Amendments in Schedule III of Companies Act 2013 - Part 2

In continuation of the previous part on Amendments in Schedule III let us discuss the remaining changes-

10. Details of Benami Property held

Where any proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder, the company shall disclose the following:

• 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 as an abetter of the transaction or as the transferor then the details shall be provided,
• Nature of proceedings, status of the same and the company's view on the same.

11. Working Capital Borrowings

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.

12. Wilful Defaulter

Wilful defaulter 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.

Where a company is a declared wilful defaulter by any bank or financial institution or other lender, following details shall be given:

• Date of declaration as wilful defaulter,
• Details of defaults (amount and nature of defaults),

13. 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:-

14. Registration of charges or satisfaction with Registrar of Companies

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

15. 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.

16. Following Ratios to be disclosed

• Current Ratio,
• Debt-Equity Ratio,
• Debt Service Coverage Ratio,
• Return on Equity Ratio,
• 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.

The company shall explain the items included in numerator and denominator for computing the above ratios. Further explanation shall be provided for any change in the ratio by more than 25% as compared to the preceding year.

17. 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.

18. Borrowings from banks and Financial Institutions

Disclosure on utilization of borrowings: Where the Company has not used the borrowings from banks and financial institutions for the purpose for which it was taken at the Balance Sheet date, the Company shall disclose the details of where they have been used.

19. Total Income

Under the heading “III. Total Revenue (I +II)”, for the word “Revenue”, the word “Income” shall be substituted; Hereafter it shall be called as “Total Income”

Under the heading “General Instructions for Preparation of Statement of Profit and Loss”, -in paragraph 2, in item (A), after sub-item (b), the following shall be inserted, namely: “(ba) Grants or donations received (relevant in case of section 8 companies only)”

20. 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 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.

21. 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:-

• amount required to be spent by the company during the year,
• amount of expenditure incurred,
• shortfall at the end of the year,
• total of previous years shortfall,
• reason for shortfall,
• nature of CSR activities,
• 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,
• 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.

22. Details of Cryptocurrency or Virtual Currency

Where the Company has traded or invested in Cryptocurrency or Virtual Currency during the financial year, the following shall be disclosed:-

• profit or loss on transactions involving Cryptocurrency or Virtual Currency
• amount of currency held as at the reporting date,
• deposits or advances from any person for the purpose of trading or investing in CryptoCurrency/ virtual currency.

Click here to read the 1st part of the article