs (FY. 2010-11) and Rs.43.00 lacs (FY 2011-12) from Govt. of India for setting up of R&Dfacilities for trial production of Iron Folic Acid Dispersible tablets. Interest earned on capital gant received for the Iron Folic Acid project has been credited to the grant account as per the termsof the grant. Iron Folic Acid project is under progress and is yet to be commissioned. Details of Grant are given as under-:

iv. Company has received capital grant from Govt. of India for setting up of R&D facilities for formulation development of Micronutrient - Vitamin mix tablets amounting to Rs.97.21 lacs (F.Y. 2010-11) and Rs. 40.63 lacs (2011-12). 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. Details of Grant are given as under-:

v. Company has received capital/revenue grant of Rs. 476.35 lacs (F.Y. 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.

i. During the year 2010-11 the Company has received capital grant of Rs 337.87 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. Details of Grant are given as under-:

Above balance of Rs. 212.38 lacs does not include T.D.S. recoverable for Rs. 2.38 lacs on interest earned on Grant. The same shall be included as and when it is received from Income Tax Department.

vii. During the year 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. Details of Grant are given as under-:

Above balance of Rs 113.49.lacs does not include T.D.S. recoverable for Rs. 0.82 lacs on interest earned on Grant. The same shall be included as and when it is received from Income Tax Department.

viii. During the year the Company has received capital grant of Rs. 132.30 lacs (PY Rs.NIL 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. Details of Grant are given as under-:

Above balance of Rs. 95.18 lacs does not include TD.S. recoverable for Rs 0.66 lacs on interest earned on Grant. The same shall be included as and when it is received from Income Tax Department.

n) An amount of Rs. 93.67 lacs has been shown as Advance Tax/TDS for the financial years 2005-06 to 2012-13 relevant to assessment years 2006-07 to 2013-2014. Out of which Rs. 9.29 lacs and 7.16 lacs relating to assessment year 2012-13 and 2013-13 respectively. The assessments stand completed up to the financial year 2010-11 relevant to assessment year 2011-12. However, a sum of Rs. 77.21 lacs still stand in the books of account for the financial years 2005-06 to 2011-12. In the absence of required information & documents, the effect on Balance Sheet cannot be ascertained.

o) On 22 January, 2013, the company was sanctioned working capital loan of Rs. 48.00 crores and foreign letter of credit limit of Rs.51.00 crores by Canara Bank, Green Park Extn., New Delhi. The working capital loan has been sanctioned at interest rate of 14.00% p.a. (base rate 10.25% 3.75%) (secured by way of first pari-passu charge on all fixed assets, both present and future (excluding Vehicles), stocks and book debts, whether now lying loose or in cases or which are not lying or stores in or whether in course of transit.

p) Diminution in the value of below detailed assets has been provided:-

a. Administrative-cum-Housing complex: - 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, there is no significant variation in value as on 31.03.2013.

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


Mar 31, 2010

1. Estimated amount of contract remaining to be executed on capital account and not provided for-Nil (PY Nil).

2. Contingent Liabilities:-

Claim against the company riot acknowledged as debts are Rs.552.48 lacs (PY Rs.518.75 lacs) which includes:-

a. Land Cases:- Liability for the land compensation cases pending the outcome of appeal before honble 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.493.26 lacs including interest (PY.474.88 lacs including interest)

b. Administrative-cum-Housing Complex:- Case is filed by, M/s. Uppal Engineering Co. Pvt. Ltd. against civil work awarded for Administrative-cum-Housing Complex before Arbitrator. Arbitrator decided in favor of appellant. Company has filed an appeal before the competent court against Arbitration award figures have been computed on the basis of award: Rs.49.35 lacs including interest (PY.43.16 lacs including interest)

c. Staff Litigations:- Litigation is pending in the cases filled against the company by the then staff i.e. Mr. Bhaskar Gupta & (Col.) V. K. Sethi for the subsistence allowance & salary respectively: Rs.9.87 lacs in total (PY 0.71 lacs in total)

d. Arrears on account of implementation of 6th Pay Commission: The applicability Of Sixth pay commission have been partially implemented with effect from 01.01.2006 by the board in its 110th meeting held on 08.04.2009. In the said meeting it has been unanimously resolved that the amount of arrear for the period from 01/01/2006 to 31.03.2009 is payable only when the company start earning profit which at present is a loss making concern. Arrears for the period 01.01.2006 to 31.03.2009: Rs, 190.77 lacs (PY Nil).

3. To make the compliance of resolution passed by Board of Directors meeting held on 08.04.2009 and read with Note 2(d) above the provision for Rs. 127.56 lacs, for salary arrears in the financial year 2008-09 is reversed.

4. In the opinion of the Board of Directors, Current Assets, Loans, and Advances shall have valued on realization, in the ordinary course of the business at least equal to the amount at which they are stated in the Balance Sheet.

5. Loans and Advances includes Rs.l6,287/-(Previous year Rs. 18,536/-) due from present & past Directors of the. Company. Maximum amount due during the year Rs.1,18,925/- (Previous yearRs.2,17,735/-).

6. The remuneration paid/provided to the Managing Director is as under:-

Note: 1. Licensed/Installed Capacity for indigenous production of OPV is 100 million doses. 2. Installed capacity for blending and filling operation is 600 million doses.

7. Balances in respect of loan and advances, debtors and creditors are subject to confirmation and consequential effect of which is not ascertainable at this stage.

8. No Provision for current years Income Tax as well as Minimum Alternative Tax (MAT) u/s 115 JB of Ineome Tax Actr 1961 has been made for want of taxable/ book profit.

9. No disclosure in accordance with AS-17 (Segment Reporting) issued by ICAI and clause 41 of listing agreement is made.

10. There is no related party in term of AS-18 (Related Party Disclosure) however Mr. S. Snbbiah, MD is the key management personnel and his remuneration particulars are given under Note No.6. -

11. No assets discarded during the year.

12. The company has initiated the process of identifying the parties and obtaining information with respect to parties, if any, covered under the Micro, Small and Medium Enterprises Development Act, 2006 (or the "Act"). The Company would account for significant interest obligations subsequently, if any. Accordingly required disclosures in this regard have not been given in the current year.

13. 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. 1,36,36,051 (PY Rs.99,58,658 ) & Half pay leave is Rs 13,48,621 (PY Rs.8,55,697/-).

14. Leave travel concession:

a. During the year neither LTC has been claimed nor provided for the block period 2010-2013. For the block period 2006-2009 amount of Rs.52,914/- has been paid as claimed (Previous Year Rs.24,808/-).

b. Rs.19850/- has been paid as LTC (Home Town) claimed (Previous Year Rs.21,228/-).

15. Gratuity: Yearly payment is made to LIC to maintain the Gratuity Account of the Employees with Life Insurance Corporation of India. BIBCOL has no Gratuity Trust so the Actuarial Valuation has not been made.

16. a) The Company has received capital grant of Rs.74.86 lacs (PY Rs.311.00 lacs) from Govt, of India for setting up of manufacturing facilities for production of Zinc dispersible tablets. Interest earned on capital grant received for the Zinc Project and the sale proceeds of Zinc tablet produced during the trial run have been credited to the grant account as per the terms of the grant. Zinc project is under progress and is yet to be commissioned. Details of Grant are given as under-:

17. As the company has preferred appeals against Income Tax Assessment Orders for the Assessment years 2004-05 and 2005-06, demands raised and deposited with Income Tax Department have been considered as recoverable and not charged to Profit & Loss account as the Company is confident to get success in appeals.

18. During the year Capital Work - in Progress has been reduced by Rs. 43,40,735/- to rectify previous years overstated Work -in - Progress and concerned vendors account.

19. Earning per share (EPS) -The numerators and denominators used to calculate Basic and Diluted EPS are as under:

20 Deferred Tax:

In accordance with AS-22 issued by the ICAI, the carrying amount of Deferred Tax (Net) have been reviewed and it is considered that amount of Rs.5,22,11,867/- which have been created up to the last previous year be reversed and no Deferred Tax (Net) be provided during the current year because of uncertainty of sufficient future taxable income.

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

a. Administrative-cum-Housing complex: - The Administrative-cum-housing complex has been shown under the head Capital Work In Progress. The work 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, there is no significant variation in value as on 31.03.2010.

b. D.G.Set: - Power generating set of 1000 KVA (Diesel) has not been capitalized, pending installation due to non-supply of alternator as such it is not in the working condition. It is appearing under the Capital Work in Progress. The value has been taken & considered as per acquisition cost.

22 Previous years figures have been re-named/re-classified/regrouped /re-arranged wherever considered necessary to make them comparable.


Mar 31, 2009

1. Contingent Liabilities not provided for- Current Year Previous Year (Rs. In lacs) (Rs. In lacs) 2008-09 2007-08

(i) Claims against the company not acknowledged as debt

(a) Land cases

Liability for the land compensation cases pending 90.93 the outcome of appeal before honble High Court, (Principal) (Principal) Allahabad. However, decision of District Court, 383.95 365.58

Bulandshahr was against the company and the (Interest) (Interest) figures have been computed on the basis of District Court order.

(b) Housing Complex case Filed by M/s. Uppal Engineering Co. Pvt. Ltd. 163.32 163.32 against civil work awarded for Administrative- Plus interest Plus interest cum-Housing Complex before Arbitrator. Arbitrator decided in favour of appellant. Company has filed an appeal before the competent court against Arbitration award.

(c) Demand of Sales Tax 2.17 2.17 For financial year 2000-01. Matter pending in appeal before Tribunal, Commercial Tax, Ghaziabad, U.P.

(ii) Capital Commitments-: NIL NIL

Estimated amount of contracts (net of advances) to be executed on capital account and not provided for.

2.In the opinion of the Board of Directors, Current Assets, Loans and Advances shall have a value on realization, in the ordinary course of the business at least equal to the amount at which they are stated in the Balance Sheet.

3. Loans and Advances includes Rs.l8,536/-(Previous year Rs. 16,190/-) due from present & past Directors of the Company. Maximum amount due during the year Rs.2,17,735/- (Previous year Rs.6,45,890/-).

4. Balances in respect of loan and advances, debtors and creditors are subject to confirmation.

5. No Provision for current Income Tax as well as Minimum Alternative Tax (MAT) u/s 115 JB of Income Tax Act, 1961 has been made for want of taxable profits.

6. No disclosure in accordance with AS17 issued by ICAI and clause 41 of listing agreement is made as company being a single product and single unit company.

7. There is no related party in terms of AS 18 issued by ICAI. However, Sh. S. Subbiah, M.D., is the key management personnel and his remuneration particulars are given under Note No. 4(b).

8. Discarded assets have been eliminated from the books of accounts in compliance of AS 10 issued by the ICAI.

9. The company has initiated the process of identifying the parties and is in the process of obtaining information with respect to parties covered, if any, under the Micro, Small and Medium Enterprises Development Act, 2006 (or the "Act"). The Company would account for significant interest obligations in this regard, if any, subsequently. Accordingly required disclosures in this regard have not been given, in the current year.

10. During the year additional provision on account of leave encashment has been made for an amount of Rs.10 lakhs on ad-hoc basis. No additional provision has been made for half pay leave during the year.

Leave travel concession:

All India (LTC) is being encashed during the block 2006 to 2009 and was paid in the respective Financial year. In the year 2008-2009 Rs 24,808/- has been paid.

LTC (Home Town) is being paid as per actual entitlement subject to amount claimed. In the year 2008-2009 the amount claimed is Rs 21,228/- which have been paid.

Gratuity:

Yearly payment is made to LIC to maintain the Gratuity Account of the Employees. B1BCOL has no Gratuity Trust so the Actuarial Valuation has not been made.

11. a) The Company has received capital grant of Rs. 311.00 lacs from Govt, of India for setting up of manufacturing facilities for production of Zinc dispersiblc tablets. Interest earned on capital grant received for the Zinc Project and the sale proceeds of Zinc tablet produced during the trial run have been credited to the grant account as per the terms of the grant. Zinc project is under progress and is yet to be commissioned. Details of Grant are given as under-:

Amount received 3,11,00,000

Add: Interest 25,61,233

Add: Sale (Zinc Tablets) 2,56,036

Less: Utilization 2,98,09,305

Balance as on 31.03.09 41,07,964

An expenditure of Rs. 24,59,161/- has been incurred on technology transfer fee over and above allocated sanctioned grant of Rs. 1,15,00,000/- (out of composite grant of Rs.3,11,00,000), the same has not been accounted for as expenditure of the company as it is envisaged that company may get reimbursement from Deptt. of Biotechnology.

b) The Company had received revenue grant of Rs.4,50,000 from Department of Science and Technology (Govt of India) for Papaya Ring Spot Virus (PRSV) project. Expenditure of Rs 3,96,823/- had been incurred against the grant up to 31.03.2009. Balance unutilized amount of grant, Rs 53,177/- has been shown under current liabilities.

14. As the company has preferred appeal against Assessment Orders for the Assessment year 2004-05 and 2005-06, demands raised and deposited with Income Tax Department have been considered as recoverable and not charged to Profit & Loss account as expenditure as the Company is confident to succeed in appeal. Accordingly brought forwarded losses have been considered as deferred tax assets as depicted under note No. 16.

17. Diminution/impairment in the value of below detailed assets has been provided:-

1. Housing complex: - The complex has been shown under the head Capital Work In Progress. The work 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 as there is no significant variation in value as on 31.03.2009.

2. DO.Set: - Diesel generating set of 1000 KVA remained unutilized in want of alternator and installation. The item is appearing under the head Capital Work in Progress. The valuation has been done internally and accounted for accordingly.

18. Previous years figures have been re-named/re-classified/ regrouped/re-arranged wherever considered necessary to make them comparable.

 
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