The Ministry of Corporate Affairs amends Schedule III of the Companies Act, 2013. It shall come into effect on April 1, 2021. Key changes in the Schedule vide the amendment are as follows:


  • In Division I, under heading “General instructions for preparation of Balance Sheet and statement of P&L of the company”, under sub-heading “General instructions”, in paragraph 4, in clause (i), for the word “may” word “shall” and for word “Turnover”, at both places where it occurs, words “Total Income” shall be substituted.


  • A company shall disclose shareholding of Promoters, Promoter’s name, number of shares, percentage of share. It is noted that similar information shall be given where no due date of payment is specified; in that case, disclosure shall be from the transaction date. Unbilled dues shall be disclosed separately.


  • Under heading “I. Tangible Assets”, for words “Tangible Assets”, words “Property, Plant and Equipment” shall be substituted.


  • Under heading “J. Intangible assets”, for an item ”reconciliation of gross and net carrying amounts of each class of assets at beginning and end of reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation and other adjustments and related depreciation and impairment losses or reversals shall be disclosed separately,” shall be substituted.


  • Additional disclosures to be made by companies. They must state if they have been declared wilful defaulters by banks, financial institutions or other lenders. It has been mandated for companies to record audit trails of their accounts. Firms using accounting software to maintain their books need to use features that can record the audit trail of each transaction.


  • In addition to this, matters such as corporate social responsibility spending, cryptocurrency dealings, benami property, relationship with struck-off, or dissolved, companies, and ageing of payables & receivables with vendors must be disclosed by the companies. The companies must provide details of shortfall in CSR spending for the previous years, including reasons for not meeting targets.


  • Loans granted to promoters, directors and related parties that are repayable on demand or without specific repayment terms from companies must be disclosed in terms of amount and percentage to total loans granted.

*Tanvi Singh, Editorial Assistant has put this story together.

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