COMPANIESBILL2013

FinancialStatementsandAccountingStandards
ICSI 24August2013

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Index

CompanyLawinIndia KeyTimelines

Accounts&Audit 1913to1956to2013(100years)

RelevancetoCompanySecretaries

FinancialStatements&AccountingStandards Overview

Companies Bill Salient Features Financial Statements and Accounting

Standards

Q&A

ContactUs

CompanyLawinIndia
Journeysofar

CompanyLawinIndia Journeysofar
TheCompaniesAct of1913 composedof290sectionsand4schedules
SubsequenttoreplacementofEnglishCompaniesAct1948bynewlegislation 1913Actin
IndiaproposedtobeamendedandreplacedbytheActof1956
Under the guidance of the then Finance Minister Mr. C.D. Deshmukh, upon
recommendations of various Committees Cohen Committee, Shastri Committee, Bhabha
Committeeetc.,1913ActreplacedbyActof1956,effective1April1956
The Companies Act 1956 Act enacted to consolidate and amend the law relating to
companiesandcertainotherassociations
TheActisdividedinto13parts,658sectionsand15schedules
Plethoraofamendmentsanddevelopmentsevolvedwithtime:
9 ConceptofProperbooksofaccount;
9 Financialstatementsandformatthereof;
9 Balancesheet,and
9 Profitandlossaccount;
9 ConceptofTrueandfairview;
9 Applicabilityofformatoffinancialstatements,etc.
overthelast100yearsstartingfromtheCompaniesAct,1913.

CompanyLawinIndia JourneysofarContd

Themostimportantandnoteworthydevelopmentsindisclosurerequirementsbeing:
9 Notification1979&Circular1982 VerticalformofBalanceSheetwasinsertedasPartBofPartI
ofScheduleVI
9 Notification1995 Insertion of Part IVofSchedule VI Balance Sheet Abstract and Companys
GeneralBusinessProfile
9 AmendmentActof1999
Insertionofsection210ArelatingConstitutionofNationalAdvisoryCommitteeonAccounting
Standards(NACAS)
Insertionofsubsection(3A),(3B) and (3C) under section 211 compliance with Accounting
Standards
9 Notification7th December,2006 Companies(AccountingStandards)Rules,2006
9 Notification No. S.O. 447(E) dated 28th February, 2011 (amended vide Notification No. F.NO.
2/6/2008CLVdated30th March,2011)
ReplacementofScheduleVIbyRevisedScheduleVIprovidingfortwoparts*:
PartI FormofBalanceSheet(includinggeneralinstructionsforpreparationofBalanceSheet)
PartII StatementofProfitandloss(includinggeneralinstructionsforpreparationofStatementof
ProfitandLoss)
*PartIIIrelatingInterpretation andPartIVrelatingBalanceSheetAbstractofCompanysGeneral
BusinessProfile hasbeenomitted.TheconceptofSchedules hasbeeneliminatedandisnowto
bepresentedintermsofNotestoAccounts.

CompanyLawinIndia JourneysofarContd

Development of Indian trade and industry, the impact of globalisation, shareholder

activismandcorporategovernance ledtoreplacementofadecadeoldActof1956by
theActof2013.

The much awaited Companies Bill 2012 (Bill) was passed by the Lok Sabha on 18
December2012 replacing56yearoldCompaniesAct1956

CompaniesBill2013(Bill)passedbytheRajyaSabhaon8August2013tobecomethe
CompaniesAct2013

TheBillseekstoconsolidateandamendthelawrelatingtothecompaniesandintends
toimprovecorporategovernance

TheBillisdividedinto29chapters,470clausesand7schedules.

CompaniesAct AccountsandAudit

1913 19562013
100years

AccountsandAudit(1913to1956to2013) Sections&Schedules
1913

1956

COMPANIESBILL2013

130 136

209to223

128to138

144145

224to233B

138to148

ScheduleIII

RevisedScheduleVI

ScheduleIII

ScheduleXIII

ScheduleV

Depreciation

ScheduleXIV

ScheduleII

Corporate Social
Responsibility

ScheduleVII

SECTION/CLAUSE
Accounts
Audit
SCHEDULES
Form of Balance
Sheet & Form of
Statement
of
Profit&Loss
Managerial
Appointment
Remuneration

&

RelevancetoCompanySecretaries

RelevancetoCompanySecretaries
Expert includesacompanysecretary
(Section2(38))
KeyManagerialPersonnel includesaCompany
Secretary(Section2(51))

ROC

FinancialStatementstobepreparedinaccordancewith
ScheduleIII(Clause129)

TRIBUNAL

AccountingStandardsformallypartoftheAct(Clause129and133)
SignatoriestoFinancialStatementsincludeCompanySecretaries
(Clause134)
DisclosureinBoardsReport(Clause134) explanationsorcommentsbythe
Boardoneveryqualification,reservationoradverseremarkordisclaimermade
bytheauditorinhisreportandbythecompanysecretaryinpracticeinhis
secretarialauditreport.

NFRA

SFIO

NationalFinancialReportingAuthority(NFRA)
9 monitor and enforce the compliance with accounting standards and auditing standards and
oversee the quality of service of the professions associated with ensuring compliance with
suchstandards
9 NointerferenceorcontinuanceofproceedingsinsuchmatterbyanyInstituteorbodylikeICAI,
ICSI,etc.(Clause132)

FinancialStatements&AccountingStandards
CompaniesAct1956vs.CompaniesBill2013

Overview
Pre7December

2006

Post7December

2006

PostRevisedSch

VI(2011,2012)
Now

COMPANIESACT1956
FinancialStatements SchVI
AS ICAI
SchVI> ICAI
FinancialStatements SchVI
AS Section211(3C),ASRules
SchVI>AS(mostly)
Financial
Statements

RevisedSchVI
AS Section211(3C),ASRules
AS>RevisedSchVI

COMPANIESBILL2013

FinancialStatements SchIII
AS Section129,133
AS+SchIII True&FairView

OverviewContd
COMPANIESACT1956
Sec209

BooksofAccount

Sec 210, 211, BalanceSheet

SchVI
Profit&LossAccount

COMPANIESBILL2013
Definitions
Clause2(13)

BooksofAccount

Definitions
Clause2(40),
Clause129,133,
SchIII

9
9
9
9

2(41)
ASRules2006,
Section211(3C)

CashFlows
AS Compliances
Disclosures

ASRules,2006
& Clause129,133

FinancialStatements
BalanceSheet
Profit&LossAccount
CashFlowStatement
Statement of changes
inequity
9 ExplanatoryNotes
9 Financialyear
AS Compliances
Disclosures

&

CompaniesBill SalientFeatures
FinancialStatementsandAccountingStandards

SalientFeatures1 AS,FormandContent TrueandFairview

COMPANIESACT1956
Section/
Clause
209
210
211

Provision
True&fairview
CompliancewithAS
RevisedSchVI

SchIII+AS=TrueandFairView
AS>SchIII

COMPANIESBILL2013
Section/
Clause
128
129
133

Provision
True&fairview
CompliancewithAS
SchIII

SalientFeatures2 ConsolidationofSubsidiaries
COMPANIESACT1956

COMPANIESBILL2013

Section/
Clause

Provision

Section/
Clause

Provision

212

Statement with respect to

Subsidiaries
Consolidation Onlyforlisted
entities
Forothers Optional

129
134
136
137

Everycompanywhichhas
9 Subsidiaries
9 JointVentures
9 Associates
havetomandatorilyconsolidate
Statement of Salient features
offinancialsofsubsidiaries
Authentication,
Approval,
Circulation, filing also specify
thesame

FinancialStatementsnowinclude=Standalone+ConsolidatedFinancials
ProvisionsrelevanttoStandalone=RelevanttoConsolidatedfinancials

SalientFeatures3 AS IGAAPvs.IFRS
COMPANIESACT1956
Section/
Clause

Provision

ASRules
210
211(3A), IndianAS
(3B),3(C) (1to29)
IndAS
(not
implemented)

COMPANIESBILL2013
Section/
Clause

Provision

129
133

Standardstobefollowed
IndAS(whenimplemented/announced)
IndianAS(1to29)

TheBillpaveswayforIFRSbasedAccounts
9
9
9
9
9

Clause129 FinancialStatements ClassofCompanies

SchII Depreciation ClassofCompanies
SchIII Format AS 2011
Clause52/55 SecuritiesPremium RedemptionofPreferenceshares
ClassofCompanies
MemorandumtotheBill NFRAmentionsIFRSasthebasis

SalientFeatures4 Signatories Responsibilities

COMPANIESACT1956
Section/
Clause
215

Provision

ManagingDirector,
Director,or
Manager,or
Secretary
Any other person
charged with such
duty

COMPANIESBILL2013
Section/
Clause

Provision

134
129(7)

ManagingDirector,CEO(ifdirector)
Whole time director in charge of
finance
Director
ChiefFinancialOfficer
CompanySecretary
Any other person charged with such
duty

TheBillnowspecifiessignatoriesandresponsibilities

SalientFeatures5 ReopeningandRevisionofAccounts
COMPANIESACT1956
Section/
Clause

Provision

No
explicit
provision
Circularissuedby
Department of
Company Affairs
in2003

COMPANIESBILL2013
Section/
Clause

Provision

130

ReopeningofaccountsonCourt'sorTribunal'sorders
InitiatedbyGovt.orRegulatoryBody:
9CentralGovernment
9IncomeTaxAuthority
9SEBI
9Anyotherconcerned
Orderby
9CompetentCourt
9Tribunal
Afterintimationto
9IncomeTaxAuthority
9SEBI
9Anyotherconcerned
Voluntary revision of financial statements or Boards
reportasapprovedbyTribunal

131

TheBillincludesexpressprovisionregardingreopening&revision
RelevanceunderIFRSbasedstandards

SalientFeatures6 RegulatoryBody
COMPANIESACT1956

COMPANIESBILL2013

Section/
Clause

Provision

Section/
Clause

Provision

210A

National Advisory
Committee
on
Accounting
Standards(NACAS)
Recommendations
Accounting Policies,
Standards

130

NationalFinancialReportingAuthority
(NFRA)
Recommendations on Accounting &
AuditingStandards
Monitorandenforcecompliance
QualityofServiceofProfessions
*CivilCourtPowers
*NointerferenceofInstitutes

TheBillnowintroducesenhancedmonitoringandcontrol
Enhancedpenalprovisions,QuasiJudicialProcessnowintroduced

CompaniesBill2013 FinancialStatements&AccountingStandards

Q&A

ContactUs

ContactUs
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