Financial Statements of a Company

fta

O Meanlig

study ol ttle Chapl€r 6hould enable you io und€Brandi ot Flnatuid Sral€m.nE

o

o o

cont€nb ol annuar Raporls
Major H€adl.06 ol lh€ B6l6nc6 sh€€l ol s company in rh€ Pr.edb€d Foh ol rh6 &hn€ Shaar ol a Company bo$ in Hod&nrar Fom and

O P6pa€lon
Essani
a

O Objdliv€s

B

Slll6m.nb slaronods Pdd€sl €6st6d in Financld srabmgnE
oi Fin6rcial
s or Finaicrar

or

us.G o, Financlalstat€m3nt6

Financial siabnents, ihe cnd produci of rhe a.counring process, a.e prcpared lollowins tbc rc.ounii.s .onceprs, accounbng principles consistently followed dnd thc legal environmeli in which the enierpri$ operales. Fimncial St.toments arc usedbyr nunbc.oluserslo univcarlhecDndusions.ndde.isions
MEANING OF FINANCIAI STATE ENIS ot ac.ouniing dat. produced a! proccss by enl$p.ise throush rhirh it coDrunicalcs lhe the e.d of lhc o.cou.ti.g oclounti.g inform.tion to ihe j n tcrn al ( M!n!gcncn!) a nd exlemal users 'l he extendl users co be iNeslors, lerders, suppliers $d h.de credilob. cu md theii agen. ies md enDloJees. Cuslonanly, a p!dffinan.isl stalthonk indudd:

Fi.ocisl Strrcmcnb *e thc sumnaised st.lcnents

o

rd liabiln'es, i.?., financillposition dste.Ii is rko known as Posibon St8temcni sivon \ii\ P.ofit an1 lats A..ount: Ii shows lhe net r$olt of busjnese ope.aiions duins!n accouting pfiod.Ii is also kno{n as ln$heStatemenr' liiit S.hedules atd Notes to Accolrrsi The Bslamc Sheet md Prolit a.d Loss A.count are suppnncd by the sc]redulcs hsvins dehns oittens ir the Balance Shee!and Profitmd LossAccour.Nhilcrhenotes t. a.counis arethtst.teheni ofaccountins policies 8nd exDloation to matenal iiums Flnanclal slatononrs-DeilnRlons "Finoncidl stdlrm?nti ofe p,?parad fDt the rxrpo:t ol p {ntinEapern\litdlrcti?\t of npan an prcst?si,tdd? b) tAz mno€znint nhd.l.al bth the status oltM!n, i thz business nrd th? fps,lts o.htzt2d .l,ri4 th. pena4 rndet rc&u. Ane.ilar Instftut. olcerrified Public Accounhnrs (AIoPA)
(i) aatdn.€ Sle€ai It is. sla€neDt of.sseh
ofan ent.ry.ise at
a

r'idbs&

of

Fi@tuizl Statenent*n1

"?h. Fitutuidt strkmats prcurle d suMrJ of a^tuhts of a busi@ss .nt ryitg the Bdld@ SA.et refl.ctina ttu @sts, liabilitizs dnA epitot u ot a @nab date dnn ihtutu statemz Eh'uirE the ftsultt ond opereioB tlltinA a @flain peti.A.' John N. Myer "Fimacial Satewnts are thz ead prcaud of lituncidl d.6tu1ins pnpagd b! trz tucountr ol d busire$ enterytbe Nhtr puryort b ftued $e fiaancirt pBitios of trz enteryie, ttu Esuh Xi6 re@nt utio i.t dnC an dtu1rti6 of uhat h@ b@^.Lre unh

min$."

-Snith ud Ashbum€

CHAFACTERISIICS AND NATURE OF FIIiIANCIAL STAIEIIENTS

I$e chdacieristi$ dfFindcial Siater@ts s€: 1. They rclate io psi pe.iod od thu, are hiriotcal doMdts. 2. They arc dpressd in bonelary terft, 3. They shoe find:ial position iheugh b.lece sheet sd lrodtabnily ibmsh ptfi rd lNs aeout. N.tur. of Fin.n.lal Sl.l€n..ta
The

i,lmiion uil

dat3 incluil€rl in th€

Finmisl Siat€nats

are

tlo Esdi

of a

(t) R€odiDg facls oi bwiness t msactions; adopl€d to fac iht€ deoutina tslniquF; Ct;) Accouti.g concepts; ed (t, ) Per6ondr judgiats ued jn the applicaiion ol cdnventions ad lNtulat€s. Re@derl FEtg ItE tm tocdrded f6ci6 nee reco.ililc ottr.es&iions li) based or sidences jn th€ aeodting bodks. Fd ex€nple, ngu€s relating to csh ; hmd, @h at hanl, debtors, bils deivable, sales, pucha*s, etc., d reco.d€d facts, the Findridl Stateme s beins statemmb pr€pd€d d tle basis ol recorded f&!s, th€y do mt depid tne worded facts. Fdr eddpl., 6ied assets are shwn at dst irespective oftleir nsket or r€plame lnce

(ii) Conveltions

(ii) Coruernda8j

(iiit

{olowed in deding *i!h smali ii€bs liLe peG, pencns, postag€ staDls, etc. TIE6€ ite4 ae @nsideretl as oxp€ndii@ in the yee in vhich tley ue purchsed even urough they e dssets in mtu€. TIE use oI accostins conventioDs nale Fimcial statenoiE simpl€, c@larable ed roalisuc. Accou tin€ An ept* Fin@cial Statenerts are pr.parad folldiry th€ a.cdunting M.eptE. Fo. @ple, under tle Goina Cdncem C.n@I'l it is assuded that tle business dral @ntinue lor a for€deeable fniure, i,e,, ina€6nii6ly. ll1e asets @ shom i! the Balmce Sheer ar ften bool value

sord€il in th€ booLs. Celtain accouiils convennoN se folldred while prpdns Finatuirl StatdmtE. Fo! mmplq on accourt 0f olv€ntid df,mnsenatisn,, !tui.ion is nade of expected lcses but dlect€rl profit€ de igm.eit. This meds t!8i ine .esl fnucial F.siiion ofthe busines may be bette. thr Rlai haE been shopn by tle Financial sra!€nenrs. The cdnvdriotr of @teialitt is
eince such pri@ is bot

Fin ciotstctuN sofdconadrr
ratlo!

1.3

li,t

th€ir nark6! %lu€. Monoy m€asrenent concept asElD4 that the valuo ofDoney qil rcD.in tl. sane in dilfer.ni peno&. Due td stlbility in lhe vrr& of b@€r ulet3 puet4ed at difereli nEe! aDd prices would b€ dbbined r4etler dd.LM ai tle @3t o n ituD..tiw of tLe cndge itr prie la€1. 'nB Re.li3.lio Conepi rquiE thal w.ne b €d.a in the 1€r in which tho sal€ wa. u ortikeo ev€! though slle pti.€ bay be re@ivsrl itr a rMb6r ofyeffi. The u@ of qcouii4 .onept3 maled th€ Finocbl Siatonentg ondsFt$dable.nd conpdable. Pe@l,Iudarentc P$oaal judrE6t! at$ hlve s impor'at b.dirs or Finrci6l Strtdent!. For tuple, the choie of selectins r b.atod of d.pRi.aid (6r€d in.iald€ni o. *nti€D dod v.lue) li6 on ile aeolrist. Sihil. y, ssletion of ih. inverto.y valualion m€ihod .l.o depe!& on !h€ pe.eonal judc@t of lhs aEoutut,
COIIIENIS OF AIIIIUAI. REPORTS aopany @ reqDied udd bw to rliel@e th€ pE&nbed

tld

lb€ 9Dud epcte or r bfodaiio. to e$ble th. !&. t nal€ inloned j"t8aenl! dd dfti.iom. the i.fornaiion i6 di{lo*d i! ih€ Finmial Stai€n.nb! DieroE R€port dd by spdit€ etat€b.rb beina ldi oa ti. .mual f€pod. A conplet€ B.t of mual rBport of a @npsy has: 1. A r.pon 6y tle Board ol Directm ontlining: (t) R€p.rt ir te@ oa Setio! 2r? oa t[e CoDpoi€ A.t, 1966; (ti) DiF.tlB R.rpd.ibiliiy Shtebeni (Se.tid 217 (2AA) oftLe Cobp{i.. Aci"
1955)i

(,,t) R€poi on Corpo.ats Cdsman@; (i') Me.gen€nt Disa.ion and Anrl$i.; 2. AudiioE R.Frt r, th. rh@noltlea lso.tio! 22? ofthG CobpMi$ A!t, 1965): 3. Barue Shet (Selior 211 &d P,n I or Scledure vI ofrhe Crnpuia &t, 1t66):
.1.

Proht and

ld. A@ut
@

(S€dion

2u dd Pan lI ofsclErlulg vI
th. cobpdy;
.Dd

of !n€

CoEpeie

6. Notes to !c@u!ts

6inin8;
d by

(;)

A@sth8 Porici.. rdolt

(!i) Addi!@diofm.iionrequir€dtob.di&lc.dint m.ofParimoN.I.nde
(t,) Balsc. Shet Ahrilet &d CoDpey. G.De.al Bu.in€.6 Ptudle in t€m. of Pdl IV of Scb€dul. \'l or $e Companee Acl. 1956, 6. carhFl@ gtltel'Mt&!.rA@urtiDastoddd 3(se{i@2ll (3A)oriheC6t&i@
7. S€g@al B.port
Crsh ndw
@

(ii) EtpllMtdy lote dpl.iliDg

stFi6ot te@cti@ ud

@i';

14 oaih€ Compui€. Act, 1955;

F! A.eurirg Sri!da!d-l?

(S€dim 2l t (3A) oltbc

Cmpdi*

'ith

tmd.r

Stlt€@t

6nil Soga€lt Bepo.i i! applicabl€ to li.t d onp6i€$.obpmie in ere3. of n , 60 c@d or @bp@i$ havi.g a@pt€d public dop@itg

j appoinied . 'lFion The sudilor is required io nake statemen! on the fotlowins: r.utar dale. F-eaFdr'1.ohpa. tr necessarily neans the anounrs and ratues siaied againsr €sch 3sser and liabitiir are hisloicsl. l a"r oIh.?..A r'1 rl p aannd so requ..e.n. (.mt.1956. rorns his opinion on the annust a. cun€nr velue.. 1956.r \ ew and '1c r . any direct .y lbr the purpose of tlr! ' Bud t (6) Wnether ptup€r book ol ac.t ".omr on pqu.-a of r\p L1. direcror i.ptanrr01-wtrt!ac. onsideand approve rhe rmusl ac@un1s.1 f. Dirccroa' Repo{ The cDntenrs ol lhc DiHroB. The Central Gove.!. ano-. wh h"-heIs A fi.d'tli).r..po.d by law. ot the pofrr o.'1 r' c.dd ni" oo'n'or in ni6 .s on a parti.o12172.n. lixcd asseh and curcnr .tu.. p.4nD"ni. li.'.t.. Wheihe.-!!. .. 1956 has -slcl"n"d"r. oad \"ts\old". obE . ihey nay nahe stalencnk on sy subject rhat rhey . Ra lance Sheet.o (t. T]re meeiing so hetd is lcmed as An.ia. hsA.ompd.ts_Xl conre nts of ihe annual repod. 2.". and rs.. ancial sralenents.J o).1bIrF. "sr ) in the c$e ol rho p.n .not Let us dis. fte a$ets or ih! mnpnl.s. lJ.t ihough il may noi be legally requiEd.oun'c p n. Hp AyDr. i. in his opinion and ro ihe b*r ottris i o. rsrp o. orD-n\ s ana r An auditor of r . Lh" ' .uat ccnerat Meetngand is @nvened s A.. REPORTBYTHE BOARD OF DIRECTOFS to adopl.at FeFo..".d ro..crb"d Lnd"r s".heAnl.rde.. t956'ldprSq'ion 2t. a pa!1 ot conpanJl lssels dd .i d B si\d a'a. uss cach of dre above 1- si of Fiaanciol Stututht.l t. is dhquahned fton bcin. B .?d L.) whcther the Balancc Sheer.nnent under Seclion 22? 14A) otrhe Conlmies Ad.n I.".ce Sheei 3ad o ofi r a' d Lo< Aro. ..D ith'"o't p.an"p.ofii md loss a.1p sFsrC.h'i"sJ1oslon{.1. k) llhetlre. ro c'.2O0J..omt s requir.o nn y ^ " r\p d.out..nalion md acoding to rhe lornlrior cvcn ro him.e er md the pmnt md "-b${ n' -Ih" 3 do.onpany... Bala. ihe Ralan."qlinrsr\pa."""". (.t iE r"oor a.counr and inrorndtion obtrined. on tle basis ot eEninarion ot books of a. iaL ri.f DaavLnd-"sp. . .e sheei.ofit and Loss Accounr a cash Ftow sielcnenr . AUDITORS' REPORT TO THE SHAREHOLDERS h" fin"n. 1956 requires cvery conpa'y !o hold a neeijng ot its sherehotdca every year.^ro' aF R. I rJr r of r1e |ohprn es A."nd'cn. have beDn kepi by the oophy. Day be defined to be a sralenenr of liabiliiies . t....o r1". ternr of Section 274(l)(g)of the Conlanies aci.. F-!. Protir and Loss Accolnr and Cash Ftow Statem€ni dealt with in the reFort are jn a*eencnt with the books ot aeourr (ll \{h!rhe.. loss tor iis financisl )€*i md (iti) Cash flow Ststeneni.counts.ditur. la s. o s Lafornf io' a'dc. they do not retlect th. bslsn.onsidu inp. Beporr are speciiied in the " compmies Act.OroH..os. The Conlsnies Ac!.onrdnir. Eosever.ppor . p-.' 'ab.d-LpsurpcsDrrt nuJi. } f ?ourJ.

d f@ ictru. ad6quats infmdrion mut be given to enabl€ one t jdse th€ fildcial stat€ of ldaiB.oi b. S.soits dE: lttt) Cll*nt As.ILe Conlries Act hs laid dosn two fohr ofBalane Sheei krm B (t) goimt l Fom nd (ii) Vsticrl Fon.izo.m ed AdYeeq (ir) Misceleou.t!. Apprietior of Fd& G cl. 1966.I.t llle lre.ne st@r 1Le ho..i. Conpeny Adre Sh@i of! CoDpsy is prepoFd fonowins lhe s.unds ?rovide delails of Secured sd Uns€cureil Ind6.leE Or tna dr&tr grC.fibeil {orn of tLe BalanE Shet is given in Pan I df Schednle vl ol ih€ Cdpsiea Act.). {!. lctnal po.. and (. right hmd . rhe relaiing io varioud it. dd Sler fte ot Bare€ SlEt p@id€e . b€ner d voE.in cat.g Sbe C.lotdzr'f!d.d e r fmtnote to tb€ B. in0at€d nor denatod.nd {i!) .tar lom cb$i66 dl e.pitsl Re@ryes od SunLu. tao! (. sidz li. Expoditue..aa of Fnnt @ cl4si6ed into: (t) SLE. Aeout (Debii Balu@).$ifie{t irto: (i) venicar fon Sour@s dd liit) Cuftnt Aet . dd (u) Rdllt oil L@s Ac@ut (Debit Bdlmce).ft dd$ift. r€qui. fw n.atior of Fm&..e. Fomat (.6r r. Thi.*M nd S@lu.left ha A sid.0) Mi.N sh.iioN ol Bald@ Shel ude.ition. thd ti.terc.) Cuaert Uabiliiies sd Provisions.ror d a plfin€.l orthe Cdnpeied Act.ne plieipla s e folNed in tl. Arso.l6 dd liabiUtier id t)len qder of p€heere.ing deiails BepaFt ly rega. Ihz item.t .td.. o" the liabititic. ot ihe B.or two min hadinAs ofFrrndq dd (!t) ApDli.l. (iu) U$ecured Lam.disioEi Pdnh.t into live mi.) Profii md I4. Alrets @d Liabilili€! nsr b€ rhod ar their od€ctvslues*neithe. DMs tiat tt!6 Fsition dri)m in tte Bsle@ Shet lhould . prepdaiion ofthe Bdame sh€et of a sole prcp. 1956. A Bols@ Alet nut dhibit a hue dd lair view oftle fir@cid poeinoD dtlp cohpor at ih€ clo* of tlrer@@neEed. Irlr: Clftnt Usbilitie! aDa Advanc*.l $e a. ... oDd P.d!: Clrpuie Aci i6 giM belo' with . Sh6el ot .ship 6n bui p. conlonl. .Fimncialsbb t ofacon@nt Balan.€sented in tne fom pEsoih€d nr Schedde r. In aildition @ti!g&t liabilitis aE .di. l!) R.l.eUa!@us Eip€ndii@.

Atul!. h.b schEo{J|. 0rE! ldsb6 mm $s Mp!i.P|srl of FiMNirl Stu^4FnI (s*slddozr) or 6 m lH6E 6tu' hB dah d *hllh rrs B€i:nd srFd i.Eu. !n0 .d.

ben s ofa Conpdnl .Fituturn &d!.

) Arred6 ol6r€d dmulativ€ divid€ ls. (s) Oihs llm.l a4out sd mt p. "srirlt (b) Uncon€d lability or.lue tu...t original cori (6) Unquot€d.rat€ly by way of loottrot t th€ Bsl@@ 3. d. Outline oftl6 two lomat! of the D. Cd.halr. The Baloce Si. (.: (a) Cl.t 6 be d!.i b€ di.vided fo. (d) Estinated lnout of ontr4tl Ftsining to b€ oxocul€tl on capit. FollNins d€ t$o uual tr?€.ny mt lclffred3ld e d.ei id adrlcd to ahfl &pdai€ly SHEfr th6 contDAerl 8-!€FTTCAL FORM 0f B{4ic€ .y for ehi.ble.h in uy ofih€ two fotus.n@s parily paid. is @rinrEtlr li.ti4enl liabiliti* d.prsiaiion Ir the q@ of quot€il inv@tndL brL6l v. 16$ totsl of n&eiln to sbtecx &to.n dre 6Dpu. rhown sop.rosd. of ontjngent lenilitio.u Not r A foohote b fte Bdee SL..bt.*' dhdn .ca trD xE ouao .lece Shsi is srver b€low: rorrroF uJcrslrForoi?oirrr roaHrrl aarM6 saErof-. glEet.ib tle @Ep..

the following ircns fo.g detah are shown: L li) Althoripd Share Cdpitdir Aulhorhed Shde Capiial is the anount ot Sh* caliial thai a conpany is aulhoriseil to iaise a@ording to it6 Meno.e Capiial heans lhe shm of ile owne. Seaond. of classes (€qd!y d. beita udersianding ofurd .€ related to om€rs' equity.6 issu€d for subs. rseNeE md luplus.onlents: Sia.ssdrj to e4lai. numbe. Exmples ofsuch iiens are seMed loms. Tho ndbe.nb ot Llablltle3 srde ol conpany's ad. etc. Undd ure headine Share Capital. a. Fi6r. cure liabiliti$. lt may have o y€quity share capital orboth p. the followi. (tt)lsued SrdD Caltral: Issned Shee Capix. nrere e iwo trTes ofitens shown on rhe liabil ies Eiil€. of the ehedules incoryoraling the i onstior is Denlioned sAahst ihe iten in Ure colunn fo.l is tlai psrt ofihe auitoriscd 6hare cdpitsl which tle conpany h. slatolory cont. rhose fteds which a. h this context. etc. it seens nec.andm ofAlsocialion.It is nor adiled to liabiliiies ofur comlmy. on. lt bai. Thc authdsed slar€ capilat for eqn y shares sd preierence sna. The anour ofauthorhed share crpital is shosn by way of infdmatim in rhe balance 6h*r.eferen@ sha.€fe.nce sheet t ei us exaniru the itens ofliabilities 5nd assexs to be presenred.ence) olshares ad their face value.s in the conpmy.3chedule nlnbe. those i!€ns whicl cEate the clains olcrcdito.. p.e capiial md eqnity share capilal.E in tie conpdy. unseared ldds. It inchdes .riplion til rne date of bdmce sheei. .es iE shown separarely.d lrovisiom.ly includes share capiral.hadneial Stutemenb of a Canpdnr 0l (4 Not€: Uswlly detail under oac! of the abNe itens is given br way of a s€lrste schedule.

it iE t uf€Eed to ro6Fe a@ouri sto. Capibl Red€nption R6oRe. profit on eissu€ df forreiLil riNs. OtE n6?. prc6t on dlenptid of ilebeniftr @ aopld olsuch 2.. t s udg M. Calls'in-Ar€ar froD directoB ud oin€B hlve to be sh@r 6. €s€Fa and enu€ r*F6 @ . p.aiiod oil.foil€d sh!m. Infomation re3ddinA ilBres slloiteil for ondide.orilie6 @ Lnom d si.eniuD.Lins Fmd. alldti€rt s lully paid boDu.t or reddpiion ofliabiliti.cout de 3l3d rieted. 6. ilividend equalGation.on@) *hich hqs been subdcrib€d by !h€ appliceb alolg wit! .l€E G cltl€d €pitdl r*.. d ldditio! t! pdd.'RseFed dd Suplu' io irclude lhe following iteb. Act. lf !.duct4d f@ the cz@rel Supia: It refd to tne credii baluce of pro6! eit lo$ accolnt aii.oFpDy hs i&ued dit€r€nt ir?6 orequiiy ud p€feM@ 6!e..odk plid imorpolatidn. sp€cid Ewe for dep@ia1i@ ed Prc6t ald Lds Ad@t A d.R.lly crcated sd repF6erted by eaddked investndts id outsid. and be shom *p6Ei6ly: 1 Capital BesoNes: Ary rcs€N€ which i! crealeil @t of capital prcit€ Md i! not edilr aveilabl€ lor dislribution divid€nd th€ sheboi. etc. But to lhe credit ol lha$ forfeit€d is shor.d. 3.. 4.iLl (€quiiy ud preIe. Anost ofcals'h'!ftq i! lhom s deduction ftoh @Ied'up 4pitsl or lub€dibed @pital'to eertli! tle pani-up €pibr ofthe @npuy lnil !!M 6 lidiriiy itr the Balan. of !.r ilm csl od sle. Rdd6 rhich @ sp*iic.6hda tu rle giv€n in tut$ hder Nh€*ibed @itd. 1966 speci66. u@u r. Capital l- .odt on !. botru. \aI ofihe CoDpdie.up cas.bi! bdlarce ia ptufu and b. t 8s.hon r. suhsdib€! towa 6 2. prodt on r. A@unt capital.lils 6pitd ir Sch€dul.er resNe.aled up \iul Pdid-Up ShdE Capitdl: tt lefer. shtuld be d. P. 4. P.|r to lt!F4.E8enesnayb€cat sod@d into g€.n es.tly ft.ets. 6. Shfti. !o inat part of 8!&dih€d she €piiar (equity ud lFroren6) shic! la3 ben paid-up by t!.r ptupo€ed ollsti@ or qpprcpnatio$ for divid@d.atrobtB ol Ftnd idt got?Nn*BI \iA Subwibd ShaE Capitdl: lt Ff€F t! ilat palt of i!. reodtie. prdi on acqubitio! oabBird!.le of frxed a.-issu6 of fo. Illa tu!& e sed.!ed c. det ils of cach tr"€ ol.heo b srv€n.6x@ple. The&'lMin ih€ forDof lmEl I!@e lo6tdd lal6uq@iiie pqlium a. Fo.e.olored addiiioa to resry$. 6.esi Naiure ud anoui ofelch resed€ sLould b€ e4lain€d &!oEt ly..puai€ly.ltd to have a !€ady hon y eith€r lor ftplacem€nl offr.

epaym€ni *ithin a p€iod ol one yod frdm !h. tiey are classified as 'unseored loms'. r ey !tuvisidn b nore !}E liabilily. Lo5tr md sdvmces fton b8nlc. then ex@ss will be lreaied as a resewe. relaneit by p. CurEnl f iEbllitl$ 5nd Provlslons This heading is ilivided intd lwo !ar!s: (A) Clrpnt !66rltrasi Th6e se those thbilitieE vhic! re Epayable sithin dn. ftne*. depftciation.a.y. .lue ot unssczud l@ur' i3 shom ude. uecur€d lods ed not under cunent liabilities. taoe od advmc$ fton subEiitieie8 3.eg Advdce pdlrent and urerTired discouis (. 'I erest occrued avJ. Snon-lem loans and advances fton othe.ovidins for my linom riability of which lhe anount cannot be deteni.! 1956.est is acmed md due. yoar.qsge m che4e on dI or rny of i1s properlies. th$e are shown in the folloeing older: 1.Io. if anJ.) Ac. in Pait m hd erTl. Infonaiidn egdding Dt@ ofs*urily given d.. In ihe Bslme Sheet ofa. Olher loms md advdces. (B) FoD6t'ror Sc-h€dde VI ofthe Cmpdnios A. 3.FitdtuLlt stdt hdk ofd ca@dnr Ifa @n! y sivd Eeruity Id the lom by a mo. Sholt-!€rn loans ae those loans which ar€ itue fo. Shori-tem loms ad adv&c* iom banks 4. Other lomE snd adYmE fton btb]l6 6.eptdres (o. ihe loan h classified s'SeclEd lnm'.y conpanies balan. dr!€ of the Balance Sheet. Delenrlpsi In ca6€ df dob€nlures. LorE md advdces fiom subsidifies.ompuy.te ol redenltion or onversion are shosn.etained by wry oflmvidiag fo.ed wiih subsioti.ue on 'Intercst ucrued 'nd i e. Un*med lods imlude: 2.E 5. 2.: 0) (tt) (iti) (. Bills Payabl. other lom6 and advan€s fron others.) Unclaimeil divide s .ovisions' shosn in the Bal@ce Sheei includes lh€ folowing it ms in !!a! o. for each seued loan is give! erory with E rEd loonr' is shown along wiih ihe items on which ra cdmpmy takes loans silhou! prcviding security.de. Th€ heading Cunent liabililies ed l.) SundrJ eeditoA Subsidir. inlormatioD aboui tems of edenpiion oi @nve. dininulion in value ol assets o.l accn.ined the tem 'Provision's oy uout miiten or. 4.sion slo4'itl the erliesl il.

edina ln€. Ad hd. FBion ed dDnd stlob€aedt Otls. &lihsted moull olinEnplot .n@ ofwhich tlepad or soh6 nrbe Lrrairs.l G b6L vsrue) of eycry sset shourd also b. difreEnt @set! lhonrd be shM epotateln For @pl€..ary to rhN onairsr @... B. tle Conpuie. u.!ict6. Ii id . y@r ed ih.For the irlomaiion ol t!6 u6dr.).iion Eiit€! olf or pMit€d up b d€ €nd ol ttre o! Mod€ of rsrud@ (o. mtiDsaci€8 (ti) PDvi. Only lhe dout of deprdltion up b rhe ibte oa B. In ihe BalanF Sheei of ! .nrsotAs$t srdo ot conFny. Oi) OiI6. 2. I\mite sil 2.xplained ir tt!.ior tor tdation (s) P&!@cd drvid€lib Gio (r) PFvi.ry tu.Claim agaiNl enpmy *hich @ not .ioD {o.l acmeil bli lot iluo @ loe. \ . nred A$ets es cat€coi!€d iito ltrd.ld@ Sh€et for €ach asset i. t laL dopni. Ii ir Firt@s.Uoot d to 6ch let epaEt ly.L llle it€nr which ur ooe uiie.ioN.r cdntinecnt Liobitiq: exciso duty clain.. 9.p€cific pNilionq ia.le!Tenditd. n*.tbdtl. oth. irdy (uii) In!€r. lhis sub-h€-eilils e: 1.d ssot ed tbo sddrtiou theeto @d dedlctioN tb€reftoD duing t!. 4.ortracta (ca!it.lXlm€nt of Ft €x@ple. etc. . Udbility for dost ucalled on pritly-taiil shared.. divid. V.lLz Amltz. 6.Ioh in ile footnole in ite Balre lS. the di!t.tulE. llE!€ de tle liabiliti. lielility for bil dr@ula4 ilj6lut d 6rfiioryco . Compqt€r:.onpar\y.6 to e tl@ sm cast! rhicb !E purhasod not ao! Fsal€ bot tu l@s t r prc6i.r fir€d s&t3. provi. Buildin& Plan! dd Machin€ry.ibl€.eepteil by tls oEp6y.b@ srEt in ItE 4*ts shoq udd ditr€@r b6di4p iir€d Asst! tle Dd@ Shrt of . €ic.: of Fi@ctnl !fu'*.s olfit d Mulaiiv.t of dv. (B) &Duirr'cft@ Ey in. R6l*dni infomtion to be 3iv€n E8lrding in*e & ld e pd.ft. Iiab iiiee. laiil do@ . Ar.. Invetocnt! ir natw N 6red R!. shown. b@t! ofaccolni.ion for pNiil€rt nsd Cn) Ptuviliotr f6i iDlfu@.lude tlE fono{itrg: (utii) PDvi. !ctd. yd il AEout of dspEiaiion snti€D ofi d pNid€il for tbe r€d shoultl b€ . irv€Btbent! are shom . @F!r ildude $e 1. i! busi!€.

(. (A) C!'anr Iss?rsr The cuent asset€ sbos. Miscellaneous E penditure: stttd 'l s refas to that pari df orpeNes whic! aie . rdvmces ssahst h tne Balmce Sheet ol lhe . T.e6. and (uii) Cash and Bank Balance. (iu) Siocl i. !ax$. It is necessdry t dhdose the natue md nod.Adlamasi ltinclndes pu. Th€y are shown in Bat3nce Shee! under on Mi*ellrneous Expendiiure Tley irdude: (i) P. (D) Wo.) Ac. €k. (.ade. (o) Deblors more the 6 nonths old (6) Oure. i e. cu.abte in cash or in hinit o.e payable or denand).iols loan girdt Pxpeneed bv rhc.t) Oiher sums. (c) INeshen! in shares. of valualion of every investmeni Naiure ofinveslm€nt Deeq to disclose ilii tu a lons t€m invesh€n! or a cunent ssset.on thc dat€ ofbslance sheoi. (wne. fo.clininary expenss. (B)dns dnl.ompoy.Fimncial Slteneak of a Compdar 1 lnvestments are classified in!o: (a) Investnent in Covernnert dd lrnsl socuriliesi (r) Investneni in shdes.n. etc.) Expenses includilg onnission or brclnage udcNriting o. (ii) Slores and Spar€ Parts.k-in-Prceress.B .es or debentuEE.es subsidiary con!8ny. (tu) Interest paid ou! ol capi!. cuiidnl As. (itU Advmces rccoye. specifyine natDr€. Lo. 2.ets. debenlures and bods ofconpanies. Total anount oi conpany's quoted md uquoted investnents ud market valno df quoied invesln€ntE nust also be disclosed in the belance sheei. por! trust. Modd ol valuaiion dhcloses how i]le int€slmenls 6re valu€d. insurece. subsctption ol (tti) Discount aud{ed on lhe iss ue ol sha. i s ..onp8n.l d urt ng onst uctior period ol the conpmy.ot ofl up to the dale of Balan@ Sheet.tued inieresi on investnents. the6e items are sho\vn under separate sub 1o (t) Loss and advan.nd Advanes TlE3o are lhe assets which aE lihery b be converled inlo .s t $r Pro sioD lor Doubttul Debis.Aa. (. md (tu) Bslsnce {ith custons. p.ash sithin a year f. debentuEs sd bonds ofsubsidiary conpani€si md (d) InvesiDent in frred assets. (iii) Loose TmlE.€paid ralos. rno vt.) Dovelopnenl erpendiiure noi adjusted.. . on cost 3. lh€ B3lsce Sneet inclnde: (.or sood. These are broadly divided into two calegorics: (B) LomE md Adv. Debto. i. value to be received. difierent p€sons....

rwEn . of FtnduioL StotcruaB-n! Prollt and Los! account Debit balance olProii ud Loss A.s and Advdn@s md (ri) lnveEtnents. stloh unde. nl$tratio! 2.Anottri. conp y'. . Ax€d A3*ls.. .siand so can be betler dderstood vith the help oi 6d€ illusi.dvisiotu. 10 . assetg .Mp@Hd*h FrycdM}!4FiciaIdd6l mdhoai@ hlPr'fulioFmg&tegndiq@d ic. R€arogc the folloeing iieE app€.hF shld h p. itens sppea. lb€ &6ets sjde in ine tollowing orde.h th.nng on thc as*rs sid€ ol the balm.4Js. ha ln.00o oquity .t BGb[ Sport is. thd nsjo.l l: (i) curent A$cLs. Di3rlrcrlon b.e sheet ac@rding io lhe requircnents of schedul€ \iI. Currcni Assetr.6nc.qoily . PartneBhlp Flrn'. (iitj MilceUd@u6 E\p€ndiiuFj (ru) Prclil od Loss A. lnvesinontr.? al t. Thc itehs will app€rr o.OOO pEf. FLi. sh@r B. t fr e nlktfaiion and 1. lD) Lor.s offts Company'E Bslmce Sheei eo cla$iffed. Ir the conpuy has soneml rcsery€. UDddftd Ldan and Cunent Liabiliiies nnd P..d.h..ulhori*d !h.00O pr€l.r of R.l.idblili?s Sd?j ShaE Clpilali Reew* Dd SurdNi Secwd I. a.@^tfud A cmranr's i wial we lried unde.ny I 6.couni cdi.h6r6! ol F!. L!d. lhar. la. it i6 deduct€d fron it. (i.nE ShBr end :ddob$. dn th.esi Nl isrella n@us Expendilu re and hoUl md Loss Acoun!.lt@ rhrF. the h€adin8.d foNdd j.atidtu. lO. Cd th6 @mp.F 6dt.d 5. Look ai the lolowins illnstraiiom hd study hF ditr€rent it€md shdvn under veious nor& in tle Balmcd She! of a cdnpony.6ch.codt (Dobi! Balrne). hea& udo.000 .dt.ts Sider Fixed Assel€.hn.r 3i'lctuc E ldbs: I o.@ r'!3ih4.std B.re .: . Iram ard Advan..nd lO.4a€d ddqkbvzci. liabilitict sides Stai.

rlr Under'Fixed Assets on the ass€ls sside lD) AuthatiselJ Share Cdpital: Vrdc.60. Illshrtior 5. (tt) Iau?s.zDtiun Aenun| Under 'Resenes and Surrrlus o. 1. Unde.nt.e) Iuu.) Loos€ Tools! (t.l) Prepad Insumcei C') Livestock.) Cureni Asseis.ssat in the Balanoe Sh€. Wo.uch dopiction? Give rcasons for yorview.ble.FinanciaL Sbkmnts af d Canpdnt and Advaces (.liture: Discouni od lssue 0f Sha.ndon! Bonds. Debt $ lb) hdns ad Aduances: Prepaid Insurmcei Bill6 Receiv.emium A@out. oflixed Cunulaiive Dividend? . and (u) Arr€srs Preniun Acmut. GNe.hrtion A.urilies (tu) Unclained Dividcnd.) Polit and bsE Accout (Dobi! Balo. (iit) ProDosed Dividend.nses: Vnier 'Iiiscellaneou ExFnditure'on rhe assets sida.i (Dt) Wo. \iu) MG9llamous E peh. (iu) Miscelmedus Expenditu. (D) Shaes in X Lid.ts.!-in-Ptugressi (uti Covemnent Bondsj (Dttt) Discourt on lssue of Shms!(d) Dobt sj and (r) Bills Receivable.nenrsi Shares in t Ltd.l< in Pr4tess. Shlre Capilal on tne liabililies side al . Ckssiry ure folowing itens uder proper headings on ih€ assets side (.. alllR*eivabls as olii.iveslock..2 Ashok.000 whichrh6 dompany had received lrofr G3laxy Expo.eirarls: Under'lotns and Advanc€s'on tn3 assels side (t.. (6) I'ans loans anil Advmces. (tt) Pr€lininary Expenses.ised li Shar Capital? ) Se. ite lisbilities side (ii) Pplininar! Eap.) Se.ls ho cor6cr in. a debror. Ltd.$. has Bills Feoeivsble amounriig to tu. rhe accountani of Uhimar€ svston Pm.) Ii:ed Aserrj C. (iii) Birs fie.urities P.nce (.) Gdodwillj (i. whai headnrss will you sho{ ihe lollosirg il€ns ir the Bdl. He has showdth. (u) Autho.e. nlugtration 4.odwill! l.t becausd honlv roDresents a replacom€^i ot slndry debrors.) Sh. (r. (.) Goodl. md (.. liii) Ctrefi As!6.re lorfeit€d Aeout. Uniler vhal headioss wiu you show tno following ibns ir ihe Balmce (t) Secufties P. Inans and Aduar@! (d) Cur@i-4ssersi In6o lools.

) Prcposed divid€ril i3 shown under ?.anattts al Fnontal Stctetunt*Xll is slDm uder 'Share capital SLNn by way of addifion to paid trp Fpit3l Nlter sub_lead subscribed capital (it) SecunfieE P€diuh Accoui is shown mder lesNes mrl surplus'.s. Work-in-Pro$ess. (ii) C. Int€tlt Acdu€d m Invesim€lt€ liii) Ituns dnd Adnnes: Prils Reeivable. G. Trade M&tl..ranr. (.oilwil.odsion€' (tu) Undained divided is snod udsr'Cullat Liabilities' (u) Aress offfr€il cMulativ€ dividenil is show! uder'Contingent liabiliiies (.) Curent Alsels! dnd (. Delcits vith Pon lYusi dd Electriciiy Suplly Cdnpany.u) Gae. Shm Fdrroiied Ac@ut R!-atane€ the fo]lowing ilens udu thfte h€ads of sseis: (t) Fixed &Eets.in'Hod.) Loos dd Advan@3: IllustEtion 6.!. Advdces to SubEiilidi€s. Funiiw. Cash. (r Ired Assetsi Livestock.4Jsebi l.ar Resene. Eit . Debto. Illu*rdiio! ?. Csh al Bsn!. (. Patt Il (. (J) Stores uit Spre Paris (m)Adva e to Suhidiari€s (n) Csh at Banl (p) wmL-in-Progress (r) lnier$! Aeru€il on Investnents (s) Deposits witl Port l. ltrd.. L€sehold..oose Tdols. StdcL_in_1lod€.usi od Eledhicity supply cdrany. Stde6 hd Spare Parts. Give ihe heailings udor which lhe follouing iteN w b€ shNn in a onpeys Babnse Sleet s per Schedde \aI..

.) Inter6i Acfted dd Due on Debenlures..dision for T*tidn. (t. (.it) A@eptances.ount? ('i) Arears offil€d Cumul.tive P. Dividends.oun!.d.) Ploposed Divide.) Advoce6 Received f.) Pnblic Deposits.c Sheet ofa Compsy: (i) Unclaimed Dividenil.) SeNities Premim A@d!. (u) Fodeiied Shres A(omt.. (ti) Calls-in-Arear6. (!') Undaimed Di'ide. dd .uriti€s Prcmiun A. Unde. *ill you classifr the following Debentms.Fiwnciol Stotneats Xd Cohpdal lllultration a. wh8i heads vil you classi& ure liabilities side ofihe b3lmce sheet of a linit€d conpmy: (..eprinA the Bald. (.d.. vill you dassi& the following itens {nne p. (iiU Calls-in.Advance. Undd wh* n€sds of liablities it€ls ir a ConpmYs Balmce Sleet: (t) side. (d. nbrtntion (D) (utt) Se. (!. (. (uitt) Shde lorfeileil Ac. (i.ed Lomq (t') Inlor$t Accrued and Drc on Umecured taans. (tu) Interest Acmed but nol du€ dn Debentures and (u) Areas ollixed Cunllaiive PEI€rene (') 10.on custoners and (a) sundry Creditos? IUultEtion L Urder whai najor headings.) Inleresf Accrued and Due or Seu.) Capital l€seFe Accout.

(. (ttt) InteEst Acmed md Due o. (. (t') Inlerest Acdued and Due on Unseured l0aDs Unsecured taane.) Secuities P. ih. (tr) Mhcellseous Erpendiiuc a'd (r) Coniingent l-iabilities. lUutrafior 11.. (it) Dabentures Sinling F!.i) Unclaim€d DiwideDd {unent l.ess of Fixed Cnnulaiive Diwide Fas a footnote unde..) Sundry Crediiors. Psri I: (. (tD) DiscoDni on Issue ofDebenlues. Balance She.Atutlsc ol Ftmnthl stalqnrnb XIt (. (u.d.plus. (ii!) Ldans and Advances.orr 1c6di3"n4 16) D$d trh edshare*enbres .)Prorisions.) Proposed DiYidonil-PlwGions.mersie kl P'ofl ridto$ A. Give the heailings ude. headinss any iwo iiens wnich &e inchded in each ofthc folowing sub-hcadingd: (i) ReseN€s rd Surplus. (D) hovision fdr Tdaiion-Prorisions. (Dttt) Sh*e Forf€ited Acmul-dded to paid up capiral-Sha. S*u. (!i) Ar. and t'l lllEtrstion majo.Fcdniing€nt liabilily. a E.e Capiial Accout.€d Lons Jecured Inms.iabilihes.obiun Acount-Roscnes and Su. which ihe follo{ing itens sill be shom in a conpmy's Balmce Sheel as per Schedule \4. 12.

000. (ir) P.o'ii!. Clod$nll. on {ritten dou value? bl cididcd *J0. 10.50. show ih€ ntushation 11.000? 2 .ntsafacamqonr iluahation 13.00. 200?) Rs.2 Ltd.50.ooo + R! 5. (i. R. 3.62.11. 200?.oo.00'000.€ciarion lor 2007 {3: (25% of Rs. vilt vou dasli& tLe fonowing itens id tie Bsldce Sheet of a linit€d conpdy: (r) Iiose T0ols. 2OO3 s !d tne requiEm€ni! of Sch€dule VII General ReENe Gin€ 31!t M&ch.10.500 Illutr. Bins R..00. u' Dopoqr wi h.. (r. Ilow vould you sndw !h€ foloeins two i!6ns a Conpaiys Balence 'n Sneet ds dn 31st Mnch.000) De!.62.tio! 15. 2007.i) Sud'v Debt s.Fiadtuill9btum.62. irni Il crcs' Ac.000 + &. 1o.0001 = 5.' ' tiii) F?paio LnsuruP. 2007-2003 tu 2.0m 1.eliminarv Eipemes. 20031 (i) Tohr Deprecj*ion io da!€ as on Apnl.500 (Rl. loial Dep. 22.ecirlion to daie: = 16. 22. onginal cos!: (Rs. (ii) Wrilt€n Dom V61* of Fixerl A!6ek as oD 13i April.ceivsble. Und€r what 119 !€ad! of assel3 side. Pndi @d Inss Ac@ut (Debit Bald@) fo.e Shai of . Ib 92 50'000i (it Depreoaiior td be witter otr ai 25% p a.500) 3.llov wonld you followig itms in tle Bsrm.dei oo Inveslneni' rur lrne tsm tnveslmcnk. ss on 31st M8'ch.00. (i4 (t) dg€srbMd m ldsfi4b Dsp6itrmcshad.i$om Au$odr:'s sd 'I L \c*ocl' t-"*.

00.ont dd Lrss Accoul (Debil) Rs.000. 2003 as pe.0001 Wo. Ho* wonld Shcel as on 31st Mdeh.50. 5O.000.h-in-Progress Rs. 4. 2003: 1.00.offt md ljss A@ount (Debit Balan@) lor 2007-2003 Rs.OO0! Secuniies l.00.00.00. 6.es have been orlracted fron the booli df Rama on 31si March. Capital Es.000i P.00 0 Prepare lalmce S]leel oi the conpary a5 p. 9. ihe equirenents of Schedule \rI: 'ou C€neral Resene (since 3lst Mdt!. 12% DebentureE 1O.000.nce 16.000.m Illustiafion shd the lollowing t{o iLbs in a Con!m/3 Bal.000. !. tu 831!tl2ll1\2{3 ls.00. CoY€men! Bonds Rs 4.000? Prcrhsdrdlarc{Dl sa €) 600m0 nlNhaiion Ltd. 1?. Live StocL Rs. rhe lolloFi4 balrn.Aaot!4r of Fr m nctol StoknPnt. 5.r Schedule \aI. Creditors Rs.2OO7)Rs 4.0 00 and Dis@unt on Issue ol 12% Debenlures Rs. 2. 1.@! 9q!9! .OOO. Pan I olthe Compmies tDdhi 1ee7 ti4odfied) Shar.. Proposed Dividenil R3 50.eniun Rs.OO. xJI Gd!€ FseroirleD lD saansl 300.00.00.

ch undd tho h6adlng'S€cu6d Lo€nland'Un6." 6.cLt€d Loan'in DBDar€d a6 p6r Soh€dule Vl of lho Conp€nioe Act. trlust stion 19. 1956 5e'm0 1!.t. prepare the Bsldca Sheet ol fie Conpmy a6 let Schedule \4. .m . P*pa€ Balsce sneet ofa .Fwncbt stutewnb xa co@dnt m@tlatior 13.!@ rJ4. Fron ihe lisi offolding assets sd ]isbilitios.onpdv s pei pmvisions ofschedlle VI lotl]lina of Balance Shet iE not tquired..:: *. Pari I of the Conlmies Ac!.

c€s lave be€D ext. 1956. ed (il) in Vertical Fom as presdibed udq Part I of S.esp€ct debt.eis loi aco iqeni acknowleds€d $ liability in .000 aglinst th6 c0npany You dc rqlired t0 prepae the Baiece Sh@t of Exe Ltd.hedule VI ofile Conpeies Ac!. s or 31st MEch.Atullai! of Fituncial sh*he*s x1I cldA'eiildBfidld'id {b d.s on 20. of a claii of Rs.. 2003 in ilorizontal Fom.20oa: T!e. FoLlowins bala.acted frod the bdoLs of slst Marh.tior Ere l.id . (t . dd'dsfre d 6i a4!*d) Illmi. 10.

likce Shzet in Vefticrl Fom: 3'c@u*i9&ffitrdAdErcd . {mpdv for tu 10'000 {ii) Bo.FiMMtat srat tuntu of o cmpdtt! O Baldrce Sheet in Horizotul Fom: (b) P@E@:Peisi rdr*tn tdhosnsrdwrl!4ddaqld€d) Not€: Coniilqat lidlility in res!€d ofclaim dist3 agaiEt the wlich i: not &ln@ledc€d s debt.

cd capilal of R3.oceived {€re forfe ed.69!]F*]0ladr '9500Eq'rilysl'esolFsr0€adr3$m0 @5osr"Fs€ F.000 shms. IuUltntion 21. show Low shde capit€] will 4pe' in the Bal@e sh€t otiheonlmy s psschedrnevl Psnt otrne cmpmi€sact 1956. Prepare a Balance Sheet ofV-T.000 sll:E. 10.eceived .3) 4.2003.all ofls. u on 31st Mmh.000 divid€il inio equitt shares ofRs. ? l@ 394'000 1tushs6Fs.Equl}sh. frd tle foldFing infomrlion ds per p. k) s€ kies dp€rdiru€ 1b ho endmiw ddddrldd) M Not€: Coniingent lisbility in respect ola claifl ensis agaitut the onpdy anodtiag to Bs 10.rep. Schedule Vl uder S4tio! 211 ofthe Conpad$ Act.jcuderLja! fi s aid a.000 which is not ackno*leiked a6 itebi. 10 €ach. Applimtion3 lor 40.ovisioE of Part I. All call3 w€re made md were ddJ . The conpmy indtd appliations fd 50. t Ltd.00. \cBsEna1) ]00'0C. hs h anthoii. Ltd.AMtt!! ol Fttuncni sloltnen^-xtr (0 rs.m0 nlwtrafion 22. 1956: . ilE fnal. 500 oftlde s]rdd on which the ffner call va nor . 2 pa &\e m 1.000 slares r€E re@ived.

00. The lollowing brtdces have ben errracted fron the bools ofvijsy L!d.000..00.000.oposed Dividend Rr. 2. P. 2.00. Coremnar Bonds Rs.OOO. Stock Rs.00.000.000 Plepm tLe Balace She6r ofth€ comp y. 1.OO. 2m'M .50. 30. 4. Fot?teh M od 4id ) v'jry nl$kation !d.000. 2003.2. P.00. Creditors Rs.000. Sba. 3% Debaiues Es.000.oEt ed Losr Acoun! (D. Buil&lB Rs.€ dpital Rs. dn 31st Mech.sl Resde Rs.tcBsEDethi2a0l. tc Bs E 1 ss7. 10. so. ?0. cene.) Rr.000. 3. G@(csr) 4 '1: th ire €ftd nd hii orssdidd) 23.000 srl Disounr oD issne of B% D€benrues Rs.

!m$ l6s sutr€rd dui4 lhe yeu.lancirg of Trading acount . (ii) Aooui trans&red to dividend equalisalion esenq (t Anoui tr@fcftd to deb. Pbdi dil ln* A.pptulriat hsdE .close<l by the Proflt uil t sa A. Whatd€r lom ofProfit md ljr6 Ac@ut may b€. of Fiturciot SidenentFx 4.sl ReEwe A.6nni. lhis mount is shom o! oedit side ol nqt yos's tIe Proit dd hss Aaoui. ud (iii) kofii a.o! prrib€d &y lom i! Rlicb tle pFdt dd lGs o@ut b prcpar.g snrehol&B a diriddd Thc mout. tb. fiuil.t elp6ns & @tded in Prd I (My be . Ms prpdeil i! the 3ue Bamd End priloples the md lrsr Acou! of a prrt. is s@. Prit I Pronr .ialion Aout. question of its dishibntidn o.d io kmw th€ lot Droit em€il d n€i los 6ulTered drins that year ed P. eBlip 5tu. nn6n ial erpo@. Whcn i! is looen ihat tla onpany h$ eMsd pbfft.hedul€ vI.5mpd ro n€K pen In the s*otrd part. appepdation uiBe. purchs6 dd dire.€s!lt PDfit dd Lcs Ac.out fo. Part II ol ih.6lled Thdtug Accort). dhD. w€ slso rscod alL inilirect dperoes undsr .nt. T1le Prcit dd In$ Aounr Dwi erhibit a true od tan view of the prc6i or los of the @puy aujrg th€ ye& In view of tle aquiren@t or ils Schedule vL Part Il ol tne CoEpdi€s Act.d Lss Alprsp. Eeling expeMe!.s. Trading A@ount i! preldr€d to tiow the stui pbfit €meit d. dGiry st€L.offt dd Loss App.AnolFi.ry md is raj.lly tss&z€d to the R6€FsAdur Bui m p6n of tE sllrlmii! dair€d iDtheMr ed laA@ut it&r.xt€6€s. nei profii ora conpmy is di. 1956ld . tie gross prcit or the gross lo!! brouglt fo dd frdn tne tEdirg accou is rso.oplioiio! Ac@uli ir prcpeed to lnow loF the net proii has b€er i!v$ted. poniculs sil i.ni lorne baseil on tie reqnir€mertE of ihe busje!! 6a tlTe ofindultry. Profit od Ij$ Accouni can be divided into t]rae parts: (!t) Pro6t dd b$ Acmut.@u!.tio! EquiFd to be sivd in ine Profit mil ldd A(out sE pre$nbed in S.cdnnt is prpar.osi is pFpded in did6r.d. oftne PDfi and Lss Ac@ut arc: (i) Ahoutrt irsnEfcftd t0 !h€ Oene.nd l@ There is no lpecidc diference in Dr. The ssrs. lEs redebptio.med bt th€ @bp. ilems ofin@Eo and erpeldituF ofthe bu6ine$ Ehould be ude. 1966.€t{inod wi$ fte mpdny it dddt strengt}la ill 6tucir1 polition.hotu sros6 profi! ror grod. a conpany or ld any oiher €nler?risr. HrelE. Some prn j! dbhilLied dd. lho B. which i! lept with the mnp6ny. Th6 itds of apprcpriatidn sbown on the debit 6id.lms) and $.ni heails of ac.uch as qihinistraiion error. 1966. As s . Bald@ of this p€rt a6l! n€l plofii (or ret l@) ofth.parinA the Prodt dil In$ Ac. The Cmpuia Act. €tc ud oiher ir@4 .nd L@ Appreprialion Ac@nt lh.. Cdbpmies Act.foB. . Some part of operaiing pbfil is .oht. the Dosl @lveni.ded. op€ning 3tock. di6hibuti0n .rerEd t! the nen pqn (IMt . PROFIT AND LOSS ACCOUMI Profit sd Loss Ac@unl shows the net tus{li of businesE opeBlions duilg u !.ounring p€nod.

md u.tion A@ut. In c. cdierl down to ihe debit of !h€ Profft md In!! Acoui.d 'Eiloe iln Afomt for th€ Dailing dd Proft rE ddIjs Ac@ut @d PF6t dd lrsAlpopriation o$rrc PFoFrro t06s rccsr{r 1. m &Du3t heil is u4d for ii.h..d in t[e c&dtt of the Profit md Ls Ac@i ud@ieitt tb.s of Net Ls.(tr) Anout ol. r€glrded s Prodt . In cds ol OFs Ls6. tDprcprorioG ! . 2. .iIIE rd. . bale@ Riu ap[Da in the reilii of ih€ lEdins AdoEt &d wiU h. 6vd.liyiildd didilibli€rl eil pnpo.i. d..nd ADpilpi. rhe 6nal bolance or pEEl rnar sbd. Ilft snil oflh€ a@ui showins apptupriadotr ofpFGr b abo 3o6. t!€ bald@ will app.bif of &o6t ed l#s ApprcplirtioD A@unt.!med loNed b lbc oatle rsrs a@L This port g PmGi ad t@ A@ut i.

. Dppr". 10 . wao registe..000 in eouftv sh@6 ofRs. iOO llom p.d" PIs' r and Mscl nep oJ t0. . 2oo3 was Rs.A@l!"8 of Fvancral StntlnP4ts xrr muh.s000 sJ00 sdrbd'iduyc]ed!p. wrf.8pi:l 9'000 BdDlblsFseNedtlAli'e0 3J00 Prepare ure lYading md ihe P. 6.o6r md t s Accout and rhe Bsloce sheet in proper forn sfter mahins the followins adiustnents.00. stock on 31st Ma4h.dminsryExp. Dcb"1 utintsTd oue -rd\F ado a4dOorbr5j DebE Resene aL 5% on Sundry Dsbrdrs. The lollNine is tle lilr olbalances diract d fiom itr book on 31st Mdch. Ti!ardu dnd.ed sith a noninal ca!ftal of Rs.di4 conpmy !d.oitR6.dch.tion 2-t.000.mo" Proviop lsl vpar. The Alfa Meuf&luinF conEnv Ltd. 7J00 3.95.

'lplEMl'd'hgcomlaiyu' l e000EqJilyShasolR!.FtMui'| Stotncnh of o canpont ri.10@i ..

SEGMENT REPORT An €nierprise nay be hrving a rumber o{ ploduci! o. may be op€. titled-{asl Flow Statemcni. il snould not disclo* the position b€ttd 0r wo$e thu tle facisl. The users of the n.I of tne Compuies Aci. Wob a . repon . The ns! dd retuh 6ied by each 8uc! !. @stDg poriciG adopt€it h prepuing the nn@cbl siai€ne. CASH FLOW STATEIIEI{T A cuh Ftnb stat hent is d rtdt tuht sh4uina rtz llou of NsL.ndviol i\fomtion about ttu differeat *crunts afttu 6mpdn!.ace the Enancial stateEento N prepared foDopi4 !h€ accrual netloil of accoutilg wlncn @y snow ptunt emed hui aciually !h€ {xnpmy bay b€ facin8 . OBJECTIVESOFFINANCIALSTATEIIEN'TS of Chariered Acomt nts of Inilia hs stat€il tlat ih€ obj echve of ihe fflancial starenent! is io p. A sesnent Repon is th.sideE io b€ impo. 7. 1. NoreE to dilitioml infonatior 6.ash tuch b€c.anorrsis af Fino^tbt 5.' Th€ Objectiv€s o{Ihmcisl Sialenenh se.raDcial Statenelts should dbclose the faciu€l infomaiion about ile 6nmci31 positior o{ ih€ onpny.onrdinina fr. dwinA dr aeau^tinE p2tiod.oilut o. Tlese e discusred <1) A.aiing in ilitrelat ee$apljcal deas. b€i1a udarstdding by lhe lsers.I outtnb.ovide 'inform.$e oi p@r ollaiion ion debto. if thsy have rhis vital infomation about each ofthe se€Dmt.mjs stetemot i3 inportdt fd band ddeGldding of nmcial staienmts. t . To prcvide nnmcial ilata on economic. Csh !'low Statenent has been discused lat€.s.ior abolt tho financidl positioa.8@ie or eegraphical area N didelent. pe. To To pre*ni true md fair via of the bBin$E.ts md e4lratiou ed clarifi@tions qs to whai tle healpm€lt co.esoues md oblisatiom o{m ent€rtris€. To reved imllication of o!@tile proft on ihe nndcitl posiiion of d entdpris.t@i {o.. To pmviile sufrcieni uil relisble hfonation to vdiox parti$ ht€ftsted in IlE Instilut 4. E* ds the lasis oftutue dpdatidns. c6h tltu d an enterpris th4t is upfut to a uide NnEe of ue6 in mkins ecanomi daisio4.rcbl siatem€nis shal be b€ila inldmed df ris*s 6d relms ed can bake bett€r aslessnent of the elt€rlnse ss a {!dle.'I'he Nota toAccouh hs inforution s to qllatitstiye ilet€ib. in a chapie. In other wods. It is so b€. NOTES TO ACCOUNTS stdt2n?nt*m Accouts i6 the statement attached to ihe fnmciel stat€nmts mriahing requned t be disclmed in tens of Sche&ne \. 3. 6.fotun@ dnd. 2.urete InfuMriot Fi. €SSEMNALS OF FIXANCIAL STATEMENTS I€t us uileEtdil tle Es*nti6t of lindcial Stalobcnts.

s whd de in airsd contrcl. rsolabl€ le period afrer ihe iheil releydo bsale adduliig period is sa.nenk s)rolld be sspared dd predted wiihin d 6m @Epdi. 6tc.t t!€y co mparc the tupnting conpdys fndcial inlomation *iih ildt olorb€E (inier-fd dnpdnson).fi€.Fvb.tion. ID vid olthe risL inhlv€d.nd Foject€d.eJent€rpliser. Iberefore.o. the oqrds e alway. Maa€pEent hs the ED..s provid€ loms dd Anucial Insiitutions Fill watdr the perro@ ottlebaine$ t ki6. Cortaturr.t i! il'e @iDs qprcityolthe@t€rpd* tud hM sde il ften irv€llmt? lil]4ier InEtituiio.!€d to the prc6t e@€d by s ent€rp.at l^stitutioroi Bsn& and tD lhe businees$. wlotlor itt h"Hnspiogrs s pili4td io tuE the $lety md @ery of the roo advolc€<l. rhlrrnsh Cublic d€brte. (ui) TteriM. ho@€. cost .6d8: Inv$tn€n! involv* rbk and slso the invegto.l contbl Ner tle buihedr sflaiF. 6n.ecords ol|]r€ compqny. interest€d in knoriDg th.r Finociar S1ai€nents Ehoutd disclose the ilfomairotr ir a hanner tbat lle uer cd @Dpe tls iDfo.AI STATEXENIS U. tn€y rely on tle 6@uting irfonaiid Nail3lle to tloo ed @e$ !o ihe qu$tiN such .ndibfitr' !o not only sdf4rdd th€ one. (u) I"t uaDti IntomatioD dtdo6ed by t!€ Financial Slaienenh should be in aMrde sith th.l neag€.on) ed abo ih.ti. th€ eDploys erd wort6 N ilt€E3rcd i! i@ci. PAFNES NIEFEsTED IN FII{ANCIAL STATETEflTS OR USERS OF FINANCI.ni ed s4rMr S4porls eDbb th€n ro N4s @h pcftim and vh€i!€r tne bnEiness segmmts ds Daldng pro8rers $ planned .Fim$iat stot wab ot a conpony i.r an l Worhe8: Enployes a l eorkers do entitled lo bonus di the yd dd bediiles ih€ sallry sDrl sage.lbeni but abo io inRse its vdlue bJ n n4ina tlie bEin6i elli. md tui@ plss ofthe onpdy.i ples for beitd ude.i€nlly so iblt it em ihe nrinun p.ncier ShtenonLs nsy of Mdn€ delay eued in Eleam olsuch inlodation. liii) EnplaJe. talen s€ry honih. Option.fon. legal requn€nent .ers or Fine. Colb Flow stat€n.nci.itl staiem€nk Day be cdiogonsed irto (U Inremal Us€Ei sd (t) O@zrui Osners @ntribuie mpitil in the bu6iness ud ihu @ always expopd to risk. c.dtrcb und rcduction. Buhe$os dre nsag€d by prcfessio!.stDent ilio nd pojsi6. VenfiobL: I omaiio! dhclos€it by the Finuciar Stat€ne s snouh be venffabl€ frob ihe. Il id 60 heau.couting prin. Vna. Boru6 is directly li. Ii is lalural tnat t!€ Banb *L .r.aounring i.lrin. \ii) Moriswt:ln1*Ee Ei.l st idne. iw. The nuag€menl hak€s €:i€!6ive uee of. omsBhip od Dudsenent are sepurt€. \i) \ii) lnDatura dnd Pabnridl lnu. *gment inyeslb€ni ed profikbiliiy.i Fiwial Stat.ilo tn€refole.l i.nation ol the ss€ entily over yess (inha- <ia. Baahs and FiMnc. E invo.d judsilg its .€levo@ b tne us8.6h position.l .lidered r€lddl L the lEB baving ben *t . pofitability.sleding ol rhe us€.fmaiiont @iye al intomed d€cisi@s 3uch s det€riralio ofleUing price.o6t. should be iliscrc.e fhey m .tftne$.td dabilitt: Fneial (rll) Stateherta should be prepsed folloving the ac@pt d d.!.s do lot have dio.

oilucrs they buy. pdlic relalio$. .odbined vfth the persoMl jndsmmt.al inone accomiE md oiher inlordaiion. SeNi@ Td md r"--e Td Tlege govelnnenl auitorftis assess ttre @soct t€: dnes Aon an satvsis or nrecn.tuntsj linancial Siaienenrs portray rhe posftion in noneldy tens.rulaers: Conslners reqlire a@ountins info.vemment laies vaied tdes such s E:cise Drty. .od a.. to conpnc miio.s.e.k are based or lersondl jndgnent !nd. etc. The lildciat starenents a. Affelzll b! Pqsoaal Julenerfu: Iinancial Srarenents are the otrrMe of acconding concepts ad convenrions . bwiness. m nor f.nenrs is hi6bncat in naxue bd does not retlecr rte turure.an b. lit) Ig-or4 the quaht tie Ei. isnoEs ihe price lsel clanses o. than.es DiIleren! dsdets ue slown ar rle hisroricd cost. or shighi-lhe ' basis or on vrftron dom val@ basis. so ii nee& trcouting infoturion r. Stocl bmters also car. VAT. qnatfty ol labou force. provided eiihe.titesi The gorernnenr dates use offinancial st3tenol. treatned ol delercd revdm dlerdiiure.bi y ed s a result assegs what should be the valne oflhe shae. The Finhcidl statemenis camor !ec! rhe purpose of all parries inrercsred in them. trp4i ElDn. Accoantina Prertcesj The Finscjal Stnremais can be dnun uD ob hd osi" or d'dere n r. sDtrners (u) Aes?arnorsj Eesea&lors € int*€sted jn i nt rlr€ling ihe finmeial sialenenrs of the coDcem for s given objEctivc.ontinne doing business with th GD) eouethtueat and n.y our r€se*ch oa nnscialstalenenkloassessihetutuepofi!. prices of some producrs are fr. ffx lair prjces so thai orsuner dd p..€e \iii) Diffetua. oLDr c p r rec for *smp p. provision for delre.e.d jn knosins ihe likely posftion h ihe turu.e the qualtalive elcmais like qualty ofnanagm€ri. Also.irl statebenls i8no.ial poEitior exctudes things shich cmnoi be exlresseil or remried i! nonerary tens. crediloE saiislJ rhetrelves snout rhe ddft worrtriless oi rh.s.d by ure sNe. nrflbet of parri€s irieresled in the Finaci. Drese!! valne ofih€ ass€is. It.mrtion for esrablisling C.ialion.reilft. <tit cannot Met the Purtt%e ofau Pofti2': Th. L) IAaorer the Pri.oducers are not *pldited. Tle finucial stdtene s help then irrnemely in baLing suct m a$dsnenl. iherdfd.isio.dl lii) Records: Pe*ons liko sharelold€.coundns corhol so that cost of !.Atdl$& of naaui. pri@s on. Autho. iNesrors. Stock vallaiton. thereforc.o! dfmuch help as rbe infdmarion siyer in rhese stat. The intormalion so svsilable !o it dables tlen to take poticy ile.e lp.l Sratenenrs k lese dd rheir inteftsrs ditrer. The lrolit or loss posiiion or Ure fhan.oduciio. (ut) C.e . Befoe gxmtnry credit. nay be &dued wftn rne resulrmr rednction ofthe prices of!. piont eamed or loss sufiered rill be differenr whcn ditr€rent prtrrices are tdllwed.rl stalement-nl lttt) Cftdiiorsr CEdito.el Chdr!. G.rmen!. Somerines. Firmciel Starenents tel! rlen ro decide wherhu rney should . are nore int€€sl. LIIIITATIONS OFFINANCIAISTATEMENTS li) Hi$ori.s are the parties ryho supply Seds o.

rolldvi4 rbE! li)a L Rseivabl tiii.tbl lou d ds rorNing ibm pin be lhown in . "@u.dt ) rruh.peanitu o.bdh6diu PEEilE.. (ii) Srured rjtu.ba!I)s .) Prtli!tuBl 9 Ud.t Gl canti@nt Lisbiti1) cr@t Aec rit Le.ofE. ti!.jDedDvid. fd tM.('i)!alan.er d& rinibd @Epsy: (..rtuaotd Eqbj yN she ih.t) Pnukioti dn.) Pahb ad copydghb ud (u) autho*ed capiiar? to tu tlA o su4/l. Rleiabrer titr) (r'ii) D. (.) b* Tolsi (ii) Birk reiv. Fhd .odqill.. ary.nd 0ur Pt! Ri..m!e: 0:!)co.. o cu@t AM't tii d.'L gtt?Mnb-fr! 1 U^da {b! headi4 airl Fu dsi& (r'ir udtucd Divid.b4 ftd4 ti) Sbcl{i (iii) C. dsdosd in !h! Biuco shel or a li'libd onp'!r: la) ciodwirrr (r) Prepdd eprnelj (c) A!6dsed c. dt.r {hat neadinF d ^d.nd (dPro@ldDiddmd.o dde viD ru dcj& rh.d rl utbD oF snd (.EdB E eMitun qlttv) R. shb tLc prw&i 6!in heding: ld b. 3.mpey @ . !h.\n)c!tu t\d ae4 .r od Ai6re wilr p 6he r}! 4r.Jstd: 6t Cl. (i) (u) sruids lltGiuo A@ut? o AbLaq liii) cumt r'Iet4 Meeltstuu.b!!tms bd (. cu Le8 r^n .liii) LadBdnd ajiBK.how4 li) lnd (i.diir.it of PiMrci.! ud sullu. td) Mixe|o.. \. r E4nsaad(y)Bill.)tin $i.o{ithcubds (i.tttcEou' E pe^ditu l limlkd . short csptbt. E.@unriG)Uur.murt. liE €d headr w r you dasi{r rn @pany: (.nat A'*.n .. (tu)Pt ltuinq Asdst \ii) hsnr l\a s4sr.oun. rNedh.e E4rdituE. cut Ld itis ond Medtd@uE Eadxufll R€{rane the fou*inshca& dfd*ob llde drtrarseo sh&lds Fshedurs \rr (a) Mseilu€ur Expddituer (6) r. or naa *{b: od dt L6n6 sd Anlcws) sh.. ad (u (ir: srldry ftbroB.o4 Tefu sudry Debba.tir) n!) Mire . oEp8r/i drErrdon rnv6.pitili (d) ulde riiiq coDni$i (t) tttrd a) Lacn ad ad.ttdw6 Lq@ Ext.c)alrE'o l. ih! Bsroce sher ot 1(i)did rtit clmn. d^a 0\ sh4E coptzrl r0.E Dd idvMer G) Fixed tu*tq (d rnv*iEen* & 11 Fb. Lv) ta u!&.) curelt Lilbiriii* d Urdd xbd ted! or '!d !esd.snes.d a*d!) 2.b. (iu) Lil1&t.') ait Mi'. o! bu.Anal!.nditure fis wourd you di&los th' fouonilg t&tu id rle ldDo Dl.nd . ronsi!: ill6 i tn I!e3? ltt) cut\nt ill.siDldqFundl0i)PEdEinAryExpgnss.aed (.) r.i) Vdecu€d ldr tuili.tk. ^sPb. fo di4 roD! rn ihe rarae sh6r d ! eeprryl (iJcutu M. Ld.t L Mtnrcnbb Eeaanldl und.a!.

hM sh.h€dul.30.qr rlc IM ta. a. P.dbs win rou rhN the 6ipar: (d) Authod&d capttrlr (r) D6b€nt@ eit (?) PrNtuid 6rT oc l.@dios b de <D. (iu) s.d b {Lu up dc n niUds !id.lr@ sLd of . 10 sa.00o. t'm.tnibit ih. 8.. ('i) B@l vlhD or d. l?.l$!. of Ea1' Pn 6n. rtiMl UId6rhriho.N.!d!..r Forb) ' u sha R'.r s.d I of r . of ds aun @nu ortle c. sb@ . 2000 n b ltr. 2.UldE Fbf b.joilt!h! G)cadtdrRetrrylr{d)56 ed tD.ne shed (i' soriant. fouoi!€ ir rb. (rit) EFviljod rd rq.l.ry @ r\an L m.0{0.h tully 9dd: l0'0e .d'ia'iuru'hdthe ronovior ibu in ib.5'000 r. {rdr .Dp!l.00. G D.t i 1992) ste cqrrc4 (6r si.+tu.r A. rol.u1t d srd M. .quir.lBdrneorxLid'shmc!'i1tl10'000 qujiy Bh3E ofEl.d of I rEii€d @EFy u on !&d31'200&{i)o!i!i!rlgtord.r!.@ui ho' *iU r. la.. (ii) UDddosd Divid.ti 1956.l ldm) d YN E qm BdrN sld.@tu r.l.6rE ori A.ry &. T'i.d vI.aao1 shet p.r-h.winr fillFr @.ruidE PEoium a.rt coflbl.t r^6 ad k P. li) tu{ill.tr Bduashd ofx Irn 6d Hqi'.rr.lti tue) l'tet 10.d!d fibb tb. 50. cuFdiE c. 61lo*bs ieu! in rh! Bdee sh..s. PE!* th.ay Bdru al B.a sas2.r 16. 52. BdDe sret cdpry: 'rib.

PPprs Eslm'" sh6t o.oolla 3' M'n!.ned R.".".-..m.l ii:* .0aotI b@l'r eq. ] '. sh@ c.!i'n I 30 0oo Pa\'dd iorTs$ !oR! 6'000 fdot at B slo+ t s shor.".". ..aa I I I I T T I I I I T T T I T .-." . Per ro 5sfoDpui.000.00.".tvdtl 11ds!otBdN 's'.00 M' r..1003.".."".. "*".20000 R| r3..o0.60.rtui."T*d. fu' s'oo' I s*l'..I I ! I l o R4ulLmibdm3rd Muh..root.000..1eb3.r @ Fs.bd r0 "a.J sh e.rod.h .*df e .-*'I| I : u4d Dl\id.."...Pd''odl I T Vdot4Bqh@sb Es. .! Sto!.. l trakt ol Br. r0{ D.aaal n5 2.o6.. l3q map'ny rs pi I 'h" \hedd.m0.| .. Gloddr 0o0 b!4rnf!ts d shllE ol Ra! Ld R! 2. 13 6o..!e cssE 2oa2.*""".P'nIorrh. r. r (.000. aa.. n3. " . c..renb-x Drb?n ls..4. l'00'om: su-d^ .tb.d0 00: s0e".00o.b hrrr Fd -..Anobsit ol Fi.q Rt t7.+ d fu l0'N'000 upr PlMt ed MtrhEe^ R! 3.000. Mad.law shtr E' s z'.rdarn3.&sE.sdl l 6'H h..nd R5 l'm'mo' &d fi.TherolbFi4balseshaveben 16 Prtrr@ tu 60.

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