Changes In Schedule III Of Companies Act, 2013: An Overview

 

Finally, the changes as proposed in Schedule III of the companies Act-2013 has become effective after Corona period is over.

Let us have a review of the changes in Schedule III as under:

1. Shareholding of Promoters: As compared to earlier version, the entities shall now disclose the shares held by the promoters at the end of the financial year and % change during the year in notes to accounts in tabular format as mentioned in the Schedule.

Shares held by Promoter at the end of the year			% Change in shareholding during the year
Sl. No.	Promoter Name	No. of shares

 

 

2. Rounding Off: It is mandatory for the companies to round off the figures appearing in the financial statements on the basis of ‘Total Income’. Earlier this provision was optional and round off was done on the basis of ‘Turnover’.

3. Short Term Borrowings: From 1 April 2021 onwards, the current maturities within 12 months from long term borrowings is required to be separately disclosed in the financial statements.

4. Trade Payables Due For Payments:Gone are those days where ageing schedule for only receivables were made. From now onwards, it shall be prepared for trade payables also which are due for payment, in a tabular form, whether or not, due date of payment is specified on bill. However, unbilled dues shall be separately disclosed.

Particular		Outstanding for following periods fromdue date of payment				Total
		Less than 1 years	1-2 years	2-3 years	More than 3 years
i) MSME
ii) Others
iii) Disputed Dues- MSME
iv) Disputed Dues- Others
Unbilled dues shall be disclosed separately;

 

5. Disclosure for Tangible and Intangible Asset:At the beginning and end of the reporting period, a reconciliation of the gross and net carrying amounts of each class of assets showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation and other adjustments and the related depreciation and impairment losses or reversals shall be disclosed separately, if  the changes is 10% or more in each class of asset.

6. Security Deposit – To be shown separately under Other non current assets instead of Loans and advances

7. Trade Receivables outstanding: Ageing schedule shall be prepared for trade receivables in a tabular form in a manner as notified by MCA, whether or not, due date of payment is specified on bill. However, unbilled dues shall be separately disclosed.

Particular	Outstanding for following periods from due date of payment					Total
	Less than 6 months	6months – 1 years	1-2 years	2-3 years	More than 3 years
i) Undisputed – considered good
ii) Undisputed – considered doubtful
iii) Disputed – considered good
iv) Disputed – considered doubtful

 

8. Title deeds of Immovable Property not held in name of the Co.
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 given below and where such immovable property is jointly held with others, details are required to be given to the extent of the company’s share.
Relevant line item in the Balance Sheet	Description of item of property	Gross carrying value	Title deeds held in the name of	Whether title deed holder is a promoter, director or relative of promoter/director or employee of promoter/director	Property held since which date	Reason for not being held in the name of the Company**
PPE	Land					**also indicate if in dispute
……	Building
Investment property	Land
	Building
PPE retired from active use and held for disposal	Land
	Building
Others

 

9. Borrowing from Banks and Financial Institutions: At balance sheet date, the companies shall disclose the details of those funds which were borrowed from banks and financial institutions for a specific purpose.

10.    Disclosure whether revaluation of assets is based on the valuation by a RV: 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.
11.    Capital-Work-in Progress
(a) For Capital-work-in progress, following ageing schedule shall be given:
CWIP ageing schedule
CWIP	Amount in CWIP for a period of
	Less than 1 year	1-2 years	2-3 years	More than 3 years
Projects in progress
Projects temporarily suspended
*Total shall tally with CWIP amount in the balance sheet.
(b) For capital-work-in progress, whose completion is overdue or has exceeded its cost compared to its original plan, following CWIP completion schedule shall be given**:
CWIP	To be completed in
	Less than 1 year	1-2 years	2-3 years	More than 3 years
Project 1
Project 2
**Details of projects where activity has been suspended shall be given separately.
12.    Intangible assets under development
(a) For Intangible assets under development, following ageing schedule shall be given:
Intangible assets under development ageing schedule
Intangible assets under development	Amount in CWIP for a period of
	Less than 1 year	1-2 years	2-3 years	More than 3 years
Projects in progress
Projects temporarily suspended
*Total shall tally with the amount of Intangible assets under development in the balance sheet.
(b) For Intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan, following Intangible assets under development completion schedule shall be given**:
Intangible assets under development	To be completed in
	Less than 1 year	1-2 years	2-3 years	More than 3 years
Project 1
Project 2
**Details of projects where activity has been suspended shall be given separately
13.    Details of Benami Property held
•Where any proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 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.
14.    Wilful Defaulter
The Company has beed declared as Wilful defaulter by Bank/ Fiancial Institution/ other lender w.e.f.– (date of declaration of wilful defaulter)
Details of defauls (amount and nature of defaults)
15.    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 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
16.    Undisclosed income
The Company shall give details of any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), unless there is immunity for disclosure under any scheme and also shall state whether the previously unrecorded income and related assets have been properly recorded in the books of account during the year
17.    CSR Details of 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:— (a) profit or loss on transactions involving Crypto currency or Virtual Currency (b) amount of currency held as at the reporting date, (c) deposits or advances from any person for the purpose of trading or investing in Crypto Currency/ virtual currency
18.    Utilisation of borrowed fund and share premium
(A)   Where company has advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries; the company shall disclose the following:- (I) date and amount of fund advanced or loaned or invested in Intermediaries with complete details of each Intermediary. (II) date and amount of fund further advanced or loaned or invested by such  Intermediaries to other intermediaries or Ultimate Beneficiaries alongwith complete details of the ultimate beneficiaries. (III) date and amount of guarantee, security or the like provided to or on behalf of the Ultimate Beneficiaries (IV) declaration that relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been complied with for such transactions and the transactions are not violative of the Prevention of Money-Laundering act, 2002 (15 of 2003).; (B) Where a company has received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, the company shall disclose the following:- (I) date and amount of fund received from Funding parties with complete details of each Funding party. (II) date and amount of fund further advanced or loaned or invested other intermediaries or Ultimate Beneficiaries alongwith complete details of the other intermediaries’ or ultimate beneficiaries. (III) date and amount of guarantee, security or the like provided to or on behalf of the Ultimate Beneficiaries (IV) declaration that relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been complied with for such transactions and the transactions are not violative of the Prevention of Money-Laundering act, 2002 (15 of 2003).

19. Ratios:Companies shall disclose the all those ratios which are prescribed and shall explain the items included in numerator and denominator for computing the above ratios. Moreover, if any change in the ratio is more than 25% as compared to the preceding year then explanation for the same shall be provided.

Ratios	Numerator	Denominator	Current Period	Previous Period	% Variance	Reason for variance
Current Ratio
Debt-equity ratio
Debt service coverage ratio
Return on equity
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

 

20. Details of pending charge creation / satisfaction registration with ROC.

 

21.    Relationship with struck off Companies
	Name of Company		Nature of Transaction	Balance outstanding	Relationship with Struck off company, if any,

22. 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

Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties
Type of Borrower		Amount in the nature of loan outstanding		% to the total Loans and Advances in the nature of loans		Terms of repayment
(i) Promoters
(ii) Directors
(iii) KMPs
(iv) Related Parties

 

23. 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.