FINANCIAL REPORTING AS PER COMPANIES ACT, 2013

1. Uniform Financial Year:

• Every Company shall follow a uniform financial year, from 01^st April to 31^st
• Companies following a different financial year need to align with the new requirement of law within two years of implementation of Act, ie 31^st March 2016.
• A Company or Body Corporate which is holding or subsidiary of a Company incorporated outside India, may follow a different financial year ONLY on permission of Tribunal.

 

2. Depreciation:

• Schedule II of Companies Act, 2013 deals withdepreciation of tangible assets as well as amortization of intangible assets.
• The revised schedule requires using only useful lives of tangible assets rather than earlier applicable depreciation rates.
• Adjustment to Accounting records
• The provision for 100% depreciation on immaterial items i.e., assets whose actual cost does not exceed Rs. 5,000/- per item has been omitted
• Use of Extra Shift Depreciation (ESD) working has been simplified.

 

3. Director’s Report:

The Director’s Report shall disclose the following:

• Financial Summary or performance of the Company
• Details of Deposits, accepted, repaid, and outstanding at the end of the financial year
• Details of Share Capital of the Company, and changes thereof
• Details of Statutory Auditor of the Company
• Conservation of Energy, technology absorption and foreign exchange earnings and outgo
• Particulars of Loans or Guarantee or Investments
• Changes in particulars of Directors including Independent Director during the year
• Details of all Related Party Transactions
• Details regarding Managerial Remuneration
• Director’s Responsibility Statement
• Details of all Board Meetings and General Meeting
• Reporting of Fraud
• Measures adopted for prevention of sexual harassment at workplace
• Material changes and commitments affecting the financial position of the company which have materialised from the past financial year

 

4. Format of Financial Statement:

The Financial Statement includes the following:

• Balance Sheet as at the end of Financial Year
• Profit & Loss Account/ Income & Expenditure Account
• Cash Flow Statement
• Statement of changes in Equity
• Any explanatory note annexed to or forming part of any of the above

(Note: One Person Company, Small Company and Dormant Company are exempted from the requirement of Cash Flow Statement)

 

Consolidation of Financial Statement:

• In case of one or more subsidiaries, the Company shall also mandatorily prepare a Consolidated Financial Statement as per Schedule III of the Companies Act, 2013 and applicable Accounting Standards.
• In addition to the above, a separate financial statement of each subsidiary will need to be prepared and a statement stating salient features shall be reported to Ministry of Corporate Affairs in Form AOC-1.

 

5. Reporting of Financial Statement to Ministry of Corporate Affairs:

• Following set of documents shall be filed with Registrar of Companies within 30 days of the Annual General Meeting in Form AOC-4:
  • Copy of financial statements, including consolidated financial statement, if any,
  • Notice of Annual General Meeting,
  • Auditors Report,
  • Directors Report,
  • Notes to Accounts

 

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