Companies Act, 2013-Presentation on Accounts & Audit
-
Upload
saspartners -
Category
Law
-
view
846 -
download
0
description
Transcript of Companies Act, 2013-Presentation on Accounts & Audit
1
Companies Act 2013Companies Act 2013 –– Session Session IIIICOMPANIES ACT 2013
Chapter IX- Accounts of Companies
2
Chapter IX- Index
� Associate Company
� Subsidiary Company
� Financial Year
� Financial Statement
� Books of Accounts
� Consolidated Financial Statement
� Financial Statement Authentication
� Board’s Report
� Rights of Member to Financial Statements
� Corporate Social Responsibility
� Depreciation
� Internal Audit
3
Associate Company [Sec 2(6)] ) (w.e.f. 12-09-13)
Company A Company B
Significant Influence
Control of ≥ 20% Total Share Capital Control of Business Decisions under
AgreementOR
Associate Company is not a subsidiary but includes Joint Venture Company
Consolidated Financial Statements
Considered as Related Party
Auditor’s Disqualification
Imp
lica
tio
ns
4
Subsidiary company [Sec 2(87)] (w.e.f.12-09-13)
Holding Company
Subsidiary Subsidiary
Subsidiary
20%
20%20%
51% 51%
Holding
Control the
Composition of
Board of Directors
Controls > 50%
Total Share Capital
either at
1. Its own
2. Together with 1
or more of its
subsidiary
Total Share Capital includes both equity
and Preference Share Capital
Restriction on number of layers of
subsidiaries
5
Financial Year [Sec 2(41)] (w.e.f - 01-04-2014)
April to March
Incorporated
On or Before
31st December
Incorporated
On or after 1st
January
31st March of Current Year 31st March of Following Year
Transition Period
2 years
Adopt different Financial Year on Application to the Tribunal
Applicable to company having holding or subsidiary company outside India and Requires to
prepare consolidation financial statements outside India.
(No other reason for application)
Not necessary 12 months for those companies
6
Financial Statement [Sec 2(40)]- ( w.e.f. 12-09-2013)
Financial Statement
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in
Equity
Explanatory Note One Person Company
Dormant Company
Small Company
N
O
T
A
P
P
L
I
C
A
B
L
E
Financial Statement includes CFS
7
Books of Accounts (Sec 128) (w.e.f. 01-04-2014)
Electronic
Mode
Books of Accounts can be maintained in Electronic mode also
Accessible in India and usable for subsequent reference
Retained in same format as sent or received and shall remain unaltered and complete
Branch records sent must be kept unaltered and in a manner as received from branches
Should be legible
A proper system for storage, retrieval, display or printout of electronic records
Back up must be kept in servers physically located in India on a periodic basis
Should intimate to ROC at the time of filing- the name, internet address, location of service provider
8
Consolidated Financial Statement (CFS) Sec 129(3) (w.e.f. 01-04-14)C
om
pa
nie
s A
ct 1
95
6
Clause 32 of the Listing
Agreement mandates Listed Companies to prepare CFS
Neither AS 21 nor Companies Act 1956
requires other company to prepare CFS C
om
pa
nie
s A
ct 2
01
3
Mandatory for all
Companies to prepare CFS in respect of the following entities:
Subsidiary Company
Associate
Joint Venture Company
CFS will have to be done in addition to SFS
CFS should be prepared in same form and manner as
Standalone Financial Statement (SFS) of holding company.
To be audited and laid before AGM
Imp
act
All companies including
private companies need to prepare CFS. They need to gear up their financial reporting process for the same.
CFS should comply with notified AS
Reopen and revision of accounts mandatory to CFS also
9
Financial Statement Authentication [Sec 134] ) (w.e.f. 01-04-14)
Financial Statement
Part I Part II PART III
Chair person when
authorised by Board
OR
Two Directors, out of
which one shall be MD
and CEO, when he is a
director
CFO Company Secretary
10
Board’s Report [Sec 134(b)] w.e.f. 01-04-2014
Board’s Report
SigningAdditional
InformationRule
Chair person when
authorised by Board
OR
Two Directors, out of
which one shall be MD
• Extract of Annual
Return as per Sec 92(3)
• Member of meeting of
Board
• Related Party
Disclosure
• CSR Policy &
Implementation Status
Performance &
Financial position of
Subsidiaries, Associates
and Joint Ventures
11
Right of members to Financial statements (Sec 136) )(w.e.f. 01-04-14)
Includes Consolidated Financial
StatementSend at least 21 days before meeting
Manner of Circulation
Listed Company
Full Circulation +
Website
OR
Circulation of Salient
Features + Documents
available for inspection
at Regd Office + website
Networth >1 Cr
AND
Turnover > 10 Cr
Unlisted Public
Company
12
Right of members to Financial statements (Sec 136)(w.e.f 01-04-2014)
1 Cr
Demat Shares
Turnover > 10 Cr
Unlisted Public
Company1 Cr
Physical Shares
Turnover > 10 Cr
Without
Registered
Email ID
with
Depository
With
Registered
Email ID
with
Depository
Consent in
writing for
Electronic
Mode
Others
Electronic Mode
Physical Mode
13
Depreciation (w.e.f 01-04-2014)N
ow
Schedule XIV of the Companies Act 1956
Specifies minimum rates of depreciation to be provided on assets.
Two methods WDV and SLM
Different rates for multiple shifts
Co
mp
an
ies
Act
20
13
Imp
act
Schedule II of the
Companies Act 2013
Specifies systematic
allocation of
depreciable amount
over its useful life
Useful life of assets
are mentioned in
the Schedule
No other methods
Companies will be
divided into three
classes to decide the
application of
depreciation rates
1. Classes of
companies
prescribed and
who comply with
AS
2. Classes
prescribed by a
regulatory
authority
3. Other
Companies
14
Depreciation
• ‘Useful Life’ instead of
standard mandated rates’
• Prescribed companies to
justify in case, ‘useful life’ is
different from ‘Schedule II’
• For other companies ‘ useful
life’ cannot > Schedule II
• Double shift rate raised by
50% and Triple shift : raised by
100%
• No specific provision for items
upto INR 5000
•Transitional provision
-Depreciate carrying value less
residual value over balance
life. Adjust networth if useful
life exhausted
Illustration (Useful life
reduced from 20 to 15 yr)
Case
A
Case
B
Useful Balance Life (Yrs) 1 0
WDV(INR) 100 100
Depreciation / Yr (INR) 100 100
Charged to P&L R&S
• Component accounting
- If cost of part of asset is
significant and has useful life
different from he remaining
asset, useful life for that part
could be determined
separately for depreciation
Key impact on change in useful
life would be on:
-Plant and machinery (life
reduced from 21 year to 15
years); Computers (life
reduced from 6 years to 3
years); furniture and fixtures
(life decreased from 21 years
to 5 years)
-Implementing component
accounting would be
burdensome especially for
capital intensive companies
-Depreciation on intangibles
not clearly specified
Applicability Requirement Implication
15
Corporate Social Responsibility [Sec 135} (w.e.f 01-04-2014)
Net worth ≥ 500 crores Turnover ≥ 1000 crores Net Profit ≥ 5 crores
CSR Committee
Consists of
3 or more director
out of which
One director
independent
director
1. Formulate and
recommend
CSR Policy
2. Recommend
amount of
expenditure to
be incurred on
activities
3. Monitor CSR
Policy
Company need to
spend minimum
2% of its average
net profits made
during the 3
immediately
financial years
Co
mp
osi
tio
n
Fu
nct
ion
s
Co
ntr
ibu
tio
n
16
Internal Audit [Sec 138] (w.e.f 01.04.2014)
Every Listed Company
Paid up Capital > = 50
crores
Outstanding Loan or
Borrowings >= 100
crores
Outstanding Deposits
>= 25 crore
Public Company
Turnover >=200 crore
Private Company
Turnover >=200 crore
Outstanding Loan or
Borrowings >= 100
crores
Internal Auditor:
Chartered
Accountant or
Cost Accountant or
such other
professional as
decided by Board.
Internal Auditor
may or may not be
employee of the
company.
Chartered
Accountant may be
in practice or not.
17
Reach us
ChennaiIndira Devi Complex, II Floor, # 20 Gopalakrishna Street,
Pondy Bazaar, T. Nagar, Chennai – 600 017,
TN, India.
RMS Apts, Door No 16, 3rtd Floor,
No. 12, Gopalakrishna St, Pondy Bazaar,
T Nagar, Chennai- 600 017, TN, India
Tel: +91 44 2815 2673/ 2815 2674,
Email: [email protected]
SAS Partners Corporate Advisors Pvt Ltd.
About SAS PARTNERS;
Over 10 years of market presence and serving more
than 200 businesses from diversified industries
Divisions : Regulatory Advisory & Support division
and Transaction & Consulting division.
Versatile professional team over 25 professionals
comprising of Company Secretaries, Legal, Finance,
and Business Professionals
Deep rooted entrepreneurial, professional and
regulatory relations
ISO 9001:2008 Certification by TUV SUD
Regulatory Advisory & support division
� Corporate Secretarial
� Capital Markets
� Foreign Exchange Management
� Intellectual Asset Management
� Due Diligences
Soy Joseph , ACS, ACIS (UK) BL
Sr Partner – Corporate Regulatory+91 (0) 988421 [email protected]
Sony George Mathew, MBA, LLB, ACS
Partner – Corporate Regulatory+91 (0) 98846 [email protected]
BangaloreC – 1, Le Chateau Apartments,
No. 90, Infantry Road,
(Opposite to Shafina Plaza)
Bangalore – 560 001
Tel: +91 98846 56382
Email: [email protected]