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Frequently Asked Questions on Revised Schedule VI to the Companies Act 1956.
May, 23rd 2012
Frequently Asked Questions (FAQs) ­ Revised Schedule VI


1. If the requirements of Company Act and/or Accounting Standards are different
   from that of Revised Schedule VI, what is the treatment to be given? If
   requirements of a regulatory authority like RBI are different from that of
   Revised Schedule VI, what treatment should be given?

   Para 4.1.1 of the Revised Schedule VI necessitates that if compliance with the
   requirements of the Act and/or accounting standards requires a change in the
   treatment or disclosure in the financial statements, the requirements of the Act and/or
   accounting standards will prevail over the Schedule VI.

  As per the general instruction for preparation of the balance sheet, the regulatory
  authority requirements that override Schedule VI and Schedule VI shall automatically
  stand modified to that extent.

2. A company is preparing its financial statements in accordance with the Revised
   Schedule VI for the first tim e. For certain inform ation required to be disclosed
   in the notes, the current year amounts are nil. For example, let us assume that
   there is no default in repayment of loan and interest existing as at the end of
   current year. Is the com pany required to present previous year figures for such
   notes? Alternatively, can it om it        the previous year inform ation since no
   disclosure is required in the current year?

   Revised Schedule VI requires that "Except in the case of the first financial statem ents
   laid before the com pany (after its incorporation), the corresponding am ounts
   (com paratives) for the im m ediately preceding reporting period for all item s show n in
   the financial statem ents including notes shall also be given."

   The objective of presenting com parative inform ation is to help users of financial
   statem ents in understanding t he trends and key changes vis --vis the previous
   period financial statem ents. The inter-period com parability of inform ation assists
   users in taking their econom ic decisions. Hence, a com pany needs to present
   com parative information for disclosures required under Revised Schedule VI even if
   their current period amount is nil.

3. C an a com pany prepare abridged financial statem ents (A FS ) in accordance
   w ith the R evised Schedule VI?

   Companies, where they are permitted / allowed to publish abridged financial statements,
   are not precluded from doing so using the format recently prescribed for this purpose.

4. A co m pan y having a D ecem ber year -end w ill prepare its first R evised Schedule
   VI financial statem ents for statutory purposes for the period 1 January to 31
   D ecem ber 2012. Shou ld such a com pany p repare its tax financial statem ents
   for the period from 1 A pril 2011 to 31 March 2012 in accordance with Revised
   Schedule VI or pre-Revised Schedule VI?

   It is only proper that accounts for tax filing purposes are also pre pared in the R evised
   Schedule VI form at for the year ended 31 M arch 2012.

5. According to the M C A circular, presentation of financial statem ents for the
   lim ited purpose of IPO / FPO during the financial year 2011­12 may be made in
   the pre-Revised Schedule VI format.
   However, for periods beyond 31 March 2012, they need to present financial
   statements only in the Revised Schedule VI format. This gives rise to the following
   (a) A company having 31 March year-end is going for IPO/FPO in May 2012. In the
       offer docum ent, it w ill include restated financial inform ation for the period
       en ding 31 Janu ary 2012. C an it prep are th e said fin an cial inform ation
       using p re -Revised Schedule VI format?
   (b) A co m pan y having 31 D ecem ber year -end is going for IPO /FPO i n Septem ber
       2012 and its IPO process is expected to close by 30 November 2012. In the offer
       document, it will include restated financial information for the stub-period
       ending 30 June 2012. Can it prepare the said financial information using the pre-
       Revised Schedule VI format?
   (c) Also, for inclusion in Qualified Institutional Placement (QIP) document, is a
       company required to prepare its financial statements in accordance with
       Revised Schedule VI?

   As explained in the Circular dated 5 September 2011, the one-time exemption is
   available only if the IPO / FPO gets closed before 31 March 2012. For any IP O/ FPO ,
   w hich will get closed after 31 M arch 2012, the com pany w ill prepare its restated

   financial inform ation in accordance with R evised Schedule VI, irrespe ctive of the
   period for w hich the inform ation is being included in the offer docum ent.

6. R evised S chedule VI requires a balance to be m aintained betw een excessive
   detail and too much aggregation. Can a company use this principle to avoid giving
   disclosures specifically required by Revised Schedule VI / Guidance Note on the
   Revised Schedule VI, say, security details for each loan?

   A com pany should not use this principle to avoid m aking m aterial disclosures, w hich
   are specifically required under R evised Sch edule VI, accounting standards, guidance
   notes and so on. Since disclosure regarding security for each loan is required by
   Revised Schedule VI and Guidance Note on the Revised Schedule VI, a com pany
   cannot avoid m aking this disclosure.

7. Any clarification, which is not covered or sufficiently covered in Accounting
   Standards or Revised Schedule VI, can it be referred to as in IND AS?

   Reference can be made only to such material, which is official and recognised. Thus,
   clarification may have to be sought in this regard within the framework of the
   Companies Act, Accounting Standards, Revised Schedule VI and ICAI publications.


8. If during the lean period, there is some activity being carried out by the company,
   which is not in its normal course of business, and there is a receivable or
   outstanding from such activity, is it considered as "Trade Receivable"?

   If the receivables arise out of sale of materials or rendering of services in the normal
   course of business, it should be treated as trade receivables. Otherwise, it is treated as
   other assets.

9. In accordance with Guidance Note on the Revised Schedule VI, a payable is
   classified as "trade payable" if it pertains to amount due towards goods purchased
   or services received in the normal course of business. Based on this principle, can a
   company include in trade payables the liability towards employees, leases or other
   contractual liabilities? What is the treatment for amounts due towards capital goods

   Paragraph 8.4.1 of Guidance Note on the Revised Schedule VI provides the following
   information with regard to identification of trade payables:

   "A payable shall be 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. As
   per the old Schedule VI, the term sundry creditors included am ounts due in respect of
   goods purchased or services received or in respect of other contractual
   obligations as well. Hence, amounts due under contractual obligations can no longer
   be included within trade payables and only com m ercial dues can be included under
   trade payables.

   A m ounts due tow ards purchase of capital goods should also not be included in trade
   payables. They m ust be disclosed under other current liabilities wi th a suitable

10. What is the meaning of "for the purpose of being traded"? Does it mean those
   directly related to the operating activity?

   It should be considered as related to the normal operating business activity of the entity.

11. Should a company classify the following items as other operating revenue or other
    Liability written back (net)
    Insurance claim
    Bad debts recovery (net)

   If a company needs to classify one or more of these line items as "other income,"
   should these items be included under the line "other non-operating Income" or
   presented as a separate line item in the "other income" note?

   Whether an item should be classified as "other operating revenue" or "other income" is a
   matter of judgment and requires consideration of specific facts. In a number of cases, the
   dividing line between these two items may be very blur. It requires an exercise of
   significant judgment.

12. What is the definition of "Related Party"? Would the definition from the
   Accounting Standard prevail as the Companies Act does not have any definition
   of "Related Party" and has only "Relatives" defined u/s 6?

   As per para 4.1.1 of Guidance Note on the Revised Schedule VI, Accounting Standards
   will override Schedule VI and hence, related party shall be as defined in the Accounting

13. The Revised Schedule VI provides that in the `Statement of Profit and Loss', the
   head "Other Income" includes interest income under which "Interest from
   customers on amounts overdue" is specifically included. However, under AS 17
   (segment reporting ­ refer to "FAQ' published on AS 17), the same is treated as
   Operating Income and not as Other Income. Then, should interest income from
   customers on amounts overdue instead be classified under other operating

   Accounting Standards override Schedule VI. In AS 17, segment reporting, particularly
   interest income and interest expense is not treated as segment revenue. Further,
   Revised Schedule VI has specifically included interest income as operating income for
   finance companies. Also, in specific cases of industries (such as power generation);
   interest could be part of the operating income as this also forms the basis for tariff

   In case of a manufacturing company, normally, interest income is not material and
   business is not done with an aim of earning interest. Practically, it is generally difficult to
   enforce the interest clause even though it is normally contained in all cases. Based on
   materiality and provisions in AS 17, the interest income on overdue outstanding is not an
   operating income. However, if a company, on the facts of its own case, determines that it
   would be appropriate to treat is as an operating income, it would have to disclose it as
   an accounting policy, if material.

14. If a third party gives a personal security for any borrowings and creates, by means
   of a legal deed, a charge on the assets held by such third party, can such
   borrowings be described as 'secured' instead of 'unsecured'?

   If the deed properly conveys a security, it can be suitably disclosed in the terms of the
   loan. However, the loan itself is disclosed under unsecured loan because the assets of
   the company are not provided as a security for the loan.


15. A com pany has classified the loan as non -current liability in the previous year.
   The loan becomes a current liability in the current year's financial statements. Is
   the company required to reclassify the loan as current liability in previous
   year also to m atch the current year classification ?

   Current / non -current classification of assets / liabilities is determ ined on a particular
   date, viz., the balance sheet date. Thus, the com pany should have determ ined the
   current / non -current classification of previous year balances based on the pos ition
   existing as at the end of the previous year. If there is any change in the position at
   the end of current year resulting in different classification of assets / liabilities in
   the current year, it will not im pact the classification m ade in the previo us year. In
   other w ords, the com pany will continue to classify the loan as non -current liability in
   the figures of the previous period.

16. A company is preparing its financial statements in accordance with Revised
   Schedule VI for the first tim e. W h en identi fying current / non -current assets /
   liabilities at the end of previous year, can a company apply hindsight based on
   the development that happened in the current year?

   C urrent / non -current classification of assets / liabilities is determ ined on a
   partic ular date, viz., the balance sheet date. If there is any new developm ent in
   the current period, it should not im pact the classification of assets and liabilities
   for the previous year. H ence, a com pany is not allow ed to use hindsight in
   arriving at the cur rent / non -current classification of assets or liabilities at the
   end of previous year.
   However, in our view, it is important to distinguish from hindsight the facts existing at the
   previous balance sheet date. In certain cases, the events happening in the current

   period may not be new developm ents. R ather, they m ay m erely be an additional
   evidence of conditions existing as at the previous year balance sheet. O bviously,
   these events need to be incorporated in arriving at current / non -current
   classificatio n of assets or liabilities at the end of previous year. In m any cases,
   identification of the two events separately m ay not be straightforward and would
   require exercise of significant judgm ent.

17. How should "fixed assets held for sale" be classified in the balance sheet?

   They should be classified as a current asset since the intent of the com pany to sell is

18. How will a company classify its investment in preference shares, which are
   convertible into equity shares within one year from the balance sheet date? Will it
   classify the investment as a current asset or a non-current asset?

   In accordance with the Revised Schedule VI, an investment realisable within 12 months
   from the reporting date is classified as a current asset. Such realisation should be in the
   form of cash or cash equivalents, rather than through conversion of one asset into
   another non-current asset. Hence, the company must classify such an investm ent as
   a non-current asset, unless it expects to sell the preference shares or the equity shares
   on conversion and realise cash within 12 months.

19. Revised Schedule VI requires that a company present trade receivables in the
   following format:
   Trade receivable
   Secured, considered good                                                          XX,XXX
   Unsecured, considered good                                                        XX,XXX
   Doubtful                                                                           X,XXX
   Total                                                                             XX,XXX
   Less: Provision for bad and doubtful debts                                         X,XXX
   Trade receivables                                                                 XX,XXX
   A co m pan y needs to disclose trade receivables under "curren t" and "non -
   current" assets depending on the Revised Schedule VI criteria. Should the
   company divide the "provision for bad and doubtful debts" also on the same basis?


20. How should a slow moving stock of stores and spares be classified when it will
   neither be consumed w ithin the nor m al operating cycle nor w ill be sold within 12
   m onths from the balance sheet date?

   Inventory should always be categorised as a current asset.

21. There is a breach of a major debt covenant as on the balance sheet date related to
   long-term borrow ing. This a llows the lender to dem and im m ediate repaym ent of
   loan. H ow ever, the lender has not demanded repayment till authorisation of
   financial statements for issue. Can the company continue to classify the loan as
   non-current? Will the classification be different if the lender has waived the breach
   before authorisation of financial statements for issue?

   As per the Guidance Note on the Revised Schedule VI, a breach is considered to impact
   the non-current nature of the loan only if the loan has been irrevocably recalled. Hence, in
   the Indian context, long-term loans, which have a minor or major breach in terms, will be
   considered as current only if the loans have been irrevocably recalled before authorisation
   of the financial statements for issue.

22. What will be the scenario if a long-term loan has been classified as a non-
   performing asset by the bank / financial institution? Can it still be classified as

   The situation in case of a loan being classified as a non-performing asset will also be the
   same as the case of a performing asset. The essential ingredient to impair the long-term
   nature of the loan would be irrevocable recall of the loan by the lender.

23. How would a rollover / refinance arrangement entered for a loan, which was
   otherwise required to be repaid in six months, impact current / non-current
   classification of the loan? Consider three scenarios: (a) R ollover is w ith the sam e
   lender on the sam e term s, (b) R ollover is w ith            th e sam e len d er b ut o n
   su b stan tially differen t term s, and (c) R ollover is w ith a differen t lender on
   similar / different terms.

   In general, the classification of the loan will be based on the tenure of the loan. Thus,
   in all the above cases, if the original term of the loan is short term , the loan would be

   treated as only current, irrespective of the rollover / refinance arrangem ent. However,
   in exceptional cases, there m ay be a need to apply significant judgm ent on substance
   over form . In such cases, categorisation could vary as appropriate.

24. A company has taken a three-year loan specifically for a business whose operating
   cycle is four years. H ence, it needs to classify the three -year loan as current
   liability. This gives rise to the follow ing issues:
   (a) Should the loan be classified in the balance sheet under the head "long-term
      borrowing", "short-term borrowing" or "current maturities of long-term debt"?
   (b) Does the company need to make all the disclosures required for long-term
      borrowings for this loan also?

   Any borrowing whose repayment falls within the operating cycle will be only a current
   liability. Hence, it will be included under short-term borrowings. Disclosures will also be
   required accordingly.

25. Fixed deposits have a maturity of more than 12 months from the balance sheet
   date. Will they be classified as current or non-current?

   They will be classified as non-current.

26. In case there is lien over FDs, thereby making it impossible to convert them into
   cash before the agreed period, how will the FDs be presented in the balance
   sheet? Moreover, will the interest accrued over such FDs be also classified as
   current and non-current?

   Such fixed deposits will be coterminous with the liability. Current or non-current
   distinction will be applied based on the expectation to be realised within 12 months after
   the reporting date. Interest accrued on such deposit will also be treated on the same

27. The company has received security deposit from its customers / dealers. Either
   the company o r th e custo m er / d ealer can term in ate th e agreem en t b y givin g
   tw o m o nth s no tice. Th e d epo sits are       refundable within one m onth of
   term ination. H ow ever, based on past experience, it is            noted that deposits
   refunded in a year are not material, with 1% to 2% of the amount outstanding. The
   intention of the company is to continue long-term relationship with its customers /

   dealers. Can the company classify such security deposits as non-current liability?

   As per R evised Schedule VI, a liability is classified as current if the com pany does
   not have an unconditional right to defer its settlem e nt for at least 12 m onths after
   the reporting date. This will apply generally. H ow ever, in specific cases, based on
   the com m ercial practice, say for exam ple electricity deposit collected by the
   departm ent, though stated on paper to be payable on dem and, th e com pany's
   records w ould show otherwise as these are generally not claim ed in short term .
   Treating them as non -current m ay be appropriate and m ay have to be considered

   A similar criterion will apply to other deposits received, for example, under cancellable

28. The company has taken premises on operating leases for which it has paid a
   security deposit to the lessor. The lease term is five years. However, both parties
   can terminate the agreement after giving a three months' notice. The deposits are
   refundable immediately on termination of agreem ent. The intention of the
   com pany is to continue the lease agreem ent for 5 years. Further, the com pany
   has taken electricity connection for w hich it has paid security deposits. These
   deposits are repayable on demand on surrender of the electricity connection. Can
   the company classify these security deposits as current assets?

   Classification of deposits paid depends on the expectation of its realisation. Hence, a
   com pany will classify lease / ele ctricity deposits given as a non -current asset, unless it
   expects to recover the same within 12 months after the reporting date, that is, by
   cancelling the lease contract or surrendering the electricity connection.

29. For funded defined benefit plans, Guidance Note on the Revised Schedule VI
   requires that amount due for payment to the fund within next 12 months be treated
   as current liability. Since a company will also recognise service cost in the next
   year, how should it determ ine the com ponent of net defi cit in the fund to be
   classified as current liability? For example, deficit is 500 and the LIC is expected
   to demand a payout of 300 in the next year. The expected cost for the next year is

   Current / non-current classification will depend on the re levant provisions of the

   Contract Act and Arrangement with LIC. If the LIC demand is known, then that portion
   will be reflected as a current liability. If the actuarial valuation is higher, then the
   difference between the actuarial valuation and the LIC demand will be treated as a long-
   term provision.

30. In case of Provision for Gratuity and Leave Encashment, can current and non-
   current portions be bifurcated on the basis of Actuarial valuation?

   The actuary should be specifically requested to indicate the current and non-current
   portions, based on which the disclosure is to be made.

31. Guidance Note on the Revised Schedule VI requires deferred tax assets / liabilities
   to be classified as non-current. Does it imply that the provision for tax (net of
   advance t ax) / advance tax (net of pro vision) also be classified as non-

   Current year tax provision (net of advance tax) will generally be treated as current
   liability, as this will become due in the short term. Current year advance tax (net of
   provision) as well as past year's advance tax (net of provision) shall generally be
   classified as non-current as these are not likely to arise in the short term. Advance tax
   against which refund orders have been passed, and if not adjusted towards other
   liabilities, will only be treated as a current asset.

32. The Reserve Bank of India (RBI), vide its notification No. DNBS.223/CGM (US)-2011
   dated 17 January 2011, has issued directions to all NBFCs to make a provision of
   0.25% on standard assets. The RBI requires this provision to be shown as a liability
   and not netted from loan balance. Will the NBFC have to split the provision into
   "current" and       "non-current" portions?

   An NBFC creates provision on the standard assets at the rate prescribed by RBI. In
   accordance with the Revised Schedule VI, it will classify these standard assets into current
   and non-current portions. Since the provision is closely linked to the underlying asset, we
   believe that an NBFC should split the standard asset provision also into current and non-
   current portions by using the same criterion.

33. The issue is whether NCI (Minority Interest) must be broken up and classified as
   current and non-current. To the extent of the share of provision of dividend to
   subsidiary, should it be current?

   The non-controlling interest is not subject to current and non-current distinction as it
   forms a part of the shareholders' funds.


34. Should an operating cycle be disclosed?

   Yes. As a matter of best practice, a company may disclose the same, especially if the
   same is more than 12 months. This disclosure will be particularly helpful to the users of
   financial statem ents, where determination of the operating cycle involves significant
   judgment and it is more than 12 months.

35. Should the operating cycle be calculated for each item separately, say for debtors,
   inventory or for the company as a whole?

   Operating cycle should not be considered for each component separately but, at the
   same time, it may not be so for the company as a whole. It will have to be calculated for
   each business line separately.

36. Is the operating cycle to be considered customer wise, especially where a large
   customer is provided a significantly different credit period?

   The Revised Schedule VI and the Guidance Note on the Revised Schedule VI
   contemplates the company to identify its operating cycle for each of its businesses and not
   based on each of its customers. Hence, the operating cycle must be defined in terms of
   each business.

37. What will be the basis for determining the operating cycle, where say the private
   sector clients and government sector clients have a significantly different credit
   period? Can the operating cycle be determined on the basis of customer category?

   The Revised Schedule VI and the Guidance Note on the Revised Schedule VI
   contemplates that the company identify its operating cycle for each of its business and not

   based on each customer. Hence, the operating cycle must be defined in terms of each
   business and not customer category wise. The company needs to suitably determine the
   normal operating cycle for the business considering the significance of the different credit
   periods, among other matters.

38. Is the lead-time for procuring raw material (time taken by the supplier from the order
   to delivery) included in the operating cycle?

   O perating cycle of a business should com prise the norm al tim e required to com plete
   its processes of (i) Acquiring raw m aterial, (ii) Processing the sam e into finished
   goods, (iii) M aking the sale, and (iv) Realising the sale p roceeds in cash. Hence, in the
   given case, the norm al lead -tim e to acquire raw m aterial should be included in
   determining the operating cycle.

39. Is the credit period allo w ed by supplier reduced w hen determ ining the
   operating cycle?

   In accordance with th e Revised Schedule VI, operating cycle is the tim e between
   the acquisition of assets for processing and their realisation in cash or cash
   equivalents. This suggests that the operating cycle should comprise the normal time
   spent on various activities, starting from purchase of raw material till realisation of cash
   and there is no need to reduce the credit period allowed by supplier from the same.
   Further, though the company has not paid for the raw material during the first six
   months, it m ight have started incurring expenses on other item s such as labour and
   overhead costs. Hence, the credit period allowed by the supplier need not be reduced
   when determining the operating cycle.


40. How will the Revised Schedule VI impact presentation of the cash flow statement?
   The following key issues need to be specifically considered for this:
   (i) Revised S chedule VI requires presentation of lines item s, either on face or
       in the notes, which are different vis--vis those required under pre-Revised
       Schedule VI. For exam ple, R evised Sch edule VI requires p resentation of
       trade receivables as against sundry             debtors required by pre-Revised
       Schedule VI. Is it mandatory for a company to present revised line items in the
       cash flow statement also?

   (ii) As part of working capital movement, is it mandatory to present a separate
       movement for current and non -current com ponents? For exam ple, a
       com pan y has segreg ated         trade receivables into current and non-current
       components based on the Revised Schedule VI criteria. Is it mandatory for the
       company to disclose movement in current and non-current trade receivables
   (ii) As part of investing and financing activities, is a com pan y required to
       present cash inflow s and outflow s separately for current and non -cu rrent
       item s? For exam ple, a com p any h as taken a loan of 10,00,000. O ut of this,
       8,00,000 is classified as non -current liability and 2,00,000 is current liability.
       Is it m andatory for the com pany to disclose inflow from the current and non-
       current component of loan separately?

   The line items / headings used in cash flow statement should be in sync with those used
   in other parts of the financial statem ents. In accordance with Guidance Note on the
   Revised Schedule VI, the term s "trade receivables" and "sun dry debtors" can have
   different m eanings. H ence, a com pany cannot present trade receivables in the
   balance sheet and show m ovem ent in "sundry debtors" in cash flow statement.
   The cash flow statement should also refer to them as trade receivables.

   W ith respect to the issues (ii) and (iii), AS 3 Cash Flow Statem ents does not
   m andate such presentation. N or is such presentation required in R evised Schedule
   VI or Guidance Note on the Revised Schedule VI. Hence, it is not mandatory for a
   company to present separate movement / inflows and outflows from current and non-
   current components of various line items separately.

41. A company has a single class of equity shares. Is the company still required to
   disclose rights, restrictions and preferences with respect to the same?

   Revised Schedule VI requires disclosures of rights, preferences and restrictions
   attached to each class of shares. If a com pany has only one class of equity shares, it
   is still required to m ake this disclosure.

42. Revised Schedule VI requires disclosures of rights, preferences and restrictions
   attached to each class of shares. Is a company required to make this disclosure
   separately for the ADR / GDR issued?

   In case of AD R / G D R, a com pany typically issues its shares to a bank in a foreign
   A gainst such shares, the foreign bank issues depository receipts to investors in the
   foreign country. Hence, from the perspective of the company, it has issued shares for
   which disclosure of rights, preferences, restrictions an d so on are already
   disclosed. If there are any additional rights / restrictions attached to ADR / GDR,
   those rights and restrictions need to be disclosed. If there are no additional rights /
   restrictions attached to AD R / G D R, it will not be required to m ake a separate
   disclosure for rights, preferences and restrictions attached to the ADR / GDR. In any
   case, it will disclose the fact of ADR / GDR issued by way of an appropriate note.

43. Is a com pany required to m ake disclosure regarding shareholders holding m ore
   than 5% shares based on legal or beneficial ownership? Can a company include
   information regarding beneficial ownership on a selective basis?

   Disclosure is to be on the basis of legal ownership, except where beneficial ownership is
   clearly available from the depositories. For instance, beneficial ownership of GDR / ADR
   may not be available.

44. Revised Schedule VI requires that a company disclose for a period of five years
   immediately preceding the balance sheet date information such as, aggregate
   number and class of shares (a) Allotted as fully paid up pursuant to contract(s)
   w ithout paym ent being received in cash, (b) Allotted as fully paid up by way of
   bonus shares, and (c) Bought back. In accordance with Guidance Note on the
   Revised Schedule VI, a company is not required to give year-wise break-up of the
   shares allotted or bought back. Rather, the aggregate number for the last five
   financial years needs to be disclosed. Is a company required to give comparative
   information for this disclosure? If yes, how will the comparative information be

   Revised Schedule VI is clear that except for the first financial statements laid before a
   company (after its incorporation), it will disclose the corresponding (com parative)
   am ounts for the im m ediately preceding reporting period for all item s show n in the

   financial statem ents, including notes. The application of this principle requires the
   company to disclose corresponding figures for information related to shares allotted /
   bought back during the period of five years.

   Typically, the com parative inform ation disclosed in the current period financial
   statem ents is the figure disclosed in the previous period financial statements. Hence,
   the same information will be disclosed as the comparative number in the current period.
   Thus, the current year figure will be for the current year and previous four years while
   the previous year figure will be for the previous five financial years.

45. Should calls unpaid be shown as a reduction in new Schedule VI?

   As per Revised Schedule VI of para 6.A.b of General Instructions, details of shares
   subscribed and fully paid up and details of shares subscribed, but not fully paid up,
   should be shown separately. The shares subscribed but not fully paid up should indicate
   the amount not paid up. Further, as per General Instructions 6.A.k, calls unpaid (showing
   aggregate value of calls unpaid by directors and officials) should be given by way of note
   under share capital. In view of this, the gross amounts should be discussed in the capital
   portion first and then the calls unpaid should be reflected as a deduction.

46. In accordan ce w ith the Revised S chedule VI read w ith Guidance Note on the
   Revised Schedule VI, a com p any need s to disclose repaym ent term s of loan
   liabilities. These term s, am on g other m atters, include period of m aturity with
   respect to the balance sheet date, num ber and am ount of instalm ents due,
   applicable interest rate and other significant relevant term s. C an a com pany
   m ake these disclosures under appropriate buckets / range? For example, can it
   state that all ECB loans carry interest rate in the range of LIBOR + 1% to LIBOR +

   W ith regard to repaym ent term s, paragraph of Guidance Note on the Revised
   Schedule VI states: "Disclosure of term s of repaym ent should be m ade preferably for
   each loan unless the repaym ent term s of individual loans within a category are
   similar, in which case, they may be aggregated."

   From this, it is clear that aggregation is perm issible for sim ilar item s (sim ilar need
   not be exactly m atching ­ it could be broadly within a range of closeness, w hich is
   reasonable for the given case and circum stance). Also, the intent is not to have all

   the interest term s explicitly stated because there could be operational sensitivities
   for com panies to explicitly disclose such item s. It is adequate in such cases to
   provide a range or an average as m ay be suitably appropriate in each case and
   circum stance.

47. Revised Schedule V I requires disclosure of the p eriod an d am ount of
   continuing default / default as on the balance sheet date in the repayment of
   loans and interest. Will a company be required to make this disclosure if the default
   has been made good after the reporting date?

   Revised Schedule VI requires disclosure of default in the repay m ent of loan and
   interest existing on the balance sheet date. W e believe that a com pany needs to m ake
   this disclosure even if the default has been made good after the reporting date.
   However, it may choose to also disclose the fact that default has been made good after
   the reporting date.

48. Where investment in LLP should be disclosed?

   It is noted that a LLP is a body corporate and not a partnership firm as envisaged under
   the Partnership Act, 1932. Hence, disclosures pertaining to investment in partnership
   firms will not include the investment in LLP. The investment in LLP should therefore be
   disclosed separately under 'Other Investments'. Other disclosures prescribed for
   investment in a partnership firm need not be made for investment in an LLP.

49. Will arrear depreciation require separate disclosure?

   Where material, arrears of depreciation, if any, provide needs disclosure in terms of Para
   19 of AS 6. In case it is not provided, it requires a disclosure, as the accrual basis has
   not been complied with.

50. What are the additional disclosures to be made in case of special purpose

   No additional disclosures are necessary except normal disclosure requirements as per
   the provisions of the applicable accounting standards.

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