‘Addl disclosure to bring transparency in financial statement’
   Date :05-Apr-2021

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Business Bureau :
CA Shah said, “In recent years, there have been substantial changes in the reporting requirement by the auditors” 
With the ever-increasing stringency in the regulatory framework and disclosure requirements under various provisions of Company Law, Ministry of Corporate Affairs, vide notification dated March 24, 2021 has further prescribed a list of numerous additional disclosure required in the financial statements by amending Schedule III to the Companies Act, 2013. The amendments have been brought to bring more transparency by providing for various disclosures including dealing with struck off companies, details of Benami property, undisclosed income etc., which is applicable from April 1, 2021 said CA Julfesh Shah while addressing a webinar organised by Corporate Entrepreneurs Guild (CEG).
He said, since the amendments have been brought in Division I, II and III of Schedule III, accordingly, the same will be applicable to the companies which need to comply with the Companies (Accounting Standards) Rules, 2006 as well as the Companies (Indian Accounting Standards) Rules, 2015 including non banking finance companies (NBFCs). In recent years, there have been substantial changes in the reporting requirement by the auditors, but no such corresponding amendments were made in Schedule-III for the preparation of the financial statements. Thus, to align the company’s financial statements in accordance with the auditor’s reporting requirements, the following amendments have been made and majority of the amendments to Schedule III to the Companies Act, 2013 have been undertaken in response to the amendments covered in the newly issued Companies (Auditors and Report Order) 2020 and the Companies (Indian Accounting Standards) Amendment Rules, 2020, Shah explained.
Amongst the various other changes disclosures regarding shareholding of promoters, ageing schedule of trade receivables and trade payables, capital work in progress, intangible assets, reasons of utilisation of funds for the purposes other than for which they were borrowed, whether any charges or satisfaction yet to be registered with ROC beyond the statutory period, information regarding receipt of funds from foreign entities etc. CA Shah said, “Now companies will also have to disclose various key ratios, any transactions with companies struck off, details where a company is a declared willful defaulter by any financial institution, whether books of accounts are tallied with the quarterly or monthly returns filed with bankers, compulsorily rounding off of figures, revaluation of fixed assets whether done by a registered valuer, reporting on amalgamation etc.” N P Udeshi, Chairman of Corporate Entrepreneurs Guild made introductory remarks while S H Singh, Secretary conducted the question and answer session and proposed the vote of thanks. The webinar was well attended by corporate entrepreneurs from various sections.