SCHEDULE III

Companies Act, 2013

 INTRODUCTION
The Companies Act 2013, has 29 chapters, 470 sections and 7 schedules.
Schedule
PARTICULARS
No.
1 Forms of MOA &AOA
2 Useful lives to Compute Depreciation
General Instructions for Preparation of B/S & Statement of P&L
3
of a Company
4 Code of Independent Directors(IDs)
Conditions to be fulfilled for the appointment of a MD/WTD or
5
a Mgr. without the approval of CG
6 Infrastructural Projects/Facility
Activities which may be included by companies in their CSR
7
Polices
 INTRODUCTION
Schedule VI of The Companies act ,
1956, replaced by Amended Schedule
VI for the preparation of financial
statements and by Schedule III under
The Companies Act, 2013.
The MCA on 6 April 2016, amended
Schedule III to include general
instructions for preparation of
financial statements of a company
whose financial statements are
required to comply with Ind AS.
Division I –
Applicable to a company who are
required to report under existing
Indian GAAP
Division II -
Applicable to a company who are
required to report under Ind AS.
Why is there a need for Schedule III?
To harmonize disclosure
requirements and for comparability.
 IMPORTANT POINTS

 Requirements of the Schedule to be Rounding off

modified with regard to compliance
with accounting standards
TURNOVER ROUNDING
 Disclosure requirements are in
addition to Accounting standards and
To the nearest
not substitution hundreds,
a) Turnover <
 Each item in the financial statements thousands, lakhs
100 crores
or millions, or
to be cross referenced to notes decimals thereof.
 Except in the case of the first Financial
Statements after incorporation , To the nearest
lakhs, millions or
comparatives for the immediately b) > 100 crores
crores, or
preceding reporting period to be decimals thereof
given
EQUITY AND LIABILITIES
CLASSIFICATION
 EQUITY AND LIABILITIES

Equity and
Liabilities

Share Appn
Shareholders Non Current Current
Money pending
Funds Liabilities Liabilities
allotment
EQUITY AND LIABILITIES

• Share Capital
• Reserves and surplus
Shareholder’s Funds
• Money received against Share
warrants
• Long term Borrowings
• DTL
Non Current Liabilities
• Other Long term liabilities
• Long- term provisions
• Short- term borrowings
• Trade Payables
Current Liabilities
• Other Current Liabilities
• Short term provisions
 ASSETS CLASSIFICATION

NON- CURRENT ASSETS CURRENT ASSETS

 Fixed Assets  Current Investments

 Non-current Investments
 DTA
 Long term Loans and advances
 Other non - current assets
 Inventories
 Trade Receivables
 Cash and cash equivalents
 Short term Loans and advances
 Other Current Assets
 CURRENT AND NON- CURRENT

Classification of Current Liability: It should satisfy ANY 1 of the following

criteria.. All the other liabilities will be classified as non-current.

 Settled in normal
operating cycle
 Expected to be settled
in 12 months after
reporting date
 Held primarily for trading
 No unconditional right to
defer settlement for at least
12 months after reporting
date
 CURRENT AND NON- CURRENT

Classification of Current Asset: It should satisfy ANY 1 of the following

criteria.. All the other assets will be classified as non-current.

Trading Restriction
Expected to be
Realised in
realised in 12 Cash or cash
normal
months after equivalence
Held primarily
operating cycle
reporting date unless
for trading
restricted to
Operating
Realization settle liabilty
cycle
 OPERATING CYCLE

Operating Lead time to acquire raw

Acquiring raw Cycle material +
materials
Raw material holding period +

Processing into
Realizing cash Work in progress period +
finished goods
Finished Goods holding
period +
Sale of goods
Receivable Collection Period

Duration of an operating cycle can be more than 12 months

BALANCE SHEET
 NOTES TO BALANCE SHEET
SHARE CAPITAL
 Authorised, subscribed and
fully paid up equity and
preference shares, par value
 Held by holding, subsidiary
or associates
 Shareholders holding more
than 5% shares
 Reco of number of shares
at beginning and end
RESERVES
 Capital reserves
 Capital redemption reserve
 Securities premium reserve
 Debenture redemption res
 Share option outstanding
 Surplus in P&L
 Accumulated losses
 Revaluation Reserve
 NOTES TO BALANCE SHEET

LONG TERM BORROWINGS OTHER LONG-TERM LIABILITIES

 Bonds/ debentures
 Term loans – Banks / Others  Trade payables
 Deposits  Others
 Loans from related party
 Long term maturity - fin lease
 Secured – unsecured classify LONG TERM PROVISIONS
 Loans guaranteed by directors
or others
 Bonds/debentures descending
 Provision for employee benefits
order of conversion
 Others (specify nature)
 Terms of repayment of term
loans and other loan
 Default – loans and interest Same reporting for Short term provisions
 NOTES TO BALANCE SHEET
SHORT TERM BORROWINGS
 Loans repayable on demand,
loans from related parties,
deposits and others
 Secured / unsecured – classify
 Nature of security given
 Loans guaranteed by directors
 Period and amount of default
in repayment of loans and
interest as on bal sheet date
OTHER CURRENT LIABILITIES
 Current maturities of long term
debt
 Current maturities of finance
lease obligations
 Interest accrued and due / not
due on borrowings
 Income received in advance
 Unpaid dividends
 Application money refund
 Unpaid matured deposits and
debentures and interest thereon
 NOTES TO BALANCE SHEET

TANGIBLE ASSETS INTANGIBLE ASSETS

Classify as
Assets under Classification as goodwill, Brand,
Land,
lease trademarks, computer software etc
buildings,
mentioned
P&M, FF, OE,
separately
Vehicles etc
Reconciliation of gross and net
carrying amounts
Revaluation :
Reconcile
Amount and
gross and net
date to be
carrying Revaluation : Amount and date to be
shown for 5
amounts shown for 5 years
yrs.
 NOTES TO BALANCE SHEET

NON- CURRENT INVESTMENTS

 Investment Property , equity  Investments

instruments, preference shares, carried other
than cost
Govt securities , Mutual Funds
etc  Names of
partnership
 Whether such bodies are firms
subsidiaries, JV , SPVs or
associates
DISCLOSURE
Aggregate amount of quoted investments and market value thereof
Aggregate amount of unquoted investments
Aggregate provision for diminution in value of investments
Same requirements for Current Investments
 NOTES TO BALANCE SHEET
LONG TERM LOANS
AND ADVANCES
Classification as capital advances,
security deposits, related parties
and others
Further classified as secured,
unsecured and doubtful
Due by directors/ officers jointly or
severally.
Allowance for bad and doubtful
loans disclosed separately
OTHER NON-
CURRENT ASSETS
Classification as Long term trade
receivables & others
Further classified as Secured,
unsecured and doubtful
Due by directors/ officers jointly or
severally
Allowance bad and doubtful loans
disclosed separately
 NOTES TO BALANCE SHEET

INVENTORIES
Mode of
valuation to be
Goods-in-transit stated
disclosed under
Classified as raw the relevant sub-
materials, WIP, head of
Finished goods, inventories
stock in trade,
stores & spares etc
 Aggregate amount outstanding
for a period of > 6 months
 Further classified as Secured,
TRADE RECEIVABLES
unsecured and doubtful
 Due by directors/ offices jointly
or severally
 Earmarked Classified as
Bank deposits Balances with balances with balances with
Repatriation
with more banks to the banks to be banks,
restrictions in
than twelve extent held as stated cheques,
case of cash
months margin money separately eg: drafts in hand,
and bank bal
maturity or security unpaid Cash on hand
dividend & others
CASH AND CASH EQUIVALENTS
NOTES TO BALANCE SHEET
 NOTES TO PROFIT & LOSS A/C

REVENUE FROM OPERATIONS REVENUE FROM OPERATIONS

(Non Finance co) (Finance co)

 Includes sale of products,  Includes interest, other financial

services and other operating services

revenues ( Less: Excise duty)  Interest is a charge on loan

 Other operating revenue are  Other financial services-

revenues arising from processing charges, appraisal

company’s main operating fees, guarantee fees other than

activity ( eg: Sale of Scrap) interest

 NOTES TO PROFIT & LOSS A/C

OTHER INCOME

Revenue
from
operations
Income not arising from the
company’s main activities
Eg :
 Interest income ( Non finance TOTAL
companies) REVENUE
 Dividend income
 Net gain or loss on sale of
investments
 Other non- operating income Other
Income
 NOTES TO PROFIT & LOSS A/C

COST OF MATERIALS
PURCHASES OF STOCK- IN TRADE
CONSUMED

Applicable for trading companies

with the intention to re-sell
 Raw material
 Packing material
 Purchased intermediaries and
components consumed in CHANGES IN INVENTORIES
manufacturing
 Semi finished goods purchased
for processing & sales Difference between opening and
closing inventories
 NOTES TO PROFIT & LOSS A/C

EMPLOYEE BENEFIT
DEPRECIATION
EXPENSES

Depreciation and amortisation

expense as per Schedule II
Aggregate to be shown in P & L
and break up in notes
 Salaries and wages
 Contribution to provident and FINANCE COST
other funds
 ESOP and ESPP
 Staff welfare expenses Break- up into interest expense and
other borrowing costs
 NOTES TO PROFIT & LOSS A/C

OTHER EXPENSES PROFIT / LOSS

 Consumption of stores and spare Appropriations are not depicted on

parts the face of the statement of profit &
loss account
 Power and fuel
 Rent
OTHER INFO
 Repairs to building / machinery
 Payment to Auditors
 Insurance 1. Value of imports on CIF basis
2. Expenditure in foreign currency
 Rates and taxes 3. Earnings in foreign currency
 Miscellaneous expenses
deepakchand@mca.co.in