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Revised Schedule VI Companies Act, 1956
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Revised Schedule VI Companies Act, 1956

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Revised Schedule VI of Companies Act, 1956 will be applicable on all Companies from 1st April 2011

Revised Schedule VI of Companies Act, 1956 will be applicable on all Companies from 1st April 2011

Published in: Economy & Finance, Business

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  • 1. REVISED SCHEDULE VI COMPANIES ACT, 1956
  • 2. INTRODUCTION Ministry of Company affairs (MCA) vide its notification dt. 28th Feb 2011 replaced the existing schedule VI by the Revised Schedule VI. Revised schedule will apply to all the companies uniformly for the financial statements to be prepared for the financial year commencing on or after 01-04-2011 Comparatives for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also have to be given as per new format. Thus for the financial statements prepared for the year 2011-12 (1st April 2011 to 31st March 2012), comparative amounts need to be given for the financial year 2010-11. Revised Schedule VI however, do not apply to any insurance or banking company, or any company engaged in the generation or supply of electricity Revised Schedule VI has been developed in the framework of existing non-converged Indian Accounting Standards and has no connection with the converged Indian Accounting Standards.
  • 3. MAIN PRINCIPLES OF REVISED SCHEDULE VI The requirements of the Companies Act, 1956 and the Accounting Standards will prevail over the Revised Schedule VI. Revised Schedule VI clarifies that the requirements mentioned therein for disclosure on the face of the financial statements or in the notes are minimum requirements Revised Schedule VI has eliminated the concept of ‘schedule‟ and such information is now to be furnished in the notes to accounts. All items of assets and liabilities are to be bifurcated between current and non-current. Rounding off requirements has been changed
  • 4. I. EQUITY & LIABILITIES I. SOURCES OF FUNDS (1) Shareholders’ Funds (1) Shareholders’ Funds (a) Share Capital (a) Capital (b) Reserves & Surplus (b) Reserves & Surplus (c) Money recd against share warrants (2) Loan Funds (2) Share application money (a) Secured Loans pending allotment (b)Unsecured Loans (3) Non-current Liabilities (3) Deferred Tax Liabilities(Net) (a) Long-term borrowings (4) Current Liabilities & Provisions (b) Deferred tax liabilities (Net) (Reclassified) (c) Other long term liabilities (a) Liabilities (d) Long-term provisions (b) Provisions (4) Current Liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions Total Total
  • 5. II. ASSETS II. APPLICATION OF FUNDS (1) (a) Fixed Assets (1) Fixed Assets (i) Tangible Assets (a) Gross Block (ii) Intangible Assets (b) Less: depreciation (iii) Capital Work-in-Progress (c) Net Block (iv) Intangible Assets under develop (d) Capital Work-in-Progress (b) Non-current Investments (2) Investments (Long term and Current) (c)Deferred tax assets (net) (3) Deferred Tax Assets (Net) (d) Long-term loans and advances (4) Current Assets, Loans and advances (e) Other non-current (a) Inventories assets (b) Sundry debtors (2) Current Assets (c) Cash and Bank balances (a) Current Investments (d) Loans & Advances (b) Inventories (e) Other current Assets (c) Trade Receivables (5) (a) Miscellaneous Expenditure (d) Cash and Cash equivalents (b) Profit and Loss Account (e) Short-term loans and advances (f) Other current assets Total Total
  • 6. FEW MAJOR CHANGES IN BALANCE SHEET Only the vertical format for presentation of financial statements Shareholder holding more than 5 percent shares need to be disclosed Aggregate number and class of shares allotted for consideration other than cash need to be disclosed only for a period of five years Debit balance of profit& loss account will be disclosed under the head “Reserves and surplus. Sundry debtors” has been replaced with the term “trade receivables. Amount due on account of other contractual obligations can no longer be included in the trade receivables Disclosure of all defaults in repayment of loans and interest to be specified in each case. Earlier, no such disclosure was required . Tangible assets under lease are required to be separately specified
  • 7. FEW MAJOR CHANGES IN PROFIT & LOSS A/C Name has been changed to “Statement of Profit and Loss” as against „Profit and Loss Account‟ Appropriation line items not to be presented on the face of Statement of Profit and Loss One percent of the revenue from operations or ` 100,000 needs to be disclosed separately Dividends from Subsidiary should be recognized as income only when the right to receive dividends is established as on the Balance Sheet date. Revenue from operations need to be disclosed separately as revenue from (a) sale of products, (b) sale of services and (c) other operating revenues
  • 8. DISCLOSURE REQUIREMENTSRevised Schedule VI introduces a number of other additional disclosures. Ex:  Terms of repayment of long-term loans need to be disclosed.  Stock-in-trade held for trading purposes, separately from other finished goods  Aggregate provision for diminution in value of investments separately for current and long-term  Rights, preferences and restrictions attaching to each class of shares, including restrictions on the distribution of dividends and the repayment of capital investmentsRevised Schedule VI has removed a number of disclosure requirements. Ex:  Information relating to licensed capacity, installed capacity and actual production  Information on investments purchased and sold during the year  Disclosures relating to managerial remuneration and computation of net profits for calculation of commission  Investments, sundry debtors and loans & advances pertaining to companies under the same management
  • 9. ABOUT DNS ADVISORSDNS Advisors is a specialized corporateadvisory firm promoted by young anddynamic professionals having richexperience in the field of corporate,financial and management consultancy.Our team consists of experts of the corporate reporting domain and havebeen exposed with auditing and corporate reporting for MNCs and largecompanies. we are committed to provide highest standards ofprofessionalism by timely delivery of highest quality of services to ourclients.
  • 10. OUR OFFERINGWe offer our services to prepare company’s financial statement as per therequirements of the revised schedule VI, which will include followings:A. Understanding the existing accounting system.B. Diagnostic study of the differences with existing systemC. Discussion of differences with the Corporate Reporting division of companyD. Preparation of financial statements as per the revised Schedule VIE. Interface with ERP team for making desired changes in the accounting & reporting system of organization– explaining & supporting them to get the desired output.
  • 11. OTHER SERVICE LINESBeside “Corporate Reporting ” and other traditional professionalservices, we at DNS Advisors specializes in following domains:  XBRL Conversion  Business Valuation  Project Funding  International Taxation  FEMA Compliances
  • 12. CONTACT USDNS AdvisorsW 123, Greater Kailash Part IINew Delhi – 110048Tel: 011 40535910Contact Persons :Naveen Goyal Deepak GuptaM +91 99110 95297 M +91 9811300590E naveen@dnsadvisors.com E deepak@dnsadvisors.com