Financial Reporting Requirements for Companies

Financial Reporting Requirementsfor Companies 1

Every company registered under Companies Act, 2013 has to comply with all the provisions of the Companies Act. The act provides detailed instructions related to preparation of financial statement prepared by companies.

According to Section 2(40) of the Companies Act, 2013, the "financial statement" includes:

  1. a balance sheet as at the end of the financial year;
  2. a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
  3. cash flow statement for the financial year;
  4. a statement of changes in equity, if applicable; and
  5. any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv):
  6. Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement

Section 129:

  • Section 129 of companies act 2013, provides for preparation of financial statements.
  • It provides that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the accounting standards notified under new section 133.
  • It is also provided that the financial statements shall be prepared in the form provided in new schedule III of Companies Act, 2013.

Hence, every company needs to prepare and maintain financial statements as per Schedule III of the Companies Act, 2013.

Schedule III of Companies Act, 2013:

  • Schedule III provides for detailed instructions for preparation of consolidated financial statements as consolidation of accounts of subsidiary companies is now made mandatory in section 129.

Consolidated Financial Statement:

As per section 129(3) if a company has one or more subsidiaries it will have to prepare a consolidated financial statement of the company and of all the subsidiaries in the form provided in the new schedule III of Companies Act, 2013.
The financials of the subsidiary: The company has also to attach along with its financial statement, a separate statement containing the salient features of the financials of the subsidiary companies in such form as may prescribed by the rules.
It is also provided that if the company has interest in any associate company or a joint venture the accounts of that company as well as joint venture shall be consolidated.

Format for Balance Sheet and Statement of Profit & Lossas per Schedule III as per Company's Act


Name of the Company…………………….
Balance Sheet as at ………………………
(Rupees in…………)

Particulars Note No.

Figures as at the end of current reporting period

Figures as at the end of the previous reporting period

1 2 3 4
(1) Shareholders’ funds
(a) Share capital
(b) Reserves and surplus
(c) Money received against share
(2) Share application money pending
(3) Non-current liabilities
(a) Long-term borrowings
(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions
(4) Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
Non-current assets
(1) (a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work-in-progress
(iv) Intangible assets under 
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long-term loans and advances
(e) Other non-current assets
(2) Current assets
(a) Current investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short-term loans and advances
(f) Other current assets

See accompanying notes to the Financial Statements

Part II - Statement of Profit & Loss

Name of the Company…………………….
Profit and loss statement for the year ended ………………………
(Rupees in…………)

Sr No. Particulars Note No.

Figures as at the end of current reporting period

Figures as at the end of the previous reporting period

1 2 3 4
I Revenue from operations xxx xxx
II Other income xxx xxx
III Total Revenue (I + II) xxx xxx

Cost of materials consumed
Purchases of Stock-in-Trade
Changes in inventories of finished goods work-in-progress and Stock-in-Trade
Employee benefits expense Finance costs
Depreciation and amortization expense
Other expenses
Total expenses









V Profit before exceptional and extraordinary items and tax (III - IV) xxx xxx
VI Exceptional Items xxx xxx
VII Profit before extraordinary items and tax (V - VI) xxx xxx
VIII Extraordinary Items xxx xxx
IX Profit before tax (VII- VIII) xxx xxx

Tax expense:
(1) Current tax
(2) Deferred tax



XI Profit (Loss) for the period from continuing operations (VII-VIII) xxx xxx
XII Profit/(loss) from discontinuing operations xxx xxx
XIII Tax expense of discontinuing operations xxx xxx
XIV Profit/(loss) from Discontinuing operations (after tax) (XII-XIII) xxx xxx
XV Profit (Loss) for the period (XI + XIV) xxx xxx

Earnings per equity share:
(1) Basic
(2) Diluted



See accompanying notes to the financial statements.

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Financial Management