1 / 45

Disclosure Requirements for Revised Schedule VI

DMKH & CO. Disclosure Requirements for Revised Schedule VI. MALAD GOREGAON CPE STUDY CIRCLE. CA. Durgesh Kabra DMKH & Co., Chartered Accountants Mumbai . DMKH & CO. Contents. Introduction Object Methodology adopted in determining the Financial Statement. General instructions

orli
Download Presentation

Disclosure Requirements for Revised Schedule VI

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. DMKH & CO. Disclosure Requirements for Revised Schedule VI MALAD GOREGAON CPE STUDY CIRCLE CA. Durgesh Kabra DMKH & Co., Chartered Accountants Mumbai Revised Schedule VI

  2. DMKH & CO. Contents • Introduction • Object • Methodology adopted in determining the Financial Statement. • General instructions • Performa of Balance Sheet • General instructions for preparation of balance sheet • Performa of Statement of Profit & loss • General instructions for preparation of statement of profit & loss. • Comparison between Old & Revised Schedule VI Revised Schedule VI

  3. DMKH & CO. Introduction • Schedule VI of the Companies Act, 1956, prescribes the format of financial statements and disclosure requirements for corporate entities in India. • Considering the economic and regulatory changes that have taken place globally, and being as old as the Act itself (1956), schedule VI had completely outlived its utility. • As per notification dated 28th March, 2011 by Ministry of Corporate Affairs the revised Schedule VI is applicable to balance sheet & profit & loss account to be prepared for the financial year commencing on or from 01st April 2011. Revised Schedule VI

  4. DMKH & CO. Object • One of the Main aim of revising schedule VI was to attain compatibility and convergence with IFRS in India. …why? • In may 2008, MCA issued a press release in which it has committed to convergence with IFRS by April 1, 2011 • At the G20 summit on financial Market and World Economy, then Finance Minister also committed to have convergence with IFRS in India • Other main object of revising schedule VI was to eliminate numerous statistical and disclosure requirements which are not relevant from an investor perspective. Revised Schedule VI

  5. General instructions DMKH & CO. Compliance with the Act and/or Accounting Standards: Requirements of the Act and/or Standards will override the related requirement of Schedule VI. Disclosures are required by the Companies Act shall be made in the notes to accounts Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of Financial Statements. Revised Schedule VI

  6. General instructions DMKH & CO. • Notes to the accounts shall contain information in addition to that presented in the Financial Statement and shall provide where required (a) narrative descriptions or disaggregations of the items recognized in those statements and (b) information about items that do not qualify for recognition in those statements. Revised Schedule VI

  7. General instructions DMKH & CO. • Each item on the face of the Balance sheet and statement of the profit and loss shall be cross- referenced to any related information in the notes to the accounts • Figures of previous period: • The corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given. • Confusion between comparative figures and corresponding figures Revised Schedule VI

  8. General instructions DMKH & CO. • Presentation of figures: • Where Turnover: • < Rs. 100 crores = Figures to be in nearest hundreds, thousands, lakhs or millions or decimals thereof. • > Rs. 100 crores = Figures to be in nearest lakhs or millions or decimals thereof. • Once a unit of measurement is used, it should be used uniformly in the Financial Statements Revised Schedule VI

  9. DMKH & CO. Part I – Format of Balance Sheet Name of the Company……………………. Balance Sheet as at……………………… (Rupees in…………) Particulars Note No. Figures as at the Figures as at the end of the end of the current reporting previous reporting period period I. EQUITY AND LIABILITIES (1) Shareholders’ funds (a) Share capital (b) Reserves and surplus (c) Money received against share warrants (2)Share application money pending allotment (3)Non-current liabilities (a) Long-term borrowings Revised Schedule VI

  10. DMKH & CO. Part I – Format of Balance Sheet (b) Deferred tax liabilities (Net) (c) Other Long term liabilities (d) Long-term provisions (4)Current liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions TOTAL II. ASSETS Non-current assets (1) (a) Fixed assets (i)Tangible assets (ii)Intangible assets (iii)Capital work-in-progress (iv)Intangible assets under development Revised Schedule VI

  11. DMKH & CO. Part I – Format of Balance Sheet (b) Non-current investments (c) Deferred tax assets (net) (d) Long-term loans and advances (e) Other non-current assets (2) Current assets (a) Current investments (b) Inventories (c) Trade receivables (d) Cash and cash equivalents (e) Short-term loans and advances (f) Other current assets TOTAL See accompanying notes to the financial statements Revised Schedule VI

  12. DMKH & CO. General Instructions for Balance Sheet • An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Where the normal operating cycle cannot be identified, it is assumed to have a duration of 12 months. • A liability shall be classified as current when it satisfies any of the criteria SPECIFIED FOR ASSETS & all other liabilities shall be classified as non-current. Revised Schedule VI

  13. DMKH & CO. General Instructions for Balance Sheet • A receivable shall be classified as a ‘trade receivable’ if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. • A payable shall be classified as a ‘trade payable’ if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. Revised Schedule VI

  14. General Instructions for Balance Sheet • New Line Items - Liabilities: • Money received against Share Warrants • Trade Payables • Share Application Money pending allotment • Separate headings for classifying Non current and Current Liabilities. • New Line Items - Assets: • Intangible Assets under development • Trade Receivables • Separate headings for classifying Non • current and Current Assets. • Cash and cash equivalents. Revised Schedule VI

  15. DMKH & CO. Share Capital • Shares in respect of each class in the company held by a) its holding company b) its ultimate holding company including shares held by or by subsidiaries c) associates of the holding company or the ultimate holding company in aggregate; • The Rights, Preference & Restrictions attaching to each Class of Shares • Shares in the company held by each shareholder holding more than 5 • percent shares specifying the number of shares held; Revised Schedule VI

  16. DMKH & CO. Reserves and Surplus • Surplus i.e. balance in Statement of Profit & Loss disclosing allocations and appropriations such as dividend, bonus shares and transfer to/from reserves etc. (Additions and deductions since last balance sheet to be shown under each of the specified heads) • A reserve specifically represented by earmarked investments shall be termed as a ‘fund’. • Debit balance of statement of profit and loss shall be shown as a negative figure under the head ‘Surplus’. Similarly, the balance of ‘Reserves and Surplus’, after adjusting negative balance of surplus, if any, shall be shown under the head ‘Reserves and Surplus’ even if the resulting figure is in the negative. Revised Schedule VI

  17. DMKH & CO. Long-Term & Short Term Borrowings • Loans and advances from related parties. • Period and amount of continuing default as on the balance sheet • date in repayment of loans and interest, shall be specified separately • in each case. Revised Schedule VI

  18. DMKH & CO. Long Term & Short Term Provisions The amounts shall be classified as: • Provision for employee benefits. • Others (specify nature). Revised Schedule VI

  19. DMKH & CO. Other current liabilities The amounts shall be classified as: (a) Current maturities of long-term debt; (b) Current maturities of finance lease obligations; (c) Interest accrued but not due on borrowings; (d) Interest accrued and due on borrowings; (e) Income received in advance; (f) Unpaid dividends (g) Application money received for allotment of securities and due for refund and interest accrued thereon. (h) Unpaid matured deposits and interest accrued thereon (i) Unpaid matured debentures and interest accrued thereon (j) Other payables (specify nature); Revised Schedule VI

  20. DMKH & CO. Tangible & Intangible Assets • Movement between opening & closing balances to be given • Details of reduction – by way of reduction of capital, revaluation etc. to be given by way of a note • Assets under lease shall be separately specified under each class of asset. Revised Schedule VI

  21. DMKH & CO. Non-current investments • Non-current investments shall be classified as trade investments and other investments and it includes Investment property; • Under each classification, details of names of the bodies corporate (indicating separately whether such bodies are • subsidiaries, • associates, • joint ventures, or • controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate. Revised Schedule VI

  22. DMKH & CO. Non-current investments • Investments carried at other than at cost should be separately stated specifying the basis for valuation thereof. • The following shall also be disclosed: (a) Aggregate amount of quoted investments and market value thereof; (b) Aggregate amount of unquoted investments; (c) Aggregate provision for diminution in value of investments Revised Schedule VI

  23. DMKH & CO. Long-term loans and advances (i) Long-term loans and advances shall be classified as: (a) Capital Advances; (b) Security Deposits; (c) Loans and advances to related parties (giving details thereof); (d) Other loans and advances (specify nature). (ii) The above shall also be separately sub-classified as: (a) Secured, considered good; (b) Unsecured, considered good; (c) Doubtful. (iii) Allowance for bad and doubtful loans and advances shall be disclosed under the relevant heads separately. Revised Schedule VI

  24. DMKH & CO. Inventories (i) Inventories shall be classified as: (a) Raw materials; (b) Work-in-progress; (c) Finished goods; (d) Stock-in-trade (in respect of goods acquired for trading); (e) Stores and spares; (f) Loose tools; (g) Others (specify nature). (ii) Goods-in-transit shall be disclosed under the relevant sub-head of inventories. (iii) Mode of valuation shall be stated. Revised Schedule VI

  25. DMKH & CO. Trade Receivables (i) Aggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment should be separately stated. (ii) Trade receivables shall be sub-classified as: (a)Secured, considered good; (b)Unsecured considered good; (c)Doubtful. (iii) Allowance for bad and doubtful debts shall be disclosed under the relevant heads separately. Revised Schedule VI

  26. DMKH & CO. Cash and cash equivalents (i) Cash and cash equivalents shall be classified as: (a) Balances with banks; (b) Cheques, drafts on hand; (c) Cash on hand; (d) Others (specify nature). (ii) Earmarked balances with banks (for example, for unpaid dividend) shall be separately stated. (iii) Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments shall be disclosed separately. (iv) Bank deposits with more than 12 months maturity shall be disclosed separately. (from the date of deposit or as on March 31st 2011) Revised Schedule VI

  27. DMKH & CO. Contingent liabilities & commitments & Others • The amount of dividends proposed to be distributed to equity and preference shareholdersfor the period and the related amount per share shall be disclosed separately. Arrears of fixedcumulative dividends on preference shares shall also be disclosed separately. • Where in respect of an issue of securities made for a specific purpose, • the whole or part of the amount has not been used for the specific purpose • at the balance sheet date, there shall be indicated by way of note how such • unutilized amounts have been used or invested. Revised Schedule VI

  28. DMKH & CO. Contingent liabilities & commitments & Others • If, in the opinion of the Board, any of the assets other than fixed • assets and non- current investments do not have a value on • realization in the ordinary course of business at least equal to • the amount at which they are stated, the fact that the Board is of that • opinion, shall be stated. Revised Schedule VI

  29. DMKH & CO. PART II – Format of Statement of Profit & loss Name of the Company……………………. Profit and loss statement for the year ended ……………………… (Rupees in…………) Particulars Note No. Figures for the Figures for the current reporting current reporting period period I. Revenue from operations II. Other income III. Total Revenue (I + II) IV. Expenses: Cost of materials consumed Purchases of Stock-in-Trade Changes in inventories of finished goods Work-in-progress and Stock-in-Trade Revised Schedule VI

  30. DMKH & CO. PART II – Format of Statement of Profit & loss Employee benefits expense Finance costs Depreciation and amortization expense Other expenses Total expenses V. Profit before exceptional and extraordinary items tems and tax (III-IV) VI. Exceptional items VII. Profit before extraordinary items and tax (V - VI) VIII. Extraordinary Items IX. Profit before tax (VII- VIII) X. Tax expense: (1) Current tax (2) Deferred tax Revised Schedule VI

  31. DMKH & CO. PART II – Format of Statement of Profit & loss XI Profit (Loss) for the period from continuing operations (VII-VIII) XII Profit/(loss) from discontinuing operations XII ITax expense of discontinuing operations XIV Profit/(loss) from Discontinuing operations (after tax) (XII-XIII) XV Profit (Loss) for the period (XI + XIV) XVI Earnings per equity share: (1) Basic (2) Diluted See accompanying notes to the financial statements Revised Schedule VI

  32. DMKH & CO. General Instructions for Preparation P&L • Now known as ‘Profit and Loss Statement for the year ended ________’. • Format specified in new Schedule. • Exceptional and extraordinary items need to be disclosed separately on the face of the Statement of Profit and Loss. The details of the same as also of any prior period items should be disclosed in the notes. • Profit / loss before and after tax from discontinuing operations and the tax expense from discontinuing operations need to be disclosed separately on the face of the Statement of Profit and Loss. Revised Schedule VI

  33. DMKH & CO. General Instructions for Preparation P&L • Any item of income or expenditure which exceeds one percent of the revenue from operations or Rs. 1,00,000 whichever is higher should be disclosed separately. • Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements. • The items to be disclosed under Revenue from Operations have been specifically indicated for both finance companies and others. • Note:- Broad heads shall be decided taking into account the concept of materiality and presentation of true and fair view of financial statements,”. Revised Schedule VI

  34. DMKH & CO. Comparison between Old & Revised Schedule VI Revised Schedule VI

  35. DMKH & CO. Comparison… (ii) Revised Schedule VI

  36. DMKH & CO. Comparison… (iii) Revised Schedule VI

  37. DMKH & CO. Comparison… (iv) Revised Schedule VI

  38. DMKH & CO. Comparison… (v) Revised Schedule VI

  39. DMKH & CO. Comparison… (vi) Revised Schedule VI

  40. DMKH & CO. Comparison… (vii) Revised Schedule VI

  41. DMKH & CO. Comparison… (viii) Revised Schedule VI

  42. DMKH & CO. Comparison… (ix) Revised Schedule VI

  43. DMKH & CO. Comparison… (x) Revised Schedule VI

  44. DMKH & CO. Comparison… (xi) Revised Schedule VI

  45. DMKH & CO. THANK YOU Revised Schedule VI

More Related