Amendments to Schedule 3 of the Companies Act, 2013 (Applicable for financial statements from FY 21-22)
What are the various Divisions of Schedule 3?
Division I – Financial Statements for a company whose Financial Statements are required to comply with the Companies (Accounting Standards) Rules, 2006.
Division II – Financial Statements for a company whose financial statements are drawn up in compliance of the Companies (Indian Accounting Standards) Rules, 2015.
Division III – Financial Statements for a Non-Banking Financial Company (NBFC) whose financial statements are drawn up in compliance of the Companies (Indian Accounting Standards) Rules, 2015
This blog specifically covers amendments to Division I of Schedule 3 of the Companies Act, 2013.
| S. No | Type | Head | Existing | Amendment | ||||||||||||||||||||||||||||||||||||||||||||
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| 1 | Amendment | Non-current Assets | II. ASSETS
Non-current assets (1) (a) Property, Plant and Equipment (i) Tangible Assets. (ii) Intangible assets. (iii) Capital work-in-progress. (iv) Intangible assets under development. (b) Non-current investments. (c) Deferred tax assets (net). (d) Long-term loans and advances. (e) Other non-current assets. |
II. ASSETS
Non-current assets (1) (a) Property, Plant and Equipment and Intangible assets (i) Property, Plant and Equipment (ii) Intangible assets. (iii) Capital work-in-progress. (iv) Intangible assets under development. (b) Non-current investments. (c) Deferred tax assets (net). (d) Long-term loans and advances. (e) Other non-current assets. |
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| 2 | Additional Disclosure | Share Capital | – | A company shall disclose Shareholding of Promoters as below:
1. Promoter means promoter as defined in the Companies Act, 2013 2. Details shall be given separately for each class of shares 3. Percentage change shall be computed with respect to the number at the beginning of the year or if issued during the year, with respect to the date of issue |
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| 3 | Change of head | Short term borrowings | – | Current maturities of Long term borrowings shall be disclosed separately – this was previously included in other current liabilities (omitted there and included here) | ||||||||||||||||||||||||||||||||||||||||||||
| 4 | Additional Disclosure | Trade Payables | – | 1. The following ageing schedule shall be given for Trade payables due for payment
2. 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 3. Unbilled dues shall be disclosed separately |
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| 5 | Amendment | Fixed Assets | A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. | A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation (if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment) and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately | ||||||||||||||||||||||||||||||||||||||||||||
| 6 | Amendment | Intangible Asset | A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related amortization and impairment losses/reversals shall be disclosed separately | A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, 3 acquisitions through business combinations, amount of change due to revaluation (if change is 10% or more in the aggregate of the net carrying value of each class of intangible assets) and other adjustments and the related depreciation and impairment losses or reversals shall be disclosed separately | ||||||||||||||||||||||||||||||||||||||||||||
| 7 | Change of head | Other non-current Assets | – | Security deposits which was earlier given under long term loans and advances should now be shown under other non-current assets. | ||||||||||||||||||||||||||||||||||||||||||||
| 8 | Additional Disclosure | Trade Receivables | – | 1. For trade receivables outstanding, the following ageing schedules shall be given
2. 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. 3. Unbilled dues shall be disclosed separately. |
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| 9 | Additional Disclosure | Notes | – | 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 | ||||||||||||||||||||||||||||||||||||||||||||
| 10 | Additional Disclosure | Additional Regulatory Information – Title deeds not held in company name | – | (i) Title deeds of Immovable Property not held in name of the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee)
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| 11 | Additional Disclosure | Additional Regulatory Information – Valuation done by registered Valuer | – | 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.
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| 12 | Additional Disclosure | Additional Regulatory Information – Loans or advances granted to promoters | – | Disclosure required in the following manner if Loans or Advances are granted to promoters, directors, KMPs and the related parties that are: (a) repayable on demand or (b) without specifying any terms or period of repayment
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| 13 | Additional Disclosure | Additional Regulatory Information – CWIP (Capital Work in progress) | – | (a) For Capital-work-in progress, following ageing schedule shall be given:
Note: 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:
Note: Details of projects where activity has been suspended shall be given separately |
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| 14 | Additional Disclosure | Additional Regulatory Information – Intangible assets under development | – | (a) For Intangible assets under development, following ageing schedule shall be given
Note: 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 information is required
Note: Details of projects where activity has been suspended shall be given separately |
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| 15 | Additional Disclosure | Additional Regulatory Information – Details of Benami Property held | – | Details of Proceedings initiated or pending against the company under the Benami Transactions (Prohibition) Act, 1988 should be disclosed in the following manner
(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. |
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| 16 | Additional Disclosure | Additional Regulatory Information – Borrowings from banks on the basis of security of current assets | – | 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 books of accounts. (b) if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed |
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| 17 | Additional Disclosure | Additional Regulatory Information – Willful defaulter | – | Where a company is a declared willful defaulter by any bank or financial Institution or other lender, following details shall be given
(a) Date of declaration as willful defaulter, (b) Details of defaults (amount and nature of defaults) |
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| 18 | Additional Disclosure | Additional Regulatory Information – Relationship with Struck off Companies | – | Where the company has any transactions with companies struck off, the Company shall disclose the following details:
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| 19 | Additional Disclosure | Additional Regulatory Information – Registration or satisfaction of charges | – | Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed | ||||||||||||||||||||||||||||||||||||||||||||
| 20 | Additional Disclosure | Additional Regulatory Information – 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. | ||||||||||||||||||||||||||||||||||||||||||||
| 21 | Additional Disclosure | Additional Regulatory Information – Ratios | – | 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 Note: 1. The company shall explain the items included in numerator and denominator for computing the above ratios 2. Further explanation shall be provided for any change in the ratio by more than 25% as compared to the preceding year |
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| 22 | Additional Disclosure | Additional Regulatory Information – 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. | ||||||||||||||||||||||||||||||||||||||||||||
| 23 | Additional Disclosure | Additional Regulatory Information – Utilization of Borrowed funds 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 along with 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 violating 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 along with 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 violating the Prevention of Money-Laundering act, 2002 (15 of 2003) |
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| 24 | Amendment | Heading | On the face of the P&L
I. Revenue from operations II. Other income III. Total Revenue (I + II) |
On the face of the P&L
I. Revenue from operations II. Other income III. Total Income (I + II) |
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| 25 | Additional Disclosure | Revenue from operations | – | In addition to (a) sale of products and (b) sale of services, a section 8 company specific sub head shall be added namely
(ba) Grants or donations received |
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| 26 | Additional Disclosure | 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 11 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. | ||||||||||||||||||||||||||||||||||||||||||||
| 27 | Additional Disclosure | Corporate Social Responsibility (CSR) | – | Where the company covered under section 135 of the companies act, the following shall be disclosed with regard to CSR activities: –
(a) amount required to be spent by the company during the year, (b) amount of expenditure incurred, (c) shortfall at the end of the year, (d) total of previous years shortfall, (e) reason for shortfall, (f) nature of CSR activities, (g) details of related party transactions, e.g., contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard, (h) where a provision is made with respect to a liability incurred by entering into a contractual obligation, the movements in the provision during the year should be shown separately |
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| 28 | Additional Disclosure | Details of Crypto Currency | – | 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 |
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