KPMG Taseer Hadi & Co.

Amendments in NBFC
Brief on the Alterati ons in
Third, FourthRegul
and Fiaftithons 2008es
Schedul
Chartered Accountants

of the Companies Act, 2017

S.R.O. 639 (I)/2019 dated 20 June, 2019

This brief highlights the significant amendments in Third, Fourth and Fifth schedules of the Companies Act, 2017. These
amendments are made by SECP to relax the extensive disclosure requirements which are in addition to the disclosure
requirements stipulated in IFRS. The major changes include but not limited to: applicability of fourth schedule on subsidiary
of listed company; option of applying IFRS on all companies and NPOs; change in the limit of book value in case of disposal
of PPE; omission of disclosure of penalties; omission of additional disclosure requirements for investments in associated
companies; omission of management assessment of tax provision; omission of disclosure requirement of auditor’s opinion
on latest available financial statements of associated companies, subsidiaries, joint ventures or holding companies
incorporated outside Pakistan; and omission of disclosure of summary of significant transactions and events. The following
table summaries and compares the requirements of the old and new schedules.

Reference Old Requirements New Requirements

THIRD SCHEDULE
Through S.R.O.1169 (I)/2017 with Effective Date: 7 November 2017

Serial 3(a,b,c) column International Financial Reporting Standards for

Revised AFRS for SSEs
4 SMEs

International Financial Reporting Standards for

Serial 3(d) column 4 Accounting Standards of NPOs
SMEs and Accounting Standards for NPOs

Subsidiary companies of a listed company shall

Note 4 N/A
follow the requirements of the Fourth Schedule

Through S.R.O. 1092 (I)/2018 with Effective Date: 3 September 2018

The Medium Sized Companies that are otherwise

N/A required to follow IFRS for SMEs and Accounting
Note 5 Standards for NPOs, may opt to follow the IFRS
notified by the Commission for the preparation of
financial statements.

The Small Sized Companies that are otherwise

N/A required to follow revised AFRS for SSEs may opt
Note 6
to follow IFRS notified by the Commission or
IFRS for SMEs.

FOURTH SCHEDULE
Through S.R.O. 888 (I)/2019 with Effective Date: 29 July 2019

Number of persons employed as on the date of Number of persons employed as on the date of
financial statements and average number of financial statements and average number of
Part 1, Clause VI (1)(iv)
employees during the year, separately disclosing employees during the year
factory employees;

Name of undertaking, registered address and country Name of undertaking and country of
Part 1, Clause VI (2)(i)
of incorporation; incorporation;

Part 1, Clause VI (2)(ii) Basis of association; Basis of association; and

Name of Chief Executive Officer or Principal Officer or Omitted

Part 1, Clause VI (2)(iv)
Authorized Agent;

© 2019 KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a member firm of the KPMG network of independent member 1
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Document Classification: KPMG Public


Reference
Part 1, Clause VI (2)(v)
Part 1, Clause VI
(2)(vi)
Part 1, Clause VI (4)
Part 1, Clause VI (5)
Part 1, Clause VI (9) (i)
Part 1, Clause VI (9)
(ii)
Part 1, Clause VI (9)
(iii)
Part 1, Clause VI (9)
(iv)
Part 2, Clause 15
Part 2, Clause 16
Part 2, Clause 17(i)
Part 2, Clause 21
© 2019 KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG Taseer Hadi & Co. Brief on the Alterations in
Third, Fourth and Fifth Schedules
Chartered Accountants
of the Companies Act, 2017
Old Requirements New Requirements
FOURTH SCHEDULE
Operational status; and
Auditor‘s opinion on latest available financial
statements. Omitted
(Disclosure in respect of associated companies,
subsidiaries, joint ventures or holding companies
incorporated outside Pakistan).
Any penalty in terms of money or otherwise imposed
under any law by any authority, on the Company shall
be disclosed in the first annual report furnished after
the imposition of the penalty. If, as a result of any
appeal, revision petition, or review application, such
Omitted
penalty is reduced enhanced or waived, the original
penalty imposed shall nevertheless be disclosed, and
the fact of any reduction, enhancement or waiver
shall be disclosed, in the first annual report furnished
after such reduction, enhancement or waiver;
Summary of significant transactions and events that
have affected the company‘s financial position and Omitted
performance during the year;
Amount of export sales made in each foreign
jurisdiction along with break up into confirmed LC, Omitted
contract or other significant categories;
Name of company or undertaking in case of related Name of company or undertaking in case of
party; related party; and
Name of defaulting parties, relationship if any, and Name of defaulting parties, relationship if any,
the default amount; and and the default amount;
Brief description of any legal action taken against the
Omitted
defaulting parties.
In the case of sale of fixed assets, if the aggregate In the case of sale of fixed assets, if the
book value of assets exceeds five hundred thousand aggregate book value of assets exceeds five
rupees, following particulars of each asset shall be million rupees, following particulars of each
disclosed,— asset, which has book value of five hundred
thousand rupees or more shall be disclosed,—
Investments in associated companies or undertakings
have been made in accordance with the requirements Omitted
under the Act;
that the loans and advances have been made in
Omitted
compliance with the requirements of the Act;
In respect of loans and advances, other than those to In respect of loans and advances, other than
the suppliers of goods or services, the name of the those to employees as per company’s human
borrower and terms of repayment if the loan or resource policy or to the suppliers of goods or
advance exceeds rupees one million, together with services, the name of the borrower and terms of
the particulars of collateral security, if any, shall be repayment if the loan or advance exceeds
disclosed separately; rupees one million, together with the particulars
of collateral security, if any, shall be disclosed
separately;
2
Document Classification: KPMG Public
 KPMG Taseer Hadi & Co. Brief on the Alterations in
Third, Fourth and Fifth Schedules
Chartered Accountants

of the Companies Act, 2017

Reference Old Requirements New Requirements

FOURTH SCHEDULE
REQUIREMENTS AS TO PROFIT AND LOSS REQUIREMENTS AS TO STATEMENT OF
Part 3 ACCOUNT PROFIT OR LOSS ACCOUNT

In case, donation to a single party exceeds
Rs.500,000, name of donee(s) shall be disclosed and
where any director or his spouse has interest in the
donee(s), irrespective of the amount, names of such
Part 3 Clause 33
directors along with their interest shall be disclosed;
In case, donation to a single party exceeds “10
per cent of company’s total amount of donation
or Rs.1 million, whichever is higher, name of
donee(s) shall be disclosed and where any
director or his spouse has interest in the
donee(s), irrespective of the amount, names of
such directors along with their interest shall be
disclosed;

Management assessment of sufficiency of tax

provision made in the company‘s financial statements
Part 3 Clause 34 shall be clearly stated along with comparisons of tax Omitted
provision as per accounts viz a viz tax assessment for
last three years;

FIFTH SCHEDULE
Through S.R.O. 888 (I)/2019 with Effective Date: 29 July 2019

Part 1 Clause V(1)(iii) number of persons employed as on the date of number of persons employed as on the date of
financial statements and average number of financial statements and average number of
employees during the year separately disclosing employees during the year; and
factory employees; and

Part 1 Clause V(3) Summary of significant transactions and events that

have affected the company‘s financial position and Omitted
performance during the year;

Part 2 Clause 10
In the case of sale of fixed assets, if the aggregate
book value of assets exceeds five hundred thousand
rupees, following particulars of each asset shall be
disclosed,—
In the case of sale of fixed assets, if the
aggregate book value of assets exceeds “five
million rupees, following particulars of each
asset, which has book value of five hundred
thousand rupees or more shall be disclosed,—

Part 2 Clause 11 Investments in associated companies or undertakings

have been made in accordance with the requirements Omitted
under the Act.

Part 3 REQUIREMENTS AS TO PROFIT AND LOSS “REQUIREMENTS AS TO STATEMENT OF

PROFIT OR LOSS ACCOUNT

Part 3 Clause 27
In case, donation to a single party exceeds
Rs.500,000 name of donee(s) shall be disclosed and
where any director or his spouse has interest in the
donee(s) irrespective of the amount, names of such
directors along with their interest shall be disclosed;
In case, donation to a single party 10 per cent of
company’s total amount of donation or Rs.1
million, whichever is higher name of donee(s)
shall be disclosed and where any director or his
spouse has interest in the donee(s) irrespective
of the amount, names of such directors along
with their interest shall be disclosed;

© 2019 KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a member firm of the KPMG network of independent member 3
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Document Classification: KPMG Public

Contact us
Karachi Office
Sheikh Sultan Trust Building No. 2
Beaumont Road
Karachi – 75530
Telephone 92 (21) 3568 5847
Telefax 92 (21) 3568 5095
e-Mail karachi@kpmg.com

Lahore Office
351, Shadman–1
Main Jail Road
Lahore 54000
Phone +92 (42) 111 576 484
Fax +92 (42) 3742 9907
E-Mail lahore@kpmg.com

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Sixth Floor, State Life Building
Blue Area
Islamabad
Telephone 92 (51) 282 3558
Telefax 92 (51) 282 2671
e-Mail islamabad@kpmg.com

www.kpmg.com.pk

The information contained herein is of a general nature and is not intended to address
the circumstances of any particular individual or entity. Although we endeavour to
provide accurate and timely information, there can be no guarantee that such information
is accurate as of the date it is received or that it will continue to be accurate in the future.
No one should act on such information without appropriate professional advice after a
thorough examination of the particular situation.

© 2019 KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan and a
member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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