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Preparation of Financial Statements

Every Company shall prepare
  • A Balance Sheet as at the end of the period
  • A Profit and Loss account for that period

In case of a Company not carrying on business for profit, an Income and Expenditure account must be prepared.

The Board of Directors shall lay before the Company, the above financial statements in the Company’s Annual General Meeting (AGM) for the shareholders’ approval. The following points must be considered while preparing the Company’s financial statements:

They must be prepared so as to give a true and fair view of the state of affairs of the Company Balance Sheet of the Company shall be prepared in accordance to Part I of Schedule VI of the Act Balance Sheet can be prepared in either horizontal or vertical format as provided in Part I of Schedule VI Schedule VI does not prescribe any form in which Profit and Loss account should be prepared. However, compliance with explanations in Schedule VI, Part II is required.

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