Types of XBRL & Applicability on Companies & NBFC- An Overview

Applicability of Filing Financial Statements in XBRL mode with Registrar of Companies:

Below mentioned class of companies are required to file their financial statements and other documents under section 137 of the Companies Act, 2013 with the Registrar in e-form AOC-4 XBRL:

-All companies listed in the stock exchange in India and their Indian subsidiaries.

-All companies with a turnover of Rs. 100 crores or more

-All companies with a paid up capital of Rs. 5 crores or more

-All the companies which are required to prepare their financial statements in accordance with the Companies (Indian Accounting Standards) rules, 2015.

However, Non-banking financial companies, Housing finance companies and Companies engaged in the business of Banking and Insurance sector are exempted from filing of financial statements under these rules.

Moreover the companies which have filed their financial statements in XBRL under section 137 shall continue to file their financial statements and other documents in XBRL only, though they may cease to fall under the class of companies specified above.

Merits:

The major benefits are

• Preparation, Analysis, and Communication of Business Information
• Reduces the Manual Data entry
• Cost and Time Efficient,
• Meeting IFRS requirement
• Qualitative Information and Decision making
• Allows the easy transmission of data between businesses
• improved accuracy and reliability to all those involved in supplying or using financial data.

Applicability of Filing Cost Audit Report in XBRL mode with Registrar of Companies:

A company required to furnish cost audit report and other documents to the Central Government under sub-section (6) of section 148 of the Act and rules made thereunder, shall file such report and other documents using the XBRL taxonomy given in Annexure-III for the financial years commencing on or after 1st April, 2014 in e-Form CRA-4 specified under the Companies (Cost Records and Audit) Rules, 2014.

Filing of Financial Statements in XBRL mode:

XBRL instance document is required to be prepared as per MCA Taxonomy (I-GAAP / IND-AS). According to MCA Taxonomy, complete set of Annual Report is required to be filed in XBRL format. Separate instance documents are to be prepared for consolidated and standalone reports. Major components of Annual report are noted below:

• Balance Sheet
• Profit and Loss Statement
• Cash Flow Statement (Direct or Indirect)
• Schedules & Notes to Balance Sheet and Profit and Loss Statement
• Significant Accounting Policies
• Statement of Change in Equity
• Independent Audit Report with annexures thereto
• Director or Board Report with annexures thereto

Apart from above, there are various other details/documents which are required for XBRL filing. You can contact us for checklist for XBRL filing.

Filing of Cost Audit Report in XBRL mode:

Complete set of Cost Audit Report with all annexures / para is required to be filed in XBRL format.

When you need to file?

As per the Companies Act 2013, the following provisions are applicable for filing the financial statements with the Registrar:

In case of delay in filing the financial statement with MCA, the following additional fees is applicable:

Penalty for non-filing of Form AOC-4:

Preparing financial statements in XBRL mode for filing with the Registrar:

The process for creation and filing of Financial Statements in XBRL mode is as under:

Step 1: Creation of XBRL instance document

Step 2: Download XBRL validation tool from the MCA portal

Step 3: Use the tool to validate the instance document

Step 4: Perform pre-scrutiny of the validated instance document through the tool

Step 5: Attach instance document to the Form AOC-4 XBRL

Step 6: Submitting the Form AOC-4 XBRL on the MCA portal

Brief Overview of XBRL Returns Applicability to the Non Deposit taking – Non Systematically Important Category of Non Banking Financial Companies (NBFCs) & other Important Provisions thereof

XBRL stands for eXtensible Business Reporting Language. It is a language for the electronic communication of business and financial data which is revolutionising the business reporting around the world. Within Reserve Bank of India, XBRL has been viewed as a natural evolution of the existing Online Returns Filing System (ORFS). As aware, the online parallel filing process for rationalized returns of Non Deposit taking – Non Systematically Important (ND-NSI) Category of NBFCs in the XBRL system has been started from February, 2020 onwards.

Thus, The XBRL Returns applicable to the Non Banking Financial Company- Non Deposit taking and Non Systematically Important Company (NBFCs-ND-NSI) as per asset size is as follows-

IMPORTANT POINTS BULLETIN

• All the ND-NSI category of NBFCs has to file the applicable returns in both the systems i.e. COSMOS & XBRL portal pertaining to the period ended March 31, 2020.
• Further, this has been decided by RBI to discontinue the online filing of returns by ND-NSI category of NBFCs (having asset size <₹500 crore) from March, 2021 onwards in the COSMOS system and operate only XBRL system as solo online return reporting system.
• NBFCs are advised to get them registered on the XBRL platform and submit the contact and other details of Key management personnel (KMPs) of the company in the format as prescribed by the RBI. NBFCs are required to communicate with RBI (Department of Non Banking Supervision) through their official Email-ids for Super User ID Creation and in order to facilitate an access (login credentials) to the new platform. After receipt of Login credentials, open https://xbrl.rbi.org.in to access XBRL Portal.
• NBFCs are required to create the Statutory Auditor ID in the XBRL System after receiving an access to the XBRL portal. After creation of Statutory Auditor user ID, An automated email would be sent to Statutory Auditor by XBRL system in order for the authentication of submission of the DNBS 10 return.
• NBFCs are required to file DNBS 13 return even in case of NIL Overseas Investment.

FAQs:

1. Which are the companies that need to file the Cost Audit Report and Compliance Report in XBRL format?

Ministry of Corporate Affairs has mandated filing of the Cost Audit Report and Compliance Report from the financial year 2011-12 onwards (including overdue reports relating to any previous year) by using the XBRL taxonomy. The relevant General Circular No. 8/2012 dated 10.5.2012 [as amended on 29.6.2012] and No. 18/2012 dated 26.7.2012 issued by MCA can be accessed from the following link: http://www.mca.gov.in/Ministry/companies_act.html.

2. Which companies are not required to file the Cost Audit Report?

All such companies that are NOT covered under the company specific Cost Audit Orders issued prior to 31.3.2011 and/or under the industry specific Cost Audit Order No. 52/26/CAB-2010 dated 2nd May 2011, 30th June 2011 and 24th January 2012 are not required to file Cost Audit Report. However, companies meeting with the threshold limits as prescribed in the relevant Cost Accounting Records Rules 2011 are required to file Compliance Report in the XBRL format.

3. Which companies are exempted from filing the Compliance Report?

All such companies that are not covered under any of the Cost Accounting Records Rules notified in 2011 are not required to file the Compliance Report.

Further, as per MCA’s General Circular No. 68/2011 dated 30.11.2011 read with the General Circular No. 12/2012 dated 4.6.2012, such companies that are covered under any of the Cost Accounting Records Rules notified in 2011 but wherein all their products/activities, excluding the exempted categories, are covered under cost audit, are not required to separately file the Compliance Report.

4. Who will certify XBRL filing for Cost Audit Report?

The Cost Auditor [or the lead Cost Auditor in case the company has more than one Cost Auditors] is required to digitally sign and file the Cost Audit Report for the company as a whole.

5. Who will certify XBRL filing for Compliance Report?

Any valid Member of the Institute of Cost Accountants of India who is either in full-time employment with the concerned company or is holding full-time Certificate of Practice can only certify the Compliance Report.

6. The responsibility of filing Cost Audit Report with the Central Government lies with the Cost Auditor. Whose responsibility is it to create XBRL document?

Creation of the Cost Audit Report in XBRL format, as approved by the Board and certified by the Cost Auditor, is the responsibility of the company. However, filing the Cost Audit Report in XBRL format with the Central Government is the responsibility of the Cost Auditor, who has to ensure the correctness of data and other information contained in the XBRL Instance Document.

7. I have completed the Cost Audit and the Board of Directors has also approved the Cost Audit Report / Compliance Report. Is the Board of Directors of the company required to approve the Instance document of the Cost Audit Report / Compliance Report?

No separate approval from the Board is required for the Instance document of the Cost Audit Report or of the Compliance Report since the data/information contained in the Instance document would already have been approved by the Board of Directors. However, if the data & other information as given in the Instance document differ from that approved by the Board, then it is advisable to get fresh approval of the revised Cost Audit Report or the Compliance Report unless the Board while according approval had authorized any officer of the company to make modifications as required in the XBRL document.

8. A company has not appointed anyone as the lead cost auditor. Is it required to appoint a lead cost auditor for consolidation?

The company is not required to separately appoint a lead Cost Auditor. It may designate/nominate any one of the existing Cost Auditors as the lead Cost Auditor and assign the additional task of consolidation, who would be responsible for verifying the consolidated report and filing the same with the Central Government.

9. Is Performance Appraisal Report required to be filed with the Central Government as a part of the Cost Audit Report?

As per provisions of the Companies (Cost Audit Report) Rules, 2011, every cost auditor, who submits a cost audit report, is also required to furnish Performance Appraisal Report to the Board/Audit Committee of the company in the prescribed format (Form III). However, this report will not be required to be filed with the Central Government.

10. My company is in the business of power generation. As per the MCA Circular, power companies are not required to file the Balance Sheet and Profit & Loss Account in XBRL format. Do I still need to file Cost Audit Report / Compliance Report (as applicable) in XBRL format?

Power generation companies have been exempted from filing their Balance Sheet and Profit & Loss Account in XBRL format as the relevant taxonomy as per disclosure requirements under the Electricity Act, 2003 is still under development. However, under the said Act, there are no such separate disclosure requirements for cost details. Hence, the costing Taxonomy for filing the Cost Audit Report or the Compliance Report is common to all companies. Therefore, companies engaged in the business of power generation, transmission or distribution are also required to file Cost Audit Report / Compliance Report (as applicable) in the XBRL format.

11. A Company voluntary prepared financial statement into XBRL for some financial year. Whether such Company required preparing the financial statement into XBRL in future also?

As Per the applicability of filing of financial statement into XBRL Rules, 2017, it is not mandatory for such companies to file financial statement into XBRL in future. It can file the normal AOC-4 form. Only Companies falling under XBRL Amendment Rules, 2017 required to file financial statement into XBRL.

12. A Company falls under the limit of applicability of filing of financial statement into XBRL for some years. However, afterwards due to any reason, it doesn’t fall under the applicability requirement of XBRL. Whether such Company required preparing the financial statement into XBRL in future also?

As Per the applicability of filing of financial statement into XBRL Rules, 2017, only companies falling under the applicability criteria required to file financial statement into XBRL. For the purpose of checking of applicability of XBRL on the Company current financial statement shall be considered. Example: For checking of applicability of XBRL for the F.Y. 2016-17 Financial statement as on 31.03.2017 shall be considered.

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Disclaimer: The Article is based on the Relevant Provisions and as per the information existing at the time of the preparation. In no event I shall be liable for any direct and indirect result from this Article. This is only a knowledge sharing initiative.

The Author – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can be reached at [email protected] or 9910248911.