MCA amends Schedule III of Companies Act 2013. Read disclosures to be made in Balance Sheet

MCA amends Schedule III of Companies Act 2013. Read disclosures to be made in Balance Sheet with effect from 1st day of April, 2021

MCA has made amendments in Schedule III to the Companies Act 2013 with effect from 1st day of April, 2021.

Schedule III of the Companies Act 2013 contains the general instructions for preparation of Balance Sheet and Statement of Profit and Loss of a Company.

Broadly, changes have been made to align the Schedule III with recent changes and to make it more meaningful and speaking. Notable changes are as under:

Amendments to Schedule III of Companies Act 2013

(i) Now companies have to round off the figures appearing in the financial statements, hitherto it was optional. Further, the criteria for rounding off shall be based on “total income” in place of “turnover”.

(ii)  company shall disclose Shareholding of Promoters.

(iii) Current maturities of Long term borrowings shall be disclosed separately.

(iv) Trade Payables ageing schedule to be given.

(v) Trade Receivables ageing schedule to be given.

(vi) 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.

(vii) Disclosures to be made where Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and related parties.

(viii) For Capital-work-in progress ageing schedule shall be given

(ix) Intangible assets under development aging schedule to be given.

(x) Disclosure of any proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition)Act, 1988 to be made.

(xi) Where a company is a declared wilful defaulter by any bank or financial Institution or other lender, details to be given.

(xii) Disclosure of any transactions with companies struck off 

(xiii) Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed.

(xiv) 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

(xv) Disclosure of Utilisation of Borrowed funds and share premium to be given

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