Check List Companies Act - Download Schedule III amendments in Excel format

Schedule III Amendments to Companies Act, 2013 – Explained with Excel Format

The Ministry of Corporate Affairs (MCA), through a notification dated 24th March 2021, introduced significant changes to Schedule III of the Companies Act, 2013. These amendments are applicable from 1st April 2021 onwards (for financial years starting from that date), and are relevant for the preparation of financial statements by companies across all divisions of Schedule III. To assist stakeholders in implementing these updates, detailed explanations along with downloadable Excel-based formats have been provided.

This notification mandates a range of new disclosures and reporting requirements that promote better corporate transparency, governance, and financial clarity. The amendments are applicable to companies preparing financial statements under Division I (Non-Ind AS), Division II (Ind AS), and Division III (NBFCs complying with Ind AS).

Key Amendments in the Balance Sheet

• Disclosure of Shareholding of Promoters: Companies must disclose promoter shareholding, including changes during the year.
• Current Maturities of Long-Term Borrowings: Now to be separately disclosed under Short-term borrowings after item (iv).
• Trade Payables Ageing: Disclosure required for dues outstanding, categorized into various age buckets.
• Property, Plant & Equipment (PPE) and Intangible Assets: A reconciliation of gross and net carrying amounts, with detailed disclosures for additions, disposals, revaluations (if 10% or more), depreciation, and impairment.
• Security Deposits: Removed from ‘Financial Assets’ and to be disclosed under ‘Other Non-Current Assets.’
• Trade Receivables Ageing: Mandatory ageing schedule to be presented.
• Title Deeds of Immovable Properties: Companies must disclose if any immovable property is not held in the name of the company, along with details.
• Benami Properties: Full details of any benami property held by the company must be disclosed.
• Willful Defaulter: Declaration required if the company is classified as a willful defaulter by any bank or financial institution.
• Relationship with Struck Off Companies: Disclose transactions with companies struck off under section 248 of the Act.
• Unregistered Charges: Details of charges or satisfactions yet to be registered with the Registrar of Companies (RoC) beyond statutory time limits.
• Compliance with Layering Restrictions: Disclosure if company has not complied with the number of layers of subsidiaries permitted.
• Utilization of Borrowings: If funds borrowed for specific purposes were diverted, the company must disclose actual usage.
• Loans to Related Parties: Disclose loans and advances in the nature of loans to directors, KMPs, or related parties.
• Capital Work-in-Progress (CWIP) and Intangibles Under Development: Detailed ageing and completion schedules to be provided.
• Borrowings Secured Against Current Assets: Companies must disclose whether quarterly returns submitted to banks/financial institutions align with the books of accounts. Any discrepancies must be explained.
• Financial Ratios: A list of key financial ratios (e.g., Current Ratio, Debt-Equity Ratio, Return on Equity) along with explanations for changes greater than 25% year-on-year.
• Approved Schemes of Arrangements: Any deviation in the accounting treatment from the approved scheme should be disclosed with reasons.
• Utilization of Borrowed Funds and Share Premium: Required disclosures in relation to intermediary companies, fund routing, and end-use of funds.

Key Amendments in the Profit and Loss Statement

• Undisclosed Income: Companies must disclose income surrendered during Income Tax proceedings, and confirm its recording in books.
• Corporate Social Responsibility (CSR): Detailed CSR disclosures are now mandatory, including shortfall and treatment of unspent CSR amounts.
• Cryptocurrency/Virtual Currency: If the company has traded or held cryptocurrency or virtual currency during the year, disclosures must include profit/loss, amount held, and deposits/advances received or given.

Statement of Changes in Equity

Companies are required to provide a Statement of Changes in Equity as part of their financials. The amendments demand more transparency and a format-based presentation of any changes in equity instruments, reserves, or other equity-related components. The statement should clearly outline movements in equity during the financial year.

Objective of the Amendments

The amendments aim to bring the Indian financial reporting practices in line with global standards and increase transparency. Enhanced disclosure norms under Schedule III help in detecting irregularities, discourage fund diversion, and promote accountability. This is particularly critical in ensuring that financial statements are more informative for shareholders, creditors, regulators, and other stakeholders.

Download Schedule III Amendment Excel Format

To simplify compliance, an Excel-based format has been prepared that covers the newly introduced disclosure requirements. This can serve as a practical tool for finance professionals, auditors, and company secretaries while finalizing statutory financial statements under the amended Schedule III.

📥 Download Now: Schedule III Amendment Format (Excel)

Who Needs to Comply?

All companies that are required to prepare financial statements as per Schedule III of the Companies Act, 2013 are expected to comply with these amendments. This includes:

• Private Limited Companies
• Public Limited Companies
• Listed and Unlisted Companies
• NBFCs following Ind AS

Impact on Financial Reporting

The impact of these amendments is significant for financial reporting. Companies now need to maintain additional details and records throughout the year to ensure that the required disclosures are available at year-end. Audit teams and finance professionals must plan well in advance to comply with these requirements and avoid last-minute challenges.

The requirement to disclose ageing schedules, revaluations, related party loans, and asset title deeds has added complexity but also improved reliability and credibility in the eyes of financial statement users.

Conclusion

The 2021 amendments to Schedule III mark a decisive step towards stronger financial governance and improved transparency. All companies must diligently study the implications of these changes and align their accounting and reporting practices accordingly. Utilizing the