Revised Schedule VI

Presented by:
Harsh Sankhala (62) (105) Kevin Coelho (107) (65) Sachin Shetty (92) (109) Vivek Vinodraj (98) (119) Lohit Sharma Aditya Chavan Aniket Metkar Munesh Sharma

Introduction
Schedule VI of the Companies Act, 1956, prescribes the

format of financial statements and disclosure requirements for corporate entities in India. Considering the economic and regulatory changes that have taken place globally, and being as old as the Act itself (1956), schedule VI had completely outlived its utility. As per notification dated 28th March, 2011 by Ministry of Corporate Affairs the revised Schedule VI is applicable to balance sheet & profit & loss account to be prepared for the financial year commencing on or from 01st April 2011.

Objectives
One of the Main aim of revising schedule VI was to attain

compatibility and convergence with IFRS in India In may 2008, MCA issued a press release in which it has committed to convergence with IFRS by April 1, 2011 At the G20 summit on financial Market and World Economy, then Finance Minister also committed to have convergence with IFRS in India Other main object of revising schedule VI was to eliminate numerous statistical and disclosure requirements which are not relevant from an investor perspective.

General instructions
Compliance with the Act and/or Accounting Standards:
Requirements of the Act and/or Standards will override the related requirement of Schedule VI.

Disclosures are required by the Companies Act shall be made in the notes to accounts
Additional disclosures specified in the Accounting Standards shall be made in the notes to accounts or by way of additional statement unless required to be disclosed on the face of Financial Statements.

General instructions
Notes to the accounts shall contain information in addition to that presented in the Financial Statement and shall provide where required (a) narrative descriptions or disaggregations of the items recognized in those statements and (b) information about items that do not qualify for recognition in those statements.

General instructions
Each item on the face of the Balance sheet and statement of the profit and loss shall be cross- referenced to any related information in the notes to the accounts Figures of previous period: The corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.

General instructions
Presentation of figures:
Where Turnover:

< Rs. 100 crores = Figures to be in nearest hundreds, thousands, lakhs or millions or decimals thereof. o > Rs. 100 crores = Figures to be in nearest lakhs or millions or decimals thereof. Once a unit of measurement is used, it should be used uniformly in the Financial Statements
o

Comparison between Old & Revised Schedule VI

Sr. No. Particulars Old Schedule VI Revised Schedule VI

1)

Form of Balance Sheet

Both horizontal and vertical form were allowed

No format specified for Profit and Loss Account Opening surplus, proposed dividend and transfer to/ from reserves were shown in Profit and Loss Appropriation Account

Only vertical form of Balance Sheet has been specified in the revised Schedule VI
Form of Profit and Loss Account specified under Part II Transfer from/ to reserves to be shown under the heading Reserves & Surplus only. No requirement of separate Profit and Loss Appropriation Account.

2)

Form of Profit and Loss Account Profit and Loss Appropriation Account

3)

Comparison (iii)
Sr. No. 4) Particulars Net Working Capital Old Schedule VI Revised Schedule VI

Current assets & Assets & Liabilities are Liabilities are shown to be bifurcated into together under current & Non-current & application of funds. The to be shown separately. net working capital Hence, net working appears on balance capital will not be sheet. appearing in B/S. There was no bifurcation Fixed assets to be required in to tangible & shown under nonintangible assets. current assets and have Capital advances used to be bifurcated into to be shown under the Tangible & intangible Head Capital Work in assets. Progress under Fixed Capital advances to be Assets shown under the head Long term Loans &

5)

Fixed Assets

Comparison (iv)
Sr. No. 6) Particulars Borrowings Old Schedule VI Short term & long term borrowings are grouped together under the head Loan funds sub-head Secured / Unsecured Revised Schedule VI Long term borrowings to be shown under non-current liabilities and short term borrowings to be shown under current liabilities with separate disclosure of secured / unsecured loans. Period and amount of continuing default as on the balance sheet date in repayment of loans and interest to be separately specified Lease deposits to be disclosed as long term loans & advances under the head

7)

Deposits

Lease deposits are part of loans & advances

Comparison (v)
Sr. Particulars No. 8) Investments Old Schedule VI Both current & noncurrent investments to be disclosed under the head investments Revised Schedule VI Current and non-current investments are to be disclosed separately under current assets & non-current assets respectively.

9)

Loans & Advances

Loans & Advance are Loans & Advances to be disclosed along with broken up in long term & short current assets term and to be disclosed under Loans & Advance to non-current & current assets subsidiaries & others respectively. to be disclosed Loans & Advance from related separately. parties & others to be disclosed separately. Deferred Tax assets / liabilities to be disclosed separately Deferred Tax assets / liabilities to be disclosed under noncurrent assets / liabilities as

10)

Deferred Tax Assets / Liabilities

Comparison (vi)
Sr. No. 11) Particulars Cash & Bank Balances Old Schedule VI Bank balance to be bifurcated in scheduled banks & others Revised Schedule VI No such bifurcation required. Bank balances in relation to earmarked balances, held as margin money against borrowings, deposits with more than 12 months maturity, each of these to be shown separately. Debit balance of Profit and Loss Account to be shown as negative figure under the head Surplus. Therefore, Reserve & Surplus can have a negative balance.

12) Profit & Loss (Debit Balance)

P&L debit balance to be separately disclosed in the Balance Sheet.

Comparison (vii)
Sr. No. 13) Particulars Sundry Debtors Old Schedule VI Debtors outstanding for more than six months from invoice date to be shown separately Revised Schedule VI Debtors outstanding for more than six months from the date they became due to be shown separately

14)

Other current liabilities

No specific mention Current maturities of long term for separate debt to be disclosed under disclosure of Current other current liabilities. maturities of long term Current maturities of finance debt lease obligation to be No specific mention disclosed. for separate disclosure of Current maturities of finance lease obligation

Comparison (viii)
Sr. No. 15) Particulars Separate line item Disclosure criteria Old Schedule VI Revised Schedule VI any item under which any item of income / expense expense exceeds one which exceeds one per cent of per cent of the total the revenue from operations or revenue of the Rs. 1,00,000, which ever is company or Rs. 5,000 higher; to be disclosed which ever is higher; separately shall be disclosed separately Function wise & nature wise Finance cost to be classified in fixed loans & other loans Expenses in Statement of Profit and Loss to be classified based on nature of expenses Finance cost shall be classified as interest expense, other borrowing costs & Gain / Loss on foreign currency transaction & translation

16)

Expense classification Finance Cost

17)

Comparison (ix)
Sr. No. 18) Particulars Foreign exchange gain / loss Purchases Old Schedule VI Revised Schedule VI

Gain / Loss on foreign Gain / Loss on foreign currency currency transaction transaction to be separated to be shown under into finance costs and other finance cost expenses The purchase made and the opening & closing stock, giving break up in respect of each class of goods traded in by the company and indicating the quantities thereof. Goods traded in by the company to be disclosed in broad heads in notes. Disclosure of quantitative details of goods is diluted. Goods-in-transit to be separately disclosed.

19)

Comparison (x)
Sr. No. Particulars Old Schedule VI TDS amount was required to be shown for Interest income etc. Payment to directors and detailed calculation under section 198 was required to be disclosed Revised Schedule VI No requirement of disclosing TDS amounts separately 20) TDS amount on Interest, royalty received 21) Managerial Remunerati on and Commission

No disclosure requirements for Managerial Remuneration

22)

ESOP expenses

No requirement to show separately as part of Employee Benefits expense

Expense on Employee Stock Option Scheme (ESOP) and Employee Stock Purchase Plan (ESPP) to be shown separately as part of Employee Benefits expense

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