(5.1) Balance Sheet

In continuation of this office Circular letter No. 1(1)/58-Accounts., dated 10. 1 1.59 regarding the submission of balance sheet with the annual accounts as on 31.3.1959 a number of points have been raised for clarification.  At the outset,  I would like to mention that it is neither the intention to prepare the balance sheet on commercial lines nor to work out any profit or loss.  As ours is a non-commercial organisation a simple balance sheet to indicate only how the Government grants have been spent from time to time and what permanent assets of a concrete & material character have been acquired by this Society will do.  In order, therefore, to facilitate the preparation of the same certain rigid principles of book-keeping have been set aside in consultation with the A.G.C.R. However in respect of commercial undertakings, separate proforma accounts and balance sheets are to be kept on commercial lines, where necessary.  The various points raised by the Accounts Officers are clarified as under: -

1. Whether stores which have been received but payment has not been made are to be shown as assets in the balance sheet?
2. Are accrued income and accrued liability to be taken into account?
3. Whether depreciation is to be allowed on assets?
4. Whether stores on hand at the end of the year and capital assets fabricated out of them are to be depicted in the balance sheet?
5. Are consumable stores in hand not to be depicted in the balance sheet?
6. Whether assets acquired during the year 1958-59 to be taken into account only
7. Whether expenditure incurred from port to Lab., on assets acquired from TCA or C. Plan, are to be shown in the Income and Expenditure accounts or the balance sheet?
   1. Whether petty works constructed for certain experimental buildings are to be taken into balance sheet as assets?
   2. What should be the distinction between consumable and non-consumable stores?
   3. Sundry Creditors or Debtors
   4. Deposits and Advances
   5. Remittances
   6. Articles manufactured in the Laboratories but not yet sold outer proceeds not yet realised:
   7. Cash Balance
   8. UNESCO Coupons
   9. Income & Expenditure statement and Balance Sheet.
   10. It is hoped that all efforts will be made to prepare the balance sheet as laid down in the bye laws of the CSIR and insisted upon by Audit, for information of the Governing Body.  The question of staff raised by certain Laboratories should not stand in the way of completion of this work by the prescribed date and the authorities concerned may be requested to render all possible help required for this purpose.  No additional staff will be provided.
8. A Land & Building Asset Register is being maintained in the Laboratories/Institutes in the prescribed proforma as per the instructions issued by the C.S.I.R. vide No. 17-CSIR(Audit)-Misc./54, dated 3.8.1956 and No. 1(5)/Accts. 69-60, dated 24th July, 1970.
9. In the above context, certain guidelines for keeping the land deeds/contracts have been issued by the CSIR vide No. 2/81/83-CDN, dated 30th December, 1983.
10. The need for keeping/updating the Asset register for Land & Building has been stressed by the Governing Body of CSIR while reviewing the accounts for 1983-84.
11. The lapses pointed out by the Audit in this regard were noted with displeasure by the Governing Body.  The Director-General desires that immediate remedial action may be taken wherever necessary.
12. The Land & Building Asset register prescribed under CPWD Code- 120 has been adopted in CSIR . The figures of the Asset Register in respect of land & building of the Labs. must be reconciled with the figures appearing in the Balance Sheet as on 31.3.1984. This register is an essential document of a permanent nature.
13. Since the progress for updating this document is to be reported early to the Governing Body of the CSIR it is requested that earnest efforts may be made to complete and update the documents by reconciling the figures from Balance Sheet upto March, 1984.
14. Date
15. Serial Number
16. Supplier/Order No. and date
17. Bill No. and date
18. Description
19. Quantity
20. Total Cost
21. Progressive total (of cost)
22. Asset Register Reference (Vol.No.Page No.) 
23. Works & Services/land & Building/Staff Quarters etc.,  Engg./Civil Sec./Works Sec.
24. Apparatus & Equipments, Office equipments, Medals, Exhibits, Stores Section
25. Library Books & Journals, Library
26. Vehicle, Furniture, General Section.
27. A Land & Building Asset Register is being maintained in the Laboratories/Institutes in the prescribed proforma as per the instructions issued by the C.S.I.R. vide No. 17-CSIR(Audit)-Misc./54, dated 3.8.1956 and No. 1(5)/Accts. 69-60, dated 24th July, 1970.
28. In the above context, certain guidelines for keeping the land deeds/contracts have been issued by the CSIR vide No. 2/81/83-CDN, dated 30th December, 1983.
29. The need for keeping/updating the Asset register for Land & Building has been stressed by the Governing Body of CSIR while reviewing the accounts for 1983-84.
30. The lapses pointed out by the Audit in this regard were noted with displeasure by the Governing Body.  The Director-General desires that immediate remedial action may be taken wherever necessary.
31. The Land & Building Asset register prescribed under CPWD Code- 120 has been adopted in CSIR . The figures of the Asset Register in respect of land & building of the Labs. must be reconciled with the figures appearing in the Balance Sheet as on 31.3.1984. This register is an essential document of a permanent nature.
32. Since the progress for updating this document is to be reported early to the Governing Body of the CSIR it is requested that earnest efforts may be made to complete and update the documents by reconciling the figures from Balance Sheet upto March, 1984.
33. Date
34. Serial Number
35. Supplier/Order No. and date
36. Bill No. and date
37. Description
38. Quantity
39. Total Cost
40. Progressive total (of cost)
41. Asset Register Reference (Vol.No.Page No.) 
42. Works & Services/land & Building/Staff Quarters etc.,  Engg./Civil Sec./Works Sec.
43. Apparatus & Equipments, Office equipments, Medals, Exhibits, Stores Section
44. Library Books & Journals, Library
45. Vehicle, Furniture, General Section.
46. The stores purchased are neither entered in the relevant stock registers on receipt nor the details thereof are incorporated in the stock ledgers. It is needless to point out that stores of consumable and non-consumable nature should be separated and entered in separate registers duly classified. It has been noticed that in some cases the component parts or accessories have not been exhibited in store ledgers at all rendering the stores verification impossible as for example the Electric Motors supplied by a firm with the machines have not been shown anywhere in the register though this formed a separate part altogether. The certifying authority may therefore, please ensure that relevant information viz., order No. and date, suppliers name, rate, quantity and value and other relevant particulars of the stores and accessories are fully noted in the stock registers before the bills are certified by him.
47. It may also be ensured that entries regarding the same stores are not spread over various registers but are entered on the same pages where similar stores have been entered.
48. Separate registers for chemicals, glass apparatus machinery, furniture, stationery articles and equipment may be maintained to avoid mixing up of stores with a view to facilitate easy checking of stores and drawing up balances in hand of each kind.
49. Proper records for assembling of -apparatus and disassembling of parts of equipment for research purposes may please be indicated in the relevant stock registers to avoid confusion at the time of verification. No part should be removed from the equipment without proper notice to the store-keeper for effecting consequential changes in the relevant register.
50. The stores purchased against special requisitions from various divisions may not be issued in bulk quantities beyond one month's probable requirements direct to divisions on receipt by the store-keeper. Such requirements should be duly certified by the Head of the Division, in whose favour the stores will be issued to avoid unnecessary accumulations, loss or their misuse by research workers.
51. A separate record of apparatus and other bulk quantities of stores issued to various heads of divisions may be maintained in each division or in central stores. In respect of such articles of stores found to be surplus or not required in the near future they may periodically be returned to central stores for use in other divisions as well as to guard against unnecessary purchases and piling up of stocks.
52. All indents for purchases should be routed though the stores to enable the Store-keeper to verify the quantities available in stock and purchases should be made on the basis of the certificate given by him that stores are not available and may be purchased.
53. All items of apparatus issued to various divisions may invariably be noted on the store register of the division and loss damage or un-serviceability of items reported to the competent authority as soon as discovered and simultaneously transferred to the relevant register (loss or unserviceable).
54. A physical verification of stores should be conducted annually by a Gazetted Officer other than one who happens to be in-charge and the result of verification should be reported to the Director for necessary orders
55. Workshop Accounts
    1. Articles fabricated in the workshop may in the first instance be transferred to stores for stock entry in the relevant register together with the full particulars including the cost thereof and subsequent issue to the indenting division. The cost of the fabricated articles or equipment may please be recorded in the stock register from the job card which should show the full details of stores consumed including the cost thereof and the labour charges etc. incurred on their fabrication - cross references of stock entry of the stores for verification purposes being given.
    2. All entries of receipt of stores and their additions may be carefully checked and attested by the officer concerned in the stock registers to avoid unauthorised additions and alterations therein.
56. As regards the fabrication of apparatus and other miscellaneous works in the workshops, the procedure laid down below may be observed.
    1. The necessary particulars of job to be executed should be detailed in the work order by the indentor and approved by the Head of the Division together with the estimated cost therefore. As far as possible subsequent changes in specifications which renders the original estimate null and void and results in infructuous expenditure may be strictly guarded against. Any change while the work is in progress result in wasteful expenditure both of labour and material and should be avoided.
    2. On receipt of a work Order, job card should be made and registered. A record of all materials and labour used daily for the job and the cost thereof be kept in the job card. The fabricated article should then be made over to stores for supply to the indentor through a proper issue register after entry in the stock register. The job card should also bear the particulars of stock entry for cross references.
    3. All issues of Consumable and non-consumable stores to be made against a job must be noted in the card, number of which may invariably be quoted on the issue slips. Materials for more than one job should not be included on the same issue slip.
    4. Stores intended for making permanent fixtures should be issued against job cards and properly accounted for. Issue of stores to individuals for this purpose may be stopped altogether. The details and quantity of stores issued for a particular job card may invariably be recorded on the reverse of the job card indicating the cost thereof, total man-hours used together with the charges for the same and the total cost of the stores fabricated, for recording the Value of the fabricated articles in the stock register.
57. Indents & Issue of materials
    1. All indents received in the Workshops should be on the job card (sample form enclosed) (Form A). This will serve as cost sheet. The Labour and Material used on the jobs should be entered on this card.
    2. Issue of materials should be entered on Issue Slips (Form B enclosed).
    3. The issue slip should be checked by the Foreman or the Shop-Incharge of respective shops and each issue should be entered on the job and debited on the Stock Ledger. Any excess should be returned back to Stores and credited on the job card and the Ledger.
58. The costing of raw material should be done from a price list revised every financial year showing the average prices of the materials.
59. The return of stores should be marked with red ink/chalk on the job card to differentiate it from other entries.
60. The costing of labour should be done by dividing the whole labour in two categories - Category 1 consisting of Sr. Electricians, Fine Mechanics and Mechanics and Category II consisting of Mistries, Attendants and Apprentices and computing an average wage for each category per hour or per day and using the average figure for costing.
61. The details of costing should be done either on a separate sheet which may be stitched to the job card itself as may be convenient.
62. All items of capital nature should be costed and sent to central stores for being issued to indentors but accessories or components and equipments etc., repair jobs or modifications can be passed on to the Indentors direct and receipt obtained on the job card for record. An additional column in the Job Registration Book will show such deliveries.
63. Fabrication of items costing upto Rs. 501- may not be costed at all, but they should be certified by the Workshop Superintendent to this effect and delivered direct to the indentor, keeping a record in job registration book in an additional column as against item (6) above.
64. The overheads should be calculated as a suitable percentage of direct labour taking into account expenditure on supervision, power, cost of machinery, cost of building, indirect labour etc. including proportionate cost of the drawing office.
65. The computation of the overheads should be worked out on a separate sheet as shown in enclosure 'C'.
66. Average wages should also be worked on a separate sheet as shown in enclosure 'D'.
67. In its efforts to increase the External Cash flow, CSIR is taking up more Projects/Schemes being financed partially or in full by outside Bodies. These money are received in advance which are gradually utilized with the progress of the Projects/Schemes. It has been observed that a huge amount always remain idle with the Bank in the current account of the Laboratories/Institutes which does not earn any interest.
68. With a view to use this huge cash balance profitably and to increase the earning of the CSIR, DG-CSIR has been pleased to authorise the Directors of the National Labs./Instts. to invest money received in connection with Sponsored, Consultancy, Collaborative and Mission Projects/Schemes subject to the following conditions
    1. that the funds will be invested in short-term deposit in the name of CSIR;
    2. that the income from investment will be treated as earning of the Society as income from investment;
    3. that the money should be invested with Nationalised /State Banks or other short-term Government securities; and
    4. that the Directors should ensure that investment of funds is made in such a manner that there is neither any unnecessary accumulation of idle money with the Labs. nor there is paucity of cash at any point of time so as to hamper smooth progress of the projects /schemes/jobs.
69. While making investment. the payment may be debited to Code No.P-834 Sponsored/Consultancy etc. money under G-Deposit & Advances (Investment Account). Similarly on maturity, the capital may be credited to "Code No.304 - Sponsored, Consultancy etc. Money" under G-Deposit & Advance (Investment Account) and the interest credited to "Code No.R-158 - Interest on Account of Investment" under Miscellaneous Receipts of CSIR and intimated separately to CSIR Headqrs. Along with 'Monthly Progressive Expenditure Statement".
70. Earnings on account of interest on the aforesaid investment, would not be used directly by the Laboratories, but the same could be made available as additional allocation by the Headqrs. as and when required.
71. The intention behind the investment scheme circulated vide our letter dated 1. 10. 1990 is not actually for investment of money from any specific sponsored/consultancy project but integrated plan of efficient management of cash flow so as to ensure that adequate cash is available with the labs/Instts for regular expenditure including expenditure under Sponsored/Consultancy Project and any surplus cash which may not be required for immediate use, say during the month or so, should not remain idle in the current account maintained by the Labs./Instts. with Banks. As such it is felt that the investment would not in any way violate the general condition of expenditure as generally stipulated by the sponsors as regarding utilization of sponsored funds.
72. Some of the Labs./Instts. have expressed their apprehensions that in the event of late transfer of funds from Hqrs. the Labs./Instts., may not be left with sufficient c ' ash balance to handle emergent payment. In this connection it may be stated that Hqrs. on its part will take adequate care that money transfer to the Labs. from CSIR is done expeditiously so that the lab. work does not suffer. It will not be wise to block large amounts of money mainly on imaginary fear that some amount may be needed for certain unforeseen eventualities. Such situation could be avoided if the Labs./Instts. takes enough care to plan and manage its cash-flow from various sources.
73. As already stated in para 4 of our circular letter the earnings on account of interest on the aforesaid investment would not be used directly by the Labs./Instts. but the same would be credited to receipts of CSIR. Additional allocation from such receipts would be considered by CSIR from time to time. Quantum of earnings of Labs./Instts. will, how ever be indicated by the lab. to CSIR in the monthly statement of receipts and expenditure and statement of progressive receipts and expenditure.
74. As per para 2(1) of the Circular letter the investment should be made in the name of the CSIR. The term 'CSIR' here means CSIR and its constituent units i.e. CSIR Headquarters and its Laboratories/Institutes.