(,' TIIE KERALA STA"[ I'INANCIAL ENTORPRISES LBIITED Corporate OIfiee, "Bhadrarka", Museum Road, Ihrissur

Size: px

Start display at page:

Download "(,*'* TIIE KERALA STA"[ I'INANCIAL ENTORPRISES LBIITED Corporate OIfiee, "Bhadrarka", Museum Road, Ihrissur"

May Violet Green
5 years ago
Views:

1 TIIE KERALA STA"[ I'INANCIAL ENTORPRISES LBIITED Corporate OIfiee, "Bhadrarka", Museum Road, Ihrissur From General Manager (Finance) H.O., Thrissur. To All Branehes, Our Ref: 7809 Your Ref. Date: Statutory.Arldit fsr FY is scheduled to commence ftom l5lp{/291s & branches have',been directed to prepare CTB with underlying schedulevstatoments as Detailed instructions with regard to closing of accounts for liy is attaehed for your ready reference & compliance. You are once again instructed to ensure that time frame as stipulated in the aforesaid Circular fi.e S7!o4/2S1& is strictly adhered to.,:ii (,*'* General Mfager (F inance)

2 (A) Trial Balance: INSTRUCTIONS FOR CLOSING OF ACCOUNTS FOR FY Check the total of Consolidated Trial Balance (CTB): i) Total side of Income & Expenditure (Profit and Loss) tallies ii) Total side of Assets & Liabilities (Balance sheet) tallies. iii) Figure of profit/loss (Account code1000) should tally with figure of Account code Ensure all relevant Statements/ Schedules/ AS etc are prepared and tallies with underlying figures of CTB. 3. It must be ensured that all relevant details to be mentioned in Form 3CD are strictly prepared in accordance with the prescribed formats made available in downloads. 4. Check whether closing balance (Balance sheet items) of previous year has been correctly carried forwarded to current year. 5. The previous year profit/loss should be transferred to HOC (General) account. 6. Corrections /rectifications instructed by pre-auditors / Statutory auditors should be carried out and corrected CTB to be extracted. 7. Three sets of corrected CTB (extracted after incorporating corrections as stated in point 6 above) along with underlying statements/ schedules/ AS etc duly signed by Accounts Assistant, Assistant Manager (Accounts) and Branch Manager should be made available to statutory auditors. (B) General: 1. It must be ensured that all bugs / mistakes related to branch duly reported to IT department or otherwise, are rectified before handing over CTB as on 31/03/2018 to the pre-auditors. 2. AM (Accounts) and Branch Manager must conduct a preliminary verification of annual accounts before handing over to the pre-auditors. 3. Branches should comply with HO circulars issued from time to time with regard to provisions of Prevention of Money Laundering Act, 2002 and Know Your Customer (KYC) Guidelines formulated by Reserve Bank of India. 4. All cases ripe for initiating RR action, as per HO directions issued must be transferred to RR. It must be ensured that statement of RR Debtors (AS 47) must tally with balance in Head Office Current Account (RR). 5. Check payroll and ensure that following items viz. staff Welfare / LWF has not been wrongly accounted under the account head - Salaries & Allowances. 6. The following allowances/ charges should be accounted under account head- Salaries and Allowances: (a) Gold Loan Risk Allowance, (b) Cashier Allowance (c) Data entry charge (C) Reconciliation: 1. Fund Pooling accounts like Federal bank RO (collection) account (Account code 1414), Federal bank RO (Disbursement) account (Account code 1415), Dhanalaxmi RO

3 (collection) account (Account code 1418) and Dhanalaxmi RO (disbursment) account (Account code 1419) must have NIL balance as on 31/03/2018. These accounts must be properly reconciled and transferred to New ROC account. 2. It must be ensured that no new accounts must be created by branches/ regions for parking unadjusted/ un-reconciled entries. 3. The Door collection suspense accounts should be made nil by transferring the balance amount (if any) to the personal ledger accounts concerned as on 31 st March 2018, itself. 4. Reconciliation of Revised Bhadratha Social Security Scheme / Lucky VAT scheme at branch level/ RO-Tvm must be carried out and reconciliation statement as on 31/03/2018 must be readily available for audit. 5. All transfer/ movement of fixed assets from / to branches must be properly reconciled and no un-reconciled/ unadjusted movement should be there on 31/03/ It must be ensured that all movement of funds between branches and RO should be properly reconciled as on 31/03/ It must be ensured that all movement of funds between RO and HO should be properly reconciled as on 31/03/ Fund movement through treasury (between HO and branches) must be properly accounted based on the debit notes issued and properly reconciled as on 31/03/ It must be ensured that reconciliation statement of various ROC / HOC accounts viz. HOC (General), HOC (WUMT), HOC (GST), HOC (TDS), HOC (e-collection), HOC (RR) for FY must be complete, without fail. (D) Statutory deductions/ Payment: 1. Statutory payments like Service tax payable, sales tax payable, TDS payable, GST payable etc must be correctly calculated & deducted at applicable rates at the time of accounting/ paying. 2. Detailed statement (showing relevant details and workings) for each of the aforesaid items mentioned in point 1 above must be made available for audit. 3. For GST related accounting/ details to be maintained at branch level as per HO directions available in downloads. (Additional directions will be available in downloads by 24/03/2018) 4. Directions issued vide Circular No. 36/2012(BD) dated regarding RSC payments under CFA 1982 must be complied with. 5. Necessary steps should be taken to settle amounts in RSC/APSTC payable accounts after properly identifying the parties & obtaining proper acknowledgement. (E) Accounts: 1. All closing journal / rectification entries etc must be duly incorporated as at the end of the financial year concerned. 2. Accounts showing wrong balance in CTB viz. Income head showing Debit balance, Expense head showing credit balance, similarly wrong balances in assets, liabilities etc must be properly scrutinized and rectified. 3. It must be ensured that all Payroll deductions (PRD) till 31/03/2018 are accounted in the accounts of FY , without fail. 4. All Debit /Credit notes pertaining to should be accounted in FY , without fail.

4 (F) Fixed Assets: 1. Fixed Assets and Depreciation- checking and cross tallying of all columns and tallying with book figures. 2. Verify and confirm amount in AS26 tallies with figures in CTB. (Ref. Circular No.60/2014(Accounts) dated Transfer-in and transfer-out of Fixed Assets between branches, branches to HO/RO are to be accounted at both ends. This is to be confirmed by pre-auditors telephonically from the camp. If it is not accounted by the transferee unit in the same year, this must be reported to HO/RO immediately from the camp and it must also be included in the pre audit report submitted to the HO and RO. 4. It must be ensured that updated fixed asset register as on 31/03/2018 is made available for audit. Fixed assets register must clearly disclose (i) particulars of the assets, (ii) Depreciation details and (iii) its location. 5. Physical verification of Fixed Assets and stamps/ stationary must be mandatorily done and it should tally with the Fixed Asset Register/Stock Register and a physical verification certificate as on 31/03/2018 should be available for audit. (G) Prior period expenses: 1. As prior period expenses are generally disallowed by the Income tax department, it must be ensured that no expense pertaining to earlier years should be booked under prior period expenses account, to the extent possible. 2. The same could be accounted under appropriate head of account of the current year (e.g.:- Agency commission recouped should be accounted in Agency commission itself and rent arrears paid should be accounted as per the manual of accounting/ho circular in force. 3. After execution of revised rent agreement of branch /RO premises, rent liability of the previous years should be accounted as expense of current year itself instead of prior period expenses. (H) TDS: 1. As per Central Government Notification No 3489 dt (Order copy available in downloads), no Tax need be deducted at source on interest accruing on Treasury deposits/ Flexi deposits made by KSFE. In case, any TDS has been incorrectly deducted from interest income of the Company by Treasury/Bank etc, then it must be ensured that the amount of TDS should be debited to HOC (General) account by giving credit for gross interest amount to interest income account. 2. TDS certificate (Form 16A) as downloaded from TRACES site of deductor (Treasury / Bank) should be forwarded to HO along with Debit note to HO (Central accounts). 3. All units are directed to request the Treasury/Sub Treasury Officers, not to deduct tax at source on Chitty Security Deposits in the name of Assistant Registrar s as we cannot claim tax deduction based on the TDS issued in the name of Assistant Registrar. 4. It must be ensured that TDS statement of the branch/ RO is to be tallied with HOC (TDS) Account. 5. It must also be ascertained that amount in HOC (TDS) account is equal to amount of TDS credit notes submitted by branches to HO (branches may verify TDS credit notes and reports from Tax KSFE application).

5 6. Amount refundable to eligible depositors/ agents/ appraisers as on 31/03/2017 and incorrectly appearing in HOC (TDS) account/ TDS payable/ any other account must be settled on or before 31/03/ It must be ensured that the closing balance in HOC (TDS) must comprise only the genuine TDS payable as on 31/03/2018. There should not be any debit entry in HOC (TDS) account other than amount refunded to eligible depositors/ agents/ appraisers. 8. Closing balance in HOC (TDS) as on 31/03/2018 should not be transferred to any other account and must be carried forward to next year. (I) Cash & Bank balances: 1. All branches should ensure that balance of imprest cash account as on 31/03/2018 is nil. 2. It must be ensured that cash on hand as on 31/03/2018 is physically verified and a certificate (with denomination) must be made available for audit. 3. Cash holding should be within the permissible limits as stipulated in HO circular issued in this regard. 4. The balance in current and savings accounts with the banks /treasury respectively should be minimum to the extent possible, as on 31/03/ Bank balances as per cash book should not show credit balances (OD) except in case of OD facility actually availed against flexi deposit. 6. Balance confirmation should be obtained for all Bank /Treasury accounts including Flexy Fixed Deposits and Chitty Security Deposits and made available for audit. Request letter forwarded to them should be available in our records. 7. Fund Management should given due importance and excess funds should not be kept at branches and surplus fund as at the end of the month, in excess of the limit prescribed by the HO/RO should be transferred to RO. (J) Accrued Interest: 1. Interest on matured treasury deposit savings bank should be provided. 2. The interest receivable on FD with Treasury in the name of Asst. Registrar of Chits should be claimed as per Circular no. 59/2017(FA) dated It must be ensured that the same has been received in full, without fail. (K) Bank Reconciliation Statement: 1. Branches should transfer all cheques issued but not cleared up to three months to the account head un-presented cheques and appropriate accounting entries based on the bank reconciliation statement should be made immediately. 2. There should not be any un-identified debits/credits in the account statement /reconciliation statement and if there is any un-identified debit/credit are noticed in the account statement during FY or there are any carry forward entries, the same should be identified and appropriate accounting entries should be passed in FY itself. 3. Any operating/ other charges (viz. cash handling charges, POS charges etc) debited by the bank in our account, should be got compulsorily reversed by 31/03/ Ensure reconciliation statements for all bank/ treasury accounts as on 31/03/2018 are made available for audit.

6 (L) General Suspense: 1. It has to be ensured that no new entries (either debit or credit) are posted under General Suspense account during FY However, if any entries have been passed during FY , the same should be transferred to correct account head without any further delay. In other words, outstanding balance, if any, in General Suspense account as on should not be more than the outstanding amount under this head as on (M) Chitty: 1. It must be ensured that chitty installment missing Suspense A/c (8530) is appropriately adjusted /recovered vide HO Circular No.45/2015(IT) dated 10/09/ Branches should ensure that all due prize money and unclaimed prize money is settled/ paid/ adjusted on or before 31/03/2018. (N) Forfeited veethapalisa under CFA 1982: 1. Before extracting AS 78 & 78A, it must be ensured that all PBNP Cases should be settled at branch level vide Circular No. 39/2016 dated 15/07/2016 & 14/20l7 dated 06/03/2017 respectively. Only after settling/closing of PBNP cases, the entry to be passed as per circular l7/20l5(fa) dated Based on the prepared schedules (AS- 78 & 78A), accounting entries are to be passed for transferring the income considering the prized default and revenue recovery. Income booked under account head (code 312), forfeited veethapalisa is the income after adjusting/considering the default and revenue recovery. If defaulted amount exceeds forfeited veethapalisa, then nil forfeited veethapalisa is taken as income and the carried forward forfeited dividend will be taken as income as and when the default is cleared. (O) Registers: 1. Various registers viz. suit /case filed register, Gold security register; Gold stock register, cheque dishonor register, key register, imprest cash register, despatch register etc should be filled in completely and made up to date as on 31/03/2018. (P) Old inoperative accounts: 1. At many branches, despite repeated instructions it has been noticed that the following suspense accounts were maintained which include un-adjusted old entries : Manual a/c. code Account Head 1037 Initial Hire HP 1038 Initial Hire EOHP 1039 Option Money HP 1040 Option Money EOHP 1041 Hirers Suspense HP 1042 Hirers Suspense EOHP 1043 Hirers Suspense Trade Loan 1045 NFDL Suspense 1062 Retention Fund HP 1063 Retention Fund EOHP

7 Branches are required to verify their books of accounts and confirm the accuracy of these outstanding balances. Accordingly, in case of loan accounts which has already been transferred to RR accounts and suspense amount is still outstanding in the account head concerned, may be transferred to General suspense account and then immediately to concerned RR account as on 31 st March All other balances outstanding in the aforesaid account heads must mandatorily be transferred to miscellaneous expenses/ income as on and balance outstanding in these account heads should be NIL as on , without fail. (Q) Terminated Chitty: 1. Branches should ensure that there are no Treasury Deposits outstanding to be released in terminated chitties as on If gazette notification is pending in any of the terminated chitties, the matter should be immediately taken up with Liaison Officer, RO Thiruvananthapuram with a copy marked to AGM (Region) and HO (Central Accounts). Government site, must be closely watched for gazette notification. 2. It must be ensured that chitty balance sheet and minutes for all chitties are filed on time. 3. Cases where matured Chitty Security Deposits are not released despite getting gazette notification must be looked into immediately and it must be ensured that there are no such cases as on 31/03/2018. (R) Investor Education & Protection Fund: 1. Fixed deposits matured but not claimed for >7 years should be transferred to H.O. through credit note along with relevant details in the prescribed format, as the same needs to be transferred to Investor Protection & Education Fund. 2. Before transferring matured fixed deposits remaining unclaimed for >7 years to HO, maximum effort should be taken to locate the depositor/nominee/legal heirs for settling the claim at branch itself by sending ordinary letter in the available postal address. 3. Once the amount is transferred to the Registrar of Companies to the credit of Investors Protection and Education Fund, request for refund will not be entertained by the fund (S) Advance recoverable: 1. Amount recoverable from Staff names of the employees with employee code and amount due from them should be accounted individually and a statement should be prepared (AS- 55). Recovery action should be initiated at branch level. 2. All unsettled TA advances/salary advances etc. outstanding for > 3 months should be rectified by passing correct entries/ deducting the same from the staff concerned, as the case may be. 3. It must be ensured that Salary advance (account code 1425)/ undisbursed salary (account code 1033) must be correctly transferred to respective account, to the extent possible. (T) Outstanding Expenses: 1. Necessary provisions should be made in the accounts for all outstanding expenses as at 31/03/ Tax should be deducted at applicable rate at the time of making the provision for expenses that are subject to tax deduction at source e.g. Rent, Agency Commission, Contract

8 Payments, Appraiser fee etc. TDS Credit notes for the same should be forwarded to HO i.e. on 31/03/2018 itself. (U) Major Items in head of accounts expenses Listing below certain Heads of Account stating in brief, nature of expenses to be debited therein: a) Office Refreshments/ Canteen expense to staff (A/c code 283) Expenses/Cost incurred for tea, Coffee, snacks, etc. served in the office premises (staff meeting, Reimbursement of tea Expenses to the staff etc.) b) Hospitality Expense (A /c code no 284) a. Tea / coffee/ snacks/ food etc. served exclusive at public function (other than staff meeting) such as inauguration, other social functions, meeting involving public, conference convened exclusively for canvassing Agents/ Dealers/ Business Association etc. b. Meeting/get together of Employees and their family meeting on annual day c. Approved lunch or dinner or accommodation provided to External Auditors (AG and other Government)/Office Guests/VIP s etc. c) Meeting / staff Training (Code no.237) Tea / coffee/ snacks / etc served to employees during the course of all kinds of office meetings (full time) including Regional Conference. d) Conference Expenses Account (A/c Code 280) Conference fee/ Charges paid to External agencies and cost of conducting meeting/ seminar need be accounted under the above head. e) Books and periodical (A/c Code 227) Reimbursement of cost of News Papers/ Periodicals to officers should be accounted under this head. f) Office Maintenance A/c (A/c Code 288) 1. Uniform Allowance /cost of uniforms purchased 2. Stitching Charge reimbursement 3. Washing Allowance/Change reimbursed 4. Spectacle Allowance/cost of spectacle reimbursed 5. Chappal Allowance reimbursed 6. Franking/Stenciling /dispatch Allowance 7. Expense incurred in connection with Independence Day, Republic Day, Gandhi Jayanthi etc. 8. Authorized Expense incurred on retirement of employees superannuation. g) Staff Welfare (A/c Code 204) a. Reimbursement of medical expense/hospital charge

9 1:Wl!}r'-:::r:iiE W+i.1 r: ':r' b. Medical Allowance c. Expense on death of Employees in service d. Award and prizes to employees/ Units h) Festival celebration Expense (A/.c Code 287) ' with Ortam' Xmas,Id'Divali' Vishu etc (does not inciude Independence/ Republic day celebration etc) i) Scholarship (A/c Code 288) ouse of the Employee should be accounted under this head. j) Sales Promotion and publicitv A/c (289) 1. Chitty Canvassing expenses reimbursed to staff Z. promotional expinses, High tea and others such expenses reimbursed to staff 3, Calendar, Dairy, Printing charges and others complement items etc (To be accounted at HO) 4. Expense/Gift given to customers as part of chitty campaign.

Procedure for : Salary and other allowances YASHADA/M02/ACC. Scope: Regular staff of YASHADA, staff on Deputation and contract

Procedure for : Salary and other allowances YASHADA/M02/ACC. Scope: Regular staff of YASHADA, staff on Deputation and contract - Purpose: Salary and related of staff Scope: Regular staff of YASHADA, staff on Deputation and contract Responsibility: Pay bill clerk, cashier Activities: 1. Receive information about joining, appointment,