Schedule iii of companies act 2013

On 24 March 2021, the Ministry of Corporate Affairs notified amendments to Schedule III to the Companies Act, 2013. The Amendments to Schedule III incorporate various additional reporting requirements in the financial statements of a company, including,  rounding off requirements, disclosure of promoters' shareholding, disclosure of maturity analysis of trade receivables and trade payables, utilisation of borrowing and share premium, disclosure of financial ratios, loans and advances, CSR,  Benami transactions and relationship with companies struck off. By and large, these amendments have been issued with the objective to align the financial reporting with the new requirements of the revised Companies (Auditors and Report Order) 2020. 

The MCA also separately notified Companies (Accounts) Amendment Rules, 2021 on that date that requires 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 in books of account along with the date when such changes were made, and, ensuring that the audit trail cannot be disabled.

This newsflash covers key amendments introduced by these two amendments along with a Division-wise comparative applicability of the key changes.