| A. | General | |
| 1. | In the case of subsidiary companies, the number of shares held by the holding company as well as by the ultimate holding company and its subsidiaries has been stated. [we are not required to certify the correctness of such shareholdings as certified by the management]. | |
| 2. | If in the opinion of the Board, any of the current assets, loans and advances have not 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 the opinion has been stated. | |
| 3. | Comparatives are shown | |
| 4. | Current accounts with directors whether they are in credit or debit are shown separately. | |
| 5. | Reference to benefits expected from contracts to the extent not executed has not been made in the Balance Sheet, reference shall be made in Board report. | |
| 6. | Have you ensured that there is adequate disclosure of Contingent Liabilities as per Schedule III and AS/Ind AS? [Complete checklist on contingent liabilities] | |
| 7. | The following have been shown by way of a note:
Amount remitted during the year in foreign currencies on account of dividends.
The number of non-resident shareholders
Number of shares held by them on which dividend was due and
The year to which the dividends related | |
| B | Raw material consumed | |
| 1. | All important basic raw materials are shown separately | |
| 2. | Materials do not include items like stores and fuel which only assist the manufacturing process. | |
| 3. | Purchased intermediates and components are classified as raw materials and only those items which account for at least 10% of the value of raw materials consumed are shown separately in quantity and value. | |
| 4. | The figures for raw materials consumed relate to actual consumption rather than the derived consumption; any normal shortage or loss may be included in the figure of consumption. | |
| 5. | Internal transfers from one department to another are disregarded in determining consumption figures. | |
| C | Value of imports of raw materials, components and spare parts and capital goods on CIF basis have been shown by way of note in respect of | |
| 1. | Raw Material
Components and spare parts
Capital goods | |
| 2. | The total value of imports of components and spare parts may be disclosed in the aggregate | |
| 3. | The disclosure in respect of imports is made on a mercantile or accrual basis. Therefore, items like goods in transit are included. | |
| 4. | The value of imports is disclosed irrespective of whether or not such imports have resulted in an expenditure in foreign currency. | |
| 5. | The value of imports is calculated on a CIF basis. | |
| 6. | The disclosure is made in Indian currency. | |
| 7. | Disclosure is with regard to the value of imports by the Company i.e., direct imports. | |
| 8. | Terms of payment for items imported are ignored since they have no relevance to value | |
| D | Value of Imported materials consumed | |
| The following have been shown by way of a note: | |
| 1. | Value of all imported raw materials, spare parts and components consumed during the financial year. | |
| 2. | Value of all indigenous raw materials, spare parts and components consumed during the financial year. | |
| 3. | The percentage of (a) and (b) each to total consumption is shown | |
| E. | Expenditure in foreign currencies | |
| 1. | Expenditure in foreign currencies during the year has been shown by way of note split between:
Royalty
Know-how
Professional, consultancy fees
Interest
Other matters (specify) | |
| 2. | “Other matters” in the Schedule III requirement covers any items for which foreign currency expenditure is involved. | |
| 3. | The requirement ordinarily relates to expenditure on intangible items. | |
| 4. | Disclosure is made on accrual basis, otherwise basis to be stated. | |
| 5. | Disclosure is limited to those cases where the company itself incurs a expenditure in foreign currency. The disclosure is to be made of the amounts actually incurred in foreign currency, which is remitted outside India (TDS under Income Tax Act to be excluded) | |
| F. | Disclosure of Foreign Earnings | |
| 1. | Export of goods calculated on FOB basis | |
| 2. | Royalty, know-how professional and consultation fees. | |
| 3. | Interest and dividend | |
| 4. | Other income (indicating nature) | |
| G. | Other Items for Notes | |
| 1. | Have you completed checklist on Segment Reporting to ensure compliance and disclosures in accordance with AS 17/Ind AS 108? | |
| 2. | Have you completed checklist on AS 20/Ind AS 33 to ensure compliance and disclosures in accordance with the standard? | |
| H | Contingent liabilities and commitments disclosures | |
| 1 | Contingent liabilities and commitments (to the extent not provided for)
(i) Contingent liabilities shall be classified as:
(a) Claims against the company not acknowledged as debt;
(b) Guarantees;
(c) Other money for which the company is contingently liable.
(ii) Commitments shall be classified as:
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for;
(b) Uncalled liability on shares and other investments partly paid;
(c) Other commitments (specify nature). | |
| 2 | Contingent Liabilities are not recognized in the books of account. However, Ind AS 37/AS 29- Provisions, Contingent Liabilities and Contingent Assets, requires the disclosure of contingent liability in the Financial Statements, if the possibility of an outflow of resources embodying economic benefits is not remote. Also, Ind AS Schedule III requires the disclosure pertaining to various commitments such as capital commitments, other commitments, and uncalled liability on shares.
A contingent liability is:
(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
(b) a present obligation that arises from past events but is not recognised because:
(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii) the amount of the obligation cannot be measured with sufficient reliability.
The word ‘commitment’ has not been defined in Schedule III. The Glossary of Terms Used in Financial Statements issued by ICAI defines ‘Capital Commitment’ as future liability for capital expenditure in respect of which contracts have been made. Hence, drawing inference from such definition, the term ‘commitment’ would simply imply future liability for contractual expenditure. | |
| 3. | Have Contingent Liabilities been measured and disclosed as per AS 29/Ind-AS 37. Check for the PPR analysis made by the Company. | |
| 4. | Have the following been disclosed in case of Contingent Liabilities as required by AS 29/ Ind AS 37:
An estimate of its financial effect
An indication of the uncertainties relating to any outflow; and
The possibility of any reimbursement. | |
| 5. | Have you ensured that separate disclosures have been made for the following as required by relevant divisions of Schedule III of the Companies Act 2013?
Claims against the company not acknowledged as debts.
Uncalled liability on shares partly paid.
Arrears of fixed cumulative dividends (the period for which the dividends are in arrears or if there is more than one class of shares, the dividends on each such class are in arrear)
Estimated amount of contracts remaining to be executed on capital account and not provided for
Other money for which the company is continentally liable.
The amount of any guarantees given by the company on behalf of directors or other officers of the company and where practicable, the general nature and amount of each such contingent liability, if material. | |
