CS M. Kurthalanathan
Schedules under Companies Act,2013-An analysis
|
Companies Act,1956 |
Companies Act,2013 |
|
16 Schedules |
7 Schedules |
As can be seen from the above, Companies Act has lesser schedules; the reason being the Act does not have the following schedules, which found a place in Companies Act 1956 :
|
Schedule of CA,1956 |
Particulars |
Changes in Companies Act,2013 |
| IA | List of Relatives | List of 8 Relatives are mentioned in the Companies (specification of definition details)rules,2014 corresponding to sec.2(77)(iii) |
| II | Matters to be Specified in Prospectus and reports to be set out therein | Details of matters to be specified in Prospectus are mentioned in the Companies (Prospectus and Allotment of Securities) Rules, 2014. corresponding to Sec.26(1) |
| III | Form of Statement in Lieu of Prospectus (SLP) | Companies Act,2013 has done away with the concept of SLP |
| IV | Form of Statement in Lieu of Prospectus (SLP) to be filed by private company on becoming public company. | Companies Act,2013 has done away with the concept of SLP |
| V | Annual Return Form | New Form for filing of Annual Return (Form MGT-7 along with Form MGT-8) |
| VII | Restrictions on powers of Managing Agents, Secretaries and Treasurers | Redundant after abolition of Managing Agents, Secretaries and Treasurers |
| VIII | Declaration to be made by Managing Agents, Secretaries and Treasurers | Redundant after abolition of Managing Agents, Secretaries and Treasurers |
| IX | Form of Proxy | New Form for appointment of Proxy is Form MGT-11 |
| X | Table of fees to be paid to ROC | Fees details are mentioned in the Companies(Registration of offices and fees)Rules,2014. |
| XI | Forms in which Sec.539 to 544 of the 1956 Act are to apply in cases where application made under Sec.397/398. | Matters are dealt with section 26 of the Companies Act,2013. |
| XII | Enactments Repealed by the 1956 Act | Sec.465 of the Companies Act,2013 repeals the 1956 act except provision of Part IXA of the 1956 act relating to Producer Companies. |
| XV | List of Industries | Omitted by the Companies Act,2013. |
The Companies Act,2013 has retained only 4 of 16 schedules of the Companies Act,1956 with changes and introduces 3 new schedules to cover new concepts of Independent Directors, CSR and Infrastructural Projects.
The 4 modified and 3 new schedules are summarized below;
|
Particulars |
Schedules |
Remarks
|
||
| CA 1956 | CA 2013 | Companies Act,1956 | Companies Act,2013 | |
| Forms of MOA &AOA-Table F of the 1956 Act | I | I (Table A to J) | Form of statement to be published by limited Banking Cos, Insurance Cos,etc.,. | Formats modified to accommodate new concepts of OPC, e-voting,etc.,. |
| Useful lives to Compute Depreciation | XIV | II | It deals with only depreciation of tangible assets.It deals with the Rate of Depreciation of tangible assets. | It deals with amortization of Intangible assets also. It deals with the useful lives of tangible assets and does not prescribe depreciation rates. |
| General Instructions for Preparation of B/S &Statement of P&L of a Company | VI | III | Form of B/S | Same as Revised Sch.VI except that Sch.III contains instructions regarding consolidated accounts as preparation of consolidated accounts made mandatory by the 2013 act. |
| Code of Independent Directors(IDs) | ——- | IV | —– | IDs is new concept introduced by the 2013 act. Sch.IV is a new schedule containing CoC for IDs. |
| Conditions to be fulfilled for the appointment of a MD/WTD or a Mgr without the approval of CG | XIII | V | —– | —– |
| Infrastructural Projects/Facility | ——- | VI | —– | New Schedule introduced by the Companies Act,2013 |
| Activities which may be included by companies in their CSR Polices | ——- | VII | —– | MCA has notified the Sec.135 & corresponding rules & Sch.VII on 27/02/14 to comply with mandatory CSR spends for specified companies. |
Useful lives to Compute Depreciation: -–Schedule-II.{(Sec.123(2)}
Depreciation:
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.
| Depreciable amount of an asset = Cost of an asset/other amount substituted for cost
(-) Residual value |
Useful life:
‘Useful life’ may be considered as a period over which an asset is available for use or as the number of production or similar units expected to be obtained from the asset by the entity.
| The useful life of an asset shall not be longer than the useful life specified in Part ‘C’ and the residual value of an asset shall not be more than 5% of the original cost of the assetProvided that where a company uses a useful life or residual value of the asset which is different from the above limits, justification for the difference shall be disclosed in its financial statement. |
For intangible assets, the provisions of the accounting standards applicable for the time being in force shall apply, except in case of intangible assets (Toll Roads) created under ‘Build, Operate and Transfer’, ‘Build, Own, Operate and Transfer’ or any other form of public private partnership route in case of road projects.
Amortisation in such cases may be done as follows:-
| (a) Mode of amortisationAmortisation Rate = Amortisation Amount x 100 ÷ Cost of Intangible Assets (A) | |
| Amortisation Amount = Actual Revenue for the year (B) x Cost of Intangible Assets (A) ÷ Projected Revenue from Intangible Asset (till the end of the concession period) (C) | |
| Meaning of particulars are as follows- Cost of Intangible Assets (A) = | Cost incurred by the company in accordance with the accounting standards. |
| Actual Revenue for the year (B) = | Actual revenue (Toll Charges) received during the accounting year. |
| Projected Revenue from Intangible Asset (C) = | Total projected revenue from the Intangible Assets as provided to the project lender at the time of financial closure / agreement. |
The amortisation amount or rate should ensure that the whole of the cost of the intangible asset is amortised over the concession period.
Revenue shall be reviewed at the end of each financial year and projected revenue shall be adjusted to reflect such changes, if any, in the estimates as will lead to the actual collection at the end of the concession period.
Applicability
The Companies Act, 2013 states that Schedule II will be applicable as follows:
i. For a prescribed class of companies, whose financial statements are required to comply with AS prescribed under the 2013 Act, the useful lives should normally be in accordance with the Schedule. However, if a prescribed company uses a different useful life, it should disclose a justification for doing so;
ii. For Government companies,useful life or residual value of any specified asset, as notified for accounting purposes by a Regulatory Authority constituted under an Act of parliament or by the Central Government shall be applied in calculating the depreciation to be provided for such asset irrespective of the requirements of this Schedule.
iii. For other Companies, the useful life of an asset shall not be longer than the useful life and the residual value shall not be higher than that prescribed in Part C.
Other Points:
1. The following information shall be disclosed in the accounts namely;
i. Depreciation method used &
ii. Useful lives of the assets for computing depreciation, if they are different from the life specified in the schedule.
2. Factory Buildings does not include offices, godowns, staff quarters.
3. During any financial year, if any addition has been made to any asset or where any asset has been sold, discarded, demolished or destroyed, the depreciation on such assets shall be calculated on a pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed.
4. Useful life specified in Part C of the Schedule is for whole of the asset. Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately.
5. Transitional Provisions:
From the date this Schedule comes into effect, the carrying amount of the asset as on that date—
(a) shall be depreciated over the remaining useful life of the asset as per this Schedule;
(b) after retaining the residual value, shall be recognised in the opening balance of retained earnings where the remaining useful life of an asset is NIL.
6. ‘‘Continuous process plant’’ means a plant which is required and designed to operate for 24 hours a day.
Schedule XIV Vs Schedule II :
| .Companies Act,1956 – Sch.XIV | Companies Act,2013- Sch.II |
| It deals with only depreciation of tangible assets. | It deals with the amortization of intangible assets also. |
| It contained rates of depreciation of tangible assets. | It contains only useful lives of tangible assets and does not prescribe depreciation rates. |
| 100% Depreciation shall be charged on assets whose actual cost does not exceed Rs.5,000/- | Omits the provision for 100% Depreciation on immaterial items i.e, assets whose actual cost does not exceed Rs.5,000/- |
Extra Shift Depreciation (ESD) not applicable to
|
Extra Shift Depreciation (ESD) not applicable to
|
| ESD for double shift and triple shift was to be made separately in proportion with No.of days for which concern worked second shift or triple shift bears to normal No.of working days in a year.For Seasonal factory:Greater of actuals and 180 days.Other cases:Greater of actual and 240 days. | ESD working simplified by the 2013 act- For Double shift:50% more depreciation for that period for which asset used. For Triple shift:100% more depreciation for that period for which asset used. |
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Though utmost efforts has made to provide authentic information, it is suggested that to have better understanding kindly cross-check the relevant sections, rules and Schedules under the Companies Act,2013
Thanks a lot for the useful information.Keep it up.
one more help , if we purchase an asset from which date we can charge depreciation on it as per companies act 2013?
is it when asset ready to use or invoice date mentioned in the purchase invoice or put to use or date of purchase?
Appreciate your view…Thanks in advance
NOT UPTO THE MARK
not interesting
refer this link
mca.gov.in/SearchableActs/Schedule3.htm
not easily understand .
Not very clear sir