Essay on the Balance Sheet of a Company | India | Accounting

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Essay on the Balance Sheet of a Company

Essay Contents:

  1. Essay on the Introduction to the Balance Sheet of a Company
  2. Essay on the Forms of Balance Sheet
  3. Essay on the Description of Various Balance Sheet Items
  4. Essay on the Preparation of Balance Sheet from Trial Balance

Essay # 1. Introduction to the Balance Sheet of a Company:


Balance Sheet is defined as a statement of the financial position of an enterprise as at a given date, which exhibits its assets, liabilities, capital, reserves and other account balances at their respective book values. Balance Sheet is required to be set out in any of the forms given in the Part I of the Schedule VI to the Companies Act.

In the Part I two forms have been provided:

(i) Horizontal, and

(ii) Vertical.

Now-a-days most of the companies use vertical form for the preparation and presentation of the Balance Sheet. It is also possible to prepare Balance Sheet in a form “as near to” the prescribed format as the circumstances permit. The Central Government is empowered to give general/special approval for the preparation of Balance Sheet in a different manner.

The Central Government is also empowered to exempt any class of companies from complying with any of the requirements in Schedule VI, if that is considered necessary in the public interest. While preparing the Balance Sheet due regard should be given to the instructions given in the Notes at the end of Part I of the Schedule VI.


Except the first Balance Sheet, it is required to give the corresponding amounts for the preceding financial year (technically called comparatives) for all the items shown in the Balance Sheet.

Essay # 2. Forms of Balance Sheet:

Forms of Balance Sheet given in the Part I of the Schedule VI is not applicable to the banking companies, insurance companies, companies engaged in the generation of electricity and other companies which are governed by any special Act.

i. Horizontal Form of Balance Sheet:

Major heads of the assets and liabilities including shareholders’ funds as set out in the horizontal form is shown below:

Horizontal Form of Balance Sheet

Contingent liabilities are to be disclosed in a footnote. In Annex 3.1, item- wise disclosure requirements has been explained in details.

Requirements of Part II of Schedule VI to the Companies Act:

Share Capital – The following disclosures are necessary:

Authorised……… shares of Rs……… each


Issued (distinguishing between the various classes of capital and stating the particu­lars specified below, in respect of each class)…………………….. Shares of Rs……… each.

Of the above shares …….. shares are allotted fully paid up pursuant to a contract without payments being received in cash.

Less: Calls unpaid:

Add: Forfeited shares amount originally paid up.

Companies can issue only two types of shares, namely, equity shares and preference shares. Accordingly, share capital of a company is comprised of only equity share capital and preference share capital (section 86 of the Companies Act). Preference share capital of a company limited by shares means the share capital that carries preferential right as regards dividend as well as repayment of capital including premium, if any, on winding up.

It will be deemed to be preference share capital although there is a right to participate in surplus as regards dividends or repayment of capital on winding up in addition to the preferential right as regards dividend/ repayment of capital on winding up (section 85 of the Companies Act). Equity share capital means all share capital which are not preference share capital.

A company can alter its share capital by (a) issuing new shares, (b) consolidating and dividing all or any of its share capital into shares of larger amount, (c) converting all or any of the fully paid up shares into stock and reconverting stock into fully paid up shares of any denomination, (d) cancelling shares (section 94 of the Companies Act).

In case of issuance of bonus shares, details to be given for shares held (i) by directors, and (ii) by others. Sources from which bonus shares are issued should be indicated. It may be from free reserves, realised capital profit (excluding revaluation reserve which is not realised capital profit) or from share premium account balance.

Particulars of different class of preference share and terms of redemption or conversion of redeemable preference shares, if any, are to be given.

Particulars of option, if any, on unissued share capital are to be given. The Statement on Auditing Practices (Third Edition, ICAI) explains that an option on shares arises when a person has acquired a right under an agreement with the company to subscribe for shares in the company, if he so chooses.

Such options generally arises under the following circumstances:

i. Under promoter’s agreement, subsequently ratified by the company;

ii. Collaboration agreements;

iii. Loan agreements, debenture deeds;

iv. Agreements to convert preference shares into equity shares;

v. Other contracts, such as for the supply of capital goods and/or other merchan­dise.

In the case of subsidiary company, disclosure is required about the number of shares held by its holding company, or ultimate holding company and its subsidiaries.

Any profit on reissue of forfeited shares should be transferred to capital reserve.

Allotment of shares in discharge of genuine debt should not be considered as shares issued in pursuance of contract without payment being received in cash (DCA letter No. 8/32 (75)/77-CLB dated 13-3-1978).

Until the allotment is made any amount received by the company against issue of shares should not be shown as “Subscribed Capital”. Statement of Auditing Practices,(issued by the ICAI), suggests that share application moneys and calls received in advance which are expected to be transferred to Share Capital account in due course should be, except two situations, shown between “Share Capital” and “Reserves and Surplus”.

Two exceptions are:

(a) Invalid or revoked applications, and

(b) Excess application money received due to over subscriptions which should be shown under the head “Current Liabilities”.

Any refunds due against the rejected share applications (fully/wholly) should be shown under the head “Current Liabilities and Provisions”.

Any unpaid amount on shares subscribed by the subscribers to Memorandum should be considered as “Subscribed and paid-up capital”. Details of the amount due should be disclosed by way of notes.

Proposed increase in share capital arising out of agreed conversion of debentures/ bonds/loans should be disclosed indicating the proposed change in share capital. This will improve the transparency. By this the users of accounts would be able to understand the proposed change in capital structure of the company and effect thereof on the Earnings Per Share.

Share Suspense Account:

Sometimes the companies to issue shares to vendor against acquisition of tangible fixed assets or intangibles like technical know-how and also in a scheme of amalgam­ation. It is common practice of the acquiring company/amalgamated company to issue shares to discharge the purchase consideration. It may so happen that although the company acquired the assets but the formalities of share issue was not complete on the Balance Sheet date.

Under the circumstance, it is an appropriate practice to present the shares to be issued under a separate heading “Share Suspense Account” indicating the number of shares to be issued. Details about the assets acquired, the purchase consideration and the agreed share premium should be disclosed by way of notes.

Share suspense account should indicate only the face value of shares. Premium portion should be included under the Reserves and Surplus as Share Premium Suspense Account.

If the shares are agreed to be issued on or before the Balance Sheet date, but actually issued after the Balance Sheet before the Board of Directors signed the Financial Statements, it is necessary to include such share issue in the share capital and share premium. This share issue is of the nature of post balance sheet event, condition of which was in existence as on the balance sheet date.

Expert Advisory Committee of the ICAI was of the opinion that such adjustment would not be necessary, because it would not materially affect the assets and liabilities, being the shares to be issued had already been indicated in the Share Suspense Account. It seems that this Opinion is not in conformity of the requirements.  

Capital reduction:

A company limited by shares or a company limited by guarantee having share capital may reduce capital subject to confirmation of the Court. It has to adopt a special resolution for reduction of capital.

Reasons for capital reduction may be:

(i) To reduce its liability on unpaid share capital,

(ii) To cancel share capital, value of which is lost,

(iii) To reduce the share capital which is in excess of the need (section 100 of the Companies Act).

The Court may order to add to the name of the company the words “and reduced”. Till the expiration of the period specified in the order of the Court, these words are deemed to be part of the name of the company.

Where a sum has been written off from the value of the fixed assets in the process of capital reduction, it is necessary to show the amount of reduction made in each balance sheet for the first five years. Subsequent to reduction, the reduced figure of the fixed asset should be used in place of original cost.

There is no special requirement for presentation of share capital after capital reduction. However, it seems necessary to give note indicating the details of capital reduction and adjustment in the value of assets, losses and share capital for transparency and that note should continue for a period of five financial years since the financial year in which the capital is reduced.

Redemption of redeemable preference shares:

A company can issue redeemable preference shares which are redeemable within a period of ten years from the date of issue (section 80 of the Companies Act). Only fully paid up preference shares can be redeemed. It is required to redeem such shares out of profits of the company otherwise available for dividend. These shares can also be redeemed out of fresh issue of shares. Premium payable on redemption of preference shares can be paid out of profit/free reserves or out of share premium account.

A company can issue new shares against the preference shares redeemed or to be redeemed within one month.

A Capital Redemption Reserve is to be created if the redeemable preference shares are redeemed out of Profit and Loss Account balance or balance of free reserve. The Capital Redemption Reserve can be utilised for issuing fully paid up bonus shares to the extent of unissued share capital of the company.

Accordingly, it seems necessary to disclose by way note the particulars as regards redemption of redeemable preference shares of the company.


Presently, many innovative debt instruments have emerged in the capital market. Many such debt instruments include convertible clauses.

If a company issues fully/partly convertible debt instruments, it seems necessary to disclose by way note the particulars of the conversion and effect of the convertibles in the future capital structure of the company for transparency.

Reserves and surplus:

Reserves are classified into:

(i) Revenue reserve and

(ii) Capital reserve. Guidance Note on Terms Used in Financial Statements issued by the ICAI defines reserve as the portion of earnings, receipts or other surplus of an enterprise (whether capital or revenue) appropriated by the management for a general or specific purpose other than a provision for depreciation or diminution in the value of fixed assets or for a known liability. The reserves are primarily of two types: capital reserve and revenue reserve.

Capital reserve is a reserve which is not available for distribution of dividend. Revenue reserve is any reserve other than capital reserve.

Profit on sale of fixed assets and investments are considered as revenue reserve since such profit is credited to Profit and Loss Account.

ICAI Guidance Note on Terms Used in Financial Statements defines “surplus” as the credit balance in the Profit and Loss statement after providing for proposed appro­priations, e.g. dividend or reserves.

Part III of the Schedule VI to the Companies Act makes distinction between reserves and provisions. Provision means any amount written off or retained by way of providing for depreciation, renewals or diminution in the value of assets, or retained by way of providing for any known liability of which amount cannot be determined with accuracy. To the contrary, reserve excludes any amount written off or retained by way of providing for depreciation or diminution in value of assets or retained by way of providing for any known liability.

Classification reserves and surplus as given in the horizontal form is as follows:

Reserves and Surplus:

1. Capital Reserve

2. Capital Redemption Reserve

3. Share Premium Account

4. Other Reserves specifying the nature of each reserve and the amount in respect thereof.

Less: Debit balance in Profit and Loss Account, if any

5. Surplus, i.e. balance in profit and loss account after providing for proposed allocations, namely,—

Dividend, bonus or reserves

6. Proposed additions to reserves

7. Sinking Funds

i. Additions and deductions since last balance sheet are to be shown under each head of Reserves and Surplus.

ii. Details are to be given as regards the utilisation of the balance of the share premium account. The manner in which the balance of the share premium account is to be utilised is specified in section 78 of the Companies Act.

The balance of share premium account can be used:

(i) In paying up unissued shares of the company as fully paid up bonus shares,

(ii) In writing off the preliminary expenses,

(iii) In writing of the balance of commission/dis­count allowed/paid on issue of shares/debentures,

(iv) In providing for the premium payable on the redemption of preference shares.

iii. Any debit balance of profit and loss account should be deducted from the unspecified reserves. In absence of any balance in any of the unspecified reserve, such debit balance should be shown in the asset side of the Balance Sheet.

iv. The word “fund” should be used after a reserve only if there is a specific investments against such reserve. Against the “sinking fund” there must be specific investments.

v. Any excess of provision should be treated as reserve.

vi. Any capital profit made on sale of fixed assets and investments is credited to profit and loss account.

The Statement on Auditing Practices (Third Edition) states that a capital profit is made when any fixed asset is sold for an amount in excess of its cost.

Such capital profit may not be distributed unless:

i. The Articles of the company permit such distribution;

ii. It has been realised in cash;

iii. The directors are satisfied that after distribution of such profit, net aggregate value of the remaining assets would not be less than book value.

Some other important reserves are- tax reserve, subsidy reserve, revaluation reserve, amalgamation reserve and debenture redemption reserve. These reserves are dis­cussed below briefly:

i. Tax Reserves:

Reserves like investment allowance reserve, development allowance reserve (for tea producing companies), foreign project reserve/export incentive reserve, foreign exchange earning reserve, etc. are created as per the Income-tax Act and these reserves maintained for a specified period as per the requirements of that Act. So long the specified period is not over, such reserve cannot be treated as free reserve for the purpose distribution as divided without additional tax liability. If any transfer is taken from such reserve without complying the requirement of the Income-tax Act, it is necessary to make required tax provision.

ii. Subsidy Reserve:

If Government grants are received against capital assets, it is possible to follow approach for accounting purpose. Under the gross approach, the fixed assets are shown at cost and the related grants/subsidy is transferred to Subsidy Reserve.

iii. Revaluation Reserve:

In case of revaluation of fixed assets if there is a net gain, such gain is transferred to the Revaluation Reserve. It is not permissible to issue bonus shares out of revaluation Reserve. It is a common practice to take transfer from the Revaluation Reserve for the additional depreciation charge arising out of revalua­tion. However, it is not prudent to take such transfer because it would frustrate the very purpose of revaluation.

iv. Amalgamation Reserve:

In case of amalgamation in the nature of purchase if the acquiring company pays less amount in terms of purchase consideration as com­pared to the net assets taken over, it is required to transfer such surplus to Amalgamation Reserve.

v. Debenture Redemption Reserve:

It is a reserve created for redemption of debentures at a future date. It is necessary create Debenture Redemption Reserve (DRR) in terms of Section N of the SEBI Guidelines for Disclosure and Investor Protection (issued on 11-6-1992). DRR may be created in equal annual instalments or for a higher amount in any year. When DRR is created, it is necessary to disclose the amount and nature of DRR by way of notes.

vi. Secured Loans:

Loans secured wholly or partly against an asset is secured loan (ICAI Guidance Note on Terms used in Financial Statement). Where the value of the security falls below the amount of loan, the loan becomes partly secured. Unsecured portion of that loan should be classified under the head “Unsecured Creditors”.

Secured loans are classified as follows:

Secured Loans:

1. Debentures

2. Loans and Advances from banks

3. Loans and Advances from Subsidiaries

4. Other loans and advance.s

Loans and Advances from Banks:

Secured overdraft from banks (like overdrafts secured by hypothecation of stores, stock-in-trade and book debts and guaranteed by other company) is classified under the sub-head “Loans and Advances from Bank”.

Other examples of Loans and Advances from Banks include:

a) Cash/Export Packing Credit

b) Term Loans under NABARD Refinance Scheme

c) Term Loan for Capital Expenditure

d) Term Loan under Equipment Finance/Refinance Scheme

e) Foreign Currency term loan/Foreign Currency Loan under ERS

f) Cash Credit

g) Bridge Loans (Pending creation of securities)

h) Demand Loan

i) Corporate Loan

j) IBRD Export Loan

k) Sales Tax Loan

l) Pre-shipment, Post-shipment, Export Bills Discounting facilities

m) Defer Payment Arrangements for purchase of plant and machinery (if secured against fixed assets)

i. Interest accrued on loans should be included under the appropriate sub­head under the head “Secured Loans”. For example, interest accrued on loans due to subsidiary should be added to that account. Funded interest, Le., interest due but deferred is also classified under this sub-head.

ii. Loans from directors and managers should be shown separately.

iii. If the loans are guaranteed by the directors or managers, it is required to mention the guarantee and the amount of loan under each head.

iv. Nature of security is to be specified.

v. Terms of redemption or conversion of debentures should be stated and earliest redemption date is to be mentioned. Particulars of any redeemed debenture which the company has the power to issue should be given.

vi. Where any of the debentures of the company are held by a nominee or a trustee for the company, the nominal amount of debentures and the amount at which they are stated in the Balance Sheet of the company should be disclosed.

vii. If the assets are mortgaged in favour of a third party who guaranteed the loan, such loan should be classified as secured loan. The fact of mortgaging the assets in favour of guarantor (instead of favouring the lender) should be disclosed.

viii. Short-term secured loans should be separately disclosed. However, there is no legal requirement to this effect.

ix. Future instalments payable under hire purchase agreement should be shown under secured loans as a separate item.

x. Instalments falling due within 12 months should be disclosed within parentheses against the relevant item.

xi. Debentures guaranteed by Government is not secured loan. Because no asset is mortgaged against that loan.

xii. Application money for debenture is not classified as debenture; it should be classified as short-term deposits.

vii. Unsecured Loans:

Unsecured loans are those loans which are not secured by mortgage of assets. Unsecured portion of the partly secured loan should be classified as unsecured loans.

Unsecured loans are classified as follows:

Unsecured Loans:

1. Fixed deposits

2. Loans and advances from subsidiaries

3. Short term loans and advances

a. From banks

b. From others

i. The interest accrued on secured loans, interest accrued on unsecured loans is to be classified under the relevant head.

ii. Loans from directors and managers should be disclosed separately.

iii. If the loans are guaranteed by the directors and managers, it is required to mention the guarantee and amount of loan guaranteed under each head.

iv. Short term loans and advances are those which are due for not more than one year as on the Balance Sheet date. Short term trade deposits, short term deposits from staff, fall under this category.

v. Fixed deposits from shareholders and public fall under the sub-head fixed deposits. Inter-corporate unsecured deposits also fall under this sub-head.

vi. Commercial paper is classified as short term loans. Maximum amount raised at any time during the year is required to be disclosed along with the outstanding amount of commercial paper.

Disclosure may be as follows:

a) Commercial paper (Maximum amount raised at any time during the year is Rs) (Previous year Rs)

Application money against debentures should be classified as short term advance:

b) Unsecured foreign currency convertible bonds/any other unsecured bonds do not fall directly under any of the categories mentioned under the head unsecured loans. These unsecured bonds are sometimes shown above the fixed deposit.

c) Defer payment liabilities for purchase of fixed assets should be classi­fied as unsecured creditors, if not secured against any asset. Any amount falling due within twelve months should be classified as current liability. Any increase in the bill because of excise duty assess­ment, foreign currency fluctuation, etc., should be added to the liability.

However, there is a practice of showing defer payment liabilities as secured/unsecured creditors indicating the amount payable within one year.

d) Deferred sales tax as per sales tax deferral scheme of the State Government is considered as unsecured loans. Similarly, sales tax deferral loan is considered as unsecured loan.

Current Liabilities:

ICAI Guidance Note on Terms used in Financial Statements defines “current liability” as liability including loans, deposits and bank overdraft which falls due for payment in a relatively short period, not more than twelve months. However, short term secured and unsecured loans are not considered as current liability – those loans are to be classified under the appropriate head. To the contrary, interest accrued but not due on long term loans is required to be classified as current liability.

Current liabilities are classified as follows:

Current Liabilities and Provisions:

Current Liabilities:

1. Acceptances

2. Sundry Creditors

3. Subsidiaries Company

4. Advance payments and unexpired discounts for the portion for which value has still to be given, e.g., in the case of the following classes of companies—

Newspaper, Fire Insurance, theatres, clubs, banking, and steamship companies, etc.

5. Unclaimed dividend

6. Other liabilities (if any)

7. Interest accrued but not due on loans

ICAI Guidance Note on Terms Used in Financial Statements defines the term “Current Liability” as liability including loans, deposits and bank overdraft which falls due for payment in a relatively short period, normally not more than twelve months. Although this is a commonly used meaning assigned to current liability, in the Schedule VI this meaning is not strictly followed.

Short term loans and advances are included under the head “Unsecured Creditors”. Interest accrued and outstanding is required to be classified as Secured or Unsecured Loans depending upon the nature of loans for which the interest is outstanding. To the contrary, interest accrued on long term loans may not be due within a period of 12 months because of agreed moratorium in interest payment, still it is a current liability.

i. Acceptances:

ICAI Guidance Note on terms used in Financial Statements defines “Acceptances” as the drawee’s signed assent on bill of exchange, to the order of the drawer. This term is also used to describe a bill of exchange that has been accepted. Thus the bills payable including promissory notes issued by the company should fall under this category.

ii. Sundry Creditors:

Sundry creditors are represented by amount owned by an enterprise on account of goods purchased or services received or in respect of contractual obligations. Sundry Creditors are also called as accounts payable or trade creditors. In the common parlance, creditors are classified as trade creditors and expense creditors.

Expense creditors include outstanding payments on account of expenses like:

(i) Rent, rates and taxes,

(ii) Electricity, telephone, telex and fax,

(iii) Wages, salaries and other dues to employees,

(iv) Office stationery, etc.

However, this distinction is not made in the Schedule VI. So all the outstanding payments on account of goods and services including those are commonly understood as expense creditors should be classified as trade creditors.

Sundry creditors include all liabilities arising out of trading activities of the company and any other current liabilities fall under residuary head.

Dues to employees should be classified as Trade Creditors since there is no other specified head.

Bank overdraft can be included under this sub-head.

iii. Subsidiary Company:

Any outstanding to subsidiary company on current account for purchase of goods or services, any advance received from subsidiary for supply of goods and services, and any other short term due to subsidiaries which are not in the nature of loans should be classified under this sub-head.

iv. Advance Payments and Unexpired Discount:

Any payments received in advance against which goods to be supplied or services to be rendered in the short run (ie. within 12 months), like advances from customers, dealers, etc., fall under this category.

In case fees or subscriptions are collected periodically which does not match with the financial year of the company, a portion of the fees/subscription remains unexpired against which services are to be rendered in the next period. Such unexpired amount of fees/subscription should be classified under this sub-head on time ratio.

Some companies offer deposit scheme. As per the deposit scheme a fixed amount is to be kept deposited with the company. So long the deposit remains with the company, the depositor is entitled to get free services. If the deposit scheme offer long term services (i.e. services for more than 12 months), it should be classified as “Unsecured Loan”, whereas short term deposits can be classified under this sub-head.

v. Unclaimed Dividend:

The ICAI Guidance Note on Terms used in Financial Statements defines unclaimed dividend as “Dividend which has been declared by a corporate enterprise and a warrant or a cheque in respect whereof has been despatched but has not been encashed by the shareholder concerned”. Un­claimed dividend is classified as current liability. The term unpaid dividend is defined as “Dividend which has been declared by a corporate enterprise but has not been paid, or the warrant or cheque in respect whereof has not been despatched”.

Section 205A of the Companies Act explains that “Dividend which remains unpaid” means any dividend warrant in respect of thereof has not been encashed or which has otherwise not been paid or claimed. So both “Unclaimed Dividend” and “Unpaid Dividend”, as distinguished in the commercial parlance, should be classified as “Unclaimed Dividend” for the purpose of balance sheet.

Dividend proposed by the directors should be provided for although it is a post- balance sheet event. “Contingencies and Events Occurring after the Balance Sheet Date” suggests that dividends stated to be in respect of the period covered by the financial statements which are proposed or declared by the enterprise after the balance sheet date but before approval of the financial statements, should be adjusted.

It is a common practice to appropriate for the proposed dividend in appropriation section of the Profit and Loss Account. Proposed dividend is shown as a provision.

As soon as the dividend is declared, Le. dividend proposal is approved in the general meeting of the shareholders, it is necessary to transfer proposed dividend to Dividend Payable Account:—

On payment of the dividend by issuing cheques or warrants the Dividend Payable Account is closed:—

On reconciliation of the dividend warrants, if it is found that all these are realised by the shareholders, Dividend Warrant Account is closed by debiting Bank Account:—

In case any warrant remains unrealised, that portion is transferred to Unclaimed Dividend Account:—

In case the cheques were issued, unrealised cheques at the yearend is credited to Unclaimed Dividend Account:—

Section 205A of the Companies Act, 1956 requires that dividend is to be paid within forty-two days from the date of declaration. In case any dividend remains unpaid/unclaimed within seven days from the day of expiry of forty-two days, such unpaid/ unclaimed dividend is to be deposited in a separate account maintained in any Scheduled Bank. That separate account is to be called as “Unpaid Dividend Account of Company Ltd /Company Pvt. Ltd”.

vi. Provisions:

The term “Provision” is defined as an amount written off or retained by way of providing for depreciation or diminution in value of assets or retained by way of providing for any known liability the amount of which cannot be determined with substantial accuracy.

Provisions are classified for the purpose of Schedule VI as follows:—

a) Provision for taxation

b) Proposed Dividends

c) For Contingencies

d) For Provident fund scheme

e) For insurance, pension and similar staff benefit scheme

f) Other provision.

a. Provision for Taxation:

Some companies adjust advance tax paid against provision for taxation. Others present total provision for taxation under the sub-head “Provision” and the advance tax under the head “Current Assets, Loans and Advances”.

Provision for provident fund schemes and other retirement benefit schemes:

Employers’ contribution for provident funds, gratuity, pension and other retirement benefit schemes should be provided for on accrual basis.

b. Provision for Contingencies:

“Contingencies and events occurring after the balance sheet date” issued by the ICAI has defined the term “contingency” as a condition or situation, the ultimate outcome of which, gain or loss, will be known or determined only on the occurrence, or non-occurrence of one or more future events.

Paras 10 and 11 of AS-4 (Revised) suggest to provide for the contingencies by way of charge to Profit and Loss Account if (i) it is probable that future events will confirm, after taking into account the probable recovery, that an asset has been impaired or a liability has been incurred; (ii) a reasonable estimate of the amount can be made. Otherwise the existence of contingent liabilities should only be disclosed.

Part of the Schedule VI requires disclosure of some contingencies by way of footnote in the Balance Sheet.

c. Provision for Loss in the Value of Investments:

Sometimes market value investments of the permanent nature declines. If such decline in the market value is not of the temporary nature, there is a need for providing for such loss. This includes a fall in the market price of the investments in subsidiaries and other group companies.

However, there is no need for providing for the loss sustained by the subsidiary.

d. Other Provisions:

Sometimes one company holds shares and securities of mutual funds created by it under trust as Principal Trustee and declares itself as Principal Trustee. It is liable to create adequate provision for loss caused to mutual funds for any breach of trust/negligence on its part.

It is also required to create:

a) Provision for liability arising out of any guarantee given by the company

b) For liability arising out of product warranty

c) For the contingencies in long term construction contracts when revenue is recognised under percentage of completion method, etc.

Provisions for bad and doubtful debts are deducted from sundry debtors.

Current Assets:

Cash and other assets that are expected to be converted into cash or consumed in the production of goods or rendering of services in the normal course of business are defined as “current assets”.

As per Part I of the Schedule VI to the Companies Act, 1956, current assets are classified as—

Classification of Current Assets:

1. Interest accrued on Investments

2. Stores and spares

3. Loose Tools

4. Stock-in-trade

5. Work-in-Progress

6. Sundry debtors:

a. Debts outstanding for a period of six months;

b. Other debts

Less: Provision

7A. Cash balance on hand

7B. Banks balances:

a. With Scheduled banks; and

b. With others

The basic principle of valuing current assets is the lower of cost and net realised value. Interest accrued on investments:

Interest accrued on investments is considered as a separate sub-head. This implies that both “interest accrued and due” and “interest accrued but not due” should be classified under this sub-head.

It is not clear why only accrued interest should be separately classified. This should be applicable to “Accrued income from investments” including both interest and dividend.

In the vertical format there is a residuary sub-head “Other Current Assets”. It is believed that as per the present disclosure requirements, any other income from investments except interest accrued (both due and not due) should be classified under that residuary sub-head.


Inventories are classified as:

(i) Stores and spare parts,

(ii) Loose Tools,

(iii) Stock-in- trade, and

(iv) Work-in-Progress.

Stock-in-trade consists of raw material stock and finished stock.

Sundry Debtors:

As regards sundry debtors the basic classification is based on age-wise analysis, i.e. whether they are outstanding for six months or more than six months.

Further disclosure is based on security and recoverability.

In regard to sundry debtors particulars to be given separately of:

a) Debts considered good in respect of which the company is fully secured;

b) Debts considered good for which the company holds no security other than the debtor’s personal security;

c) Debts considered doubtful or bad.

Disclosure of related party debts and maximum amount outstanding at any time during the year is another important aspect of debt disclosure.

It is required to disclose:

i. Debts due by directors or other officers of the company or any of them either jointly or severally with any other person;

Debts due by firms in which any director is a partner;

Debts due by a private company in which a director is a director/member.

i. Maximum amount due by directors or other officers of the company at any time during the year is to be shown by way of note;

ii. Debts due from other companies under the same management within the meaning of section 370(1B) are to be disclosed with name of those companies.

It is required to deduct provision for bad and doubtful debts from the sundry debtors. The provision should not exceed the amount considered doubtful or bad. Any surplus of provision already created is to be shown under the head “Reserves and Surplus” under a separate sub-heading “Reserve for doubtful or bad debts”. Statement on Auditing Practices (Para 7.12, 3rd Edn.) specifies certain indicators for identifying doubtful and uncollected debts.

These are:

i. The terms of credit have been continuously ignored;

ii. Payments are being made on account but the balance is continuously increas­ing;

iii. And old bill has been partly paid (or not paid), while later bills have been fully settled;

iv. Customer who formerly paid cash now accepts bills of exchange;

v. Old debts handed over to lawyers for filing suit;

vi. the presence of discouraging correspondence;

vii amounts due from former employees;

viii. Collection is barred by statute of limitation;

ix. debtors have either become insolvent or gone into liquidation or disappeared or have gone out of business or have deceased.

The amount to be shown under sundry debtors shall include the amounts due in respect of goods sold or services rendered or in respect of other contractual obligations but shall not include the amounts which are in the nature of loans and advances.

Bank Balances:

Bank balances maintained are primarily classified into:

(a) Balance with scheduled bank, and

(b) Other banks.

Idea behind this disclosure is to indicate safety of funds as well as to indicate the related party interest involved, if any, in maintaining such balances with a non-scheduled banker.

It is necessary to give particulars about:

i. Current account, call account and deposit account balances with scheduled banks – mention of the names of the scheduled banker is not necessary;

ii. Current account, call account and deposit account balances with banks other than scheduled bank indicating name of that bank(s);

iii. Nature of interest of the directors or their relatives in the non-scheduled banks wherein bank balances are maintained.

Loans and Advances:

Although the loans and advances may not be in the nature of current assets, yet in the Part I of the Schedule VI they are merged with current assets by connective “Current Assets, Loans and Advances”.

Loans and advances are classified as:

i. Advances and loans to subsidiaries;

ii. Advances and loans to partnership firms in which the company or its subsidiary is a partner.

iii. Bills of exchange.

iv. Advances recoverable in cash or kind or for value to be received, ie. rates, taxes, insurance, etc.

v. Balance with customers, port trust, etc. (where payable on demand)

a) Disclosure requirements of loans and advances are similar to sundry debtors :

b) Loans and advances are classified into: (i) due for more than six months and (ii) other dues.

c) Provision for bad and doubtful debts should be deducted from the balance of loans and advances. Provision should not exceed the amount of loans and advances considered doubtful or bad.

d) Loans and advances to directors, or officers of the company, or to any of them either jointly or severally with any other person should be disclosed.

e) Loans and advances to firms in which any director of the company is partner, or to any private company in which any director of the company is a director or member should be disclosed.

f) The maximum amount due by directors or other officers of the company during the year should be disclosed.

Statement on Amendments to Schedule VI, ICAI clarifies that loans and advances to the firms in which any company under the same management is partner is not required to be disclosed.

Advance paid for purchase of fixed assets and other advances on the capital work- in-Progress is required to be shown under the head “Loans and Advances”. However, many companies show such advances as Capital Work-in-Progress.

The disadvantage of the horizontal form is that all the item-wise details are to be shown in the Balance Sheet itself that makes the Balance Sheet bit lengthy and clumsy. Figures of paise in addition to the rupees should be given in this form, of course, if desired.

Any information which cannot be conveniently presented in the Balance Sheet that can be given in the form of Schedules. This is recommended when the items are numerous. Such schedules should form integral part of the Balance Sheet.

Now-a-days almost all the listed companies (those are listed in the stock exchanges) prepare Balance Sheet in a vertical form.

ii. Vertical Form of Balance Sheet:

Vertical Form -Style of presentation of the Balance Sheet elements are as follows:

Balance Sheet

All the necessary details under each item as required in the Horizontal form should be given in separate Schedules. All the Schedules, account­ing policies and notes should form an integral part of the balance sheet. Figures in the Balance Sheet may be rounded off to the nearest ‘000 or ’00 as may be convenient or may be expressed in the decimal of thousands. Even the figures may be rounded of to the nearest of lacs or crores depending upon the size of the company on approval of the Central Government.

Essay # 3. Description of Various Balance Sheet Items:

Vertical format of balance sheet helps to present information about assets, liabilities and equity in precise manner. Under this format balance sheet information is classi­fied into sources of funds and applications of funds. As per the basic principles of double entry book keeping, sources should always be equal to applications.

Two major sources of funds are shareholders’ funds and loan funds. Shareholders funds are further sub-classified into two categories, namely, share capital and reserve and surplus. Share capital implies equity share capital and preference share capital. Reserves and surplus imply accu­mulated revenue profit of the company and capital profit like share premium and revaluation reserve, Loan funds may come from secured loans which are obtained against security of asset(s) and unsecured loans.

Three major application of funds are:

(i) Tangible and intangibles fixed assets titled as gross block,

(ii) Investments, and

(iii) Net current assets.

The caption “gross block” covers all types of fixed assets used in the business. They include tangible assets like land, building, plant and machinery, furniture and fixture, vehicles and intangibles having long live like patents, trade mark, copyrights, etc. Generally, fixed assets are shown at gross value and then accumulated depreciation is deducted therefrom and net block is also presented.

Assets shown under the head “Investments” are investments outside the business. Whenever a company has some free cash it can either tempo­rarily invest outside the business as short term investments. Companies can also invest money in subsidiaries, joint ventures and other group companies and also in different types organizations including in Govern­ment securities.

Finally, no business can run simply with fixed asset. It needs working assets like inventories, debtors, cash. These are called current assets. Also a business needs to give various types of advances in the course of business like advances to employees, advance tax, advance to suppliers, etc. These are clubbed with current assets and shown together as “Current Assets, Loans and Advances”.

Moreover, in the course of business, an enterprise incurs certain working liabilities like goods and services purchased but not paid (they are called trade creditors for goods purchased on credit, and expense creditors for expense incurred but not paid). These are also termed as current liabilities. In addition, an enterprise has to provide for certain known liabilities which is certain to occur in future.

Examples are retirement benefits like gratuity payable to employees on retirement, warranty claim to be paid to customers for non-satisfactory product/service, tax liability which is to be assessed in the future, dividend which has been planned to be paid but actually to be declared by the company in its annual general meeting in future. These are called provisions. These items are presented together as “Current Liabilities and Provisions”. Net Current Assets are net of Current Assets, Loans and Advances over Current Liabilities and Provisions.

A company incurs certain expenses like preliminary expenses (which is incurred at the time of formation of the company by way of legal fees, registration charges, etc.), share issue expenses (incurred for issuing equity/preference shares), debenture issue expenses (incurred for issu­ing debentures or taking loans by way of legal fees, documentation charges, etc.) and so on.

These expenses are written off over a period of time against profit earned by the company as these are capital expendi­ture by nature. They are treated as miscellaneous expenditure. Miscel­laneous expenditure to the extent not written off is presented in the balance sheet as applications of funds.

If a company suffers loss, that is first adjusted against its accumulated profit (other than capital profit like share premium and revaluation reserve). Any unadjusted loss is shown as an application of funds.

Illustration 1:

In this section we shall know more about a company balance sheet. Let us take up Balance Sheet of Reliance Industries Ltd. as on 31-3-2003 for discussion.

Presented below is the Balance Sheet of Reliance Industries Ltd. as at 31-3-2003:

Reliance Industries Limited:

Balance Sheet as at 31st March, 2003: 

Reliance Industrie Limited

Once you go through the above balance sheet, you will be in a position to answer the following questions:

(i) What does the schedule reference means?

It means that details of a particular item is available in the schedule. In case details were presented on the face of the balance sheet, it would have lost preciseness.

(ii) How much is the share capital of the company? Is there any change in share capital ? If yes, so how much?

Share capital of Reliance Industries is 1395.92 cr. which is 342.26 cr. higher than last year.

(iii) What is the composition of its share capital?

To understand the composition of the share capital of Reliance Indus­tries, we need to read Schedule A of the Balance sheet which provides details about the share capital.

Schedule 'A'


1. Of the above Equity Shares:

(a) 481770552 (481770552) Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.

(b) 523198799 (180578290) Shares were allotted pursuant to Schemes of Amalgamation without payments being received in cash and includes 10,46,60,154 Shares allotted to the Petro­leum Trust, the sole beneficiary of which is Reliance Industrial Investments and Holdings Limited, a wholly owned subsidiary of the Company.

(c) 330427345 (330427345) Shares were allotted on conversion/ surrender of Debentures and bonds, conversion of Term Loans, exercise of warrants against Global Depository Shares and re-issue of forfeited equity shares.

2. The Company has reserved issuance of 5, 26, 87,851 Equity Shares of Rs.10 each for offering to employees under Employees Stock Option Scheme (ESOP).

3. The Company during the year has issued and redeemed Preference Shares aggregating to Rs.400.00 crore, at par.

4. The Authorised share capital has increased to Rs.3, 000 crore consisting of 250,00,00,000 equity shares of Rs.10 each and 50,00,00,000 Preference Shares of Rs.10 each in terms of the Scheme of Amalgamation sanctioned by order dated 7th June, 2002 of the Hon’ble High Court of Bombay and the order dated 13th September, 2002 of the Hon’ble High Court of Gujarat.


Authorized capital of Reliance Industries consists of two types of shares equity and preference. It had increased authorized capital during 2002-03 as it had to issue new shares in pursuant to scheme of amalgamation of the company with Reliance Petroleum Ltd.

The company did not increase its authorized capital limit as regards preference share capital. It may be mentioned that because of financing disadvantage companies now-a-days do not issue preference share capital. Know more about financial disadvantage of preference share capital in author’s Corporate Finance book.

The company did not issue any bonus shares during the year.

The issued new equity to the extent of 342620509 shares of Rs.10 each of which 523158799 shares are for amalgamation. It is interesting to note that 20% of such shares (10, 46, 60,1 54) are held by Petroleum trust for Reliance Industries. This must be received for holding of Reliance Industries in Reliance Petroleum.

(iv) Is there any cash issue of equity shares during the year 2002-03?

A reconciliation of equity shares account explains the fact.

We may put the data given in Schedule A into the following Table:

To reconcile the opening balance of equity with the closing balance, it appears that there was new equity issue for cash. How do you verify the information ? For verification you have to check cash flow statement of Reliance Industries.

(v) What are the constituent elements of Reserves and Surplus of Reliance Industries.

Constituent elements of the company’s Reserves and Surplus are:

(a) Revaluation Reserve,

(b) Capital Reserve,

(c) Capital Redemption Reserve,

(d) Securities Premium Account,

(e) Debenture Redemption Reserve,

(f) Investment Allowance (Utilized) Reserve,

(g) Taxation Re­serve,

(h) General Reserve and

(i) Profit and Loss Account.

Schedule 'B'

(vi) How was revaluation reserve created?

Revaluation reserve is created out of profit arising out of revaluation of fixed assets. From Schedule E you will know the source of revaluation reserve of Reliance Industries.

(f) Gross Block includes Rs.2, 735.81 crore (Previous year Rs.2, 738.50 crore) being the amount added on revaluation of Plant & Machinery as at 1-4-1997.

So it was created by revaluation of plant and machinery way back in 1997.

(vii) Why were the fixed assets revalued?

Fixed assets are generally carried in the Balance Sheet at their historical costs (this means at value that reflects their original purchase price). Current market value of such fixed assets may be more or less than their historical costs. When there is major change in the current value of fixed assets from their historical costs, they are revalued to reflect a true of view of the value of fixed assets in the Balance Sheet.

(viii) Explain Capital Reserve of Reliance Industries:

From Schedule J other income, it appears that Rs.4.95 cr. was earned by the company on account discount on buy back of shares/redemption of debentures. This was transferred to capital reserve as this is item of capital profit. Schedule B explains that profit arising out of amalgam­ation was 0.65 cr. This means that Reliance Industries paid Rs.0.65 cr. less than the fair value of net assets of Reliance Petroleum.

(ix) What is capital redemption reserve? Why was capital redemption reserve of Reliance Industries Ltd. Increased by Rs.400 cr. during 2002- 03?

Capital Redemption Reserve:

This represents reserve utilized for redemption of capital. In case equity shares are brought back or prefer­ence shares are redeemed out of balance of general reserve and/or profit or loss account, to the extent such balance get utilized. To communicate this message through balance sheet, amount used for capital redemption is transferred from general reserve and/or profit or loss account to capital redemption reserve.

Reliance Industries had redeemed its preference share capital Rs.400 cr.

(x) What is securities premium account? How is its balance created? How is such balance utilized? Explain the movement in securities premium account of Reliance Industries Ltd.? From this could you estimate the premium charged on new issue?

Securities premium account reflects premium earned on capital issue. This is created to account for premium earned on issue of shares and debentures/bonds. Reliance earned a substantial amount of premium from new issue arising out of amalgamation as well as cash issue. Of course, a small portion of such premium was used for redemption premium of debentures/bonds. A small fraction of share issue was not fully called up. The related portion of the premium also remained uncollected.

Premium per share = Increase share premium for new issue/new issue = Rs.10704.59 cr./34.26 cr. No. = Rs.342.43 (approx.)

(xi) What is debenture redemption reserve? Explain movement in this reserve of Reliance Industries.

It is a reserve created for redemption of debentures at a future date. It is necessary create Debenture Redemption Reserve (DRR) in terms of Section N of the SEBI Guidelines for Disclosure and Investors’ Protec­tion (issued on 11-6-1992). DRR may be created in equal annual instalments or for a higher amount in any year. When DRR is created, it is necessary to disclose the amount and nature of DRR by way of notes.

During 2001-02 Reliance’s DRR increased by virtue of amalgamation with Reliance Petroleum and also transfer from Profit and Loss Account. During the year 2002-03 transfer to DRR increased as in the post-merger situation its debentures balance also increased from 9013.06 cr. to Rs.10560.95 cr. (see Schedule C).

(xii) What is Investment Allowance (Utilized) Reserve? What did Reliance transferred a portion of the balance to P&L Account in 2001- 02?

This was created under section 32A of the Income-tax Act, 1961 in respect of eligible assets purchased by an assessee. Presently, this allowance has been withdrawn. It was applicable up to the assessment year 1990-91. The company was not allowed to utilize the balance standing in this reserve other than for the purpose of business for period of eight years.

Reliance Industries Ltd. utilized the amount of reserve on expiry of the eight year, period. Now it can write off the balance. The objective of transferring the balance to profit and loss account was intended for increasing the distributable profit.

(xiii) What is taxation reserve?

Reserve created out of excess tax provision. A company has to pay income-tax in advance instalments and it creates tax provision in profit and loss account. It may so happen that the company has created excess provision than required. It needs to transfer that excess provision to reserve. On the other hand, the company may create less tax provision than required. In such a case it may utilize the taxation reserve to cover the shortfall in provisioning.

(xiv) What is general reserve? Explain movement of general reserve of Reliance Industries.

This is an unspecified reserve of the company created out of profit. This is meant for future contingencies and growth.

The company transferred from general reserve on account of excess depreciation charge arising out:

(i) Change in depreciation method, and

(ii) Revaluation of plant and machinery.

(xv) Explain the constituent elements of secured loans of Reliance Industries Ltd. Are these short-term loans or long-term loans?

Schedule 'C'


(i) Reliance repaid term loans,

(ii) Its financing through debentures have been increased. Also it has increased working capital loans.

From balance sheet it is difficult to classify short-term and long-term loans.

(xvi) Explain movement in unsecured loans of Reliance Industries?

Schedule 'D'


There is increase in long-term unsecured loans.

(xvii) Explain comparative change in debt and equity of Reliance Industries.

Change in funds of the company in 2002-03 was due to increased profit. The company already provided for the new equity by way of Equity Suspense Account in 2001-02. Contribution of debt funds in change is 24.93%. As on 31-3-2002, debt constituted 40.44% of total funds. In view of the new profit, debt component got reduced.

(xviii) State different types of fixed assets presented by Reliance Industries. What is their relative position in 2001-02 and 2002-03? What is the proportion of net block to Gross Block? What does it signify? What is the rate of growth of fixed assets in terms of gross value and net value?

Own Assets:

a) Leasehold Land

b) Freehold Land

c) Development Rights/

d) Producing Properties

e) Buildings

f) Plant and Machinery

g) Electrical Installations

h) Equipments

i) Furniture and Fixtures

j) Vehicles

k) Ships

l) Aircrafts & Helicopters Jetties.

Gross block is 50552.99 cr. and net block is 32091.83 cr. The ratio is 63.48%. This implies 36.52% of the value of the fixed assets has been depreciated.

(xix) How much is the addition to plant and machinery?

Ans. Rs.3392.92 cr. This signifies 7.26% growth over gross block of 2001- 02. This means major portion of fixed asset growth of the company is in the form of plant and machinery.

(xx) What is capital work-in-progress? Explain investment made by Reliance Industries in capital work-in-progress.

Ans. Capital work in progress implies fixed assets under construction. The company incurred Rs.1994.44 cr. in capital work-in-progress,

Major components of Capital Work-in-Progress of Reliance Industries include:

(i) Rs.76.47 crore on account of pre-operative expenses. (Previous year Rs.64.86 crore).

(ii) Rs.133.97 crore on account of cost of construction materials at site. (Previous year Rs. 477.04 crore).

(iii) Rs.279.18 crore on account of advance against Capital Expendi­ture. (Previous year Rs.197.62 crore).

Fixed assets under construction is only 3.95% of gross block.

(xxii) Distinguish between long-term investments and current invest­ments. How much assets of Reliance Industries are in the form of investments? How much is the current investments? What is the major investments of Reliance Industries?

Ans: Current investments are investments held for a period not more than twelve months. This is meant for short-term parking of funds. Investments other than short-term investments are termed as long-term investments.

Investments of Reliance Industries increased substantially during 2002- 03. Its major investments is in Reliance Communication Infrastructure Ltd. Amounting to Rs.233.81 cr. In 2002 the company had also invested Rs.1600.02 cr. in the deep discount bonds of Reliance Communication Infrastructure Ltd.

Its short investments are mostly in Reliance Mutual Funds. Therefore, the company is over-exposed to intra-group investments.

(xxii) How much current assets did Reliance Industries maintain? Is there any major change?

Inventories increased during 2002-03. Interestingly, the major portion of such money was lying in the bank. It might so happen that amount of working capital loan raised during 2001-02 remained unutilized in that year.

(xxiii) What type of loans and advances did the company exposed to?

Ans: The major portion of the company’s loans and advances are towards advances to subsidiaries.

(xxiv) What are items of current liabilities in the Balance Sheet of Reliance Industries? How much of the current assets are covered by its current liabilities?

Ans. Various components of current liabilities of the company are – sundry creditors, liability for leased assets, unpaid dividend, accrued interest, unpaid call money on investments, unpaid matured debentures, etc. Companies current liabilities constitute a substantial portion of the current assets. % of current liabilities has increased from 65.84% to 84.78%. Of course, an important element of sundry creditors is due on capital account amounting to Rs.717.48 cr. Excluding this item % of current liabilities covers 78.37%.

(xxv) What are elements of provisions in the Balance Sheet of Reliance Industries Ltd.?

Ans. Proposed dividend including tax on dividend, provision for income- tax and wealth-tax, provision for retirement benefits like gratuity, leave encashment.

(xxvi) What constituted miscellaneous expenditure of Reliance Industries Ltd.? How much of such expenditure was written off during 2002-03?

Ans. It comprises of expenses relating to voluntary retirement of em­ployees. The company treated the expenditure as deferred revenue expenditure.

The company amortized Rs.45.71 cr. during 2002-03.

Essay # 4. Preparation of Balance Sheet from Trial Balance:

Now let us prepare Balance Sheet of XYZ Ltd. as on 31 March, 2002.

Illustration 2:

Prepare a Balance Sheet of XYZ Ltd. as on 31-3-2002.


Common Size Balance Sheet:

Absolute amount of sources and applications of funds so far pre­sented does not explain relative position of various elements of sources and applications over the period as sources and applications change over such period. For better comparison both sources and applications are put 100 and all elements are converted into percentage of sources/applications.

Given below in Illustration 3 balance sheet information of Asian Paints (India) Ltd. during 1997-2002. As you can observe that total changed over the periods. It is difficult to observe at a glance whether financing or application composition changed.

Try to find out the answer for the following queries:

i. Whether proportion of shareholders’ funds increased vis-a-vis loan funds?

ii. Whether proportion of fixed assets increased vis-a-vis current assets?

iii. Whether proportion current assets decreased vis-a-vis current liabilities?

You have realized that it is not possible to find immediate answer from the absolute values of balance sheet. To answer their queries, we need to find out percentage of sources/applications elements which helped to convert all elements to a common base 100.

Illustration 3:

On the basis of the following balance sheet information of Asian Paints (India) Ltd. prepare common size Balance Sheet:

Comment on the balance sheet trend.


Common Size Balance Sheet


(1) The company has inclined towards using more shareholders’ funds than loan funds in financing assets. Over the period of six years there has been 17.24% shift towards shareholders’ funds. It is necessary to appre­ciate the impact of cost of capital as opportunity cost shareholders’ funds is generally higher than the loan funds. The reasons for inclination towards shareholders’ funds is ploughing back of profit.

(2) The company has improved the utilization of current assets per rupee of fixed assets. In the asset structure proportion of fixed assets has been increased to 12.12% and outside investments increased to 12.15% whereas net current assets decreased to only 13.14% from 45.69%. The company followed a very tight working capital policy.

(3) There is a continuous growth in fixed assets component and outside investments signifying better fund management.

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