The Revised Schedule VI To The Companies Act, 1956

1. The Revised Schedule VITo The Companies Act, 1956 CA ANIL MOOKIM D H A N B A D

2. POINT OF DISCUSSION • Pre-revised schedule VI to The Co. Act,1956 • Revised schedule VI to The Co. Act,1956-- main priciples changes in Balance Sheet & Profit & Loss Format of B/S – P/L with itemwise discussion • Question/Answers.

3. WHY REVISED SCHEDULE VI ? • Financial statements of indian corporate comparable with international format. • To facilitate a fair portroyal of the financial and liquidity position of the company to the readers of the F/statements. • Harmonising and synchronising with notified accounting standards • Revise in terms of contents, format and to alignment with AS. • Applicable to all co. financial statements prepared for F.Y commencing on or after 01/04/2011. • Applies to all companies following indian GAAP until required to follow IFRS.

4. preceding period information Immediately preceding period information in financial statement with notes to a/c mandatory. applicable from the 1st year of revised schedule vi. Exemption : in the case of 1st year financial statements after incorporation.

5. DO NOT APPLY TO…. • Insurance companies • Banking companies • Any other class of companies to which separate form of balance sheet and profit and loss account has been specified. • APPLY TO ELECTRICITY CO. As because neither the Electricity Act 2003 nor the rules framed thereunder prescribe any format applicable to Interim financial statement also.

6. MAIN PRINCIPLES • Compliance with the requirements of the act and/or the notified acounting standards will prevail over the schedule • Disclosure on the face of the finacial statements or in the notes are minimum. • Eliminated the concept of “SCHEDULE” and such information is now to be furnished in the notes to Accounts • The term used in the revised schedule vi will carry the same meaning as defined by the applicable accounting standards

7. CONTINUE…. • A balance will have to be maintained between providing excessive detail and not providing important information • All items of assets and liablities are to be bifurcated between current and non current portions. • To use the same unit of measurement uniformally through out the financial statements and notes thereon

8. CHANGES RELATED TO BALANCE SHEET • Prescribes only the vertical format for presentation of financial statements • Assets and liabilities are to be segregated into current and non-current portions • Shareholders holding more than 5 % shares needs to be disclosed • Aggregate number and class of shares allotted for consideration other than cash, bonus shares and shares brought back will need to be disclosed • Any debit balance in the P/L account will be disclosed under the head “Reserve and Surplus” • The application money not exceeding the capital offered for issuance and to the extent not refundable will be shown separately on the face of the balance sheet • Excess amount of subscription will be shown under “other current liabilities”

9. CONTINUE… • Sundry Debtors replaced by the term “Trade Receivables” defined as dues arising from goods sold or services rendered in the normal course of business. • Separate disclosures of the trade receivables outstanding for a period exceeding six months from the date bill is due for payment. Earlier from the date bill was raised. • Capital advances are required to be presented under the head “Loans and Advances” • Tangible assets under lease are required to be separately specified under each class of asset • Capital commitments and other commitments are required to be disclosed. Earlier only capital commitments was required. • Disclosure of all defaults in repayment of loans and interest now mandatory. Earlier no disclosure was required in F/statement except was to be reported under CARO 2003.

10. OTHER ADDITIONAL DISCLOSURES • Rights, preferences and restrictions to each class of shares • Terms of repayment of long term loans • In each class of investment, details regarding names of bodies corporate, indicating bodies are subsidiaries, associates, joint ventures or controlled special purpose entities. • Provision for diminution in the value of investments. • Stock in trade held for trading purposes, separately from other finished goods.

11. CHANGES RELATING TO PROFIT AND LOSS ACCOUNT • The name has been changed to “STATEMENT OF PROFIT AND LOSS” • Statement of profit does not mention any appropriation items on its face • Any items of income or expense which exceeds 1% of the revenue from the operation or Rs 100000, whichever is higher, needs to be disclosed separately (earlier 1% of total revenue or 5000/-) • As per AS-9 Revenue Recognition, dividends should be recognised as income only when the rights to receive dividends is estlablished as on the balance sheet date • Companies other than finance companies, revenue from operations need to be disclosed separately as revenue from sale of products, sale of services, and another operating revenues • Interest cost needs to be disclosed separately as finance cost.

12. Schedule No. changed to Note No. • Rounding off not compulsory . • Option to present figures in lakhs , millions, crores which did not exist earlier.

13. DISCLOSURES NO LONGERREQUIRED • Managerial remuneration and computation of net profits for calculation of commission. • Quantitative information relating to turnover, raw material & purchases • Information relating to licenced/installed capacity and actual production. • Investments purchased and sold during the year. • Investment, s/debtors and loans & advances from co. under the same management. • Max. amt. due on a/c of loans & adv. From directors / officers of the co. • Commission , brokerage and non-trade discounts.

14. JOURNEY OF SCHEDULE VI ENDS THANKS A LOT FOR PATIENT HEARING CA A.K.MOOKIM DHANBAD