With a view to promote Transparency and accountability in Company Financial Statement, the Ministry of Corporate Affairs (MCA) has amended the Schedule III to the Companies Act, 2013 vide notification dated 24.03.2020, wherein the certain disclosure requirements as well as the principles as stated in respect of the preparation of the financial statements has been amended. This amendments are applicable with effect from 01.04.2021, However it must be noted company needs to show comparatives figure for FY 2020-21 in FY 2022, Therefore impact of the additional disclosure need to assess w.e.f FY 2020-2021 itself. These additional disclosures will definitely improve the qualities of financial Statement of the companies but at the same time it will increase the Compliance cost of the company. It will create friction in the easy of doing especially for smaller companies…..
Additional Disclosure introduced by MCA Vide Notification dated 24.03.2021, which need to be taken care of by the companies.
1. Every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. it will also enhance accountability among company personnel and enable audit of pervasive controls
2. A company shall disclose Shareholding of Promoters at the end of the Year with regards to No of Share, %of total shares and % Change during the year
3. This disclosure will mandate the company to disclose the ageing payment cycle for MSMEs and Non-MSME Trade Payable in the format mentioned below
| Particulars | Outstanding for following periods from due date of payment# | ||||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| (i) MSME
(ii) Others (iii) Disputed dues – MSME (iv) Disputed dues – Others |
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And the disclosure for trade receivable needs to provide in the format mentioned below
| Particulars | Outstanding for following periods from due date of payment# | |||||
| Less than 6 months | 6 months – 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| (i) Undisputed Trade receivables – considered good
(ii) Undisputed Trade Receivables – considered doubtful (iii) Disputed Trade Receivables considered good (iv) Disputed Trade Receivables considered doubtful |
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4. 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 given below and where such immovable property is jointly held with others, details are required to be given to the extent of the company’s share.
| Relevant line item in the Balance sheet | Description of item of property | Gross carrying value | Title deeds held in the name of | Whether title deed holder is a promoter, director or relative# of promoter*/director or employee of promoter/director | Property held since which date | Reason for not being held in the name of the company** |
| PPE-
Investment property- PPE retired from active use and held for disposal – others |
Land Building
Land Building Land Building |
– | – | – | – | **also indicate if in dispute |
5. Following 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,) either severally or jointly with any other person, that are:
a. repayable on demand or
b. without specifying any terms or period of repayment
| Type of Borrower | Amount of loan or advance in the nature of loan outstanding | Percentage to the total Loans and Advances in the nature of loans |
| Promoters | ||
| Directors | ||
| KMPs | ||
| Related Parties |
6. Capital-Work-in Progress (CWIP) :For Capital-work-in progress, following ageing schedule shall be given: CWIP aging schedule
(Amount in Rs.)
| CWIP | Amount in CWIP for a period of | Total* | |||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | ||
| Projects in progress
Projects temporarily suspended |
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*Total shall tally with CWIP amount in the balance sheet.
(a) For capital-work-in progress, whose completion is overdue or has exceeded its cost compared to its original plan, following CWIP completion schedule shall be given**:
(Amount in Rs.)
| CWIP | To be completed in | |||
| Less than1 year | 1-2 years | 2-3 years | More than 3 years | |
| Project 1
Project 2” |
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**Details of projects where activity has been suspended shall be given separately.
7. For Intangible assets under development, following ageing schedule shall be given: Intangible assets under development aging schedule
(Amount in Rs.)
| Intangible assets under development | Amount in CWIP for a period of | Total* | |||
| Less than 1 year | 1-2
years |
2-3 years | More than 3 years | ||
| Projects in progress
Projects temporarily suspended |
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* Total shall tally with the amount of Intangible assets under development in the balance sheet.
a. For Intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan, following Intangible assets under development completion schedule shall be given**:
(Amount in Rs.)
| Intangible assets under development | To be completed in | |||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | |
| Project 1
Project 2 |
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**Details of projects where activity has been suspended shall be given separately.
8. 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:-
a. Details of such property, including year of acquisition,
b. Amount thereof,
c. Details of Beneficiaries,
d. If property is in the books, then reference to the item in the Balance Sheet,
e. If property is not in the books, then the fact shall be stated with reasons,
f. Where there are proceedings against the company under this law as an abetter of the transaction or as the g. Nature of proceedings, status of same and company’s view on
9. 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
b. if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately
10. Wilful Defaulter*
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.
11. 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:-
| Name of struck off Company | Nature of transactions with struck-off Company | Balance outstanding | Relationship with the Struck off company, if any, to be disclosed |
| Investments in securities | |||
| Receivables | |||
| Payables | |||
| Shares held by stuck off company | |||
| Other outstanding balances (to be specified) |
12. 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.
13. 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.
14. Following Ratios to be disclosed:-
a. Current Ratio,
b. Debt-Equity Ratio,
c. Debt Service Coverage Ratio,
d. Return on Equity Ratio,
e. Inventory turnover ratio,
f. Trade Receivables turnover ratio,
g. Trade payables turnover ratio,
h. Net capital turnover ratio,
i. Net profit ratio,
j. Return on Capital employed,
k. Return on
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.
15. 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:-
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 years shortfall,
e. reason for shortfall,
f. nature of CSR activities,
g. 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,
h. 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
16. Details of 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,
c. deposits or advances from any person for the purpose of trading or investing in Crypto Currency/ virtual currency.”;
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Read.Good compilation.