List of some important changes in schedule III of the companies act 2013
Introduction : Important changes has been explained for finalizing financial statements as per schedule III of the companies act 2013 for the FY 2021-22. .for any confusion you may refer to the notification no. gsr 207(E) dated 24th of March 2021 with effect from 01-04- 2021
- Mandatory Rounding off of figure in Financial statements for the F.Y ending 31.03.2022 as follows-
|Total Income Less than 100 crore rupees||To the nearest 100,1000,100000 or 1000000 or decimals thereof|
|100 crore rupees or more||To the nearest 100000,1000000,10000000 or decimals thereof|
- Additional disclosure-
- Promoters shareholding- Details of shareholding of promoters along with changes ,if any during the F.Y.
Who is promoter- It means a person –
- who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or
b.who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or
- in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act.
- Creditors Aging Schedule- Trading payable ageing schedule-
|Particulars||Outstanding for Less than 1 year from due date of payment||1-2 years||2-3 years||More than 3 years||total|
|Disputed dues MSME|
|Disputed dues -others|
3 .Trade Receivables ageing schedule- outstanding for below periodwise from due date of payment:
|Particular||Less than 6 months||6 month-1 year||1-2 years||2-3 years||More than 3 years||total|
|Undisputed Trade Receivables- Considered good|
|undisputed Trade Receivables considered Doubtful|
|Disputed Trade Receivables considered good|
|Disputed Trade Receivables considered doubtful|
Note: Where the due date of payment is not specified disclosure shall be from the date of transaction.
- Title Deed of Immovable Property not held in name of the Company:
The company shall provide the details of all the immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the company in format specified and where such immovable property is jointly held with others, details are required to be given to the extent of the company’s share.
Note:Such reporting may be used for benami transaction identification.
Note: immovable property is not defined under the Companies Act However general clauses act may be referred where under immovable property shall include land, benefit arising out of land and things attached to earth or permanently fastened to anything attached to earth.
Note: title is not defined in the Companies Act, but title deeds means a legal documents or deed constituting evidence of a right Such as registered sale deed, transfer deed, conveyance deed of land or building that creates a legal ownership of immovable property.
Disclosure in the financial statements shall be by way of following information:
|Gross carrying value|
|title deed not held in the name of company||full name of of individual or other entity holding the title of immovable property|
|weather title or deed in the name of promoter, director or relative of promoter or director||disclosure of relationship with the company|
|property held since|
|reason for not holding immovable property in the name of company|
5, Disclosure of revaluation of Assets–
Where the Company has revalued its Property, Plant and Equipment, the company shall disclose as to whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017
- Disclosure on Loans/ Advance to Directors/ KMP/ Related parties:
Disclosures shall be made whether Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013)Idhar severally or jointly with any other person, that are:
- Repayable on demand
- without specifying the terms or period of repayment
|Type of borrower||amount of loan or advance in the nature of loan outstanding||percentage of total loan and advances in the nature of loan|
note : disclosure required for the current period as well as previous period
- Capital Work in progress (CWIP):–
Following CWIP Aging schedule shall be given:
|CWIP||Less than 1years||1-2 years||2-3 years||More than 3 years||Total|
|projects in progress|
|Projects temporarily suspended|
- Intangible Assets under Development–
For intangible assets under development, following ageing schedule shall be given:
|Intangible Assets under development||Less than 1 year||1-2 years||2-3 years||More than 3 years||total|
|projects in progress|
|Projects temporarily suspended|
- Details of Benami Property held: In case, any proceedings have been initiated or pending against the entity under the Benami Transactions (Prohibitions) Act, 1988, the disclosures shall be provided in the financial statements.Following disclosure Shall be required such as:
- details of such property including year of acquisition
- Amount of acquisition cost
- details of beneficiary such as name, registered address, identification numberSuch as pan, Aadhar number, c i n etc relationship with the company
- Whether property is in books and represented in the balance sheet?
- property not in books, this fact to be stated
- proceedings against the company under benami law such as details of show Cause Notice and other proceeding details etc
- nature of proceeding whether it involves attachment/ adjudication/ confiscation of property
10 Details of borrowings– Where the Company has borrowings from banks or financial institutions on the basis of security of current assets, disclosure shall be made whether quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts. if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed.
note: no reporting required in the case of unsecured loan or borrowings secured by other current assets.
- Willful Defaulter– Where a company is a declared wilful defaulter by any bank or financial Institution or other lender details of such defaults .Following disclosures Shall be required:
- Date of declaration as willful defaulter
- details of default such as amount and nature of default
Note: willful defaulter means a person who is categorised as willful defaulter by the bank or financial institution in accordance with the guidelines on wilful defaulter issued by RBI.
12- Relationship with Struck off Companies– Relationship with struck off companies need to be disclosed such as name of company, Nature of transactions with such company, balance outstanding, relationship with such company etc.
13 . Registration of charges or satisfaction with Registrar of Companies: Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed.
- Disclosure of ratios – The amendment requires the companies covered under division I and II of schedule III to disclose the following ratios: Current Ratio,
Debt Service Coverage Ratio,
Return on Equity Ratio,
Inventory turnover ratio,
Trade Receivables turnover ratio,
Trade payables turnover ratio,
Net capital turnover ratio,
Net profit ratio,
Return on Capital employed,
Return on investment.
The ratios required to be reported for the current period as well as previous period along with variance and reason for variance
Note: the numerator and denominator should be consistently taken as same in the current reporting period as well as previous reporting period. if there is any change it should be reported by way of footnote.
- Compliance with number of layers of companies– Where the company has not complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, the name and CIN of the companies beyond the specified layers and the relationship/extent of holding of the company in such downstream companies shall be disclosed.
- Utilization of Borrowed funds and share premium:
Details shall be provided in respect of advance or loan or investment ( whether borrowed fund or share premium or any other source or kind of funds) to any other person for entity including foreign entity ( intermediaries) with the understanding that such intermediary shell :
- Such intermediary directly or indirectly lend or invest in other person buy on behalf of the company( ultimate beneficiary) ; or
- such intermediary provide any guarantee, security on behalf of ultimate beneficiary
similar reporting where the company has received any fund from any person or entity including foreign entity with the understanding that search fund shall be invested by the company on behalf of funding party( ultimate beneficiary) or provide any guarantee or security on behalf of such ultimate beneficiary
17 . Compliance with approved Scheme(s) of Arrangements : Where any Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 (Corporate Restructuring) of the Companies Act, 2013 the Company shall disclose that: a. the effect of such Scheme of Arrangements have been accounted for in the books of account of the Company ‘in accordance with the Scheme’ and b. in accordance with accounting standards and c. deviation in this regard shall be explained.
- Total Income-Under the heading “III. Total Revenue (I +II)”, for the word “Revenue”, the word “Income” shall be substituted; Hereafter it shall be called as “Total Income”
- Undisclosed Income: The Company shall give details of any transaction not recorded in the books of accounts- surrendered or disclosed as income during the year in tax assessments Under the Income Tax Act such as surrender in the search or survey unless there is immunity from disclosure and also state whether previously unrecorded income and related assets have been properly recorded in the books of account during the year.
- CSR- Where the company covered under section 135 of the Companies Act, the following shall be disclosed with regard to CSR activities:
- amount required to be spent by the company during the year,
- amount of expenditure incurred,
- shortfall at the end of the year,
- total of previous year’s shortfall,
- reason for shortfall,
- nature of CSR activities,
- Crypto Currency or Virtual Currency:- Where the Company has traded or invested in Crypto currency or Virtual Currency during the financial year, the following shall be disclosed:
- profit or loss on transactions involving Crypto currency or Virtual Currency b. amount of currency held as at the reporting date,
- deposits or advances from any person for the purpose of trading or investing in Crypto Currency/ virtual currency
Note: Besides there and minor changes in the format of and presentation of balance sheet vide notification no. gsr 207(E) dated 24th of March 2021 with effect from 01-04- 2021