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Financial Statements of a Company

Meaning of Financial Statement

Financial statement, concerning a company, comprises:

• A balance sheet at the end of the financial year
• A profit and loss account, or for non-profit activities, an income and expenditure account for the financial year
• Cash flow statement for the financial year
• Explanatory notes attached to any document referenced in the above sub-clauses

• For One Person Company, small company, and dormant company (S. 455), the cash flow statement may be excluded.

Meaning of Financial Year

According to Section 2(41), the financial year for any company or corporate body ends on March 31st each year. If a company is incorporated on or after January 1st of a given year, its first financial year will end on March 31st of the following year.

For a company or corporate body that is a holding, subsidiary, or associate company of a company incorporated outside India and needs to follow a different financial year for consolidating its accounts internationally, the Tribunal may permit a different period as its financial year, regardless of whether that period is a full year, provided it is satisfied with the reasons.

Types of Financial Statements based on Period

There are two main types of financial statements:

Financial Statements

• Annual financial statements: Prepared once within a financial year.
• Quarterly financial statements: Prepared quarterly by listed companies to comply with SEBI requirements.

Legal Requirements Related to Financial Statements (Section 129)

Sections 128 to 138 outline the financial requirements under the Companies Act, 2013. Section 129 specifies the following legal requirements for financial statements:

1. Section 129(1) mandates that financial statements:
   • Must present a true and fair view of the company's financial state.
   • Must comply with accounting standards notified under Section 133.
   • Should be in the prescribed form for different classes of companies as per Schedule III.
   • Should have items in accordance with the accounting standards.
     These provisions do not apply to insurance or banking companies, companies engaged in the generation or supply of electricity, or any other class of company for which specific forms of financial statements are defined by their governing Act.
2. Section 129(2) requires that the Board of Directors lay the financial statements before the general meeting for the financial year.
3. Section 129(3) states that if a company has subsidiaries or associate companies, it must prepare a consolidated financial statement in addition to the standalone financial statement. This consolidated statement should be prepared in the same form and manner and in accordance with applicable standards, and presented at the annual general meeting alongside the standalone statement.
4. Section 129(4) indicates that the provisions for preparing, adopting, and auditing the financial statements of a holding company apply equally to the consolidated financial statements mentioned in Section 129(3).
5. Section 129(5) requires that if the financial statements do not comply with the accounting standards, the company must disclose the deviation, the reasons for it, and the financial effects, if any, in its financial statements.
6. Section 129(6) grants the Central Government the authority to exempt any class or classes of companies from complying with the requirements of Section 129 or its rules if it is deemed necessary for public interest.

The Central Government may establish a National Financial Reporting Authority to handle matters related to accounting and auditing standards under the Companies Act, 2013 [Section 132]. Furthermore, the Central Government may prescribe accounting standards or any addendum thereto as recommended by the Institute of Chartered Accountants of India, in consultation with the National Financial Reporting Authority [Section 133].

Share Warrant

• Share warrants, according to AS-20, Earnings per Share, refer to financial instruments granting the holder the right to acquire equity shares. Essentially, these share warrants become part of the shareholders' funds.
• Since shares are not yet assigned against share warrants, they are not considered part of the share capital. Instead, they are depicted as a distinct entry: 'Money received against share warrants.'

Share Application Money Pending Allotment

• Share application money pending allotment should be presented separately on the balance sheet, positioned between 'Shareholders' Funds' and 'Non-current liabilities.'
• Share application money, which does not exceed the issued capital and is irrevocable to a certain extent, must be disclosed under 'Share application money pending allotment.'
• The remaining balance of such funds is categorized under 'Other current liabilities.'
• However, any amount due for refund along with the associated interest, if applicable, will be reflected under 'Other current liabilities.'

Schedule III to the Companies Act, 2013

Schedule III of the Companies Act, 2013 outlines the format for preparing the Statement of Profit and Loss, Balance Sheet, and Notes to Accounts or Notes to Financial Statements for every company registered under the Act. To enhance disclosure requirements and align them with notified accounting standards, the Ministry of Corporate Affairs issued a revised form of Schedule VI via Notification No. S.O. 447(E) on February 28, 2011. The Revised Schedule VI was applicable for financial statements prepared for the financial year starting on or after April 1, 2011. Under the new Companies Act, 2013, this has been renumbered as Schedule III.

Schedule III prescribes the format of financial statements for three categories:

• DIVISION I: Financial statements for companies required to comply with the Companies (Accounting Standards) Rules, 2006.
• DIVISION II: Financial statements for companies complying with the Companies (Indian Accounting Standards) Rules, 2015.
• DIVISION III: Financial statements for Non-Banking Finance Companies (NBFCs) complying with the Companies (Indian Accounting Standards) Rules, 2015.

Schedule III | Division-I Non Ind AS

Financial Statements for Companies Complying with Companies (Accounting Standards) Rules, 2006

General Instructions for Preparation of Financial Statements

Overriding Status of Other Requirements of the Companies Act and Accounting Standards: Schedule III of the Companies Act, 2013 stipulates that if compliance with the Act's requirements, including applicable Accounting Standards, necessitates any changes in treatment or disclosure (such as addition, amendment, substitution, or deletion of any head/sub-head or inter se changes in the Financial Statements or statements forming part thereof), such changes must be made. Consequently, Schedule III will be modified accordingly. Thus, the provisions of the Companies Act, 2013 and the Accounting Standards take precedence over the Schedule III requirements.

Additional Disclosure Requirements: The disclosure requirements specified in Part I (Form of Balance Sheet) and Part II (Form of Statement of Profit and Loss Account) of Schedule III are supplementary to, not substitutes for, the disclosure requirements prescribed by the Accounting Standards under the Companies Act, 2013. Additional disclosures specified in the Accounting Standards should be made in the Notes to Accounts or by way of additional statements unless required on the face of the Financial Statements. Similarly, all other disclosures required by the Companies Act should also be included in the Notes to Accounts, in addition to the Schedule III requirements.

• Narrative descriptions or disaggregations of items recognized in the Financial Statements.
• Information about items not qualifying for recognition in the Financial Statements, such as contingent liabilities and commitments not shown on the face of the Balance Sheet.

Each item on the Balance Sheet and Statement of Profit and Loss should be cross-referenced to related information in the Notes to Accounts. A balance should be maintained to avoid excessive detail that may overwhelm users and insufficient detail due to over-aggregation. The manner of cross-referencing has changed from "Schedule No." to "Note No."

New Rounding Off Norms: New rounding off norms have been introduced based on the company's turnover. The figures in the Financial Statements may be rounded off as follows:

Once a unit of measurement is used, it should be used uniformly in the Financial Statements.

Figures for immediately preceding period: Except in the case of the first Financial Statements laid before the Company (after its incorporation) the corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.

Terms used in the Schedule: The terms used in the Schedule shall be as per the applicable Accounting Standards.
Notes to General Instructions: This part of Schedule sets out the minimum requirements for disclosure on the face of the Balance Sheet, and the Statement of Profit and Loss (hereinafter referred to as “Financial Statements” for the purpose of this Schedule) and Notes, Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the Financial Statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Accounting Standards.

Part I | Format of BALANCE SHEET

The following is the form of the Balance Sheet as per Schedule III (Division I – Non Ind AS) of the Companies Act, 2013, as amended in 2018:
Name of the Company ………
Balance Sheet as at ……………See accompanying notes to the financial statements.

General Instructions for Preparation of Balance Sheet

• The following are the general guidelines for preparing a Balance Sheet according to Schedule III:

Classification of Assets

An asset is considered current if it meets any of the following criteria:

• It is expected to be realized, sold, or consumed in the company's normal operating cycle.
• It is held primarily for trading purposes.
• It is expected to be realized within twelve months after the reporting date.
• It is cash or its equivalent, unless restricted from use for at least twelve months after the reporting date.

All assets not meeting the above criteria are classified as non-current.

Explanation of Current Assets

Assets falling under this category include:

Clause (a): Assets expected to be realized in the company's normal operating cycle, like debtors, finished goods, stock-in-trade, and raw materials. For instance, debtors that are expected to be realized within the operating cycle are considered current assets.

Clause (b): Assets held primarily for trading, such as stock-in-trade and finished goods. Investments may also fall under this category if held mainly for trading purposes.

Clause (c): Realization within 12 months

• An asset is considered current if it is expected to be converted into cash within 12 months after the reporting date.
• Includes investments in debentures maturing within this timeframe, classified as current assets.

Clause (d): Cash or Cash Equivalents

• Cash equivalents are short-term, highly liquid investments convertible into known cash amounts with minimal risk of value changes.
• If cash is restricted from use for over 12 months after the reporting date, it's not a current asset.
• Example: A company with a bank balance of `50,000, restricted from using `40,000 for over 12 months, won't list the `40,000 as a current asset.
• The three-month period from the investment date determines if an investment qualifies as a cash equivalent.

Operating Cycle

An operating cycle is the period between acquiring assets for processing and converting them into cash or cash equivalents. This cycle can be shorter than, equal to, or longer than 12 months. If the normal operating cycle cannot be determined, it is assumed to be 12 months. Inventory items that are expected to be consumed or realized within the company's normal operating cycle should be classified as current, even if they are not expected to be consumed or realized within 12 months of the reporting date.

Liability

A liability is classified as current if it meets any of the following criteria:
(a) It is expected to be settled during the company's 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.
(d) The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms that could result in the liability being settled by issuing equity instruments do not affect its classification.

All other liabilities are classified as non-current.

Explanation of Current Liabilities:

• Clause (a): A liability is classified as current if it is expected to be settled within the company's normal operating cycle, regardless of whether it arises in the ordinary course of business or otherwise. For example, trade creditors are classified as current liabilities because they are expected to be settled within the business's normal operating cycle, which may be less than, equal to, or more than 12 months.
• Clause (b): A liability held primarily for trading purposes is classified as current. This occurs when a company trades in another organization's liabilities (current or non-current) for a commission or other compensation.
• Clause (c): A liability due to be settled within 12 months of the reporting date is classified as current, regardless of whether it arises in the ordinary course of business. For instance, if creditors must be paid within three months of the reporting date, they are classified as current liabilities. Additionally, the portion of a long-term liability payable within 12 months of the reporting date is classified as a current liability, such as the current maturity of long-term debentures.
• Clause (d): A liability is classified as current if the company lacks an unconditional right to defer its settlement for at least 12 months after the reporting date. For example, when a company declares a dividend at an Annual General Meeting, it must be paid within one month. Any unpaid portion is transferred to an "Unpaid Dividend Account," and shareholders can claim the unpaid dividend within seven years. Thus, the company does not have an unconditional right to defer the liability for at least 12 months, making unpaid dividends a current liability.

Definition of Trade Receivable

• A receivable is classified as a "trade receivable" if it is due to the sale of goods or rendering of services in the normal course of business.

Definition of Trade Payable

• A payable is classified as a "trade payable" if it is due to the purchase of goods (such as raw materials, work-in-progress, or stock-in-trade) or services received in the normal course of business.

Disclosure Requirements for Notes to Accounts

A. Share Capital
For each class of share capital (different classes of preference shares to be treated separately), the company must disclose:
(a) The number and amount of shares authorized.
(b) The number of shares issued, subscribed, fully paid, and subscribed but not fully paid.
(c) The par value per share.
(d) A reconciliation of the number of shares outstanding at the beginning and end of the reporting period.
(e) The rights, preferences, and restrictions attached to each class of shares, including restrictions on the distribution of dividends and the repayment of capital.
(f) Shares of each class held by the company's holding or ultimate holding company, including shares held by subsidiaries or associates of the holding or ultimate holding company in aggregate.
(g) Shares in the company held by each shareholder owning more than 5% of the shares, specifying the number of shares held.
(h) Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the terms and amounts.
(i) For the five years immediately preceding the Balance Sheet date:
The aggregate number and class of shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash.
The aggregate number and class of shares allotted as fully paid-up as bonus shares.
The aggregate number and class of shares bought back.
(j) The terms of any securities convertible into equity/preference shares issued, along with the earliest date of conversion in descending order from the farthest such date.
(k) Unpaid calls, showing the aggregate value of calls unpaid by directors and officers.
(l) Forfeited shares, detailing the amount originally paid up.

The disclosure, inter alia, will be as follows:

Notes to Accounts

Note: It may be noted that unpaid amount towards shares subscribed by the subscribers of the memorandum of association should be considered as ‘Subscribed and paid up capital’ in the balance sheet and debts due from the subscriber should be appropriately disclosed as an asset in the balance sheet.

Reconciliation of shares outstanding at the beginning and at the end of the reporting year will be shown as follows:

B. Reserves and Surplus
(i) Reserves and Surplus shall be classified as:
(a) Capital Reserve;
(b) Capital Redemption Reserve*;
(c) Securities Premium [*****];
(d) Debenture Redemption Reserve;
(e) Revaluation Reserve;
(f) Share Options Outstanding Account;
(g) Other Reserves—(specify the nature and purpose of each reserve and the amount in respect thereof);
(h) Surplus, i.e., the balance in the Statement of Profit and Loss, disclosing allocations and appropriations such as dividend, bonus shares, and transfers to/from reserves, etc.
(Additions and deductions since the last Balance Sheet are to be shown under each of the specified heads)

(ii) A reserve specifically represented by earmarked investments shall be termed a ‘fund’.

(iii) A debit or negative balance in the 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 any negative balance of Surplus, shall be shown under the head ‘Reserves and Surplus’ even if the resulting figure is negative.
When there is a change in the balance of any reserve compared to the previous year, disclose the movement in the reserve.
Similarly, show the additions and deductions since the last balance sheet in the surplus, i.e., the balance in the statement of profit and loss.

C. Long-term Borrowings
(i) Long-term borrowings shall be classified as:

• Bonds/debentures
• Term loans
  From banks
  From other parties
• Deferred payment liabilities
• Deposits
• Loans and advances from related parties
• Long-term maturities of finance lease obligations
• Other loans and advances (specify nature)

(ii) Borrowings shall further be sub-classified as secured and unsecured. The nature of security shall be specified separately in each case.
(iii) Where loans have been guaranteed by directors or others, the aggregate amount of such loans under each head shall be disclosed.
(iv) Bonds/debentures (along with the rate of interest and particulars of redemption or conversion, as the case may be) shall be stated in descending order of maturity or conversion, starting from the farthest redemption or conversion date. Where bonds/debentures are redeemable by instalments, the date of maturity for this purpose must be reckoned as the date on which the first instalment becomes due.
(v) Particulars of any redeemed bonds/debentures which the company has the power to reissue shall be disclosed.
(vi) The terms of repayment of term loans and other loans shall be stated.
(vii) The period and amount of continuing default as of the Balance Sheet date in the repayment of loans and interest shall be specified separately in each case.

D. Other Long-term Liabilities

Other Long-term Liabilities shall be classified as:
(a) Trade payables
(b) Others

Dues payable in respect of the purchase of property, plant, and equipment, intangible assets, etc., cannot be included under trade payables. Such payables should be classified as “Others,” and each such item should be disclosed nature-wise. However, long-term bills payable should be disclosed as part of trade payables.

E. Long-term Provisions

The amounts shall be classified as:
(a) Provision for employee benefits
(b) Others (specify nature)

F. Short-term Borrowings
(i) Short-term borrowings shall be classified as:

• Loans repayable on demand
  From banks
  From other parties
• Loans and advances from related parties
• Deposits
• Other loans and advances (specify nature)

(ii) Borrowings shall further be sub-classified as secured and unsecured. The nature of security shall be specified separately in each case.
(iii) Where loans have been guaranteed by directors or others, the aggregate amount of such loans under each head shall be disclosed.
(iv) The period and amount of default as of the Balance Sheet date in the repayment of loans and interest shall be specified separately in each case.
(v) Current maturities of long-term borrowings* (inserted w.e.f. 1-4-2021).

Bank overdraft is shown under “short-term borrowings.” An overdraft is not ordinarily offset with the bank balance unless there is a legal right to do so.

FA. Trade Payables

The following details relating to Micro, Small, and Medium Enterprises shall be disclosed in the notes:
(a) The principal amount and the interest thereon (to be shown separately) remaining unpaid to any supplier at the end of each accounting year;
(b) The amount of interest paid by the buyer in terms of section 16 of the Micro, Small, and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year;
(c) The amount of interest due and payable for the period of delay in making payment (which has been paid but beyond the appointed day during the year) without adding the interest specified under the Micro, Small, and Medium Enterprise Development Act, 2006;
(d) The amount of interest accrued and remaining unpaid at the end of each accounting year; and
(e) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under section 23 of the Micro, Small, and Medium Enterprises Development Act, 2006.

Explanation.- The terms ‘appointed day’, ‘buyer’, ‘enterprise’, ‘micro enterprise’, ‘small enterprise’ and ‘supplier’ shall have the same meaning assigned to those under clauses (b), (d), (e), (h), (m), and (n) respectively on section 2 of the Micro, Small, and Medium Enterprises Development Act, 2006.

G. Other Current Liabilities

The amounts shall be classified as:
(a) Omitted w.e.f. 1-4-2021
(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. Share application money includes advances towards allotment of share capital. The terms and conditions, including the number of shares proposed to be issued, the amount of premium, if any, and the period before which shares shall be allotted shall be disclosed. It shall also be disclosed whether the company has sufficient authorized capital to cover the share capital amount resulting from the allotment of shares out of such share application money. Further, the period for which the share application money has been pending beyond the period for allotment as mentioned in the document inviting application for shares, along with the reason for such share application money being pending, shall be disclosed. Share application money not exceeding the issued capital and to the extent not refundable shall be shown under the head Equity, and share application money to the extent refundable, i.e., the amount in excess of subscription or in case the requirements of minimum subscription are not met, shall be separately shown under ‘Other current liabilities.’
(h) Unpaid matured deposits and interest accrued thereon
(i) Unpaid matured debentures and interest accrued thereon
(j) Other payables (specify nature)

Term deposits and security deposits, which are not in the nature of borrowings, should be classified under ‘Other Non-current liabilities’ or ‘Other current liabilities,’ as the case may be.

H. Short-term Provisions

The amounts shall be classified as:
(a) Provision for employee benefits
(b) Others (specify nature)

Others would include all provisions other than provisions for employee benefits, such as provision for taxation, provision for warranties, etc. These should be disclosed separately, specifying the nature thereof.

Schedule III provides that current tax (i.e., provision for tax) is to be disclosed under ‘short-term provisions’ on the equity and liabilities part of the balance sheet; and advance tax is to be disclosed under ‘Loans and advances’ on the assets side of the balance sheet.

AS-22, Accounting for Taxes on Income, has a specific requirement with respect to off-setting. As per paragraph 27, an enterprise should offset assets and liabilities representing current tax (i.e., provision for tax) if the enterprise:
(a) Has a legally enforceable right to set off the recognized amounts; and
(b) Intends to settle the asset and liability on a net basis.

Therefore, where the enterprise can, in fact, fulfill the criteria set in paragraph 27 of AS-22, disclose the advance tax/current tax (i.e., provision for tax) on a net basis, mentioning the adjusted amount in the inner column.

I. Property, Plant and Equipment

(i) Classification shall be given as:
(a) Land
(b) Buildings
(c) Plant and Equipment
(d) Furniture and Fixtures
(e) Vehicles
(f) Office equipment
(g) Others (specify nature)

(ii) Assets under lease shall be separately specified under each class of asset.

(iii) 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, amount of change due to revaluation (if the change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant, and Equipment), and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately.

(iv) Where sums have been written off on a reduction of capital or revaluation of assets, or where sums have been added on revaluation of assets, every Balance Sheet subsequent to the date of such write-off or addition shall show the reduced or increased figures as applicable, and shall, by way of a note, also show the amount of the reduction or increase as applicable, together with the date thereof, for the first five years subsequent to the date of such reduction or increase.

Notes to Accounts of Property, Plant and Equipment is to be prepared as follows:

Note No…… Property, Plant and Equipment

J. Tangible Assets
(i) Classification shall be given as :
(a) Land
(b) Buildings
(c) Plant and Equipment
(d) Furniture and Fixtures
(e) Vehicles
(f) Office equipment
(g) Others (specify nature)
(ii) Assets under lease shall be separately specified under each class of asset.
(iii) A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and at end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately.
(iv) Where sums have been written off on a reduction of capital or revaluation of assets or where sums have been added on revaluation of assets, every Balance Sheet subsequent to date of such write-off, or addition shall show the reduced or increased figures as applicable and shall by way of a note also show the amount of the reduction or increase as applicable together with the date thereof for the first five years subsequent to the date of such reduction or increase.
Note: Guidance note on Division I of Schedule III (second edition July, 2019) States that “Tangible Assets” be named as “Property, Plant and Equipment (Tangible Assets)”. Its Notes to Accounts may be prepared as follows:

K. Intangible Assets
(i) Classification shall be given as:
(a) Goodwill
(b) Brands/trademarks
(c) Computer software
(d) Mastheads and publishing titles
(e) Mining rights
(f) Copyrights, patents, and other intellectual property rights, services, and operating rights
(g) Recipes, formulae, models, designs, and prototypes
(h) Licenses and franchises
(i) Others (specify nature)

(ii) 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, and other adjustments, and the related amortization and impairment losses/reversals, shall be disclosed separately.
(iii) Where sums have been written off due to a reduction of capital or revaluation of assets, or where sums have been added due to revaluation of assets, every Balance Sheet subsequent to the date of such write-off or addition shall show the reduced or increased figures as applicable. Additionally, a note shall disclose the amount of the reduction or increase, together with the date thereof, for the first five years following the date of such reduction or increase.

Note No. …… Intangible Assets

L. Non-current Investments

(i) Non-current investments shall be classified as trade investments and other investments, and further categorized as follows:
(a) Investment in property
(b) Investments in equity instruments
(c) Investments in preference shares
(d) Investments in government or trust securities
(e) Investments in debentures or bonds
(f) Investments in mutual funds
(g) Investments in partnership firms
(h) Other non-current investments (specify nature)

For each classification, provide details of the 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 which investments have been made. Also, specify the nature and extent of the investments in each body corporate, showing separately investments that are partly-paid. For investments in partnership firms, provide the names of the firms, along with the names of all partners, total capital, and the shares of each partner.
(ii) Investments carried at amounts other than cost should be separately stated, specifying the basis for valuation.
(iii) The following information shall also be disclosed:
(a) Aggregate amount of quoted investments and their market value;
(b) Aggregate amount of unquoted investments;
(c) Aggregate provision for diminution in the value of investments.

M. 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 (providing details thereof);
(d) Other loans and advances (specify nature).

(ii) These shall also be separately sub-classified as:
(a) Secured, considered good;
(b) Unsecured, considered good;
(c) Doubtful.

(iii) Allowances for bad and doubtful loans and advances shall be disclosed under the relevant heads separately.
(iv) Loans and advances due by directors or other officers of the company, either severally or jointly with any other persons, or amounts due by firms or private companies in which any director is a partner, director, or member, should be separately stated.

N. Other Non-current Assets

Other non-current assets shall be classified as:

(i) Long-term trade receivables (including trade receivables on deferred credit terms);

• Security deposits;
• Others (specify nature).

(iii) Long-term trade receivables shall be sub-classified as:

• Secured, considered good;
• Unsecured, considered good;
• Doubtful.

Allowances for bad and doubtful debts shall be disclosed under the relevant heads separately.

Debts due by directors or other officers of the company, either severally or jointly with any other person, or debts due by firms or private companies in which any director is a partner, director, or member, should be separately stated.

(iv) For trade receivables outstanding, the following ageing schedule shall be provided:

Trade Receivables Ageing Schedule

Similarly, when no due date of payment is specified, the disclosure shall be from the date of the transaction.

Unbilled dues must be disclosed separately.

O. Current Investments

(i) Current investments shall be classified as:
(a) Investments in equity instruments;
(b) Investment in preference shares;
(c) Investments in government or trust securities;
(d) Investments in debentures or bonds;
(e) Investments in mutual funds;
(f) Investments in partnership firms;
(g) Other investments (specify nature).

For each classification, provide details of the 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 which investments have been made. Specify the nature and extent of the investment made in each such body corporate, showing separately investments that are partly-paid. For investments in the capital of partnership firms, provide the names of the firms (with the names of all their partners, total capital, and the shares of each partner).

(ii) The following information shall also be disclosed:
(a) The basis of valuation of individual investments;
(b) Aggregate amount of quoted investments and their market value;
(c) Aggregate amount of unquoted investments;
(d) Aggregate provision made for diminution in the value of investments.

P. 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).