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Companies Act--Schedule III

Reporting Changes in Schedule III to the Companies Act, 2013

D.K. Saxena

The financial statements of a company has to be prepared in the form(s) as provided for different classes of companies in Schedule III to the Companies Act, 2013. Time and being, Schedule III is updated with changes as required for better reporting and increased transparency. Recently, MCA vide Notification No. G.S.R 207 (E), dated 24-3-2021 applicable from 1st April, 2021 introduced additional disclosure requirements which will form part of financial statements to be prepared for financial year 2021-22 onwards. The learned author discusses major amendments in Schedule III in this article.

1. Introduction

From 1st April, 2021, corporates have to be extra cautious to close books of account and prepare financial statements for the year ended 31st March, 2022 onwards because the amendments made in the Schedule III to the Companies Act, 2013 will completely revamp the picture of financial statements. The new additional disclosures will provide company's status about its financial ratios, CSR transactions, crypto transactions, undisclosed income in income tax, etc. on the face of financial statements. Besides, there are some presentational changes also being included in the notification (supra) which are not covered here.

2. Rounding off

The figures in financial statements are to be rounded off mandatorily by all companies. The criteria of rounding off has also been made to the total income instead of turnover. So, now, if a company have a total income less than 100 crores, then it has to round off the financial figures in the financial statements to the nearest hundreds, thousands, lakhs or millions or decimals thereof. However, if any company have total income of more than 100 crores, then it has to round off to the nearest lakhs, millions or crores or decimals thereof.

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