The ministry of corporate affairs (MCA) has modified various rules under the companies law pertaining to audits, auditors, and accounts. In this article, we will discuss on Amendment made by MCA.
Amendment made by MCA
The ministry of corporate affairs (MCA) has revised various rules under the companies law related to audits, auditors, and accounts.
Besides, by making changes to Schedule III of the Companies Act, 2013, there are increased disclosure provisions, including details about their dealings in cryptocurrencies, if any.
The modifications were notified by the ministry, which is enforcing the company’s law, which will be effective from April 1.
Following are the modifications made in the financial accounts of amendments in Schedule III brought about by MCA:
Companies to Round off figures in the financial statements
Now companies have to round off the figures seeming in the financial statements. Further, the criteria for rounding off shall be based on “total income” in place of “turnover”.
Company to disclose Shareholding of Promoters
The statement on Share Capital in the Financial Statements shall mention circumstances of the Shareholding of the Promotes along with differences, if any, during the Financial Year under review with effect from 1st April, 2021.
Current maturities of Long term borrowings to be disclosed separately
As per the Amendment Current Maturities of Long-Term Borrowings during the Financial Year are compelled to be disclosed separately under the head ‘Short Term Borrowings’ rather of ‘Other Current Liabilities’.
Trade Payables ageing schedule to be given
The statement on Trade Payables due for payment by the Company shall consist of an ageing schedule. This exposure has a material impact specifically on the pending/prospective prosecutions under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Reclassification of Security Deposits
Security Deposits strengthened with the Company shall be reclassified as ‘Other Non- Current Assets’ rather of ‘Long term loans and advances.’
Disclosure on utilization of borrowings
The company shall disclose the justification of utilization of funds for the objectives other than for which they were borrowed and shall also disclose the bases for which the funds were utilised.
Company to disclose items of all the immovable property
The Company shall furnish the elements of 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 title of the Company in the specified format.
Company to announce revaluation of Property Plant, Equipment
If the Company has revalued its property, plant and equipment, the Company shall publish as to whether the revaluation is based on the valuation by an enrolled valuer.
Disclosures considering the Loans or Advances
The amendment made by MCA regarding the Loans or Advances in the nature of loans granted to promoters, directors, KMPs and the applicable parties (as per the definition mentioned in Companies Act, 2013) either severally or together with any other person, that are repayable on demand or without stipulating any terms or period of repayment.
Disclosure considering the proceedings or pending against the Company
Disclosure regarding the proceedings has been launched or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and the Rules made thereunder.
Disclosure considering Capital-work-in Progress
Disclosure regarding Capital-work-in Progress (Capital WIP) ageing schedule and the Capital WIP whose completion is unpaid or has transcended its expense compared to its actual plan.
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