Schedules Under Companies Act, 2013- An analysis

Schedules Under Companies Act, 2013- An analysis

Schedules underCompanies Act,2013-An analysis

Companies Act,1956	Companies Act,2013
16 Schedules	7 Schedules

As can be seen from the above ,Companies Act has lesser schedules; the reason being the Act does not have the following schedules, which found a place in Companies Act 1956 :

Schedule of CA,1956	Particulars	Changes in Companies Act,2013
IA	List of Relatives	List of 8 Relatives are mentioned  in the  Companies (specification of definition details)rules,2014corresponding to sec.2(77)(iii)
II	Matters to be Specified in Prospectus and reports to be set out therein	Details of matters to be specified in Prospectus are mentioned in the   Companies (Prospectus and Allotment of Securities) Rules, 2014. corresponding to Sec.26(1)
III	Form of Statement in Lieu of Prospectus (SLP)	Companies Act,2013 has done away with the concept of SLP
IV	Form of Statement in Lieu of Prospectus (SLP) to be filed by private company on becoming public company.	Companies Act,2013 has done away with the concept of SLP
V	Annual Return Form	New Form for filing of Annual Return  (Form MGT-7 along with Form MGT-8)
VII	Restrictions on powers of Managing Agents, Secretaries and Treasurers	Redundant after abolition of  Managing Agents, Secretaries and Treasurers
VIII	Declaration to be made by Managing Agents, Secretaries and Treasurers	Redundant after abolition of  Managing Agents, Secretaries and Treasurers
IX	Form of Proxy	New Form for appointment of Proxy is Form MGT-11
X	Table of fees to be paid to ROC	Fees details are mentioned in the Companies(Registration of offices and fees)Rules,2014.
XI	Forms in which Sec.539 to 544 of the 1956 Act are to apply in caseswhere application made under Sec.397/398.	Matters are dealt with section 26 of the Companies Act,2013.
XII	Enactments Repealed by the 1956 Act	Sec.465 of the Companies Act,2013 repeals the 1956 act except provision of Part IXA of  the 1956 act relating to Producer Companies.
XV	List of Industries	Omitted by the Companies Act,2013.

 The Companies Act,2013 has retained only 4 of 16 schedules of the Companies Act,1956 with changes and introduces 3 new schedules to cover new concepts of Independent Directors, CSR and Infrastructural Projects.

The  4 modified and 3 new schedules are summarized below;

Particulars	Schedules		Remarks
	CA 1956	CA 2013	Companies Act,1956	Companies Act,2013
Forms of MOA &AOA-Table F of the 1956 Act	I	I (Table A to J)	Form of statement to be published by limited Banking Cos, Insurance Cos,etc.,.	Formats modified to accommodate new concepts of OPC, e-voting,etc.,.
Useful lives to Compute Depreciation	XIV	II	It deals with only depreciation of tangible assets.It deals with the Rate of Depreciation of tangible assets.	It deals withamortization of Intangible assets also. It deals with the useful lives of tangible assets and does not prescribe depreciation rates.
General Instructions for Preparation of B/S &Statement of P&L of a Company	VI	III	Form  of B/S	Same as Revised Sch.VI except that Sch.III contains instructions regarding consolidated accounts as preparation of consolidated accounts made mandatory by the 2013 act.
Code of Independent Directors(IDs)	——-	IV	—–	IDs is new concept introduced by the 2013 act. Sch.IV is a new schedule containing CoC for IDs.
Conditions to be fulfilled for  the appointment of a MD/WTD or a Mgr without the approval of CG	XIII	V	—–	—–
Infrastructural Projects/Facility	——-	VI	—–	New Schedule introduced  by  the Companies Act,2013
Activities which may be included by companies in their CSRPolices	——-	VII	—–	MCA has notified the Sec.135 & corresponding rules & Sch.VII on 27/02/14 to comply with mandatory CSR  spends for specified companies.

 Useful lives to Compute Depreciation: -–Schedule-II.{(Sec.123(2)}

Depreciation:

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.

Depreciable amount of an asset = Cost of an asset/other amount substituted for cost (-)  Residual value

Useful life:

‘Useful life’ may be considered as a period over which an asset is available for use or as the number of production or similar units expected to be obtained from the asset by the entity.

The useful life of an asset shall not be longer than the useful life specified in Part ‘C’ and the residual value of an asset shall not be more than 5% of the original cost of the asset Provided that where a company uses a useful life or residual value of the asset which is different from the above limits, justification for the difference shall be disclosed in its financial statement.

  For intangible assets, the provisions of the accounting standards applicable for the time being in force shall apply, except in case of intangible assets (Toll Roads) created under ‘Build, Operate and Transfer’, ‘Build, Own, Operate and Transfer’ or any other form of public private partnership route in case of road projects.

Amortization in such cases may be done as follows:-

(a) Mode of amortisation Amortisation Rate = Amortisation Amount x 100 ÷ Cost of Intangible Assets (A)
Amortisation Amount = Actual Revenue for the year (B) x Cost of Intangible Assets (A) ÷ Projected Revenue from Intangible Asset (till the end of the concession period) (C)
Meaning of particulars are as  follows- Cost of Intangible Assets (A)       =	Cost incurred by the company in accordance with the accounting standards.
Actual Revenue for the year (B)     =	Actual revenue (Toll Charges) received during the accounting year.
Projected Revenue from Intangible Asset (C)                                         =	Total projected revenue from the Intangible Assets as provided to the project lender at the time of financial closure / agreement.

 The amortisation amount or rate should ensure that the whole of the cost of the intangible asset is amortised over the concession period.

Revenue shall be reviewed at the end of each financial year and projected revenue shall be adjusted to reflect such changes, if any, in the estimates as will lead to the actual collection at the end of the concession period.

Applicability

The Companies Act, 2013 states that Schedule II will be applicable as follows:

o    For a prescribed class of companies, whose financial statements are required to comply with AS prescribed under the 2013 Act, the useful lives should normally be in accordance with theSchedule. However, if a prescribed company uses a different useful life, it should disclose a justification for doing so;

o    For Government companies,useful life or residual value of any specified asset, as notified for accounting purposes by a Regulatory Authority constituted under an Act of parliament or by the Central Government shall be applied in calculating the depreciation to be provided for such asset irrespective of the requirements of this Schedule.

o    For other Companies, the useful life of an asset shall not be longer than the useful life and the residual value shall not be higher than that prescribed in Part C.

Other Points:

1. The following information shall be disclosed in the accounts namely;

o    Depreciation method used &

o    Useful lives of the assets for computing depreciation, if they are different from the life specified in the schedule.

2. Factory Buildings does not include offices, godowns, staff quarters.

3. During any financial year, if any addition has been made to any asset or where any asset has been sold, discarded, demolished or destroyed, the depreciation on such assets shall be calculated on a pro rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed.

4. Useful life specified in Part C of the Schedule is for whole of the asset. Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately.

5. Transitional Provisions:

 From the date this Schedule comes into effect, the carrying amount of the asset as on that date—

(a) shall be depreciated over the remaining useful life of the asset as per this Schedule;

(b) after retaining the residual value, shall be recognised in the opening balance of retained earnings where the remaining useful life of an asset is NIL.

6. ‘‘Continuous process plant’’ means a plant which is required and designed to operate for 24 hours a day.

Schedule XIV Vs Schedule II :

.Companies Act,1956 – Sch.XIV	Companies Act,2013- Sch.II
It deals with only depreciation of tangible assets.	It deals with the amortization of intangible assets also.
It contained rates of depreciation of tangible assets.	It contains only useful lives of tangible assets and does not prescribe depreciation rates.
100% Depreciation shall be charged on assets whose actual cost does not exceed Rs.5,000/-	Omits the provision for 100% Depreciation on immaterial items i.e, assets whose actual cost does not exceed Rs.5,000/-
Extra Shift Depreciation (ESD) not applicable to o    Items marked NESD in the schedule o    Specified items of P&M to which general rate of Depreciation was applicable.	Extra Shift Depreciation (ESD) not applicable to o    Items marked NESD in  the schedule. o    ESD will apply to P&M items subject to general rate i.e., useful life of 15 years.
ESD for double shift and triple shift was to be made separately in proportion with No.of days for which concern worked second shift or triple shift bears to normal No.of working days in a year. For Seasonal factory: Greater of actuals and 180 days.Other cases: Greater of actual and 240 days.	ESD working simplified by the 2013 act- For Double shift:50% more depreciation for that period for which asset used. For Triple shift:100% more depreciation for that period for which asset used.