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RESEARCH METHOD USED

Research is a systematic purposive investigation looking for the facts through verifiable methods
in order to establish a relationship between them and to conclude from them broad principles or
laws. There are various types of research based on the intent:
1. Pure and Applied Research
2. Exploratory Research
3. Descriptive Research
4. Diagnostic Study
5. Evaluation Studies
6. Action Research
This project report is based on Exploratory Research, that is, I have conducted a preliminary
study of an unfamiliar problem. I have done it to generate new ideas or increase my familiarity
with the problem. Generally the methods used are literature survey, experience survey, case
studies etc.
Data Collection Method
There are two categories of data collection methods: Primary and Secondary. I have used both
sources of data. The sources include websites, text book and reference books. Details of these
sources are available in Bibliography and Webliography.

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AS-16 BORROWING COST
Objective:
The objective of this Standard is to prescribe the accounting treatment for borrowing costs.
Scope
1. This Standard should be applied in accounting for borrowing costs.
2. This Standard does not deal with the actual or imputed cost of owners’ equity, including
preference share capital not classified as a liability..
Definitions
The following terms are used in this Standard with the meanings specified:
1 Borrowing costs are interest and other costs incurred by an enterprise in connection with the
borrowing of funds.
2 A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for
its intended use or sale. Conditions of AS – 16
Borrowing costs may include:
(a) Interest and commitment charges on bank borrowings and other short-term and long-term
borrowings;
(b) Amortization of discounts or premiums relating to borrowings;
(c) Amortization of ancillary costs incurred in connection with the arrangement of borrowings;
(d) Finance charges in respect of assets acquired under finance leases or under other similar
arrangements; and
(e) Exchange differences arising from foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs.
Excess of the Carrying Amount of the Qualifying Asset over Recoverable Amount

2

When the carrying amount or the expected ultimate cost of the qualifying asset exceeds its
recoverable amount or net realizable value, the carrying amount is written down or written off in
accordance with the requirements of other Accounting Standards. In certain circumstances, the
amount of the write-down or write-off is written back in accordance with those other Accounting
Standards.
Commencement of Capitalization
The capitalization of borrowing costs as part of the cost of a qualifying asset should commence
when all the following conditions are satisfied:
(a) Expenditure for the acquisition, construction or production of qualifying asset is being
incurred;
(b) Borrowing costs are being incurred; and
(c) activities that are necessary to prepare the asset for its intended use or sale are in progress.
Expenditure on a qualifying asset includes only such expenditure that has resulted in payments
of cash, transfers of other assets or the assumption of interest-bearing liabilities. Expenditure is
reduced by any progress payments received and grants received in connection with the asset (see
Accounting Standard 12, Accounting for Government Grants). The average carrying amount of
the asset during a period, including borrowing costs previously capitalized, is normally a
reasonable approximation of the expenditure to which the capitalization rate is applied in that
period.
Illustration
Note: This illustration does not form part of the Accounting Standard. Its purpose is to assist in
clarifying the meaning of paragraph 4(e) of the Standard.
Facts:
XYZ Ltd. has taken a loan of USD 10,000 on April 1, 20X3, for a specific project at an interest
rate of 5% p.a., payable annually. On April 1, 20X3, the exchange rate between the currencies
was Rs. 45 per USD. The exchange rate, as at March 31, 20X4, is Rs. 48 per USD. The
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000. The following computation would be made to determine the amount of borrowing costs for the purposes of paragraph 4(e) of AS 16: (i) Interest for the period = USD 10.500. 30. the total borrowing cost would be Rs. In the above example.25. 24. The Effects of Changes in Foreign Exchange Rates.000 × (48–45) = Rs. Therefore. total borrowing cost would be Rs. out of Rs.000. The Effects of Changes in Foreign Exchange Rates. 54.corresponding amount could have been borrowed by XYZ Ltd.30.000 would be considered as borrowing costs. (ii) Increase in the liability towards the principal amount = USD10. 34. 49. 30. 25.000) which would be accounted for under AS 16 and there would be no exchange difference to be accounted for under AS 11. 49. 30.500 – Rs.000 × 5% × Rs. 58.000 on foreign currency borrowings [covered by paragraph 4(a) of AS 16] plus the exchange difference to the extent of difference between interest on local currency borrowing and interest on foreign currency borrowing of Rs. 25.500. 49. if the interest rate on local currency borrowings is assumed to be 13% instead of 11%.500 – Rs. 24. the entire exchange difference of Rs. 48/USD =Rs. (iii) Interest that would have resulted if the loan was taken in Indian currency = USD 10.000)] is more than the exchange difference of Rs. in local currency at an interest rate of 11 per cent annum as on April 1.500 would be considered as the borrowing cost to be accounted for as per AS 16 and the remaining’s. 4. Therefore. 4 . only Rs.000 × 45 × 11% = Rs. Rs.000 + Rs.000 = Rs. in such a case. 24.500 (Rs.500 will be considered as the borrowing cost. Rs. 24.000 increase in the liability towards principal amount.e.000 (Rs. 24. since in that case the difference between the interest on local currency borrowings and foreign currency borrowings [i. (iv) Difference between interest on local currency borrowing and foreign currency borrowing = Rs. 49. 20X3.500 would be considered as the exchange difference to be accounted for as per Accounting Standard (AS) 11. Thus.500 being the aggregate of interest of Rs.000. Thus. 30.500.

4. issued by the Council of the Institute of Chartered Accountants of India. comes into effect in respect of accounting periods commencing on or after 1.AS-17 SEGMENT REPORTING Accounting Standard (AS) 17.2001. Business segment • Normally referred to as SBU’s (Strategic business units) • Distinguishable component of enterprise that is engaged in providing individual product or service or group of related products and services subject to risks and returns that are different from other business segments. • Factors to consider: – Similarity of economic and political conditions – Relationship between operations in different geographical regions – Proximity of operations – Special risks associated with operations in a particular area – Exchange control regulations and – The underlying currency risks • Geographical location is one where: – Location of production or service facilities and other assets 5 . ‘Segment Reporting’. Geographical segment • A distinguishable component of an enterprise engaged in providing products or services within a particular environment subject to risks and returns different from those components operating in other economic environments.

low intensity of disclosures • If risks and rewards are primarily affected by differences in products or services. 6 .– Location of its markets and customers • Grouping of countries could be continent wise • No splitting of India into further segments normally required unless there are specific risks applicable to a region which are significant. then primary segment should be geographical • Segments reportable in standalone financial statements may not be reportable in CFS. higher the rewards and losses and vice versa • What one should look for is ‘significantly’ different risks and rewards • If majority of following are common it would be same segment: – Nature of product or service – Nature of production process – Type and class of customers – Methods of distribution – Nature of regulatory environment Primary and secondary segments • Primary –high intensity of disclosures • Secondary. primary segment should be business • If risks and rewards are primarily affected by the operations in different countries. Risk and reward • Higher the risk.

in most cases business will be primary segment. directors should take the decision • With globalization risks are mainly seen as coming mainly from business rather than location. geography – If in organization and reporting neither business nor geography is followed.Determination of primary segment • Internal organization and management structure of an enterprise and system of financial reporting to board should normally the basis of identifying the primary segment except when: – If risks and returns are affected by both business and geography and matrix approach is followed. additional segments to be identified (even if less than 10%) till 75% is reached. whichever is greater in absolute amounts – Assets are 10% or more of total assets • If external revenue applicable to reportable segments constitutes less than 75% of the total enterprise revenue. then primary segment is business and secondary. Separate segments • Reportable segment if – Sales 10% or more of total revenue – Profit or loss is 10% or more • Of combined result of all segments in profit or • Combined result of all segments in loss. Segment expenses • Excludes 7 .

HO expenses and other enterprise level expenses. An enterprise operates through eight segments.’000): A B C D E F G H Total(Seg Total(Enter ments) prise) 1. E. A. Illustration This illustration does not form part of the Accounting Standard. The relevant information about these segments is given in the following table (amounts in Rs. F. G and H. namely. C.– Extra ordinary items – Interest • Finance charge part of finance lease rental to be also excluded • Interest included in inventories under AS 16 to be included being part of operating expense – Loss on sale of investments and on extinguishment of debt – Income tax – General Admin expenses. B. Its purpose is to illustrate the application of the Accounting Standard. SEGMENT REVENUE - 225 15 10 15 50 (a) External Sales 8 20 35 400 . D.

5 2. Combined (90) (5) (5) Result of all Segments in loss 9 100 400 .7 52. Segment result[Profit/ (Loss] 4.8 5 (90) 15 (5) 8 (5) 5 7 5 15 5 7 (c) Total Revenue 2) Total revenue of each segment as a percentage 5 of total revenue of all segments 3.3 4.Combined 8 40 Result of all Segments in profits 5. 7.(b) Inter-segment Sales 100 60 30 5 - - 5 - 200 100 315 45 15 15 50 25 35 600 16.2 5.5 8.5 2.

e.. Segment assets 15 47 5 11 3 5 5 9 Result as a percentage of the greater of the totals arrived at 4 and 5 above in absolute amount (i. SEGMENT ASSETS as a percentage of total assets of all segments 10 100 .6. Segment 5 90 15 5 8 5 5 7 15 47 5 11 3 5 5 9 8. 100) 7.

This Standard should be applied by all companies. In consolidated financial statements. disclosure of diluted earnings per share (both including and excluding extra. a Small and Medium Sized Company. However. may not disclose diluted earnings per share (both including and excluding extraordinary items). as defined in the Notification. Objective The objective of this Standard is to prescribe principles for the determination and presentation of earnings per share which will improve comparison of performance among different enterprises for the same period and among different accounting periods for the same enterprise. Definitions For the purpose of this Standard. 2 A preference share is a share carrying preferential rights to dividends and repayment of capital. The focus of this Standard is on the denominator of the earnings per share calculation. 11 . as defined in the Notification. 3 A financial instruments is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity shares of another enterprise. the information required by this Statement should be presented on the basis of consolidated information. the following terms are used with the meanings specified: 1 An equity share is a share other than a preference share.AS-20 EARNING PER SHARE Earnings per Share This Accounting Standard is mandatory for all companies. However. Even though earnings per share data has limitations because of different accounting policies used for determining ‘earnings’. 2. Scope 1. Such companies are however encouraged to make these disclosures.ordinary items) is not mandatory for Small and Medium Sized Companies. a consistently determined denominator enhances the quality of financial reporting.

or may entitle. willing parties in an arm’s length transaction. or liability settled. its holder to equity shares. 20X1 31st cash Buy Back of shares Balance 12 .. 5 Share warrants or options are financial instruments that give the holder the right to acquire equity shares. of share No. No. between knowledgeable.Weighted Average Number of Shares (Accounting year 01-01-20X1 to 31-12-20X1) Balance 1st January. of share No. 6 Fair values is the amount for which an asset could be exchanged. of share issued bought back outstanding 1800 - 1800 600 - 2400 - 300 2100 2400 300 2100 beginnin g of year 20X1 31st Issue of May. Illustration Example .4 A potential equity share is a financial instrument or other contract that entitles. share for 20X1 1st Nov.

800 x 5/12) + (2.800 x12/12) + (600 x 7/12) .100 shares AS-22 ACCOUNTING FOR TAXES ON INCOME 13 .400 x 5/12) + (2.100 shares..(300 x 2/12) = 2. The weighted average number of shares can alternatively be computed as follows: (1.100 x 2/12) = 2. at end of 20X1 year Computation of Weighted Average: (1.Dec.

2. taxes on income are accrued in the same period as the revenue and expenses to which they relate. based upon which income tax payable (recoverable) is determined. or how. there are differences between the amount in respect of a particular item of revenue or expense as recognized in the statement of profit and loss and the corresponding amount which is recognized for the computation of taxable income. expenses or deductions for tax purposes. Firstly. an enterprise should account for taxes that are payable on distribution of dividends and other distributions made by the enterprise. For the purposes of this Standard. 2. before deducting income tax expense or adding income tax saving.Objective The objective of this Standard is to prescribe accounting treatment for taxes on income. Scope 1. This includes the determination of the amount of the expense or saving related to taxes on income in respect of an accounting period and the disclosure of such an amount in the financial statements. Taxes on income are one of the significant items in the statement of profit and loss of an enterprise. Secondly. determined in accordance with the tax laws. there are differences between items of revenue and expenses as appearing in the statement of profit and loss and the items which are considered as revenue. In accordance with the matching concept. taxable income may be significantly different from the accounting income. taxes on income include all domestic and foreign taxes which are based on taxable income. Definitions For the purpose of this Standard. Matching of such taxes against revenue for a period poses special problems arising from the fact that in a number of cases. This Standard should be applied in accounting for taxes on income. This Standard does not specify when.Accounting income (loss) is the net profit or loss for a period. 14 . 3. Taxable incomes (tax loss) is the amount of the income (loss) for a period. the following terms are used with the meanings specified: 1 . as reported in the statement of profit and loss. This divergence between taxable income and accounting income arises due to two main reasons.

Taxes on income are considered to be an expense incurred by the enterprise in earning income and are accrued in the same period as the revenue and expenses to which they relate. in the balance sheet. 6. Such matching may result into timing differences. Recognition Tax expense for the period.3. an improvement in trading conditions may make it reasonably certain that the enterprise will be able to generate sufficient taxable income in the future. The enterprise recognizes previously unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain. Re-assessment of Unrecognized Deferred Tax Assets At each balance sheet date. Deferred taxes is the tax effect of timing differences. 7. should be included in the determination of the net profit or loss for the period. an enterprise re-assesses unrecognized deferred tax assets. Timing differences are the differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods. Permanent differences do not result in deferred tax assets or deferred tax liabilities. Permanent differences are the differences between taxable income and accounting income for a period that originates in one period and do not reverse subsequently. as the case may be. 5. The tax effects of timing differences are included in the tax expense in the statement of profit and loss and as deferred tax assets (subject to the consideration of prudence as set out in paragraphs 15-18) or as deferred tax liabilities. 15 . Current tax is the amount of income tax determined to be payable (recoverable) in respect of the taxable income (tax loss) for a period. comprising current tax and deferred tax. For example. 4. that sufficient future taxable income will be available against which such deferred tax assets can be realized. Tax expense (tax saving) is the aggregate of current tax and deferred tax charged or credited to the statement of profit and loss for the period.

1961. e. etc. substantial advertisement expenses to introduce a product.g. duty. but disallowed for tax purposes under section 40(a)(i) and allowed for tax purposes in subsequent years when relevant tax is deducted or paid. that sufficient future taxable income will be available against which deferred tax asset can be realized. preliminary expenses under section 35D.g. cess. Expenses debited in the statement of profit and loss for accounting purposes but allowed for tax purposes in subsequent years. c) Provisions made in the statement of profit and loss in anticipation of liabilities where the relevant liabilities are allowed in subsequent years when they crystallize. fees. a) Expenditure of the nature mentioned in section 43B (e. Any such write-down may be reversed to the extent that it becomes reasonably certain or virtually certain.g. taxes. expenses incurred for amalgamation under section 35DD.g. The purpose of this illustration is to assist in clarifying the meaning of the Accounting Standard.) accrued in the statement of profit and loss on mercantile basis but allowed for tax purposes in subsequent years on payment basis. 2001. as the case may be.Review of Deferred Tax Assets The carrying amount of deferred tax assets should be reviewed at each balance sheet date. as amended by the Finance Act. b) Payments to non-residents accrued in the statement of profit and AS 22 (issued 2001)loss on mercantile basis. An enterprise should write-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain. The sections mentioned hereunder are references to sections in the Income-tax Act. 2. etc. that sufficient future taxable income will be available. prospecting expenses under section 35E). 16 . as the case may be. Illustration Examples of Timing Differences Note: This illustration does not form part of the Accounting Standard. 1. Expenses amortized in the books over a period of years but are allowed for tax purposes wholly in the first year (e. treated as deferred revenue expenditure in the books) or if amortization for tax purposes is over a longer or shorter period (e.

g.g. Income credited to the statement of profit and loss but taxed only in subsequent years e. If for any reason the recognition of income is spread over a number of years in the accounts but the income is fully taxed in the year of receipt. calculation of depreciation with reference to individual assets in the books but on block basis for tax purposes and calculation with reference to time in the books but on the basis of full or half depreciation under the block basis for tax purposes. 4. 6.3. b) Differences in method of depreciation e. conversion of capital assets into stock in trade.g.g. This could arise due to: a) Differences in depreciation rates. Where a deduction is allowed in one year for tax purposes on the basis of a deposit made under a permitted deposit scheme (e. INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS) 17 . c) Differences in method of calculation e. 5. tea development account scheme under section 33AB or site restoration fund scheme under section 33ABA) and expenditure out of withdrawal from such deposit is debited in the statement of profit and loss in subsequent years. d) Differences in composition of actual cost of assets. Where book and tax depreciation differ. SLM or WDV.

with more countries expected to transition to IFRS by 2015. Objective of Financial Statements Financial statements are a structured representation of the financial positions and financial performance of an entity. along with other information in the notes. financial statements provide information about an entity's: (a) assets. in particular. (e) contributions by and distributions to owners in their capacity as owners. (d) income and expenses. Currently. assists users of financial statements in predicting the entity's future cash flows and. their timing and certainty. (b) liabilities. over 100 countries permit or require IFRS for public companies. financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions.Fair presentation and compliance with IFRS: 18 . This information. Having an international standard is especially important for large companies that have subsidiaries in different countries. The following are the general features in IFRS: 1. A single standard will also provide investors and auditors with a cohesive view of finances. IFRS provides general guidance for the preparation of financial statements. IFRS is sometimes confused with IAS (International Accounting Standards). not-for-profit organization called the International Accounting Standards Board (IASB).Meaning International Financial Reporting Standards (IFRS) is a set of accounting standards developed by an independent. To meet this objective. The goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements. The objective of financial statements is to provide information about the financial position. including gains and losses. Financial statements also show the results of the management's stewardship of the resources entrusted to it. (c) equity. Proponents of IFRS as an international standard maintain that the cost of implementing IFRS could be offset by the potential for compliance to improve credit ratings. and (f) cash flows. which are older standards that IFRS has replaced. Adopting a single set of world-wide standards will simplify accounting procedures by allowing a company to use one reporting language throughout. rather than setting rules for industry-specific reporting.

liabilities. Frequency of reporting: IFRS requires that at least annually a complete set of financial statements is presented. equity. Accrual basis of accounting: An entity shall recognize items as assets. 6. 2. 3. Items that are of a dissimilar nature or function shall be presented separately unless they are immaterial. 4. other events and conditions in accordance with the definitions and recognition criteria for assets. Going concern: Financial statements are present on a going concern basis unless management either intends to liquidate the entity or to cease trading. In addition comparative information shall also be provided for narrative and descriptive information if it is relevant to 19 . Comparative information: IFRS requires entities to present comparative information in respect of the preceding period for all amounts reported in the current period's financial statements. However listed companies generally also publish interim financial statements (for which the accounting is fully IFRS compliant) for which the presentation is in accordance with IAS 34 Interim Financing Reporting. liabilities. Offsetting Offsetting is generally forbidden in IFRS. 7.Fair presentation requires the faithful representation of the effects of the transactions. 5. However certain standards require offsetting when specific conditions are satisfied (such as in case of the accounting for defined benefit liabilities in IAS 19 and the net presentation of deferred tax liabilities and deferred tax assets in IAS 12). income and expenses set out in the Framework of IFRS. income and expenses when they satisfy the definition and recognition criteria for those elements in the Framework of IFRS. Materiality and aggregation: Every material class of similar items has to be presented separately. or has no realistic alternative but to do so.

The standard IAS 1 also requires an additional statement of financial position (also called a third balance sheet) when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements.e. Equity: Nominal equity is the nominal residual interest in the nominal assets of the entity after deducting all its liabilities in nominal value. This for example occurred with the adoption of the revised standard IAS 19 (as of 1 January 2013) or when the new consolidation standards IFRS 10-11-12 were adopted (as of 1 January 2013 or 2014 for companies in the European Union) Qualitative Characteristics of Financial Statements Qualitative characteristics of financial statements include: Relevance (Materiality) Faithful representation Enhancing qualitative characteristics include: Comparability Verifiability Timeliness Understandability The elements directly related to the measurement of the statement of financial position include: Asset: An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.understanding the current period's financial statements. Liability: A liability is a present obligation of the entity arising from the past events. i. assets. the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. 20 . or when it reclassifies items in its financial statements.

In addition research and development expenses can only be recognised as an intangible asset if they cross the threshold of being classified as 'development cost'. these don't include the distributions made to the equity participants Recognition of Elements of Financial Statements An item is recognized in the financial statements when: it is probable future economic benefit will flow to or from an entity. However. publishing titles. In that case the acquirer shall recognise a contingent liability even if it is not probable that an outflow of resources embodying economic benefits will be required. which consists of the income statement and the statement of other comprehensive income (usually presented in two separate statements). prohibits the recognition of a provision for contingent liabilities. or decrease of liabilities that result in increases in equity. IAS 37. for which recognition is prohibited by IAS 38. Expenses: decreases in economic benefits during an accounting period in the form of outflows. 21 . An example is the recognition of internally generated brands. the resource can be reliably measured In some cases specific standards add additional conditions before recognition is possible or prohibit recognition altogether. Financial performance includes the following elements (which are recognised in the income statement or other comprehensive income as required by the applicable IFRS standard): Revenues: increases in economic benefit during an accounting period in the form of inflows or enhancements of assets. However. mastheads. this prohibition is not applicable to the accounting for contingent liabilities in a business combination. customer lists and items similar in substance.The financial performance of an entity is presented in the statement of comprehensive income. Whilst the standard on provisions. or depletions of assets or incurrences of liabilities that result in decreases in equity. it does not include the contributions made by the equity participants (for example owners. partners or shareholders).

Plant and Equipment 11 The Effects of Changes in Foreign 21 The Effects of Changes in Foreign Exchanges Rates 12 Accounting for Government Grants Exchanges Rates 20 Accounting for Government Grants and Disclosure of Government Assistance 13 Accounting for Investments Mainly dealt with in IAS 39 14 Accounting for Amalgamations IFRS 3 Business Combinations 15 Employee Benefits 19 22 Employee Benefits . 1 Disclosures of Accounting Policies 1 Presentation of financial statements 2 Valuation of Inventories 2 Inventories 3 Cash Flow Statements 7 Statements of Cash Flows 4 Contingencies and Events Occurring 10 Events after the Reporting Period 8 Accounting Policies.COMPARISON WITH CURRENT INDIAN ACCOUNTING STANDARD WITH THE CORRESPONDING NUMBER OF RELEVANT IAS/IFRS Indian Accounting Standard IAS/IFRS AS IAS/ Name of Standard No. Name of Standard IFRS No. Prior Period Items and Changes in Accounting Estimates and Errors Accounting Policies 6 Depreciation No equivalent standard. Changes in after the Balance Sheet Date 5 Net Profit or Loss for the Period. Included in IAS 16 7 Constructions Contracts 11 Constructions Contracts 9 Revenue Recognition 18 Revenue 10 Accounting for Fixed Assets 16 Property.

16

Borrowing Costs

23

Borrowings Costs

17

Segment Reporting

IFRS 8 Operating Segments

18

Related Party Disclosures

24

Related Party Disclosures

19

Leases

17

Leases

20

Earnings Per Share

33

Earnings Per Share

21

Consolidated Financial Statements

27

Consolidated and Separate Financial
Statements

22

Accounting for Taxes for Income

12

Income Taxes

23

Accounting for Investment in

28

Investments in Associates

Associates in Consolidated Financial
Statements
24

Discontinuing Operations

IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations

25

Interim Financial Reporting

34

Interim Financial Reporting

26

Intangible Assets

38

Intangible Assets

27

Financial Reporting of Interest in

31

Interest in Joint Ventures

Joint Ventures
28

Impairment of Assets

36

Impairment of Assets

29

Provisions, Contingent Liabilities and

37

Provisions, Contingent Liabilities and

Contingent Assets
30

Financial Instruments: Recognition

Contingent Assets
32

and Measurement

Financial Instruments: Recognition and
Measurement

31

Financial Instruments: Presentation

39

32

Financial Instruments: Disclosures

IFRS 7 Financial Instruments: Disclosures

Benefits of Adopting IFRS for Indian Company
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Financial Instruments: Presentation

Adoption of IFRS by Indian Company
India today has become an international economic force. Indian companies has surpassed in
several sectors of the industry that includes, ITES, software, pharmaceutical, auto spare part to
name a few. And to stay as a leader in the international market India opted the changes it need to
interface Indian stakeholders', the international stakeholders' and comply with the financial
reporting in a language that is understandable to all of them. In response to the need several
Indian companies have already been providing their financial statements as per US GAAP and/or
IFRS on voluntary basis. But, however this is becoming more of a necessity then just being a
best practice.
In the coming years, critical decisions will need to be made regarding the use of global
accounting standards in India. Market participants will be called upon to determine whether
achieving a uniform set of high-quality global accounting standards is feasible, what sort of
investments would be required to achieve that outcome, and whether it is a desirable goal in the
first place. This dialogue will be critical to the future of financial reporting and of fundamental
importance to the long-term strength and stability of the global capital markets.
Performance measures, based on Indian GAAP may need revisiting as it may change in IFRS
adoption by fair amount on account of valuation aspect. Expectation of investor and market will
also be required to be of paramount importance to manage in the adoption of process.
DEVELOPMENTS IN INDIA- IFRS
The Indian GAAP is influenced by several standard setters and influenced by Statute, namely
Companies Act, Income Tax Act, Banking Regulation Act, Insurance Act etc and directions from
regulatory bodies like RBI, SEBI, IRDA.
The legal or regulatory requirement will prevail over the IFRS requirement, in case of conflicts.
Therefore, pre-conditions for IFRS adoption by India to be effective need amendments in
required legislation and clarity on impact of IFRS adoption on Direct and Indirect taxes,
especially transactions recorded at fair values.

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Institute of Chartered Accountants of India is actively promoting the IASB's pronouncements in
the country with a view to facilitating global harmonization of Accounting Standards and ICAI
has pronounced that Indian GAAP will converge into IFRS with effect from April 1, 2011.
According to the above press release, there will be two separate sets of Accounting Standards
under Section 211(3C) of the Companies Act, 1956. The two sets would be as described below:
First set would comprise of the Indian Accounting Standards which are converged with the IFRS
(IFRS converged standards). It shall be applicable to specified class of companies;
Second set would comprise of the existing Indian Accounting Standards (Existing Accounting
Standards) and would be applicable to other companies including small and medium companies
(SMCs).
WHO WILL BE BENEFITED?
The convergence with IFRS entails benefit to the following:
The Investors:- The investor will be benefited in as the way accounting information made
available to them will be more reliable, relevant, timely and most importantly the information
will be comparable across different legal framework. It will develop better understanding and
confidence among the investors.
The Professional:- The professional, both in practice and in employment will get benefits as
they will be able to provide their services in various part of the world, as few years after
everybody will follow the same reporting standards.
The Corporate world:- The Indian corporate reputation and relationship with international
finance community will elevate because of achievement of higher level of consistency between
reporting structure and requirements; better access to international markets; improving
confidence among the international investors. The international comparability will also get
improve strengthening the industrial and capital markets in the country.
CHALLENGES TO BE FACED?

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Financial Instruments accounting. IFRS 1 has been cited by Association of Chartered Certified Accountants (ACCA) as having "great practical significance" in jurisdictions that are adopting the IFRSs. Investment accounting. Convergence is not just one time technical steps but will impose practical challenges of significant business and regulatory matters like structuring of ESOP schemes. Scope IFRS 1 applies to an entity's "first IFRS financial statements" and to interim financial reports for parts of the period covered by the first IFRS financial statements. It sets out requirements on the preparation and presentation of financial statements and interim financial reports by entities that are adopting the IFRS for the first time. presentation of financial statements. modification of IT system. The differences are wide and very deep routed. Share based payment. all are not dealt under Indian GAAP. 26 . with the Commission Services finding in 2009 that the latest version of IFRS 1 has benefits that outweigh the costs of adoption. to say a few -Plant Property and Equipment (PPE) accounting.Despite several benefits as may be looked out by the different people. training of employees. to ensure that they contain highquality information. tax planning. current and non-current classification of asset and liabilities. Business combination. compliance with debt covenants. there will be several challenges that will be faced on the way of IFRS convergence. Brief about IFRS 1 — First-time Adoption of International Financial Reporting Standards International Financial Reporting Standard 1: First-time Adoption of International Financial Reporting Standards or IFRS 1 is an international financial reporting standard issued by the International Accounting Standards Board (IASB). The first and far most would be from the differences between Indian GAAP and IFRS. The standard has been endorsed by the European Commission for use in the European Union.

IFRS 1 requires entities to present an opening IFRS statement of financial position using accounting policies in compliance with each IFRS effective as of the end of its first IFRS reporting period. Additionally. However. Recognition and Measurement In the first financial statement. Any adjustments due to the previous use of a different GAAP are to be recognized directly in retained earnings or another category of equity if appropriate. and cash flows. accounting estimates at the date of transition to IFRSs are to be consistent with estimates made in accordance with the previously-used GAAP. it requires entities to present certain reconciliations between accounting amounts under the previous GAAP and that under IFRS. by an explicit and unreserved statement in those financial statements of compliance with IFRSs". If it does so. among other requirements. financial performance. Presentation and Disclosure IFRS 1 requires entities to explain the effect of the transition to IFRS on their financial position. the entity is required to disclose the aggregate of these fair values and aggregate adjustments from the previous GAAP. interim financial reports covering part of the period of the first IFRS financial statement are also required include reconciliations from the previous GAAP. plant and equipment at the date of transition to IFRSs as its deemed cost at that date. For example. Specific cases include financial statements of firms whose most recent financial statements were prepared in accordance with national requirements not consistent with IFRS or that did not present financial statements in previous periods.The standard defines an entity's first financial statement as "the first annual financial statements in which the entity adopts IFRSs. An entity is permitted to use the fair value of an item of property. IFRS 7 — Financial Instruments: Disclosures Overview 27 .

IFRS 7 was originally issued in August 2005 and applies to annual periods beginning on or after 1 January 2007. Information about the nature and extent of risks arising from financial instruments. The remaining parts of IAS 32 deal only with financial instruments presentation matters. both in qualitative and quantitative terms. Overview of IFRS 7 IFRS 7: adds certain new disclosures about financial instruments to those previously required by IAS 32 Financial Instruments: Disclosure and Presentation (as it was then cited) replaces the disclosures previously required by IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions Puts all of those financial instruments disclosures together in a new standard on Financial Instruments: Disclosures. Certain other disclosures are required by class of financial instrument.6] The two main categories of disclosures required by IFRS 7 are:   Information about the significance of financial instruments. and the nature and extent of risks arising from those financial instruments. For those disclosures an entity must group its financial instruments into classes of similar instruments as appropriate to the nature of the information presented. Disclosure requirements of IFRS 7 IFRS requires certain disclosures to be presented by category of instrument based on the IAS 39 measurement categories.IFRS 7 Financial Instruments: Disclosures requires disclosure of information about the significance of financial instruments to an entity. 28 . Specific disclosures are required in relation to transferred financial assets and a number of other matters. [IFRS 7.

[IFRS 10:1] The Standard: [IFRS 10:1] requires a parent entity (an entity that controls one or more other entities) to present consolidated financial statements defines the principle of control. requiring entities to consolidate entities it controls. [IFRS 10:19] However. Objective The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee. a parent need not present consolidated financial statements if it meets all of the following conditions: [IFRS 10:4(a)] 29 . IFRS 10 was issued in May 2011 and applies to annual periods beginning on or after 1 January 2013.IFRS 10 — Consolidated Financial Statements Overview IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements. and establishes control as the basis for consolidation set out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee sets out the accounting requirements for the preparation of consolidated financial statements defines an investment entity and sets out an exception to consolidating particular subsidiaries of an investment entity*. Accounting requirements Preparation of consolidated financial statements A parent prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Furthermore. and do not object to. income. post-employment benefit plans or other long-term employee benefit plans to which IAS 19 Employee Benefits applies are not required to apply the requirements of IFRS 10. effective 1 January 2016. the parent not presenting consolidated financial statements its debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an overthe-counter market. nor is it in the process of filing.it is a wholly-owned subsidiary or is a partially-owned subsidiary of another entity and its other owners. equity. liabilities. including local and regional markets) it did not file. its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market. expenses and cash flows relating to transactions between entities of the group (profits or losses resulting from intragroup 30 . Investment entities are prohibited from consolidating particular subsidiaries (see further information below).* * Fair value measurement clause added by Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10. [IFRS 10:4B] Consolidation procedures Consolidated financial statements: [IFRS 10:B86] Combine like items of assets. including those not otherwise entitled to vote. and its ultimate or any intermediate parent of the parent produces financial statements available for public use that comply with IFRSs. in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with IFRS 10. equity. have been informed about. expenses and cash flows of the parent with those of its subsidiaries offset (eliminate) the carrying amount of the parent's investment in each subsidiary and the parent's portion of equity of each subsidiary (IFRS 3 Business Combinations explains how to account for any related goodwill) Eliminate in full intragroup assets and liabilities. income. IFRS 12 and IAS 28) amendments.

[IFRS 10:B88] The parent and subsidiaries are required to have the same reporting dates. but not required. or consolidation based on additional financial information prepared by subsidiary. such as inventory and fixed assets. Income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognised in the consolidated financial statements at the acquisition date.transactions that are recognised in assets. IFRS 12 Disclosure of Interests in Other Entities outlines the disclosures required. The difference between the date of the subsidiary's financial statements and that of the consolidated financial statements shall be no more than three months [IFRS 10:B92. IFRS 14 — Regulatory Deferral Accounts Objective The objective of IFRS 14 is to specify the financial reporting requirements for 'regulatory deferral account balances' that arise when an entity provides good or services to customers at a price or rate that is subject to rate regulation. Where impracticable.5] 31 . [IFRS 14. [IFRS 14:1] Scope IFRS 14 is permitted. IFRS 10:B93] Disclosure There are no disclosures specified in IFRS 10. to be applied where an entity conducts rate-regulated activities and has recognised amounts in its previous GAAP financial statements that meet the definition of 'regulatory deferral account balances' (sometimes referred to 'regulatory assets' and 'regulatory liabilities'). are eliminated in full). unless impracticable. the most recent financial statements of the subsidiary are used. A reporting entity includes the income and expenses of a subsidiary in the consolidated financial statements from the date it gains control until the date when the reporting entity ceases to control the subsidiary. Instead. adjusted for the effects of significant transactions or events between the reporting dates of the subsidiary and consolidated financial statements.

Accordingly: Separate line items are presented in the statement of financial position for the total of all regulatory deferral account debit balances. but are separately disclosed using subtotals [IFRS 14. and all regulatory deferral account credit balances [IFRS 14.22-23] 32 . However.9] Paragraph 11 of IAS 8 requires an entity to consider the requirements of IFRSs dealing with similar matters and the requirements of the Conceptual Framework when setting its accounting policies. an entity is not permitted to change accounting policies to start to recognize regulatory deferral account balances. or more reliable and not less relevant.13] Presentation in financial statements The impact of regulatory deferral account balances are separately presented in an entity's financial statements. This requirement applies regardless of the entity's previous presentation policies in respect of regulatory deferral balance accounts under its previous GAAP. The effect of the exemption is that eligible entities can continue to apply the accounting policies used for regulatory deferral account balances under the basis of accounting used immediately before adopting IFRS ('previous GAAP') when applying IFRSs. Entities are permitted to change their accounting policies for regulatory deferral account balances in accordance with IAS 8.21] The net movement in regulatory deferral account balances are separately presented in the statement of profit or loss and other comprehensive income using subtotals [IFRS 14.20] Regulatory deferral account balances are not classified between current and non-current. [IFRS 14. to the economic decision-making needs of users of the entity's financial statements. subject to the presentation requirements of IFRS 14 [IFRS 14. Changes in Accounting Estimates and Errors when an entity determines its accounting policies for regulatory deferral account balances. but only if the change makes the financial statements more relevant and no less reliable.Accounting policies for regulatory deferral account balances IFRS 14 provides an exemption from paragraph 11 of IAS 8 Accounting Policies. [IFRS 14.11].

the rate regulation that establishes the price(s) the entity can charge customers for the goods or services it provides . Insurance Act 1938 General Insurance Company Functions of the Executive Committee of General Insurance Council 64L (1) the functions of the Executive Committee of the General Insurance Council shall be (a) to aid and advise insurers.Disclosures IFRS 14 sets out disclosure objectives to allow users to assess: [IFRS 14. INSURANCE ACT. and risks associated with.27] the nature of. carrying on general insurance business. 1938 RELATING TO GENERAL INSURANCE COMPANY. and the impacts of risks and uncertainties on the recovery or reversal of regulatory deferral balance accounts.including information about the entity's rate-regulated activities and the rate-setting process. 33 . in the matter of setting up standards of conduct and sound practice and in the matter of rendering efficient service to holders of policies of general insurance. the identity of the rate regulator(s).

after giving the insurer an opportunity of being heard. (2) For the purpose of enabling it effectively to discharge its functions. (c) To bring to the notice of the Authority the case of any such insurrecting in a manner prejudicial the interests of holders of general insurance po1icies. waive the collection of the prescribed fees for any year and where any such resolution has been approved by the Authority. Executive Committee of the General Insurance Council may advise in controlling expenses. it may by a resolution passed by it. the Executive Committee of the General Insurance Council may collect such fees as may be prescribed from all insurers carrying on general insurance business: Provided that if the General Insurance Council thinks fit. and in the fixing any such limits the Authority shall have due regard to the conditions obtaining in general insurance business in the preceding year. administer a warning to the insurer. 34 . the Executive Committee of the General Insurance Council shall not collect any fees in relation to that year.(b) To render advice to the Authority in the matter of controlling the expenses of such insurers carrying on business in India in the matter of commission and other expenses. 64M. (d) To act in any matter incidental or ancillary to any of the matters specified in Clauses (a) to (c) as with the approval of the Authority may be notified by the General Insurance Council in the Gazette of India. (1) It shall be the duty of the Executive Committee of the General Insurance Council to meet at least once before the 31st day of March every year to advise the Authority in fixing under the proviso to subsection (1) of Section 40-C the limits by which the actual expenses of management incurred by an insurer carrying on general insurance business in respect of such business in the preceding year may exceed the limits prescribed under that sub-section. (2) Where an insurer is guilty of contravening the provisions of Section 40C with respect to the expenses of management the Authority may. and he may fix different limits for different groups of insurers.

(ii) The summoning and holding of meetings. (b) Determine the manner in which any prescribed fee may be collected. General powers of Life Insurance Council and General Insurance Council 64R (1) For the efficient performance of its duties. and the conditions subject to which. Powers of Executive Committees to act together in certain cases 64N. make regulations for (i) The holding of elections other than the first elections. The Central Government may prescribe the circumstances in which. (c) Keep and maintain up to date a copy of the list of all insurers who are members or associate members of the Insurance Association of India. (d) With the previous approval of the Authority. the Executive committee of the Life Insurance Council and the Executive Committee of the General Insurance Council may hold joint meetings for the purpose of doing with any matter of common interest to both Committee. as the case may be. the Authority may take such action against the insurer as may be prescribed. the manner in which. the conduct of business thereat and the number of persons necessary to form a quorum.(3) Where in any case two warnings given to an insurer under sub-section (2) have been disregarded by him. 35 . may (a) Appoint such officers and servants as may be necessary and fix the conditions of their service. the Life Insurance Council or the General Insurance Council. and it shall be lawful for the two Committees at any such joint meeting to delegate any matter under consideration for the determination of a subcommittee appointed for this purpose from amongst the members of the two Committees.

as the case may be. in such manner as may be directed by the Central Government. (b) where a notification under sub-section (1) of Section 64A has been issued declaring provident societies to be members of the Insurance Association of India. (iv) The levy and collection of any fees. as the case may be. Power of Central Government to remove difficulties 64S. into effective existence for the purposes of this Part. Power to exempt 36 . (c) The power to make the provisions of Section 40B applicable to the provident societies specified in Clause (b) in the same manner as they apply to insurers. and any such powers shall include (a) the power to hold. the General Insurance Council or the Executive Committee of any of the said Councils. the first elections to the Executive Committees of the Life Insurance Council and the General Insurance Council.(iii) The submission by insurers to the Executive Committee of the Life Insurance Council. C1ause (b) or C1ause (c) of sub-section (1). or the General Insurance Council of such statements or information as may be required of them and the submission of copies thereof by the insurers to the Authority. (v) The regulation of any other matter which may be necessary for the purpose of enabling it to carry out its duties under this Act. under C1ause (a). the powers to associate provident societies effectively in the exercise of all powers and the discharge of all functions of the Life Insurance Council and the Executive Committee thereof. The Central Government may exercise such powers as may be necessary for bringing the Life Insurance Council. (2) The Life Insurance Council or the General Insurance Council may authorize the Executive Committee concerned to exercise any of the powers conferred on the Life Insurance Council or the General Insurance Council.

exempt any insurer specified in sub-clause(c) of C1ause (9) of Section 2 from the operation of all or any of the provisions of this Part. Receipts and Payments Account [Cash Flow statement] and Profit and Loss Account [Shareholders’ Account] of the insurer shall be in conformity with the Accounting Standards (AS) issued by the ICAI. subject to such conditions and restrictions as it may think fit to impose. except that: 37 . Applicability of Accounting Standards---Every Balance Sheet. The Central Government may. IRDA REGULATIONS FOR FINANCIAL STATEMENTS OF GENERAL INSUARANCE COMPANY PART I Accounting principles for preparation of financial statements 1.64T. to the extent applicable to the insurers carrying on general insurance business.

Acquisition costs are those costs that vary with. shall not be applicable. 5. (ii) Accounting Standard 13 (AS 13) – Accounting for Investments. both of which represent premium income not relating to the current accounting period. Premium Deficiency--Premium deficiency shall be recognised if the sum of expected claim costs. Unearned premium as well as premium received in advance.---An insurer shall determine the values of investments in the following manner:a) Real Estate – Investment Property-. once a premium deficiency has occurred. shall be disclosed separately in the financial statements. 2. whichever is appropriate. if any. 4.Segment Reporting – shall apply irrespective of whether the securities of the insurer are traded publicly or not. Acquisition Costs---Acquisition costs. shall be expensed in the period in which they are incurred. For contracts exceeding four years. 38 .(i) Accounting Standard 3 (AS 3) – Cash Flow Statements – Cash Flow Statement shall be prepared only under the Direct Method. 3.e. and those estimated or anticipated under the policies. The most essential test is the obligatory relationship between costs and the execution of insurance contracts (i. related expenses and maintenance costs exceeds related unearned premiums. (iii) Accounting Standard 17 (AS 17) . Premium--Premium shall be recognised as income over the contract period or the period of risk. residual value being considered zero and no revaluation being permissible.Investment Property shall be measured at historical cost less accumulated depreciation and impairment loss. future changes to the liability shall be based on actuarial/technical evaluation. and are primarily related to. commencement of risk). Claims under policies comprise the claims made for losses incurred. the acquisition of new and renewal insurance contracts. 6. Procedure to determine the value of investments. Claims--The components of the ultimate cost of claims to an insurer comprise the claims under policies and claims settlement costs.

if any. Catastrophe Reserve---Catastrophe reserve shall be created in accordance with norms. For the purpose of calculation of fair value. Investment of funds out of catastrophe reserve shall be made in accordance with prescription of the Authority. An impairment loss shall be recognised as an expense in the Revenue/Profit and Loss Account immediately. b) Debt Securities--Debt securities including government securities and redeemable preference shares shall be considered as “held to maturity” securities and shall be measured at historical cost subject to amortisation. 8. Loans--Loans shall be measured at historical cost subject to impairment provisions. prescribed by the Authority. and (ii) Installment of loan falling due and remaining unpaid during the last six months. The insurer shall assess the quality of its loan assets and shall provide for impairment. c) Equity Securities and Derivative Instruments that are traded in active markets---Listed equity securities and derivative instruments that are traded in active markets shall be measured at fair value as at the balance sheet date. The impairment provision shall not be less than the aggregate amount of loans which are subject to defaults of the nature mentioned below:(i) Interest remaining unpaid for over a period of six months.The Insurer shall assess at each balance sheet date whether any impairment of the investment property has occurred. It is clarified that this reserve is towards meeting losses which might arise due to an entirely unexpected set of events and not for any specific known purpose. Fair value as at the balance sheet date and the basis of its determination shall be disclosed in the financial statements as additional information. PART II 39 . This reserve is in the nature of an amount set aside for the potential future liability against the insurance policies in force. the lowest of the last quoted closing price of the stock exchanges where the securities are listed shall be taken. 7.

Ageing of claims – distinguishing between claims outstanding for more than six months and other claims. for: (a) Purchases where deliveries are pending. 40 . Premiums. 8. including whether reliance has been placed on external evidence. 7. Extent of premium income recognised. Contingent Liabilities: (a) Partly-paid up investments (b) Underwriting commitments outstanding (c) Claims. based on varying risk pattern. with basis and justification therefor. written from business in/outside India. paid to claimants in/outside India. 5. The following shall be disclosed by way of notes to the Balance Sheet: 1. not acknowledged as debts (d) Guarantees given by or on behalf of the company (e) Statutory demands/liabilities in dispute. (b) Sales where payments are overdue. category wise. Claims. Encumbrances to assets of the company in and outside India. 9. 3. Investments and Fixed Assets. less reinsurance. Value of contracts in relation to investments.Disclosures forming part of Financial Statements A. less reinsurance. 4. other than those under policies. 6. not provided for (f) Reinsurance obligations (g) Others (to be specified) 2. Commitments made and outstanding for Loans. Actuarial assumptions for claim liabilities in the case of policies exceeding four years.

Any other accounting policies followed by the insurer shall be stated in the manner required under Accounting Standard AS 1 issued by ICAI. All significant accounting policies in terms of the accounting standards issued by the ICAI. B. 41 . security and any special rights in and outside India. Basis of amortisation of debt securities. (a) Unrealised gain/losses arising due to changes in the fair value of listed equity shares and derivative instruments are to be taken to equity under the head ‘Fair Value Change Account’ and on realisation reported in profit and loss Account. 13. 14. 16. Fair value of investment property and the basis therefor. Computation of managerial remuneration. 15. 11. the credit balance in the ‘Fair Value Change Account’ is not available for distribution. nature. Operating expenses relating to insurance business: basis of allocation of expenditure to various classes of business. (b) Pending realisation. Any departure from the accounting policies as aforesaid shall be separately disclosed with reasons for such departure. The following information shall also be disclosed: 1.10. Investments made in accordance with any statutory requirement should be disclosed separately together with its amount. and significant principles and policies given in Part I of Accounting Principles. C. The following accounting policies shall form an integral part of the financial statements: 1. Historical costs of those investments valued on fair value basis. 12. 2. Claims settled and remaining outstanding for a period of more than six months on the balance sheet date.

Segregation into performing/ non performing investments for purpose of income recognition as per the directions. Dividends and Rent between Revenue Account and Profit and Loss Account. subject to as aforesaid. include any amount written off or retained by way of providing for depreciation. unless the context otherwise requires (a) the expression ‘provision’ shall. the amount of income tax deducted at source being included under 'advance taxes paid'. subject to note II below mean any amount written off or retained by way of providing for depreciation. Basis of allocation of Interest. A summary of financial statements for the last five years. or retained by way of providing for any known liability or loss of which the amount cannot be determined with substantial accuracy. Accounting Ratios as may be prescribed by the Authority. dividends and rentals receivable in connection with an investment should be stated as gross value. renewals or diminution in value of assets. 42 . issued by the Authority 3. renewals or diminution in value of assets or retained by way of providing for any known liability. 4) Income from rent shall not include any notional rent. 5. in the manner as may be prescribed by the Authority. 2) The figures in the financial statements may be rounded off to the nearest thousands. 4.2. if any. Revenue Account and Profit and Loss Account should be given. (b) the expression "reserve" shall not. PART III GENERAL INSTRUCTIONS FOR PREPARATION OF FINANCIAL STATEMENTS 1) The corresponding amounts for the immediately preceding financial year for all items shown in the Balance Sheet. Percentage of business sector-wise. For the purposes of financial statements. 3) Interest. 6.

the excess shall be treated for the purposes of these accounts as a reserve and not as a provision. 43 . (d) The expression "liability" shall include all liabilities in respect of expenditure contracted for and all disputed or contingent liabilities. Preparation of Financial Statements (1) An insurer shall prepare the Revenue Account. make an appropriate qualification in this regard in his report. (2) An insurer shall prepare separate Receipts and Payments Account in accordance with the Direct Method prescribed in AS 3 – “Cash Flow Statement” issued by the ICAI. and miscellaneous insurance business.(c) the expression capital reserve shall not include any amount regarded as free for distribution through the profit and loss account. however. shall be separately disclosed indicating the amount of premiums involved and the amount of risks covered. The auditor shall. 6) The company should make provisions for damages under lawsuits where the management is of the opinion that the award may go against the insurer. (II) (a) Where: any amount written off or retained by way of providing for depreciation. marine. Form B-PL. and the expression "revenue reserve" shall mean any reserve other than a capital reserve. Profit and Loss Account [Shareholders’ Account] and the Balance Sheet in Form B-RA. or (b) any amount retained by way of providing for any known liability is in excess of the amount which in the opinion of the directors is reasonably necessary for the purpose. or as near thereto as the circumstances permit. shall be shown separately. Provided that an insurer shall prepare Revenue Account separately for fire. renewals or diminution in value of assets. 7) Risks assumed in excess of the statutory provisions. if any. and Form B-BS. 8) Any debit balance of Profit and Loss Account shall be shown as deduction from uncommitted reserves and the balance if any.

FORM B-RA Name of the Insurer: Registration No. Change in provision for unexpired risk 4.’000) . and miscellaneous insurance) Particulars 1. Operating Expenses related to Insurance Business 4 4. Commission 3 3. Claims Incurred (Net) 2 2. 20___.’000) (Rs. Interest. (To be prepared separately fire. Premiums earned (Net) 2. Others – To be specified 44 Current Previous Year Year (Rs. marine. and Date of Registration with the IRDA REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH. Others (to be specified) 3. Dividend & Rent – Gross Schedule 1 TOTAL (A) 1.

Particulars 1.’000) (Rs. 20___. and Date of Registration with the IRDA PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH. Dividend & Rent – Gross (b) Profit on sale of investments 45 Current Previous Year Year (Rs. Schedule OPERATING PROFIT/(LOSS) (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance INCOME FROM INVESTMENTS (a) Interest.B) FORM B-PL Name of the Insurer: Registration No.’000) .TOTAL (B) Operating Profit/(Loss) from Fire/Marine/Miscellaneous Business (A . 2.

Others (to be specified) OTHER EXPENSES (a) Expenses other than those related to Insurance Business (b) Others (To be specified) TOTAL (B) Profit Before Tax Provision for Taxation Profit After Tax Less: Catastrophe Reserve * Profit available for appropriation APPROPRIATIONS (a) Interim dividends paid during the year 46 . PROVISIONS (Other than taxation) (a) For diminution in the value of investments (b) 5.Less: Loss on sale of investments 3. OTHER INCOME (To be specified) TOTAL (A) 4.

’000) (Rs.(b) Proposed final dividend (c) Dividend distribution tax (d) Transfer to any Reserves or Other Accounts (to be specified) Balance of profit/ loss brought forward from last year Balance carried forward to Balance Sheet FORM B-BL Name of the Insurer: Registration No. 20___.’000) . Schedule SOURCES OF FUNDS SHARE 5 CAPITAL RESERVES AND SURPLUS 6 47 Current Previous Year Year (Rs. and Date of Registration with the IRDA BALANCE SHEET AS AT 31ST MARCH.

FAIR VALUE CHANGE ACCOUNT BORROWINGS 7 TOTAL APPLICATION OF FUNDS INVESTMENTS 8 LOANS 9 FIXED ASSETS 10 CURRENT ASSETS Cash and Bank Balances 11 Advances and Other Assets 12 Sub-Total (A) CURRENT LIABILITIES 13 PROVISIONS 14 Sub-Total (B) 48 .

Underwriting commitments outstanding 4. Others (to be specified) TOTAL SCHEDULES FORMING PART OF FINANCIAL STATEMENTS 49 . (Rs.NET CURRENT ASSETS (C) = (A . Partly paid-up investments 2. Statutory demands/ liabilities in dispute. Claims. Reinsurance obligations 7. not Current Year Previous Year (Rs. Guarantees given by or on behalf of the Company 5.’000). other than against policies.B) MISCELLANEOUS EXPENDITURE (to the extent 15 not written off or adjusted) DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT TOTAL CONTINGENT LIABILITIES Particulars 1. acknowledged as debts by the company 3.’000). not provided for 6.

’000) .SCHEDULE – 1 PREMIUM EARNED [NET] Particulars Premium from direct business written Add: Premium on reinsurance accepted Less : Premium on reinsurance ceded Net Premium Adjustment for changes in Unearned Premium Adjustment for changes in premium received in advance Total Premium Earned (Net) Premium Income from business effected : In India Outside India Total Premium Earned (Net) 50 Current Year Previous Year (Rs.’000) (Rs.

SCHEDULE – 2 CLAIMS INCURRED [NET] Particulars Claims paid Direct Add :Re-insurance accepted Less :Re-insurance Ceded Net Claims paid Total Claims Incurred Claims paid to claimants: In India Outside India Total Claims Incurred 51 Current Year Previous Year (Rs.’000) (Rs.’000) .

’000) 1.’000) Commission paid Direct Add: Re-insurance Accepted Less: Commission on ReInsurance Ceded Net Commission SCHEDULE – 4 OPERATING EXPENSES RELATED TO INSURANCE BUSINESS Particulars Current Year Previous Year (Rs.’000) . Employees’ remuneration & welfare benefits 52 (Rs.’000) (Rs.3 COMMISSION Particulars Current Year Previous Year (Rs.SCHEDULE.

Depreciation TOTAL SCHEDULE – 5 53 . conveyance and vehicle running expenses 4. rates & taxes 5. Others (to be specified) 14.2. Travel. Advertisement and publicity 12. Printing & stationery 7. Managerial remuneration 3. Medical fees 10. Auditors' fees. Communication 8. Rents. expenses etc (a) as auditor (b) as adviser or in any other capacity. Legal & professional charges 9. and (c) in any other capacity 11. Interest & Bank Charges 13. Repairs 6. in respect of (i) Taxation matters (ii) Insurance matters (iii) Management services.

Called-up Capital Equity Shares of Rs.. Issued Capital Equity Shares of Rs.. Subscribed Capital Equity Shares of Rs.each 5.’000).’000). (Rs.... Less : Calls unpaid Add : Equity Shares forfeited (Amount originally paid up) Less : Preliminary Expenses Expenses including commission or brokerage on Underwriting or subscription of shares TOTAL SCHEDULE – 5A SHARE CAPITAL PATTERN OF SHAREHOLDING [As certified by the Management] 54 Current Previous Year Year (Rs.... . each 2. Authorised Capital Equity Shares of Rs...SHARE CAPITAL Particulars 1. ......each 4..each 3. ...

’000) . Capital Redemption Reserve 3 Share Premium 4 General Reserves Less: Debit balance in Profit and Loss Account Less: Amount utilized for Buy-back 5 Catastrophe Reserve 6 Other Reserves (to be specified) 7 Balance of Profit in Profit & Loss Account TOTAL 55 Current Year Previous Year (Rs.Shareholder Current Year Previous Year Number % of Number of of Shares Holding Shares % of Holding Promoters · Indian · Foreign Others TOTAL SCHEDULE – 6 RESERVES AND SURPLUS Particulars 1.’000) (Rs. Capital Reserve 2.

’000). Others (to be specified) Current Year Previous Year (Rs.8 INVESTMENTS Particulars LONG TERM INVESTMENTS 1.’000) . Fixed Deposits 3. Debentures/ Bonds 2.SCHEDULE . (Rs. Other entities carrying on insurance business 6. Government securities and Government guaranteed bonds including Treasury Bills 2. Other Approved Securities 3.’000) (Rs. Financial Institutions 5. TOTAL SCHEDULE.’000). Banks 4.7 BORROWINGS Particulars 1. Other Investments (a) Shares (aa) Equity (bb)Preference 56 Current Year Previous Year (Rs.

Other Approved Securities 3. Government securities and Government guaranteed bonds including Treasury Bills 2.(b) Mutual Funds (c) Derivative Instruments (d) Debentures/ Bonds (e) Other Securities (to be specified) (f) Subsidiaries (g) Investment Properties-Real Estate SHORT TERM INVESTMENTS 1. Other Investments (a) Shares (aa) Equity (bb)Preference (b) Mutual Funds (c) Derivative Instruments (d) Debentures/ Bonds (e) Other Securities (to be specified) (f) Subsidiaries (g) Investment Properties-Real Estate TOTAL INVESTMENTS 1 In India 57 .

9 LOANS Particulars 1. PERFORMANCE-WISE CLASSIFICATION (a) Loans classified as standard 58 Current Year Previous Year (Rs. Govt.’000) .’000) (Rs. BORROWER-WISE CLASSIFICATION (a) Central and State Governments (b) Banks and Financial Institutions (c) Subsidiaries (d) Industrial Undertakings (e) Others (to be specified) TOTAL 3. SECURITY-WISE CLASSIFICATION Secured (a) On mortgage of property (aa) In India (bb)Outside India (b) On Shares. Bonds. Securities (c) Others (to be specified) Unsecured TOTAL 2.2 Outside India TOTAL SCHEDULE .

’000) Particula rs Cost/ Gross Block Net Block Depreciation Openi Additio Deducti Closi Upt For On Sales/ To ng ns ng o Th Adjustme Dat at us Las e nts e Year t Yea ons 59 As ye ar Yea r en r d Previo .(aa) In India (bb)Outside India (b) Non-performing loans less provisions (aa) In India (bb)Outside India TOTAL 4.10 FIXED ASSETS (Rs. MATURITY-WISE CLASSIFICATION (a) Short Term (b) Long Term TOTAL SCHEDULE .

Goodwill Intangible s (specify) LandFreehold Leasehold Property Buildings Furniture & Fittings Informati on Technolo gy Equipmen t Vehicles Office Equipmen t Others (Specify nature) TOTAL PREVIO US YEAR SCHEDULE.11 60 .

CASH AND BANK BALANCES Particulars 1.’000) . Cash (including cheques. 4.’000) (Rs. drafts and stamps) 2. (b) Current Accounts (c) Others (to be specified) Money at Call and Short Notice (a) With Banks (b) With other Institutions Others (to be specified) TOTAL Balances with non-scheduled banks included in 2 and 3 above CASH & BANK BALANCES 1 In India 2 Outside India 61 Current Previous Year Year (Rs. Bank Balances (a) Deposit Accounts (aa) Short-term (due within 12 months) (bb) Others 3.

[Section 2(6)] • Committee – means the committee of management or board of directors in which the management of the affairs of the society is vested under section 73 of the Maharashtra Cooperative Societies Act. 1960 [Section 2(10-aii)] 62 . 1960 and include registered amendments therein.TOTAL LEGAL PROVISIONS AND STATUTORY REQUIREMENTS FOR CO-OPERATIVE SOCIETIES Definitions • Bye laws – means bye laws registered under the Maharashtra Cooperative Societies Act. 1949 [Section 2(10)] • Cooperative Appellate Court – means the Maharashtra Cooperative Appellate Court constituted under the Maharashtra Cooperative Societies Act. 1960 [Section 2(10-ai)] • Cooperative Court – means a court constituted under the Maharashtra Cooperative Societies Act. [Section 2(5)] • Central Bank – means a cooperative bank the object of which includes the creation of funds to be loaned to other societies. 1960 [Section 2(7)] • Cooperative Bank – means a society which is doing the business of banking as defined in Section 5(1)(b) of the Banking Regulation act.

Kulkarni. Managing Director.operative society which is subsequently registered Or A person duly admitted to membership of a society after registration and includes a nominal. Managing Director. Managing Director. to attach and sell the property of defaulter or to execute any decree by attachment and sale of property Rule 2(j) P. ViceChairman. Fluent Consultants Pvt Ltd Pune 11 Definitions • Officer – means a person elected or appointed by a society to any office of the society according to its bye-laws to give directions in regard to the business of the society Contd. Fluent Consultants Pvt Ltd Pune 10 Definitions • Associate member – means a member who holds jointly a share of a society with others but whose name does not stand first in the share certificate [Section 2(19)(b)] • Nominal member – means a person admitted to membership as such after registration in accordance with the bye. Managing Director. Kulkarni. the powers of Registrar under section 156 Rule 2(h) P.laws [Section 2(19)(c)] P. associate or sympathizer member [Section 2(19)(a)] P. Managing Director. Manager. Kulkarni. Kulkarni. R. Managing director. Managing Director. R. Fluent Consultants Pvt Ltd Pune 12 Definitions . the Rules or the bye-laws [Section 2(20)] P. Fluent Consultants Pvt Ltd Pune 14 Definitions • Sale officer – means an officer empowered by the Registrar. Kulkarni. R. Fluent Consultants Pvt Ltd Pune 13 Definitions • Recovery officer – means any person empowered to exercise. R.) and includes a Chairman. R. …… P. Secretary. Fluent Consultants Pvt Ltd Pune 8 • Member – means a person joining in an application for the registration of a co. Kulkarni.Officer (contd.• Cooperative Year – means a year ending on 31st March for balancing of accounts. by general or special order. Treasurer and Member of the committee and any other person elected or appointed under this Act. Kulkarni. R. Fluent Consultants Pvt Ltd Pune 15 Definitions 63 . The Registrar may fix any other date as year end for any society or class of societies [Section 2(10aiii)] P. R. President. Managing Director. in any district.

promotion of the economic interests or general welfare of its members or of the public . Fluent Consultants Pvt Ltd Pune 16 Registrar • State Govt. Kulkarni. Fluent Consultants Pvt Ltd Pune 20 Application for registration • Application is accompanied by four copies of the proposed bye-laws • Copy of the resolution authorizing the persons to sign the application for registration must be attached 64 .in accordance with the Co-0operative principles • A society may be registered which has the object of facilitating the operations of any other society Section 4 P. Kulkarni. Kulkarni. P. …. R. Fluent Consultants Pvt Ltd Pune 17 Registration of Society • A society may be registered which has as its objects. appoints the Registrar of Co-operative Societies (RCS) for the State and also appoints persons to assist him for the local areas or the State as may be specified and confer by specific order on any such powers of the RCS Section 3 P. R. R. Kulkarni. Managing Director. Fluent Consultants Pvt Ltd Pune 19 Application for registration • Application in prescribed form signed by at least 10 persons • Signatory to the application should be member of the committee of the society and should be authorized by the committee by resolution to sign on behalf of the society Contd.• Working capital – means funds at the disposal of the society inclusive of paid up share capital + funds built out of profits + money raised by borrowing and by other means [section 2(31)] P. Managing Director. Kulkarni. Managing Director. Fluent Consultants Pvt Ltd Pune 18 Conditions of registration (other than Federal and Agri. Managing Director. Managing Director.. R. related societies) • At least 10 persons who are qualified to become member as per the Act • Each of such people should be from different family • Such persons should be residing within the area of operation of the society • Word ‘Limited’ shall be the last word of the name of the society Section 6 P. . R.

Kulkarni. w. the rules and the applicable other laws . rule 5 …. Managing Director. In such event the Registrar shall issue the registration certificate for the society within 15 days from expiry of two month period. Managing Director. Section 9(2) r.Proposed bye-laws of the society are not contrary to the Act. R. …. Fluent Consultants Pvt Ltd Pune 22 Registration • If the Registrar fails to dispose the application for registration within said period of two months. rule 5 P. notice of proposed amendment is given to the members and resolution is passed by not less than 2/3 65 . …. rule 5 and 8 contd. he shall forward the application to his next higher authority within 15 days of expiry of two month period • If Registrar himself is the registering authority he shall forward the application to the State Govt. w. Managing Director. R. • Amendment should be passed in the General Meeting. where the issue was on agenda. R. R.proposed society has complied with the provisions of the Act. Managing Director. w. R.laws within two months from receipt of application for registration Section 9(1) r. Kulkarni. Kulkarni. Contd.• Prescribed fee must be paid Section 8 r. are complied with .policy directions issued by the State Govt. Section 9(3) r. w. Fluent Consultants Pvt Ltd Pune 25 Amendment to bye-laws • No amendment of the bye-laws shall be valid until registered under the Act. • But in failure to do so it shall be deemed that the society and its bye-laws are registered. P. Kulkarni. . Fluent Consultants Pvt Ltd Pune 23 Registration • Such higher authority shall dispose of the application within two months from receipt by it . Kulkarni. l • If the Registrar refuses the registration he shall immediately communicate his decision with reasons for refusal . w. • The said communication shall be sent to the person whose signature appears first on the registration application. P. as per rule 8 in bye-laws then he shall register the society and its bye. Section 9(2) r. rule 7 P. Fluent Consultants Pvt Ltd Pune 24 Registration. rule 4 P. if any. Fluent Consultants Pvt Ltd Pune 21 Registration • If the Registrar is satisfied that. Managing Director. Registrar may ask to add missing points.

Kulkarni. w. Managing Director. Fluent Consultants Pvt Ltd Pune 27 Registrar’s powers to direct amendment in bye-laws • If the Registrar is of the view that in the interest of the society the bye-laws must be changed. Fluent Consultants Pvt Ltd Pune 66 . Kulkarni. rule 13(2). Managing Director. Fluent Consultants Pvt Ltd Pune 30 P. Kulkarni. rule 14 P. Managing Director. R. R.E) to make amendments in the bye-laws within a given time but such time shall not be more than 2 months. Kulkarni. Managing Director. He shall issue to the society a copy of the amendment certified by him. rule 12 … Cont. …. he can direct in prescribed manner (Form .members present and voting Section 13 r. • Every application for amendment must be disposed of by the Registrar within two months. R. Fluent Consultants Pvt Ltd Pune 32 P. • If not so disposed same procedure as it is for application for registration of the society Section 13 r. Fluent Consultants Pvt Ltd Pune 28 Society not effecting amendment as directed • If the society fails to make the amendment within specified time the Registrar may after giving hearing to the society register the amendment. w. Kulkarni. • Certificate of registration is amended to that effect by the Registrar Section 15 r. Fluent Consultants Pvt Ltd Pune 31 P. w. R. He has to give exact amendment that the society needs to make. Fluent Consultants Pvt Ltd Pune 29 Change of name of society • A society may change its name by passing a resolution at the General Meeting and also proposing amendment in the bye-laws for that purpose. Kulkarni. Section 14(1) r. • This needs approval from the Registrar and it is notified in Official Gazette . P. Fluent Consultants Pvt Ltd Pune 26 Amendment to bye-laws • Resolution passing the amendment should be forwarded to the Registrar within two months from the date of meeting. R.(3) and (4) P. Managing Director. Managing Director. R. Kulkarni. R. w. In such event it shall be deemed that the society has made the amendment Section 14(2) r. rule 12 P. Managing Director. • Change in name does not affect the rights or liabilities of the society and they continue in new name. R. w. Kulkarni. rule 13(1) – Form E P. Managing Director.

During office hours or at any time fixed by the society. Contd…. . . Managing Director.. List of members of committee.Within one month from date of payment of fees 1. Managing Director. rule 27 and 30 P. Fluent Consultants Pvt Ltd Pune 34 P. Kulkarni.That his employer shall be competent to deduct from the salary payable to him by the employer . At society’s office. 4. Kulkarni. Contd… P. R.To inspect. Minutes of General Meeting. Kulkarni. Fluent Consultants Pvt Ltd Pune 35 P. Fluent Consultants Pvt Ltd Pune 36 Rights of Member • Every member of a society shall be entitled. a copy of such agreement duly attested by the officer of the society shall be forwarded by the society to the employer. Fluent Consultants Pvt Ltd Pune 40 Deduction from salary to meet claim of society • On receipt of a copy of such agreement the employer shall make the deduction in accordance with the agreement and pay the amount so deducted to the society 67 . P. Fluent Consultants Pvt Ltd Pune 39 Deduction from salary to meet claim of society • To demand the deduction from the employer as per the agreement executed by the employee. Contd.On request in writing. P. Free of cost. Portions of the books and records in which his transactions with the society are recorded Section 32(1) r. Kulkarni. Kulkarni. Kulkarni. Register of members. Managing Director. Kulkarni. R.Such total amount payable to the society and in such installments as specified in the agreement .. A copy of the Act and rules.. 1. Managing Director. . 6. . A copy of any of the documents mentioned at Section 32(1) Section 32 (2) r. Fluent Consultants Pvt Ltd Pune 37 Rights of Member • Society shall furnish t a member. R.33 P. R. 5. w. Managing Director.And to pay to the society amount so deducted in satisfaction of the debtor demand of the society Section 49(1) . Fluent Consultants Pvt Ltd Pune 38 Deduction from salary to meet claim of society • A member of the society may execute an agreement in favour of the society . R.Payment of such fees as may be prescribed and . Section 49(1) . Minutes of Committee Meeting and 8. w. Managing Director. 3. 2.. Managing Director. R. Byelaws. 7. R. rule 27 and 30 …. Latest audited annual balance sheet and profit and loss account.

1936 Section 49(2) . Fluent Consultants Pvt Ltd Pune 46 P. Fluent Consultants Pvt Ltd Pune 48 P. Managing Director. R.5 times the interest charged by the society to the member Section 49(3) . Kulkarni. Fluent Consultants Pvt Ltd Pune 43 P.. Managing Director. the employer is liable to pay interest to the society. R. Contd. R. Managing Director. the Act. Kulkarni. The Bye-laws. mines and oil fields …. R. the employer shall be personally liable for payment of requisitioned amount. Kulkarni. Fluent Consultants Pvt Ltd Pune 42 Deduction from salary to meet claim of society • Any amount kept unpaid by the employer after the requisition by the society ca be recovered by the society from the employer as if recovery of land revenue. Section 73(1) P. …. Kulkarni. Kulkarni. Managing Director. Contd. Fluent Consultants Pvt Ltd Pune 41 Deduction from salary to meet claim of society • If the employer fails to deduct the amount from the salary or deducts but does not pay to the society. from date of deduction to the date of payment to the society. • If deduction is made but payment is not done to the society. All decisions taken by the committee during its term relating to business of the society and 2. P. Fluent Consultants Pvt Ltd Pune 51 Bond by the committee member . Managing Director. Section 49(3) • Provisions of section 49 do not apply to employees of Railway. Kulkarni. Managing Director. Fluent Consultants Pvt Ltd Pune 50 Liability of Committee Member Members of the Committee are jointly and severally responsible for 1. Kulkarni. Fluent Consultants Pvt Ltd Pune 44 P. Kulkarni. about his 68 . .. Kulkarni. R.• Such deduction and payment from the salary shall be treated as if it were a part of wages payable under the Payment of Wages Act. R. Fluent Consultants Pvt Ltd Pune 45 P. R. The Rules and.Every member of the committee has to execute a bond on stamp paper in prescribed manner. Managing Director. Section 49(4) P. at 1. Kulkarni. and it shall exercise powers and perform duties as conferred or imposed by.. R. P. after a certificate of recovery is issued by the Registrar …. R. Kulkarni. Managing Director. Managing Director. All the acts and omissions detrimental to the interest of the society Section 73(1AB) P.. Fluent Consultants Pvt Ltd Pune 49 Committee Management of every society shall vest in a Committee (Board of Director) constituted in accordance with. Managing Director. Fluent Consultants Pvt Ltd Pune 47 P. R.. Managing Director. R.

R. Kulkarni. P.liability for acts or omissions detrimental to the bank. R. any number of children born out of a single subsequent delivery • (b) Child does not include an adopted child or children Contd. Kulkarni. R. Member failing to give such bond is deemed to have vacated the office of member of a committee Section 73(1AB) r. w.Has expressed dissenting opinion which is recorded in the minutes . P. form M-20 P. …. Managing Director. subscribed share capital or turnover of the society the Registrar may by special or general order published in the Official Gazette prescribe the maximum number of members in a society or class of societies Section 73(2) P. Kulkarni. Managing Director. Fluent Consultants Pvt Ltd Pune 53 Maximum number of members on the Committee • Considering the area of operation. within 15 days of assuming the office. rule 58. R.Was not present when the resolution was passed or decision was taken and the member has not confirmed the minutes ** The dissenting member may communicate his dissent to the Registrar within 7 days from the date of resolution /decision Section 73 (1AB) P. Kulkarni. Fluent Consultants Pvt Ltd Pune 55 Disqualification for membership of committee Section 73FF(1)(vii) – explanation • (a) If a couple has one child on or after 7/9/2001. Fluent Consultants Pvt Ltd Pune 56 Disqualification for membership of committee Section 73FF(2) • A member who has incurred any disqualification u/s 73FF(1) shall cease to be a member of the committee and his seat be deemed to be vacant P. Managing Director. Managing Director. Fluent Consultants Pvt Ltd Pune 57 Dispute – Section 91 69 . R. Managing Director. Fluent Consultants Pvt Ltd Pune 52 Member when not liable **The member is not liable as per the bond to a resolution / decision when the member . Fluent Consultants Pvt Ltd Pune 54 Disqualification for membership of committee Section 73FF(1)(vii) • A member is disqualified if he/she has more than two children • But no disqualification if more than two children prior to 7/9/2001 and there is no addition after 7/9/2001 or one year thereafter Contd. R. Kulkarni. …. Kulkarni. Managing Director.

the Registrar may after such inquiries as he may deem fit. R. past member or the nominee. Managing Director. R. P. For any other dispute as per the provisions of the Limitation Act. by the Co-operative Bank to the Registrar. Fluent Consultants Pvt Ltd Pune 62 Recovery of arrears as land revenue – Section 101 • The certificate for recovery granted by the Registrar shall be final and conclusive proof of the arrears stated therein. R. R. Kulkarni. past member or deceased member or by any officer. 70 . Kulkarni. Fluent Consultants Pvt Ltd Pune 58 Dispute – Section 91 • Provided that. In case of past member or deceased member for recovery of dues from him.. …. Managing Director. Contd. 1963 Section 92 P. any proceeding for the recovery of the amount as arrears of land revenue on a certificate granted under section 101(1) of the Act or the recovery proceeding by the Registrar or by any such authorized officer who is empowered under section 156(1) of the Act shall not be a dispute under section 91 Contd. …. Kulkarni. Kulkarni. a member of society 3. …… P. Managing Director. along with the statement of accounts in respect of arrears.• Any dispute touching the business of the society shall be referred by any of the parties to the dispute to the Cooperative Court if both the parties thereto are one or the other of the following 1. society 2. Managing Director. Managing Director. grant a certificate for recovery of the amount stated therein. Fluent Consultants Pvt Ltd Pune 59 Dispute – Section 91 • Following are the disputes within the meaning of section 91 1. Fluent Consultants Pvt Ltd Pune 61 Recovery of arrears as land revenue – Section 101 • On making an application. 1. heir or legal representative of a deceased member 2. past officer or deceased officer P. from the date he ceases to a member or from his death 2. A claim by or against the society for any debt or demand due to it from a member. Fluent Consultants Pvt Ltd Pune 60 Limitation • The period of limitation for the dispute to be referred to the Co-operative Court (u/s 91) shall be from. A claim by a society for any loss caused to it by a member. P. a surety of the member Contd. R. Kulkarni.

cost etc.icai. 1. Any amount due under a decision. R. Any amount due under a decree or order of a Civil Court obtained by a society 2. Managing Director. shall be recoverable by the attachment and sale or by sale without attachment of the property of the person against whom such decree. along with interest. Kulkarni. R. Co-Operative Appellate Court or Liquidator 3. P.in www. award or order has been obtained or passed. Co-Operative Court.irda.mca. Kulkarni. ….iasplus. REFERENCES www.wikipedia.wikipedia.in www.gov. Fluent Consultants Pvt Ltd Pune 63 Registrar’s powers for recovery – Section 156 • The Registrar or the officer empowered by him (SRO) may recover.html?post_id=474 71 .org/post. The amount to be recovered as stated above.caclubindia. Managing Director. award or order of the Registrar.org/wiki/IFRS_1 http://www.. decision.gov.com http://www.• The recovery of the amount stated in the certificate shall be recoverable as a land revenue recovery.iasplus. P. Fluent Consultants Pvt Ltd Pune 64 Registrar’s powers for recovery – Section 156 4.in www.org/wiki/International_Financial_Reporting_Standards http://en.com/en/standards/ifrs/ifrs14 http://en. Any sum awarded by way of costs under the Act Contd.

72 .