Details Of Ninth Schedule Companies Act 1965(Act No 125)

September 2nd, 2008 Comments off
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Append below the details of Ninth Schedule Companies Act 1965, readers should go through them  whether for knowledge or to comply with Accounts under the Malaysian Company Law:- 

Companies Act 1965 (Act No. 125)
NINTH SCHEDULE [SECTIONS 169, 326] – ACCOUNTS
 

Profit and Loss Accounts


1. There shall be shown in respect of the period of accounting –

 

(a) sales or other operating revenues, stating the basis on which they are determined;
(b) the net balance of profit or loss on the company’s trading;
(c) the gross income before the deduction of income tax from investments in subsidiaries of the company;

(d) the gross income before deduction of income tax from other investments distinguishing between –
 

 

 

(i) income received from any shares or. debentures which are quoted, listed or dealt in on anyprescribed stock exchange in Malaysia;(ii) income received from any shares or debentures which are dealt in on any prescribed stock exchange outside Malaysia; and

(iii) income received from other sources;
 

 

 

 

(e) the amount of –

 

(i) interest income (other than from debentures); and(ii) income from rent of land and buildings;
 

 

 

 

(f) amounts charged for depreciation, amortization or diminution in value on –

(i) fixed assets showing the charge for each category of depress able asset;(ii) goodwill and other intangible assets; and

(iii) investments,
 

 

 

 

and the amount, if material, of the effect of changes in the methods or bases of providing for depreciation, amortization or diminution in value of assets and, by way of note, specify the reasons for any such changes;(g) the amounts charged in respect of –
 

 

 

(i) interest on the company’s debentures, loans, overdrafts and other borrowings;(ii) rent for land and buildings used by the company;
(iii) the hire of plant and machinery used by the company; and

(iv) research and development including amortization of development costs previously deferred;
 

 

 

 

(h) any profit or loss, if material, arising from a sale or disposal of fixed or intangible assets;(i) the amounts set aside or proposed to be set aside to, or withdrawn from, reserves;
(j) the amount, if material, set aside to provisions other than provisions for depreciation, renewals or diminution in value of assets or, as the case may be, the amount, if material, withdrawn from such provisions and not applied for the purposes thereof, in each case classified separately under appropriate headings;

(k) the amounts respectively provided for redemption of share capital and for redemption of loans;

(l) provision made for all taxes on income distinguishing between –
 

 

 

(i) tax payable before double taxation relief in Malaysia

;(ii) tax payable outside
 

 

Malaysia

;(iii) any relief granted because of double taxation; and

(iv) deferred taxation;
 

 

 

 

(m) in respect to tax losses, if material -

(i) the amount of the tax saving for which credit is taken in the period of the loss;(ii) the amount of the tax saving for which credit is taken as a result of the realisation of a tax loss carried forward that had not been accounted for in the period of the loss; and

(iii) the amount and future availability of tax losses for which the related tax effects have not been accounted for in any period;
 

 

 

 

(n) the aggregate amount of the dividends paid and the aggregate amount of the dividends proposed to be paid;(o) in respect of directors and past directors of the company, the amounts of –
 

 

 

(i) fees and other emoluments (distinguished separately), paid to or receivable by them from the company or its subsidiary companies as remuneration for their services to the company or its subsidiary companies, inclusive of all fees, percentages, bonuses, commissions, compensation for loss of office, any contribution in respect of them under any pension or retirement benefit scheme and inclusive of commission paid or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares in or debentures of the company or of its holding company or any subsidiary of the company; provided that where a director or any firm of which the director is a member, acts for the company in a professional capacity, the amount paid to the director or to his firm for services rendered to the company in that capacity shall not be included in the aforesaid total but shall be shown separately whether by way of note or otherwise; and(ii) by way of note or otherwise, the estimated money value of any other benefits received or receivable by them otherwise than in cash from the company or from any of its subsidiary companies;
 

 

 

 

(p) the total of amounts paid to or receivable by any third party in respect of the services provided to the company or any of its subsidiary companies by any director or past director of the company;(q) the total of the amount paid to or receivable by the auditors as remuneration for their services as auditors, inclusive of all fees, percentages or other payments or consideration given by or from the company or by or from any subsidiary of the company;
(r) under separate headings, and giving particulars of each item, any exceptional or unusual credits or charges, if material, and where applicable, the tax effects thereon;

(s) under separate headings, and giving particulars of each item, any prior year credits or charges, if material, and the tax effects thereon;

(t) under separate headings and giving particulars of each item, any changes in estimates made for the purpose of accounting and included in net profit or loss from trading, if material; and

(u) significant transactions with related corporations.
 

 

 

 

Balance sheet


2. (1) There shall be shown as at the end of the period of accounting –

 

(a) the amount of authorized capital and particulars of issued capital showing movements during the period of accounting and distinguishing between classes of shares and specifying by way of note to the balance-sheet any rights, preferences or restrictions with respect to distribution of dividends or repayment of capital attached to the shares and any portion of the share capital which has not already been called up and which is not capable of being called up except in the event and for the purposes of the company being wound up and stating the rates of dividend, and whether participating or cumulative or both, attaching to shares other than ordinary shares, and stating amount of calls in arrear in each class;(b) the part of the issued capital that consists of redeemable preference shares, the date on or before which these shares are, or are liable, to be redeemed and the earliest date on which the company has power to redeem those shares (showing by way of note or otherwise whether the redemption is optional to or obligatory on the company) and the amount of the premium (if any) at which those shares are redeemable.
(c) so far as the information is not given in the profit and loss account, any share capital on which interest has been paid out of capital during the financial year, and the rate at which interest has been so paid;

(d) reserves classified under the separate headings –
 

 

 

 

(i) share premium account;(ii) revaluation surplus;
(iii) balance of profit and loss account; and

(iv) other reserves,
 

 

 


indicating the movements for the period and any restrictions on distribution including the extent to which tax credits are available for the company to frank the reserves available for distribution;(e) income or gain carried forward to subsequent periods of accounting, and by way of note, specify the basis for carrying that income or gain;

(f) under separate headings, so far as they are not written off –
 

 

 

 

(i) the preliminary expenses;(ii) any expenses incurred in connection with any issue of shares or debentures;
(iii) any sums paid by way of commission in respect of any shares or debentures;

(iv) any sum allowed byway of discount in respect of any debentures;

(v) the amount of the discount allowed on any issue of shares at a discount;

(vi) if the amount of the goodwill and any patents and trade marks or part of that amount is shown as a separate item in or is otherwise ascertainable from the books of the company or from any contract for the sale or purchase of any property to be acquired by the company or from any documents in the possession of the company relating to the stamp duty payable in respect of any such contract or the conveyance of any such property – the said amount so shown or ascertained;

(vii) the amount of deferred development expenditure and movements in the period of accounting; and

(viii)any other expenditure carried forward by category of expenditure,
 

 

 

 

and by way of note, specify the basis for carrying forward any such expenditure;(g) particulars of any redeemed debentures which the company has power to reissue;

(h) the fixed assets, current assets, liabilities and provisions classified separately under headings appropriate to the company’s business and stating the method used to arrive at the amount of assets under each heading but –
 

 

 

(i) where the amount of any class is not material, it may be included under the same heading as some other class;(ii) where any assets of one class are not separable from assets of another class, those assets may be included under the same heading; and

(iii) where any assets cannot truly and fairly be shown as either fixed assets or current assets, those assets may be included separately under an appropriate heading;
 

 

 

 

(i) in respect of fixed assets –

 

(i) under separate headings, the amount of lands and buildings, plant and machinery and other categories suitably identified;(ii) in the case of fixed assets whose amount is arrived at in accordance with paragraph 3(1) of this Schedule and is so arrived at by reference to a valuation, the years (so far as they are known to the directors) in which the assets were severally valued and the several values, whether an external valuer was involved and the basis of valuation used;
(iii) of the amount of fixed assets consisting of land, how much is ascribable to land of freehold tenure and how much to land of leasehold tenure, and, of the latter, how much is ascribable to land held on long lease being a lease with an unexpired period of fifty years or more and how much to land held on short lease;

(iv) any restrictions as to title;

(v) the amount, if material, of any assets being acquired on installment purchase plans;

(vi) the amount, if material, of any assets retired from active use and held for disposal; and

(vii) by way of note, the methods of depreciation used for each category of fixed assets together with the rate of depreciation or number of years over which provision is made for depreciation;
 

 

 

 

(j) under separate headings, stating the methods used to arrive at the amount of the investments under each heading and showing the quoted market values of investments which are quoted, listed or dealt in on any prescribed stock exchange –

 

(i) investments in Federal Government securities;(ii) investments in other government, municipal or public debentures stock or bonds;
(iii) investments in subsidiaries of the company;

(iv) investments in shares (of corporations which are not subsidiaries of the company) which are quoted, listed or dealt in on any prescribed stock exchange in Malaysia or elsewhere;

(v) investments in shares (of corporations which are not subsidiaries of the company) which are not so quoted, listed or dealt in on any such prescribed stock exchange;

(vi) investments in debentures (of corporations which are not subsidiaries of the company) which are quoted, listed or dealt in on any prescribed stock exchange in Malaysia or elsewhere;

(vii) investments in debentures (of corporations which are not subsidiaries of the company) which are not so quoted, listed or dealt in on any such prescribed stock exchange;

(viii) other investments in corporations; and

(ix) other investments;
 

 

 

 

(k) the stock of assets held for trading classified in the main categories appropriate to the business of the company showing the amount held in each category, such amounts being stated at the lower of cost and the net value realisable by sale in the market where cost includes all those expenses which relate to bringing the stock to its present location and condition;(l) the stock of assets representing long-term contract work in progress, stating by way of note –
 

 

 

 

(i) the methods used to arrive at the amounts of these assets; and(ii) the amounts received and receivable as progress payments, advances and retentions on account of contracts included in long-term contract work in progress;
 

 

 

 

(m) under separate headings –

(i) amounts owing by the holding company of the company;

 

(ii) amounts owing by subsidiaries of the company;(iii) amounts owing by other related corporations of the company;
(iv) trade debts and bills receivable (other than amounts owing by related corporations of the company);

(v) the amount outstanding of any loan made, guaranteed or secured by the company being a loan made to a director of the company or of a related corporation or a loan made to another corporation in which one or more directors of the company or of the company which is so deemed to be related to the company owns a controlling interest;

(vi) other debts owing to the company; and

(vii) deposits distinguishing between those with licensed banks, finance companies, other corporations and others,
and where any amounts shown under such a heading include any sums which consists of or are in the nature of interest, accommodation charges, service charges, maintenance charges or insurance premiums, those sums shall, except to the extent that they have become due and payable and have been demanded, be shown as deduction from the amounts shown under that heading;
 

 

 

 

(n) under separate headings and showing separately amounts that are redeemable or payable not later than twelve months after the date to which the accounts are made up and amounts that are redeemable or payable later than twelve months after that date –

 

(i) debentures;(ii) liabilities (other than debentures and bank loans and overdrafts) secured by any charge on the assets whether registered or not;
(iii) bank loans and overdrafts, distinguishing between those which are secured and those which are unsecured; and

(iv) other amounts borrowed without security,

giving details of the contractual terms and, where secured, of the nature of that security;
 

 

 

 

(o) under separate headings –

 

(i) amounts owing to the holding company of the company;(ii) amounts owing to the subsidiaries of the company;
(iii) amounts owing to other related corporations of the company;

(iv) amounts owing to trade creditors (other than amounts owing to related corporations of the company);

(v) amounts owing by the company or by a subsidiary of the company to a director of the company; and

(vi) other amounts owing by the company;
 

 

 

 

(p) the provision for taxation, distinguishing between taxation payable and deferred taxation and stating any special circumstances affecting the liability to taxation;(q) provision for pension or retirement benefits;
(r) dividends distinguishing between dividends payable and proposed;

(s) arrears of dividends on preference shares; and

(t) under separate headings (to be stated by way of note if not otherwise shown) –
 

 

 

 

(i) contingent liabilities unsecured;(ii) contingent liabilities secured upon the company’s assets giving details of the nature of security; and

(iii) where practicable, the aggregate amount, if it is material, of contracts for capital expenditure, so far as that amount has not been provided for, and the aggregate amount or estimated amount, if it is material, of capital expenditure authorized by the directors which has not been contracted for.
 

 

 

 

(2) For the purposes of this paragraph, where more than one method is used to arrive at any amount shown in the balance-sheet, there shall be shown in the balance-sheet a separate total in respect of each of the methods so used.(3) There shall be shown by way of note or otherwise on the balance sheet of every company which is a borrowing corporation or a guarantor corporation, a schedule setting out separately estimates of the amounts of the liabilities payable by and the debts payable to the company –
 

 

 

 

(a) not later than two years;(b) later than two years but not later than five years; and

(c) later than five years,
 

 

 

calculated from the date to which the balance sheet of the company was made up.3. (1) The method of arriving at the amount of any fixed asset or investment shall, subject to sub-paragraph (2), be to take the difference between –
 

 

 

(a) its cost or, if it stands in the company’s books at a valuation other than cost, the amount of the valuation; and(b) the aggregate amount provided or written off since the date or acquisition or valuation as the case may be, for depreciation or diminution in value.
 

 

 


(2) For the purposes of this paragraph the net amount at which any assets stand in the company’s books at the commencement of this Act (after deduction of the amounts previously provided or written off for depreciation or diminution in value) shall, if the figures relating to the period before the commencement of this Act cannot be obtained without unreasonable expense or delay, be treated as if it were the amount of the valuation of those assets made at the commencement of this Act, and where any of those assets are sold, the said net amount less the amount of the sales shall be treated as if it were the amount of a valuation so made of the remaining assets.(3) Sub-paragraph (1) shall not apply –
 

 

 

(a) to assets for which the figures relating to the period beginning with the commencement of this Act cannot be obtained without unreasonable expense or delay; or(b) to assets the replacement of which is provided for wholly or partly –
 

 

 

(i) by making provision for renewals and charging the cost of replacement against the provision so made; or(ii) by charging the cost of replacement direct to revenue; or
 

 

 

(c) to any investments of which the market value (or, in the case of investments not having a market value, their value as estimated by the directors) is shown either as the amount of the investments or by way of note; or(d) to goodwill, patents or trade marks.
 

 

 

(4) For the assets under each heading whose amount is arrived at in accordance with sub-paragraph (1) there shall be shown –

(a) the aggregate of the amounts referred to in sub-paragraph (1)(a); and(b) the aggregate of the amounts referred to in sub-paragraph (1)(b).
 

 

 

(5) As respects the assets under each heading whose amount is not arrived at in accordance with sub-paragraph (1) because their replacement is provided for as mentioned in sub-paragraph (3) (b) there shall be stated –

(a) the means by which their replacement is provided for; and(b) the aggregate amount of the provisions (if any) made for renewals and not used.
 

 

 

 

Statement of Changes in Financial Position


4. There shall be annexed to every profit and loss account and balancesheet a statement of changes in financial position showing separately –

(i) the funds provided from and used in the operations of the company; and(ii) other sources or uses of funds of the company,
 

 

 

except that in respect of consolidated accounts of holding and subsidiary companies as required by paragraph 5 of this Schedule the statement of changes in financial position shall be the consolidated statement of changes in financial position of the holding and subsidiary companies and the statement relating to the holding company alone need not be so annexed.

Holding and Subsidiary Companies


5. (1) Subject to sub-paragraph (4), there shall be annexed to the profit and loss account of every holding company a consolidated profit and loss account of the holding company and of its subsidiary companies eliminating all intercompany transactions and showing separately that part of the profit or loss of the subsidiary companies attributable to shares in subsidiary companies owned other than by the holding company or its subsidiary companies.

(2) There shall be clearly stated (by way of note or otherwise) either in the profit and loss account of the holding company or in any document annexed thereto pursuant to sub-paragraph (1) the name, place of incorporation, principal activities of, and percentage of issued share capital held by the holding company in each subsidiary to which that profit and loss account or other document relates.(3) Subject to sub-paragraph (4), there shall be annexed to the balance sheet of every holding company a consolidated balance sheet of the holding company and of its subsidiary companies eliminating all inter-company balances and showing separately that part of the net assets of the subsidiary companies attributable to shares in subsidiary companies owned other than by the holding company or its subsidiary companies.

(4) Notwithstanding anything in this paragraph –
 

 

 

(a) consolidated accounts shall not be required where the company is at the end of its financial year the wholly owned subsidiary of another body corporate incorporated in Malaysia;(b) consolidated accounts need not deal with a subsidiary of the company if the company’s directors are of the opinion that –
 

 

 

(i) it is impracticable, or would be of no real value to members of the company, in view of the insignificant amounts involved, or would involve expense or delay out of proportion to the value to members of the company; or(ii) controlling interest in the subsidiary company is to be temporary; or
(iii) the subsidiary company operates outside Malaysia under conditions which impair the exercise by the company of its controlling interest; or

(iv) the result would be misleading, or harmful to the business of the company or any of its subsidiaries; or

(v) the business of the company and that of the subsidiary are so different that they cannot reasonably be treated as a single undertaking,
 

 

 

and if the directors are of such an opinion about each of the company’s subsidiaries, then consolidated accounts shall not be required:Provided that the approval of the Registrar shall be required for not dealing in the consolidated accounts with a subsidiary on the ground that the result would be harmful or on the ground of the difference between the business of the holding company and that of the subsidiary; and

(c) where consolidated accounts are not submitted or where the consolidated accounts do not deal with a subsidiary of a company –
 

 

 

(i) the directors shall disclose by way of a note on the accounts their reason for not causing the accounts for such one or more subsidiaries to be consolidated; and(ii) there shall be annexed to the accounts of the holding company the accounts of each subsidiary, the accounts of which are not consolidated with those of the holding company. Such accounts shall be accompanied by the auditor’s report thereon.
 

 

 

(5) Such profit and loss accounts and balance sheet as required by subparagraphs 5(1), 5(3) and 5(4) of this Schedule shall be in the same form as the profit and loss account and balance-sheet of the holding company and shall be accompanied by the auditor’s report thereon.(6) In the case of a subsidiary company incorporated in a country outside Malaysia (whether it has or has not established a place of business in Malaysia), which country has been declared by the Minister by notice published in the Gazette to be a country to which this paragraph applies, it shall be sufficient if the separate profit and loss account or balance sheet (as the case requires) of the subsidiary company is in such form and is so reported upon by auditors and contains such particulars and includes such documents (if any) as the company is required to make out and lay before the company in a general meeting by the law for the time being applicable to the company in the place where it is incorporated.
(7) If the auditor’s report on the accounts of a subsidiary company is qualified in any way, the consolidated balance-sheet of the holding company (as the case may be) shall contain particulars of the manner in which the report is qualified in so far as the matter which is the subject of the qualification is not covered by the holding company’s own accounts and is material from the point of view of its members.

(8) There shall be shown under separate headings in the balance sheet of every subsidiary company the extent of its holding of shares in its holding company and in other related corporations.

(9) This clause shall not apply to a subsidiary which would not be subsidiary but for the operation of section 5(1)(a)(i) or (ii) of the Act.
 

 

 


General6. (1) All amounts shown in profit and loss accounts and balance sheets shall be quoted in Malaysian currency, and not otherwise.
 

 

 

(2) Except in the case of the first balance sheet or profit and loss account laid before the company after the commencement of this Act, there shall be shown in every balance sheet and profit and loss account the corresponding amounts for all items shown in the balance sheet or profit and loss account for the previous financial year.(3) Where any such corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount shall be adjusted and, if material, particulars of the adjustment and the reasons for it shall be disclosed in a note to the accounts.
(4) Every profit and loss account or balance sheet shall state by way of note if any translation into Malaysian currency has been made for the purposes of the profit and loss account and balance-sheet together with the basis of the translation of the other currency into Malaysian currency.

(5) Every profit and loss account and balance sheet shall include a statement of accounting policies adopted by the company or, as appropriate, the holding company and its subsidiaries.

(6) In the case of any consolidated profit and loss account and balance sheet as required by sub-paragraphs 5(1) and 5(3) of this Schedule the accounting policies adopted by the holding company and its subsidiaries shall be the same, and where different accounting policies are used in the accounts of a subsidiary and the effect is material, appropriate adjustments should be made in the consolidated profit and loss account and balance sheet.
 

 

 

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