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DISCLOSURE REQUIREMENTS AS PER SCHEDULE VI (PART I) Co. Act


CA.Parsun Garg 
posted on 01 December 2009



BALANCE SHEET

 
DISCLOSURE REQUIREMENT AS PER SCHEDULE VI (PART I) OF THE COMPANIES ACT, 1956
 
 
1.General
The Balance Sheet of the Company shall be either in horizontal form or vertical form. Except in the case of the Balance Sheet laid before the company after the commencement of the Act, the corresponding amounts for the immediately preceding financial year for all items shown in the Balance Sheet shall be given in the Balance Sheet
 
In case of companies preparing quarterly or half-yearly accounts, the above requirement relate to the Balance Sheet for the period, which entered on the corresponding date of the previous year.
 
Note: 
·         Where the period covered by the previous accounts does not comprise the same period as covered by current period a note thereof should be given.
·         In case of first accounts, a note thereof should be given.
 
Figures in the Balance Sheet be uniformly stated in rupees giving paise also or rounded off to the nearest rupee if in horizontal form. In case of vertical form, figures stated rounded off to the nearest ‘000 or ’00 or in decimals of thousands or if in form approved by Central Government figured stated as approved.
The information required to be given under any of the items or sub-items, if it cannot be conveniently included in the Balance Sheet itself, shall be furnished in a separate schedule/s to be annexed to and form part of the Balance Sheet. This is recommended when items are numerous.
 
Share Capital
Authorised Capital
a)    Various classes of capital.
b)    Nominal value of each share of each such class.
c)    Number of shares of each such class.
Issued, Subscribed and Paid-up Capital
a)    Various classes of shares
b)    Nominal value of each share of each such class.
c)    Number of shares of each such class.
d)    Extent to which each class has been called up and paid up.
Note:
§ The following additional information should be disclosed in respect of each class of shares –
a)    Terms of redemption or conversion (if any) of any redeemable
      Preference capital together with earliest date of redemption
      or conversion.
a)    Particulars of any option on unissued share capital
b)    Particulars of the different classes of preference shares
c)    Number of shares allotted as fully paid-up pursuant to a contract without payment being received in cash.
d)    Number of shares issued as fully paid-up by way of bonus shares specifying the sources from which bonus shares are issued e.g. capitalization of profits or reserves or from Share Premium account
e)    In the case of subsidiaries companies, the number of shares held by the holding company as well as by the ultimate holding company and its subsidiaries
 
In case where all particulars in respect of issued, subscribed and paid-up are same, these can be stated as combined. Otherwise subscribed, called-up and paid-up capital to be shown individually.
 
2.3 Calls Unpaid
a)    Amount unpaid for each class of shares including different classes of preference shares.
b)    Aggregate of unpaid calls deducted from paid-up capital
c)    Amount unpaid by Directors and others separately disclosed.
2.4 Forfeited Shares
a)    Amount originally paid-up for each class of shares
b)    Aggregate of forfeited amount added to paid-up capital
Note:
Any capital profit on reissue of forfeited shares should be transferred to Capital Reserve.
3.       Reserve and surplus
3.1         Distinguish between:-
a)    Capital Reserve
Note:
Capital Reserve shall not include any amount regarded as free for distribution through the Profit and Loss Account
b)    Capital Redemption Reserve
c)    Share Premium Account
Note:
Disclose details of its utilization in the manner provided in the Section 78 in year of utilization.
d)    Other Reserves specifying the nature of each reserve and the amount in respect thereof
     less : debit balance in Profit and Loss Account (To be shown by way  
               deduction from the uncommitted reserves, if any)
e)    Surplus i.e. balance in Profit and Loss Account after providing for proposed allocations i.e. dividend, bonus or reserves.
f)     Proposed additions to reserves
g)    Sinking funds
Note:
·         Additions and deductions since last balance sheet to be shown under each of the specified heads
·         The word ‘fund’ in relation to any “Reserve” should be used only where such Reserve is specifically represented by earmarked investments.
·         " Reserve” shall not include any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability.
 
4.           Secured Loans
4.1 Classify loans under the following heads:-
a)    Debentures
Note:
In respect of each class of debentures the following has to be stated -
·      Terms of redemption or conversion (if any) of debentures issued together with earliest date of redemption or of conversion.
·      In respect of the Company’s debentures held by a nominee or a trustee of the Company, the nominal amount of the debentures and the amount at which they are stated in the books of the Company.
·      Particulars of any redeemed debentures, which the Company has power to issue.
·      The nature of security
b)    Loans and Advances from Banks
c)    Loans and Advances from subsidiaries
d)    Other Loans and Advance
e)    Loans from Directors and Managers.
Note:
The following additional information should be disclosed in respect of each of the above loans:
·      The nature of security
·      Aggregate amount of loans guaranteed by Managers and/or Directors under each head.
·      Interest accrued and due on Secured loans included under the appropriate sub-heads.
5.               Unsecured Loans
5.1 Classify loans as under:-
a)    Fixed Deposits
b)    Loans and Advances from subsidiaries
c)    Short Term Loans and Advances
From Banks
From Others
        Note:
Short Term Loans will include those that are due for not more than one year as at the date of the Balance Sheet.
d)    Other Loans and Advances
From Banks
From Others
e)    Loans from Directors and Managers
Note:
In respect of each type of loan, other than Fixed Deposit, the following additional disclosures is required:-
·         Aggregate amount of loans guaranteed by Managers and/or Directors under each head.
·         Interest accrued and due on loans included under appropriate sub-heads.
6.               Current Liabilities and Provisions
6.1         Current Liabilities
Classify under the following heads:-
a)    Acceptances
b)    Sundry creditors segregated into
                            I.    Total outstanding dues to small scale industrial undertaking)(s)
                          II.    Total outstanding dues of creditors other than small scale industrial undertaking(s)
          Note:
 Name(s)of small scale industrial undertaking(s) to whom the company owes any sum together with interest outstanding for more than 30 days should be also disclosed.
c)    Subsidiary Companies
d)    Advance Payments and unexpired discounts for the portion for which values has still to be given e.g. for following companies – Newspaper, Fire Insurance, Theatres, Clubs, Banking, Steamship Companies etc.
e)    Unclaimed Dividends
f)     Other Liabilities(if any)
g)    Interest accrued but not due on loans
h)   Current Account with Directors and Managers
6.2         Provisions
Classify under the following heads:-
a)    Provision for taxation
b)    Proposed Dividends
c)    Provision for Contingencies
d)    Provision for Provident Fund Scheme
e)    Provision for Insurance, pension and similar staff benefit scheme
f)      Other provisions
Note:
The expression provision shall mean any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy. Where the amount provided which in the opinion of the Directors is reasonably in excess of the amount reasonably necessary for the purpose, such excess shall be treated as reserve.
7. Footnote to the Balance Sheet
7.1 Show separately:-
a)    Claims against the Company not acknowledged as debts.
b)    Uncalled liability on shares partly paid
c)    Arrears of fixed cumulative dividends
Note:
·         The Period for which the dividends are in arrears or if there is more than one class of shares, the dividends on each such class are in arrears shall be disclosed
·          The amount shall be before deduction of Income-tax, except that in the case of tax-free dividends the amount shall be shown free of Income-tax and the fact that it is so shown stated.
d)    Estimated amount of contracts remaining to be executed on capital account and not provided for.
e)    Other money for which Company is contingently liable.
Note:
Amount of any guarantee given by the Company on behalf of Directors or other officers of the Company and where practicable, the general nature and material amount of each such contingent liability stated.
8.       Fixed Assets
8.1         Distinguish fixed assets as far as possible between:-
a)    Goodwill
b)    Land
c)    Building
d)    Leaseholds
e)    Railway sidings
f)     Plant and Machinery
g)    Furniture and Fittings
h)   Development of Property
i)     Patents, trademarks and designs
j)     Livestock, and
k)    Vehicles, etc.
Note:
·         Under each head the original cost, additions thereto and deductions there from during the year and the total depreciation written off or provided upto the end of the year to be disclosed.
·         Difference in exchange rate during the year on account of liability for payment of the cost of asset or for repayment of any money burrowed, directly or indirectly, in foreign currency for the acquisition of assets should be added/deducted from the cost of assets.
·         Where original cost cannot be ascertained without reasonable expense or delay, the valuation shown by the books should be given. In case of sale of such asset the amount of sales proceeds shall be shown as a deduction.
·         In case of reduction of capital or revaluation of assets:
 
(i)           Every balance Sheet (after the first Balance Sheet) subsequent to the reduction or revaluation shall show the reduced or revalued figures in place of the original cost together with the date of reduction or revaluation.
(ii)          Each balance sheet for the first five years subsequent to the date of reduction or revaluation shall also show the amount of reduction or increase made.
 
9 Investments
 
9.1 Distinguish between:-
 
(a) Investments in Government or Trust Securities.
(b) Investment in shares, debentures or bonds (showing separately shares fully and partly paid-up and also distinguishing the different classes of shares and showing also similar details of investments in shares, debentures or bonds of subsidiary companies).
(c) Immovable Properties
(d) Investments in the capital of partnership firms
(e) Balance of unutilised monies raised by the issue.
 
Note :
All unutilised monies out of the issue must be separately disclosed indicating the form in which such unutilised funds have been invested.
 
9.2 In Respect of above investments the following disclosures are made:
 
(a) Nature of investments and mode of valuation i.e. cost or market value.
(b) Aggregate amount of company’s quoted investments and market value thereof
 
Note :
Quoted Investments means an investment in respect of which there has been granted a quotation or permission to deal on a recognized stock exchange
 
(c) Aggregate amount of Company’s unquoted investments
(d) Distinguish Between trade investments and other investments
 
Note :
Trade investments means an investments by a company in the shares or debentures of another company not being its subsidiary, for the purpose of promoting the trade or business of the company.
 
(e) Distinguish between long-term investments and current investments
 
Note :
Long term investments are investments that are intended to be held for a period exceeding a year.
 
(f)   The names of the bodies corporate (indicating separately the names of the bodies corporate under the same management) and the nature and extent of the investment so made in each such body corporate (including all the investments, whether existing or not, made subsequent to the date as at which the previous Balance Sheet was made out).
 
Note:
  • For investment Company whose principal business in the acquisition of shares, stocks, debentures or other securities, it will be sufficient if the disclosure is made of the investments existing as at the Balance Sheet date.
 
  • For investments in the capital of partnership firms, the name of the firms with the name of all their partners, total capital and the share of each partner.
 
10. Current Assets ,Loans and Advances
 
Note :
If in the opinion of the board, any of the current assets ,loans and advances have not a value on realization in the ordinary course of business at least equal to the amount at which they are stated ,the fact that the Board is of that opinion shall be stated.
 
10.1 Current Assets :
(a) Classify current assets as under :
(i)   Interest accrued on investments
(ii) Inventories
(a) Stores and spare parts
(b) Loose Tools
(c) Stock in trade
(d) Work in progress
 
Note :
  • In respect of above items other than loose tools mode of valuation shall be stated.
  • Where practicable amount for raw material shall be separately stated.
 
(iii) Sundry Debtors
(a) Debts outstanding for a period exceeding six months
(b) Other Debts
(c) Less : Provision for bad and doubtful debts – shown by way of deduction from debtors
 
Note :
The Provision should not exceed the amount of debts stated to be considered bad and doubtful and any surplus of such provision should be shown under “Reserve & Surplus” under a separate sub-head “Reserve for doubtful or bad debts”.
In respect of items (a) and (b) above disclose separately –
(i) Debts considered good – fully secured
(ii) Debts considered good – unsecured for which company holds no security other  
     than the debtors personal security
 
(iii) Debts considered doubtful
(iv) Debts due by directors or other Officers of the Company or any of then either severally or jointly with any other person along with the maximum amount due at any time during the year
(v)   Debts due by firms in which any Director is a partner
(vi) Debts due by a Private Company in which any director is Director or a member.
(vii) Debts due by companies under same management (Section 370(IB) ) alongwith   the names of the companies.

Published in Audit
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