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Article discusses important changes in financial statements for a company whose financial statements are required to comply with the Companies (Accounting  Standards) Rules, 2006

Check List that help you while finalising financial statements

a. Rounding off – Financial statements for the F.Y ending 31.03.2022 shall be rounded off as follows-

Total Income Rounding off
Less than 100 crore rupees To the nearest 100,1000,100000 or 1000000 or decimals thereof
100 crore rupees or more To the nearest 100000,1000000,10000000 or decimals thereof

 b. Additional disclosure-

1. Promoters shareholding- Details of shareholding of promoters along with changes ,if any during the F.Y.

Who is promoter- It means a person –

who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or

(b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or

(c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act.

 2. Creditors Ageing Schedule-

Trading payable ageing schedule- 

Particulars Less than 1 year 1-2 years 2-3 years More than 3 years
Disputed MSME
Disputed -others

 3 .Trade Receivables ageing schedule- 

Particulars Less than 6 months 6 months-1 year 1-2 years 2-3 years More than 3 years
Undisputed Trade receivables- considered good
Undisputed Trade Receivables- Considered Doubtful
Disputed Trade Receivables considered good
Disputed Trade Receivables considered doubtful

4. Title Deed of Immovable Property not held in name of the Company:

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 specified and where such immovable property is jointly held with others, details are required to be given to the extent of the company’s share.

5, Disclosure on revaluation of Assets

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.

6. Disclosure on Loans/ Advance to Directors/ KMP/ Related parties:

Disclosures shall be made where Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013)

7. Capital Work in progress

Following CWIP completion schedule shall be given:

CWIP Less than 1 year 1-2 years 2-3 years More than 3 years

8. Intangible Assets under Development

For Intangible assets under development, following ageing schedule shall be given:

Intangible Assets under development Less than 1 year 1-2 years 2-3 years More than 3 years Total

9. Details of Benami Property held: In case, any proceedings have been initiated or pending against the entity under the Benami Transactions (Prohibitions) Act, 1988, the disclosures shall be provided in the financial statements.

10 Details of borrowings-

Where the Company has borrowings from banks or financial institutions on the basis of security of current assets, disclosure shall be made

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.

11. Wilful DefaulterWhere a company is a declared wilful defaulter by any bank or financial Institution or other lender details of such defaults .

12-  Relationship with Struck off Companies–  Relationship with struck off companies need to be disclosed- Nature of transactions , balance outstanding etc.

13 . 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.

14. Disclosure of ratios

The amendment requires the companies covered under division I and II of schedule III to disclose the following ratios:

  • 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.

 -Explanation  need to be given if changes in ratios more than 25% as compared to previous year.

Check List - Revised Schedule III of Companies Act for F.Y 2021-22

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. Details in respect of Utilization of Borrowed funds and share premium shall be provided in respect of:

a. Transactions where an entity has provided any advance, loan, or invested funds to any other person (s) or entity/ entities, including foreign entities.

b. Transactions where an entity has received any fund from any person (s) or entity/ entities, including foreign entity

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 (Corporate Restructuring) of the Companies Act, 2013 the Company shall disclose that: a. 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 b. in accordance with accounting standards and c. deviation in this regard shall be explained.

 18. 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”

19. Undisclosed Income: The Company shall give details of any transaction not recorded in the books of accounts- surrendered or disclosed as income during the year in tax assessments.

20. CSR-

Where the company covered under section 135 of the Companies Act, the following shall be disclosed with regard to CSR activities:

a. amount required to be spent by the company during the year,

b. amount of expenditure incurred,

c. shortfall at the end of the year,

d. total of previous year’s shortfall,

e. reason for shortfall,

f. nature of CSR activities,

21. Crypto Currency or Virtual 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,

b. deposits or advances from any person for the purpose of trading or investing in Crypto Currency/ virtual currency

I have summarised changes made in financial statements for F.Y 2021-2022 still if any query/help needed -email  

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June 2024