SALIENT FEATURES OF THE GN ON REVISED SCHEDULE VI ISSUED BY ICAI The ICAI had earlier issued Statement on the Amendment

t to Schedule VI to the Companies Act, 1956 in March 1976 (as amended) !hene"er #uidance pro"ided in this pu$lication is di%%erent %orm the #uidance in the a%oresaid statement, this &uidance 'ote (ill pre"ail The correspondin# amounts %or the immediatel) precedin# period are to $e disclosed in the %inancial statements includin# the 'otes to Accounts The *ro%it + loss account should $e named as ,Statement o% *ro%it and -oss. In respect o% companies other than %inance companies, re"enue %rom operations need to $e disclosed separatel) as re"enue %rom a) Sale o% products $) Sale o% ser"ices c) /ther operatin# re"enues Cash is de%ined as cash in hand and demand deposits (ith $an0s Cash e1ui"alents are de%ined as short term, hi#hl) li1uid in"estments that are readil) con"erti$le into 0no(n amounts o% cash and (hich are su$2ect to an insi#ni%icant ris0 o% chan#es in "alue The standard %urther e3plains that an in"estment normall) 1uali%ies as a cash e1ui"alent onl) (hen it has a short maturit) o% three months or less %rom the date o% ac1uisition An illustrati"e list o% disclosures re1uired under the act is enclosed (*# 151)

BALANCE SHEET
I LIABILITIES: Share Capital4
As per old schedule VI, de$it $alance on the allotment or call account is presented in the 5alance Sheet not as an asset $ut $) (a) o% deduction %rom Called6up capital 7o(e"er, as re1uired $) Clause 8 o% 'ote 6A o% the 9e"ised Schedule VI, calls unpaid are to $e disclosed separatel) as per 9e"ised Schedule VI Clause d o% 'ote 6A : a reconciliation o% the num$er o% shares outstandin# at the $e#innin# and at the end o% the reportin# period to $e #i"en 9econciliation %or the comparati"e pre"ious period is also to $e #i"en

'um$er o% share holder holdin# more than 5; shares speci%)in# the num$er o% shares held : should $e #i"en %or the comparati"e pre"ious period also <isclosure on allotment or $ou#ht $ac0 durin# the last 5 )ears is onl) a##re#ate hence )ear (ise $rea0up is not necessar), a##re#ate num$er o% shares onl) needs to $e displa)ed

9eser"es + Surplus4
Additions and deductions since the last $alance sheet to $e sho(n under each o% the speci%ied head *roposed di"idend + <i"idend ta3 pro"ision : should $e deducted %rom reser"es and the pro"ision %or di"idend and <<T should $e re%lected in current pro"isions This is o"er and a$o"e the disclosure re1uired under other notes to $alance sheet

5orro(in#s4
!here loans ha"e $een #uaranteed $) directors or others the a##re#ate amount o% such loans under each head shall $e disclosed 5onds = de$entures (alon# (ith the rate o% interest and particulars o% redemption or con"ersion, as the case ma) $e) shall $e stated in descendin# order o% maturit) or con"ersion, startin# %rom %arthest redemption or con"ersion date as the case ma) $e *articulars o% an) redeemed $onds = de$entures (hich the compan) has po(er to reissue shall $e disclosed *eriod and amount o% continuin# de%ault as on $alance sheet date in repa)ment o% loan + interest under each case Current maturities o% all lon# : term $orro(in#s (ill $e disclosed under other current lia$ilities ('ot under short term $orro(in#s or lon# term $orro(in#s) The nature o% securities o%%ered should $e disclosed %or each case o% $orro(in#s separatel) !hen promoters, other shareholders or an) third part) ha"e #i"en an) personal securit) %or an) $orro(in#, such as shares or other assets held $) them, disclosure should $e made there o%, though such security oes !ot resu"t i! the c"#ssi$ic#tio! o$ such %orro&i!g #s secure ' Terms o% repa)ment o% term loans and other loans shall $e disclosed <isclosure o% repa)ment terms should include the period o% maturit) (ith respect to the $alance sheet date, num$er and amount o%

instalments due, the applica$le rate o% interest and other si#ni%icant rele"ant terms i% an)

II ASSETS Tan#i$le Asset

A reconciliation o% the #ross and net carr)in# amounts o% each class o% assets at the $e#innin# and end o% the reportin# period sho(in# additions, disposals, ac1uisitions throu#h $usiness com$inations and other ad2ustments and the related depreciation and impairment losses = re"ersals shall $e disclosed separatel) Separate disclosure %or each class o% assets is re1uired %or the %ollo(in# under other ad2ustments4 a) Capitali>ation o% e3chan#e di%%erence (here such option has $een e3ercised $) the compan) as per AS 11 $) Ad2ustment on account o% e3chan#e %luctuations %or %i3ed assets in case o% non inte#ral operations as per AS 11 c) 5orro(in# costs capitali>ed in accordance (ith AS 16 An) amount has $een (ritten6o%% on a reduction o% capital or re"aluation o% assets or (here sums ha"e $een added on re"aluation o% asset : disclose the reduction = increase, to#ether (ith the date thereo% %or the %irst %i"e )ears su$se1uent to the date o% such reduction = increase /%%ice e1uipment is introduced as a separate line item

In"estments ('on6current + current)4

?nder each class o% in"estment %ollo(in# details should $e #i"en a) 'ame o% the $od) corporate $) 'ature : su$sidiar) = associate = 2oint "enture = controlled special purpose entities c) 'ature and e3tend o% in"estment (Sho(in# separatel) in"estment (hich are partl) paid up) d) In case o% in"estment in partnership %irm : 'ame o% the %irm, 'ame o% all the partners, Total capital, Share o% each partner in the pro%it o% the %irm should $e #i"en o The details o% partnership %irm should $e dra(n on the date o% the compan)@s $alance sheet date I% the %inancials o% the %irm could not $e dra(n, then the di%%erence $et(een reportin# date o% the %irm and the compan) should not $e more than si3 months In such case, the di%%erence in reportin# dates should $e disclosed

o !here the partnership %irm has separate accounts %or partner@s capital, dra(in#s or current, loan to or %rom parties, disclosure should $e made (ith re#ard to the total o% the capital account alone, since this is (hat constitutes the capital o% the partnership %irm o Separate disclosure is re1uired $) re%erence to each partnership %irm in (hich the compan) is a partner In"estment carried "alue other than cost : $asis o% "aluation Additional disclosure 1 A##re#ate "alue o% Auoted in"estments B Mar0et "alue o% the Auoted in"estments C A##re#ate "alue o% ?n1uoted in"estments A##re#ate pro"ision %or diminution in "alue o% D in"estments As per re"ised schedule VI, diminution in "alue o% in"estment should $e disclosed separatel) in notes 7o(e"er, as per AS 1C, all lon# term in"estments are to $e carried at cost 7o(e"er, (hen there is a decline in in"estment other than temporar), in the "alue o% lon# term in"estment, the carr)in# "alue needs to $e reduced Accordin#l) each lon# term in"estment should $e carried at cost less pro"ision %or other than temporar) diminution in the "alue It is recommended to disclose the "alue o% pro"ision netted6o%% %or each lon# term in"estment There is no re1uirement to classi%) in"estments into trade and non trade under current in"estments

-oans + ad"ances ('on6current + current)4

Eor each su$ class o% loan pro"ide (hether the loan is secured = unsecured = dou$t%ul Allo(ances %or $ad and dou$t%ul loans and ad"ances shall $e disclosed under the rele"ant heads separatel) <ue %rom directors + other o%%icers includin# the %irm = compan) in (hich the director is partner= mem$er = director should $e pro"ided /ther loans and ad"ances should include all other items in the nature o% ad"ances reco"era$le in cash or 0ind such as prepaid e3penses, ad"ance ta3, CF'VAT credit recei"a$le, VAT credit recei"a$le, Ser"ice ta3 credit recei"a$le, etc (hich are not e3pected to $e reali>es (ith the ne3t t(el"e months or operatin# c)cle (hiche"er is lon# should %orm part o% lon# term Mode o% "aluation shall $e stated

In"entories4

&oods in transit shall $e disclosed under the rele"ant su$ head o% in"entories The headin# %inished should comprise o% all %inished #oods other than those ac1uired %or tradin#

Trade 9ecei"a$les4
Trade recei"a$les should $e classi%ied as secured = unsecured = dou$t%ul Allo(ances %or $ad and dou$t%ul de$ts shall $e disclosed under the rele"ant heads separatel) <ue %rom directors + other o%%icers includin# the %irm = compan) in (hich the director is partner= mem$er = director should $e pro"ided

Cash + cash e1ui"alents4

Farmar0ed $alances (ith $an0s (e#4 %or unpaid di"idend) shall $e separatel) stated 5alances (ith $an0s to the e3tent held as mar#in mone) or securit) a#ainst the $orro(in#s, #uarantees, other commitments shall disclosed separatel) 9epatriation restrictions, i% an) in respect o% cash and $an0 $alance shall $e separatel) stated 5an0 deposits (ith more than t(el"e months maturit) shall $e disclosed separatel)

/ther current assets4

?namorti>ed portion o% Gthe miscellaneous e3penditure@ : the portion that (ill $e amorti>ed in ne3t 1B months (ill $e ta0en to Gother current assets and the $alance (ill %orm part o% Gother non current assets@ This is an all inclusi"e headin# (hich incorporates current assets that do not %it into an) other asset cate#ories, e#4 un$illed re"enue, unamorti>ed premium on %or(ard contracts Ftc

Contin#ent lia$ilities and commitments + /ther disclosure to 5alance sheet4

!here a compan) underta0es to per%orm o(n o$li#ations, and %or this purpose issues, #uarantee does not represent a contin#ent lia$ilit) : hence per%ormance #uarantees and counter #uarantees should $ot $e disclosed as contin#ent lia$ilities

<isclosure is re1uired in re"ised schedule VI %or "arious commitments such as capital commitments not pro"ided %or and uncalled lia$ilit) on shares /ther commitment should include onl) those non cancella$le contractual commitments (i e cancellation o% (hich (ill result in a penalt) disproportionate to the $ene%its in"ol"ed) $ased on the pro%essional 2ud#ement o% the mana#ement Accountin# standard o"errides re"ised schedule VI, companies (ill ha"e to continue to create a pro"ision %or di"idends in respect o% the period co"ered $) the %inancial statements and disclose the same as a pro"ision in the 5alance sheet <i"idend pa)ment to pre%erence and e1uit) share holders %or the period and related amount per share Arrears o% %i3ed cumulati"e di"idends pre%erence shares shall also $e disclosed separatel) Issue o% securities made o% %or a speci%ic purpose and the (hole or part o% the amount not utilised %or and ho( such unutili>ed amount has $een used or in"ested

Statement of Profit and loss

9e"enue %rom operations
In respect o% companies other than %inance companies, re"enue %rom operations need to $e disclosed separatel) as re"enue %rom a) Sale o% products $) Sale o% ser"ices c) /ther operatin# re"enues Indirect ta3es such as sales ta3, ser"ice ta3, purchase ta3 etc are #enerall) collected %rom the customer on $ehal% o% the #o"ernment 7ence the collection %rom the customers is not an economic $ene%it %or the enterprise and pa)ment (old not $e treaded as e3penses in the %inancial statements F"en i% the enterprise has not char#ed VAT separatel) $ut has made a composite char#e, it should se#re#ate the portion o% sales (hich is attri$uta$le to ta3 and should credit the same to VAT pa)a$le account at periodic inter"als 'et %orei#n e3chan#e #ain should $e classi%ied as other income

/ther income
/ther income is to $e disclosed on %ace o% the statement o% pro%it and loss /ther income comprise o%4 a) Interest income (in case o% a compan) other than a %inance compan)) $) <i"idend income c) 'et #ain = loss on sale o% in"estments d) /ther non :operatin# income (net o% e3penses directl) attri$uta$le to such income) To reco#ni>e di"ided $ased on the ri#ht to recei"e (ould constitute a chan#e in accountin# polic) (hich should $e applied prospecti"el) <i"idend appro"ed $) the shareholders o% the su$sidiar) in the current )ear $ut alread) reco#ni>ed $) the holdin# compan) in the pre"ious )ear@s %inancial statements as per old schedule VI should not $e a#ain reco#ni>ed in the %irst )ear o% application o% re"ised schedule VI Share o% pro%it = loss on partnership concern = limited lia$ilit) partner ship should $e accounted in $oo0s o% the compan) as and (hen the same is credited = de$ited to the partner@s capital account

Cost o% materials consumed

In case o% manu%acturin# compan) or manu%acturin# + tradin# compan) disclosure (ith re#ard to ra( materials consumed : should $e the actual consumption rather than deri"ed consumption

Current ta3
In case o% MAT credit entitlement the disclosure is as %ollo(s4 Current ta3 (MAT) HHHH -ess4 MAT credit entitlement (HHHH) 'et Current ta3 HHHHH An) interest on short%all in pa)ment o% ad"ance income ta3 is in the nature o% %inance cost and hence should not $e clu$$ed (ith the current ta3 The same should $e classi%ied as interest e3pense under %inance costs 7o( e"er, such amount should $e separatel) disclosed An) penalties le"ied under income ta3 la(s should not $e classi%ied as current ta3 *enalties (hich are compensator) in nature should $e treated as interest and other ta3 penalties should $e classi%ied under other e3penses

!ealth ta3 pa)a$le $) the compan) on assets are to $e included under rates and ta3es under other e3penses

/thers
An) #ains = losses on account o% %orei#n e3chan#e %luctuations other than currenc) transaction and translation (other than the amount reco#nised under %inancial cost Ire% *ara D(e) o% AS16J) Additional in%ormation $) (a) o% notes in case o% Manu%acturin# companies, Tradin# companies and companies renderin# or suppl)in# ser"ices Apparentl) there is no need to #i"e 1uantitati"e details %or an) o% the items It is su##ested to disclose ma2or items o% openin# and closin# stoc0 thou#h it is not mandator) 'ormall) 1K; o% total "alue o% sales = ser"ices, purchases o% tradin# #oods and consumption o% ra( materials is considered as an accepta$le threshold %or determination o% $road heads V#"ue o$ i()orts to %e )ro*i e o! CIF %#sis %y the co()#!y uri!g the $i!#!ci#" ye#r +irres)ecti*e o$ &hether the )#y(e!t h#s %ee! (# e or !ot, a) 9a( materials $) Components and spare parts c) Capital &oods Import o% capital #oods should %orm part o% notes to pro%it and loss account onl) and not to the $alance sheet : since this is speci%ic re1uirement o% re"ised schedule VI <isclosure o% import under this re1uirement relates to the )ear o% import and should not $e lin0ed to utilisation o% capital #oods or consumption o% ra( materials Import o% ra( materials, components, spare parts and capital #oods is to $e disclosed irrespecti"e o% (hether or not such import has resulted in e3penditure in %orei#n currenc) It is possi$le that imports ma) ha"e $een arran#ed on rupee pa)ment terms (ith out in"ol"in# an) %orei#n currenc) e3penditure, $ut the "alue o% imports (ould $e included (ith such items I% %or an) reason, there is some practical di%%icult) in disclosin# the "alue o% the imports on CIE $asis, a %ootnote should $e appended to the statement indicatin# the precise the method $) (hich the "alue o% imports has $een arri"ed at F# It ma) $e stated that, $ecause o% practical di%%iculties in disclosin# the "alue o% imports on CIE $asis, such disclosure has $een made on E/5 $asis

Imports $) the compan) should onl) $e disclosed and throu#h a#enise li0e State tradin# corporation In case o% import o% capital #oods in instalments throu#h part shipments %rom time to time and the contract pro"ided %or the total "alue o% the entire shipment, (here it is di%%icult to determine the separate "alue o% the part shipment recei"ed durin# the )ear, reasona$le estimated has to $e made and no o$2ection needs to $e ta0en thereto Eor the purpose o% (or0in# out the CIE "alue o% imports it necessar) to ma0e appro3imations in suita$le case, i% such appro3imations are reasona$le, no o$2ection should ordinaril) $e ta0en thereto

E-)e!ses i! $oreig! curre!cy a) 9o)alt) $) 8no(6ho( c) *ro%essional and consultation %ee d) Interest e) /ther matters F3penses in %orei#n currenc) on 9o)alt), 8no(6ho(, *ro%essional and consultation %ee, Interest and other matters does not re1uired disclosure i% the ser"ice is recei"ed %ree o% cost or pa)ment made a#ainst rupee terms Total Value o% imported and indi#enous "alue o% ra( materials, spare parts and components consumed durin# the )ear alon# (ith ; o% each to the total consumption

A(ou!t re(itte uri!g the ye#r i! $oreig! curre!cy o! #ccou!t o$ a) <i"idend $) 'um$er o% non resident share holders c) 'um$er o% shares held $) them %or (hich the di"idend (ere paid d) 9elati"e )ear %or (hich di"idend has $een paid In case o% di"idend paid to the %orei#n share holders in Indian rupee, then this disclosure is not re1uired The amount remitted should $e disclosed on cash $asis and not on accrual $asis E#r!i!gs i! $orea) F3port o% #oods on E/5 $asis

$) 9o)alt), 0no(6ho(, pro%essional and consultation %ees c) Interest and di"idend d) /ther income indicate the nature thereo%