The Ministry of Corporate Affairs, Government of India, issued notifications dated 24th March, 2021 to amend Schedule III to the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and Companies (Audit and Auditors) Rule, 2014 to enhance the disclosures required to be made by the Company in its:-
i. Financial Statements
ii. Board Report
iii. Audit Report
The main aim of the amendments in Schedule III of the Companies Act, 2013 is to improve the transparency in the financial statements of the company.
- Shareholding of Promoter:
under the heading “A. Share Capital”, after item (l) and the entries relating thereto, the following shall be inserted, namely:
A company shall disclose Shareholding of Promoters as below::
| Shares held by promoters at the end of the year | % change during the year | |||
| Sr. no | Promoter’s Name | No. of shares | % of total shares | |
| Total |
- Rounding Off :
Earlier companies had to round off the figures appearing in the financial statements based on “turnover”; however, based on the latest amendment rounding off will be based on the “total income” of your company.
- Trade Payable ageing Schedule:
| (Amount in Rs.) | |||||
| Particulars | Outstanding for following periods from due date of payment# | ||||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| (i)MSME (ii)Others (iii) Disputed dues – MSME (iv) Disputed dues – Others |
- Trade Receivables ageing schedule:
| (Amount in Rs.) | ||||||
| Particulars | Outstanding for following periods from due date of payment# | |||||
| Less than 6 months | 6 months – 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| (i) Undisputed Trade receivables – considered good (ii) Undisputed Trade Receivables – considered doubtful (iii) Disputed Trade Receivables considered good (iv) Disputed Trade Receivables considered doubtful |
- Loans or advances to Promoters/Directors/KMP/Related Parties:
Following disclosures shall be made where Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person, that are:
(a) repayable on demand or
(b) without specifying any terms or period of repayment
| Type of Borrower | Amount of loan or advance in the nature of loan outstanding | Percentage to the total Loans and Advances in the nature of loans |
| Promoters | ||
| Directors | ||
| KMPs | ||
| Related Parties |
- Details of Benami Property (if any):
Where any proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder, the company shall disclose the following: –
(a) Details of such property, including year of acquisition,
(b) Amount thereof,
(c) Details of Beneficiaries,
(d) If property is in the books, then reference to the item in the Balance Sheet,
(e) If property is not in the books, then the fact shall be stated with reasons,
(f) Where there are proceedings against the company under this law as an abetter of the transaction or as the transferor then the details shall be provided,
(g) Nature of proceedings, status of same and company’s view on same.
- Registration of Charges:
Registration charges or satisfaction yet to be registered with ROC beyond the statutory period, details and reasons thereof shall be disclosed.
- Wilful Defaulter:
Where a company is a declared wilful defaulter by any bank or financial Institution or other lender, following details shall be given:
(a) Date of declaration as wilful defaulter,
(b) Details of defaults (amount and nature of defaults).
- Following ratios to be disclosed:
(a) Current Ratio,
(b) Debt-Equity Ratio,
(c) Debt Service Coverage Ratio,
(d) Return on Equity Ratio,
(e) Inventory turnover ratio,
(f) Trade Receivables turnover ratio,
(g) Trade payables turnover ratio,
(h) Net capital turnover ratio,
(i) Net profit ratio,
(j) Return on Capital employed,
(k) Return on investment.
10.Title deeds of immovable property not held in the name of company
Details of immovable property not held in company name (other than lease where company is lessee)
| Relevant line item in the Balance sheet | Description of item of property | Gross carrying value | Title deeds held in the name of | TD Holder- Promoter, Director or relative of P/D or employee of P/D | Property held since which date | Reason for not being held in the name of the company (also indicate if in dispute) |
| PPE | Land & Building | |||||
| Investment Property | Land & Building | |||||
| PPE retired from active use and held for disposal | Land & Building | |||||
| Others |
11.Borrowings from Banks & Financial Institutions:
Where the Company has borrowings from banks or financial institutions on the basis of security of current assets, it shall disclose the following: –
(a) whether quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the book of accounts,
(b) if not, summary of reconciliation and reasons of material discrepancies if any to be adequately disclosed.
12.Revaluation of Plant, Property and Equipment:
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.
13.Transactions with Struck off Companies:
If your company has had any transactions with another company whose name has been struck off, disclosures have to be made accordingly.
14.Scheme of arrangement:
Where any Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013, the Company shall disclose that 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 ‘in accordance with accounting standards and deviation in this regard shall be explained.
