The ministry of corporate affairs (MCA) has amended various rules under the companies law pertaining to audits, auditors, and accounts. Besides, by making changes to Schedule III of the Companies  Act, 2013, there are increased disclosure requirements, including details about their dealings in cryptocurrencies, if any. The changes were notified by the ministry, which is implementing the company’s law, which will be effective from April 1.

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Now companies have to round off the figures appearing in the financial statements, hitherto it was optional. Further, the criteria for rounding off shall be based on “total income” in place of “turnover”

The note on Share Capital in the Financial Statements shall mention details of the Shareholding of the Promotes along with changes, if any, during the Financial Year under review with effect from 1st April, 2021.

As per the Amendment Current Maturities of Long-Term Borrowings during the Financial Year are required to be disclosed separately under the head ‘Short Term Borrowings’ instead of ‘Other Current Liabilities

The note on Trade Payables due for payment by the Company shall consist of an ageing schedule.

This disclosure has a material impact specifically on the pending/prospective litigations under Section 9 of the Insolvency and Bankruptcy Code, 2016. As is well settled by the Supreme Court of India in Mobilox Innovations Private Limited v. Kirusa Software Private Limited and in view of the provisions of Section 9(5)(ii)(d) of the Insolvency and Bankruptcy Code, 2016 (IBC) an application under Section 9 for initiating Corporate Insolvency Resolution Process (CIRP) by an operational creditor cannot be admitted if the debt in respect of which such application is filed is disputed i.e., there exists a dispute in respect of the quality or any other matter of the goods or service provided.

Hence, this amendment is material for litigation purposes.

Deposits maintained with the Company shall be reclassified as ‘Other Non- Current Assets’ instead of ‘Long term loans and advances.

The company shall disclose the reason of utilization of funds for the purposes other than for which they were borrowed and shall also disclose the purposes for which the funds were utilised.

Where the Company has borrowings from banks or financial institutions on the basis of security of current assets, it shall disclose whether quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts and if not, a summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed.

The Company shall provide the details 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 name of the Company in the prescribed format. If such immovable property is jointly held with others, details are required to be given to the extent of the Company’s share.

If the Company has revalued its property, plant and equipment, the Company shall disclose as to whether the revaluation is based on the valuation by a registered valuer.

Disclosures regarding the Loans or Advances in the nature of loans granted to promoters, directors, KMPs and the related parties (as per the definition mentioned in Companies Act, 2013) either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

The note on Intangible Assets shall additionally disclose the amount of change due to revaluation (if the change is 10% or more in the aggregate of the net carrying value of each class of intangible assets).

Disclosure regarding the proceedings have been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and the Rules made thereunder.

Disclosure regarding the name of the Company being declared as a wilful defaulter by any bank or financial institutions or other lenders.

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