Disclosure Requirements for Revised
Schedule VI
MALAD GOREGAON CPE STUDY CIRCLE
CA. Durgesh Kabra
DMKH & Co.,
Chartered Accountants
Mumbai
1
Revised Schedule VI
28th August, 2011
Contents
 Introduction
 Object
 Methodology adopted in determining the Financial Statement.
 General instructions
 Performa of Balance Sheet
 General instructions for preparation of balance sheet
 Performa of Statement of Profit & loss
 General instructions for preparation of statement of profit & loss.
 Comparison between Old & Revised Schedule VI
2
Revised Schedule VI
28th August, 2011
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.
3
Revised Schedule VI
28th August, 2011
Object
 One of the Main aim of revising schedule VI was to attain compatibility
and convergence with IFRS in India. …why?
 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.
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Revised Schedule VI
28th August, 2011
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.
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Revised Schedule VI
28th August, 2011
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.
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Revised Schedule VI
28th August, 2011
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.
 Confusion between comparative figures and corresponding
figures
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Revised Schedule VI
28th August, 2011
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
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Revised Schedule VI
28th August, 2011
Part I – Format of Balance Sheet
Name of the Company…………………….
Balance Sheet as at………………………
(Rupees in…………)
Particulars Note No.
Figures as at the
Figures as at the
end of the
end of the
current reporting
previous reporting
period
period
I. EQUITY AND LIABILITIES
(1) Shareholders’ funds
(a) Share capital
(b) Reserves and surplus
(c) Money received against share warrants
(2)Share application money pending allotment
(3)Non-current liabilities
(a) Long-term borrowings
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Revised Schedule VI
28th August, 2011
Part I – Format of Balance Sheet
(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions
(4)Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
TOTAL
II. ASSETS
Non-current assets
(1) (a) Fixed assets
(i)Tangible assets
(ii)Intangible assets
(iii)Capital work-in-progress
(iv)Intangible assets under development
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Revised Schedule VI
28th August, 2011
Part I – Format of Balance Sheet
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long-term loans and advances
(e) Other non-current assets
(2) Current assets
(a) Current investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short-term loans and advances
(f) Other current assets
TOTAL
See accompanying notes to the financial statements
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Revised Schedule VI
28th August, 2011
General Instructions for Balance
Sheet
 An operating cycle is the time between the acquisition of assets for
processing and their realization in cash or cash equivalents. Where the
normal operating cycle cannot be identified, it is assumed to have a
duration of 12 months.
 A liability shall be classified as current when it satisfies any of the criteria
SPECIFIED FOR ASSETS & all other liabilities shall be classified as noncurrent.
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Revised Schedule VI
28th August, 2011
General Instructions for Balance
Sheet
 A receivable shall be classified as a ‘trade receivable’ if it is in respect of the
amount due on account of goods sold or services rendered in the normal
course of business.
 A payable shall be classified as a ‘trade payable’ if it is in respect of the
amount due on account of goods purchased or services received in
the normal course of business.
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Revised Schedule VI
28th August, 2011
General Instructions for Balance
Sheet
New Line Items - Liabilities:
New Line Items - Assets:
Money received against Share
Warrants
Trade Payables
Share Application Money pending
allotment
Separate headings for classifying
Non current and Current
Liabilities.
Intangible Assets under
development
Trade Receivables
Separate headings for classifying
Non
current and Current Assets.
Cash and cash equivalents.
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Revised Schedule VI
28th August, 2011
Share Capital
 Shares in respect of each class in the company held by
a) its holding company
b) its ultimate holding company including shares held by or by
subsidiaries
c) associates of the holding company or the ultimate holding company
in aggregate;
The Rights, Preference & Restrictions attaching to each Class of Shares
 Shares in the company held by each shareholder holding more than 5
percent shares specifying the number of shares held;
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Revised Schedule VI
28th August, 2011
Reserves and Surplus
 Surplus i.e. balance in Statement of Profit & Loss disclosing allocations and
appropriations such as dividend, bonus shares and transfer to/from reserves
etc. (Additions and deductions since last balance sheet to be shown under
each of the specified heads)


16
A reserve specifically represented by earmarked investments shall be
termed as a ‘fund’.
Debit balance of statement of profit and loss shall be shown as a negative
figure under the head ‘Surplus’. Similarly, the balance of ‘Reserves and
Surplus’, after adjusting negative balance of surplus, if any, shall be shown
under the head ‘Reserves and Surplus’ even if the resulting figure is in the
negative.
Revised Schedule VI
28th August, 2011
Long-Term & Short Term Borrowings
 Loans and advances from related parties.
 Period and amount of continuing default as on the balance sheet
date in repayment of loans and interest, shall be specified separately
in each case.
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Revised Schedule VI
28th August, 2011
Long Term & Short Term Provisions
The amounts shall be classified as:
 Provision for employee benefits.
 Others (specify nature).
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Revised Schedule VI
28th August, 2011
Other current liabilities
The amounts shall be classified as:
(a) Current maturities of long-term debt;
(b) Current maturities of finance lease obligations;
(c) Interest accrued but not due on borrowings;
(d) Interest accrued and due on borrowings;
(e) Income received in advance;
(f) Unpaid dividends
(g) Application money received for allotment of securities and due for
refund and interest accrued thereon.
(h) Unpaid matured deposits and interest accrued thereon
(i) Unpaid matured debentures and interest accrued thereon
(j) Other payables (specify nature);
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Revised Schedule VI
28th August, 2011
Tangible & Intangible Assets
 Movement between opening & closing balances to be given
 Details of reduction – by way of reduction of capital, revaluation etc. to
be given by way of a note
 Assets under lease shall be separately specified under each class of asset.
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Revised Schedule VI
28th August, 2011
Non-current investments

Non-current investments shall be classified as trade investments and
other investments and it includes Investment property;
Under each classification, details of names of the bodies corporate
(indicating separately whether such bodies are
(i) subsidiaries,
(ii) associates,
(iii) joint ventures, or
(iv) controlled special purpose entities in whom investments have been
made and the nature and extent of the investment so made in each such
body corporate.

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Revised Schedule VI
28th August, 2011
Non-current investments
 Investments carried at other than at cost should be separately stated
specifying the basis for valuation thereof.
 The following shall also be disclosed:
(a) Aggregate amount of quoted investments and market value thereof;
(b) Aggregate amount of unquoted investments;
(c) Aggregate provision for diminution in value of investments
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Revised Schedule VI
28th August, 2011
Long-term loans and advances
(i) Long-term loans and advances shall be classified as:
(a) Capital Advances;
(b) Security Deposits;
(c) Loans and advances to related parties (giving details thereof);
(d) Other loans and advances (specify nature).
(ii) The above shall also be separately sub-classified as:
(a) Secured, considered good;
(b) Unsecured, considered good;
(c) Doubtful.
(iii) Allowance for bad and doubtful loans and advances shall be disclosed
under the relevant heads separately.
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Revised Schedule VI
28th August, 2011
Inventories
(i) Inventories shall be classified as:
(a) Raw materials;
(b) Work-in-progress;
(c) Finished goods;
(d) Stock-in-trade (in respect of goods acquired for trading);
(e) Stores and spares;
(f) Loose tools;
(g) Others (specify nature).
(ii) Goods-in-transit shall be disclosed under the relevant sub-head of
inventories.
(iii) Mode of valuation shall be stated.
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Revised Schedule VI
28th August, 2011
Trade Receivables
(i) Aggregate amount of Trade Receivables outstanding for a period
exceeding six months from the date they are due for payment should be
separately stated.
(ii) Trade receivables shall be sub-classified as:
(a)Secured, considered good;
(b)Unsecured considered good;
(c)Doubtful.
(iii) Allowance for bad and doubtful debts shall be disclosed under the
relevant heads separately.
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Revised Schedule VI
28th August, 2011
Cash and cash equivalents
(i) Cash and cash equivalents shall be classified as:
(a) Balances with banks;
(b) Cheques, drafts on hand;
(c) Cash on hand;
(d) Others (specify nature).
(ii) Earmarked balances with banks (for example, for unpaid dividend) shall be
separately stated.
(iii) Balances with banks to the extent held as margin money or security against the
borrowings, guarantees, other commitments shall be disclosed separately.
(iv) Bank deposits with more than 12 months maturity shall be disclosed separately.
(from the date of deposit or as on March 31st 2011)
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Revised Schedule VI
28th August, 2011
Contingent liabilities & commitments
& Others
 The amount of dividends proposed to be distributed to equity and
preference shareholders for the period and the related amount per share shall
be disclosed separately. Arrears of fixed cumulative dividends on preference
shares shall also be disclosed separately.
 Where in respect of an issue of securities made for a specific purpose,
the whole or part of the amount has not been used for the specific purpose
at the balance sheet date, there shall be indicated by way of note how such
unutilized amounts have been used or invested.
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Revised Schedule VI
28th August, 2011
Contingent liabilities & commitments
& Others
 If, in the opinion of the Board, any of the assets other than fixed
assets and non- current investments do not have 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.
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Revised Schedule VI
28th August, 2011
PART II – Format of Statement of Profit &
loss
Name of the Company…………………….
Profit and loss statement for the year ended ………………………
(Rupees in…………)
Particulars
Note No.
Figures for the
Figures for the
current reporting current reporting
period
period
I. Revenue from operations
II. Other income
III. Total Revenue (I + II)
IV. Expenses:
Cost of materials consumed
Purchases of Stock-in-Trade
Changes in inventories of finished goods
Work-in-progress and Stock-in-Trade
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Revised Schedule VI
28th August, 2011
PART II – Format of Statement of Profit &
loss
Employee benefits expense
Finance costs
Depreciation and amortization expense
Other expenses
Total expenses
V. Profit before exceptional and extraordinary
items tems and tax (III-IV)
VI. Exceptional items
VII. Profit before extraordinary items and tax
(V - VI)
VIII. Extraordinary Items
IX. Profit before tax (VII-VIII)
X. Tax expense:
(1) Current tax
(2) Deferred tax
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Revised Schedule VI
28th August, 2011
PART II – Format of Statement of Profit &
loss
XI Profit (Loss) for the period from continuing operations
(VII-VIII)
XII Profit/(loss) from discontinuing operations
XII ITax expense of discontinuing operations
XIV Profit/(loss) from Discontinuing operations (after tax)
(XII-XIII)
XV Profit (Loss) for the period (XI + XIV)
XVI Earnings per equity share:
(1) Basic
(2) Diluted
See accompanying notes to the financial statements
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Revised Schedule VI
28th August, 2011
General Instructions for Preparation
P&L
Now known as ‘Profit and Loss Statement for the year ended ________’.
Format specified in new Schedule.
Exceptional and extraordinary items need to be disclosed separately on the
face of the Statement of Profit and Loss. The details of the same as also of
any prior period items should be disclosed in the notes.
Profit / loss before and after tax from discontinuing operations and the tax
expense from discontinuing operations need to be disclosed separately on
the face of the Statement of Profit and Loss.
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Revised Schedule VI
28th August, 2011
General Instructions for Preparation
P&L
Any item of income or expenditure which exceeds one percent of the
revenue from operations or Rs. 1,00,000 whichever is higher should be
disclosed separately.
Broad heads shall be decided taking into account the concept of
materiality and presentation of true and fair view of financial statements.
The items to be disclosed under Revenue from Operations have been
specifically indicated for both finance companies and others.
Note:- Broad heads shall be decided taking into account the
concept of materiality and presentation of true and fair view
of financial statements,”.
33
Revised Schedule VI
28th August, 2011
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
Only vertical form of Balance
Sheet has been specified in the
revised Schedule VI
2)
Form of Profit and
Loss Account
3)
Profit and Loss
Appropriation
Account
34
Revised Schedule VI
No format specified for Profit
Form of Profit and Loss
and Loss Account
Account specified under Part II
Opening surplus, proposed
dividend and transfer to/
from reserves were shown in
Profit and Loss Appropriation
Account
Transfer from/ to reserves to
be shown under the heading
Reserves & Surplus only. No
requirement of separate Profit
and Loss Appropriation
Account.
28th August, 2011
Comparison… (ii)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
4)
Rounding off of
Figures appearing
in financial
statement
Turnover of less than Rs. 100
Crs - R/off to the nearest
Hundreds, thousands or
decimal thereof
Turnover of less than Rs. 100
Crs - R/off to the nearest
Hundreds, thousands, lakhs
or millions or decimal
thereof
Turnover of Rs. 100 Crs or
more but less than Rs. 500 Crs
- R/off to the nearest
Hundreds, thousands, lakhs or
millions or decimal thereof
Turnover of Rs. 100 Crs or
more - R/off to the nearest
lakhs, millions or crores, or
decimal thereof
Turnover of Rs. 500 Crs or
more - R/off to the nearest
Hundreds, thousands, lakhs,
millions or crores, or decimal
thereof
35
Revised Schedule VI
28th August, 2011
Comparison… (iii)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
5)
Net Working Capital
Current assets & Liabilities
are shown together under
application of funds. The net
working capital appears on
balance sheet.
Assets & Liabilities are to be
bifurcated into current &
Non-current & to be shown
separately. Hence, net
working capital will not be
appearing in B/S.
6)
Fixed Assets
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Revised Schedule VI
There was no bifurcation
Fixed assets to be shown
required in to tangible &
under non-current assets and
intangible assets.
have to be bifurcated into
Capital advances used to be
Tangible & intangible assets.
shown under the Head Capital Capital advances to be shown
Work in Progress under Fixed under the head ‘Long term
Assets
Loans & Advances’
28th August, 2011
Comparison… (iv)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
7)
Borrowings
Short term & long term
borrowings are grouped
together under the head
Loan funds sub-head
Secured / Unsecured
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
8)
Deposits
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Revised Schedule VI
Lease deposits are part of Lease deposits to be disclosed as long
loans & advances
term loans & advances under the
head non-current assets
28th August, 2011
Comparison… (v)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
9)
Investments
Both current & noncurrent investments to be
disclosed under the head
investments
Current and non-current investments
are to be disclosed separately under
current assets & non-current assets
respectively.
10)
Loans &
Advances
Loans & Advance are
disclosed along with
current assets
Loans & Advance to
subsidiaries & others to be
disclosed separately.
Loans & Advances to be broken up in
long term & short term and to be
disclosed under non-current &
current assets respectively.
Loans & Advance from related parties
& others to be disclosed separately.
11)
Deferred Tax
Assets /
Liabilities
Deferred Tax assets /
liabilities to be disclosed
separately
Deferred Tax assets / liabilities to be
disclosed under non-current assets /
liabilities as the case may be.
38
Revised Schedule VI
28th August, 2011
Comparison… (vi)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
12)
Cash & Bank
Balances
Bank balance to be
bifurcated in scheduled
banks & others
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.
13)
Profit & Loss
(Debit Balance)
P&L debit balance to be
separately disclosed in the
Balance Sheet.
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.
39
Revised Schedule VI
28th August, 2011
Comparison… (vii)
Sr.
No.
Particulars
14)
Sundry
Debtors
15)
Other current
liabilities
40
Revised Schedule VI
Old Schedule VI
Revised Schedule VI
Debtors outstanding for Debtors outstanding for more than six
more than six months from
months from the date they became
invoice date to be shown
due to be shown separately
separately
No specific mention for
separate disclosure of
Current maturities of long
term debt
No specific mention for
separate disclosure of
Current maturities of
finance lease obligation
Current maturities of long term debt
to be disclosed under other current
liabilities.
Current maturities of finance lease
obligation to be disclosed.
28th August, 2011
Comparison… (viii)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
16)
Separate line
item
Disclosure
criteria
any item under which
expense exceeds one per
cent of the total revenue of
the company or Rs. 5,000
which ever is higher; shall
be disclosed separately
any item of income / expense which
exceeds one per cent of the revenue
from operations or Rs. 1,00,000,
which ever is higher; to be disclosed
separately
17)
Expense
classification
Function wise & nature
wise
Expenses in Statement of Profit and
Loss to be classified based on nature of
expenses
18)
Finance Cost
Finance cost to be classified
in fixed loans & other loans
Finance cost shall be classified as
interest expense, other borrowing
costs & Gain / Loss on foreign
currency transaction & translation
41
Revised Schedule VI
28th August, 2011
Comparison… (ix)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
19)
Foreign
exchange gain
/ loss
Gain / Loss on foreign
currency transaction to be
shown under finance cost
Gain / Loss on foreign currency
transaction to be separated into
finance costs and other expenses
20)
Purchases
42
Revised Schedule VI
The purchase made and the Goods traded in by the company to be
opening & closing stock,
disclosed in broad heads in notes.
giving break up in respect
Disclosure of quantitative details of
of each class of goods
goods is diluted.
traded in by the company
Goods-in-transit to be separately
and indicating the
disclosed.
quantities thereof.
28th August, 2011
Comparison… (x)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
21)
TDS amount
on Interest,
royalty
received
TDS amount was required
to be shown for Interest
income etc.
No requirement of disclosing TDS
amounts separately
22)
Managerial
Remuneration
and
Commission
Payment to directors and
detailed calculation under
section 198 was required
to be disclosed
No disclosure requirements for
Managerial Remuneration
23)
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
43
Revised Schedule VI
28th August, 2011
Comparison… (xi)
Sr.
No.
Particulars
Old Schedule VI
Revised Schedule VI
24)
Part IIIInterpretation
Terms provision, reserve,
capital reserve , quoted
investment etc. were
defined
No such specific definitions.
25)
Part IVBalance Sheet
Abstract
Details of company
registration number,
capital raised, Balance
Sheet details, products etc.
were required to be
attached with financials
No such requirement.
44
Revised Schedule VI
28th August, 2011
THANK YOU
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Revised Schedule VI
28th August, 2011