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Guidance Note on Division III to Schedule III to the Companies Act 2013 for NBFC that is required to comply with IND AS by CL&CGC ICAI
November, 06th 2019
     GUIDANCE NOTE ON
  DIVISION III - SCHEDULE III
TO THE COMPANIES ACT, 2013
         FOR
NBFC THAT IS REQUIRED TO
  COMPLY WITH IND AS
         GUIDANCE NOTE
                 ON
    DIVISION III - SCHEDULE III
TO THE COMPANIES ACT, 2013 FOR
   NBFC THAT IS REQUIRED TO
      COMPLY WITH IND AS




The Institute of Chartered Accountants of India
             (Set up by an Act of Parliament)
                        New Delhi
© The Institute of Chartered Accountants of India

All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means electronic,
mechanical, photocopying, recording or otherwise without prior permission in
writing from the publisher.




First Edition            : October 2019


Committee/Department : Corporate Laws            &   Corporate    Governance
                       Committee


E-mail                   : clcgc@icai.in


Website                  : www.icai.org


Price                    : Rs. 200/-


ISBN No.                 :

Published by             : The Publication Department on behalf of the
                           Institute of Chartered Accountants of India. ICAI
                           Bhawan, Post Box No. 7100, Indraprastha Marg,
                           New Delhi ­ 110 002, India.

Printed by               : Sahitya Bhawan Publications, Hospital Road,
                           Agra 282 003
                                                            Foreword
The Ministry of Corporate Affairs (MCA) has earlier amended the formats for
Division I and Division II to Schedule III to the Companies Act and has also
notified the formats of Division III to Schedule III pertaining to Non-Banking
Financial Companies (NBFCs) that are required to comply with Indian
Accounting Standards (Ind AS).
The revised formats of Division III have brought changes with regard to the
classification of trade payables, trade receivables and loan receivables. Also,
with the amendments, there is change in the terminology of Schedule III to
align it with Ind AS. As the Ind AS has become applicable on NBFCs that fall
within the prescribed criteria w.e.f. 1st April, 2018, with the prescription of
Division III to Schedule III, the presentation of the financial results will be in
line with the Indian Accounting Standards.
In light of the changes to Division III to Schedule III, a need was felt by the
Institute of Chartered Accountants of India (ICAI) for providing appropriate
guidance to the members so that the requirements of Schedule III can be
complied with by the NBFCs that are required to prepare their financial
statements as per Ind AS in letter and spirit.
I am happy that the Corporate Laws & Corporate Governance Committee of
ICAI has undertaken the task of preparing the Guidance Note on the Division
III to Schedule III of the Companies Act, 2013 for necessary guidance of
NBFCs and all others involved. Detailed notes have also been provided on
various items of the Schedule III and issues and intricacies involved therein
which will surely help the readers.
I commend the efforts of CA. (Dr.) Debashis Mitra, Chairman, CA.
Chandrashekhar V. Chitale, Vice-Chairman and all the members of the
Corporate Laws & Corporate Governance Committee who have made
invaluable contribution in preparing this Guidance Note.
I am confident that the members and other stakeholders would find the
Guidance Note immensely useful.

                                                         CA Prafulla P. Chhajed
                                                                 President ICAI
                                                              Preface
The Institute of Chartered Accountants of India (ICAI) through the Corporate
Laws & Corporate Governance Committee (CLCGC) had issued Guidance
Notes on Division I and Division II to Schedule III to the Companies Act 2013
and the same were revised on the basis of amendments which were notified
by the Ministry of Corporate Affairs vide Notification dated 11.10.2018.
In October, 2018, the Ministry of Corporate Affairs notified Division III to
Schedule III to the Companies Act, 2013 which contained the format of
Financial Statements as well as Disclosure Requirements for Non- Banking
Financial Companies (NBFCs) that are required to comply with the Indian
Accounting Standards (Ind AS).
In view of the above, CLCGC of ICAI decided to bring out a Guidance Note
on Division III to Schedule III to the Companies Act 2013. The Note provides
guidance on each of the items of the Balance Sheet & Statement of Profit
and Loss. Few illustrations have also been included on application of the
principles provided in the Guidance Note.
We would like to convey our sincere gratitude to the President of ICAI, CA.
Prafulla P. Chhajed, and the Vice President ICAI, CA. Atul Kumar Gupta for
supporting us in bringing out the publication. We are also thankful to all our
Central Council Colleagues & other Members /Special Invitees of the
Committee for their valuable inputs in giving shape to this Guidance Note.
Our special thanks to CA. Shriniwas Y. Joshi, Central Council Member and
Convenor of the Study Group comprising of CA. Charanjit Attra, CA.
Sandeep Shah, CA. Ritesh Goyal, Shri Avinash Chander, CA. Krishna Vyas
and CA. Manan Lakhani for their sincere efforts in bringing out this
Publication.
The Committee would like to acknowledge the valuable inputs received from
the Nominees of Reserve Bank of India to the Study Group namely Shri P.K.
Chophla, Shri Anuj Sharma and Shri Sandeep Parmar.
We would also like to thank Secretary to the Committee CA. Sarika Singhal
and Ms Seema Jangid and CA. Deepa Agarwal for their technical and
administrative support.
We trust that this Guidance Note would be very useful to the members of the
Institute and others interested in the subject.


CA. (Dr.) Debashis Mitra                 CA. Chandrashekhar V. Chitale
Chairman,                                Vice- Chairman,
Corporate Laws &                         Corporate Laws &
Corporate Governance Committee           Corporate Governance Committee
                                                                   Index
Sr.                             Contents                              Page
No.                                                                    No.
1.    Introduction                                                       1
2.    Objective and Scope                                                2
3.    Applicability                                                      4
4.    Main Principles ­ Summary of Division III to Schedule III'         5
5.    Structure of Division III to Schedule III                          9
6.    General Instructions       for   Preparation   of   Financial     10
      Statements: Notes
7.    Part I Notes ­ General Instructions for Preparation of            13
      Balance Sheet
8.    Part I ­ Form of Balance Sheet and Notes ­ General                13
      Instructions for Preparation of Balance Sheet: Notes 6 to
      11
9.    Part II ­ Statement of Profit and Loss and Notes ­ General        71
      Instructions for Preparation of Statement of Profit and
      Loss: Notes 1 to 10
10.   Other Comprehensive Income                                        89
11.   Additional information to be disclosed by way of Notes to         91
      Statement of Profit and Loss
12.   Part III ­ General Instructions for Preparation of                93
      Consolidated Financial Statements
      Annexures
      Annexure A ­ Division III to Schedule III to the Companies       101
      Act, 2013
      Annexure B ­ Changes between Division I and Division II          143
      to Schedule III
      Annexure C ­ Illustrative List of Disclosures required           171
      under the Companies Act, 2013
Annexure D ­ List of Indian Accounting Standards notified   174
as on date
Annexure E ­General Circular No. 39 / 2014 dated 14th       176
October 2014
Glossary                                                    177
1.    Introduction
1.1    Schedule III to the Companies Act, 2013 (`the Act') was notified along
with the Act itself on August 29, 2013 thereby providing the manner in which
every company registered under the Act shall prepare its Financial
Statements. Financial Statements as defined under the Act include Balance
Sheet, Statement of Changes in Equity for the period, the Statement of Profit
and Loss for the period, Cash flow statement as applicable for the financial
year and Notes.
1.2     Ministry of Corporate Affairs (`MCA') notified Indian Accounting
Standards (`Ind AS') on February 16, 2015 thereby laying down the roadmap
for all companies, except insurance companies, banking companies and non-
banking finance companies, for adoption of Ind AS (`MCA roadmap'). Further,
MCA notified amendments to Schedule III to the Act on April 6, 2016
whereby:
      1.2.1 The existing Schedule III was renamed as `Division I' to
            Schedule III (`Non-Ind AS Schedule III') ­ which gives a format
            of Financial Statements for Non-Ind AS companies, that are
            required to comply with the Companies (Accounting Standards)
            Rules, 2006. In other words, Non-Ind AS companies, will be
            required to prepare Financial Statements as per Companies
            (Accounting Standards) Rules, 2006, as per the format of
            Division I to Schedule III to the Act;
      1.2.2 `Division II' - `Ind AS Schedule III' was inserted to give a format
            of Financial Statements for companies that are required to
            comply with the Companies (Indian Accounting Standards)
            Rules, 2015, as amended from time to time (`Companies Ind AS
            Rules'). This was newly inserted into Schedule III for companies
            that adopt Ind AS as per Rule 4(1)(i) or Rule 4(1)(ii) or Rule
            4(1)(iii) of the Companies Ind AS Rules. Accordingly, such
            Companies, while preparing its first and subsequent Ind AS
            Financial Statements, would apply Division II to Ind AS
            Schedule III to the Act.
1.3 The MCA issued a notification dated March 30, 2016 announcing the
Ind AS roadmap for non-banking financial companies (`NBFC'). Further, MCA
notified amendments to Schedule III to the Act on October 11, 2018 whereby:


                                    1
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

      1.3.1    `Division III' to Schedule III' (Refer Annexure A, Page 101)
               was inserted to give a format of Financial Statements for
               NBFC's that are required to comply with the Companies
               (Indian Accounting Standards) Rules, 2015, as amended from
               time to time (`Companies Ind AS Rules'). As per the
               Companies Ind AS Rules, "Non-Banking Financial Company"
               means a Non-Banking Financial Company as defined in
               clause (f) of section 45-I of the Reserve Bank of India Act,
               1934 and includes Housing Finance Companies, Merchant
               Banking companies, Micro Finance Companies, Mutual
               Benefit Companies, Venture Capital Fund Companies, Stock
               Broker or Sub-Broker Companies, Nidhi Companies, Chit
               Companies, Securitisation and Reconstruction Companies,
               Mortgage Guarantee Companies, Pension Fund Companies,
               Asset Management Companies and Core Investment
               Companies.' Accordingly, NBFC's while preparing its first and
               subsequent Ind AS Financial Statements, would apply
               Division III to Schedule III to the Act.
1.4    It may, however, be clarified that for companies engaged in the
generation or supply of electricity, neither the Electricity Act, 2003, nor the
rules framed thereunder, prescribe any specific format for presentation of
Financial Statements by an electricity company. Section 1(4) of the Act
states that the Act will apply to electricity companies, to the extent it is not
inconsistent with the provisions of the Electricity Act. Keeping this in view,
Division III to Schedule III, Division I or Division II as applicable may be
followed by such companies till the time any other format is prescribed by the
relevant statute.
2.    Objective and Scope
2.1 The objective of this Guidance Note is to provide guidance in the
preparation and presentation of Financial Statements in accordance with
various aspects of Division III to Schedule III, for NBFC's adopting Ind AS.
The disclosure requirements under Ind AS, the Companies Act, 2013, other
pronouncements of the Institute of Chartered Accountants of India (ICAI),
other statutes, etc., would be in addition to the guidance provided in this
Guidance Note. Paragraph 9 of Division III of Schedule III further states that
where any Act, Regulation, Guidelines or Circulars issued by the relevant
regulators from time to time requires specific disclosures to be made in the

                                    2
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

standalone financial statements of an NBFC, the said disclosures shall be
made in addition to those required under this Schedule.
2.2 Guidance given in `Guidance Note on Division I to the Schedule III to
the Companies Act, 2013' published in February 2016 and revised in July
2019 would continue to be applied by Non-Ind AS companies which are
required to prepare Financial Statements as per the format of Non-Ind AS
Schedule III.
2.3 In preparing this Guidance Note, reference has been made to Ind AS
notified under Section 133 of the Act read together with Paragraph 3 of the
Companies Ind AS Rules given in Annexure D (Pg 174) and various other
pronouncements of the ICAI. The primary focus of the Guidance Note is to
lay down broad guidelines to deal with practical issues that may arise in the
implementation of Division III to Schedule III while preparing Financial
Statements as per Ind AS. The Guidance Note would primarily provide
guidance on the line items contained in the Division III to the Schedule III
rather than the specific issues which an NBFC may face.
2.4 This Guidance Note includes changes to presentation and disclosure
requirements of Division III to Schedule III pursuant to Ind AS notified up to
May 31, 2019. Ind AS 116 Leases, is notified on March 30, 2019 and will be
effective from 1st April 2019. It changes the current accounting requirements
of differentiating between lease arrangements as an `Operating Lease' and
`Finance Lease' for the lessees. It requires recognition of a `Right-to-use'
(ROU) and a corresponding lease liability where the lessee, at the
commencement date, has a financial obligation to make lease payments to
the lessor for its right to use the underlying asset during the lease term.
While the requirements (including presentation and disclosures) for lessor
remains substantially unchanged from Ind AS 17, the requirements for lessee
changes significantly as compared to Ind AS 17. An entity shall present and
disclose rights and obligations arising from lease arrangements as per Ind
AS 116 and the requirements under this schedule stand modified accordingly
(Refer Paragraph 2 of General Instructions for preparation of Financial
Statements of a Non-Banking Financial Company (NBFC) that are required to
comply with Indian Accounting Standards (Ind AS)).
2.5 As per the clarification issued by ICAI regarding the authority attached
to the Documents issued by ICAI, `Guidance Notes' are primarily designed to
provide guidance to members on matters which may arise in the course of


                                    3
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

their professional work and on which they may desire assistance in resolving
issues which may pose difficulty. Guidance Notes are recommendatory in
nature. A member should ordinarily follow recommendations in a guidance
note relating to an auditing matter except where he is satisfied that in the
circumstances of the case, it may not be necessary to do so. Similarly, while
discharging his attest function, a member should examine whether the
recommendations in a guidance note relating to an accounting matter have
been followed or not. If the same have not been followed, the member should
consider whether keeping in view the circumstances of the case, a disclosure
in his report is necessary.

3.    Applicability
3.1    As per the Government Notification no. S.O. 902 (E) dated 26 th March,
2014, Schedule III is applicable for the Financial Statements prepared for the
financial year commencing on or after April 1, 2014. As per the Government
Notification no. G.S.R. 404(E) dated April 6, 2016, Schedule III is amended
to include a format of Financial Statements for a company preparing
Financial Statements in compliance with the Companies Ind AS Rules.
Further, as per the Government Notification no. G.S.R. 1022 (E) dated
October 11, 2018, the Schedule III is amended to include a format of
Financial Statements for an NBFC preparing Financial Statements in
compliance with the Companies Ind AS Rules. Every Non-Banking Financial
company as defined in the Companies (Indian Accounting Standards)
(Amendment) Rules, 2016 to which Indian Accounting Standards apply, shall
prepare its financial statements in accordance with this Schedule or with
such modification as may be required under certain circumstances. Division
III to Schedule III requires that except in the case of the first Financial
Statements laid before the company after incorporation, the corresponding
amounts (i.e. comparatives) for the immediately preceding period are to be
disclosed in the Financial Statements including the Notes to Accounts. Thus,
for the Financial Statements prepared for the financial year 2018-19 (i.e.
1stApril 2018 to 31st March 2019), corresponding amounts need to be given
for the financial year 2017-18. As per Ind AS 101, a company's first Ind AS
financial statements shall include at least three balance sheets, two
statements of profit and loss, two statements of cash flows and two
statements of changes in equity and related notes. This Guidance Note does
not deal with the presentation aspects of reconciliations that are required to
be provided as a part of a company's first Ind AS financial statements.

                                    4
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

3.2 For applicability, in the first and subsequent years, of Division III to
Schedule III format by a company to its interim Financial Statements (other
than quarterly, half-yearly and annual financial results published as per SEBI
guidelines), relevant paragraphs of Ind AS 34 ­ Interim Financial Reporting
are quoted below:
      "9.    If an entity publishes a complete set of Financial Statements in
             its interim financial report, the form and content of those
             statements shall conform to the requirements of Ind AS 1 for a
             complete set of Financial Statements.
      10.    If an entity publishes a set of condensed Financial Statements
             in its interim financial report, those condensed statements shall
             include, at a minimum, each of the headings and subtotals that
             were included in its most recent annual Financial Statements
             and the selected explanatory notes as required by this
             Standard. Additional line items or notes shall be included if their
             omission would make the condensed interim Financial
             Statements misleading."
In case, a company is presenting condensed interim Financial Statements,
its format should also conform to that used in the company's most recent
annual Financial Statements, i.e., which would be as per Division III to
Schedule III. However in case, a company is presenting condensed interim
Financial Statements in its first year of applicability of Ind AS reporting the
company's most recent annual financial statements would be Indian GAAP
and hence, the same may be applied for its Interim Financial reporting.
3.3 Listed entities shall follow guidelines issued by SEBI by way of
circulars prescribing formats for publishing financial results (quarterly, half-
yearly and annual) which are guided by the relevant provisions of the Ind AS
and Division III to Schedule III and may make suitable modifications, as
applicable.

4.    Main principles ­ Summary of Division III to
      Schedule III
4.1 Every Non-Banking Financial company as defined in the Companies
(Indian Accounting Standards) (Amendment) Rules, 2016 to which Indian
Accounting Standards apply, shall prepare its financial statements in



                                    5
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

accordance with this Schedule or with such modification as may be required
under certain circumstances.
4.2 As per Paragraph 1 of Part III of Division III where a Non-Banking
Financial Company (NBFC) is required to prepare Consolidated Financial
Statements, i.e., consolidated balance sheet, consolidated statement of
changes in equity and consolidated statement of profit and loss, the NBFC
shall mutatis mutandis follow the requirements of this Schedule as applicable
to an NBFC in the preparation of balance sheet, statement of changes in
equity and statement of profit and loss. However, where the consolidated
financial statements contain elements pertaining to NBFCs and other than
NBFCs, mixed basis of presentation may be followed for consolidated
financial statements where both kinds of operations are significant.
4.3 Financial Statements include Balance Sheet, Statement of Changes in
Equity for the period, Statement of Profit and Loss for the period and Notes.
Cash Flow Statement shall be prepared in accordance with the requirements
of the relevant Ind AS.
4.4   Balance sheet
      --    Division III provides a format of the balance sheet and sets out
            the minimum requirements of disclosure on the face of the
            balance sheet for NBFCs.
      --    Items presented in the balance sheet are to be classified as
            financial and non-financial.
      --    It permits NBFCs to avail of the option of presenting assets and
            liabilities in the order of liquidity, as provided by Ind AS 1,
            Presentation of Financial Statements .
      --    It requires an NBFC to disclose such information that enables
            users of its financial statements to evaluate the NBFC's
            objectives, policies and processes for managing capital.
4.5   Statement of Profit and Loss
      --    The division provides a format of the statement of profit and loss
            and sets out the minimum requirements of disclosure on the
            face of the statement of profit and loss.




                                   6
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

      --     Items comprising `revenue from operations' and `other
             comprehensive income' have to be disclosed on the face of the
             statement of profit and loss.
4.6   Statement of changes in equity
      --     The statement of changes in equity would reconcile opening to
             closing amounts for each component of equity including
             reserves and surplus and items of other comprehensive income.
      --     NBFCs are specifically required to disclose the statutory
             reserves as part of `other equity' in the statement of changes in
             equity.
      --     Additionally, the conditions or restrictions for distribution
             attached to statutory reserves have to be separately disclosed
             in the notes as stipulated by the relevant statute.
4.7   Materiality
NBFCs are required to disclose all `material' items in their financial
statements i.e., the items if they could, individually or collectively, influence
the economic decisions that users make on the bases of financial
statements. Materiality depends on the size and nature of the item judged in
particular circumstances. However, while preparing the statement of profit
and loss, it specifies that an NBFC should disclose a note for any item of
`other income' or `other expenditure' which exceeds 1 per cent of the total
income, in addition to the consideration of materiality.
A General Instruction on `Materiality' has been included in Note 7 to General
Instructions for Preparation of Financial Statements requiring Financial
Statements to disclose items that could, individually or collectively, influence
the economic decisions that users make on the bases of the Financial
Statements. Materiality depends on the size or nature of the item or a
combination of both, to be judged based on particular facts and in particular
circumstances. Moreover, Paragraph 29 of Ind AS 1 states w.r.t. `materiality'
that an entity shall present separately each material class of similar items. An
entity shall present separately items of a dissimilar nature or function unless
they are immaterial except when required by law. Further, reference to
Paragraph 29 to 31 of Ind AS 1 should be considered when determining
materiality and aggregation.



                                     7
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

The General Instructions for Preparation of Financial Statements also lay
down the principle that in preparing Financial Statements including Notes, a
balance shall be maintained between providing excessive detail that may not
assist users of Financial Statements and not providing important information
as a result of too much aggregation. Compliance with this requirement is a
matter of professional judgement and may vary on a case to case basis
based on facts and circumstances. However, it is necessary to strike a
balance between overburdening Financial Statements with excessive detail
that may not assist users of Financial Statements and obscuring important
information as a result of too much aggregation. For example, a company
should not obscure important information by including it among a large
amount of insignificant detail or in a way that it obscures important
differences between individual transactions or associated risks.
4.8 As per Paragraph 60 of Ind AS 1, an entity shall present current and
non-current assets, and current and non-current liabilities, as separate
classifications in its balance sheet except if a presentation based on liquidity
provides information that is reliable and more relevant. The format prescribed
by Division III is currently a liquidity based format. Thus the assets and
liabilities are classified as financial and non-financial instead of current, non-
current classification as required by Division I and Division II of Schedule III.
However as per Paragraph 61 of Ind AS 1 whichever method of presentation
is adopted, an entity shall disclose the amount expected to be recovered or
settled after more than twelve months for each asset and liability line item.
 Disclosure regarding recovery or settlement within 12 months after the
reporting date (current) and more than 12 months after the reporting date
(non­current) shall be provided separately in the financial statements.
4.9 Division III to Schedule III clarifies that the requirements mentioned
therein for disclosure on the face of the Financial Statements or in the notes
are the minimum requirements and in addition to the disclosure requirements
specified in the Ind AS. Line items, sub-line items and sub-totals shall be
presented as an addition or substitution on the face of the Financial
Statements when such presentation is relevant to an understanding of the
NBFC's financial position or performance or to cater to categories of NBFCs
as prescribed by the relevant regulator or sector-specific disclosure
requirements or when required for compliance with the amendments to the
relevant statutes or under the Indian Accounting Standards. For e.g., line
items required by Paragraph 54 and Paragraph 82 of Ind AS 1 should be

                                     8
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

included, as an addition to or substitution of the Division III to Schedule III
line items on the face of Balance Sheet and Statement of Profit and Loss,
respectively.
4.10 Disclosures required under Ind AS (for e.g., fair value measurement
reconciliation, fair value hierarchy, risk management and capital
management, disclosure of interests in other entities, components of other
comprehensive income, reconciliations on first-time adoption of Ind AS, etc.)
shall be made in the Notes or by way of additional statement(s) unless
required to be disclosed on the face of the Financial Statements.
4.11 Where any Act, Regulation, Guidelines or Circulars issued by the
relevant regulators from time to time requires specific disclosures to be made
in the standalone and consolidated financial statements of an NBFC, the said
disclosures shall be made in addition to those required under Division III to
Schedule III.
4.12 Note 8 to General Instructions for Preparation of Financial Statements
in Division III to Schedule III states that the terms used in Division III to
Schedule III will carry the same meaning as defined by the applicable Ind AS.
For example, the terms such as `associate', `related parties', etc. will have
the same meaning as defined in Ind AS notified under the Companies Ind AS
Rules.
4.13 For any terms which are not specifically defined in Ind AS, attention
may also be drawn to the Framework for the Preparation and Presentation of
Financial Statements in accordance with Indian Accounting Standards (`Ind
AS Framework') issued by ICAI. However, if any term is not defined in the
Ind AS Framework, the entity may consider the principles described in
paragraph 10 to paragraph 12 of Ind AS 8 for developing and applying an
accounting policy.
4.14 An NBFC preparing financial statements as per this Schedule may
change the order of presentation of line items on the face of financial
statements or order of line items within the notes in order of liquidity, if
appropriate, considering the operations performed by the NBFC.

5.    Structure of Division III to Schedule III
The Structure of Division III to Schedule III is as under:




                                     9
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

A.    General Instructions for Preparation of Financial Statements of a Non-
      Banking Financial Company (NBFC) that is required to comply with Ind
      AS (`General Instructions for Preparation of Financial Statements')
B.    Part I ­ Form of Balance Sheet and Statement of Changes in Equity
C.    Part I Notes ­ General Instructions for Preparation of Balance Sheet
D.    Part II ­ Form of Statement of Profit and Loss
E.    Part II Notes ­ General Instructions for Preparation of Statement of
      Profit and Loss
F.    Part III ­ General Instructions for the Preparation of Consolidated
      Financial Statements

6.    General Instructions for Preparation of Financial
      Statements: Notes 1 to 10
6.1 The General Instructions lay down the broad principles and guidelines
for preparation and presentation of Financial Statements.
6.2 As laid down in Part A of the Annexure to Companies Ind AS Rules,
Ind AS, which are specified, are intended to be in conformity with the
provisions of applicable laws. However, if due to subsequent amendments in
the law, a particular Ind AS is found to be not in conformity with law, the
provisions of the said law will prevail and the Financial Statements should be
prepared in conformity with such law. In such a scenario, the statement of
compliance with Ind AS should be considered in the light of the principle of
overriding effect of law over Ind AS when applying the presentation or
disclosure requirements of Division III to Schedule III.
6.3 Division III to Schedule III requires that if compliance with the
requirements of the Act, Regulation, Guidelines or Circulars issued by the
relevant regulators from time to time including applicable Ind AS require any
change in the presentation or disclosure including addition, amendment,
substitution or deletion in the head/sub-head or any changes in the Financial
Statements or Notes to Accounts thereof, the same shall be made and the
requirements of Division III to Schedule III shall stand modified accordingly.
6.4 Note 3 of the General Instructions for Preparation of Financial
Statements state that the disclosure requirements of Division III to Schedule
III are in addition to and not in substitution of the disclosure requirements


                                   10
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

specified in Ind AS. They further clarify that the disclosures specified in Ind
AS shall be made in the Notes or by way of additional statement(s) unless
required to be disclosed on the face of the Financial Statements. Similarly, all
other disclosures as required by the Act shall be made in the Notes in
addition to the requirements set out in this Schedule.
6.5   Examples to illustrate the above point are:
      (a)    Specific disclosure is required by Paragraph 33 of Ind AS-105
             Non-current Assets Held for Sale and Discontinued Operations
             which has not been incorporated in Division III to Schedule III.
      (b)    Ind AS-107 Financial Instruments: Disclosures , which requires
             disclosure of information that enable users of the Financial
             Statements to evaluate the significance of financial instruments
             for its financial position and performance.
6.6 Disclosures required by Ind AS as well as by the Act will continue to
be made in the Financial Statements and in the Notes to Accounts. An
example of this is the separate disclosure required by Sub Section (3) of
Section 182 of the Act for donations made to political parties. Such
disclosures would be made in the Notes. An illustrative list of disclosures
required under the Act is enclosed as Annexure C (Pg 171).
6.7 The above principle would apply to disclosures to be made in
compliance with other regulatory requirements such as, disclosures required
under Regulation 34 (including Schedule V) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015; the statutory requirements
by RBI such as Asset-Liability Management, Concentration of exposure,
Asset Quality etc.; any additional disclosure requirements created by NHB
directions issued by National Housing Bank and any pronouncements by
ICAI etc.
6.8 Division III to Schedule III requires all information relating to each item
on the face of the Balance Sheet and Statement of Profit and Loss to be
cross-referenced to the Notes. The manner of such cross-referencing to
various other information contained in the Financial Statements has been
retained as "Note No." in Division III to Schedule III. The instructions state
that the Notes to Accounts should provide where required with narrative
descriptions or disaggregation of items recognized in those statements.
Hence, presentation of all narrative descriptions and disaggregation should
preferably be presented in the form of Notes rather than in the form of

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Schedules. Such style of presentation is also in line with the manner of
presentation of Financial Statements followed by companies internationally
and would facilitate comparability of Financial Statements.
6.9 Note 4 of the General Instructions for Preparation of Financial
Statements also states that the Notes should also contain information about
items that do not qualify for recognition in Financial Statements. These
disclosures normally refer to items such as Contingent Liabilities and
Commitments which do not get recognised in the Financial Statements.
These have been dealt with in Paragraph 8.2.12.
6.10 Division III to Schedule III requires using the same unit of
measurement uniformly across the Financial Statements. Such requirement
should be taken to imply that all figures disclosed in the Financial Statements
including Notes should be of the same denomination, except where a
different denomination may be required for ratios or metrics in order to
increase its understandability.
6.11 Division III to Schedule III has specified the rounding off requirements
as Non-Ind AS Schedule III, as given below:

                         Division III to Schedule III
 ·    Total Income < Rs. 100 Crores - Round off to the nearest hundreds,
      thousands, lakhs or millions or decimal thereof.
 ·    Total Income >= Rs. 100 Crores - Round off to the nearest lakhs,
      millions or crores, or decimal thereof

6.12 A Note below Note 10 of the General Instructions for Preparation of
Financial Statements clarifies that Division III to Schedule III sets out the
minimum requirements for disclosure in the Financial Statements including
notes. It states that line items, sub-line items and sub-totals shall be
presented as an addition or substitution on the face of the Financial
Statements when such presentation is relevant to the understanding of the
NBFC's financial position or performance or to cater to categories of NBFC's
as prescribed by the relevant regulator or sector-specific disclosure
requirements, apart from, when required for compliance with amendments to
the relevant statutes or Ind AS.




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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

7.    Part I Notes: General Instructions for Preparation of
      Balance Sheet
7.1   Financial/ Non-financial assets and liabilities:
Division III to Schedule III requires all items in the Balance Sheet of an NBFC
to be classified as either Financial or Non-financial and be reflected as such.
Further Paragraph 54 of Ind AS 1 also specifies a requirement of presenting
financial assets and liabilities as line items on the balance sheet separately
from other items.

8.    Part I ­ Form of Balance Sheet and Notes ­ General
      Instructions for Preparation of Balance Sheet: Notes
      6 to 11
Framework for the Preparation and Presentation of Financial Statement
under Indian Accounting Standards' issued by ICAI (hereinafter referred to as
Ind AS Framework) defines the terms asset, liability and equity which are as
follows:
An asset is a resource controlled by the entity as a result of past events and
from which future economic benefits are expected to flow to the entity.
A liability is a present obligation of the entity arising from past events, the
settlement of which is expected to result in an outflow from the entity of
resources embodying economic benefits.
Equity is the residual interest in the assets of the entity after deducting all its
liabilities.
8.1   Assets
On the face of the Balance Sheet, Division III to Schedule III requires the
following items to be presented under financial assets and non-financial
assets:
Financial assets
(a)   Cash and cash equivalents
(b)   Bank Balance other than included in (a) above
(c)   Derivative financial instruments
(d)   Receivables


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

       (I) Trade Receivables
       (II) Other Receivables
(e)    Loans
(f)    Investments
(g)    Other Financial assets (to be specified)
Non-financial assets
(a) Inventories
(b) Current Tax Assets (Net)
(c)   Deferred Tax Assets (Net)
(d) Investment Property
(e) Biological assets other than bearer plants
(f)   Property, Plant and Equipment
(g) Capital work-in-progress
(h) Intangible assets under development
(i)   Goodwill
(j)   Other Intangible assets
(k)   Other non-financial assets (to be specified)
Financial Assets
8.1.1. Cash and cash equivalents:
Cash and cash equivalents shall be classified as:
(a)    Cash on hand;
(b)    Balances with banks (of the nature of cash and cash equivalents);
(c)    Cheques, drafts on hand; and
(d)    Others (specify nature).
The term `Cash and cash equivalents' is not defined in Division III to
Schedule III. According to Ind AS-7, Statement of Cash Flows, Cash is
defined to include cash on hand and demand deposits with banks. Cash
Equivalents are defined as short term, highly liquid investments that are

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
Ind AS 7 further explains that an investment normally qualifies as a cash
equivalent only when it has a short maturity of, say, three months or less
from the date of acquisition. This would include term deposits with banks that
have an original maturity of three months or less. However, bank balances
(including term deposits) held as margin money or security against
borrowings are neither in the nature of demand deposits, nor readily
available for use by the company, and accordingly, do not meet the aforesaid
definition of cash equivalents.
Further, interest accrued on a fixed deposit is included in the carrying value
of fixed deposit.
Generally, there should not be a difference in the amount of cash and cash
equivalents as per Ind AS 1 and as per Ind AS 7. However, as per Paragraph
8 of Ind AS 7 "where bank overdrafts which are repayable on demand form
an integral part of an entity's cash management, bank overdrafts are
included as a component of cash and cash equivalents. A characteristic of
such banking arrangements is that the bank balance often fluctuates from
being positive to overdrawn." Although Ind AS 7 permits bank overdrafts to
be included as cash and cash equivalents, however for the purpose of
presentation in the balance sheet, it is not appropriate to include bank
overdraft as a component of cash and cash equivalents unless the offset
conditions as given in paragraph 42 of Ind AS 32 are complied with. Bank
overdraft, in the balance sheet, should be included as `borrowings' under
Financial Liabilities.
8.1.2. Bank Balances other than cash and cash equivalents
Bank balances other than cash and cash equivalents as above, i.e. having a
maturity of more than three months shall be disclosed as Bank Balances
other than cash and cash equivalents on the face of the Balance Sheet.
Further, Note (A) of General Instructions for Preparation of Balance Sheet
requires the following disclosures with regard to Bank Balance other than
cash and cash equivalents:
(a)   Earmarked balances with banks (for e.g., for unpaid dividend) shall be
      separately stated;



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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

(b)   Balances with banks to the extent held as margin money or security
      against the borrowings, guarantees, other commitments shall be
      disclosed separately;
(c)   Repatriation restrictions, if any, in respect of cash and bank balances
      shall be separately stated.
The disclosure regarding `bank balances other than cash and cash
equivalents' should include items such as balances with banks held as
margin money or security against borrowings, guarantees, etc.
8.1.3. Derivative Financial Instruments:
As per Appendix A of Ind AS 109, `derivative' is defined as "A financial
instrument or other contract within the scope of the Standard with all three of
the following characteristics:
(a)   its value changes in response to the change in a specified interest
      rate, financial instrument price, commodity price, foreign exchange
      rate, index of prices or rates, credit rating or credit index, or other
      variable, provided in the case of a non-financial variable that the
      variable is not specific to a party to the contract (sometimes called the
      `underlying').
(b)   it requires no initial net investment or an initial net investment that is
      smaller than would be required for other types of contracts that would
      be expected to have a similar response to changes in market factors.
(c)   it is settled at a future date."
The following should be disclosed in the note for Derivative Financial
Instruments:
An explanation should be given for the use of derivatives, how the risk is
mitigated and for what purpose has the company entered into derivative
contracts in accordance with Paragraphs 21A to 21F of Ind AS 107. Eg. to
hedge its foreign currency risks, interest rate risks and equity price risks a
company may enter into the following kinds of derivative contracts such as -
interest rate swaps, cross-currency swaps, forward foreign exchange
contracts, futures and options on interest rates, foreign currencies and
equities etc.
A cross-reference to the financial risks section for management of risks
arising from derivatives should be done. As per paragraphs 31 to 33 of Ind

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

AS 107, an entity shall disclose information that enables users of its financial
statements to evaluate the nature and extent of risks arising from financial
instruments to which the entity is exposed at the end of the reporting period.
Disclosures should explain what the financial risks are, how the entity
manages the risks and why the entity enters into various derivative contracts
to hedge the risks, i.e, Credit risk, liquidity risk, market risk and other risk.
Derivatives are measured at fair value and carried as assets when their fair
value is positive and as liabilities when their fair value is negative. The
notional amount and fair value of such derivatives are disclosed separately in
the Notes to Accounts. Changes in the fair value of derivatives are included
in net gain on fair value changes in the statement of profit and loss unless
hedge accounting is applied.
Embedded derivative separated from host contract and accounted separately
as per Ind AS 109 requirements should be disclosed under the relevant
heading, for example, options, etc.
Part I below caters to disclosure of all derivative financial instruments held by
the Company.
Part II below requires analysis of derivatives included in Part I above into
different categories of hedge accounting specified in Ind AS 109 and risk
management purposes.
The notional amounts, fair value ­ assets, and fair value ­ liabilities shall be
disclosed for each category and sub-category of derivative financial
instruments as:
1.    Part I
      (i)      Currency Derivatives
               --     Spot and forwards
               --     Currency futures
               --     Currency swaps
               --     Options purchased
               --     Options sold (written)
               --     Others
               Subtotal (i)


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

      (ii)      Interest Rate Derivatives
                --     Forward rate agreements and interest rate swaps
                --     Options purchased
                --     Options sold (written)
                --     Futures
                --     Others
                Subtotal (ii)
      (iii)     Credit Derivatives
      (iv)      Equity Linked Derivatives
      (v)       Other Derivatives (Please specify)
      Total Derivative financial instruments (i) + (ii) + (iii) + (iv) + (v)
2.    Part II
Included in above (Part I) are derivatives held for hedging and risk
management purposes as follows
      (i)       Fair value hedging
                --     Currency Derivatives
                --     Interest rate derivatives
                --     Credit derivatives
                --     Equity linked derivatives
                --     Others
                Subtotal (i)
      (ii)      Cash flow hedging
                --     Currency Derivatives
                --     Interest rate derivatives
                --     Credit derivatives
                --     Equity linked derivatives
                --     Others


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

               Subtotal (ii)
      (iii)    Net investment hedging
      (iv)     Undesignated derivatives
      Total Derivative financial instruments (i) + (ii) + (iii) + (iv)
With respect to hedges and hedge accounting, NBFCs may provide a
description in accordance with the requirements of Indian Accounting
Standards, of how derivatives are used for hedging, explain types of hedges
recognized for accounting purposes and their usage/ application by the
entity.
8.1.4. Receivables:
Receivables are classified as `Trade and Other Receivables'.
A receivable should be classified as 'trade receivable' if it is in respect of the
amount due on account of goods sold or services rendered in the normal
course of business and the company has a right to an amount of
consideration that is unconditional (i.e. if only the passage of time is required
before payment of that consideration is due).
Other receivables would generally mean receivables emanating from items
that are classified as `others' under `Revenue from Operations'. Other
receivables shall also include debts due by directors or other officers of the
NBFC or any of them either severally or jointly with any other person or debts
due by firms including limited liability partnerships (LLPs), private companies
respectively in which any director is a partner or a director or a member if the
same is not in the nature of trade receivables, however, the same is required
to be disclosed separately in the financial statements.
Refer Paragraph 8.1.7 for items that may be classified as `other financial
assets'.
Receivables shall be sub-classified as:
(i)   (a) Receivables considered good - Secured;
      (b) Receivables considered good - Unsecured;
      (c)     Receivables which have significant increase in credit risk; and
      (d) Receivables ­ credit impaired



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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

(ii)    Allowance for impairment loss shall be disclosed under the relevant
        heads separately.
(iii)   Debts due by directors or other officers of the NBFC or any of them
        either severally or jointly with any other person or debts due by firms
        including limited liability partnerships (LLPs), private companies
        respectively in which any director is a partner or a director or a
        member should be separately stated.
Impairment of Trade Receivables
As per Ind AS 109, a company is required to recognize a loss allowance (i.e.
impairment) for expected credit losses on financial assets including trade
receivables.
The impairment requirements in Ind AS 109 are based on forward-looking
expected credit loss (ECL) model which requires an application of one of the
following:
(a)     The general approach, where an entity recognises ECL in the following
        stages viz.,
        ·     credit exposures for which there has not been a significant
              increase in credit risk since initial recognition;
        ·     credit exposures for which there has been a significant increase
              in credit risk since initial recognition but not credit-impaired;
        ·     credit exposures that are credit impaired;
(b)     The simplified approach, where an entity does not separately track
        changes in credit risk.
(c)     The purchased or originated credit-impaired approach.
For trade receivables that do not contain a significant financing component, it
is a requirement to apply a simplified approach, while for trade receivables
that contain a significant financing component, and for lease receivables, a
choice between a general approach or simplified approach is available.
Application Guidance to Ind AS 109 allows using practical expedients when
measuring expected credit losses if they are consistent with the
measurement principles reflecting a probability-weighted outcome, the time
value of money and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

conditions and forecasts of future economic conditions, for e.g., using a
provision matrix based calculation of expected credit loss on trade
receivables.
Disclosures under the general approach
If a company chooses to calculate impairment loss under the general
approach for trade receivables containing significant financing component,
then the disclosures representing the following different categories of Trade
Receivables would be provided (amounts are illustrative only):
 Trade Receivables

            Particulars                 Exposure        Loss         Net
                                                     Allowance      Amount
                                          Rs.            Rs.           Rs.
 Considered good ­ Secured                      --             --            --
 Considered good ­ Unsecured*            1,25,000        13,000       1,12,000
 Trade Receivables which have              20,000        10,000         10,000
 significant increase in credit risk
 Trade Receivables        ­   credit        5,000         4,000          1,000
 impaired
 Total                                   1,50,000        27,000       1,23,000
* It is assumed for simplicity that all the Trade Receivables considered good
are Unsecured.
Similar table as mentioned above would be required for any debts due which
are in the nature of trade receivables and where general approach has been
used by the company for any debts due by any directors or other officers of
the NBFC or any of them either severally or jointly with any other person or
debts due by firms including limited liability partnerships (LLPs), private
companies respectively in which any director is a partner or a director or a
member
Except in case of purchased or originated credit-impaired trade receivables
where a company only recognises cumulative changes in lifetime expected
credit losses since initial recognition, the impairment loss allowance does not
reduce the carrying amount of the trade receivables.

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

In disclosing `Trade Receivables which have significant increase in credit
risk', the company shall disclose the amount of trade receivables that have
experienced significant increase in credit risk since initial recognition but are
not credit-impaired.
In disclosing `Trade Receivables ­ credit impaired', the company shall
disclose the amount of trade receivables which are credit impaired as
defined in Ind AS- 109 .
The balance amount of trade receivables which have neither experienced
significant increase in credit risk nor are credit impaired as per Ind AS 109,
shall be disclosed as `good'.
For calculating the loss allowance, reference shall be drawn from Ind
AS 109.
Disclosures under the simplified approach
If a company chooses to calculate impairment under the simplified approach
for trade receivables containing significant financing component and for the
impairment calculated on trade receivables that do not contain significant
financing component, then the company is not required to separately track
changes in credit risk of trade receivables as the impairment amount
represents "lifetime" expected credit loss.
Accordingly, based on a harmonious reading of Ind AS 109 and the break-up
requirements under Schedule III, the disclosures for all such trade
receivables would be made as below, irrespective of whether they contain a
significant financing component or not (amounts are illustrative only):
Trade Receivables

           Particulars                Exposure          Loss           Net
                                                     Allowance        Amount
                                         Rs.             Rs.             Rs.
  Considered Good ­ Secured               --              --              --
 Considered         Good        ­     2,00,000         25,000         1,75,000
 Unsecured*
 Trade Receivables which have             --              --              --
 significant increase in credit
 risk


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

    Trade Receivables ­ credit            --             --             --
    impaired
    Total                           2,00,000        25,000         1,75,000
* It is assumed for simplicity that all the Trade Receivables are Unsecured.
Break-up of trade receivables into `significant increase in credit risk'
and `credit impaired'
Ind AS 109 neither prohibits nor mandates a company to perform individual
assessment of credit risk for some of its financial assets. If a company
performs individual credit risk assessment on specific parties despite the
normal collective pool-based assessment for a group of parties falling under
a particular credit exposure bucket (e.g., ageing, rating, etc.) and if it
indicates that a trade receivable has experienced a significant increase in
credit risk or is credit impaired then disclosures to be provided are as under.
The disclosure of trade receivables in the manner as required by Schedule III
shall be made specifically where the company has a trade receivable for
which credit risk is assessed individually. However, the disclosure of `trade
receivables ­ credit impaired' shall be made if such a trade receivable meets
the definition of `credit impaired' as per Ind AS 109.
When a company has assessed credit risk on an individual basis irrespective
of recognition of a loss allowance on collective basis, it is recommended that
a company should disclose the following by way of a footnote just after the
illustrative table given below:
·       The amount of trade receivables for which the company has assessed
        credit risk on an individual basis; and
·       The amount of loss allowance recognized for such trade receivables.
Trade Receivables

            Particulars              Exposure          Loss          Net
                                                    Allowance       Amount
                                         Rs.            Rs.            Rs.
    Considered Good ­ Secured             --             --             --
    Considered      Good        ­        1,50,000        25,000       1,25,000
    Unsecured*


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 Trade Receivables which have             --              --             --
 significant increase in credit
 risk
 Trade Receivables ­ credit               50,000          50,000         --
 impaired
 Total                                   2,00,000         75,000      1,25,000

*Where a company has performed credit assessment on an individual basis
and the assessment indicates that the trade receivable has experienced
significant increase in credit risk but is not credit impaired, in that case the
exposure of such a trade receivable and its respective loss allowance would
be shown as part of Considered good - secured and Considered good ­
Unsecured as the case may be. This is because, in case of `trade
receivables' under the simplified approach, a company is not required to
separately track the changes in credit risk and even if the company does
individual assessment it will not be possible for a company to establish that
there has been significant increase in credit risk. Hence, any exposure of
trade receivables other than that which is credit impaired and the respective
loss allowance will be shown as part of Considered Good ­ Secured /
Unsecured as the case may be.
Similar tables as mentioned above would be required for any debts due by
directors or other officers of the NBFC or any of them either severally or
jointly with any other person or debts due by firms including limited liability
partnerships (LLPs), private companies respectively in which any director is a
partner or a director or a member.
Presentation of loss allowance
Except in case of purchased or originated credit-impaired trade receivables
where a company only recognises cumulative changes in lifetime expected
credit losses since initial recognition, the impairment loss allowance does not
reduce the carrying amount of the trade receivables. Accordingly, the total
expected credit loss allowance is presented as a deduction in a single line
item from the total carrying amount of the trade receivables, as shown above.
The above disclosures are consistent with the requirements of Ind AS 109
and the requirements under Division III to Schedule III may be modified in
the light of Paragraph 2 of `General Instructions for Preparation of Financial



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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Statements of a Company Required to comply with Ind AS' to Division III to
Schedule III.
Impairment of Other Receivables
Similar disclosures as mentioned above under the general approach may be
made for impairment of Other Receivables.
8.1.5. Loans
An NBFC shall disclose the following in the Notes under the head `Loans':
(i)     Bills purchased and bills discounted
(ii)    Loans repayable on demand
(iii)   Term Loans
(iv)    Leasing
(v)     Factoring
(vi)    Others (to be specified, example of `Others' could be Intercorporate
        Deposits, Staff loans , loans to related parties, etc)
Loans should be classified as per Ind AS 109 as measured at amortised cost,
at fair value through Other Comprehensive Income, fair value through Profit
or Loss, or designated at fair value through Profit or Loss.
The impairment loss allowance as per Ind AS 109 should be disclosed as a
separate line item under the aforesaid measurement categories as
applicable.
A break up of the total loans should also be disclosed as:
(a)     Secured by tangible assets
(b)     Secured by intangible assets
(c)     Covered by Bank/ Government Guarantee
(d)     Unsecured
As per Guidance Note on Terms Used in Financial Statements, `Secured
loan' is defined as loan secured wholly or partly against an asset.
The security wise break-up of loans as mentioned above shall additionally
disclose as a separate line item of loans secured by book debts, fixed
deposits and other working capital items as applicable. Loans to the extent

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

they are covered by guarantees of Indian/ foreign governments and Indian/
foreign banks shall be included in line item (c) above. Government refers to
government, government agencies, and similar bodies whether local, national
or international. All loans or parts thereof that are not classified under the
previous sub-heads shall be included in line item (d) above. For instance, if
an advance is secured by tangible assets to the extent of 75 percent, the
secured component should be reflected under secured advance, while the
balance 25 percent unsecured component would be included under this sub-
head. The total of the above line items, after deducting impairment loss
allowance in a separate line item, should match with the net loans and
advances.
Additional disclosure of loans within India and outside India is required to be
made. Further, within India, loans should be classified as those from public
sector and others (to be specified). Advances to Central and State
Governments and other Government undertakings including Government
Companies and statutory corporations are to be included in the category
`Public Sector'. All other loans are included in `Others' category for example
loans to retail or Corporate or industry-wise classification etc. based on the
business of the company.
All the above mentioned disclosures are required to be given for each of the
measurement categories, namely, measured at amortised cost, at fair value
through other comprehensive income, fair value through Profit or Loss or
designated at fair value through Profit or Loss.
As per Ind AS 109, in case of loans measured at fair value through other
comprehensive income, the fair value changes shall be presented in other
comprehensive income. A company shall estimate a portion of fair value
change, if any, attributable to a change in credit risk of such loans, by
applying the impairment requirements of Ind AS 109 in recognising and
measuring the loss allowance, and disclose the same in the statement of
profit and loss with a corresponding impact in other comprehensive income.
In other words, the company shall not reduce/increase the carrying amount of
such loans in the balance sheet on account of change in the credit risk as the
loan needs to be presented at fair value.
For finance lease receivables, an entity shall apply the presentation and
disclosure requirements under Ind AS 116 in addition to the requirements of
Division III to Schedule III. The disclosure requirements of Ind AS 107 would


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

also apply to such receivables and the requirements under this schedule
stand modified accordingly (Refer Paragraph 2 of General Instructions for
preparation of Financial Statements of a Non-Banking Financial Company
(NBFC) that are required to comply with Indian Accounting Standards (Ind
AS))
Ind AS 107 has prescribed extensive disclosures (qualitative and
quantitative) pertaining to Credit Risk on financial instruments of an entity.
The same will be required over and above the disclosure requirements stated
in the Division III of Schedule III.
8.1.6. Investments
Investments shall be classified as:
(i)     Investments in Mutual funds
(ii)    Investments in Government securities
(iii)   Investments in Other approved securities
(iv)    Investments in Debt Securities
(v)     Investments in Equity Instruments
(vi)    Investments in Subsidiaries
(vii)   Investments in Associates
(viii) Investments in Joint Ventures
(ix)    Others (Specify)
Investments should further be classified as:
(a)     Measured at amortised cost,
(b)     Fair value through Other Comprehensive Income,
(c)     Fair value through Profit or Loss, and
(d)     Designated at fair value through Profit or Loss.
Additional disclosure of Investments within and outside India is required to be
provided.
Where the NBFC has used a basis other than amortised cost or fair value,
the same may be included in column `Others', with the basis of measurement
to be disclosed as a footnote. e.g. Investment in subsidiaries measured at

                                      27
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

cost under Ind AS 27 shall be classified under `Others' in the Separate
Financial Statements of the NBFC.
The impairment loss allowance as per Ind AS 109 should be disclosed as a
separate line item under the sub-heads (measurement categories) mentioned
above.
8.1.6.1 Aggregate amount of impairment in value of investments
As per Division III to Schedule III, this amount should be disclosed
separately. As per Ind AS 109, the company is required to recognize a loss
allowance (i.e. impairment) for expected credit losses on investments
measured at amortized cost. Such loss allowance should be presented as an
adjustment to the amortized cost of the investment.
As per Ind AS 109, in case of debt investments measured at fair value
through other comprehensive income, the fair value changes will be
presented in other comprehensive income. A company should estimate a
portion of fair value change, if any, attributable to a change in credit risk of
such investment, by applying the impairment requirements of Ind AS 109 in
recognising and measuring the loss allowance, and disclose the same in the
statement of profit and loss with a corresponding impact in other
comprehensive income. In other words, the company shall not
reduce/increase the carrying amount of such investment in the balance sheet
on account of change in the credit risk as the investment needs to be
presented at fair value. Disclosure pertaining to impairment shall be
disclosed by way of Notes in accordance with the requirements of Ind AS
107.
As per Ind AS 109, equity instruments measured at other than at cost and
debt instruments measured at fair value through profit or loss do not require
a separate evaluation of impairment amount. Hence, in such cases, the
disclosure pertaining to impairment shall not be applicable.
For the purpose of disclosing aggregate provision for impairment in the value
of investments, an entity shall disclose an amount equal to the aggregate
amount of impairment recognized and measured in accordance with Ind AS
109, as stated in the paragraphs above.
The aggregate provision for impairment should be presented in totality for
each measurement category.


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

8.1.6.2 Investments in Subsidiaries / Associates / Joint Ventures
The terms `subsidiary', `associate' and `joint venture' shall be as defined in
the respective Ind AS. Ind AS 32, Ind AS 107 and Ind AS 109 scope out
those interests in subsidiaries, associates, joint ventures that are accounted
for in accordance with Ind AS 110 Consolidated Financial Statements , Ind AS
27 Separate Financial Statements or Ind AS 28 Investments in Associates
and Joint Ventures.
In some cases, Ind AS 110, Ind AS 27 or Ind AS 28 require or permit an
entity to account for an interest in a subsidiary, associate or joint venture in
accordance with Ind AS 109. Accordingly, only in its Separate Financial
Statements, the entity shall present such interests in a subsidiary, associate
or joint venture under `Others' if an entity uses a basis for measurement for
the same other than that specified under Ind AS 109.
As per Part III, General Instructions for the Preparation of Consolidated
Financial Statements, the Consolidated Financial statements shall further
disclose the information as per the requirements specified in the applicable
Indian Accounting Standards notified under the Companies (Indian Ac-
counting Standards) Rules 2015. Thus, for an entity's Consolidated Financial
Statements, investments accounted using the equity method (i.e. associates
and joint ventures) need to be shown as a separate line item outside
`Financial Assets', as per the requirements of Ind AS 1, Paragraph 54.
Structured Entities
Division III to Schedule III does not require an entity to specifically disclose
investments in `structured entities'. However in case a company has
investments in `structured entities' then the same may be disclosed in
addition to investments in subsidiaries, associates, and joint ventures.
Ind AS-112 Disclosure of Interests in Other Entities states that a "structured
entity" is an entity that has been designed so that voting or similar rights are
not the dominant factor in deciding who controls the entity, such as when any
voting rights are related to administrative tasks only and the relevant
activities are directed by means of contractual arrangements.
Non-Ind AS Schedule III requires details to be given for only "controlled
special purpose entities" whereas, under Division II of Schedule III,
investments in all structured entities need to be given, irrespective of whether
controlled or not.


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Division II to Schedule III also requires disclosure of the `nature and extent'
of the investments so made. In case of an investment in other than a
structured entity, the nature and extent would imply the number of such
instruments held and the face value of such instrument. In case of a
Structured Entity, rights are mainly established by way of contractual
arrangements and therefore as a part of `nature and extent', a brief
description of the nature of contracts may be provided along with the rights
held in such entities as evidenced by such contracts.
8.1.7. Other Financial assets:
Other financial assets should include items such as dues in respect of
insurance claims, sale of Property, Plant and Equipment, contractually
reimbursable expenses, security deposits etc. In case advances are of the
nature of a financial asset as per Ind AS 32, these are to be disclosed under
`other financial assets' separately.
Other financial assets may also include receivables emanating from items
that are classified as `other Income'.
Application money paid towards securities
Any application money paid towards securities, where security has not been
allotted on the date of the Balance Sheet, shall be disclosed as a separate
line item under `other financial assets'. If the amount is material, details about
the date of allotment or when the allotment is expected to be completed may
also be disclosed.
Non-Financial Assets
8.1.8. Inventories:
(i)   Inventories shall be classified as:
      (a) Raw materials;
      (b) Work-in-progress;
      (c)   Finished goods;
      (d) Stock-in-trade (in respect of goods acquired for trading);
      (e) Stores and spares;
      (f)   Loose tools;


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

        (g) Others (specify nature).
(ii)    Goods-in-transit shall be disclosed under the relevant sub-head of
        inventories.
(iii)   Mode of valuation shall be stated.
As per Division III to Schedule III, goods in transit should be included under
relevant heads with suitable disclosure. Further, mode of valuation for each
class of inventories should be disclosed.
The heading Finished goods should comprise all finished goods other than
the stock-in-trade acquired for trading purposes.
8.1.9. Current Tax Assets (Net):
If amount of tax already paid in respect of current and prior periods exceeds
the amount of tax due for those periods (assessment year-wise and not
cumulative unless tax laws allow e.g., say tax laws in the country of overseas
subsidiary permits), then such excess tax shall be recognised as an asset.
8.1.10. Investment property:
Ind AS 40, Investment Property, defines Investment Property as the property
(land or a building--or part of a building--or both) held (by the owner or by
the lessee as a right of use asset) to earn rentals or for capital appreciation
or both, rather than for: (a) use in the production or supply of goods or
services or for administrative purposes; or (b) sale in the ordinary course of
business.
Division III to Schedule III requires a reconciliation of the gross and net
carrying amounts of each class of property at the beginning and end of the
reporting period showing additions, disposals, acquisitions through business
combinations and other adjustments and the related depreciation and
impairment losses or reversals shall be disclosed separately.
The guidance given below on Property, Plant and Equipment, to the extent
applicable, is also to be used for Investment Property.
8.1.11. Biological assets other than bearer plants:
As per Ind AS-41 Agriculture, a biological asset is a living animal or plant.
Examples of biological assets are sheep, Trees in a timber plantation, Dairy
Cattle, Cotton plants, Tea bushes, Oil palms, Fruit trees, etc. Some plants,
for example, cotton plants, tea bushes, oil palms, fruit trees, grape vines,

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

usually meet the definition of a bearer plant. However, the produce growing
on bearer plants, viz., cotton, tea leaves, oil palm fruit, fruits and grapes are
biological assets other than bearer plants.
As per Ind AS 41, an entity shall present a reconciliation of changes in the
carrying amount of biological assets between the beginning and the end of
the current period. The reconciliation shall include:
(i)     the gain or loss arising from changes in fair value less costs to sell;
(ii)    increases due to purchases;
(iii)   decreases attributable to sales and biological assets classified as held
        for sale (or included in a disposal group that is classified as held for
        sale) in accordance with Ind AS 105;
(iv)    decreases due to harvest;
(v)     increases resulting from business combinations;
(vi)    net exchange differences arising on the translation of financial
        statements into a different presentation currency, and on the
        translation of a foreign operation into the presentation currency of the
        reporting entity; and
(vii)   other changes.
The guidance given below on Property, Plant and Equipment, to the extent
applicable, is also to be used for Biological Assets other than bearer plants.
8.1.12. Property, Plant and Equipment:
The company shall disclose the following in the Notes under the head
`Property, Plant and Equipment':
(i)     Classification shall be given as:
        (a)   Land;
        (b)   Buildings;
        (c)   Plant and Equipment;
        (d)   Furniture and Fixtures;
        (e)   Vehicles;
        (f)   Office equipment;


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

          (h)     Bearer Plants;
          (g)     Others (specify nature).
(ii)      Assets under lease shall be separately specified under each class of
          asset as part of Notes.
          For assets under lease, an entity shall apply the presentation and
          disclosure requirements under Ind AS 116 in addition to the
          requirements of Division III to Schedule III.
(iii)     A reconciliation of the gross and net carrying amounts of each class of
          assets at the beginning and end of the reporting period showing
          additions, disposals, acquisitions through business combinations and
          other adjustments and the related depreciation and impairment
          losses/reversals shall be disclosed separately.
As per Paragraph 47 of Ind AS 116 a lessee shall either present in the
balance sheet or disclose in the notes: right-of-use assets separately from
other assets. If a lessee does not present right-of-use assets separately in
the balance sheet, the lessee shall:
(i)       include right-of-use assets within the same line item as that within
          which the corresponding underlying assets would be presented if they
          were owned; and
(ii)      disclose which line items in the balance sheet include those right-of-
          use assets.
                                   Illustrative Table

                   Particulars                             Buildings
                                                Freehold    Owner    Right of
                                                           Occupied Use under
                                                           property  a lease
Current Year
At cost or fair value at the beginning of
the year
Additions
      Revaluation adjustment, if any
      Disposals


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

  Reclassification from/to held for sale
  Other adjustments (please specify)
At cost or fair value at the end of the
year
Accumulated      depreciation     and
impairment as at the beginning of the
year
  Depreciation for the year
  Disposals
  Impairment/(reversal) of impairment
  Reclassification from/to held for sale
  Other adjustments (please specify)
Accumulated        depreciation       and
impairment as at the end of year
Net carrying amount as at the end of the
year (A)
Total

Similar presentation may be provided for all the above mentioned assets.
8.1.12.1 Since reconciliation of gross and net carrying amounts of Property,
Plant and Equipment, Investment Property and Other Intangible assets is
required, the corresponding depreciation/amortization for each class of asset
should be disclosed in terms of Opening Accumulated Depreciation,
Depreciation / amortization for the year, Deductions / Other adjustments and
Closing Accumulated Depreciation / Amortization. Similar disclosures should
also be made for Impairment, if any, as applicable.
8.1.12.2 As per Ind AS 101, Paragraph D5 and D6, an entity may elect to
measure an item of property, plant and equipment at the date of transition to
Ind ASs at its fair value or use a previous GAAP revaluation as deemed cost.
Further, as per Paragraph D7AA of Ind AS 101, an entity may also consider
previous GAAP carrying amount of all its property, plant and equipment as its
deemed cost on the date of transition. In case when a company applies
Paragraph D5 or Paragraph D7AA, the deemed cost considered on the date



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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

of transition shall become the new `gross block' and accordingly presented in
the reconciliation statement as required by Division III to Schedule III.
8.1.12.3 In case a company wants to disclose information regarding gross
block of assets, accumulated depreciation and provision for impairment as
per previous GAAP, the same may only be disclosed as an additional
information by way of a note forming part of the financial statements.
8.1.12.4 All acquisitions, whether by way of an asset acquisition or through a
business combination are to be disclosed as part of the reconciliation in the
note on Property, Plant and Equipment (refer Paragraph 8.1.12), Investment
Property (refer Paragraph 8.1.10) Other Intangible assets (refer Paragraph
8.1.16) and Biological Assets other than bearer plants (refer Paragraph
8.1.11). Acquisitions through `Business Combinations' need to be disclosed
separately for each class of assets. Similarly, though not specifically
required, it is advisable that asset disposals through demergers, etc. may
also be disclosed separately for each class of assets.
8.1.12.5 Other adjustments may include items as required by disclosure
requirements of Ind AS 16 and such disclosure should be made in the
manner prescribed therein. It may also include, for example net exchange
gain / loss arising on the translation of the financial statements from the
functional currency into a presentation currency.
8.1.12.6 Under Division III to Schedule III, land and building are presented as
two separate classes of property, plant and equipment. In contrast,
paragraph 37 of Ind AS 16 gives an example of grouping land and building
under same class for revaluation purposes. The Paragraph states that a
class of property, plant and equipment is a grouping of assets of a similar
nature and use in an entity's operations. However, companies should
continue to present land and building separately as given in Division III to
Schedule III and such presentation needs to be followed consistently.
8.1.13. Capital work-in-progress
As per Division III to Schedule III, capital advances should be included under
other non-financial assets and hence, cannot be included under capital work-
in-progress. The capital work-on-progress shall be disclosed as a separate
line-item on the face of the balance sheet.




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

8.1.14. Intangible assets under development
Intangible assets under development should be disclosed under this head
provided they can be recognized based on the criteria laid down in Ind AS-38
Intangible Assets.
8.1.15. Goodwill
Division III to Schedule III requires a company to present Goodwill as a
separate line item on the face of the balance sheet apart from `Other
Intangible Assets'. Further, it requires a reconciliation of the gross and net
carrying amount of goodwill at the beginning and end of the reporting period
showing additions, impairments, disposals and other adjustments.
8.1.16. Other Intangible assets
The company shall disclose the following in the Notes to Accounts:
(i)    Classification shall be given as:
       (a) Brands / trademarks;
       (b) Computer software;
       (c)   Mastheads and publishing titles;
       (d) Mining rights;
       (e) Copyrights, patents, other intellectual property rights, services
           and operating rights;
       (f)   Recipes, formulae, models, designs and prototypes;
       (g) Licenses and franchises;
       (h) Others (specify nature).
(ii)   A reconciliation of the gross and net carrying amounts of each class of
       assets at the beginning and end of the reporting period showing
       additions, disposals, acquisitions through business combinations and
       other adjustments and the related amortization and impairment losses
       or reversals shall be disclosed separately.
The guidance given above on Property, Plant and Equipment, to the extent
applicable, is also to be used for Other Intangible Assets.




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

8.1.17. Contract assets and impairment thereof
Ind AS 115 requires in case of a contract with customer, when either party
has performed, to present a contract asset in the balance sheet as a line item
separate from trade receivables. Contract asset arises if an entity performs
by transferring goods or services to a customer before the customer pays
consideration or before payment is due. It excludes any amounts presented
as a receivable.
The presentation requirements of trade receivables (viz., secured and
unsecured, considered good, significant increase in credit risk and credit
impaired) may be applied to contract assets if a company has sufficient and
appropriate information.
Ind AS 115 also requires impairment of contract assets to be measured,
presented and disclosed on the same basis as a financial asset that is
within the scope of Ind AS 109.
Accordingly, all the impairment related requirements as outlined above for
trade receivables (Paragraph 8.1.4) shall be applied to contract assets as
well.
8.1.18. Other non-financial assets (to be specified)
Capital advances are advances given for procurement of Property, Plant and
Equipment including bearer plants, Investment Property, Other Intangible
Assets or Biological Assets which are non-financial assets. Typically,
companies do not expect to realize them in cash. Rather, over the period,
these get converted into Property, Plant and Equipment including bearer
plants, Investment Property, Other Intangible assets or Biological Assets,
respectively, which are non-financial assets. Hence, capital advances should
be treated as other non-financial assets irrespective of when the Property,
Plant and Equipment including bearer plants, Investment Property, Other
Intangible assets or Biological Assets are expected to be received.
Security Deposits under Other non-financial assets should include those
deposits which do not meet the definition of a financial asset.
`Other advances' include all other items in the nature of advances which do
not meet the definition of a financial asset viz., Prepaid expenses, GST
receivable, etc.




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

It may be noted that in case advances are of the nature of a financial asset
as per Ind AS 32, these are to be disclosed under `Other financial assets'
separately.
Non-current Assets and disposal group held for sale
As per Paragraph 38 of Ind AS 105, Non-current Assets Held for Sale and
Discontinued Operations, an entity shall present a non-current asset
classified as held for sale and the assets of a disposal group classified as
held for sale separately from other assets in the balance sheet. The major
classes of assets classified as held for sale shall be separately disclosed
either in the balance sheet or in the notes.
8.2   Liabilities and Equity
Liabilities
On the face of the Balance Sheet, Division III to Schedule III requires the
following items to be presented under financial liabilities as well as non-
financial liabilities:
Financial Liabilities
(a)   Derivative financial instruments
(b)   Payables
      (I)     Trade Payables
              (i)    total outstanding dues of micro enterprises and small
                     enterprises
              (ii)   total outstanding dues of creditors other than micro
                     enterprises and small enterprises
      (II)    Other Payables
              (i)    total outstanding dues of micro enterprises and small
                     enterprises
              (ii)   total outstanding dues of creditors other than micro
                     enterprises and small enterprises
(c)   Debt Securities
(d)   Borrowings (Other than Debt Securities)
(e)   Deposits

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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

(f)    Subordinated Liabilities
(g)    Other financial liabilities (to be specified)
Non-financial Liabilities
(a)    Current tax liabilities (Net)
(b)    Provisions
(c)    Deferred tax liabilities (Net)
(d)    Other non-financial liabilities (to be specified)
Financial Liabilities
8.2.1 Payables
Division III to Schedule III requires presenting `Payables' as a separate line
item on the face of the Balance Sheet under `Financial Liabilities'. The
following shall be disclosed as sub-heads on the face of the Balance Sheet
under payables as per Division III of Schedule III:
(I)    Trade Payables
       (i)    Total outstanding dues of micro enterprises and small
              enterprises
       (ii)   Total outstanding dues of creditors other than micro
              enterprises and small enterprises
(II)   Other Payables
       (i)    Total outstanding dues of micro enterprises and small
              enterprises
       (ii)   Total outstanding dues of creditors other than micro
              enterprises and small enterprises
8.2.1.1 A payable shall be classified as 'trade payable' if it is in respect of
the amount due on account of goods purchased or services received in the
normal course of business. Amounts due under contractual obligations other
than purchase of goods and services or statutory payables shall not be
included within Trade Payables. Such items may include dues payable in
respect of statutory obligations like contribution to provident fund or
contractual obligations like contractually reimbursable expenses, amounts



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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

due towards purchase of capital goods, etc. These amounts should be shown
under Non-financial liabilities.
8.2.1.2 Unpaid Creditors for Capital goods and Debts due to directors or
other officers of the NBFC or any of them either severally or jointly with any
other person or debts due to firms including LLPs, Private companies
respectively in which director is a partner or a director or a member, if they
are not in the nature of `Trade Payables', should be classified as `Other
payables'.
As per Schedule III, the Payables should present separately the portion
representing outstanding dues of micro and small enterprises and others.
Amount due from `Medium enterprises' shall form part of `Others'.
8.2.1.3 As per the requirements of Schedule III the following shall be
disclosed:
(a)   the principal amount and the interest due thereon (to be shown
      separately) remaining unpaid to any supplier at the end of each
      accounting year;
(b)   the amount of interest paid by the buyer in terms of section 16 of the
      Micro, Small and Medium Enterprises Development Act, 2006, along
      with the amount of the payment made to the supplier beyond the
      appointed day during each accounting year;
(c)   the amount of interest due and payable for the period of delay in
      making payment (which has been paid but beyond the appointed day
      during the year) but without adding the interest specified under the
      Micro, Small and Medium Enterprises Development Act, 2006;
(d)   the amount of interest accrued and remaining unpaid at the end of
      each accounting year; and
(e)   the amount of further interest remaining due and payable even in the
      succeeding years, until such date when the interest dues above are
      actually paid to the small enterprise, for the purpose of disallowance of
      a deductible expenditure under section 23 of the Micro, Small and
      Medium Enterprises Development Act, 2006.
Similar requirements are given under The Micro, Small and Medium
Enterprises Development (MSMED) Act, 2006.



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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

8.2.1.4 The terms ''appointed day'', ''buyer'', ''enterprise'', ''micro enterprise'',
"medium enterprise", ''small enterprise'' and'' supplier'', shall be as defined
under clauses (b), (d), (e), (h), (m) and (n) respectively of section 2 of the
Micro, Small and Medium Enterprises Development Act, 2006.
8.2.2 Debt Securities
8.2.2.1 The head `Debt Securities' under `Financial Liabilities' will include
securities (secured or unsecured) other than those which are classified as
`Subordinated debt'. Debt securities shall comprise of liability component of
Compound Financial instruments as per Ind AS and Other such as Bonds
and Debentures. Debt securities should be further classified into the
following measurement categories such as
(a)    Amortised Cost,
(b)    Fair Value through Profit or Loss and
(c)    Designated at Fair Value through Profit or Loss.
8.2.2.2 Additional disclosures of Debt securities within India and Outside
India are required to be made.
8.2.2.3 Refer Paragraph 8.2.14.8 on guidance on liability component of
compound financial instrument. Moreover disclosure requirements as
applicable to other debt securities shall be applicable to `liability component
of compound financial instrument' under the heading `Debt securities'
8.2.2.4 Bonds or debentures (along with the rate of interest, and particulars
of redemption or conversion, as the case may be) shall be stated in
descending order of maturity or conversion, starting from earliest redemption
or conversion date, as the case may be. Where bonds/debentures are
redeemable by instalments, the date of maturity for this purpose must be
reckoned as the date on which the first instalment becomes due.
8.2.2.5 Particulars of any redeemed bonds or debentures which an NBFC
has power to reissue shall be disclosed.
8.2.2.6 Liabilities arising out of Securitisation transactions resulting into
issue of debt securities shall be classified as debt securities.
8.2.3 Borrowings (Other than Debt Securities)
Borrowings (Other than Debt Securities) shall be classified as:
(a)    Term Loans

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

      (i)    From banks
      (ii)   From other parties
(b)   Deferred payment liabilities
(c)   Loans from related parties
(d)   Finance lease obligations*
(e)   Liability component of compound financial instruments
(f)   Loans repayable on demand
      (i)    From banks
      (ii)   From other parties
(g)   Other loans (specify nature) ­ example securitization liabilities.
*Division III to Schedule III requires finance lease obligation to be disclosed
under Borrowings; however basis the facts and circumstances of the case
the presentation may be different i.e. if it is presented as other financial
liabilities instead of Borrowings under Ind AS 116.
8.2.3.1 The borrowings should be further classified into the following
measurement categories such as:
(a)   Amortised Cost,
(b)   Fair value through Profit or Loss and
(c)   Designated at Fair Value through Profit or Loss.
Additional disclosures of Borrowings within India and Outside India are
required to be made.
8.2.3.2 Borrowings shall further be sub-classified as secured and
unsecured. Nature of security shall be specified separately in each case.
8.2.3.3 Where borrowings have been guaranteed by directors or others, the
aggregate amount of such borrowings under each head shall be disclosed.
The word "others" used in the phrase "directors or others" would mean any
person or entity other than a director. Therefore, this is not restricted to mean
only parties related to the directors.




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

8.2.3.4 Terms of repayment of term loans and other loans are also required
to be stated.
8.2.3.5 Period and amount of default as on the Balance Sheet date in
repayment of borrowings and interest shall be specified separately in each
case.
8.2.3.6 The phrase "term loan" has not been defined in Schedule III. Term
loans normally have a fixed or pre-determined maturity period and / or
repayment schedule.
8.2.3.7 Deferred payment liabilities would include any liability for which
payment is to be made on deferred credit terms. E.g. deferred payment for
acquisition of Property, Plant and Equipment, etc.
8.2.3.8 Division III to Schedule III also stipulates that the nature of security
shall be specified separately in each case. A blanket disclosure of different
securities covering all loans classified under the same head such as `All
Term loans from banks' will not suffice. However, where one security is given
for multiple loans, the same may be clubbed together for disclosure purposes
with adequate details or cross referencing.
8.2.3.9 Disclosure about the nature of security should also cover the type of
asset given as security e.g. inventories, plant and machinery, land and
building, etc. This is because the extent to which loan is secured may vary
with the nature of asset against which it is secured.
8.2.3.10 When promoters, other shareholders or any third party have given
any personal security for any borrowing, such as shares or other assets held
by them, disclosure should be made thereof, though such security does not
result in the classification of such borrowing as secured.
8.2.3.11 Division III to Schedule III requires that under the head "Borrowings,"
period and amount of default as on the Balance Sheet date, in repayment of
borrowings and interest shall be specified separately in each case. Even one
default by a company would create an obligation to disclose the period and
amount of default. Further, in line with Paragraph 18 of Ind AS 107, if there
was a default during the reporting period, an entity shall provide a disclosure
even if the default was remedied before the financial statements were
approved for issue.
8.2.3.12 The word "loan" has been used in a generic sense. Hence, the
disclosures relating to default should be made for all items listed under the






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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

category of borrowings such as deferred payment liabilities, lease
obligations, etc. and not only to items classified as "loans" such as term
loans, etc.
8.2.3.13 Division III to Schedule III requires separate disclosure for default,
as on the balance sheet date, in repayment of borrowings and interest but
does not require any disclosure of breaches. However, Paragraph 18 of Ind
AS 107 would require an entity to disclose those breaches made during the
reporting period, which permitted the lender to demand accelerated
repayment and, were not remedied on or before the end of the reporting
period.
8.2.3.14 Terms of repayment of term loans and other loans shall be
disclosed. The term `other loans' is used in general sense and should be
interpreted to mean all categories listed under the heading `Borrowings' as
per Division III to Schedule III. Disclosure of terms of repayment should be
made for each loan unless the repayment terms of individual loans within a
category are similar in which case these may be aggregated.
8.2.3.15 Disclosure of repayment terms should include the period of maturity
with respect to the Balance Sheet date, number and amount of instalments
due, the applicable rate of interest, other significant and relevant terms, if
any.
8.2.3.16 Loans from related parties are required to be disclosed. All the
disclosure requirements of borrowings would be applicable to such loans
from related parties.
8.2.3.17 Refer Paragraph 8.2.14.8 for guidance on liability component of
compound financial instruments. Moreover, disclosure requirements as
applicable to Other Borrowings shall be applicable to `liability component of
compound financial instruments' under the heading `Borrowings'.
8.2.3.18 Liabilities arising out of Securitisation transactions resulting into
issue of borrowings shall be classified as borrowings.
8.2.4 Deposits
8.2.4.1 Deposits shall be classified as Public Deposits, from Banks, and from
others. `Others' would also include Inter corporate deposits. Deposits should
be further classified into the following measurement categories such as:
(a)   Amortised Cost,


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

(b)     Fair Value through Profit or Loss and
(c)     Designated at Fair Value through Profit or Loss.
8.2.5 Subordinated Liabilities
Subordinated Liabilities shall be classified as:
(i)     Perpetual Debt Instruments to the extent that do not qualify as equity;
(ii)    Preference Shares other than those that qualify as equity;
(iii)   Others (Specifying the nature and type of instrument issued).
The subordinated liabilities shall be disclosed both within and outside India.
`Others' will include those liabilities which are considered as subordinated by
the respective regulator, e.g. RBI has defined "subordinated debt" as
instrument, which is fully paid up, is unsecured and is subordinated to the
claims of other creditors and is free from restrictive clauses and is not
redeemable at the instance of the holder or without the consent of the
supervisory authority of the non-banking financial company.
Disclosures as required in respect of `debt securities' will have to be given
and also additional disclosures as required by the RBI will have to be
provided.
8.2.6 Other Financial liabilities (to be specified)
Division III to Schedule III requires presenting `Other Financial Liabilities' as
a separate line item on the face of the Balance Sheet under `Financial
Liabilities'. Items which meet the definition of financial liabilities as per Ind
AS 32 should be presented under this heading as under:
(i)     Interest accrued;
(ii)    Unpaid dividends;
(iii)   Application money received for allotment of securities to the extent
        refundable and interest accrued thereon;
(iv)    Unpaid matured deposits and interest accrued thereon;
(v)     Unpaid matured debentures and interest accrued thereon;
(vi)    Margin money (to be specified); and
(vii)   Others (specify nature)


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Items which meet the definition of financial liabilities as per Ind AS 32, like
contingent consideration, derivative contracts, financial guarantee contracts
issued, contractually reimbursable expenses etc. should be presented under
other financial liabilities.
Interest Accrued
Interest accrued on financial liabilities shall form part of their carrying amount
whether it is at amortized cost (i.e. as per effective interest method), or at fair
value. Accordingly, an entity shall not present `Interest Accrued' separately
from the related financial liability.
Offsetting a Financial Asset and a Financial Liability
In accordance with Paragraph 42 of Ind AS 32, to offset a financial asset and
a financial liability, an entity must have a currently enforceable legal right to
set off the recognised amounts and the intention to either settle on a net
basis or to realize the asset and settle the liability simultaneously.
Non-financial liabilities
8.2.7 Current Tax Liabilities
Current tax is the amount of income taxes payable (recoverable) in respect of
the taxable profit (tax loss) for a period. The tax for current and prior periods
shall, to the extent unpaid, be recognised as a liability.
If the amount already paid in respect of current and prior periods exceeds the
amount due for those periods, the excess shall be recognised as an asset.
8.2.8 Provisions
The provisions shall be classified as:
(a)   Provision for employee benefits;
(b)   Others (specify nature).
`Others' would include all provisions other than provisions for employee
benefits such as provision for litigation, provision for decommissioning
liabilities, loan commitments etc. These amounts should be disclosed
separately specifying nature thereof.
For loan commitments and financial guarantee contracts as per Ind AS 109
the loss allowance is recognised as a provision. An entity should disclose

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information about the changes in the loss allowance for financial assets
separately from those for loan commitments and financial guarantee
contracts. However, if a financial instrument includes both a loan (i.e.
financial asset) and an undrawn commitment (i.e. loan commitment)
component and the entity cannot separately identify the expected credit
losses on the loan commitment component from those on the financial asset
component, the expected credit losses on the loan commitment should be
recognised together with the loss allowance for the financial asset. To the
extent that the combined expected credit losses exceed the gross carrying
amount of the financial asset, the expected credit losses should be
recognised as a provision.
8.2.9 Deferred Tax Liability (Net)
Ind AS 12 requires companies to recognise deferred tax assets or liabilities
using a balance sheet approach, i.e. comparing the Ind AS carrying value of
the asset or liability to its tax base.
8.2.10 Other non-financial liabilities (to be specified)
The amounts shall be classified as:
(a) Revenue received in advance;
(b) Other advances (specify nature);
(c) Others (specify nature).
Other advances that satisfy the requirements for being classified as non-
financial liabilities should be classified under this head. The definition of the
terms `financial instruments', `financial asset', `financial liability' and `equity'
as defined in Ind AS 32 may be referred to in order to determine items that
may get classified as financial and non-financial liabilities for example,
amount received in advance. `Others' should include items under other non-
financial liabilities e.g., statutory dues payable, legal claims outstanding.
Trade Deposits and Security Deposits, which do not meet the definition of
financial instruments, should be classified as `Others' grouped under this
head. `Others' may also include liabilities in the nature of statutory dues such
as Withholding taxes, Goods and Services Tax (GST), etc.
Contract Liability
Ind AS 115 requires in case of a contract with customer, when either party


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has performed, to present a contract liability in the balance sheet. Contract
liability arises if a customer pays consideration, or an entity has a right to an
amount of consideration that is unconditional (i.e. a receivable), before the
entity transfers a good or service to the customer, the entity shall present the
contract as a contract liability when the payment is made or the payment is
due (whichever is earlier).
A company shall apply the requirements of Ind AS 1 and Ind AS 32 to
determine whether it is appropriate to offset contract assets and liabilities
against other balance sheet items (e.g., receivables).
8.2.11 Liabilities for assets held for sale
As per Paragraph 38 of Ind AS 105, the liabilities of a disposal group
classified as held for sale shall be presented separately from other liabilities
in the balance sheet. Those assets and liabilities shall not be offset and
presented as a single amount. The major classes of assets and liabilities
classified as held for sale shall be separately disclosed either in the balance
sheet or in the notes.
8.2.12 Contingent liabilities and commitments
(i)    Contingent liabilities shall be classified as:
       (a)    Claims against the company not acknowledged as debt;
       (b)    Guarantees excluding financial guarantees; and
       (c)    Other money for which the company is contingently liable.
(ii)   Commitments shall be classified as:
       (a)    Estimated amount of contracts remaining to be executed on
              capital account and not provided for;
       (b)    Uncalled liability on shares and other investments partly paid
       (c)    Other commitments (specify nature)
The provisions of Ind AS-37 Provisions, Contingent Liabilities and Contingent
Assets, will be applied for determining contingent liabilities.
8.2.12.1 Division III to Schedule III requires guarantees other than financial
guarantees to be disclosed as a part of contingent liabilities, since financial
guarantees are recognized on the balance sheet in accordance with Ind AS
109. Ind AS 107 specifies certain disclosure in respect of the exposure to


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credit risk on financial guarantee contracts as a part of the disclosures on
`credit risk exposures', which an entity should provide in its Notes to
Accounts.
Where a company undertakes to perform its own obligations, and for this
purpose issues, what is called a "guarantee", it does not represent a
contingent liability and it is misleading to show such items as contingent
liabilities in the Balance Sheet. For various reasons, it is customary for
guarantees to be issued by Bankers e.g. for payment of insurance premium,
deferred payments to foreign suppliers, letters of credit, etc. For this
purpose, the company issues a "counter-guarantee" to its Bankers. Such a
"counter-guarantee" is not really a guarantee at all, but is an undertaking to
perform what is, in any event, the obligation of the company, namely, to pay
the insurance premium when demanded or to make deferred payments when
due. Hence, such performance guarantees and counter guarantees should
not be disclosed as contingent liabilities.
8.2.12.2 Division III to Schedule III also requires disclosures pertaining to
various commitments such as capital commitments not provided for and
uncalled liability on shares. It also requires disclosures pertaining to `Other
commitments', with specification of nature thereof.
8.2.12.3 The word `commitment' has not been defined in Schedule III. The
Guidance Note on Terms Used in Financial Statements issued by ICAI
defines `Capital Commitment' as future liability for capital expenditure in
respect of which contracts have been made. Hence, drawing inference from
that definition, the term `commitment' would simply imply future liability for
contractual expenditure. Accordingly, the term `Other commitments' would
include all expenditure related to contractual commitments apart from capital
commitments such as employee contracts, lease commitments, etc.
However, the disclosure of all contractual commitments should be made
bearing in mind the overarching principle under Note 4(ii) in General
Instructions for Preparation of Financial Statements that "a balance shall be
maintained between providing excessive detail that may not assist users of
Financial Statements and not providing important information as a result of
too much aggregation."
8.2.12.4 Disclosures relating to lease commitments are required to be
disclosed as per Ind AS-116 Leases, for example short term leases as per
Paragraph 55 of Ind AS 116.


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8.2.12.5 Accordingly, the disclosures required to be made for `other
commitments' should include only those non-cancellable contractual
commitments (i.e. cancellation of which will result in a penalty
disproportionate to the benefits involved) based on the professional
judgement of the management which are material and relevant in
understanding the Financial Statements of the company and impact the
decision making of the users of Financial Statements. Examples may include
commitments in the nature of buy-back arrangements, commitments to fund
subsidiaries and associates, non-disposal of investments in subsidiaries and
undertakings, derivative related commitments, etc. Care should be taken to
ensure that items that are to be reflected as liabilities under Ind AS do not
get disclosed under this head and appropriate disclosure required by Ind AS
should be complied with.
8.2.12.6 Division III to Schedule III requires disclosure of the amount of
dividends proposed to be distributed to equity and preference shareholders
for the period and the related amount per share to be disclosed separately.
Though, the Act prohibits issue of irredeemable preference shares, Division
III to Schedule III requires separate disclosure of the arrears of fixed
cumulative dividends on irredeemable preference shares. The term
`irredeemable' is used in the context of compulsorily convertible preference
shares rather than in the context of perpetual preference shares which are
neither convertible nor redeemable. Ind AS-10 Events after the Reporting
Period, requires that dividends in respect of the period covered by the
Financial Statements, which are proposed or declared by the enterprise after
the Balance Sheet date but before approval of the Financial Statements,
should not be adjusted but should be disclosed in accordance with Ind AS-1
Presentation of Financial Statements .
Division III to Schedule III requires that where, in respect of an issue of
securities made for a specific purpose, the whole or part of the amount has
not been used for the specific purpose at the Balance Sheet date, then the
company shall indicate by way of note, how such unutilized amounts have
been used or invested.
8.2.13 Equity
Under this head, following line items are to be disclosed on the face of the
Balance Sheet:
·     Equity Share Capital and
·     Other Equity;

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Division III to Schedule III, Part I ­ Format of Balance Sheet, includes not
only the format of Balance Sheet but also includes a `Statement of Changes
in Equity' comprising (A) Equity Share Capital and (B) Other Equity.
Presentation and Disclosures for both of these are included in Note (S) and
(T) to General Instructions for Preparation of Balance Sheet.
In the Statement of Changes in Equity, the portion for `Equity Share Capital'
provides reconciliation of:
(a)   Balance at the beginning of the reporting period;
(b)   Changes in equity share capital during the year;
(c)   Balance at the end of the reporting period.
As a part of Statement of Changes in Equity, the portion for `Other Equity'
requires an entity to provide a reconciliation during a particular reporting
period, as a part of one single statement, of all items other than equity share
capital, that are attributable to the holders of equity instruments of an entity.
The items included in columnar form are listed below:
(a)   Share application money pending allotment;
(b)   Equity component of compound financial instruments;
(c)   Reserves and Surplus:
      (i)     Capital Reserve;
      (ii)    Securities Premium;
      (iii)   Other Reserves (specify nature);
      (iv)    Retained Earnings;
(d)   Debt instruments at fair value through other comprehensive income;
(e)   Equity instruments at fair value through other comprehensive income;
(f)   Effective portion of Cash Flow Hedges;
(g)   Revaluation Surplus;
(h)   Exchange differences on translating the financial statements of a
      foreign operation;
(i)   Other items of other comprehensive income (specify nature);
(j)   Money received against share warrants;

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(k)     Non-controlling interests (for Statement of Changes in Equity of
        Consolidated Financial Statements)
The reconciliation of above line items needs to be provided by way of the
following line items:
(i)     Balance at the beginning of the reporting period;
(ii)    Changes in accounting policy or prior period errors;
(iii)   Restated balance at the beginning of the reporting period;
(iv)    Total comprehensive income for the year;
(v)     Dividends;
(vi)    Transfer to retained earnings;
(vii)   Any other change (to be specified);
(viii) Balance at the end of the reporting period.

Reconciliation as described in Paragraph 109 of Ind AS 1 provides that,
"changes in an entity's equity between the beginning and the end of the
reporting period reflect the increase or decrease in its net assets during the
period. Except for changes resulting from transactions with owners acting in
their capacity as owners (such as equity contributions, reacquisitions of the
entity's own equity instruments and dividends) and transaction costs directly
related to such transactions, the overall change in equity during a period
represents the total amount of income and expenses, including gains and
losses, generated by the entity's activities during that period."
8.2.14. Equity Share Capital
8.2.14.1 Notes to the General Instructions for Preparation of Balance Sheet
require a company to disclose in the Notes items referred to in Note (S).
Such disclosures are required for each class of equity share capital. The
disclosure requirements for share capital are common under Non-Division III
to Schedule III as well as Division III to Schedule III. However, Division III
restricts the disclosures to `Equity' while Division I makes it applicable to all
kinds of `Share Capital' but states an exception that different classes of
preference shares are to be treated separately.
8.2.14.2 As per ICAI Guidance Note on Terms Used in Financial
Statements, `Capital' refers "to the amount invested in an enterprise by its


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owners e.g. paid-up share capital in a corporate enterprise. It is also used to
refer to the interest of owners in the assets of an enterprise."
8.2.14.3 The said Guidance Note defines `Share Capital' as the "aggregate
amount of money paid or credited as paid on the shares and/or stocks of a
corporate enterprise."
8.2.14.4 Section 2(84) of the Act defines "share" as "a share in the share
capital of a company and includes stock". While, section 2(30) of the Act
defines "debenture" to "include debenture stock, bonds or any other
instrument of a company evidencing a debt, whether constituting a charge on
the assets of the company or not". Further, section 43 of the Act gives two
kinds of share capital of a company limited by shares viz.,
(a)    Equity share capital;
(b)    Preference share capital.
8.2.14.5 On the other hand, Ind AS 32 defines an equity instrument as "any
contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities". The accounting definition of `Equity' is principle
based as compared to the legal definition of `Equity' or `Share', such that any
contract that evidences residual interest in an entity's net assets is termed as
`Equity' irrespective of whether it is legally recognized as a `Share' or not.
Accordingly, all instruments (including convertible preference shares and
convertible debentures) that meet the definition of `Equity' as per Ind AS 32
in its entirety and when they do not have any component of liability, should
be considered as having the nature of `Equity' for the purpose of Division III
to Schedule III. Such instruments shall be termed as `Instruments entirely
equity in nature'.
 As per Paragraph 11 of Ind AS 32 "The issuer of a financial instrument shall
classify the instrument, or its component parts, on initial recognition as a
financial liability, a financial asset or an equity instrument in accordance with
the substance of the contractual arrangement and the definitions of a
financial liability, a financial asset and an equity instrument." A preference
share, for example, may display either equity or liability characteristics
depending on the substance of the rights attaching to it.
8.2.14.6 Instruments entirely equity in nature, may be presented as a
separate line item on the face of the Balance Sheet under `Equity' after
`Equity Share Capital' but before `Other Equity', as shown below:


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Name of the Company..........
Balance Sheet as at...............
(Rupees in.............)

         Particulars                          Note     Figures       Figures
                                              No.      as at the     as at the
                                                       end     of    end     of
                                                       current       previous
                                                       reporting     reporting
                                                       period        period

         EQUITY AND LIABILITIES

         Equity

         (a) Equity Share Capital

         (b) Instruments entirely equity in
         nature

         (c) Other Equity

In the Statement of Changes in Equity, the reconciliation for instruments
entirely equity in nature should be presented as below:
STATEMENT OF CHANGES IN EQUITY
Name of the Company.......................
Statement of Changes in Equity for the period ended....................
(Rupees in...............)
A.     Equity Share Capital

Balance       at       the Changes in equity Balance at the end of
beginning      of      the share capital during the reporting period
reporting period           the period




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B.    Instruments entirely equity in nature *
(a)   Compulsorily Convertible Preference Shares

Balance       at     the Changes              in Balance at the end of
beginning      of    the compulsorily            the reporting period
reporting period         convertible preference
                         shares during the
                         period


(b)   Compulsorily Convertible Debentures

Balance       at     the Changes             in Balance at the end of
beginning      of    the compulsorily           the reporting period
reporting period         convertible debentures
                         during the period


(c)   [Instrument] (Any other instrument entirely equity in nature)

Balance       at     the Changes               in Balance at the end of
beginning      of    the [Instrument] during the the reporting period
reporting period         period


C.    Other Equity
[Table providing reconciliation of Other Equity]
* It is assumed that Instruments entirely equity in nature have such terms and
conditions that qualify them for being entirely equity in nature based on the
criteria given in Paragraph 16 of Ind AS 32. It is assumed that Compulsorily
Convertible Preference Shares and Compulsorily Convertible Debentures in
the above illustrative disclosure qualify for classification as entirely equity;
however, companies should assess terms and conditions specific to their
instruments for deciding whether they are entirely equity in nature.
All the disclosures as required by Note (S) to General Instructions in
Preparation of Balance Sheet shall be provided for all instruments entirely
equity in nature, to the extent applicable.

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8.2.14.7 Premium received on Compulsorily Convertible Preference Shares
which are entirely equity in nature shall be classified and presented as a part
of `Other Equity' under `Securities Premium'.
8.2.14.8 As per Paragraph 28 of Ind AS 32, "The issuer of a non-derivative
financial instrument shall evaluate the terms of the financial instrument to
determine whether it contains both a liability and an equity component. Such
components shall be classified separately as financial liabilities, financial
assets or equity instruments in accordance with paragraph 15" . Hence, all
those compound financial instruments which have both `Equity' and `Liability'
components, shall be split and their `Equity component' shall be presented
under `Other Equity' portion of Statement of Changes in Equity while their
`Liability component' shall be presented as a separate line item under either
`Debt Securities' or `Borrowings'.
8.2.14.9 Division III to Schedule III, Notes 3 and 4 of Other Classification
related General Instructions highlight that the disclosure and presentation
requirements as applicable to the relevant class of `Equity' or `Liability' shall
be applicable mutatis mutandis to the instruments (including, their
components) classified and presented under the relevant heads in `Equity'
and `Liabilities'. Accordingly, it is recommended that the companies provide
all the relevant disclosures for `Equity component of a compound financial
instruments' as applicable to `Equity Share Capital' (given in Note (S) of
General Instructions for Preparation of Balance Sheet), to the extent
applicable. An example could be to disclose, for equity component of a
compound financial instrument, terms as per Clause (j) i.e. terms of any
securities convertible into equity shares issued along with the earliest date of
conversion in descending order starting from the farthest such date, etc. For
the liability component of compound financial instruments, all the disclosures
applicable to `Debt Securities' and `borrowings' (refer Paragraph 8.2.2 and
8.2.3) shall be made, to the extent applicable. An example could be to
disclose the rate of interest, particulars of redemption or conversion stated in
descending order of maturity or conversion, etc. However, for those
instruments which are entirely liability in nature, all disclosures applicable to
`Borrowings' or `Debt Securities' should be made.
8.2.14.10 Clause (a) of Note (S) - the number and amount of shares
authorized:
As per the Guidance Note on Terms Used in Financial Statements,
`Authorised Share Capital' means "the number and par value, of each class


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of shares that an enterprise may issue in accordance with its instrument of
incorporation. This is sometimes referred to as nominal share capital."
This disclosure is to be provided for instruments entirely equity in nature as
well as for compound instruments that have an equity component, to the
extent applicable.
8.2.14.11 Clause (b) of Note (S) - the number of shares issued,
subscribed and fully paid, and subscribed but not fully paid:
The disclosure is for shares:
·     Issued;
·     Subscribed and fully paid;
·     Subscribed but not fully paid.
Though the disclosure is only for the number of shares under each of the
above three categories, to make the disclosure relevant to understanding the
company's share capital, even the amount for each category above should
be disclosed. Issued shares are those which are offered for subscription
within the authorised limit. It is possible that all shares offered are not
subscribed to and to the extent of unsubscribed portion, there will be
difference between shares issued and subscribed. As per the Guidance Note
on Terms Used in Financial Statements, the expression `Subscribed Share
Capital' is "that portion of the issued share capital which has actually been
subscribed and allotted. This includes any bonus shares issued to the
shareholders."
Though there is no requirement to disclose the amount per share called, if
shares are not fully called, it should be appropriate to state the amount per
share called.
As per the definition contained in the Guidance Note on Terms Used in
Financial Statements, the expression ` Paid-up Share Capital' is "that part of
the subscribed share capital for which consideration in cash or otherwise has
been received. This includes bonus shares allotted by the corporate
enterprise."
This disclosure is to be provided for instruments entirely equity in nature as
well as for compound instruments that have an equity component, to the
extent applicable.


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8.2.14.12 Clause (c) of Note (S) ­ par value per share:
Par value per share is the face value of a share as indicated in the Capital
Clause of the Memorandum of Association of a company. It is also referred
to as `face value' per share. In the case of a company having share capital,
(unless the company is an unlimited company), the Memorandum shall also
state the amount of share capital with which the company is registered and
their division thereof into shares of fixed amount as required under clause
(e)(i) to the sub-section (1) of section 4 of the Act. In the case of a company
limited by guarantee, Memorandum shall state that each member undertakes
to contribute to the assets of the company in the event of winding-up while
he is a member or within one year after he ceases to be a member, for
payment of debts and liabilities of the company, as the case may be. There is
no specific mention for the disclosure by companies limited by guarantee and
having share capital, and companies limited by guarantee and not having
share capital. Such companies need to consider the requirement so as to
disclose the amount each member undertakes to contribute as per their
Memorandum of Association.
This disclosure is to be provided for instruments entirely equity in nature as
well as for compound instruments that have an equity component, to the
extent applicable.
8.2.14.13 Clause (d) of Note (S)­ a reconciliation of the number of
shares outstanding at the beginning and at the end of the reporting
period:
As per Division III to Schedule III, opening number of shares outstanding,
shares issued, shares bought back, other movements, etc. during the year
and closing number of outstanding shares should be shown. Though the
requirement is only for a reconciliation of the number of shares, as given for
the disclosure of issued, subscribed capital, etc. [Clause (b) of Note (S)]
above, to make the disclosure relevant for understanding the company's
share capital, the reconciliation is to be given even for the amount of share
capital. Reconciliation for the comparative previous period is also to be
given. Further, the above reconciliation should be disclosed separately for
each class of Equity Shares issued.
This disclosure is to be provided for instruments entirely equity in nature.
Also, for compound instruments having both equity and liability components,
the reconciliation should be given for total number of shares / debentures

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

outstanding, which will facilitate understanding the movement of compound
instruments upon either redemption or conversion or when both occur partly.
8.2.14.14 Clause (e) of Note (S)­ the rights, preferences and restrictions
attaching to each class of shares including restrictions on the
distribution of dividends and the repayment of capital:
As per the Guidance Note on Terms Used in Financial Statements, the
expression `Preference Share Capital' means "that part of the share capital of
a corporate enterprise which enjoys preferential rights in respect of payments
of fixed dividend and repayment of capital. Preference shares may also have
full or partial participating rights in surplus profits or surplus capital." The
rights, preferences and restrictions attached to shares are based on the
classes of shares, terms of issue, etc., whether equity or preference. In
respect of Equity Share Capital, it may be with voting rights or with
differential voting rights as to dividend, voting or otherwise in accordance
with such rules and subject to such conditions as may be prescribed under
Companies (Share Capital and Debentures) Rules, 2014. In respect of
Preference Shares, the rights include (a) with respect to dividend, a
preferential right to be paid a fixed amount or at a fixed rate and, (b) with
respect to capital, a preferential right of repayment of amount of capital on
winding up. For Compulsorily Convertible Debentures, the rights could be
with the holder to convert into Equity Shares.
This disclosure is to be provided for instruments entirely equity in nature as
well as for compound instruments that have an equity component, to the
extent applicable.
8.2.14.15 Clause (f) of Note (S)­ shares in respect of each class in the
company held by its holding company or its ultimate holding company
including shares held by or by subsidiaries or associates of the holding
company or the ultimate holding company in aggregate:
The requirement is to disclose shares of the company held by -
·     Its holding company;
·     Its ultimate holding company;
·     Subsidiaries of its holding company;
·     Subsidiaries of its ultimate holding company;
·     Associates of its holding company; and
·     Associates of its ultimate holding company.

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Aggregation should be done for each of the above categories.
The terms `subsidiary' and `associate' should be understood as defined
under Ind AS 110 and Ind AS 28. The term `holding company' is not defined
in Ind AS, therefore, it may be referred from the definition as per Section 2
(46) of the Act. The equivalent term `parent' is defined in Ind AS 110.
Notwithstanding the aforesaid definitions, for the purposes of the above
disclosures, shares held by the entire chain of subsidiaries and associates
starting from the holding company and going right up to the ultimate holding
company would have to be disclosed.
In case of a joint arrangement viz., a joint venture or a joint operation
conducted through a separate legal entity, disclosure may be made for
shares of such joint arrangement held by its venturers.
This disclosure is to be provided for instruments entirely equity in nature, to
the extent applicable.
8.2.14.16 Clause (g) of Note (S)­shares in the company held by each
shareholder holding more than 5 percent shares specifying the number
of shares held:
In the absence of any specific indication of the date of holding, the date for
computing such percentage should be taken as the Balance Sheet date. For
example, if during the year, any shareholder held more than 5% Equity
shares but does not hold as much at the Balance Sheet date, disclosure is
not required. Though it is not specified as to whether the disclosure is
required for each class of shares or not, companies should disclose the
shareholding for each type of Equity Instruments. Accordingly, such
percentage should be computed separately for each class of shares
outstanding within Equity Shares. This information should also be given for
the comparative previous period.
This disclosure is to be provided for instruments entirely equity in nature, to
the extent applicable.
8.2.14.17 Clause (h) of Note (S)­ shares reserved for issue under
options and contracts or commitments for the sale of shares or
disinvestment, including the terms and amounts:
Shares under options generally arise under promoters or collaboration
agreements, loan agreements or debenture deeds (including convertible
debentures), agreement to convert preference shares into equity shares,

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ESOPs or contracts for supply of capital goods, etc. The disclosure would be
required for the number of shares, amounts and other terms for shares so
reserved. Such options are in respect of unissued portion of share capital.
This disclosure is to be provided for instruments entirely equity in nature as
well as for compound instruments that has an equity component and liability
component, to the extent applicable.
8.2.14.18 Clause (i) of Note (S) ­ For the period of five years
immediately preceding the date as at which the Balance Sheet is
prepared: (a) Aggregate number and class of shares allotted as fully
paid up pursuant to contract(s) without payment being received in cash.
(b) Aggregate number and class of shares allotted as fully paid up by
way of bonus shares. (c) Aggregate number and class of shares bought
back:
(a)   Aggregate number and class of shares allotted as fully paid up
      pursuant to contract(s) without payment being received in cash.
      The following illustrate the allotments which are considered as shares
      allotted for payment being received in cash and not as without
      payment being received in cash and accordingly, the same are not to
      be disclosed under this Clause:
      (i)    If the subscription amount is adjusted against a bona fide debt
             payable in money at once by the company;
      (ii)   Conversion of loan into shares in the event of default in
              repayment.
(b)   Aggregate number and class of shares allotted as fully paid up by way
      of bonus shares.
      As per the Guidance Note on Terms Used in Financial Statements,
      `Bonus shares' are defined as shares allotted by capitalisation of the
      reserves or surplus of a corporate enterprise. The requirement of
      disclosing the source of bonus shares is omitted in Schedule III.
(c)   Aggregate number and class of shares bought back.
      The total number of shares bought back for each class of shares
      needs to be disclosed.




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All the above details pertaining to aggregate number and class of shares
allotted for consideration other than cash, bonus shares and shares bought
back need to be disclosed only if such event has occurred during a period of
five years immediately preceding the Balance Sheet date. Since disclosure is
for the aggregate number of shares, it is not necessary to give the year-wise
break-up of the shares allotted or bought back, but the aggregate number for
the last five financial years needs to be disclosed.
This disclosure is to be provided for instruments entirely equity in nature, to
the extent applicable.
8.2.14.19 Clause (j) of Note (S)­ Terms of any securities convertible into
equity/preference shares issued along with the earliest date of
conversion in descending order starting from the farthest such date:
Under this Clause, disclosure is required for any security, when it is either
convertible into equity or preference shares. In this case, terms of such
securities and the earliest date of conversion are required to be disclosed. If
there are more than one date of conversion, disclosure is to be made in the
descending order of conversion. If the option can be exercised in different
periods then earlier date in that period is to be considered. In case of
compulsorily convertible securities, where conversion is done in fixed
tranches, all the dates of conversion have to be considered. Terms of
convertible securities are required to be disclosed under this Clause.
However, in case of Convertible debentures/bonds, etc., for the purpose of
simplification, reference may also be made to the terms disclosed under the
note on borrowings where these are required to be classified in the Balance
Sheet, rather than disclosing the same again under this clause.
This disclosure is to be provided for instruments entirely equity in nature and
compound instruments that have an equity component and a liability
component. In other words, this disclosure is not required for instruments
entirely liability in nature (for e.g., those instruments which entirely meet the
definition of a financial liability as per Paragraph 11 of Ind AS 32) since
similar disclosure needs to be provided as a part of `Borrowings'.
Accordingly, duplication of disclosures is not intended.
8.2.14.20 Clause (k) of Note (S) - Calls unpaid (showing aggregate value
of calls unpaid by directors and officers):
A separate disclosure is required for the aggregate value of calls unpaid by
directors and also officers of the company.

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However, the unpaid amount towards shares subscribed by the subscribers
of the Memorandum of Association should be considered as 'subscribed and
paid-up capital' in the Balance Sheet and the debts due from the subscriber
should be appropriately disclosed as an asset in the balance sheet.
This disclosure is to be provided for instruments entirely equity in nature, to
the extent applicable.
8.2.14.21 Clause (m) of Note (S) - An NBFC shall disclose information
that enables users of its financial statements to evaluate the NBFC's
objectives, policies and processes for managing capital.
Paragraph 134 of Ind AS 1 also requires an entity to disclose information that
enables users of its financial statements to evaluate the entity's objectives,
policies and processes for managing capital. Hence guidance as stated in
Paragraph 135 and 136 of Ind AS 1 may be referred upon for this disclosure.
8.2.15 Other Equity
Note (T) of the General Instructions for Preparation of Balance Sheet deals
with the disclosures of "Other Equity" in the Notes. Disclosure should be
made for the nature and amount of each item.
Disclosures in `Other Equity' are required to be made for the following:
(i)    Share application money pending allotment
       Share Application money pending allotment is to be disclosed as a
       separate line item under Other Equity. Note 2 of Other Classification
       related General Instructions states that share application money
       pending allotment shall be classified into equity or liability in
       accordance with relevant Ind AS. Share application money to the
       extent not refundable shall be shown in this line item and share
       application money to the extent refundable shall be separately shown
       under `other financial liabilities'.
(ii)   Equity component of compound financial instruments
       For compound financial instruments that have both equity as well as
       liability component, Ind AS 32 requires splitting the two components
       and separately recognizing `equity component of compound financial
       instrument'. Such equity component is required to be presented as a
       part of `Other Equity' under this head. On the other hand, the `liability
       component of compound financial instrument' is required to be

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        presented as a part of `Borrowings' (refer Paragraph 8.2.3.). For
        recommended disclosures for equity component of compound financial
        instruments, refer to the guidance given in Paragraph 8.2.14.8.
(iii)   Reserves and Surplus ­ these shall be further disclosed as (discussed
        in Paragraph 8.2.15.1):
        (a)   Capital Reserve;
        (b)   Securities Premium;
        (c)   Other Reserves
              (i)    Capital Redemption Reserve;
              (ii)   Debenture Redemption Reserve;
              (iii) Share Options Outstanding Account;
              (iv) Statutory Reserves;
              (v)    Others ­ (specify the nature and purpose of each reserve
                     and the amount in respect thereof);
        (d)   Retained Earnings.
(iv)    Debt Instruments through Other Comprehensive Income ­
        As per Ind AS 109, investments are subsequently measured at FVOCI
        based on the company's business model for managing the portfolio of
        debt instruments as well as the debt instruments' contractual cash flow
        characteristics. Any fair value gain or loss on debt instruments
        measured at FVOCI is presented as a part of Other Equity under this
        heading until the debt instrument is derecognized;
(v)     Equity Instruments through Other Comprehensive Income ­
        As per Ind AS 109, companies have an option to designate
        investments in equity instruments to be measured at FVOCI. For such
        instruments, the cumulative fair value gain or loss is presented as a
        part of Other Equity under this heading;
(vi)    Effective portion of Cash Flow Hedges ­
        For all qualifying cash flow hedges, this component of Other Equity
        associated with the hedged item (i.e. cash flow hedge reserve) is
        adjusted to the lower of the cumulative change in the fair value of the


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        hedging instrument and the cumulative change in the fair value of the
        hedged item attributable to the hedged risk. The portion of the gain or
        loss on the hedging instrument that is determined to be an effective
        hedge (i.e. the portion that is offset by the change in the cash flow
        hedge reserve) is recognized in Other Comprehensive Income. Also,
        Ind AS 109 requires that exchange differences on monetary items that
        qualify as hedging instruments in a cash flow hedge are recognized
        initially in other comprehensive income to the extent that the hedge is
        effective;
(vii)   Revaluation Surplus ­
        As per Ind AS 16 and Ind AS 38, if an asset's carrying amount is
        increased as a result of revaluation, the increase shall be recognized
        in other comprehensive income and accumulated in equity under the
        heading of revaluation surplus. However, such increase shall be
        recognized in profit or loss to the extent that it reverses a revaluation
        decrease of the same asset previously recognized in profit or loss.
        Correspondingly, decreases as a result of revaluation are recognized
        in other comprehensive income thereby reducing the amount
        accumulated under this heading of revaluation surplus, to the extent of
        any credit balance existing in the revaluation surplus in respect of that
        asset.
(viii) Exchange differences on translating the Financial Statements of a
       foreign operation ­
        In accordance with Ind AS 21 The Effects of Changes in Foreign
        Exchange Rates, the exchange differences arising on translation of the
        financial statements of foreign operation from functional currency to
        presentation currency needs to be included in this head of OCI.
(ix)    Other items of Other Comprehensive Income (specific nature)
        Any other items that need to be presented in Other Comprehensive
        Income as per the relevant Ind AS shall be included under this head of
        Other Comprehensive Income.
        Refer Paragraph 8.2.15.3. for guidance on presentation of `re-
        measurement of defined benefit plans'.



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(x)   Money received against share warrants
      Generally, in case of listed companies, share warrants are issued to
      promoters and others in terms of the Guidelines for preferential issues
      viz., SEBI (Issue of Capital and Disclosure Requirements), Guidelines,
      2009. Ind AS 33, Earnings per Share, defines `warrants' as "financial
      instruments which give the holder the right to acquire equity shares".
      Thus, effectively, warrants are nothing but the amount which would
      ultimately form part of the Shareholders' funds. Since shares are yet to
      be allotted against the same, these are not reflected as part of Share
      Capital but as a separate line item ­ `Money received against share
      warrants.'
8.2.15.1 Reserves & Surplus:
Ind AS 103, Appendix C on Business Combinations under Common Control
defines the term `Reserve' as "the portion of earnings, receipts or other
surplus of an entity (whether capital or revenue) appropriated by the
management for a general or a specific purpose other than a provision for
depreciation." `Reserves' should be distinguished from `provisions'. For this
purpose, reference may be made to the definition of the term `provision' in
Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.
As per Ind AS 37, a `provision' is "a liability of uncertain timing or amount". A
`liability' is "a present obligation of the entity arising from past events, the
settlement of which is expected to result in an outflow from the entity of
resources embodying economic benefits." `Present obligation' ­ "an
obligation is a present obligation if, taking account of all available evidence, it
is more likely than not that a present obligation exists at the end of the
reporting period".
(a)   Capital Reserves:
It is necessary to make a distinction between capital reserves and revenue
reserves in the accounts. A revenue reserve is a reserve which is available
for distribution. The term "Capital Reserve" has not been defined under
Division III to Schedule III. However, as per the Guidance Note on Terms
Used in Financial Statements, the expression `capital reserve' is defined as
"a reserve of a corporate enterprise which is not available for distribution as
dividend". Though Division III to Schedule III does not have the requirement
of "transferring capital profit on reissue of forfeited shares to capital reserve",
since profit on re-issue of forfeited shares is basically transaction with the

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shareholders / owners of the entity, it should be recognized in equity as a
credit to Capital Reserve.
A gain on bargain purchase arising in a business combination where clear
evidence of the underlying reasons does not exist, shall be recognized
directly in equity as Capital Reserve as per Paragraph 36 of Ind AS 103.
Further as per Paragraph 34 of Ind AS 103 where clear evidence of the
underlying reasons exists the acquirer shall recognise the resulting gain in
other comprehensive income on the acquisition date and accumulate the
same in equity as capital reserve.
(b)    Securities Premium:
The Guidance Note of Terms Used in Financial Statements defines `Share
Premium' as "the excess of the issue price of shares over their face value."
Other Reserves (specify the nature and purpose of reserve and the
amount in respect thereof):
Every other reserve which is not covered in above paragraphs is to be
reflected as `Other Reserves'. However, since the nature, purpose and the
amount are to be shown, each reserve under `Other Reserves' is to be
shown separately in Notes to Accounts. This would include e.g., reserves to
be created under other statutes.
(i)    Capital Redemption Reserve:
       Under the Act, Capital Redemption Reserve is required to be created
       in the following two situations:
       (a)   Under the provisions of Section 55 of the Act, where the
             redemption of preference shares is out of profits, an amount
             equal to nominal value of shares redeemed is to be transferred
             to a reserve called `capital redemption reserve'.
       (b)   Under Section 69 of the Act, if the buy-back of shares is out of
             free reserves, the nominal value of the shares so purchased is
             required to be transferred to capital redemption reserve from
             distributable profit.
(ii)   Debenture Redemption Reserve:
       According to Section 71 of the Act where a company issues
       debentures, it is required to create a debenture redemption reserve for
       the redemption of such debentures. The company is required to credit

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        adequate amounts, out of its profits every year to debenture
        redemption reserve, until such debentures are redeemed.
        On redemption of the debentures for which the reserve is created, the
        amounts no longer necessary to be retained in this account need to be
        transferred to the Retained Earnings. The Ministry of Corporate Affairs
        on 19th August 2019 has amended the Companies (Share Capital &
        Debentures) Rules by removing Debenture Redemption Reserve
        requirement for Listed Companies, NBFCs and HFCs.
(iii)   Share Options Outstanding Account:
        Division III to Schedule III requires Share Options Outstanding
        Account to be shown as a part of `Reserves and Surplus' under `Other
        Reserves'.
(iv)    Statutory Reserves:
        Division III to Schedule III requires Statutory Reserves to be shown as
        a part of `Reserves and Surplus' under `Other Reserves'. For instance,
        Section 29C (i) of The National Housing Bank Act, 1987 defines that
        every housing finance institution which is a Company shall create a
        reserve fund and transfer therein a sum not less than twenty percent
        of its net profit every year as disclosed in the statement of profit and
        loss before any dividend is declared. For this purpose, any special
        reserve created by the Company under Section 36(1) (viii) of Income
        tax Act 1961, is considered to be an eligible transfer.
        Similarly, section 45-IC of Reserve Bank of India Act, 1934 requires
        every non-banking financial company to create a reserve fund to
        transfer a sum not less than twenty per cent of its net profit every year
        as disclosed in the profit and loss account and before any dividend is
        declared.
        Thus, the amounts transferred to such reserve and the nature and
        purpose of the reserve shall be disclosed.
(c) Additions and deductions since the last Balance Sheet to be
shown under each of the specified heads:
This requires the company to disclose the movement in each of the reserves
and surplus since the last Balance Sheet.
Further, as per Division III to Schedule III, a reserve specifically represented
by earmarked investments shall disclose the fact that it so represented.


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(d) Debit balance of Statement of Profit and Loss and negative
balance of Other Equity:
Debit balance of Statement of Profit and Loss which would arise in case of
accumulated losses, is to be shown as a negative figure under the head
`Retained Earnings'. The aggregate amount of the balance of `Other Equity',
is to be shown after adjusting negative balance of retained earnings, if any. If
the net result is negative, the negative figure is to be shown under the head
`Other Equity'.
8.2.15.2 Gain/Loss on changes in the proportion held by non-
controlling interests
Ind AS 110, Paragraph B96 requires that an entity shall recognize directly in
`Equity' any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or
received, and attribute it to the owners of the parent.
Ind AS 1, Paragraph 106(d)(iii) requires that for each component of equity, a
reconciliation between the carrying amount at the beginning and the end of
the period, separately disclosing changes resulting from changes in
ownership interests in subsidiaries that do not result in a loss of control, shall
be made.
For such difference, which is a gain / loss on changes in the proportion held
by non-controlling interests, Ind AS does not specify whether such gain / loss
should be presented separately under `Capital Reserve' or under `Other
Reserves'. Division III to Schedule III also does not specify anything in this
regard. An entity may present such gain / loss separately as `Gain/Loss on
change in proportion held by NCI' shown under `Other Reserves' by
specifying the nature.
8.2.15.3 Reconciliation of items in Other Equity
Reconciliations for each component of other equity are required to be made
in the following manner (to the extent applicable):
(i)     Balance at the beginning of the reporting period
(ii)    Changes in accounting policy or prior period error
(iii)   Restated balance at the beginning of the reporting period
(iv)    Total Comprehensive Income for the year


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(v)     Dividends
(vi)    Transfer to retained earnings
(vii)   Any other change (to be specified)
(viii) Balance at the end of reporting period
Apart from the above items, Division III to Schedule III requires that:
 ·      Re-measurement of defined benefit plans; and
 ·      Fair value changes relating to own credit risk of financial liabilities
        designated at fair value through profit or loss,
shall be recognised as a part of retained earnings with separate disclosure of
such items along with the relevant amounts in the Notes.
Ind AS 19 requires that re-measurements of the net defined benefit liability
(asset) recognized in other comprehensive income shall not be reclassified to
profit or loss in a subsequent period. However, the entity may transfer those
amounts recognized in other comprehensive income within equity.
Division III to Schedule III requires `re-measurements of defined benefit
plans' during the reporting period to be shown as a separate line item in
other comprehensive income. (Refer Paragraph 10.2)
As per Division III to Schedule III requirement    mentioned above, such re-
measurements of defined benefit plans, when        accumulated at the end of
every reporting period, shall be recognized as     a part of retained earnings
with separate disclosure of this item along with   the relevant amounts in the
Notes to Accounts.
Accordingly, a company shall present the accumulated re-measurements of
defined benefit plans at the end of each reporting period as a part of retained
earnings.
8.3     Regulatory Deferral Account Balances
Regulatory Deferral Account Balances are defined in Ind AS 114 as those
arising when an entity provides goods or services to customers at a price or
rate that is subject to rate regulation.
Note 5 of Other Classification Related General Instructions requires
Regulatory Deferral Account Balances to be presented in the Balance Sheet
in accordance with the relevant Ind AS.
Accordingly, as per Ind AS 114, the separate line items for the totals of all

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regulatory deferral account debit balances and the totals of all regulatory
deferral account credit balances shall be distinguished from the assets and
liabilities that are presented in accordance with other Standards by the use of
sub-totals, which are drawn before the regulatory deferral account balances
are presented.
8.4   Presentation of earlier comparative period
Note 1 to Other Classification Related General Instructions states that when
a company applies an accounting policy retrospectively or makes a
restatement of items in the financial statements or when it reclassifies items
in its financial statements, the company shall attach to the Balance Sheet, a
Balance Sheet as at the beginning of the earliest comparative period
presented.
Similar requirement is also in Paragraph 40A of Ind AS 1, which requires an
entity to present a third balance sheet as at the beginning of the preceding
period in addition to the minimum comparative financial statements required
if:
(a)   An entity applies an accounting policy retrospectively, makes a
      retrospective restatement of items in its financial statements or
      reclassifies items in its financial statements; and
(b)   The retrospective application, retrospective restatement or the
      reclassification has a material effect on the information in the balance
      sheet at the beginning of the preceding period.

9. Part II ­ Statement of Profit and Loss and Notes ­
General Instructions for Preparation of Statement of Profit
and Loss: Notes 1 to 10
Part II deals with disclosures relating to the Statement of Profit and Loss.
The format prescribed is the vertical form wherein disclosures for revenues
and expenses have been given in various line items. Part II contains items I
to XVIII which lists items of Revenue, Expenses, Profit / (Loss) and Other
Comprehensive Income. "General Instructions for Preparation of Statement
of Profit and Loss" govern the other disclosures and presentation aspects
related to the Statement of Profit and Loss.
As per Note 1 of "General Instructions for Preparation of Statement of Profit
and Loss", the provisions of this part also apply to the income and

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expenditure account referred to in sub-clause (ii) of clause (40) of section 2
of the Act in the same manner as they apply to a Statement of Profit and
Loss.
As per Note 2 of "General Instructions for Preparation of Statement of Profit
and Loss", the Statement of Profit and Loss shall include:
(1)   Profit or loss for the period;
(2)   Other Comprehensive Income for the period.
The sum of (1) and (2) above is `Total Comprehensive Income'.
`Profit or Loss' is defined in Ind AS 1 as ` the total of income less expenses,
excluding the components of other comprehensive income.
`Other comprehensive income' is defined in Ind AS 1 as `comprising items of
income and expense (including reclassification adjustments) that are not
recognised in profit or loss as required or permitted by other Ind ASs .
Other comprehensive income shall be presented as:
(a)   Items that will not be reclassified to profit or loss and its related
      income tax effects;
(b)   Items that will be reclassified to profit or loss and its related income
      tax effects.
`Reclassification adjustments' are defined in Ind AS 1 as amounts
reclassified to profit or loss in the current period that were recognised in
other comprehensive income in the current or previous periods.
The Statement of Profit and Loss is a single statement of profit and loss, with
profit or loss and other comprehensive income presented in two sections, as
per Part II of Division III to Schedule III. The sections are presented together,
with the profit or loss section presented first followed directly by the other
comprehensive income section. This is in sync with Paragraph 10A of Ind
AS 1.
Ind AS 1 prohibits an entity from presenting any items of income or expense
as extraordinary items, in the statement of profit and loss or in the notes.
Accordingly, there are no line items like `Extraordinary items' and `Profit
before extraordinary items and tax' in this Schedule.
The specific format laid down for presentation of various items of Income and
Expenses in the Statement of Profit and Loss indicates that expenses should


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be aggregated based on their nature, which is in sync with Ind AS 1
Paragraph 99. Accordingly, functional classification of expenses is
prohibited.
As per the Ind AS Framework for the Preparation and Presentation of
Financial Statements, income and expenses are defined as follows:
(a)   Income encompasses both revenue and gains. Revenue arises in the
      course of the ordinary activities of an entity. Gains represent other
      items that meet the definition of income and may or may not, arise in
      the course of the ordinary activities of an entity. Gains represent
      increases in economic benefits and as such are no different in nature
      from revenue.
(b)   Expenses encompass losses as well as those expenses that arise in
      the course of the ordinary activities of the entity. Losses represent
      other items that meet the definition of expenses and may or may not,
      arise in the course of the ordinary activities of the entity. Losses
      represent decreases in economic benefits and as such they are no
      different in nature from other expenses.
Further, separate line items should be included in the profit or loss section of
the Statement of Profit and Loss to present the following items in line with
Paragraph 82 of Ind AS 1:
(a)   Revenue, presenting separately interest revenue calculated using the
      effective interest method;
(b)   Gains and losses arising from the de-recognition of financial assets
      measured at amortized cost;
(c)   Finance costs;
(d)   Impairment losses (including impairment gains or reversals of
      impairment losses) determined as per Ind AS 109, Section 5.5;
(e)   Share of profit or loss of associates and joint ventures accounted for
      using the equity method;
(f)   Any gain or loss arising from a difference between the previous
      amortized cost of the financial asset and its fair value at the date when
      the financial asset is reclassified from amortized cost to fair value
      through profit or loss;


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(g)   Any cumulative gain or loss previously recognized in other
      comprehensive income that is reclassified to profit or loss, when the
      financial asset is reclassified from fair value through other
      comprehensive income to fair value through profit or loss;
(h)   A single amount for the total of discontinued operations, as per Ind AS
      105.
In separately disclosing the above, consideration should be given to Note 5
and Note 9 of General Instructions for Preparation of Statement of Profit and
Loss, that requires disclosure of any item of `Other Income' or `Other
Expenses' exceeding one percent of the total income, in addition to the
consideration of `materiality'. An entity should consider these requirements
as mutually exclusive.
9.1. Revenue from operations
The aggregate of revenue from operations needs to be disclosed on the face
of the Statement of Profit and Loss as per Schedule III.
9.1.1. Note 3 of General Instructions for the Preparation of Statement of
Profit and Loss requires that revenue from operations is to be separately
disclosed on the face of the Statement of Profit and Loss, showing:
(a)   Interest Income;
(b)   Dividend Income;
(c)   Rental Income;
(d)   Fees and commission Income;
(e)   Net gain on fair value changes;
(f)   Net gain on derecognition of financial instruments under amortised
      cost category;
(g)   Sale of products (including Excise duty);
(h)   Sale of services; and
(i)   Others (to be specified)
9.1.2. For the purpose of presentation Ind AS 113 and 115 will have to be
referred to. As per the definition of Revenue in Ind AS 115, "revenue is
income arising in the course of an entity's ordinary activities" and income is
defined in Ind AS 115, "increases in economic benefits during the accounting

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period in the form of income or enhancements of assets or decreases of
liabilities that result in an increase in equity, other than those relating to
contributions from equity participants". Further, as per Ind AS 115, revenue
includes only the gross increase in economic benefits occurring to the entity
on its own account. Amounts collected, in capacity of an agent, on behalf of
third parties such as sales taxes, goods and services taxes and value added
taxes are not economic benefits which flow to the entity and do not result in
increases in equity. Therefore, they are excluded from revenue. Similarly, in
an agency relationship, the gross increase in economic benefits include
amounts collected on behalf of the principal and which do not result in
increases in equity for the entity. The amounts collected on behalf of the
principal are not revenue.
9.1.3. Under the GST regime, the collection of GST by an entity would not be
an inflow on the entity's own account but it shall be made on behalf of the
government authorities. Accordingly, the revenue from operations should be
presented net of GST.
9.1.4. The revenue from operation shall include:
9.1.4.1. Interest Income:
As per Note 3 of General Instructions for Preparation of Profit and Loss,
Interest Income shall be classified as:
(a)   Interest on loans;
(b)   Interest income from investments;
(c)   Interest on deposits with banks;
(d)   Other interest income
Interest income should be classified based on the financial assets measured
at fair value through OCI, at amortised cost, or classified as fair value
through profit or loss.
As per Paragraph 82 (a) of Ind AS 1, in addition to items required by other
Ind ASs, the profit or loss section of the statement of profit and loss shall
include line items that presenting separately interest revenue calculated
using the effective interest method.
Ind AS 107, Paragraph 20(b) requires total interest revenue calculated using
the effective interest method for financial assets that are measured at
amortized cost and that are measured at FVOCI, to be shown separately.


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The effective interest rate is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial instrument or, when
appropriate, a shorter period, to the net carrying amount of the financial
asset.
`Other Interest' Income includes any other interest/ discount income not
included in sub-heads (a), (b) and (c) as mentioned above. Dividend in the
nature of interest should be classified here as per the requirements of Indian
Accounting Standards. Also, interest income on unwinding of security
deposits and interest received on delayed payments by customers should be
classified under other interest income. Interest income on income tax refund
which is in the nature of income tax should be treated as per Ind AS 12.
Ind AS 107 Paragraph B5(e) requires a company to disclose whether interest
income from financial assets measured at FVTPL is included as a part of fair
value changes. Accordingly, a company shall disclose as its accounting
policy, whether it presents interest income on financial assets at FVTPL as a
part of fair value changes or presents separately.
9.1.4.2. Dividend Income:
As per Paragraph 5.7.1A of Ind AS 109 dividends are recognised in profit or
loss only when:
(a)   the entity's right to receive payment of the dividend is established;
(b)   it is probable that the economic benefits associated with the dividend
      will flow to the entity; and
(c)   the amount of the dividend can be measured reliably.
As per Paragraph 5.7.6 of Ind AS 109 if the entity makes an irrevocable
election to present the fair value changes in other comprehensive income, it
shall recognize in profit or loss dividends from that investment in accordance
with Paragraph 5.7.1A of Ind AS 109.
Further, Ind AS 107 Paragraph B5(e) requires a company to disclose
whether dividend income on financial assets measured at FVTPL is included
as a part of fair value changes. Accordingly, a company shall disclose as its
accounting policy, whether it presents dividend income on financial assets at
FVTPL as a part of fair value changes or presents separately.
9.1.4.3. Rental Income
Rental income shall include rent on investment property and operating lease
payments received if the entity is in the nature of renting business.


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9.1.4.4. Fees and commission income:
Fees that are not an integral part of effective interest rate in accordance with
Ind AS 109 should be considered under this head. `Fees and Commission
Income' shall include all remuneration on services such as commission on
collections, commission/ exchange on remittances and transfers, commission
on letters of credit and guarantees, commission on Government business,
commission on other permitted agency business including consultancy,
distribution of third party products and other services, brokerage, fees
charged for servicing a loan, loan syndication fees etc.
9.1.4.5. Net gain/(loss) on fair value changes:
As per Note 4 of General Instructions for preparation of Statement of Profit
and Loss, the fair value gains or losses (net) on financial assets which are
measured at FVTPL should be presented under `Revenue from Operations'
with the following line items:
(A)   Net Gain/ (Loss) on financial instruments at fair value through profit or
      loss
      (i)    On trading portfolio
             -- Investments
             -- Derivatives
             -- Others
      (ii)   On financial instruments designated at fair value through profit
             or loss
(B)   Others (to be specified)
      Total Net gain/ (loss) on fair value changes (C)
      Fair value changes:
      --     Realised
      --     Unrealised
      Total Net gain/ (loss) on fair value changes (D) to tally with (C)
The fair value changes in this schedule are other than those arising on
account of accrued interest income/ expense.
The amount of net loss under this section should be disclosed in Expenses ­
Net loss on fair value changes.

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`Others' may include instruments other than those held for trading or
designated at fair value through profit or loss such as debt instruments which
are classified as fair value through profit or loss and on derecognition of debt
instruments classified as fair value through other comprehensive income.
Further, Paragraph B5(e ) of Ind AS 107 as mentioned above is also required
to be referred.
9.1.4.6. Others (to be specified):
The term "others" is not defined. This would include revenue arising from a
company's operating activities, i.e., either its principal or ancillary revenue-
generating activities, but which is not revenue arising from the sub-items
mentioned above. Whether a particular income constitutes "other operating
revenue" or "other income" is to be decided based on the facts of each case
and detailed understanding of the company's activities.
9.2. Other income
The aggregate of `Other income' is to be disclosed on the face of the
Statement of Profit and Loss. As per Note 5 of General Instructions for the
Preparation of Statement of Profit and Loss, `Other Income' shall be
classified as:
(a)   Net gain/ (loss) on ineffective portion of hedges;
(b)   Net gain/ (loss) on derecognition of property, plant and equipment;
(c)   Net gain or loss on foreign currency transaction and translation (other
      than those considered as finance cost) (to be specified) and
(d)   Others (to be specified)
As per Paragraph 6.5.11 (b) and (c) of Ind AS 109, for designated and
qualifying cash flow hedges, the effective portion of the cumulative gain or
loss on the hedging instruments is initially recognised directly in OCI within
equity (cash flow hedge reserve). The ineffective portion of the gain or loss
on the hedging instrument is recognised immediately in net gain/loss on fair
value changes in the statement of profit and loss.
Net gain/ (loss) on derecognition of property, plant and equipment includes
profit/loss on sale of furniture, land and building, motor vehicles, etc. Only
the net position should be shown. If the net position is a loss, the amount
should be shown as an expense.


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Any gains on account of foreign exchange fluctuations are to be disclosed
separately as per Ind AS 21. Thus, net exchange gain should be classified
under other income and the amount so included should be separately
disclosed.
Interest on income tax refund shall form part of `others' under `Other Income'.
Rental income other than that presented under `Revenue from operations'
shall be disclosed under `others'.
Income under `others' should be disclosed net off expenses directly
attributable to such income. However, the expenses so netted off should be
separately disclosed.
Any item under the head `Other Income' which exceeds one per cent of the
total income should be presented separately.
9.3. Expenses
The aggregate of the following expenses is to be disclosed on the face
of the Statement of Profit and Loss:
·     Finance Costs
·     Fees and commission expense
·     Net loss on fair value changes
·     Net loss on derecognition of financial instruments under amortised
      cost category
·     Impairment of financial instruments
·     Cost of materials consumed
·     Purchases of Stock-in-Trade
·     Changes in inventories of finished goods, stock-in-trade and work-in-
      progress
·     Employee benefits expense
·     Depreciation, amortization and impairment
·     Other expenses (to be specified)
9.3.1 Finance Costs
As per Note 6 of the General Instructions for the Preparation of the

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Statement of Profit and Loss, disclosure of finance costs is to be bifurcated
under the following:
(a)   Interest on deposits
(b)   Interest on borrowings
(c)   Interest on debt securities
(d)   Interest on subordinated liabilities
(e)   Other interest expense
The finance costs should be classified based on financial liabilities measured
at fair value through profit or loss and on financial liabilities measured at
amortised cost. The latter should be calculated as per the effective interest
method as per Ind AS 107.
Interest on deposits: Interest on deposits includes interest paid on all types
of deposits including deposits from banks and other institutions.
Interest on deposits also includes unwinding of the discount that results in an
increase in financial liabilities such as security deposits for assets taken on
lease.
Interest on borrowings: Interest on borrowings includes discount/interest on
all borrowings and refinance from banks and other institutions and agencies.
Interest in respect of lease liabilities recognised in accordance with Ind AS
116, Leases
Interest on debt securities: Interest on debt securities includes interest on
bonds/ debentures and liability component of financial instruments.
Dividend on preference shares, whether redeemable or convertible, is of the
nature of `Interest expense', only where there is no discretion of the issuer
over the payment of such dividends. In such case, the portion of dividend as
determined by applying the effective interest method should be presented as
`Other Interest expense' under `Finance cost'. Accordingly, the corresponding
Dividend Distribution Tax on such portion of non-discretionary dividends
should also be presented in the Statement of Profit and Loss under `Interest
expense'. On the other hand, where there is a discretion of issuer over the
payments of dividend on preference shares, whether redeemable or
convertible, the entire dividend is in the nature of distribution of profit and
therefore shall be presented in Statement of Changes in Equity. Accordingly,

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the corresponding Dividend Distribution Tax should also be presented in
Statement of Changes in Equity.
Interest on subordinated liabilities: This includes interest expense on all
subordinated liabilities.
Other interest expense: Other interest expense includes the following:
1.    Increases in the carrying amount of provisions / decommissioning
      liabilities where such increase reflects the passage of time;
2.    Net interest on net defined benefit liability which reflects the change in
      net defined benefit liability that arises from the passage of time.
9.3.2 Ind AS 21 and Ind AS 23 deal with foreign exchange differences
arising on foreign currency transactions included in the financial statements
of an entity. The same shall be disclosed under `Other interest expense'
finance cost. All exchange differences within the purview of Ind AS 21 are
recognized as exchange differences and presented accordingly. However, all
exchange differences arising from foreign currency borrowings are within the
purview of Ind AS 23 and are regarded as a cost of borrowing irrespective of
whether they are capitalized or not as a part of the cost of the asset. In
accordance with Ind AS 23 ­ `Borrowing Costs', borrowing costs that are
directly attributable to the acquisition, construction or production of a
qualifying asset form part of the cost of that asset. For the purpose of
capitalization, borrowing costs also include exchange difference regarded as
an adjustment to borrowing costs. Exchange differences eligible for
capitalization are determined in accordance with Paragraph 6(e) and 6A of
Ind AS 23. Accordingly, in case a company has utilized its foreign currency
borrowings for the purpose of acquisition or construction of a qualifying
asset, it would capitalize certain portion of foreign exchange differences in
accordance with the Paragraph 6(e) and 6A of Ind AS 23. All other borrowing
costs are recognized as an expense. For presenting foreign exchange
differences arising on foreign currency borrowings in the statement of profit
and loss, there is no specific requirement to apply the limit prescribed in
paragraphs 6(e) and 6A of Ind AS 23 since the nature of the exchange
difference on foreign currency borrowings is effectively a cost of borrowing.
Accordingly, the entire foreign exchange differences relating to foreign
currency borrowings to the extent not capitalized in accordance with Ind AS
23 should be presented under the head `finance costs'.



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9.3.3 Fees and commission expense
Fees and commission expenses include all expenses on services such as
commission on documents sent on collection, commission/ exchange on
remittances and transfers, commission on letters of credit, and guarantees,
commission on other permitted agency business including consultancy and
other services, brokerage, etc. If any of these elements are required to be
included for the purpose of computing effective interest rate under Indian
Accounting Standards, it should not be included under this head.
9.3.4 Net loss on fair value changes
(Refer Paragraph 9.1.4.5. for the line items to be presented as a part of Net
gains (losses) on fair value changes)
9.3.5 Impairment of financial instruments
As per Note 8 of the General Instructions for the Preparation of the
Statement of Profit and Loss, disclosure of impairment of financial
instruments is to be bifurcated under the following:
(e)   Loans
(f)   Investments
(g)   Others (to be specified)
The same is to be further classified based on financial instruments measured
at fair value through OCI, and on financial instruments measured at
amortised cost.
Ind AS 109 requires that its impairment provisions are also applied to loan
commitments and trade receivables. Thus, such impairments would be
included under the sub-head `Others' as mentioned above.
Excess of amount of loss written-off over the accumulated loss allowance is
of the nature of impairment loss and should thus be presented under this line
item. In case of subsequent recoveries which are higher than previously
written off asset, the nature of recoveries is similar to reversals of impairment
and should thus be presented in the impairment line in profit or loss as it
would provide useful and relevant information to the users of the financial
statements.




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9.3.6 Employee benefits expense
As per Paragraph 7 of Ind AS 19 an employee may provide services to an
entity on a full-time, part-time, permanent, casual or temporary basis. For the
purpose of this Standard, employees include directors and other
management personnel.
This line item under the schedule requires disclosure of the following details:
9.3.6.1 Salaries and wages
The aggregate amounts paid/payable by the company for payment of
salaries and wages are to be disclosed here. Expenses on account of bonus,
leave encashment, compensation and other similar payments also need to
be disclosed here. Where a separate fund is maintained for gratuity payouts,
contribution to Gratuity Fund should be disclosed under the sub-head
Contribution to provident and other funds.
9.3.6.2 Contribution to provident and other funds
The aggregate amounts paid / payable by a company on account of
contributions to provident fund and other funds like Superannuation fund,
ESI, Labour Welfare Fund, etc., are to be disclosed here. This is true for
defined contribution plans since the expense recognized for a defined benefit
plan is not necessarily the amount of the contribution due for the period.
Contributions for such funds for contract labour may also be separately
disclosed here. However, penalties and other similar amounts paid to the
statutory authorities are not strictly in the nature of `contribution' and should
not be disclosed here.
9.3.6.3 Share based payment to employees
The amount of expense under this head should be determined in accordance
with Ind AS 102 ­ Share-based Payments and/or the SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999,
as applicable. Companies should also consider all disclosures required by
Ind AS 102.

9.3.6.4 Staff welfare expense
The total expenditure on staff welfare is to be disclosed herein.




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9.3.7 Depreciation, amortization and impairment
A company should disclose depreciation provided on Property, Plant and
Equipment, Investment Property and amortization of intangible assets and
any impairment under this head.
9.3.8 Other Expenses
All other expenses not classified under other heads will be classified here. As
per Note 9 of General Instructions for Preparation of Profit and Loss, Other
expenses shall be bifurcated into:
(c)   Rent, taxes and energy costs;
(d)   Repairs and maintenance;
(e)   Communication costs;
(f)   Printing and stationery;
(g)   Advertisement and publicity;
(h)   Director's fees, allowances, and expenses;
(i)   Auditor's fees and expenses;
(j)   Legal and Professional charges;
(k)   Insurance;
(l)   Other expenditure.
Rent, taxes and energy costs: Rent will include expenses such as rent on low
value or short term leases i.e. in respect of leases which are not accounted
for under Ind AS 116. Taxes shall include municipal and other taxes
(excluding income tax) and energy cost shall include electricity and other
similar charges and levies.
Repairs and maintenance: This includes repairs to company's property, plant
and equipment and their maintenance charges, etc.
Communication costs: This includes postal charges (like stamps),
telephones, courier costs, facsimile, e-mail, internet, SWIFT charges etc.
Printing and stationery: This includes cost of books, forms and stationery
used by the company and other printing charges which are not incurred by
way of publicity expenditure.


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Advertisement and publicity: This includes expenditure incurred by the
company for advertisement and publicity purposes including printing charges
on publicity material.
Director's fees, allowances and expenses: This includes sitting fees and all
other items of expenditure incurred on behalf of directors including all
allowances and expenses on behalf of directors. The daily allowance, hotel
charges, conveyance charges, etc. which though in the nature of
reimbursement of expenses incurred may be included under this head.
Auditor's fees and expenses: This includes the fees paid to the statutory
auditors and branch auditors for professional services rendered and all
expenses for performing their duties, even though they may be in the nature
of reimbursement of expenses.
Legal and Professional charges: All legal expenses and reimbursement of
expenses incurred in connection with legal services are to be included here.
Professional charges could include fee paid for consultancy, valuations, etc.
Insurance: This includes insurance charges on company's property, plant
and equipment, etc.
Other expenditure: All expenses other than those not included in any of the
other heads like license fees, donations, subscriptions to papers, periodicals,
entertainment expenses, travel expenses, etc. may be included under this
head.
Any item under the head `Other expenditure' which exceeds one per cent of
the total income shall be presented separately.
9.4. Exceptional items
The term `Exceptional items' is neither defined in Division III to Schedule III
nor in Ind AS. However, Ind AS 1 requires separate disclosures of certain
items of similar nature in Paragraphs 85, 86, 97 and 98.
Paragraph 85 states that additional line items, headings and subtotals in the
statement of profit and loss shall be presented, when such presentation is
relevant to an understanding of the entity's financial performance.
Further, Paragraph 86 states that disclosing the components of financial
performance assists users in understanding the financial performance
achieved and in making projections of future financial performance. An entity
considers factors including materiality and the nature and function of the
items of income and expense.

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Paragraph 97 states that when items of income or expense are material, an
entity shall disclose their nature and amount separately. Paragraph 98 gives
circumstances that would give rise to the separate disclosure of items of
income and expense and includes:
(a)    Write-downs of inventories to net realisable value or of property, plant
       and equipment to recoverable amount, as well as reversals of such
       write-downs;
(b)    restructurings of the activities of an entity and reversals of any
       provisions for the costs of restructuring;
(c)    disposals of items of property, plant and equipment;
(d)    disposals of investments;
(e)    discontinued operations;
(f)    litigation settlements; and
(g)    other reversals of provisions.
In case the company has more than one such item of income / expense of
the above nature which is exceptional, then such items should be disclosed
on the face of the Statement of Profit and Loss. Details of all the individual
items should be disclosed in the Notes.
9.5.   Tax expense
This is to be disclosed on the face of the Statement of Profit and Loss and
bifurcated into:
(1)    Current tax, and
(2)    Deferred tax
9.5.1 Current tax
The term `Current tax' has been defined under Ind AS-12 Income Taxes as
the amount of income taxes payable (recoverable) in respect of the taxable
profit (tax loss) for a period. Hence, details of all taxes on income payable
under the applicable taxation laws should be disclosed here.
Any interest on shortfall in payment of advance income-tax is in the nature of
finance cost and hence should not be clubbed with the `Current tax'. The
same should be classified as interest expense under finance costs. However,
such amount should be separately disclosed.


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Any penalties levied under Income tax laws should not be classified as
`Current tax'. Penalties which are compensatory in nature should be treated
as interest and disclosed in the manner explained above. Other tax penalties
should be classified under `Other Expenses'.
Excess/Short provision of tax relating to earlier years should be separately
disclosed.
9.5.2 Deferred tax
Any charge/credit for deferred taxes needs to be disclosed separately on the
face of the Statement of Profit and Loss.
Ind AS 12 defines `deferred tax liabilities', `deferred tax assets', `temporary
differences' as:
`Deferred tax liabilities' are the amounts of income taxes payable in future
periods in respect of taxable temporary differences;
`Deferred tax assets' are the amounts of income taxes recoverable in future
periods in respect of:
(a)   deductible temporary differences;
(b)   the carry forward of unused tax losses; and
(c)   the carry forward of unused tax credits.
`Temporary differences' are differences between the carrying amount of an
asset or liability in the balance sheet and its tax base
Ind AS 12 has the concept of temporary differences as against AS 22 which
has a concept of timing differences. Moreover, deferred tax asset is defined
in Ind AS 12 to include the carry forward of unused tax credits. MAT Credits
are in the form of unused tax credits that are carried forward by the company
for a specified period of time. Accordingly, MAT Credit Entitlement should be
grouped with Deferred Tax Asset (net) in the Balance Sheet of an entity and
a separate note should be provided specifying the nature and amount of MAT
Credit included as a part of deferred tax. However, the company should
review at each balance sheet date the reasonable certainty to recover
deferred tax asset including MAT Credit Entitlement.
Correspondingly, MAT Credit Entitlement should be grouped with deferred
tax in the Statement of Profit and Loss and a separate note should be
provided specifying the amount of MAT Credit.


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9.6.    Profit / (loss) from discontinued operations
The term 'discontinued operations' is defined in Ind AS 105, "Non-current
Assets Held for Sale and Discontinued Operations" as a component of an
entity that either has been disposed of or is classified as held for sale and:
(a)     represents a separate major line of business or geographical area of
        operations,
(b)     is part of a single co-ordinated plan to dispose of a separate major line
         of business or geographical area of operations; or
(c)     is a subsidiary acquired exclusively with a view to resale.
Profit or loss from Discontinued Operations needs to be separately disclosed
on the face of Statement of Profit and Loss. This disclosure is in line with the
disclosure requirement of Ind AS 105 Paragraph 33(a) which requires a
single amount in the statement of profit and loss comprising the total of: (i)
post-tax profit or loss of discontinued operations; and (ii) post-tax gain or loss
recognized on the measurement to fair value less costs to sell or on the
disposal of the assets or disposal group(s) constituting the discontinued
operation.
Further, Ind AS-105 Paragraph 33(b) requires an entity to present an
analysis of a single amount either in Notes or on the face of the Statement of
Profit and Loss:
(i)     the revenue, expenses and pre-tax profit or loss of discontinued
        operations;
(ii)    the gain or loss recognised on the measurement to fair value less
        costs to sell or on the disposal of the assets or disposal group(s)
        constituting the discontinued operation; and
(iii)   the related income tax expense as required by paragraph 81(h) of Ind
        AS 12.
If the above analysis is presented in the Statement of Profit and Loss, then it
shall be presented in a section identified as relating to discontinued
operations, i.e. separately from continuing operations.
9.7.    Tax expense of discontinued operations
In case there are any taxes payable / tax credits available on profits / losses
of discontinued operations, the same need to be disclosed as a separate line

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item on the Statement of Profit and Loss, when presenting a separate
analysis as per Paragraph 33(b) of Ind AS 105, as stated above in Paragraph
9.5.
9.8. Earnings per equity share
Computation of Basic and Diluted Earnings per Share should be made in
accordance with Ind AS 33, Earnings per Share. It is pertinent to note that
the nominal value of equity shares should be disclosed along with the
Earnings per Share figures as required by Ind AS 33.

10. Other Comprehensive Income
10.1 `Other comprehensive income' (OCI) is defined in Ind AS 1 as
`comprising items of income and expense (including reclassification
adjustments) that are not recognised in profit or loss as required or permitted
by other Ind ASs.
10.2 Note 10 of General Instructions for Preparation of Statement of Profit
and Loss state that `Other Comprehensive Income' shall be classified into:
(a)   Items that will not be reclassified to profit or loss and its related
      income tax effects:
      (1)    Changes in revaluation surplus;
      (2)    Re-measurements of the defined benefit plans;
      (3)    Equity Instruments through other comprehensive income;
      (4)    Fair value changes relating to own credit risk of financial
             liabilities designated at fair value through profit or loss;
      (5)    Share of Other Comprehensive Income in Associates and Joint
             Ventures, to the extent not to be classified into profit or loss;
             and
      (6)    Others (specify nature);
(b)   Items that will be reclassified to profit or loss and its related income
      tax effects:
      (1)    Exchange differences in translating the financial statements of a
             foreign operation;
      (2)    Debt Instruments through other comprehensive income;
      (3)    The effective portion of gain and loss on hedging instruments in
             a cash flow hedge;

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      (4)    Share of Other Comprehensive Income in Associates and Joint
             Ventures, to the extent to be classified into profit or loss; and
      (5)    Others (specify nature).
10.3 As a part of the definition of OCI given in Ind AS 1, the components of
OCI, which are in addition to above, are stated to include:
Items that will not be reclassified to profit or loss and its related income tax
effects:
(a)   Gains and losses on hedging instruments that hedge investments in
      equity instruments measured through Other Comprehensive Income;
(b)   Changes in time value of options when separating the intrinsic value
      and time value of an option contract and designating only intrinsic
      value changes as the hedging instrument;
(c)   Changes in the value of the forward elements of forward contracts
      when separating the forward element and spot element of a forward
      contract and designating only spot element changes as hedging
      instrument;
(d)   Changes in the value of the foreign currency basis spread of a
      financial instrument when excluding it from the designation of that
      financial instrument as the hedging instrument.
10.4 Ind AS 1, Paragraph 91 gives a choice of presentation for tax effects
of items presented in other comprehensive income. An entity may present
items of OCI either:
(a)   Net of related tax effects, or
(b)   Before related tax effects with one amount shown for the aggregate
      amount of income tax relating to those items.
However, Schedule III requires an entity to present items of OCI in aggregate
and the related tax effects to be shown separately.
10.5 Further, an entity shall present for each component of equity, an
analysis of other comprehensive income by item as required by Ind AS 1,
Paragraph 106A (including, reclassification adjustments as required by Ind
AS 1, Paragraph 92). Such presentation may be made either in the
Statement of Changes in Equity or in the Notes to Accounts.

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10.6 Division III to Schedule III does not highlight the presentation of
bargain purchase gains arising in a business combination. Paragraph 34 of
Ind AS 103, requires an acquirer to recognize a bargain purchase gain in
other comprehensive income on the acquisition date, after meeting the
requirements of Paragraph 36 of Ind AS 103. Such gain shall be attributed to
the acquirer (i.e. parent and not non-controlling interest) and may be
presented under `Other Items of other comprehensive income' in statement
of changes in equity. The above would also hold true in case of an
acquisition of a business which is accounted for in Separate Financial
Statements. However, if Paragraph 36 requirements are not met, then, the
acquirer shall recognize and disclose such gain directly in capital reserve as
per Paragraph 36A of Ind AS 103.

11. Additional information to be disclosed by way of
Notes to Statement of Profit and Loss
Besides the above disclosures, Note 11 of the General instructions for
Preparation of Statement of Profit and Loss also require disclosure by way of
notes, additional information regarding aggregate expenditure and income on
the following items:
11.1 Depreciation, amortization and impairment [Clause (i) of Note 11]
A company should disclose depreciation provided on Property, Plant and
Equipment, Investment Property and amortization of intangible assets and
any impairment under this head.
11.2 Payments to the auditor [Clause (ii) of Note 11]
Payments covered here should be for payments made to the firm of
auditor(s). Expenses incurred towards auditor's remuneration should be
disclosed under each of the following sub-heads as follows:
(a)   As Auditor,
(b)   For taxation matters,
(c)   For company law matters,
(d)   For other services,
(e)   For reimbursement of expenses;



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11.3 In case of NBFCs covered under section 135, amount of
expenditure incurred on corporate social responsibility activities
[Clause (iii) of Note 11]
This new requirement introduced by the Act is that the companies which are
covered under Section 135 are required to disclose the amount of
expenditure incurred on corporate social responsibility activities. The
Guidance Note on Accounting for Expenditure on Corporate Social
Responsibility Activities issued by the ICAI may be referred to for disclosure
requirements, which are essentially as under:
(a)   From the perspective of better financial reporting and in line with the
      requirements of Schedule III in this regard, it is recommended that all
      expenditure on CSR activities, that qualify to be recognised as
      expense should be recognised as a separate line item as `CSR
      expenditure' in the statement of profit and loss. Further, the relevant
      note should disclose the break-up of various heads of expenses
      included in the line item `CSR expenditure'.
(b)   The notes to accounts relating to CSR expenditure should also contain
      the following:
      (1)    Gross amount required to be spent by the company during the
             year.
      (2)    Amount spent during the year on:
             (i)    Construction/acquisition of any asset
             (ii)   On purposes other than (i) above
      The above disclosure, to the extent relevant, may also be made in the
      notes to the cash flow statement, where applicable.
(c)   Details of related party transactions, e.g., contribution to a trust
      controlled by the company in relation to CSR expenditure as per Ind
      AS 24, Related Party Disclosures.
(d)   Where a provision is made in accordance with the above paragraph,
      above the same should be presented as per the requirements of
      Schedule III to the Act. Further, movements in the provision during
      the year should be shown separately.




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

12. Part III ­ General Instructions for Preparation of
Consolidated Financial Statements
The Act defines a `subsidiary company' and an `associate company' which is
different from the definition of a `subsidiary', an `associate' and a `joint
venture' under Ind AS. An amendment to the Companies (Accounts) Rules,
2014 on 4 September 2015, newly inserted Rule 4A which state that
"financial statements shall be in the form specified in Schedule III to the Act
and comply with Accounting Standards or Indian Accounting Standards as
applicable, provided that the items contained in financial statements shall be
prepared in accordance with the definitions and other requirements specified
in the Accounting Standards or the Indian Accounting Standards, as the case
may be."
The Act mandates that the companies which have one or more subsidiaries
or associates (which as per the Act includes joint ventures) are required to
prepare Consolidated Financial Statements (CFS), except under certain
circumstances exempted under the Act and Rules.
Accordingly, Ind AS definitions of subsidiary, associate and joint venture
shall be considered for assessment of control, joint control and significant
influence even though the requirement of preparation of CFS will be
governed by the Act.
The companies are expected to prepare the Separate Financial Statements
in addition to Consolidated Financial Statements.
Part III of Division III to Schedule III provides for General Instructions for
Preparation of Consolidated Financial Statements. This is a new addition
brought in under the Act.
12.1 General requirements
Where a company is required to prepare Consolidated Financial Statements,
i.e. consolidated balance sheet, consolidated statement of changes in equity
and consolidated statement of profit and loss, the company shall mutatis
mutandis follow the requirements of this Schedule as applicable to a
company in preparation of the Separate Financial Statements. This means
that all the reporting requirements of the Schedule III need to be aggregated
and reported for the group as a whole in the Consolidated Financial
Statements. However, where the consolidated financial statements contains
elements pertaining to NBFCs and other than NBFCs, mixed basis of

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

presentation may be followed for consolidated financial statements where
both kinds of operations are significant.
In addition, the Consolidated Financial Statements shall disclose the
information as per the requirements specified in the applicable Ind AS
notified under the Companies Ind AS Rules, including the following, namely:
(1)   Profit or loss attributable to `non-controlling interest' and to `owners of
      the parent' in the statement of profit and loss shall be presented as
      allocation for the period. Further, `total comprehensive income' for the
      period attributable to `non-controlling interest' and to `owners of the
      parent' shall be presented in the statement of profit and loss as
      allocation for the period. The aforesaid disclosures for `total
      comprehensive income' shall also be made in the statement of
      changes in equity. In addition to the disclosure requirements in the
      Indian Accounting Standards, the aforesaid disclosures shall also be
      made in respect of `other comprehensive income'. This requirement is
      in line with Paragraph 81B of Ind AS 1.
(2)   `Non-controlling interests' in the Balance Sheet and in the Statement
      of Changes in Equity, within equity, shall be presented separately from
      the equity of the `owners of the parent'.
(3)   Investments accounted for using the equity method.
(4)   Ind AS 110 Paragraph B96 deals with changes in proportion held by
      non-controlling interest. When the proportion of the equity held by non-
      controlling interests changes, an entity shall adjust the carrying
      amounts of the controlling and non-controlling interests to reflect the
      changes in their relative interests in the subsidiary. The entity shall
      recognise directly in equity any difference between the amount by
      which the non-controlling interests are adjusted and the fair value of
      the consideration paid or received, and attribute it to the owners of the
      parent. An entity may present such gain / loss separately as `Non-
      controlling Interest Reserve' shown under `Other Reserves' by
      specifying the nature.
All of these would also indicate the need to obtain such information for all the
subsidiaries / associates for preparing the Consolidated Financial
Statements, including where such subsidiaries / associates are not audited
under the Act.


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

However, due note has to be taken of the fact that the Schedule III itself
states that the provisions of the schedule are to be followed mutatis mutandis
for a Consolidated Financial Statements. MCA has also clarified vide General
Circular No. 39 / 2014 dated 14th October 2014 that Schedule III to the Act
[Refer Annexure E (Pg 176)] read with the applicable Accounting Standards
does not envisage that a company while preparing its CFS merely repeats
the disclosures made by it under stand-alone accounts being consolidated.
Accordingly, the company would need to give all disclosures relevant for CFS
only.
In this context, the requirements of Division III to Schedule III shall apply to a
CFS, subject to the following exemptions / modifications based on the
relevance to the CFS:

 Division III to        Schedule      III Applicability to CFS (if left blank,
 Requirements                             is applicable, as it is)
 Share capital ­ authorized, issued, It is adequate to present paid up
 subscribed and paid up              capital and any calls in arrears
                                          Note: It has no relevance in the CFS
                                          context.
 Sources from which bonus shares Not relevant at CFS level and
 are issued, e.g., capitalisation of hence, may be dispensed with.
 profits or Reserves or from
 Securities Premium Account.
 Disclosure of all unutilized monies Not relevant at CFS level and
 out of the issue indicating the form hence, may be dispensed with.
 in which such unutilized funds have
 been invested.
 (a) Period     and     amount  of        On all these items, disclosure can
     continuing default as on the         be limited to those which are
     Balance     Sheet     date in        material to the CFS; materiality
     repayment of borrowings and          could be considered at 10% of the
     interest, shall be specified         respective balance sheet item
     separately in each case.
 (b) Loans and advances due by
     directors or other officers of the
     company or any of them either

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

     severally or jointly with any
     other persons or amounts due
     by firms or private companies
     respectively in which any
     director is a partner or a
     director or a member should be
     separately stated
 (c) Debts due by directors or other
     officers of the company or any
     of them either severally or
     jointly with any other person or
     debts due by firms or private
     companies respectively in which
     any director is a partner or a
     director or a member should be
     separately stated
 (d) Where in respect of an issue of
     securities made for a specific
     purpose, the whole or part of
     the amount has not been used
     for the specific purpose at the
     Balance Sheet date, there shall
     be indicated by way of note how
     such unutilized amounts have
     been used or invested.
 Share application money pending          Separate disclosure should be given
 allotment shall be classified into       for such monies due outside the
 equity or liability in accordance with   group in respect of entities which are
 relevant Ind AS. Share application       consolidated.
 money to the extent not refundable
 shall be shown under the head
 `Equity' and share application
 money to the extent refundable shall
 be separately shown under `Other
 financial liabilities'.
 Additional information for disclosure:   Not relevant at CFS level and
 (a) Payments to the auditor as (a)       hence, may be dispensed with.

                                    96
    GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

         auditor,(b) for taxation matters,
         (c) for company law matters, (d)
         for other services, (e) for
         reimbursement of expenses;
     (b) In case of Companies covered
         under section 135, amount of
         expenditure    incurred     on
         corporate social responsibility
         activities
     (c) Disclosures required as per the
         MSMED Act, 2006

    12.2 Indian Accounting Standards
    The Consolidated Financial Statements shall also disclose the information as
    required under the various Indian Accounting Standards applicable.
    12.3 Additional information on the entities included in the
         Consolidated Financial Statements
    Division III to Schedule III also requires specific disclosure of additional
    information on the entities which are included in the Consolidated Financial
    Statements in the following format:
    Name     Net Assets i.e.,   Share in profit   Share in other    Share in total
    of the    total assets         or loss        comprehensive    comprehensive
    entity    minus total                            income           income
    in the     liabilities
    Group
             As % of Amount As % of Amount As % of Amou As % of Amount
             Consolid       Consolid      consolidated nt     total
               ated           ated            other       comprehen
                net         profit or     comprehensi         sive
              assets          loss         ve income        income

Parent
Subsidiari
es
Indian
1
2


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    GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

3
...
.....
Foreign
1
2
3
...
.....
Non-
controlling
interest in
all
subsidiari
es
Associate
s
(Investme
nt as per
equity
method)
Indian
1
2
3
...
...
Foreign
1
2
3
...
.....
Joint
Ventures
(Investme
nt as per


                                     98
      GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

equity
method)
Indian
1
2
3
...
.....
Foreign
1
2
3
...
.....
TOTAL

    Certain joint arrangements which are of the nature of joint operations will be
    consolidated to the extent of the share of joint operator based on the
    principles laid down in Ind AS 111. Even though the above table does not
    specify a disclosure about joint operations' net assets, profit or loss, other
    comprehensive income and total comprehensive income, it should be
    disclosed in similar manner as disclosed for joint ventures. This requirement
    would apply only if a joint operation is conducted through a separate legal
    entity.
    Moreover, as regards consolidation adjustments (including elimination of
    intra-group transactions), it should be ensured that these are either disclosed
    as a single line item separately or adjusted in the information (e.g., net
    assets) disclosed for the parent and its each component.
    These are necessary in order to match the respective amounts reported in
    Consolidated Financial Statements with the respective total amounts in the
    above table.
    12.4 Entities not consolidated
    Entities which are not covered in the Consolidated Financial Statements,
    whether subsidiaries, associates or joint ventures are to be listed in the
    Consolidated Financial Statements along with the reasons for not

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

consolidating such entities. Additional disclosure requirements as set out in
Ind AS 112 should also be complied with in this regard.
12.5 Definition of terms relevant for consolidation
The terms "Control", "Subsidiary" and "Associate" are defined very differently
in the Act as compared to definition in Ind AS. Rule 6 of the Companies
(Accounts) Rules, 2015 however states that Consolidated Financial
Statements shall be prepared in accordance with the provisions of Division III
to Schedule III of the Act and the applicable Ind AS. Further, Rule 4A of the
Companies (Accounts) Rules, 2015 provides that the items contained in the
financial statements shall be prepared in accordance with the definitions and
other requirements specified in Ind AS.




                                  100
                                                     Annexure A
"Division III
Financial Statements for a Non-Banking Financial Company (NBFC) whose
financial statements are drawn up in compliance of the Companies (Indian
Accounting Standards) Rules, 2015.
GENERAL INSTURCTIONS FOR PREPARATION OF FINANCIAL
STATEMENTS OF A NON- BANKING FINANCIAL COMPANY (NBFC)
THAT IS REQUIRED TO COMPLY WITH INDIAN ACCOUNTING
STANDARDS (Ind AS)
1.    Every Non-Banking Financial company as defined in the Companies
      (Indian Accounting Standards) (Amendment) Rules, 2016 to which
      Indian Accounting Standards apply, shall prepare its financial
      statements in accordance with this Schedule or with such modification
      as may be required under certain circumstances.
2.    Where compliance with the requirements of relevant Act, Regulations,
      Guidelines or Circulars issued by the relevant regulator from time to
      time including Indian Accounting Standards (Ind AS) (except the
      option of presenting assets and liabilities in accordance with current,
      non-current classification as provided by relevant Ind AS) as
      applicable to the NBFCs require any change in treatment or disclosure
      including addition, amendment, substitution or deletion in the head or
      sub-head or any changes inter se, in the financial statements or
      statements forming part thereof , the same shall be made and the
      requirements under this Schedule shall stand modified accordingly.
3.    The disclosure requirements specified in this Schedule are in addition
      to and not in substitution of the disclosure requirements specified in
      the Indian Accounting Standards. Additional disclosures specified in
      the Indian Accounting Standards shall be made in the Notes or by way
      of additional statement or statements unless required to be disclosed
      on the face of the Financial Statements. Similarly, all other disclosures
      as required by the Companies Act, 2013 shall be made in the Notes in
      addition to the requirements set out in this Schedule.




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

4.    (i)    Notes shall contain information in addition to that presented in
             the Financial Statements and shall provide where required-
             (a)    narrative descriptions or disaggregations of items
                    recognised in those statements; and
             (b)    information about items that do not qualify for recognition
                    in those statements.
      (ii)   Each item on the face of the Balance Sheet, Statement of
             Changes in Equity and Statement of Profit and Loss shall be
             cross-referenced to any related information in the Notes. In
             preparing the Financial Statements including the Notes, a
             balance shall be maintained between providing excessive
             details that may not assist users of Financial Statements and
             not providing important information as a result of too much
             aggregation.
5.    Depending upon the total income of the NBFC, the figures appearing
      in the Financial Statements shall be rounded off as below:
                   Total Income                         Rounding off
       (i) less than one hundred crore      To     the     nearest    hundreds,
       rupees                               thousands, lakhs or
                                            millions, or decimals thereof.
       (ii) one hundred crore rupees or     To the nearest, lakhs, millions or
       more                                 crores, or
                                            decimals thereof.
      Once a unit of measurement is used, it should be used uniformly in the
      Financial Statements.
6.    Financial Statements shall contain the corresponding amounts
      (comparatives) for the immediately preceding reporting period for all
      items shown in the Financial Statements including Notes except in the
      case of first Financial Statements after incorporation.
7.    Financial Statements shall disclose all `material' items, i.e., the items if
      they could, individually or collectively, influence the economic
      decisions that users make on the basis of the financial statements.
      Materiality depends on the size or nature of the item or a combination
      of both, to be judged in the particular circumstances.

                                    102
GN on Division III - Schedule III to the Companies Act 2013

8.    For the purpose of this Schedule, the terms used herein shall have the
      same meanings assigned to them in Indian Accounting Standards.
9.    Where any Act, Regulation, Guidelines or Circulars issued by the
      relevant regulators from time to time requires specific disclosures to
      be made in the standalone financial statements of an NBFC, the said
      disclosures shall be made in addition to those required under this
      Schedule.
10.   The NBFCs preparing financial statements as per this Schedule may
      change the order of presentation of line items on the face of financial
      statements or order of line items within the schedules in order of
      liquidity, if appropriate, considering the operations performed by the
      NBFC.
Note: This Schedule sets out the minimum requirements for disclosure on
the face of the Financial Statements, i.e., Balance Sheet, Statement of
Changes in Equity for the period, the Statement of Profit and Loss for the
period (The term `Statement of Profit and Loss' has the same meaning as `
Profit and Loss Account') and Notes. Cash flow statement shall be prepared,
where applicable, in accordance with the requirements of the relevant Indian
Accounting Standard.
Line items, sub-line items and sub-totals shall be presented as an addition or
substitution on the face of the Financial Statements when such presentation
is relevant to an understanding of the NBFC's financial position or
performance or to cater to categories of NBFCs as prescribed by the relevant
regulator or sector-specific disclosure requirements or when required for
compliance with the amendments to the relevant statutes or under the Indian
Accounting Standards.




                                  103
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

                            PART I ­BALANCE SHEET
Name of the Non-Banking Financial Company.........................
Balance Sheet as at ...........................
(Rupees in............)

                      Particulars                 Note   Figures as Figures as
                                                  No.    at the end at the end
                                                         of current   of the
                                                         reporting previous
                                                           period   reporting
                                                                      period
                           1                                2           3
            ASSETS
 (1)    Financial Assets
 (a)    Cash and cash equivalents
 (b)    Bank Balance other than (a)
        above
 (c)    Derivative financial instruments
 (d)    Receivables
        (I) Trade Receivables
        (II) Other Receivables
 (e)    Loans
 (f)    Investments
 (g)    Other Financial assets (to be
        specified)


 (2)    Non-financial Assets
 (a)    Inventories
 (b)    Current tax assets (Net)
 (c)    Deferred tax Assets (Net)
 (d)    Investment Property


                                       104
GN on Division III - Schedule III to the Companies Act 2013

 (e)    Biological assets       other     than
        bearer plants
 (f)    Property, Plant and Equipment
 (g)    Capital work-in-progress
 (h)    Intangible      assets           under
        development
 (i)    Goodwill
 (j)    Other Intangible assets
 (k)    Other non-financial assets (to be
        specified)
       Total Assets
        LIABILITIES AND EQUITY
        LIABILITIES
 (1)    Financial Liabilities
 (a)    Derivative financial instruments
 (b)    Payables
        (I) Trade Payables
            (i) total outstanding dues of
                micro enterprises and
                small enterprises
            (ii) total outstanding dues of
                 creditors other than
                 micro enterprises and
                 small enterprises
        (II) Other Payables
            (i) total outstanding dues of
                micro enterprises and
                small enterprises
            (ii) total outstanding dues of
                 creditors other than
                 micro enterprises and
                 small enterprises


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 (c)      Debt Securities
 (d)      Borrowings (Other than Debt
          Securities)
 (e)      Deposits
 (f)      Subordinated Liabilities
 (g)      Other financial liabilities(to be
          specified)
  (2)     Non-Financial Liabilities
 (a)      Current tax liabilities (Net)
 (b)      Provisions
 (c)      Deferred tax liabilities (Net)
 (d)      Other non-financial liabilities(to be
          specified)


 (3)      EQUITY
 (a)      Equity Share capital
 (b)      Other Equity
         Total Liabilities and Equity

See accompanying notes to the financial statements
                       STATEMENT OF CHANGES IN EQUITY
Name of the Non-Banking Financial Company.........................
Statement of Changes in Equity for the period ended ........................
(Rupees in.................)
       A. Equity Share Capital

 Balance at the beginning         Changes in equity       Balance at the end of
  of the reporting period         share capital during     the reporting period
                                       the year
              Xxx                               xxx                Xxx




                                          106
                                                            GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...



B. Other Equity
                 Share Equity             Reserves and Surplus              Debt       Equity Effecti Revalu Exchang       Other    Money Total
                applicati compon    Statut Capita Securiti Other Retain instruments Instruments  ve    ation      e      items of   receiv
                   on      ent of    ory     l      es Reserv ed          through     through portio Surplus differenc     Other      ed
                 money compou       Reser Reser Premiu es Earnin Other                 Other    n of           es on     Compre     agains
                pending nd           ve s ve        m (specif gs Comprehen Comprehen Cash                    translati   hensive       t
                allotme financial                            y              sive        sive    Flow           ng the     Income    share
                   nt instrume                            nature)         Income      Income Hedge           financial   (specify   warra
                            nts                                                                   s          stateme      nature)    nt s
                                                                                                              nts of a
                                                                                                              foreign
                                                                                                             operatio
                                                                                                                  n
Balance at
the
beginning
of        the
reporting
period
Changes in
accounting
policy/prior
period
errors




                                                                     107
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...


Restated
balance at
the
beginning
of        the
reporting
period
Total
Comprehen
sive Income
for the year
Dividends
Transfer to
retained
earnings
Any other
change (to
be
specified)
Balance at
the end of
the
reporting
period




                                                        108
 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Note:
(i)     Remeasurement of defined benefit plans and fair value changes
        relating to own credit risk of financial liabilities designated at fair value
        through profit or loss shall be recognised as a part of retained earnings
        with separate disclosure of such items alongwith the relevant amounts
        in the Notes.
(ii)    A description of the purpose of each reserve within equity shall be
        disclosed in the Notes.
Notes
GENERAL INSTRUCTIONS FOR PREPARATION OF BALANCE SHEET
A Non-Banking Financial company shall disclose the following in the notes to
accounts:
(A)     Cash and cash equivalents: Cash and cash equivalents shall be
        classified as:
        (i)     Cash on hand
        (ii)    Balances with Banks (of the nature of cash and cash
                equivalents);
        (iii)   Cheques, drafts on hand; and
        (iv)    Others (specify nature).
        Cash and Bank balances: The following disclosures with regard to
        cash and bank balances shall be made:
        (i)     Earmarked balances with banks (for example, for unpaid
                dividend) shall be separately stated.
        (ii)    Balances with banks to the extent held as margin money or
                security against the borrowings, guarantees, other commitments
                shall be disclosed separately.
        (iii)   Repatriation restrictions, if any, in respect of cash and bank
                balances shall be separately stated.
(B)     Derivative financial Instruments
        1       Explain use of derivatives
        2       Cross-reference to Financial Risks section for management of
                risks arising from derivatives

                                      109
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

       Part I            (Current Year)               (Previous Year)
                   Notional  Fair     Fair     Notional    Fair     Fair
                   amounts Value ­ Value - amounts        Value - Value -
                            Assets Liabilities            Assets Liabilities
 (i) Currency
 derivatives:
 -Spot     and
 forwards
 -Currency
 Futures
 -Currency
 swaps
 -Options
 purchased
 -Options sold
 (written)
 -Others
 Subtotal (i)


 (ii) Interest
 rate
 Derivatives
 -Forward Rate
 Agreements
 and Interest
 Rate Swaps
 -Options
 Purchased
 -Options sold
 (written)
 -Futures
 -Others
 Subtotal (ii)
 (iii)   Credit
 derivatives
 (iv)    Equity
 linked
 Derivatives
 (v)       Other


                                   110
                     GN on Division III - Schedule III to the Companies Act 2013

derivatives
(Please
specify)


Total
Derivative
Financial
Instruments
(i) + (ii) + (iii)
+ (iv) + (v)
Part II
Included      in
above
(Part I) are
derivatives
held         for
hedging and
risk
management
purposes as
follows:
(i) Fair value
hedging:
- Currency
Derivatives
- Interest rate
derivatives
- Credit
derivatives
- Equity linked
Derivatives
- Others
Subtotal (i)
(ii) Cash flow
hedging:
-     Currency
derivatives
- Interest rate
derivatives
-          Credit


                                       111
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 derivatives
 - Equity linked
 derivatives
 - Others
 Subtotal (ii)
 (iii)Net
 investment
 hedging:
 (iv)
 Undesignated
 Derivatives
 Total
 Derivative
 Financial
 Instruments
 (i) + (ii) + (iii)
 + (iv)

With respect to hedges and hedge accounting, NBFCs may provide a
description in accordance with the requirements of Indian Accounting
Standards, of how derivatives are used for hedging, explain types of hedges
recognized for accounting purposes and their usage/application by the entity.
(C) Receivables:
(i)     Receivables shall be sub-classified as:
        (a)      Receivables considered good - Secured;
        (b)      Receivables considered good - Unsecured;
        (c)      Receivables which have significant increase in Credit Risk; and
        (d)      Receivables - credit impaired
(ii)    Allowance for impairment loss allowance shall be disclosed under the
        relevant heads separately.
(iii)   Debts due by directors or other officers of the NBFC or any of them
        either severally or jointly with any other person or debts due by firms
        including limited liability partnerships (LLPs), private companies
        respectively in which any director is a partner or a director or a
        member should be separately stated.



                                      112
                                                       GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...



(D) Loans
                                         (Current Year)                                          (Previous Year)
                    Amortised          At Fair Value           Sub- Total Amortise             At Fair Value           Sub-     Total
                      cost    Through Through Designat total                   d cost Through Through Designat total
                                Other profit or ed at fair                              Other profit or ed at fair
                              Compreh loss           value                            Compreh loss           value
                                ensive              through                             ensive              through
                               Income              profit or                           Income               profit or
                                                      loss                                                    loss
                       (1)        (2)       (3)        (4)   (5 = 2 + (6 = 1 +   (7)      (8)       (9)       (10)    (11 = 8   (12 =
                                                              3 + 4)     5)                                            +9+      (7) +
                                                                                                                        10)      (11)
 Loans
 (A)
 (i) Bills
 Purchased and
 Bills Discounted
 (ii) Loans
 repayable on
 Demand
 (iii) Term
 Loans
 (iv) Leasing
 (v) Factoring



                                                               113
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...


 (vi) Others (to
 be specified)
 Total (A) ­
 Gross
 Less:
 Impairment loss
 allowance
 Total (A)
 Net

 (B) (i) Secured
 by tangible
 assets
 (ii) Secured by
 intangible
 assets
 (iii) Covered by
 Bank/Governme
 nt Guarantees
 (iv) Unsecured
 Total (B)-
 Gross
 Less:
 Impairment loss




                                                        114
                           GN on Division III - Schedule III to the Companies Act 2013


Allowance
Total (B)-
Net
(C) (I)
Loans in India
(i) Public
Sector
(ii) Others (to be
specified)
Total (C)-
Gross
Less:
Impairment loss
Allowance
Total(C) (I)-Net
(C) (II) Loans
outside India
Less:
Impairment loss
Allowance
Total (C) (II)-
Net
Total C(I) and C
(II)




                     115
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...



(E) Investments

Investments
 Investme                           (Current Year)                                         (Previous Year)
 nts      Amortis       At Fair Value         Sub-   Others Total Amortis       At Fair Value        Sub- Other Total
          ed cost Through Through Design Total         *          ed cost Through Throug Designa Total     s*
                   Other    profit ated at                                 Other h profit ted at
                  Compre or loss       fair                               Compre or loss       fair
                  hensive             value                               hensive             value
                  Income            through                               Income            through
                                      profit                                                  profit
                                     or loss                                                 or loss
              (1)    (2)      (3)     (4)    (5) =    (6)     (7) =   (8)   (9)     (10)     (11)   (12) =   (13)   (14) =
                                             (2) +            (1) +                                  (9) +           (8) +
                                             (3) +            (5) +                                 (10) +          (12) +
                                              (4)              (6)                                   (11)            (13)
 Mutual
 funds
 Governme
 nt
 securities




                                                            116
                   GN on Division III - Schedule III to the Companies Act 2013



Other
approved
securities
Debt
securities
Equity
instrumen
ts
Subsidiari
es
Associate
s
Joint
Ventures
Others
(specify)
Total ­
Gross (A)
(i)
Investmen




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...



 ts outside
 India
 (ii)
 Investmen
 ts in India
 Total (B)
 Total (A)
 to     tally
 with (B)
 Less:
 Allowance
 for
 Impairme
 nt
 loss (C)
 Total ­
 Net
 D= (A)-
 (C)
 * Other basis of measurement such as cost may be explained as a footnote




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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

(F) Investment Property
A reconciliation of the gross and net carrying amounts of each class of
property at the beginning and end of the reporting period showing additions,
disposals, acquisitions through business combinations and other adjustments
and the related depreciation and impairment losses or reversals shall be
disclosed separately.
(G) Biological Assets other than bearer plants:
A reconciliation of the carrying amounts of each class of assets at the
beginning and end of the reporting period showing additions, disposals,
acquisitions through business combinations and other adjustments shall be
disclosed separately.
(H) Property, Plant and Equipment
(i)     Classification shall be given as:
        (a) Land
        (b) Buildings
        (c)   Plant and Equipment
        (d) Furniture and Fixtures
        (e) Vehicles
        (f)   Office equipment
        (g) Bearer Plants
        (h) Others (specify nature)
(ii)    Assets under lease shall be separately specified under each class of
        asset.
(iii)   A reconciliation of the gross and net carrying amounts of each class of
        assets at the beginning and end of the reporting period showing
        additions, disposals, acquisitions through business combinations and
        other adjustments and the related depreciation and impairment losses
        or reversals shall be disclosed separatel y.
(I)     Goodwill
A reconciliation of the gross and net carrying amount of goodwill at the
beginning and end of the reporting period showing additions, impairments,
disposals and other adjustments.

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(J) Other Intangible assets
(i)    Classification shall be given as:
       (a)   Brands or trademarks
       (b)   Computer software
       (c)   Mastheads and publishing titles
       (d)   Mining rights
       (e)   Copyrights, patents, other intellectual property rights, services
             and operating rights
       (f)   Recipes, formulae, models, designs and prototypes
       (g)   Licenses and franchises
       (h)   Others (specify nature)
(ii)   A reconciliation of the gross and net carrying amounts of each class of
       assets at the beginning and end of the reporting period showing
       additions, disposals, acquisitions through business combinations and
       other adjustments and the related amortization and impairment losses
       or reversals shall be disclosed separately.
(K) Payables
The following details relating to Micro, Small and Medium Enterprises shall
be disclosed:
(a)    the principal amount and the interest due thereon (to be shown
       separately) remaining unpaid to any supplier at the end of each
       accounting year;
(b)    the amount of interest paid by the buyer in terms of section 16 of the
       Micro, Small and Medium Enterprises Development Act, 2006, along
       with the amount of the payment made to the supplier beyond the
       appointed day during each accounting year;
(c)    the amount of interest due and payable for the period of delay in
       making payment (which have been paid but beyond the appointed day
       during the year) but without adding the interest specified under the
       Micro, Small and Medium Enterprises Development Act, 2006;
(d)    the amount of interest accrued and remaining unpaid at the end of
       each accounting year; and


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(e)    the amount of further interest remaining due and payable even in the
       succeeding years, until such date when the interest dues above are
       actually paid to the small enterprise, for the purpose of disallowance of
       a deductible expenditure under section 23 of the Micro, Small and
       Medium Enterprises Development Act, 2006.
       Explanation.- The terms `appointed day', `buyer', `enterprise', `micro
       enterprise', `small enterprise' and `supplier', shall have the same
       meaning assigned to those under clauses (b), (d), (e), (h), (m) and (n)
       respectively of section 2 of the Micro, Small and Medium Enterprises
       Development Act, 2006."
(L) Debt Securities
                      (Current Year)                       (Previous Year)
                At     At Fair Designate Total    At    At Fair DesignatedTotal
             Amortised Value d at fair         Amortise Value     at fair
               Cost Through value               d Cost Through value
                      profit or through                profit or through
                        loss profit or                   loss profit or
                                  loss                             loss
                (1)      (2)      (3)        (4) =   (5)      (6)      (7)   (8) =
                                             (1) +                           (5) +
                                             (2) +                           (6) +
                                              (3)                             (7)
Liability
component
of
compound
financial
instruments
Others
(Bonds/
Debenture
etc.)
Total (A)
Debt
securities
in India

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Debt
securities
outside
India
Total (B)
to tally
with (A)

(i)     bonds or debentures (along with the rate of interest, and particulars of
        redemption or conversion, as the case maybe) shall be stated in
        descending order of maturity or conversion, starting from earliest
        redemption or conversion date, as the case may be. Where
        bonds/debentures are redeemable by installments, the date of maturity
        for this purpose must be reckoned as the date on which the first
        installment becomes due;
(ii)    particulars of any redeemed bonds or debentures which the NBFC has
        power to reissue shall be disclosed
(M) Borrowings (Other than Debt Securities)
                       (Current Year)                 (Previous Year)
                At At fair Designa Total        At At fair Designa Total
              Amorti value ted                Amorti value ted
               sed Throu at fair               sed Throu at fair
               Cost    gh    value             Cost    gh    value
                     profit through                  profit through
                       or profit or                    or profit or
                      loss loss                      loss loss
                (1)    (2)     (3) (4)=(1)+(2) (1)     (2)     (3) (4)=(1)+(2)
                                      +(3)                            +(3)
(a)Term
loans
(i)from
banks
(ii)from
other
parties
(b)Deferre
d
payment
liabilities


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(c)Loans
from
related
parties
(d)
Finance
lease
obligations
(e)Liability
component
of
compound
financial
instrument
s
(f)Loans
repayable
on demand
(i)from
banks
(ii)from
(g)
       Oth
er    loans
(specify
nature)
Total (A)
Borrowings
India
Borrowings
outside
India
Total (B)
to tally
with (A)

(i)     Borrowings shall further be sub-classified as secured and unsecured.
        Nature of security shall be specified separately in each case.


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(ii)    Where borrowings have been guaranteed by directors or others, the
        aggregate amount of such borrowings under each head shall be
        disclosed;
(iii)   terms of repayment of term loans and other loans shall be stated; and
(iv)    period and amount of default as on the balance sheet date in
        repayment of borrowings and interest shall be specified separately in
        each case.
(N) Deposits
                       (Current Year)                        (Previous Year)
                  At  At fair    Desig        Total     At   At fair    Desig     Total
                Amort value      nated                Amorti value      nated
                 ised throug     at fair               sed throug       at fair
                Cost     h       value                 Cost     h       value
                       profit   throug                       profit    throug
                      or loss       h                          or          h
                                 profit                       loss      profit
                                or loss                                   or
                                                                         loss
                 (1)    (2)       (3)      (4)=(1)     (5)     (6)       (7)      (8)=(5)
                                           + (2) +                                + (6) +
                                             (3)                                    (7)
Deposits
(i) Public
Deposits
(ii)     From
Banks
(iii)From
Others
Total




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(O) Subordinated Liabilities
                          (Current Year)                  (Previous Year)
                  At     At fair Design Total        At    At fair Design Total
                Amorti    value ated at            Amorti value ated at
                 sed     throug fair                sed throug fair
                 Cost    h profit value             Cost h profit value
                         or loss throug                   or loss throug
                                  h profit                         h profit
                                  or loss                          or loss
                 (1)        (2)     (3) (4)=(1)+ (5)        (6)      (7) (8)=(5)+
                                           (2)+(3)                          (6)+(7)
Perpetual
Debt
Instruments
to the
extent that
do        not
qualify as
equity
Preference
Shares
other than
those that
qualify as
Equity
Others
(specifying
the nature
and type of
instrument
issued)
Total (A)

Subordinate
d Liabilities
in India
Subordinated
Liabilities
outside
India
Total (B) to
tally with
(A)

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(P)    Other Financial Liabilities (to be specified):
Other Financial liabilities shall be classified as-
(a)    Interest accrued;
(b)    Unpaid dividends;
(c)    Application money received for allotment of securities to the extent
       refundable and interest accrued thereon;
(d)    Unpaid matured deposits and interest accrued thereon;
(e)    Unpaid matured debentures and interest accrued thereon;
(f)    Margin money (to be specified);and
(g)    Others (specify nature)
(Q)    Provisions:
The amounts shall be classified as-
(a)    Provision for employee benefits; and
(b)    Others (specify nature)
(R)    Other Non-financial liabilities (to be specified):
(a)    Revenue received in advance;
(b)    Other advances (Specify nature); and
(c)    Others (specify nature).
(S)    Equity Share Capital : For each class of equity share capital:
(a)    the number and amount of shares authorized;
(b)    the number of shares issued, subscribed and fully paid, and
       subscribed but not fully paid;
(c)    par value per share;
(d)    a reconciliation of the number of shares outstanding at the beginning
       and at the end of the period;
(e)    the rights, preferences and restrictions attaching to each class of
       shares including restrictions on the distribution of dividends and the
       repayment of capital;


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

(f)   shares in respect of each class in the company held by its holding
      company or its ultimate holding company including shares held by or
      by subsidiaries or associates of the holding company or the
      ultimate holding company in aggregate;
(g)   shares in the company held by each shareholder holding more than
      five percent shares specifying the number of shares held;
(h)   shares reserved for issue under options and contracts/commitments
      for the sale of shares or disinvestment, including the terms and
      amounts;
(i)   For the period of five years immediately preceding the date at which
      the Balance Sheet is prepared:
      ·     Aggregate number and class of shares allotted as fully paid up
            pursuant to contract without payment being received in cash;
      ·     Aggregate number and class of shares allotted as fully paid up
            by way of bonus shares; and
      ·     Aggregate number and class of shares bought back;
(j)   terms of any securities convertible into equity shares issued along with
      the earliest date of conversion in descending order starting from the
      farthest such date;
(k)   calls unpaid (showing aggregate value of calls unpaid by directors and
      officers);
(l)   forfeited shares (amount originally paid up)
(m)   An NBFC shall disclose information that enables users of its financial
      statements to evaluate the NBFC's objectives, policies and processes
      for managing capital.
(T)   Other Equity
(i)   Other Reserves' shall be classified in the notes as:
      (a)   Capital Redemption Reserve;
      (b)   Debenture Redemption Reserve;
      (c)   Share Options Outstanding Account;
      (d)   Statutory Reserves; and


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

        (e)   Others ­ (specify the nature and purpose of each reserve and
              the amount in respect thereof); (Additions and deductions since
              last balance sheet to be shown under each of the specified
              heads)
(ii)    Retained Earnings represents surplus i.e. balance of the relevant
        column in the Statement of Changes in Equity;
(iii)   A reserve specifically represented by earmarked investments shall
        disclose the fact that it is so represented;
(iv)    Debit balance of Statement of Profit and Loss shall be shown as a
        negative figure under the head `retained earnings'. Similarly, the
        balance of `Other Equity', after adjusting negative balance of retained
        earnings, if any, shall be shown under the head `Other Equity' even if
        the resulting figure is in the negative;
(v)     Under the sub-head `Other Equity', disclosure shall be made for the
        nature and amount of each item; and
(vi)    Under the sub-head `Other Equity', disclosure shall be made for
        conditions or restrictions for distribution attached to statutory reserves.
(U)     Contingent Liabilities and commitments (to the extent not
        provided for)
(i)     Contingent Liabilities shall be classified as:
        (a)   Claims against the company not acknowledged as debt;
        (b)   Guarantees excluding financial guarantees; and
        (c)   Other money for which the company is contingently liable
(ii)    Commitments shall be classified as:
        (a)   Estimated amount of contracts remaining to be executed on
              capital account and not provided for;
        (b)   Uncalled liability on shares and other investments partly paid;
        (c)   Other commitments (specify nature).
(V)     The amount of dividends proposed to be distributed to equity and
        preference shareholders for the period and the related amount per
        share shall be disclosed separately. Arrears of fixed cumulative
        dividends on irredeemable preference shares shall also be disclosed
        separately.

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(W)   Where in respect of an issue of securities made for a specific purpose
      the whole or part of amount has not been used for the specific purpose
      at the Balance Sheet date, there shall be indicated by way of note how
      such unutilized amounts have been used or invested.
(X)   Other Classification related General Instructions
1.    When an NBFC applies an accounting policy retrospectively or makes
      a restatement of items in the financial statements or when it
      reclassifies items in its financial statements, the NBFC shall attach to
      the Balance Sheet, a "Balance Sheet" as at the beginning of the
      earliest comparative period presented.
2.    Share application money pending allotment shall be classified into
      equity or liability in accordance with relevant Indian Accounting
      Standards. Share application money to the extent not refundable shall
      be shown under the head Equity and share application money to the
      extent refundable shall be separately shown under `Other financial
      liabilities'.
3.    Preference shares including premium received on issue, shall be
      classified and presented as `Equity' or `Liability' in accordance with the
      requirements of the relevant Indian Accounting Standards.
      Accordingly, the disclosure and presentation requirements in this
      regard applicable to the relevant class of equity or liability shall be
      applicable mutatis mutandis to the preference shares. For instance,
      plain vanila redeemable preference shares shall be classified and
      presented under `liabilities' as `borrowings' or `subordinated liability'
      and the disclosure requirements in this regard applicable to such
      borrowings shall be applicable mutatis mutandis to redeemable
      preference shares.
4.    Compound financial instruments such as convertible debentures,
      where split into equity and liability components, as per the
      requirements of the relevant Indian Accounting Standards, shall be
      classified and presented under the relevant heads in ``Liabilities and
      Equity'.
5.    Regulatory Deferral Account Balances shall be presented in the
      Balance Sheet in accordance with the relevant Indian Accounting
      Standards.


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

                PART II ­ STATEMENT OF PROFIT AND LOSS
Name of the Non-Banking Financial Company.........................
Statement of Profit and Loss for the period ended ...........................
(Rupees in .................)

                       Particulars                    Note Figures for Figures for
                                                      No. the current the previous
                                                            reporting   reporting
                                                              period      period
             Revenue from operations
(i)          Interest Income
(ii)         Dividend Income
(iii)        Rental Income
(iv)         Fees   and          commission
             Income
(v)          Net gain       on   fair      value
             changes
(vi)         Net gain on derecognition of
             financial instruments
             under       amortised   cost
             category
(vii)        Sale of products(including
             Excise Duty)
(viii)      Sale of services
(ix)          Others (to be specified)
(I)         Total    Revenue                from
            operations


(II)         Other Income            (to         be
             specified)
(III)        Total Income (I+II)




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

         Expenses
(i)      Finance Costs
(ii)     Fees    and          commission
         expense
(iii)    Net loss      on     fair     value
         changes
(iv)     Net loss on derecognition of
         financial instruments under
         amortised cost category
(v)      Impairment      on      financial
         instruments
(vi)     Cost of materials consumed
(vii)    Purchases of Stock-in-trade
(viii)   Changes in Inventories of
         finished goods, stock-in-
         trade and work-in- progress
(ix)     Employee Benefits Expenses
(x)      Depreciation,  amortization
         and impairment
(xi)     Others expenses             (to    be
         specified)
(IV )    Total Expenses (IV)


(V )      Profit / (loss) before
          exceptional items and tax
          (III-
         IV)
(VI )    Exceptional items
(VII )   Profit/(loss) before tax (V -VI
         )
(VIII)   Tax Expense:


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              (1) Current Tax
              (2) Deferred Tax
(IX)      Profit / (loss)      for    the
          period      from     continuing
          operations(VII-VIII)
(X)       Profit/(loss)           from
          discontinued operations
(XI)      Tax Expense of discontinued
          operations
(XII)     Profit/(loss)           from
          discontinued operations(After
          tax) (X-XI)
(XIII)    Profit/(loss) for the period
          (IX+XII)


(XIV)     Other          Comprehensive
          Income
          (A) (i) Items that will not be
          reclassified to profit or loss
          (specify items and amounts)


          (ii) Income tax relating to
          items that will not be
          reclassified to profit or loss
          Subtotal (A)
          (B) (i) Items that will be
          reclassified to profit or
          loss
          (specify items and amounts)
          (ii) Income tax relating to
          items that will be
          reclassified to profit or loss


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

           Subtotal (B)
           Other      Comprehensive
           Income (A + B)


 (XV)      Total       Comprehensive
           Income for the period
           (XIII+XIV)     (Comprising
           Profit (Loss) and other
           Comprehensive Income for
           the period)


 (XVI)     Earnings per equity share
           (for continuing operations)
           Basic (Rs.)
           Diluted (Rs.)


 (XVII)    Earnings per equity share
           (for discontinued
           operations)
           Basic (Rs.)
           Diluted (Rs.)


 (XVIII)   Earnings per equity share
           (for    continuing     and
           discontinued operations)
           Basic (Rs.)
           Diluted (Rs.)
See accompanying notes to the financial statements




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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Notes
GENERAL INSTRUCTIONS FOR PREPARATION OF STATEMENT OF
PROFIT AND LOSS
1.       The provisions of this Part shall apply to the income and expenditure
         account, in like manner as they apply to a Statement of Profit and
         Loss.
2.       The Statement of Profit and Loss shall include:
         (A) Profit or loss for the period;
         (B) Other Comprehensive Income for the period.
         The sum of (A) and (B) above is `Total Comprehensive Income'.
3.       Interest Income
       Particulars              (Current Year)              (Previous Year)
                           On         On     Interest    On        On    Interest
                       Financial Financial Income Financial Financial Income
                         Assets Assets          on     Assets Assets         on
                       measured measured Financial measured measured Financial
                         at fair      at      Assets at fair       at     Assets
                         value Amortised Classified value Amortised classified
                        through      Cost     at fair through     Cost    at fair
                          OCI                 Value     OCI               value
                                             through                     through
                                             profit or                   profit or
                                               Loss                         loss
     Interest     on
     Loans
     Interest income
     from
     investments
     Interest     on
     deposits
     with Banks
     Other interest
     Income
     Total


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 GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

     4. Net gain/ (loss) on fair value changes*

             Particulars                    (Current Year)      (Previous Year)
      (A) Net gain/ (loss) on
      financial instruments at fair
      value through profit or loss
      (i) On trading portfolio
      - Investments
      - Derivatives
      - Others
      (ii)      On       financial
      instruments designated at
      fair value through profit or
      loss
      (B) Others (to be specified)
      Total Net gain/(loss) on fair
      value changes (C)
      Fair Value changes:
      -Realised
      -Unrealised
     Total Net gain/(loss) on fair
     value changes(D) to tally
     with (C)
*Fair value changes in this schedule are other than those arising on account
of accrued interest income/expense.
5.       Other Income (to be specified)

                      Particulars                 (Current Year) (Previous Year)
     Net gain/(loss) on ineffective portion of
     hedges
     Net gain/(loss) on derecognition of
     property, plant and equipment
     Net gain or loss on foreign currency


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     transaction and translation (other than
     considered as finance cost) (to be
     specified)
     Others ( to be specified)*
     Total
* Any item under the subhead `Others' which exceeds one per cent of the
total income to be presented separately.
6.       Finance Costs

               Particulars               (Current Year)          (Previous Year)
                                         On         On             On          On
                                     Financial Financial       Financial Financial
                                     liabilities Liabilities   liabilities liabilities
                                     measured measured         measured measured
                                       at fair       at          at fair       at
                                       value     Amortised       value     Amortised
                                      through       Cost        through       Cost
                                      profit or                 profit or
                                        Loss                      loss
       Interest on deposits
       Interest on borrowings
       Interest      on       debt
       securities
       Interest on subordinated
       liabilities
       Other interest expense
       Total
7.       Employee Benefits Expenses

                     Particulars                   (Current Year) (Previous Year)
       Salaries and wages
       Contribution to provident and other
       funds
       Share Based Payments to employees


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

       Staff welfare expenses
       Others (to be specified)
       Total
8.      Impairment on financial instruments

             Particulars            (Current Year)           (Previous Year)
                                      On         On           On         On
                                  Financial   Financial   Financial   Financial
                                instruments instruments instruments instruments
                                measured at measured measured measured
                                  fair value     at         at fair      at
                                through OCI Amortised       value    Amortised
                                                Cost       through      Cost
                                                             OCI
     Loans
     Investments
     Others        (to     be
     specified)
     Total
9.      Other expenses (to be specified)
                    Particulars                 (Current Year)   (Previous Year)
     Rent, taxes and energy costs
     Repairs and maintenance
     Communication Costs
     Printing and stationery
     Advertisement and publicity
     Director's    fees,   allowances     and
     expenses
     Auditor's fees and expenses
     Legal and Professional charges
     Insurance
     Other expenditure
     Total

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

* Any item under the subhead `Others expenditure' which exceeds one per
cent of the total income to be presented separately.
10.   Other Comprehensive Income shall be classified into-
      (A) Items that will not be reclassified to profit or loss
               (i)   Changes in revaluation surplus;
             (ii)    Remeasurements of the defined benefit plans;
             (iii)   Equity Instruments through Other Comprehensive
                     Income;
             (iv)    Fair value changes relating to own credit risk of financial
                     liabilities designated at fair value through profit or loss;
              (v)    Share of Other Comprehensive Income in Associates
                     and Joint Ventures, to the extent not to be classified into
                     profit or loss; and
             (vi)    Others (specify nature).
      (B) Items that will be reclassified to profit or loss;
               (i)   Exchange differences in translating the financial
                     statements of a foreign operation;
             (ii)    Debt Instruments through Other Comprehensive Income;
             (iii)   The effective portion of gains and loss on hedging
                     instruments in a cash flow hedge;
             (iv)    Share of Other Comprehensive Income in Associates
                     and Joint Ventures, to the extent to be classified into
                     profit or loss; and
              (v)    Others (specify nature).
11.   Additional Information: An NBFC shall disclose by way of notes,
      additional information regarding aggregate expenditure and income on
      the following items:
      (i) Depreciation, amortisation and impairment
      (ii) payments to the auditor as (a) auditor, (b) for taxation matters, (c)
           for company law matters, (d) for other services, (e) for
          reimbursement of expenses;

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

     (iii) in case of NBFCs covered under section 135, amount of
           expenditure incurred on corporate social responsibility activities;
           and
     (iv) details of items of exceptional nature




                                  139
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

      PART III-GENERAL INSTRUCTIONS FOR THE PREPARATION OF
                CONSOLIDATED FINANCIAL STATEMENTS
(1)    Where a Non-Banking Financial Company (NBFC) is required to
       prepare Consolidated Financial Statements, i.e., consolidated balance
       sheet, consolidated statement of changes in equity and consolidated
       statement of profit and loss, the NBFC shall mutatis mutandis follow
       the requirements of this Schedule as applicable to an NBFC in the
       preparation of balance sheet, statement of changes in equity and
       statement of profit and loss. However, where the consolidated financial
       statements contains elements pertaining to NBFCs and other than
       NBFCs, mixed basis of presentation may be followed for consolidated
       financial statements where both kinds of operations are significant. In
       addition, the consolidated financial statements shall disclose the
       information as per the requirements specified in the applicable Indian
       Accounting Standards notified under the Companies (Indian
       Accounting Standards) Rules 2015, including the following, namely:-
       (i)    Profit or loss attributable to `non-controlling interest' and to
              `owners of the parent' in the statement of profit and loss shall be
              presented as allocation for the period. Further, `total
              comprehensive income' for the period attributable to `non-
              controlling interest' and to `owners of the parent' shall be
              presented in the statement of profit and loss as allocation for the
              period. The aforesaid disclosures for `total comprehensive
              income' shall also be made in the statement of changes in equity.
              In addition to the disclosure requirements in the Indian
              Accounting Standards, the aforesaid disclosures shall also be
              made in respect of `other comprehensive income'.
       (ii)   `Non-controlling interests' in the Balance Sheet and in the
              Statement of Changes in Equity, within equity, shall be presented
              separately from the equity of the `owners of the parent'.
       (iii) Investments accounted for using the equity method.
(2)    In Consolidated Financial Statements, the following shall be disclosed
       by way of additional information:









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Name of Net Assets,       Share in        Share in other Share in total
  the       i.e., total profit or loss    comprehensiv comprehensive
entity in assets minus                      e income       income
  the          total
 Group      Liabilities
             As % of Amou As % of Amou    As % of Amou As % of Amou
             consolid nt consolida nt    consolidat nt     total nt
             ated net     ted profit      ed other     comprehen
              assets       or loss       comprehe          sive
                                           nsive         income
                                          income
Parent
Subsidia
ries
Indian
1.
2.
3.
Foreign
1.
2.
3.
Non-
controllin
g
Interests
in all
Subsidia
ries
Associat
es
(Investm
ent as
per the
equity
method)


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Indian
1.
2.
3.
Foreign
1.
2.
3.
Joint
Ventures
(as per
the
equity
method)
Indian
1.
2.
3.
Foreign
1.
2.
3.
Total
(3)     All subsidiaries, associates and joint ventures (whether Indian or
        foreign) will be covered under consolidated financial statements.
(4)     An entity shall disclose the list of subsidiaries or associates or joint
        ventures which have not been consolidated in the consolidated
        financial statements along with the reasons of not consolidating.




                                    142
                                                      Annexure B
Key Differences in Division I and Division III to Schedule III to the
Companies Act, 2013

 Division I                            Division III
 1. Applicability
 Division I is applicable to a         Division III is applicable to every
 Company       whose    Financial      NBFC to which Ind AS apply in
 Statements are not required to        preparation of its financial
 comply Ind AS.                        statements.
 2. What it includes?
 Division I includes                   Division III includes
 1. Balance Sheet                      1. Balance Sheet
 2. Statement of Profit and Loss       2. Statement of Changes in Equity
 3. Statement of Cash Flow             3. Statement of Profit and Loss.
 4. Notes, comprising a summary of     4. Statement of Cash Flow
 significant accounting policies and   5. Notes, comprising a summary of
 other explanatory information         significant accounting policies and
                                       other explanatory information
                                       6. A balance as at the beginning of
                                       the earliest comparative period
                                       when an entity applies an
                                       accounting policy retrospectively or
                                       makes a retrospective restatement
                                       of items in its Financial Statements,
                                       or when it reclassifies items in its
                                       Financial Statements.
                                       Statement of Profit and Loss shall
                                       include profit or loss for the period
                                       and Other Comprehensive Income
                                       for the period.
 3. Materiality
 A Company shall disclose by way of A NBFC shall disclose by way of


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 Division I                               Division III
 notes additional information any         notes additional information for any
 item of expenditure and income           item of `other income' or `other
 which exceeds one per cent of the        expenditure' which exceeds 1
 revenue from operations or Rs.           percent of the total income.
 1,00,000 whichever is higher.            Also disclosure is to be made of all
                                          material items i.e. the items if they
                                          could, individually or collectively,
                                          influence the economic decisions
                                          that users make on the Financial
                                          Statements.
 4. Earnings per Share
 No separate disclosure is required Division III requires separate
 for earning per share for continuing disclosure of the earning per share
 and discontinuing operations.        for continuing and discontinuing
                                      operations.
 5. Extraordinary items
 Separate disclosure is required.         There is no separate disclosure of
                                          extraordinary items which is in line
                                          with IND AS 1.
 6. Investments
 Under each classification of             The head `investments' includes the
 investments details shall be given       total     investments       including
 of names of bodies corporate             investments at amortised cost, at
 indicating separately whether such       fair    value       through     Other
 bodies are                               Comprehensive Income, at fair
 1. Subsidiaries                          value through Profit or Loss, and
 2. Associates                            designated at fair value through
                                          Profit or Loss both within and
 3. Joint ventures
                                          outside India. Where the NBFC has
 4. Controlled special purpose
                                          used a basis other than amortised
 entities
                                          cost or fair value, the same may be
 The following shall also be              included in column `Others', with
 disclosed.                               the basis of measurement disclosed
 (a) The basis of valuation of            as a footnote. The impairment loss
        individual investment             allowance as per Ind AS 109 should

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Division I                            Division III
(b) Aggregate amount of quoted        be disclosed as a separate line item
      investments and market          under the sub-heads mentioned
      value thereof                   above.
(c) Aggregate       amount    of      Investments shall be classified as:
      unquoted investments            (i)     Investments in Mutual funds
(d) Aggregate provision made for      (ii) Investments in Government
      diminution in value of                 securities
      investments                     (iii) Investments         in    Other
                                             approved securities
                                      (iv) Investments           in    Debt
                                             Securities
                                      (v) Investments          in    Equity
                                             Instruments
                                       (vi) Investments in Subsidiaries
                                      (vii) Investments in Associates
                                      (viii) Investments in Joint Ventures
                                      (ix) Others (Specify)
7. Trade Receivables
Aggregate amount of Trade             As per the amendments to
receivable outstanding for a period   Schedule III, `trade receivables'
exceeding six months from the date    should be classified as follows:
they are due for payment should be    a) Trade receivables considered
separately disclosed                  good (Secured)
                                      b) Trade receivables considered
                                      good (Unsecured)
                                      c) Trade receivables which have
                                      significant increase in credit risk
                                      and
                                      d) Trade receivables ­ credit
                                      impaired.
                                      A separate disclosure under
                                      `receivables' is required for any
                                      debts due from any Limited
                                      Liability Partnership (LLP) in

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 Division I                             Division III
                                        which its director is a partner or
                                        member.
 8. Contingent liabilities
 Contingent liabilities includes all Contingent liabilities pertaining to
 guarantees                          guarantees excluding financial
                                     guarantees.
                                     Further, the following has been
                                     removed for Division III:
                                     W. If, in the opinion of the Board,
                                     any of the assets other than fixed
                                     assets        and       non-current
                                     investments do not have a value
                                     on realization in the ordinary
                                     course of business at least equal
                                     to the amount at which they are
                                     stated, the fact that the Board is
                                     of that opinion, shall be stated.
 9. Finance Cost
 Finance cost shall be classified as    Finance Cost shall be classified as
 (a)   Interest Expense                 (a)   Interest on deposits
 (b)   Other borrowing cost             (b)   Interest on borrowings
 (c)   Applicable net gain/loss on (c)        Interest on debt securities
       foreign currency transactions (d)      Interest on      subordinated
       and translations                       liabilities
                                        (e)   Other interest expense


 10. Revenue
 Revenue is disclosed as Sales net Revenue includes excise duty.
 of Excise duty                    Also, NBFCs are required to
                                   disclose    items     comprising
                                   `revenue from operations' and
                                   `other comprehensive income' on


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Division I                           Division III
                                     the face of the statement of profit
                                     and loss.
11. Bank Deposits
Cash and cash equivalents            Cash and cash equivalent
Cash and Cash equivalents shall be
classified as:                       Cash and Cash equivalents shall be
(a) Balance with banks               classified as:
Bank deposits with more than 12
months maturity should be            (a) Balance with banks (of the
classified under Other bank          nature of cash and cash
balances                             equivalents)
12. Defined benefit plan
Gains/losses arising on defined Division III to Schedule III states
benefit plan is recognized in that Re-measurement gains/ losses
statement of profit and loss    on defined benefit plans should
                                form part of retained earnings.
                                Ind AS requires that Re-
                                measurement        gains/    (losses)
                                arising on defined benefit plans
                                should be recognized in the other
                                comprehensive income (OCI) and
                                these gains/ losses cannot
                                subsequently be reclassified to
                                profit or loss.
                                However, Ind AS does not contain
                                any specific guidance/ requirement
                                whether such gains/ losses should
                                be recognized in the retained
                                earnings or should appear as a
                                separate reserve within the
                                statement of changes in equity.
13. Liquidity
Where compliance with the Where any Act, Regulation,
requirements of the Act including Guidelines or Circulars issued by

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 Division I                             Division III
 Accounting Standards as applicable     the relevant regulators from
 to the companies require any           time to time requires disclosures to
 change in treatment or disclosure      be made in the standalone financial
 including addition, amendment,         statements of an NBFC, the said
 substitution or deletion in the head   disclosures shall be made in
 or sub-head or any changes, inter      addition to those required under
 se, in the financial statements or     this Schedule. The NBFCs
 statements forming part thereof, the   preparing financial statements as
 same shall be made and the             per this Schedule may change the
 requirements of this Schedule shall    order of presentation of line
 stand modified accordingly.            items on the face of financial
                                        statements or order of line items
                                        within the schedules in order of
                                        liquidity,     if      appropriate,
                                        considering       the    operations
                                        performed by the NBFC.
 14.   Other     disclosures      of
 Statement of Profit and Loss
 The following disclosures are These disclosures are no longer
 required                            required under Division III to
 A. (a) In the case of manufacturing Schedule III.
 companies,
 (1) Raw materials under broad
        heads.
 (2) goods purchased under
        broad heads.
 (b) In the case of trading
 companies, purchases in respect of
 goods traded in by the company
 under broad heads.
 (c) In the case of companies
 rendering or supplying services,
 gross income derived from services
 rendered or supplied under broad
 heads.


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Division I                             Division III
(d) In the case of a company, which
falls under more than one of the
categories mentioned in (a), (b) and
(c) above, it shall be sufficient
compliance with the requirements
herein if purchases, sales and
consumption of raw material and
the gross income from services
rendered is shown under broad
heads.
(e) In the case of other companies,
gross income derived under broad
heads.
B. In the case of all concerns
having works in progress under
broad heads.
C. (a) The aggregate, if material, of
any amounts set aside or proposed
to be set aside, to reserve, but not
including provisions made to meet
any specific liability,
Contingency       or    commitments
known to exist at the date as to
which the balance sheet is made
up.
(b) The aggregate, if material, of
any amounts withdrawn from such
reserves.
D. (a) The aggregate, if material, of
the amounts set aside to provisions
made for meeting specific liabilities,
contingencies or commitments.
(b) The aggregate, if material, of
the amounts withdrawn from such
provisions, as no longer required.
E. Expenditure incurred on each of

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 Division I                           Division III
 the following items, separately for
 each item:
 (a) Consumption of stores and
        spare parts;
 (b) Power and fuel;
 (c) Rent;
 (d) Repairs to buildings;
 (e) Repairs to machinery;
 (f)    Insurance;
 (g) Rates and taxes, excluding
        taxes on income;
 (h) Miscellaneous expenses,
 F. (a) Dividends from subsidiary
 companies.
 (b) Provisions for losses of
 subsidiary companies.
 G. The profit and loss account shall
 also contain by way of a note the
 following information, namely:
 (a) Value of imports calculated on
 C.I.F basis by the company during
 the financial year in respect of
 I.     Raw materials;
 II.    Components and spare
 parts;
 III. Capital goods;
 (b) Expenditure in foreign currency
 during the financial year on account
 of royalty, know-how, professional
 and consultation fees, interest, and
 other matters;
 (c) Total value if all imported raw
 materials,     spare     parts   and
 components consumed during the


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Division I                            Division III
financial year and the total value of
all indigenous raw materials, spare
parts and components similarly
consumed and the percentage of
each to the total consumption;
(d) The amount remitted during the
year in foreign currencies on
account of dividends with a specific
mention of the total number of non-
resident shareholders, the total
number of shares held by them on
which the dividends were due and
the year to which the dividends
related;
(e) Earnings in foreign exchange
classified under the following
heads, namely:
I.     Export of goods calculated
       on F.O.B. basis;
II.    Royalty,           know-how,
       professional and consultation
       fees;
III. Interest and dividend;
IV. Other income, indicating the
       nature thereof.
15. Dividend      on     Preference
Shares
Dividend on redeemable preference Dividend on redeemable preference
shares was regarded as an shares is now presented as a part
adjustment to reserves.           of Finance cost.
16. Prior Period Items
A separate disclosure was required There is no concept of Prior period
for Prior Period Items.            items and any retrospective
                                   application of accounting policy or
                                   retrospective restatement of items

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 Division I                            Division III
                                       in Financial Statements, or
                                       reclassification of items in Financial
                                       Statements requires restatement of
                                       comparative period.
 17. Rounding off Disclosure
 Depending upon the turnover of the    Depending upon the turnover of the
 company, the figures appearing in     company, the figures appearing in
 the Financial Statements may be       the Financial Statements shall be
 rounded off as given in Non-Ind AS    rounded off as given in Division III
 Schedule III.                         to Schedule III.
 18. Investments ­ Names of
 Bodies Corporate
 Under each classification of          The head `investments' includes the
 investments details shall be given    total     investments        including
 of names of bodies corporate          investments at amortised cost, at
 indicating separately whether such    fair    value       through      Other
 bodies are                            Comprehensive Income, at fair
  1. Subsidiaries                      value through Profit or Loss, and
 2. Associates                         designated at fair value through
                                       Profit or Loss both within and
 3. Joint ventures
                                       outside India. Where the NBFC has
 4. Control special purpose entities
                                       used a basis other than amortised
                                       cost or fair value, the same may be
                                       included in column `Others', with
                                       the basis of measurement disclosed
                                       as a footnote. The impairment loss
                                       allowance as per Ind AS 109 should
                                       be disclosed as a separate line item
                                       under the sub-heads mentioned
                                       above.
                                       Investments shall be classified as:
                                        (i)   Investments in Mutual funds
                                        (ii) Investments in Government
                                              securities
                                        (iii) Investments        in     Other

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Division I                           Division III
                                            approved securities
                                     (iv) Investments        in   Debt
                                            Securities
                                     (v) Investments        in   Equity
                                            Instruments
                                     (vi) Investments in Subsidiaries
                                     (vii) Investments in Associates
                                     (viii) Investments      in   Joint
                                            Ventures
                                     Others (Specify)
19. Investment Property
Investment property was disclosed Investment Property is disclosed as
as a part of Investments.         a separate line item on the face
                                  of balance sheet.
                                  Also the following disclosure needs
                                  to be given
                                  A reconciliation of the gross and
                                  net carrying amounts of each
                                  class of property at the
                                  beginning and end of the
                                  reporting      period      showing
                                  additions, disposals, acquisitions
                                  through business combinations
                                  and other adjustments and the
                                  related       depreciation      and
                                  impairment losses or reversals
                                  shall be disclosed separately.
20. Disclosure in standalone
financial statements
No such explicit Requirement         Disclosures required by Act,
                                     Regulation,     Guidelines      or
                                     Circulars issued by the relevant
                                     regulators from time to time shall
                                     be made in the standalone financial


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 Division I                           Division III
                                      statements which shall be made in
                                      addition to those required under
                                      this Schedule.
 21.   Property,    Plant    and
 Equipment and Intangible Assets
 Tangible assets                      Property, Plant and Equipment
 Classification shall be given as:    Classification shall be given as:
 (i) Land;                            (i) Land
 (ii) Buildings;                      (ii) Buildings
 (iii) Plant and Equipment;           (iii) Plant and Equipment
 (iv) Furniture and Fixtures;         (iv) Furniture and Fixtures
 (v) Vehicles;                        (v) Vehicles
 (vi) Office equipment;               (vi) Office equipment
 (vii) Others (specify nature)        (vii) Bearer Plants
 Clause common to Tangible assets     (viii) Others (specify nature)
 and Intangible assets:               Clause common to Property, Plant
                                      & Equipment and Other Intangible
                                      Assets:
 22. Capital Reduction
 Where sums have been written-off No such requirement
 on a reduction of capital or
 revaluation of assets or where
 sums have been added on
 revaluation of assets, every balance
 sheet subsequent to date of such
 write-off, or addition shall show the
 reduced or increased figures as
 applicable and shall by way of a
 note also show the amount of the
 reduction or increase as applicable
 together with the date thereof for
 the first five years subsequent to
 the date of such reduction or
 increase.

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Division I                               Division III
23. Biological Assets other than
bearer plants
Biological assets other than bearer Biological assets other than bearer
plants                              plants
No such requirement                 Biological assets other than bearer
                                    plants need to be disclosed
                                    separately on the face of balance
                                    sheet.
                                    Further, A reconciliation of the
                                    carrying amounts of each class of
                                    assets at the beginning and end of
                                    the reporting period showing
                                    additions, disposals, acquisitions
                                    through business combinations and
                                    other adjustments shall be
                                    disclosed separately.
24. Loans: Non-current
Long-term loans and advances             As per the amendment to Schedule
shall be classified as:                  III, `loans receivables' should be
(a) Capital Advances;                    classified as follows:
(b) Security Deposits;                   (a) Loans receivables considered
(c) Loans and advances to                        good - Secured;
       related parties (giving details   (b) Loans receivables considered
       thereof);                                 good ­ Unsecured;
(d) Other loans and advances             (c) Loans receivables which have
       (specify nature).                         significant increase in credit
                                                 risk; and
                                         (d) Loans receivables ­ credit
                                                 impaired.
25. Other non-current assets
Other non-current assets shall be There is no line item as Other
classified as:                      non-current assets in Division III
(i)    Long-term             Trade  to Schedule III.
       Receivables (including trade


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 Division I                            Division III
        receivables on deferred
        credit terms);
 (ii) Others (specify nature);
 (iii) Long-term                Trade
        Receivables, shall be sub-
        classified as:
         (a) Secured,      considered
             good;
         (b) Unsecured, considered
             good;
         (c) Doubtful.
 Allowance for bad and doubtful
 debts shall be disclosed under the
 relevant heads separately.
 Debts due by directors or other
 officers of the company or any of
 them either severally or jointly with
 any other persons or advances to
 firms or private companies
 respectively in which any director is
 a partner or a director or a member
 should be separately stated.
 26. Loans: Current
 Short-term loans and advances There is no line item as Loans:
 shall be classified as:       Current in Division III to
 (a) Loans and advances to Schedule III.
       related parties (giving details
       thereof);
 (b)   Others (specify nature).
 27. Other current assets
 This is an all-inclusive heading, There is no line item as Other
 which incorporates current assets current assets in Division III to
 that do not fit into any other asset Schedule III.
 categories.


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Division I                           Division III
28. Share capital

For each class of share capital For each class of equity share
(different classes of preference capital (different classes of
shares to be treated separately): preference shares to be treated
(j)    terms of any securities separately):
convertible into equity/preference
shares issued along with the         (j) terms of any securities
earliest date of conversion in       convertible into equity/ preference
descending order starting from the   shares issued along with the
farthest such date;                  earliest date of conversion in
                                     descending order starting from the
                                     farthest such date;
29. Reserves and Surplus/Other
Equity
(i)   Reserves and Surplus shall     (i) `Other Reserves' shall be
be classified as:                    classified in the notes as-
(a) Capital Reserves;                (a) Capital Reserve;
(b) Capital Redemption Reserve;      (a) Capital Redemption Reserve;
(c) Securities Premium Reserve;      (c) Securities Premium Reserve;
(d) Debenture           Redemption   (b)      Debenture      Redemption
      Reserve;                            Reserve;
(e) Revaluation Reserve;             (c) Share Options Outstanding
(f)   Share Options Outstanding           Account
      Account;                       (d) Statutory Reserves; and
(g) Other Reserves-(specify the
      nature and purpose of each     (e) Others - (specify the nature and
      reserve and the amount in           purpose of each reserve and
      respect thereof);                   the amount in respect thereof);
(h) Surplus i.e., balance in         (Additions and deductions since last
      Statement of Profit and Loss   balance sheet to be shown under
      disclosing allocations and     each of the specified heads)
      appropriations     such   as   (ii) Retained Earnings represents
      dividend, bonus shares and     surplus i.e. balance of the relevant


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 Division I                               Division III
         transfer to/ from reserves,       column in the Statement of
         etc.;                             Changes in Equity;
 (Additions and deductions since last     (iii)     A     reserve    specifically
 balance sheet to be shown under          represented         by     earmarked
 each of the specified heads);            investments shall disclose the fact
 (ii) A         reserve    specifically   that it is so represented;
 represented        by     earmarked      (iv) Debit balance of Statement of
 investments shall be termed as a         Profit and Loss shall be shown as a
 "fund".                                  negative figure under the head
 (iii) Debit balance of statement of      `retained earnings'. Similarly, the
 profit and loss shall be shown as a      balance of `Other Equity', after
 negative figure under the head           adjusting negative balance of
 "Surplus". Similarly, the balance of     retained earnings, if any, shall be
 "Reserves and Surplus", after            shown under the head `Other
 adjusting negative balance of            Equity' even if the resulting figure is
 surplus, if any, shall be shown          in the negative; and
 under the head "Reserves and             (v) Under the sub-head `Other
 Surplus" even if the resulting figure    Equity', disclosure shall be made
 is in the negative.                      for the nature and amount of each
                                          item.
                                          (vi) Under the sub-head `Other
                                          Equity', disclosure shall be made
                                          for conditions or restrictions for
                                          distribution attached to statutory
                                          reserves.
 30. Borrowings: Non-current
 Long-term borrowings shall be There are no current and non-
 classified as:                    current classifications in Division III.
 (a) Bonds/debentures;             Borrowings and Debt Securities fall
 (b) Term loans:                   under       the    head      `Financial
                                   Liabilities'.
      (A) from banks.
                                   Borrowings (Other than Debt
      (B) from other parties.
                                   Securities) shall be classified as:
 (c) Deferred payment liabilities;
                                   (a) Term Loans
 (d) Deposits;
                                           (i) From banks


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Division I                            Division III
(e) Loans and advances from                   (ii) From other parties
     related parties;                 (b) Deferred payment liabilities
(f) Long term maturities of finance   (c) Loans from related parties
     lease obligations;               (d) Finance lease obligations
(g) Other loans and advances          (e) Liability        component      of
     (specify nature).                    compound financial instruments
Period and amount of continuing       (f)     Loans repayable on demand
default as on the balance sheet
                                              (i) From banks
date in repayment of loans and
                                              (ii) From other parties
interest,    shall    be  specified
separately in each case.              (g) Other loans (specify nature)
                                      The borrowings shall be disclosed
                                      at amortised cost and at fair value
                                      through profit or loss, and
                                      designated at fair value through
                                      profit and loss, both within and
                                      outside India.
                                      The head `Debt Securities' under
                                      `Financial Liabilities' includes
                                      Liability component of compound
                                      financial instruments as per
                                      applicable accounting standards
                                      and Others (Bonds/ Debentures
                                      etc.) i.e. debt securities other than
                                      subordinated liabilities; including
                                      debt securities at amortised cost
                                      and at fair value, both within and
                                      outside India.
31. Other non-current liabilities
Other Long-term Liabilities shall be There is no line item as `Other
classified as:                       non-current liabilities' in Division
(a) Trade payables                   III to Schedule III. Other financial
(b) Others                           liabilities and other non-financial
                                     liabilities are disclosed as line
                                     items in the balance sheet.


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 Division I                           Division III
 32. Borrowings: Current
 Short-term borrowings shall be There are no current and non-
 classified as:                 current classifications in Division III.
 (a) Loans repayable on demand;       Borrowings and Debt Securities fall
      (A) from banks.                 under         the   head      `Financial
                                      Liabilities'.
      (B) from other parties.
                                      Borrowings (Other than Debt
 (b) Loans and advances from
                                      Securities) shall be classified as:
      related parties;
                                      (h) Term Loans
 (c) Deposits;
                                           (i) From banks
 (d) Other loans and advances
      (specify nature).                    (ii) From other parties
 Period and amount of default as on   (i) Deferred payment liabilities
 the balance sheet date in            (j) Loans from related parties
 repayment of loans and interest,     (k) Finance lease obligations
 shall be specified separately in     (l) Liability        component         of
 each case.                                compound                   financial
                                           instruments
                                      (m) Loans repayable on demand
                                           (i) From banks
                                               (ii) From other parties
                                      (n) Other loans (specify nature)
                                      The borrowings shall be disclosed
                                      at amortised cost and at fair value
                                      through profit or loss, and
                                      designated at fair value through
                                      profit and loss, both within and
                                      outside India.
                                      The head `Debt Securities' under
                                      `Financial Liabilities' includes
                                      Liability component of compound
                                      financial instruments as per
                                      applicable accounting standards
                                      and Others (Bonds/ Debentures
                                      etc.) i.e. debt securities other than


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Division I                               Division III
                                         subordinated liabilities; including
                                         debt securities at amortised cost
                                         and at fair value, both within and
                                         outside India.
33. Other current liabilities
Other current liabilities           There is no line item as `Other
The amounts shall be classified as: current liabilities' in Division III
                                    to Schedule III. Other financial
(a) Current maturities of long-
                                    liabilities and other non-financial
     term debt;
                                    liabilities are disclosed as line
(b) Current maturities of finance items in the balance sheet.
     lease obligations;
(c)    Interest accrued but not due
       on borrowings;
(d)    Interest accrued and due on
       borrowings;
(e)    Income received in advance;
(f)    Unpaid dividends;
(g)    Application money received
       for allotment of securities and
       due for refund and interest
       accrued thereon;
(h)    Unpaid matured deposits and
       interest accrued thereon;
(i)    Unpaid matured debentures
       and interest accrued thereon;
(j)    Other payables        (specify
       nature).
34. Non-current assets held for
sale
No such requirement                      The presentation of liabilities
                                         associated with group of assets
                                         classified as held for sale and non-

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 Division I                              Division III
                                         current assets classified as held for
                                         sale shall be in accordance with the
                                         relevant      Indian      Accounting
                                         Standards (Ind ASs).
 35. Proposed dividend
 The amount of dividends proposed     The amount of dividends proposed
 to be distributed to equity and      to be distributed to equity and
 preference shareholders for the      preference shareholders for the
 period and the related amount per    period and the related amount per
 share shall be disclosed separately. share shall be disclosed separately.
 Arrears of fixed cumulative          Arrears of fixed cumulative
 dividends on preference shares       dividends       on     irredeemable
 shall also be disclosed separately.  preference shares shall also be
 As per AS 4 Contingencies and disclosed separately.
 Events Occurring After the Balance As per Ind AS 10 Events after the
 Sheet Date (Revised 2016), Reporting                Period,     proposed
 proposed dividends should not be dividends should not be recognized
 recognized as a liability but rather as a liability but rather should be
 should be disclosed as a separate disclosed as a separate note.
 note.                                Hence, there is no difference
                                      between Indian GAAP and Ind AS.
 36. Share application money
 Share application money includes        Share application money pending
 advances towards allotment of           allotment shall be classified into
 share capital. The terms and            equity or liability in accordance with
 conditions including the number of      relevant        Indian      Accounting
 shares proposed to be issued, the       Standards.         Share    application
 amount of premium, if any, and the      money to the extent not refundable
 period before which shares shall be     shall be shown under the head
 allotted shall be disclosed. It shall   Equity and share application money
 also be disclosed whether the           to the extent refundable shall be
 company has sufficient authorised       separately shown under `Other
 capital to cover the share capital      financial liabilities'.
 amount resulting from allotment of


                                  162
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Division I                           Division III
shares out of such share
application money. Further, the
period for which the share
application money has been
pending beyond the period for
allotment as mentioned in the
document inviting application for
shares along with the reason for
such share application money being
pending shall be disclosed. Share
application money not exceeding
the issued capital and to the extent
not refundable shall be shown
under the head Equity and share
application money to the extent
refundable, i.e., the amount in
excess of subscription or in case
the requirements of minimum
subscription are not met, shall be
separately shown under "Other
current liabilities"
37. Classification of preference
shares
No such requirement                   Preference        shares      including
                                      premium received on issue, shall be
                                      classified and presented as `Equity'
                                      or `Liability' in accordance with the
                                      requirements of the relevant Indian
                                      Accounting Standards. Accordingly,
                                      the disclosure and presentation
                                      requirements in this regard
                                      applicable to the relevant class of
                                      equity or liability shall be applicable
                                      mutatis mutandis to the preference
                                      shares. For instance, plain vanila
                                      redeemable preference shares shall
                                      be classified and presented under


                                163
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 Division I                            Division III
                                       `liabilities' as `borrowings' or
                                       `subordinated liability' and the
                                       disclosure requirements in this
                                       regard       applicable to   such
                                       borrowings shall be applicable
                                       mutatis mutandis to redeemable
                                       preference shares.
 38.Compound               financial
 instruments
 No such requirement                   Compound financial instruments
                                       such as convertible debentures,
                                       where split into equity and liability
                                       components,      as     per     the
                                       requirements of the relevant Indian
                                       Accounting Standards, shall be
                                       classified and presented under the
                                       relevant heads in `Liabilities and
                                       Equity'.
 39. Regulatory Deferral Account
 No such requirement                   Regulatory     Deferral   Account
                                       Balances and changes in such
                                       Balances shall be presented in the
                                       Balance Sheet and Statement of
                                       Profit and Loss in accordance with
                                       the relevant Indian Accounting
                                       Standards.
 40. Boards opinion on realizable
 value
 If, in the opinion of the Board, any No such   requirement               in
 of the assets other than fixed accordance with Ind AS.
 assets and non-current investments
 do not have a value on realisation
 in the ordinary course of business
 at least equal to the amount at
 which they are stated, the fact that
 the Board is of that opinion, shall be
 stated.


                                164
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Division I                             Division III
41. Revenue from operations
In respect of a company other than     Revenue from operations shall be
a finance company revenue from         separately disclosed on the face of
operations shall disclose separately   the Statement of Profit and Loss,
in the notes revenue from-             showing:
(a) Sale of products;                  (a) Interest Income;
(b) Sale of services;                  (b) Dividend Income;
(c) Other operating revenues;          (c) Rental Income;
Less:                                  (d) Fees        and    commission
(d) Excise duty                             Income;
In respect of a finance company,       (e) Net gain on fair value
revenue from operations shall               changes;
include revenue from-                  (f) Net gain on derecognition of
(a) Interest                                financial instruments under
(b) Other financial services                amortised cost category;
Revenue under each of the above        (g) Sale of products (including
heads shall be disclosed separately         Excise duty);
by way of notes to accounts to the     (h) Sale of services; and
extent applicable.                     (i) Others (to be specified)
42. Other income
Other income shall be classified as:   `Other Income' shall be classified
(a) interest income (in case of a      as:
      company other than a             (a) Net gain/ (loss) on ineffective
      finance company)                       portion of hedges;
(b) dividend income                    (b) Net        gain/    (loss)     on
(c) Net gain/loss on sale of                 derecognition of property,
      investments                            plant and equipment;
(d) other non-operating income         (c) Net gain or loss on foreign
      (net of expenses directly              currency transaction and
      attributable to such income)           translation    (other      than
                                             considered      as      finance
                                             cost)(to be specified)
                                       (d) Others (to be specified)


                                165
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 Division I                            Division III
 43. Employee benefit expense
 Employee benefits expense shall       Employee benefits expense shall
 classified as:                        classified as:
 (i)    salaries and wages,            (a)     salaries and wages
 (ii) contribution to provident and    (b)     contribution to provident and
        other funds                            other funds
 (iii) expense on Employee Stock       (c)     share based payments to
        Option Scheme (ESOP) and               employees
        Employee Stock Purchase        (d)     staff welfare expenses
        Plan (ESPP)
 (iv) staff welfare expenses
 44.Adjustments    to      carrying
 amount of investments
 A Company shall disclose by way of No such requirement
 notes     additional    information
 regarding aggregate expenditure
 and income on adjustments to the
 carrying amount of investments.
 45. Payment to auditors
 Payments to auditor shall be Payments to auditor shall be
 classified as:                  classified as:
 (a) auditor                     (a) auditor
 (b) for taxation matters        (b) for taxation matters
 (c) for company law matters     (c) for company law matters
 (d) for management services     (d) for management services
 (e) for other services          (d)     for other services
 (f) for        reimbursement of (e) for         reimbursement of
       expenses                  expenses
 46.Consolidated           financial
 statements
 "Minority interests" in the balance `Non-controlling interests' in the
 sheet within equity shall be Balance Sheet and in the
 presented separately from the Statement of Changes in Equity,

                                166
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Division I                             Division III
equity of the owners of the parent.    within equity, shall be presented
                                       separately from the equity of the
                                       `owners of the parent'.
                                       Consolidated financial statements
                                       shall also disclose investments
                                       accounted for using the equity
                                       method.
47. Retrospective restatement or
reclassification
No such requirement                    When a company applies an
                                       accounting policy retrospectively or
                                       makes a restatement of items in the
                                       financial statements or when it
                                       reclassifies items in its financial
                                       statements, the company shall
                                       attach to the Balance Sheet, a
                                       "Balance Sheet" as at the beginning
                                       of the earliest comparative period
                                       presented.
48. Other Comprehensive Income
No such requirement                    Other Comprehensive Income shall
                                       be classified into:
                                       (A)   Items that will not be
                                             reclassified to profit or loss:
                                             (i)    Changes in revaluation
                                                    surplus;
                                             (ii)   Remeasuremnts of the
                                                    defined benefit plans;
                                             (iii) Equity    Instruments
                                                   through          Other
                                                   Comprehensive Income;
                                             (iv) Fair value changes
                                                  relating to own credit
                                                  risk of financial liabilities

                                 167
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 Division I                           Division III
                                                   designated at FVTPL; or
                                            (v)    Share        of     Other
                                                   Comprehensive Income
                                                   in Associates and Joint
                                                   Ventures, to the extent
                                                   not to be classified into
                                                   profit or loss; and
                                            (vi) Others (specify nature).
                                            Income tax relating to items
                                            that will not be reclassified to
                                            profit or loss
                                      (B)   Items that will be reclassified
                                            to profit or loss:
                                            (i)    Exchange differences in
                                                   translating the financial
                                                   statements of a foreign
                                                   operation;
                                            (ii)   Debt      Instruments
                                                   through          Other
                                                   Comprehensive Income;
                                            (iii) The effective portion of
                                                  gains and loss on
                                                  hedging instruments in a
                                                  cash flow hedge;
                                            (iv) Share        of     Other
                                                 Comprehensive Income
                                                 in Associates and Joint
                                                 Ventures, to the extent
                                                 to be classified into
                                                 profit or loss; and
                                            (v)    Others (specify nature).
                                      Income tax relating to items that will
                                      be reclassified to profit or loss


                                168
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Key Differences in Division II and Division III Schedule III to the
Companies Act, 2013

 Division II                           Division III
 1. Applicability
 Division II is applicable to a        Division III is applicable to every
 company       whose       financial   NBFC to which Ind AS apply in
 statements are prepared in            preparation     of    its   financial
 accordance with Ind AS (other than    statements.
 Non-Banking Financial Companies
 (NBFCs)).
 2. Presentation of balance sheet items
 Division II does not allow NBFCs have been allowed to
 presentation of items of the balance present the items of the balance
 sheet in order of their liquidity.   sheet in order of their liquidity.
 3. Classification of balance sheet items
 The items of the balance sheet        The items of the balance sheet
 shall be broadly classified into      shall be broadly classified into
 current and non-current assets/       financial and non-financial assets/
 liabilities.                          liabilities.
 4. Separate Disclosure based on materiality
 A separate disclosure is required     A separate disclosure by way of a
 for any item of income or             note is required for any item of
 expenditure which exceeds 1           `other income' or `other expenditure'
 percent of the revenue from           which exceeds 1 percent of the
 operations or INR 10,00,000,          total income.
 whichever is higher.
 5. Separate disclosure under `receivables'
 No such requirement.                  A separate disclosure under
                                       `receivables' is required for any
                                       debts due from any Limited Liability
                                       Partnership (LLP) in which its
                                       director is a partner or member.


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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

 6. Disclosure of items comprising `revenue from operations' and
 `other comprehensive income'
 Companies are required to disclose    NBFCs are required to disclose
 items comprising `revenue from        items comprising `revenue from
 operations'      and         `other   operations'        and          `other
 comprehensive income' as part of      comprehensive income' on the face
 the notes.                            of the statement of profit and loss.




                                170
                                                     Annexure C
Illustrative list of disclosures required under the Companies Act 2013
1.   Section 69 - Transfer of certain sums to capital redemption reserve
     account.
Where a company purchases its own shares out of free reserves or securities
premium account, a sum equal to the nominal value of the shares so
purchased shall be transferred to the capital redemption reserve account and
details of such transfer shall be disclosed in the balance sheet.
2.   Section 129 - Financial Statements
(5) Without prejudice to sub-section (1), where the Financial Statements
of a company do not comply with the accounting standards referred to in sub-
section (1), the company shall disclose in its Financial Statements, the
deviation from the accounting standards, the reasons for such deviation and
the financial effects, if any, arising out of such deviation.
3.   Section 131 - Voluntary revision of Financial Statements or Board's
     report
(1) If it appears to the directors of a company that--
(a) the Financial Statements of the company; or
(b) the report of the Board, do not comply with the provisions of section 129
or section 134 they may prepare revised Financial Statements or a revised
report in respect of any of the three preceding financial years after obtaining
approval of the Tribunal on an application made by the company in such form
and manner as may be prescribed and a copy of the order passed by the
Tribunal shall be filed with the Registrar:
Provided that the Tribunal shall give notice to the Central Government and
the Income tax authorities and shall take into consideration the
representations, if any, made by that Government or the authorities before
passing any order under this section:
Provided further that such revised Financial Statements or report shall not be
prepared or filed more than once in a financial year:
Provided also that the detailed reasons for revision of such Financial


                                   171
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Statements or report shall also be disclosed in the Board's report in the
relevant financial year in which such revision is being made.
4.   Section 135 - Corporate Social Responsibility
(2) The Board's report under sub-section (3) of section 134 shall disclose
the composition of the Corporate Social Responsibility Committee.
5.   Section 182 - Prohibitions and restrictions regarding political
     contributions
(3) Every company shall disclose in its profit and loss account the total
amount contributed by it under this section during the financial year to which
the account relates.
6.   Section 183 - Power of Board and other persons to make
     contributions to national defence fund, etc.
(2) Every company shall disclose in its profits and loss account the total
amount or amounts contributed by it to the Fund referred to in sub-section (1)
during the financial year to which the amount relates.
7.   Section 186 - Loan and investment by company
(4) The company shall disclose to the members in the Financial
Statements the full particulars of the loans given, investment made or
guarantee given or security provided and the purpose for which the loan or
guarantee or security is proposed to be utilised by the recipient of the loan or
guarantee or security.
8.   Section 272 - Petition for winding up
(4) The Registrar shall be entitled to present a petition for winding up
under subsection (1) on any of the grounds specified in sub-section (1) of
section 271, except on the grounds specified in clause (b), clause (d) or
clause (g) of that sub-section:
Provided that the Registrar shall not present a petition on the ground that the
company is unable to pay its debts unless it appears to him either from the
financial condition of the company as disclosed in its balance sheet or from
the report of an inspector appointed under section 210 that the company is
unable to pay its debts:
Provided further that the Registrar shall obtain the previous sanction of the
Central Government to the presentation of a petition:

                                   172
GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Provided also that the Central Government shall not accord its sanction
unless the company has been given a reasonable opportunity of making
representations.




                               173
                                                    Annexure D
List of Indian Accounting Standards notified as on date:

Ind AS       Description
Ind AS 101   First-time Adoption of Indian Accounting Standards
Ind AS 102   Share-based Payment
Ind AS 103   Business Combinations
Ind AS 104   Insurance Contracts
Ind AS 105   Non-current Assets         Held for Sale and    Discontinued
             Operations
Ind AS 106   Exploration for and Evaluation of Mineral Resources
Ind AS 107   Financial Instruments: Disclosures
Ind AS 108   Operating Segments
Ind AS 109   Financial Instruments
Ind AS 110   Consolidated Financial Statements
Ind AS 111   Joint Arrangements
Ind AS 112   Disclosure of Interests in Other Entities
Ind AS 113   Fair Value Measurement
Ind AS 114   Regulatory Deferral Accounts
Ind AS 115   Revenue from Contracts with Customers
Ind AS 1     Presentation of Financial Statements
Ind AS 2     Inventories
Ind AS 7     Statement of Cash Flows
Ind AS 8     Accounting Policies, Changes in Accounting Estimates and
             Errors
Ind AS 10    Events after the Reporting Period
Ind AS 11    Construction Contracts
Ind AS 12    Income Taxes
Ind AS 16    Property, Plant and Equipment

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GN on Division III ­ Schedule III to the Companies Act 2013 for NBFC ...

Ind AS 17   Leases
Ind AS 19   Employee Benefits
Ind AS 20   Accounting for Government Grants and Disclosure of
            Government Assistance
Ind AS 21   The Effects of Changes in Foreign Exchange Rates
Ind AS 23   Borrowing Costs
Ind AS 24   Related Party Disclosures
Ind AS 27   Separate Financial Statements
Ind AS 28   Investments in Associates and Joint Ventures
Ind AS 29   Financial Reporting in Hyperinflationary Economies
Ind AS 32   Financial Instruments: Presentation
Ind AS 33   Earnings per Share
Ind AS 34   Interim Financial Reporting
Ind AS 36   Impairment of Assets
Ind AS 37   Provisions, Contingent Liabilities and Contingent Assets
Ind AS 38   Intangible Assets
Ind AS 40   Investment Property
Ind AS 41   Agriculture




                                 175
                                                       Annexure E
General Circular No. 39/2014 dated: 14th October, 2014
To
All Regional Directors,
All registrars of Companies,
All Stakeholders
Subject: Clarification on matters relating to Consolidated Financial
Statements.
Sir,
Government has received representations from stakeholders seeking
clarifications on the manner of presentation of notes in Consolidated
Financial Statements (CFS) to be prepared under Schedule III to the Act.
These representations have been examined in consultation with the Institute
of Chartered Accountants of India (ICAI) and it is clarified that Schedule III to
the Act read with the applicable Accounting Standards does not envisage
that a company while preparing its CFS merely repeats the disclosures made
by it under stand-alone accounts being consolidated. In the CFS, the
company would need to give all disclosures relevant for CFS only.
2.     This issues with the approval of the competent authority




                                    176
                                                          Glossary
Act                       The Companies Act, 2013
Ind AS Schedule III       Division II to Ind AS Schedule III
Ind AS                    Indian Accounting Standards
Companies     Ind     AS Companies Ind AS Rules, 2015 as amended from
Rules                    time to time
Ind AS Framework          Framework for the preparation and presentation
                          of Financial Statements in accordance with Indian
                          Accounting Standards
Non Ind AS                Accounting Standards
Companies AS Rules        Companies Accounting Standards Rules, 2006 as
                          amended from time to time
FVTPL                     Fair Value through Profit or Loss
FVOCI                     Fair Value through other Comprehensive Income
SEBI                      Securities and Exchange Board of India
SEBI (LODR)               SEBI (Listing Obligations and         Disclosure
                          Requirements) Regulations, 2015
GAAP                      Generally Accepted Accounting Principles
MSMED                     The Micro, Small and Medium Enterprises
                          Development Act, 2006
CENVAT                    Central Value Added Tax
GST                       Goods and Services Tax
MAT                       Minimum Alternate Tax
CFS / SFS                 Consolidated Financial Statements / Standalone
                          Financial Statements

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