New Disclosure Requirements as per Schedule 3 of Companies Act, 2013

Prepared On:
13/07/22


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MCA (Ministry of Corporate Affairs) had made this Amendments to align Financials with auditor's reporting requirements in Companies (Auditors and Report Order) 2020 and the Companies (Indian Accounting Standards) Amendment Rules, 2020.

This Amendments will be effective from 01.04.2021. 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. By these amendments MCA is increasing stringency in compliance and adding numerous additional disclosures in Financial Statement, Directors Report and Audit Report.

15 new disclosures as per schedule ||| of company Act,2013

  1. Shareholding of Promoter

    Notes on share capital shall disclose the following

  2. *Promoter here means promoter as defined in the Companies Act, 2013.

    ** Details shall be given separately for each class of shares

    *** percentage change shall be computed with respect to the number at the beginning of the year or if issued during the year for the first time then with respect to the date of issue.

  3. 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.

    Where total income refers to Revenue from Operations and Other income.

  4. Trade Payable ageing Schedule
  5. # Similar information shall be given where no due date of payment is specified in that case disclosure shall be from the date of the transaction.

    Unbilled dues shall be disclosed separately.

  6. Debtors ageing Schedule
  7. # Similar information shall be given where no due date of payment is specified in that case disclosure shall be from the date of the transaction.

    Unbilled dues shall be disclosed separately.

  8. Loans & advances to Directors/KMP/Related Parties
  9. Details of Loans & advances to Directors/KMP/Related Parties either severally or jointly with any other person, that are:

    (a) repayable on demand or
    (b) without specifying any terms or period of repayment

  10. Details of Benami Property (if any)
  11. 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.

    Where abetter mean a person who encourages or assists someone to do something wrong, in particular to commit a crime.

  12. Registration of charges or satisfaction with Registrar of Companies
  13. Details of Registration or satisfaction of charge not registered with ROC beyond the time period needs to be disclosed along with reasons thereof.

    Where Due dates for

    1. Registration of Charge:
    2. Whenever any charge is created, the Company shall register the charge with the concerned ROC in e-form CHG 1 (other than debentures) and in CHG 9 (for debentures) within 30 days of creation or modification of charge, duly signed by the Company and charge- holder, along with normal fee. Registrar on an application by the Company may allow Company to register the Charge after the above specified period, as below:

      1. Charges created before the Commencement of the Companies (Amendment) Ordinance, 2019, within a period of 300 days of such creation, i.e, 270 more days after the expiry of 30 days. If registration still not made within the prescribed period, then, it has to be made within 6 months from the date of commencement of the Companies (Amendment) ordinance, 2019 on payment of additional fees.

      2. Charges created on or after the commencement of the Companies (Amendment) Ordinance, 2019 within a period of sixty days of such creation, on payment of such additional fees as may be prescribed, i.e, 30 more days after the expiry of 30 days. If registration still not made within the prescribed time period, then an application has to be made to Central Government in form CHG 8 for further 60 days extension, which if approved can be registered by paying advalorem fees.

    3. Satisfaction of Charge:
    4. Satisfaction of Charge is required to be filed with concerned ROC within 30 days from its satisfaction or date of full payment. If not paid within 30 days, then has to file within 300 days (i.e, 270 more days on expiry of 30 days). If still not filed CHG 4, then Company shall first apply for condonation of delay to be made to Regional Director in CHG 8 and only then Satisfaction of charge to be filed. As soon as order is received from RD, has to be intimated to ROC in INC 28

    Where abetter mean a person who encourages or assists someone to do something wrong, in particular to commit a crime.

  14. Title deeds of immovable property not held in the name of company
  15. 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:

    #Relative here means relative as defined in the Companies Act, 2013.
    *Promoter here means promoter as defined in the Companies Act, 2013.

  16. Following ratios to be disclosed
  17. Borrowings from Banks & FI (Financial Institutions)
    • Where the company has borrowed funds from banks/FI (being current assets as collateral security), the company needs to disclose 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 and if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed.
    • Where the company has not used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date, the company shall disclose the details of where they have been used.
  18. Foreign Exchange earnings
  19. Earnings in foreign exchange shall be classified under the following heads namely:-

    1. Export of goods calculated on FOB ((free on-board price) of exports and imports of goods is the market value of the goods at the point of uniform valuation) basis
    2. Royalty, know-how, professional and consultation fees,
    3. Interest and dividend
    4. Other income, indicating the nature thereof.
  20. Undisclosed Income:
  21. 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.

  22. Revaluation of Plant, Property and Equipment:
  23. Where the Plant, Property or Equipment has been revalued, the details of the same needs to be mentioned in the Auditor's report. Also, whether the same has been done from a registered valuer or not.

  24. Wilful Defaulter
  25. 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),

    “Wilful defaulter” here means a person or an issuer who or which is categorized as a wilful defaulter by any bank or financial institution (as defined under the Act) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

  26. Transactions with Struck off Companies
  27. Where the company has any transactions with companies struck off (provides the procedure of striking off company names by the ROC or voluntary by the company. Strike off of a company name means closing a defunct company in a faster manner. It is the simplest way to dissolve a company.) under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, the Company shall disclose the following details: -

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Disclaimer:

“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of situation.”