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Company financial statements

Jayshree (Chartered Accountant) (82 Points)

08 October 2015

Is there any requirement for preparation of Cash flow statements for private companies under Company Act 2013? If so then under which section such compliance is required?Thanks in advance.

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Jishnu Surendran (Finance Manager) (312 Points)
Replied 08 October 2015

I can get back to you on that after referring the law book, but as a quick reply let me tell you that the Revised Schedule VI gives more importance to Accounting Standards than the act itself, ie. if the Schedule and the specified Accounting Sandard differs in opinion, Accounting Standards will prevail. Assuming from this you have to consider enterprise differentiation by ICAI, you know what I mean, Level 1, Level 2, Level 3, and should know where your company falls to ascertain the applicability of various accounting standards.

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Jishnu Surendran (Finance Manager) (312 Points)
Replied 08 October 2015

Try this exemption details u/s 2(40) of the Companies Act 2013 :

Exemption available

Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement i.e. there is an exemption given to OPC, small company and dormant Company for preparing the Cash flow statement for purpose of inclusion in financial statement.

SMALL COMPANIES:

Sec 2(85) ‘‘small company’’ means a company, other than a public company,—

(i) paid-up share capital of which does not exceed fifty lakh rupees (Rs 50 Lakhs ) or such higher amount as may be prescribed which shall not be more than five crore rupees; ( Rs 5 Crores) or

(ii) turnover of which as per its last profit and loss account does not exceed two crore rupees ( Rs 2 crore ) or such higher amount as may be prescribed which shall not be more than twenty crore rupees ( Rs 20 crores ).

Provided that nothing in this clause shall apply to—

(A) a holding company or a subsidiary company;

(B) a company registered under section 8; or

(C) a company or body corporate governed by any special Act;

Jayshree (Chartered Accountant) (82 Points)
Replied 08 October 2015

Thanks for the reply.But my further question is if private company comes under level 2 enterprise and is not a small company ,still it require to prepare Cash Flow Statement?