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Hello Auditor

What are the financial statements required for an OPC?

Balance Sheet

  • The Balance Sheet provides a snapshot of the OPC’s financial position as of the end of the financial year.
  • It includes details of assets, liabilities, and equity, showing how funds are deployed and sourced.
  • Assets are categorized into current and non-current, while liabilities reflect short- and long-term obligations.
  • Equity represents the capital contributed by the member and retained earnings.
  • The Balance Sheet must be prepared by Schedule III of the Companies Act, 2013.

Profit and Loss Statement

  • Also called the Statement of Profit and Loss, it shows the company’s income and expenditure during the financial year.
  • It details revenue from operations, other income, cost of goods sold, employee expenses, depreciation, and net profit or loss.
  • This statement reflects the financial performance and profitability of the OPC.
  • It helps in evaluating the company’s operational efficiency and margin trends.
  • Taxable income is computed based on this statement, subject to allowable deductions.

Notes to Accounts

  • This section provides explanatory details and breakdowns of items shown in the Balance Sheet and Profit & Loss Statement.
  • It includes information on accounting policies, contingent liabilities, related party transactions, and asset valuations.
  • Notes to Accounts are a mandatory part of financial disclosures under company law.
  • They offer transparency and help auditors, regulators, and stakeholders understand the financial details better.
  • Accurate notes ensure compliance and support the audit process.

Cash Flow Statement (Optional for OPC)

  • OPCs are generally exempt from preparing a Cash Flow Statement, unless they voluntarily choose to include it.
  • If prepared, it shows cash inflows and outflows from operating, investing, and financing activities.
  • It helps assess the liquidity position and cash management efficiency of the company.
  • This statement is useful when applying for loans or seeking a financial evaluation.
  • Though optional, it adds depth and clarity to financial reporting.

Auditor’s Report

  • The Auditor’s Report is not a financial statement but is mandatorily attached to the financial statements.
  • It is issued by a Chartered Accountant who has conducted the statutory audit of the company.
  • The report gives an opinion on whether the financial statements present a true and fair view.
  • It includes compliance findings, observations, and qualifications (if any).
  • This report supports credibility and is required when filing Form AOC-4 with the Registrar of Companies.

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