Amendments to Sch III of

Companies Act

D Ramprasad
and
Vinay KS
 INDEX

Applicability of the amendment

Changes in Balance Sheet

Additional Disclosures Requirement for the Balance

Sheet Items

Changes in Statement of Profit and Loss

Division II – Part I – Balance Sheet and Notes

Other Disclosures
 Applicability
• Applicable from : 1st April 2021 (FY 21-22)
• Applicable to:
Division I
Entities whose financial statements are required to comply with
the Companies (Accounting Standards) Rules, 2006.

Division II
Entities whose financial statements are required to comply with
the Companies (Indian Accounting Standards) Rules,
2015.

Division III
Non- Banking Financial Companies (NBFCs) whose
financial statements are required to comply Companies (Indian
Accounting Standards) Rules, 2015.
Changes in Balance Sheet
 General Instructions for
preparation of Balance Sheet

Except in the case of the first Financial Statements laid before

the Company (after its incorporation),
the corresponding amounts (comparatives) for the immediately
preceding reporting period for all items shown in the
Financial Statements including notes shall also be given.
 Changes in Balance Sheet
Share Capital -
Old New Clause Type of Change
Clause
Notes Company shall disclose New disclosure:
shareholding of promoters as Disclosure of
shown in the next slide – shareholding of
promoters and % of
change during the year
has been added for all
companies (Currently
listed companies to make
specified disclosures as
per format specified by
SEBI
 Changes in Balance Sheet
Disclosure of Share Holding of the Company
• Promoters Shareholding in the Company to be disclosed
in the following manner.
% Change
Shares held by promoters at the end of the year during the
year
Promoter No. of % of total
Sl No
Name Shares Shares
1 Mr. XXX XXX XX% XX%

Total
 Changes in Balance Sheet

Other Current Liabilities -

Old Clause New Clause Type of Change

The amounts The amounts shall be Omission:
shall be classified as: Omitted and included
classified as: (a) Current maturities of under the heading
(a) Current long term debt
maturities of “Short Term Borrowings” /
long term Borrowings” (Ind AS)
debt
 Changes in Balance Sheet
Trade Payables -
Old
New Clause Type of Change
Clause
Notes Trade payables due for New disclosure:
payment –

Ageing schedule (As shown in Trade Payable ageing

next slide) shall be given for schedule has been
Trade payables due for payment inserted

• If due date of payment is not

specified – Disclosure shall
be from date of transaction

• Unbilled dues shall be

disclosed separately
 Changes in Balance Sheet
Trade Payables
• Ageing schedule in respect of trade payables shall be provided
in the following format –
• Outstanding for following
periods from due date of
payment
Particulars Total
Less More
1-2 2-3
than 1 than 3
years Years
year years

i. MSME
ii. Others
iii. Disputed dues-MSME
iv. Disputed dues-
Others
 Changes in Balance Sheet

Long Term Loans and Advances (LTLA) -

Old Clause New Clause Type of Change

LTLA shall be LTLA shall be Omission:
classified as: classified as: Omitted and included
under the heading
(a) Capital Advances (a) Capital Advances
“Other non-current
(b) Security Deposits (b) Security Deposits assets/ Other financial
assets (For Ind AS
Companies)”
 Changes in Balance Sheet
Property, plant and equipment -
Old Clause
I. Tangible Assets
(iii) 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.
New Clause
I. Property, plant and equipment (I
GAAP)
(iii) 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
 Changes in Balance Sheet

Property, plant and equipment - …Contd

Type of Change

Change in nomenclature for Indian GAAP Companies.

Amendment in disclosure for tangible and intangible assets –
Aligned with requirements in CARO 2020
 Changes in Balance Sheet
Other Non current assets -

Old Clause New Clause Type of Change

Other non current Other non current assets New addition -
assets shall be shall be classified as:
classified as: i. Long-term trade New addition of
i. Long-term trade receivables security deposits
receivables (Including trade have been made.
(Including trade receivables on
receivables on deferred credit For Ind AS
deferred credit terms) Companies –
terms) ia. Security Deposits Under “Other
ii. Others (Specify Financial Assets”
Nature) i. Others (Specify
Nature)
 Changes in Balance Sheet

Other Non current assets -

Old Clause New Clause Type of Change

No clause (iv) Clause (iv) Trade New insertion –
receivables ageing
schedule (Refer next Trade receivables
slide) ageing schedule
has been
inserted
 Changes in Balance Sheet

Trade receivables -

Old Clause New Clause Type of Change

For Trade receivables New insertion –
outstanding, the following ageing
schedules shall be given (Refer Trade receivables
next slide) ageing schedule
has been inserted
 Changes in Balance Sheet
• Trade receivables ageing schedule – Indian GAAP Companies – under
“Other non-current assets” and Trade receivables
Outstanding for following periods from due
date of payment.
Particulars
<6 2-3 More Total
6Months 1-2
Year than 3
months – 1 year years
s years
(i) Undisputed Trade
receivables – considered good
(ii) Undisputed Trade
Receivables – considered
doubtful
(iii) Disputed Trade Receivables
considered good
(iv) Disputed Trade Receivables
considered doubtful

• Unbilled dues to be disclosed separately.

• Where no due date of payment is specified, date of the transaction to be
considered
 Trade Receivables
• Trade receivables ageing schedule – Ind AS Companies – under ‘Non-current
assets’ and ‘Current Assets’
Outstanding for following periods from due date of Total
Particulars payment.
Less than 6 Months – 1-2 2-3 More than 3
6 Months 1 year years Years years

(i) Undisputed Trade receivables –

considered good
(ii) Undisputed Trade Receivables –
Which have significant increase in credit
risk
(iii) Undisputed Trade Receivables -
Credit impaired
(iv) Disputed Trade Receivables
considered good
(v) Disputed Trade Receivables - Which
have significant increase in credit risk
(vi) Disputed Trade Receivables – Credit
impaired
 Changes in Balance Sheet

Notes -

Old
New Clause Type of Change
Clause
VA. Where the company has not used New insertion
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.
 Changes in Balance Sheet
Notes -
Old Clause
W. If, in the opinion of the
Board, any of the assets
other than fixed assets and
non-current investments do
not have a value on
realisation in the ordinary
course of
business at least equal to
the amount at which they
are stated, the fact that the
Board
is of that opinion, shall be
stated.
Type of
New Clause
Change
W. If, in the opinion of the Board, Intangible
any of the assets other than fixed assets have
assets and intangible assets also been
and non-current investments do included
not have a value on realisation in
the ordinary course of business at
least equal to the amount at
which they are stated, the fact
that the Board is of that opinion,
shall be stated.
Y. Additional Regulatory
Information
 New insertion

Property, Plant and Equipment

and Intangible Assets

• Immovable Properties for which the title is held by a

person other than the company(Other than Leased
assets), following details to be disclosed in the below format.

(Refer next slide)

 Property, Plant and Equipment and Intangible Assets
Relevant line Descript Gross Title Whether title Propert Reason
item in the ion of carrying deeds deed holder is a y held for not
Balance sheet item of value held in promoter,direct since being
propert the or or relative of which held in
y name promoter/direct date the name
of or or employee of the
of promoter company
/director

PPE - - - - -
- Investment
property
--PPE retired
from active use
and held for
disposal
- Others
 New Insertion

ii. 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.
 New insertion
• The Loans and advances given to the promoters,
directors, KMPs and the related parties either severally or
jointly with any other person by the company that are
➢ Repayable on demand OR;
➢ without specifying any terms or period of
repayment,
are to be disclosed in the following manner.
Type of Amount of loan or Percentage to the total
Borrower advance in the nature Loans and Advances in
of loan outstanding the nature of loans
Promoters
Directors
KMPs
Related Parties
 New Insertion

For Capital work in progress/ intangible assets under

development, ageing schedule shall be given
Amount in CWIP/Intangible assets
CWIP/Intangible under development for a period of
assets under More Total
Less than 1-2 2-3
development than 3
1 year years Years
years
Projects in
progress

Projects
temporarily
suspended
 New Insertion
• For Capital Work in Progress/ Intangible assets, whose completion
is overdue or has exceeded its cost compared to its original
plan, CWIP completion schedule shall be given

• Details of projects where activities have been suspended shall be

given separately

To be Completed in
CWIP/Intangible
assets under Less
1-2 More than 3
development than 1 2-3 Years
years years
year
Project 1

Project 2
 New Insertion
• In case, any proceedings have been initiated or pending against
the entity under the Benami Transactions (Prohibitions) Act, 1988,
the following disclosures shall to be provided:
Details of such property, including year of acquisition

Amount thereof

Details of Beneficiaries

If property is in the books, then reference to the item in the Balance Sheet,

If property is not in the books, then the fact shall be stated with reasons,

Where there are proceedings against the company under this law

Nature of proceedings, status of same and company’s view on same

 New Insertion

• Where the Company has borrowings from banks or financial

institutions on the basis of security of current assets, it shall
disclose the following -

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.
if not, summary of
reconciliation and reasons of
material discrepancies, if any
to be adequately disclosed.
 New Insertion

• Wilful Defaulter* (Loans and Borrowings) –

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.
 New Insertion

• Relationship with Struck off Companies

Where the company has any transactions with companies struck off
under section 248 of the Companies Act, 2013 or section 560 of
Companies Act, 1956, the Company shall disclose the following details:-
Relationship with
Name of
Nature of transactions Balance the Struck off
struck off
with struck-off Company outstanding company, if any, to
Company
be disclosed
Investments in securities
Receivables
Payables
Shares held by stuck off
Company
Other outstanding balances
(to be specified)
 New Insertion
Other Disclosures

• Below Ratios are to be disclosed

Currently, few
➢ Current Ratio,
ratios are
➢ Debt-Equity Ratio, required to be
➢ Debt Service Coverage Ratio, disclosed by
➢ Return on Equity Ratio, listed companies
➢ Inventory turnover ratio,
➢ Trade Receivables turnover ratio,
➢ Trade payables turnover ratio,
➢ Net capital turnover ratio,
➢ Net profit ratio,
➢ Return on Capital employed,
➢ Return on investment.

(difference of more than 25% as compared to the preceding year is

to be justified with explanation)
 New Insertion

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.
 New Insertion
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.
 New Insertion

Utilization of Borrowed funds and share premium:

(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
violative of the Prevention of Money-Laundering act, 2002 (15 of
2003).;
 New Insertion
Utilization of Borrowed funds and share premium:

(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.
 New Insertion

Utilization of Borrowed funds and share premium:

(i) Provide any guarantee, security or the like on behalf of the

Ultimate Beneficiaries, the company shall disclose the following:-

(II) date and amount of fund further advanced or loaned or invested

other intermediaries or Ultimate Beneficiaries alongwith 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
violative of the Prevention of Money-Laundering act, 2002 (15 of
2003)
 Rounding off

• Rounding off provisions, which was previously optional is now a

mandatory requirement and the criteria of the same shall be
based on “Total income” rather than “Turnover” as previously
followed

< 100 To the nearest hundreds,

Crore thousands, lakhs or millions or
Rupees decimals thereof
> 100
Crore To the nearest lakhs, millions or
Rupees crores, or decimals thereof

• Note: Currently rounding off is mandatory only for companies complying with Ind AS
Changes in Statement of
Profit and Loss
 Statement of Profit and Loss and Notes

Old Clause New Clause Type of Change

I. Revenue from I. Revenue from Total Revenue has

operations operations been substituted
II. Other Income II. Other Income by total Income
III. Total Revenue III. Total Income (For Indian GAAP)

Revenue from operations New insertion for

(ba) Grants or donations Ind AS Companies
received (relevant in case of
section 8 companies only)
 Statement of Profit and Loss and Notes

Old
New Clause Type of Change
Clause
(ix) Undisclosed income New insertion

The Company shall give details of any To align with

transaction not recorded in the books
reporting
of accounts that has been surrendered or
disclosed as income during the year requirements
in the tax assessments under the under CARO 2020
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.
 Statement of Profit and Loss and Notes

Old Clause New Clause Type of Change

Companies The following shall be disclosed Amendment/

covered with respect to CSR activities –
under section New insertion
135,
Amount of [ Refer next slide]
expenditure
incurred on
CSR activities
 Statement of Profit and Loss and Notes
CSR related Disclosures as per amendment -

Amount required to
be spent by the Amount of Shortfall at the end
company during the expenditure incurred of the year
year

Total of previous Nature of CSR

Reason for shortfall
years shortfall activities

Where a provision is made with respect

Details of related party transactions,
to a liability incurred by entering into a
e.g., contribution to a trust controlled by the
contractual obligation, the movements
company in relation to CSR expenditure as
in the provision during the year
per relevant Accounting Standard
should be shown separately
 Statement of Profit and Loss and Notes
Old Type of
New Clause
Clause Change
(xi) Details of Crypto Currency or Virtual New insertion
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.
 Division II

Part I

Balance Sheet and Notes

Division II – Part I – Balance Sheet & Notes

Type of
Old Clause New Clause
Change
Non Current Non Current Liabilities – New insertion
Liabilities –

(a)Financial Liabilities (a)Financial Liabilities

(i) Borrowings (i) Borrowings

(ia) Lease Liabilities
Division II – Part I – Balance Sheet & Notes

Type of
Old Clause New Clause
Change
Current Liabilities – Current Liabilities – New insertion

(a)Financial Liabilities (a)Financial Liabilities

(i) Borrowings (i) Borrowings

(ia) Lease Liabilities
Division II – Part I – Balance Sheet & Notes

Type of
Old Clause New Clause
Change
Bank deposits with Other financial assets Change in
more than 12 months disclosure
maturity shall be (i) Security Deposits
disclosed under ‘Other
Financial assets’ (ii)Bank deposits with
more than 12
months maturity

(iii)others(to be specified)
Division II – Part I – Balance Sheet & Notes

Old Type of
New Clause
Clause Change

VA. Other Financial Assets: New

This is an all-inclusive heading, which Insertion
incorporates financial assets that do not fit
into any other financial asset categories,
such as, Security Deposits.

L. Additional Regulatory Information New

(Only additional clauses which were not Insertion
covered by Division I have been reproduced
below)
Division II – Part I – Balance Sheet & Notes

Old Type of
New Clause
Clause Change

L. Additional Regulatory Information New

Insertion
Where the Company has revalued its Property,
Plant and Equipment (including Right-of Use
Assets) and Investment Property, the company
shall disclose as to whether the revaluation is
based on the valuation by a registered valuer
as defined under rule 2 of Companies
(Registered Valuers and Valuation) Rules,
2017.
 Disclosure of Share Holding
of the Company
➢ Division III
Statement Of Changes In Equity: Old disclosures have
Name of the Company ……… been substituted with
A. Equity Share Capital the following
(1) Current reporting period

Restated
Changes in
balance at Changes in Balance at the
Balance at the Equity
the beginning of equity share end of the
beginning of the Share Capital
the capital current
current due to
current during the reporting
reporting Period prior period
reporting current year Period
errors
Period
- - - -
 Disclosure of Share Holding
of the Company
❖Previous reporting period
Old disclosures have
been substituted with
the following

Restated
Changes in
Changes in balance at Balance at the
Balance at the equity share
Equity Share the beginning of end of the
beginning of the capital
Capital due to the previous
previous during the
prior period previous reporting
reporting Period previous
errors reporting period
year
Period
- - - -
 Other Disclosures

• Additional Disclosures for Division III entities

➢ Capital to risk-weighted assets ratio (CRAR)

➢ Tier I CRAR
➢ Tier II CRAR
➢ Liquidity Coverage Ratio
 Key Takeaways and Action Points

Start preparing for comparative information for the year ended March
31, 2022
Enhanced disclosures for companies to which Indian GAAP/ Ind AS is
applicable and for NBFCs
Assess and make changes to existing systems, controls and
processes

Enhanced auditor’s reporting requirements in addition to CARO 2020

Aligned with additional reporting requirements under CARO 2020

Gear up for new IT infrastructure to meet the new disclosure

requirements
Team BCIC

58