Schedule III Amendments, 2021: New Presentation and Disclosure Requirements (Division I, Non Ind AS)
The Ministry of Corporate Affairs (MCA) revised Schedule III (Division I, Non-Ind AS) to the Companies Act, 2013, via notification dated 24th March 2021, introducing a significant set of additional presentation and disclosure requirements and changing several existing requirements in financial statements, with the stated objective of improving governance and transparency.
Note: if you were looking for a different Schedule III update, see our related coverage of changes in Schedule III of the Companies Act, 2013.
The major changes include disclosure of title deeds of immovable property not held in the company’s name, ageing schedules for CWIP, intangible assets under development, trade payables and trade receivables, disclosure of financial ratios, undisclosed income, CSR shortfall, reconciliation of statements filed with banks for working capital purposes, promoter shareholding disclosure, mandatory rounding off, and reclassification of certain line items.
Summary: What Changed and Who’s Affected
| Theme | Key Changes | Most Relevant To |
| Presentation and rounding | Compulsory rounding off based on total income threshold; “Turnover” replaced with “Total Income”; PPE/Intangible Assets line items restructured; “Revenue” replaced with “Income” in P&L | Finance and accounts teams preparing financial statements |
| Asset and ageing disclosures | Ageing schedules for trade payables, trade receivables, CWIP, and intangible assets under development; title deed disclosure for immovable property not in the company’s name; PPE revaluation disclosure | Finance teams; companies with significant capital projects or older receivables/payables |
| Governance and related-party disclosures | Promoter shareholding disclosure; loans/advances to promoters, directors, KMPs, and related parties; benami property disclosure; struck-off company relationships; layering compliance | Company secretarial and governance teams |
| Banking and financing disclosures | Reconciliation of quarterly returns filed with banks against books of account for current-asset-secured borrowings; wilful defaulter disclosure; utilisation of borrowed funds and share premium (intermediary/ultimate beneficiary chains) | Treasury and finance teams; companies with secured working capital facilities |
| Analytical and tax disclosures | Mandatory disclosure of 11 financial ratios with variance commentary above 25%; undisclosed income surrendered in tax assessments; CSR shortfall details; crypto/virtual currency transactions | CFO office; tax and compliance teams |
The Amendments in Detail
A. In the General Instructions
Compulsory Rounding Off
Rounding off is now compulsory; a company can no longer present figures in full.
| Total Income* < Rs. 100 Crore | Round off to the nearest hundreds, thousands, lakhs, or millions, or decimal thereof. |
| Total Income > Rs. 100 Crore | Round off to the nearest lakhs, millions, or crores, or decimals thereof. |
*The word “Total Income” has been substituted in place of “Turnover.”
B. In the Balance Sheet
The word “Intangible Assets” has been inserted after “Property, Plant and Equipment,” and “Tangible Assets” has been substituted with “Property, Plant and Equipment,” as shown below:
| EARLIER in the face of balance sheet | NOW in the face of balance sheet |
| II. ASSETS (1) Non Current Assets (a) Property, Plant and equipment (i) Tangible assets (ii) Intangible assets |
II. ASSETS (1) Non Current Assets (b) Property, Plant and equipment and Intangible assets (i) Property, Plant and equipment (ii) Intangible assets |
C. Notes Under “General Instructions for Preparation of Balance Sheet,” Paragraph 6
1. Promoter Shareholding Disclosure
Under “A. Share Capital,” after item (l), disclosure of “Shareholding of Promoters” has been inserted:
| Share held by promoter at the beginning of the year | Share held by promoter at the end of the year | % Change during the year | ||||
| S.No. | Promoter Name | No. of shares | % of total shares* | No. of shares | % of total shares* | |
| Total | ||||||
*Details shall be given separately for each class of shares.
2. Current Maturities of Long-Term Borrowings
This shall now be disclosed under “Short-term borrowings,” and has been omitted from “Other current liabilities.”
3. Trade Payables Ageing Schedule
After “FA. Trade Payables” and related entries, the following ageing schedule for trade payables due for payment shall be given:
| Particulars | Outstanding for following period from due date of payment* | ||||||
| Unbilled | Not due | Less than 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| (i) MSME (ii) Others (iii) Disputed dues – MSME (iv) Disputed dues – Others |
Provisions | Bill not due as on Mar 31 | |||||
*Where no due date of payment is specified, disclosure shall be from the date of the transaction.
4. Property, Plant and Equipment / Intangible Assets Terminology and Reconciliation
“Tangible Assets” has been substituted with “Property, Plant and Equipment.” A reconciliation of gross and net carrying amounts of each asset class at the beginning and end of the reporting period showing additions, disposals, business combination acquisitions, revaluation changes (where the change is 10% or more in aggregate net carrying value), other adjustments, and related depreciation/impairment must now be disclosed separately.
5. Security Deposits
Security Deposits shall now be disclosed under “Other non-current assets,” and have been omitted from “Long-term loans and advances.”
6. Trade Receivables Ageing Schedule
Under “Other non-current assets,” after item (iii), the following ageing schedule for trade receivables is inserted:
| Particulars | Outstanding for following periods from due date of payment* | |||||||
| Unbilled | Not due | Less than 6 months | 6 months – 1 year | 1-2 years | 2-3 years | More than 3 years | Total | |
| (i) Undisputed Trade receivables – considered good (ii) Undisputed Trade receivables – considered doubtful (iii) Disputed Trade Receivables – considered good (iv) Disputed Trade Receivables – considered doubtful |
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Where no due date of payment is specified, disclosure shall be from the date of the transaction. The previous requirement to separately state trade receivables outstanding beyond six months has been substituted with this aging schedule.
7. Other Procedural Changes
- Where borrowings from banks/financial institutions have not been used for their stated specific purpose and remain outstanding at the balance sheet date, the company must disclose where the funds were actually used.
- The disclosure requirement for “Specified Bank Notes” has been omitted.
D. Additional Regulatory Information
1. Title Deeds of Immovable Property Not Held in the Company’s Name
Details must be disclosed for all immovable property (excluding lessee arrangements with duly executed lease agreements) whose title deeds are not held in the company’s name. Where jointly held, disclosure is required to the extent of the company’s share.
| Relevant line item in the Balance Sheet | Description of item of property | Gross carrying value | Title deeds held in the name of | Whether title deed holder is a promoter, director or relative of promoter/director or employee of promoter/director | Property held since which date | Reason for not being held in the name of the company |
| Property, plant and equipment | Land Building | ** also indicate if in dispute | ||||
| Investment property | Land Building | |||||
| PPE retired from active use and held for disposal | Land Building | |||||
| Other |
2. PPE Revaluation Disclosure
Where the company has revalued its Property, Plant and Equipment, it must disclose whether the revaluation was based on valuation by a registered valuer as defined under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017.
3. Loans/Advances to Promoters, Directors, KMPs, and Related Parties
Details of loans or advances repayable on demand or without specified repayment terms, granted to promoters, directors, KMPs, and related parties, must be disclosed in the following format:
| Current Period | Previous Period | |||
| Type of Borrower | Amount outstanding* | % of Total^ | Amount outstanding* | % of Total^ |
| Promoters | ||||
| Directors | ||||
| KMPs | ||||
| Related Parties | ||||
*Represents loan or advance in the nature of loan. ^Represents percentage of total loans and advances in the nature of loans.
4. Capital Work-in-Progress (CWIP) Ageing and Completion Schedules
Total CWIP must be split between “Projects in progress” and “Projects temporarily suspended,” along with an ageing schedule. Disclosure is not required at asset/project level, but the total must tally with the CWIP figure in the financial statements.
| CWIP | Amount in CWIP for a period of | Total | |||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | ||
| Project in progress Project temporarily suspended |
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For CWIP projects that are overdue or have exceeded original cost plans, a completion schedule is also required:
| CWIP | To be completed in | |||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | |
| Project in progress Project 1 Project 2Project temporarily suspended Project 1 Project 2 |
||||
5. Intangible Assets Under Development
The same “Projects in progress” / “Projects temporarily suspended” split and ageing schedule applies to intangible assets under development, to the extent applicable.
6. Benami Property Disclosure
Where proceedings have been initiated or are pending against the company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988, the company must disclose: details (name and nature) of the property including year of acquisition; acquisition cost; details of beneficiaries (name, registered address, government ID, relationship with the company); the relevant balance sheet line item if recognised in the books, or the fact and reasons if not recognised; details of any proceedings against the company as abettor or transferor; and the nature and status of proceedings along with the company’s view.
7. Security of Current Assets Against Borrowings
Where the company has borrowed from banks or financial institutions at any point during the year on the security of current assets, it must disclose whether quarterly returns/statements filed with the lender agree with the books of account, and, if not, a summary of reconciliation and reasons for material discrepancies.
| Quarter | Name of Bank | Particular of securities provided | Amount as per books of account | Amount as reported in quarterly return/statement | Amount of difference | Reason of material discrepancies |
| June 20XX | Bank XYZ | Finished goods | XX | XX | XX |
This includes both fund-based and non-fund-based credit facilities, fresh and renewed sanctions during the period, and is confined to quarterly (not monthly) returns even where monthly returns are also submitted to lenders.
8. Wilful Defaulter Disclosure
Where a company has been declared a wilful defaulter by any bank, financial institution, or other lender (per RBI guidelines), it must disclose the date of declaration and details of the default (amount and nature).
9. Relationship with Struck-Off Companies
Where the company has transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956, details must be disclosed including nature of transaction, outstanding balances (gross, without netting provisions), and relationship, for both current and previous periods — including transactions fully settled within the year. Companies restored by an adjudicating authority before financial statement approval are excluded.
10. Registration of Charges
Where charges or satisfactions remain unregistered with the Registrar of Companies beyond the statutory period, details and reasons for the delay must be disclosed.
11. Compliance with Layering Restrictions
Where the company has not complied with the prescribed number of layers under Section 2(87) read with the Companies (Restriction on Number of Layers) Rules, 2017, the names and CINs of companies beyond the specified layers, along with the relationship/extent of holding, must be disclosed.
12. Analytical Ratios
The company must explain the numerator and denominator for each of the following ratios, with commentary required for any variance exceeding 25% versus the prior year: Current Ratio, Debt-Equity Ratio, Debt Service Coverage Ratio, Return on Equity Ratio, Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payable Turnover Ratio, Net Capital Turnover Ratio, Net Profit Ratio, Return on Capital Employed, and Return on Investment.
13. Compliance with Approved Schemes of Arrangement
Where a Scheme of Arrangement has been approved under Sections 230–237 of the Companies Act, 2013, the company must disclose whether the effect of the scheme has been accounted for in accordance with the scheme and with the applicable accounting standard, explaining any deviation.
14. Utilisation of Borrowed Funds and Share Premium
Where a company has advanced, loaned, or invested funds to intermediaries with the understanding that the intermediary will, in turn, lend, invest, or provide guarantees/security to ultimate beneficiaries identified by or on behalf of the company, the company must disclose the dates and amounts of funds advanced to each intermediary, the dates and amounts further advanced by such intermediaries to other intermediaries or ultimate beneficiaries, details of any guarantees/security provided, and a declaration of FEMA and Companies Act compliance and non-violation of the Prevention of Money-Laundering Act, 2002. An equivalent disclosure applies where the company itself has received funds from a funding party under a similar understanding to on-lend or provide guarantees on the funding party’s behalf.
E. In Part II – Statement of Profit and Loss
| EARLIER in the face of Statement of P&L | NOW in the face of Statement of P&L |
| I. Revenue from operation II. Other Income III. Total Revenue (I+II) |
I. Revenue from operation II. Other Income III. Total Income (I+II) |
1. Grants or Donations Received (Section 8 Companies)
In paragraph 2, item (A), after sub-item (b) (Sale of Service), “Grants or donations received” has been inserted as a disclosure item relevant for Section 8 companies.
2. Undisclosed Income
Companies must disclose details of any transaction not recorded in the books that was surrendered or disclosed as income during tax assessments under the Income Tax Act, 1961 (e.g., following a search or survey), unless immunity applies under a relevant scheme, and must state whether the previously unrecorded income and related assets have since been properly recorded.
| S. No. | Assessment Year | Section of the Act | Amount disclosed in tax return | Transaction description along with value treated as income | Assessment Status | Whether transaction recorded in books of account? | FY in which transaction is recorded |
3. Corporate Social Responsibility (CSR)
Companies covered under Section 135 must disclose the amount required to be spent during the year, expenditure incurred, shortfall at year-end, total prior-year shortfall, reasons for shortfall, nature of CSR activities, related-party transaction details (e.g., contributions to a company-controlled trust), and, where a provision has been made for a contractual CSR liability, the movement in that provision during the year.
4. Crypto Currency / Virtual Currency Disclosure
Where the company has traded or invested in crypto or virtual currency during the year, it must disclose the profit or loss on such transactions; the amount of currency held as at the reporting date; and any deposits or advances received from any person for the purpose of trading or investing in crypto/virtual currency.
What This Means for Finance and Compliance Teams
This amendment is one of the more operationally significant Schedule III changes in recent years, because several of the new requirements, aging schedules for CWIP, trade receivables, trade payables, and intangible assets under development; the bank reconciliation disclosure for secured borrowings; and the ratio variance commentary require data that finance teams may not have been systematically tracking before. Building these disclosures accurately, particularly the aging schedules and the quarterly bank reconciliation, typically requires process and system changes well in advance of year-end, not a one-time disclosure exercise at the close of the reporting period.
How MBG Can Help
Operationalizing this Schedule III amendment, building the data capture processes for aging schedules, structuring the ratio disclosure and variance analysis, and ensuring related-party and governance disclosures are complete and accurate is exactly the kind of compliance work MBG’s accounting advisory services and financial reporting and assurance teams support on an ongoing basis. For companies needing to assess whether their internal controls and data systems can reliably produce these disclosures, our internal financial controls practice can help identify and close any process gaps before they become a year-end scramble.