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HIMANSHU KISHNADWALA 8 AUGUST 2012

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1. Format / disclosures Revised Schedule VI 2. Disclosures as per notified Accounting Standards (i.e. Companies AS Rules, 2006) 3. Disclosures as per Companies Act, 1956 Buyback of shares (as per sec 77) 4. Disclosures as per other Statutes E.g. MSME Act, RBI notifications for NBFCs 5. Disclosures as per ICAI pronouncements ICAI announcement for derivatives 6. Disclosures as per Clause 32 of listing agreement Loans/advances to subsidiaries, etc.
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For FY commencing on or after 1st April 2011 First year of applicability FY 2011-12 Cannot be applied earlier on voluntary basis Corresponding figures for 2010-11 mandatory Applicable to ALL companies (except those engaged in banking, insurance)

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Concept of schedules eliminated All information to be given in notes to accounts. Extensive cross-referencing required Terms used to carry meaning as defined by the notified Accounting Standards. If conflict between requirements of the Act and / or AS, requirements of the Act and / or AS will prevail over RS VI. Only vertical format to be followed Format follows permanency in presentation of assets / liabilities
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PL now to be called Statement of Profit and Loss Formats given for both BS and Stt of PL
Option of giving functional classification of expenses in PL not available

No Appropriation account in Stt of PL

All appropriations to be disclosed in Reserves & Surplus Surplus in Statement of PL

Debit balance of Profit/Loss to be deducted from Reserves and Surplus

Final figure of Reserves & Surplus can even be negative
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Disclosure of additional line items in BS / PL? Instructions to RS VI mentions that the requirements mentioned therein are minimum requirements. Hence additional line items can be included say, for EBDITA, Net Working Capital, Industry Specific Disclosures? Industry specific disclosures for NBFCs, also required to be given as required by the respective statutes.

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Managerial remuneration and computation thereof; Details of Licensed capacity, Installed capacity Quantitative information about actual production, purchases, sales, consumption, etc.; Investments purchased/sold during the year; Investments, sundry debtors and loans/advances pertaining to companies under the same management; Maximum amounts due on account of loans and advances from directors or officers of the company; Information under Part IV of Schedule VI
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only if opted for Same unit of measurement in entire Financial Stts

Existing Schedule VI Turnover < Rs 100 Crores R/off to the nearest hundreds, thousands or decimal thereof. Turnover Rs 100 to Rs 500 Crores R/off to the nearest hundreds, thousands, lakhs or millions or decimal thereof. Turnover > Rs 500 Crores R/off to the nearest hundreds, thousands, lakhs millions or crores or decimal thereof.
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Revised Schedule VI Turnover < Rs 100 Crores R/off to the nearest hundreds, thousands, lakhs or millions or decimal thereof. Turnover > Rs 100 Crores R/off to the nearest lakhs, millions or crores, or decimal thereof.

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Section 115JB requires PL account to be prepared under part II of pre-revised Schedule VI for MAT purposes ICAI GN on 44AB suggests to use format prescribed under governing law For a company having year end other than Financial Year, which format to be followed for FS?

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Shareholders Funds
Share Capital

Non Current Liabilities

Long term borrowings

Current Liabilities
Short term borrowings Trade Payables Other current liabilities Short term provisions
11

Reserves and surplus Deferred tax liabilities Money received against share warrants Other Long term liabilities Long-term provisions
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A liability is classified as Current if it satisfies any of the following criteria: a) it is expected to be settled in the companys normal operating cycle; b) it is held primarily for the purpose of being traded; c) it is due to be settled within 12 months after the reporting date; or d) the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
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An asset is classified as Current when it satisfies any of the following criteria: (a) It is expected to be realized in, or is intended for sale or consumption in the companys normal operating cycle; (b) It is held primarily for the purpose of being traded; (c) It is expected to be realized within 12 months after the reporting date; or (d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after reporting period date.
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An Operating Cycle (OC) is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.
If an OC cannot be identified, it is assumed to have a duration of 12 months If a company is engaged in multiple businesses, the OC can be different for each line of business
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Different OC for different customers based on different credit terms? say., PSU and non PSU customers Can OC differ from year to year? Whether lead time for procuring raw material should be included in OC? Is credit period allowed by supplier reduced in determination of OC?
To determine OC to consider: o Normal business behaviour o Industry practice o Liquidity position ??
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Industry specific OC:

Manufacturing Companies: To determine business-wise Real Estate Companies: Can be determined project-wise Finance Companies: Difficult to determine to be assumed at 12 months Service companies: To determine business-wise

Relevance of OC for classification of:

Trade receivables / payables OC relevant Supplier/Customer advances OC relevant Borrowings OC relevant Loans 12 months period Other assets / liabilities 12 months period
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Manufacturing Companies OC considered as 12 months

Bajaj Electricals Ltd, Grasim Industries Ltd Hindustan Unilever Ltd, Excel Industries Ltd Ultratech Cement Ltd

Finance Company OC considered as 12 months

M & M Financial Services Ltd

Multi activity company OC different for specific project / contract / product line / service
Larsen & Toubro Ltd
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Real Estate Industry: Disclosures regarding OC Oberoi Realty Limited

The Companys normal operating cycle in respect of operations relating to under construction real estate projects may vary from project to project depending upon the size of the project, type of development, project complexities and related approvals. Operating Cycle for all completed projects and hospitality business is based on 12 months period. Assets & Liabilities have been classified into Current and Non Current based on Operating Cycle of respective businesses.
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Real Estate Industry: Disclosures regarding OC Mahindra Lifespace Developers Limited

.. Based on the nature of activity carried out by the company and the period between the procurement and realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 5 years for the purpose of Current Non Current classification of assets & liabilities.

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Determining Whether Current or Non-Current?

For Assets: To consider expectation of receipt For Liabilities: To consider obligation to pay

Whether accounting policy for classification of items into Current / Non Current is to be disclosed?
Neither the RS VI nor the GN on RS VI requires such disclosure However, disclosure preferable in case of OC > 12 months In other cases, though not required, maybe given as it lends higher transparency to the FS

Classification may have impact on CARO reporting

Whether funds raised on short term basis are used for long term purposes? CNK 20

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Whether Current or Non-Current? Payables or Operating liabilities within operating cycle, but not paid within 12 months. Technical / minor breach on some covenants of Term Loans; Slow-moving Raw Materials Provision for employee benefits like Gratuity and Leave encashment Stock of Finished Goods unsold for 15 months

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Whether Current or Non-Current Loan given to Subsidiary (repayable on demand) Loan from Holding company (repayable on demand) Deposits : Electricity/ Lease deposits Others Advance tax (net of provisions) Provision for tax (net of advance tax)

Audit Fees payable?

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Share Capital Shares in the company held by each shareholder holding more than 5% shares specifying the number of shares held. Whether names to be disclosed based on legal ownership or beneficial ownership?
Section 187C of the Companies Act, 1956. Name of depository to be given?? (Refer Tata Motors Ltd)

Disclosure for each class of shares as at BS date Comparative information necessary even if in 2011-12, the amounts are below 5 % Additional disclosures in line with Ind-AS 1 / IAS 1.
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Presentation of Preference Share Capital for a company who has adopted AS 30 Whether to be presented as Share Capital or Liability?
RS VI deals only with presentation and disclosure Accounting is governed by applicable AS. If a company early adopts AS 30/31/32 it has to decide classification between the liability/equity of preference shares based on principles of AS 31. ICAI GN mentions that only Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 are to be followed, reclassification of Preference shares not possible under RS VI.
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To be disclosed as a separate line-item on the face of Balance Sheet between Shareholders Funds and Non-current Liabilities. Share application money not exceeding the issued capital and to the extent not refundable is to shown under this line item. Share application money to the extent Refundable shall be shown under Other current liabilities. Inadequacy of Authorised Capital? Transfer to IEPF after 7 years from the date amount becomes due for payment?
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Disclosure requirements: Number of shares proposed to be issued The amount of premium, if any The period before which shares are to be allotted Whether the company has sufficient authorized share capital to cover the share capital amount on allotment Interest accrued on amount due for refund Period for which share application money is pending beyond the period for allotment as mentioned in the share application form along with the reasons thereof for such share application money being pending is to be disclosed. Above disclosures to be made for amounts classified under both Shareholders funds or Current Liabilities
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Disclosure requirements: Nature of Security to be specified in each case (overall disclosure not allowed) Bonds & Debentures (along with rate of interest and particulars redemption or conversion, as the case may be) shall be stated in descending order of maturity or conversion date, as the case may be. Particulars of any redeemable bonds/debentures which the company has the power to reissue shall be disclosed. Terms of Repayment of term loans and other loans Period and amount of continuing default as on BS date in repayment of loans and interest, shall be specified separately in each case. CNK 27

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How to disclose details of borrowings: No Standard format prescribed. Whether to give name / amount of borrowing / installments due, etc. for each bank or institution? Disclosure of Continuing Default Disclosure in RS VI vs. reporting in CARO

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Illustrative disclosures by companies: Grasim Industries Ltd

Rupee term loan secured by exclusive charge on certain specific FA of the Co located at .. Quarterly ballooning repayment from October 20XX, over xx years. Foreign Currency Loans secured by first pari-passu charge on fixed assets, both present & future of the Co located at . Repayable after 5 years, bullet repayment in March, 20XX.
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Illustrative disclosures by companies: Reliance Industries Ltd

Maturity Profile and Rate of Interest of Bonds

Rate of Interest 2015-16 2.86% 6.21% 6.34% 1,011 2016-17 254 Maturity Profile 2018-19 193 2026-27 2027-28 2046-47 2096-97 -

Maturity Profile of Unsecured Term Loans:

Maturity Profile Particulars Term Loans from Banks 1-2 yrs 12,920 2-3 yrs 3,418
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3-4 yrs 5,926

Beyond 4 yrs 15,005

30

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Illustrative disclosures by companies: Prism Cement Ltd

Secured Term Loan from Banks and Others

Security Amount as at 31.03.2012
500

Repayment Terms

Secured by charge on movable and immovable properties of the Cement division, both present and future, subject to prior charges on specific assets in favour of Cement Division's bankers towards Working Capital facilities Secured by first charge on vehicles of HRJ Division together with all accessories and addition to or in the vehicles, whether present or future

Quarterly in equal installments payable over a period of 4 years.

3.50

EMI over a period of 5 years.

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Illustrative disclosures by companies: Ramco Industries Term Loan from Banks (Secured) Repayment Schedule given separately in the NTA along with other disclosures

Same not cross referenced

Rate of Interest Outstanding as on 31.03.2012 2013-14 13.25% 12.25% 164.2 5000 131.20 2500
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Repayment Schedule

2014-15 33 2500

2015-16 -

201617 32

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Illustrative disclosures by companies: Petronet LNG

Secured by first ranking mortgage and first charge on pari passu basis on all movable and immovable properties, both present & future including Current Assets except on trade receivables on which second charge is created on pari passu basis.
Loan From ROI (as on 31.03.2012) No of Installments Year of Maturity Amount Outstanding as on 31.03.2012 Amount Outstanding as on 31.03.2011

Indian Banks IFC (Washington) Total

11% 11.37%

20 17

2017 2022

55,712 23,000 XXXXX (XXXX)

117,500 23,000 XXXXX (XXXX)

Less: Shown in Current Maturities of Long term Debt

Balance shown as above

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XXXX
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Illustrative disclosures by companies: UltraTech Cement Ltd

Term Loans from Banks in Foreign Currency Secured by way of first charge, having pari passu rights, on the Companys movable and immovable assets (save and except stocks and book debts), both present and future , situated at certain locations, in favour of Cos lenders/trustees.
Particulars
Hongkong & Shanghai Banking Corporation Ltd, Singapore (Japanese Yen 208.80 Crores) DBS Bank Ltd, Singapore (Japanese Yen 184.80 Crores) Less: Current Portion of Foreign Currency Loans shown under Other Current Liabilities Total
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Repayment Schedule
In 3 equal annual installments beginning September 2012 January 2014

As at March 31,2012
93.82

As at March 31,2011
93.82

98.40 (XXX)

98.40 (XXX)

XXX

XXX
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Disclosure for Defaults

Under RS VI Continuing Default for LT Borrowings Default for ST Borrowings Applies to all items of borrowings like bonds / debentures, deferred payment liabilities, finance lease obligations, etc. No disclosure if default made good on BS date Under CARO Defaults in repayment of any dues Applies only to dues of financial institutions, banks and debentures

Reporting even if default made good on BS date

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Trade Payable: A payable is classified as trade payable if it is in respect of amount due on account of goods purchased or services received in the normal course of business. Under earlier Sch VI, Sundry Creditors (for goods, services, etc.) included above amounts plus amounts due on account of contractual obligations. Under RS VI, amounts due under contractual obligations cannot be included within trade payables e.g. Contribution to PF, accrued interest, payables for fixed asset purchases, etc. Such amounts are to be disclosed under Other current liabilities with a suitable description.
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Fixed Assets
Fixed Assets: Tangible (a) Land (b) Buildings (c) Plant and Equipment (d) Furniture and Fixtures (e) Vehicles (f) Office Equipment (g) Others (Specify nature) Assets under lease to be separately specified under each class of asset.
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Fixed Assets: Intangible (a) Goodwill (b) Brands/trademarks (c) Computer software (d) Mastheads and publishing titles (e) Mining rights (f) Copyrights and patents and other intellectual property rights, services and operating rights. (g) Recipes, formulae, models, designs and prototypes (h) Licenses and franchise (i) Others (specify nature)
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Capital Work in Progress Capital advances not to be included Capital Advances should be included under Long Term Loans & Advances Intangible Assets under Development This is a new head under Revised Schedule VI

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Other disclosures regarding Tangible and Intangible Assets are: A Reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing: Additions Disposals Acquisitions through business combinations other adjustments and the related depreciation and impairment losses / reversals to be disclosed separately.
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Fixed Assets
Particulars Opening Additions Disposals Through Business Combinations

Other Adjustments ***

Gross

*** to include capitalisation of exchange differences (as per AS 11), borrowing costs for each class of assets

Opening Depreciation

On Business Combinations

For the year

Total

Closing

Closing (LY)

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RS VI requires foll. disclosure of Related Parties (RP):

Long Term / Short Term borrowings from RP Long Term / Short Term Loans and Advances to RP

RS VI requirement is to also give details thereof AS 18 requires detailed disclosures of RP and transactions GN on RS VI states details of RP should be as per AS 18 Illustrative disclosures:
Tata Motors Ltd: details of RP given below respective line item Sundaram Fasteners Ltd: cross reference given to AS 18 disclosures L & T Ltd: broad details given and cross referencing also done Cross referencing to disclosures under Clause 32 done in many cases
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Non Current Investments shall be classified as trade Investment or Other Investments. The term trade investments is defined neither in Revised Schedule VI nor Accounting Standards. The term trade investment is normally understood as an investment made by a company in shares or debentures of another company, to promote the trade or business of the first company.
Whether investment in subsidiary is to be classified as trade investment or other investment ?
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Following Companies have classified Subsidiaries as Trade Investments :

TATA Steel TATA Power UltraTech Cement Ltd

Investment

in

Following Companies have NOT classified Investment in Subsidiaries as Trade Investments :

Asian Paints JSW Steel Reliance Industries Ltd Infosys
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As per Revised Schedule VI: Current investments to be classified if expected to be realised within 12 months of BS date As per AS 13 Investment that by its nature is readily realisable and intended to be held for not more than 1 year from the date of investment. Investment made in December 2011 and expected to be realised in February 2013 (i.e. after 14 months) whether current or non-current as on 31st March 2012? Since RS VI deals with only presentation, investment will be presented as current, with additional disclosure that the same is Long Term as per AS 13.
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Disclosure in Tata Power Ltd Reconciliation for Disclosure as per AS 13 Long Term Investments Non-current Investments Current portion of Long Term Investments (included in current investments) Current Investments Other current Investments

xxx xxx

xxx

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Investment in preference shares, convertible into equity shares within 1 year from the BS date, whether to be classified as Current or Non Current asset? An investment expected to be realized within 12 months from the reporting date is classified as Current Asset. Such realization should be in the form cash or cash equivalents rather than through conversion of one asset into another non current asset. Above investment is to be classified as Non Current Asset since on conversion it is not cash or cash equivalent.
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Whether classification of Investments in FS has any tax implications? Disclosure in Directors Report by Tata Invt Corpn Ltd The directors confirm that all the investments classified as noncurrent investments / trade investments as per the revised Schedule VI of the Companies Act, 1956 have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade.
Investments in the category of Current Investments intended to be held for less than one year, which for accounting and other purposes are so classified at the time of making the investment, are indicated separately in the Balance Sheet.
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To be classified as both Current and Non Current

o Capital account balance: Non current o Current account balance: Current

If the FS of the partnership firm not made up to same date:

o Gap cannot exceed 6 months o To consider un-audited amounts till BS date; o The above facts need to be specifically disclosed

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Names of the firms (with the names of all their partners, total capital and shares of each partner) Additional disclosures in Notes for: Change in constitution of Firm. If firms accounts are not made up to the same date as the date of the companys Balance Sheet Specific disclosure required regarding: Share of partners in profits of the firm; The total capital of the partnership firm in which the company is a partner; Separate disclosure is required by reference to each partnership firm in which the company is a partner.
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LLP is a Body Corporate and not a partnership firm as envisaged under the Partnership Act, 1932. Hence disclosures pertaining to Investments in Partnership firms, not required for Investment in LLP. Share of Profit/loss in LLP:
Does not automatically accrue to the partners (like a firm) LLP can carry forward profits (without transfer to partners) No entry can be passed in books of company till profits are transferred to the partners of the LLP
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Trade Receivable: A receivable is classified as trade receivable if it is in respect of amount due on account of goods sold or services rendered in the normal course of business. To be classified as Current and Non Current. Aggregate amount of Trade Receivables outstanding for a period exceeding 6 months from the date they are due for payment (and not billing date) should be separately stated. To also classify the above as Secured, Unsecured, good/doubtful of recovery. Provision for bad and doubtful debts required to be divided into Current / Non Current. Is recovery towards OPE to be included as Trade Receivables?
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CCE as per RS VI includes:

Balances with Banks held as margin money or security against borrowings, guarantees, etc. and Bank deposits with more than 12 months maturity

As per AS-3
Cash is defined to include cash on hand and demand deposits with banks. Cash equivalents are defined as short term, highly liquid investments (i.e. less than 3 months maturity) that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
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Apparent Conflict between the requirements of the Revised Schedule VI and the Accounting Standards. The conflict should be resolved by changing the caption Cash and Cash equivalents to Cash and bank balances, which may have two sub-headings, viz. Cash and cash equivalents and Other bank balances. The former should include only the items that constitute CCE as per AS 3 (and not RS VI), The remaining line-items may be included under the latter heading.

As per FAQs to RS VI, Fixed Deposits with more than 12 months are to be classified as Non Current Assets.
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Impact of RS VI on presentation of cash flow statement. Items appearing in the Cash Flow Statement should be aligned with the nomenclature of the items used in BS.
E.g. a company cannot present trade receivables in the BS and show movement in Sundry Debtors in Cash Flow Statement.

However it is not mandatory for a company to present inflow / outflow from current and non-current components of various line items separately.
E.g. for borrowings it can be overall

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Under RS VI, there is no line item like Miscellaneous Expenditure RS VI also does not contain any specific disclosure requirement for the unamortized portion of expense items. Since AS 26 does not apply to share issue expenses and incidental costs of borrowings, how can the unamortized portion of the above be disclosed? These need to be classified as other current / noncurrent assets, depending on whether the amount will be amortized in the next 12 months or thereafter.
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RS VI requires separate disclosure of amount of dividends proposed for the period (in Notes) Existing Schedule VI specifically required proposed dividend to be disclosed under the head Provisions. As per AS-4, dividends stated to be in respect of the period covered by the financial statements, which are proposed or declared by the enterprise after the Balance Sheet date but before approval of the financial statements, should be adjusted. Since AS 4 will override, RS VI, treatment as under: Provision to be made in FS for proposed dividend Separate disclosure of the same in Notes
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A Company other than a finance company shall disclose separately in the notes revenue from:
Sale of Products Sale of services Other operating revenues Less: Excise duty

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Whether Revenue should be Gross or Net? As per GN on terms used in FS, Sales Turnover is defined as: aggregate amount for which sales are effected or services rendered by an enterprise Guide to Company Audit mentions Total turnover is the aggregate amount for which sales are effected, giving the amount of sales in respect of each class of goods dealt with by the company and indicating quantities separately Statement of CARO and Part II of existing Schedule VI defines turnover as aggregate amount for which sales are effected by the company. Sales effected would include sale of goods as well as services rendered by the company.
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Whether Revenue should be Gross or Net? As per GN on Tax Audit, turnover maybe interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprise Para 10 of AS 9 requires disclosure of Gross Turnover with separate deduction for Excise Duty. GN on VAT states VAT is collected from customers on behalf of VAT authorities and should not be recorded as revenue of the enterprise
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Whether Revenue should be Gross or Net? Service Tax For Service Tax, sec 83 of the Finance Act, 1994, provides that the provisions of certain sections (like sec 9C, 12A, etc.) of the Central Excise Act, 1944 shall apply, so far as may be, in relation to service tax as they may apply to a duty of excise. Section 12 A of the Central Excise Act, 1944, which provides that the amount of excise duty shall form part of the price of the goods sold. On a similar analogy, service tax would form part of the price of the services provided.
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Statement of Profit and Loss

Whether Revenue should be Gross or Net? Excise Duty Since format of RS VI clearly mentions Excise Duty as a deduction from Sales, the same would be necessary. Service Tax / VAT As per GN On RS VI Such taxes are generally collected from the customer on behalf of government. Depending on whether company is acting as agent or principal, such taxes should be included in Sales (i.e. Gross or excluded (i.e. Net).

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The term Other Operating Revenue is not defined by RS VI. It would include Revenue arising from a companys operating activities, i.e., either its principal or ancillary revenue-generating activities, but which is not revenue arising from the sale of products or rendering of services. Whether a particular income constitutes other operating revenue or other income is to be decided based on the facts of each case and detailed understanding of the companys activities.
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Revenue from Operations in case of finance company

A Finance company shall include revenue from a) Interest and b) Other Financial services The term finance company is not defined under the Companies Act, 1956, or Revised Schedule VI. Hence, the same should be taken to include all companies carrying on activities which are in the nature of business of non-banking financial institution as defined under section 45(1) (f) of the Reserve Bank of India Act, 1935.

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Other Income
Other Income shall be classified as:
a) Interest Income (in case of a company other than a finance company); b) Dividend Income; c) Net gain / loss on sale of investments; d) Other non-operating income (net of expenses directly attributable to such income).

Since (b) and (c) are always considered Other Income, finance companies can have negligible Revenue from Operations This can have implications in taxation and also affect valuation.
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Whether the following is Other Operating Revenue or Other Income?

A Company engaged in manufacture and sale of industrial and consumer products also has one real estate arm. A consumer products company owns a 10 storied building. The company currently does not need one floor for its own use and has given the same temporarily on rent. Sale of Fixed Assets Sale of Scrap Interest from customers on delayed payments Foreign Exchange Gains
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Following treated as Other Operating Revenue: Sale of Carbon credits Dividend from Joint Venture/Subsidiary Since division operates part of its business through Subsidiaries /JVs, dividend income is taken as Operating Income Prism Cements Ltd Insurance Claims and Indirect taxes claimed received Kansai Nerolac Paints Ltd

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Tata Investments Corporation Ltd has classified the following as Revenue from Operations:
Income from Investments Dividend Interest on Investments Fees from Shares lent Interest on Deposits and Advances

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RS VI requires separate disclosure for dividends from Subsidiary Companies. Old schedule VI specifically required parent companies to recognise dividend declared by subsidiary companies even if declared after the BS date if they are related to the same period covered by financial statements. RS VI does not prescribe any such accounting/disclosure requirement. Thus Dividend will now be recognised as per AS 9 i.e. only when they have a right to receive the same on or before the balance sheet date.
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Actual Consumption vs. Derived Consumption In case of a manufacturing or manufacturing and trading company care should be taken to ensure that raw material consumed should relate to actual consumption rather than derived consumption. Disclosure by Mahindra & Mahindra Ltd: The consumption in value has been ascertained on the basis of opening stock plus purchases less closing stock and includes adjustment for excesses and shortages as ascertained on physical count and write-off of obsolete and unserviceable raw materials and components.
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Other Commitments Additional requirement in RS VI Scope of terminology very wide AS per GN, it would include all expenditure related to contractual commitments apart from capital commitments such as commitments arising from long term contracts for purchase of RM, employee contracts, lease commitments, sales, investments, etc. Disclosure in L & T Ltd:
Other commitments related to sales / procurements made in normal course of business are not disclosed to avoid excessive details

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Illustrative disclosure of Other Commitments Under lease obligations Under derivative contracts Going concern support to group company PE arrangement between Holding co, subsidiary, associate Buy back arrangements Commitment to fund research projects, etc.

CNK

75

CNK

75

08-08-2012

As per AS 21, CFS are presented, to the extent possible, in the same format as that adopted by the parent for its separate financial statements. Thus disclosures of RS VI will be applicable to CFS Bifurcation between current / non current Trade receivables over 6 months from due date of payment, etc. Disclosure of Minority Interest Separate line item on the face of the BS after Shareholders Funds.
Mahindra Lifespace developers Ltd Minority Interest classified as Non Current Liabilities.
CNK 76

CNK

76

08-08-2012

Information pertaining preparation of CFS:

to

Subsidiaries

required

for

Break up of assets / liabilities in current and non current (to also cover related parties); Security details, Terms of repayment of Long term Borrowings; Trade Receivables - ageing analysis from the due date of payment; Break up of cash and cash equivalents any restriction / pledge of fixed deposits, Tenure of deposits; Details of Capital Advances, etc.; Details of any Other Commitments having financial obligations; Details of expenditure in excess of 1% of revenue from operation; etc.

CNK

77

CNK

77

08-08-2012

Balance Sheet Statement of Profit and Loss Cash Flow Statement Company Background (preferable) Significant Accounting Policies Notes pertaining to items appearing in the BS, PL Other disclosures required as per RS VI Disclosures required as per notified AS Disclosures required under other statutes, ICAI, etc. Note that RS VI applied from 2011-12 and that previous year figures are regrouped / reclassified as per requirements of RS VI.
CNK 78

CNK

78

08-08-2012

Additional procedures for verification/documentation Audit Documentation (SA 230)

o Documents to be taken and arranged in the Audit file as per

classification of items given in RS VI.

Representation to be taken from Management (SA 580)

o Representation Letter to be taken from the management will

undergo a change this year since the company will be preparing its FS in the format of RS VI for the first time, hence the classification of items into Current and Non Current by management.

CNK

79

CNK

79

08-08-2012

CNK

80

CNK

80