M/s Vardhman and Associates have been appointed as the statutory auditors of a NBFC (UVW Ltd.

M/s Vardhman and Associates have been appointed as the statutory auditors of a NBFC (UVW
Ltd.) for the financial year 2021-22. The company is required to comply with the Indian Accounting
Standards. During the course of audit CA Vardhman found that the company has classified its
Assets and Liabilities as financial and non-financial instead of current and non-current. What
should CA Vardhman advice the management of NBFC UVW Ltd. in this regard?

a) The management of NBFC UVW Ltd. is correct in classifying the Balance Sheet items as
financial and non-financial as per requirement of Division III of Schedule III of Companies Act 2013.

b) The management of NBFC UVW Ltd. is not correct in this regard and should classify the
Balance Sheet items as current and non-current as is required by all other companies as per
the requirement of the Division III under Schedule III of the Companies Act 2013.

c) The management of NBFC UVW Ltd is right in this regard as the NBFC has the option to
classify the balance sheet items either as current and non-current or as financial and non- financial.

d) The management of NBFC UVW Ltd. should classify the Balance Sheet items as current and
noncurrent as per the requirement of Division II of Schedule III of the Companies Act 2013
applicable in case of NBFC.