# Schedule III Companies Act Format and Key Disclosures in 2026

> Source: https://krystal7.com/insights/schedule-iii-financial-statements-format-india
> Publisher: Krystal7 Consultants (Krystal7 Innovations Private Limited), Gurugram, India
> Author: CA Nandini
> Published: 29 Mar 2026; updated 24 Oct 2026
> Summary: Schedule III sets the format of Indian company accounts. Since 1 Apr 2021 it has required ageing schedules, 11 ratios and promoter shareholding.

*Written by CA Nandini Hasija, Krystal7 Consultants. Last updated 23 October 2026.*

## AI Overview Summary

- Section 129(1) of the Companies Act, 2013 requires Schedule III accounts, except for banks, insurers and electricity companies. Indian AS companies use Division I, Ind AS companies Division II and Ind AS NBFCs Division III.
- From 1 Apr 2021, Schedule III added promoter shareholding, ageing schedules, title deed and benami disclosures, 11 ratios with reasons for changes above 25 percent, CSR and crypto details.
- Rounding depends on total income: below INR 100 crore, to hundreds, thousands, lakhs or millions; INR 100 crore or more, to lakhs, millions or crores, used uniformly.
- Trade payables split dues to micro and small enterprises from others, with the five interest disclosures that section 22 of the MSMED Act, 2006 requires.
- A foreign parent's IFRS or US GAAP pack never replaces Schedule III accounts. Map the group chart of accounts to Schedule III lines and add the Indian regulatory notes the pack lacks.

**Schedule III to the Companies Act, 2013 sets the format of Indian company financial statements and notes, under section 129(1). Division I applies to companies on Indian Accounting Standards, Division II to Ind AS companies and Division III to Ind AS NBFCs. Since 1 Apr 2021, Schedule III has also required ageing schedules, promoter shareholding, 11 ratios and other regulatory notes.**

This page covers the two main divisions, the 2021 disclosures, rounding, and the MSME and related party notes. It ends with how a foreign parent's group pack maps to Schedule III. INR 1 crore is 10 million, and INR 1 lakh is 100,000.

## What is Schedule III of the Companies Act?

Schedule III is the statutory format for Indian company financial statements. Section 129(1) of the Companies Act, 2013 requires accounts that give a true and fair view and comply with the notified accounting standards. They must also follow "the form or forms" in Schedule III, which covers the balance sheet, the statement of profit and loss and the notes.

The schedule has three divisions. The table shows which one a company uses.

| Division | Applies to | Accounting standards | Main statements |
|---|---|---|---|
| Division I | Companies not on Ind AS | Companies (Accounting Standards) Rules, 2021 (Indian AS) | Balance sheet, statement of profit and loss, notes; cash flow statement under AS 3 |
| Division II | Ind AS companies other than NBFCs | Companies (Indian Accounting Standards) Rules, 2015 | Balance sheet, statement of profit and loss with other comprehensive income, statement of changes in equity, notes |
| Division III | NBFCs on Ind AS | Companies (Indian Accounting Standards) Rules, 2015 | Formats built for lending and investment businesses |

The heading of Division I in the Act's text still names the Companies (Accounting Standards) Rules, 2006. Those rules are now cited as the Companies (Accounting Standards) Rules, 2021. In practice, Division I is the format for every company on Indian AS.

The second proviso to section 129(1) leaves out insurance and banking companies, electricity companies and others whose own law specifies a format. A foreign owned operating company is rarely in those classes.

Our note on [Ind AS applicability for a foreign owned company](/insights/ind-as-applicability-private-companies-foreign-subsidiary) explains which companies move from Division I to Division II.

## How do Division I and Division II differ?

Division I starts with equity and liabilities and uses shareholders' funds and reserves and surplus. Division II starts with assets, separates financial assets and liabilities, and adds other comprehensive income and a statement of changes in equity. The regulatory disclosures added in 2021 sit in both divisions.

| Feature | Division I (Indian AS) | Division II (Ind AS) |
|---|---|---|
| Order of the balance sheet | Equity and liabilities first, then assets | Assets first, then equity and liabilities |
| Equity captions | Share capital; reserves and surplus; money received against share warrants | Equity share capital; other equity |
| Financial assets and liabilities | No separate heading | Shown separately: investments, trade receivables, loans, others; borrowings, lease liabilities, trade payables, others |
| Lease liabilities | No line, as AS 19 keeps operating leases off the balance sheet | Separate line under financial liabilities, added in 2021 |
| Other comprehensive income | Not used | Shown in the statement of profit and loss |
| Statement of changes in equity | Not required | Required, for share capital and other equity |
| Trade receivables ageing | Undisputed and disputed, each good or doubtful | Adds significant increase in credit risk and credit impaired |
| Additional Regulatory Information | Required | Required |
| Rounding by total income | Required | Required |

General Instruction 1 in each division lets the company change headings where the Act or an accounting standard requires it. General Instruction 2 says the schedule's disclosures add to those in the accounting standards and do not replace them.

## What did the 2021 amendments to Schedule III add?

MCA amended Schedule III by notification G.S.R. 207(E) of 24 Mar 2021, for financial years from 1 Apr 2021. It added promoter shareholding, ageing schedules, title deed and benami notes, 11 ratios, CSR and crypto details, and other regulatory information. Both divisions carry the changes.

The additions fall into four groups. The table lists them with the notes that hold them.

| Group | Disclosure | What the company shows |
|---|---|---|
| Share capital | Shareholding of promoters | Each promoter's shares, percentage held and percentage change in the year, by class |
| Ageing | Trade receivables | Undisputed and disputed balances by age: less than 6 months, 6 months to 1 year, 1 to 2 years, 2 to 3 years, more than 3 years |
| Ageing | Trade payables | MSME, others and disputed dues by age from the due date: less than 1 year, 1 to 2 years, 2 to 3 years, more than 3 years |
| Ageing | Capital work in progress and intangible assets under development | Ageing by project, and a completion schedule for overdue or over budget projects |
| Assets | Title deeds not in the company's name | Property, carrying value, title holder, relationship, date held and reason |
| Assets | Revaluation of property, plant and equipment | Whether a registered valuer did the valuation |
| Loans | Loans to promoters, directors, KMPs and related parties | Amounts repayable on demand or without repayment terms, with percentage of total loans |
| Regulatory | Benami property proceedings | Details of proceedings under the Prohibition of Benami Property Transactions Act, 1988 |
| Regulatory | Borrowings against current assets | Whether quarterly statements to banks agree with the books, with reconciliation |
| Regulatory | Wilful defaulter | Date of declaration and nature and amount of default |
| Regulatory | Struck off companies | Nature of balances or transactions with struck off companies and the relationship |
| Regulatory | Charges | Charges or satisfactions not registered with the ROC within the statutory period |
| Regulatory | Layers of companies | Any breach of the permitted number of layers |
| Regulatory | Ratios | 11 ratios, with the formula and reasons for any change above 25 percent |
| Regulatory | Schemes of arrangement | Whether the scheme is accounted for as approved, with deviations explained |
| Regulatory | Funds through intermediaries | Funds lent or invested through intermediaries for ultimate beneficiaries, and funds received for that purpose |
| Profit and loss | Undisclosed income | Income surrendered or disclosed in tax assessments and not recorded in the books |
| Profit and loss | CSR | Amount required, amount spent, shortfall, reasons, nature of activities, related party spend, provision movement |
| Profit and loss | Crypto or virtual currency | Profit or loss, amount held and deposits or advances received |

The same notification moved current maturities of long term borrowings into short term borrowings. It renamed tangible assets as property, plant and equipment in Division I. It also changed the rounding test from turnover to total income.

## Which 11 ratios does Schedule III require?

Schedule III requires 11 ratios, from the current ratio and debt equity ratio to return on capital employed and return on investment. The company states the formula for each. It explains any change of more than 25 percent from the previous year. The table lists all 11.

The schedule names the ratios but leaves the formula to the company. The note must show the numerator and denominator used. Keep the same formula every year, or the comparison means little.

| Ratio | Usual numerator | Usual denominator |
|---|---|---|
| Current ratio | Current assets | Current liabilities |
| Debt equity ratio | Total debt | Shareholders' equity |
| Debt service coverage ratio | Earnings available for debt service | Interest and principal due in the year |
| Return on equity | Net profit after tax | Average shareholders' equity |
| Inventory turnover | Cost of goods sold or sales | Average inventory |
| Trade receivables turnover | Revenue from operations | Average trade receivables |
| Trade payables turnover | Purchases | Average trade payables |
| Net capital turnover | Revenue from operations | Working capital |
| Net profit ratio | Net profit | Revenue from operations |
| Return on capital employed | Earnings before interest and tax | Capital employed |
| Return on investment | Income from investments | Average investments |

These are common working definitions, not prescribed ones. A service subsidiary with no inventory states that the inventory ratio does not apply. A cost plus subsidiary often shows stable margins, so the explanations mostly concern working capital and new borrowing.

## How should figures be rounded under Schedule III?

Rounding depends on total income. Below INR 100 crore, a company rounds to the nearest hundreds, thousands, lakhs or millions, or decimals of them. At INR 100 crore or more, it rounds to the nearest lakhs, millions or crores, or decimals of them. Once chosen, the unit applies uniformly across the statements.

The 2021 amendment replaced turnover with total income as the test. We read total income as revenue from operations plus other income, the total in the statement of profit and loss. A company near INR 100 crore should check the figure each year, because crossing the line rules out thousands and hundreds.

So a company with INR 85 crore of total income may present in INR thousands or INR lakhs. One with INR 140 crore may present in INR lakhs or INR crore, but not in thousands.

The statutory accounts are in Indian rupees. A parent's pack in USD thousands does not meet Schedule III, even if converted line by line. Convert at the transaction level in the Indian ledger, then present in an allowed rupee unit.

## What MSME disclosures does Schedule III require?

Schedule III splits trade payables into dues to micro and small enterprises and dues to others. The notes then give five figures that section 22 of the MSMED Act, 2006 requires. They cover unpaid principal and interest, interest paid under section 16, interest due for the delay, interest accrued and unpaid, and further interest.

The five notes in Division I read as follows:

1. The principal amount and the interest due on it, shown separately, remaining unpaid to any supplier at the year end.
2. The interest paid by the buyer under section 16 of the MSMED Act, with the payments made to suppliers after the appointed day.
3. The interest due and payable for the period of delay, where payment was made late but without the interest.
4. The interest accrued and remaining unpaid at the year end.
5. Further interest remaining due and payable in later years, until the dues are paid.

The figures rest on section 15 and section 16 of the MSMED Act. Section 15 allows 15 days where there is no written agreement, and at most 45 days with one. Section 16 charges compound interest with monthly rests at three times the RBI bank rate. At a bank rate of 5.50 percent, the rate RBI's homepage showed on 25 Sep 2026, that is 16.5 percent a year. After the October 2026 policy review the homepage showed 5.75 percent, which gives 17.25 percent. Use the rate in force for each month of the delay.

Section 23 of the MSMED Act bars a tax deduction for this interest. Tax law also restricts the deduction for late payments to these suppliers. For years up to FY 2025-26, section 43B(h) of the Income Tax Act, 1961 applies.

The split depends on knowing which suppliers are registered. We ask every Indian supplier for its Udyam registration number at onboarding and record the category in the vendor master. Our guide to the [MSME Form 1 and the 45 day payment rule](/insights/msme-form-1-45-day-payment-rule) covers the half yearly return.

To see how the registration behind a supplier's Udyam number works, read our guide to [Udyam registration for foreign owned companies](/insights/udyam-registration-online-for-small-business).

## What related party disclosures does Schedule III need?

Schedule III adds to the related party note under AS 18 or Ind AS 24. It asks for shares held by the holding company and ultimate holding company, and promoter shareholding. It also asks for loans due from directors and officers, and loans to related parties repayable on demand or without terms.

For a foreign owned subsidiary, these notes nearly always name the parent. The parent holds the shares, usually controls the company and so counts as a promoter under section 2(69). The note on shares held by the holding company names it. The ultimate holding company appears too, even when it sits two or three tiers up abroad.

| Disclosure | Source rule | What a foreign owned subsidiary usually shows |
|---|---|---|
| Related party list, relationships and transactions | AS 18 or Ind AS 24 | Parent, ultimate parent, fellow subsidiaries, directors and KMPs; service fees, cost recharges, loans, share issues |
| Shares held by the holding company or ultimate holding company | Schedule III share capital note | Parent's shares by class; any nominee shareholder |
| Promoter shareholding and change in the year | Schedule III share capital note | Parent's percentage, and any change from a rights issue or transfer |
| Debts and loans due from directors and officers | Schedule III receivables and loans notes | Staff loans to directors, travel advances outstanding |
| Loans repayable on demand or without terms | Additional Regulatory Information | Intercompany loans given to a fellow subsidiary or the parent |
| Contracts with related parties | Section 188 and Form AOC-2 in the board's report | Service agreements with the parent and fellow subsidiaries |

The nominee holder matters. Many wholly owned subsidiaries keep one share with a nominee to meet the two member minimum for a Private Limited company. The share capital note should show both holdings, and the related party note should explain the nominee arrangement.

Our note on [related party transactions under section 188](/insights/related-party-transactions-section-188-indian-subsidiary) covers board and shareholder approvals.

## What do the CSR and crypto notes require?

A company covered by section 135 discloses the CSR amount required, the amount spent and any shortfall, with earlier shortfalls and reasons. It adds the nature of activities, related party spend and provision movements. A company that dealt in crypto discloses the profit or loss, the amount held and deposits received.

Section 135 applies when a company met any one test in the preceding financial year. The tests are net worth of INR 500 crore, turnover of INR 1,000 crore or net profit of INR 5 crore, or more. It must spend at least 2 percent of its average net profits of the three preceding financial years. Many foreign owned service subsidiaries cross the INR 5 crore profit line well before the other two.

Our note on [CSR applicability for a foreign owned company](/insights/csr-applicability-foreign-owned-company-india) covers the committee, the policy and the unspent account.

## How does a foreign parent's group pack map to Schedule III?

A group pack follows the parent's IFRS or US GAAP chart of accounts and calendar. Schedule III accounts follow Indian standards, the Indian 31 March year and the Indian line items. The two need a documented mapping from each group account to a Schedule III line, plus the Indian notes that the pack never asks for.

Section 129(1) leaves no room for a pack to stand in for the statutory accounts. The Indian company keeps one ledger and produces two outputs. The mapping should sit in the ledger itself, through a second reporting hierarchy, rather than in a spreadsheet rebuilt every March.

| Group pack line (IFRS) | Division II line (Ind AS) | Division I line (Indian AS) | Watch for |
|---|---|---|---|
| Property, plant and equipment | Property, plant and equipment | Property, plant and equipment | Indian depreciation under Schedule II useful lives |
| Right of use assets | Usually shown within property, plant and equipment or as a separate line | None; operating lease rent expensed under AS 19 | Remove for Division I |
| Intercompany receivable from parent for services | Trade receivables (financial asset) | Trade receivables | Ageing schedule; export proceeds realisation dates |
| Loan from parent | Borrowings, with current maturities in current borrowings | Long term borrowings, current maturities in short term borrowings | ECB reporting and charge filing where secured |
| Lease liabilities | Lease liabilities (financial liabilities) | None | Remove for Division I |
| Accrued expenses and vendor payables | Trade payables, split MSE and others | Trade payables, split MSE and others | MSME interest notes |
| Deferred revenue | Other current liabilities | Other current liabilities | Revenue standard differences |
| Share based payment recharge from parent | Other equity or liability, by plan terms | Depends on the AS treatment the company adopts | Group plans need Indian accounting advice |
| Statutory dues payable (GST, TDS, PF) | Other current liabilities | Other current liabilities | Ties to returns and challans |
| Retained earnings and other reserves | Other equity | Reserves and surplus | Ind AS transition reserve; OCI items |

The pack also misses the Indian regulatory notes: promoter shareholding, title deeds, struck off companies, unregistered charges, MSME interest, CSR and ratios. Build a year end questionnaire for these and send it to the Indian finance lead and group legal.

Our note on the [31 March year end and a December parent](/insights/year-end-31-march-vs-december-parent-consolidation) covers the calendar mismatch. Our note on the [MIS report format for an Indian subsidiary](/insights/mis-report-indian-subsidiary-foreign-parent) covers the monthly view.

## How do the Schedule III accounts reach the Registrar?

The board approves the Schedule III accounts, the auditor signs, and the members adopt them at the AGM. The company files them with the ROC in Form AOC-4 within 30 days of the AGM. Companies above the XBRL thresholds, and every Ind AS company, file AOC-4 in XBRL, tagging each Schedule III line.

The XBRL taxonomy follows Schedule III line by line. A poor mapping from the ledger to Schedule III therefore shows up twice: in the printed accounts and in the tags. Our note on [AOC-4 XBRL filing](/insights/xbrl-filing-aoc-4-foreign-owned-company) covers the tagging, and our guide to [AOC-4 and MGT-7 annual filing](/insights/aoc-4-mgt-7-annual-filing-foreign-owned-company) covers the deadlines.

The auditor checks the Schedule III notes against the books. The Additional Regulatory Information also links to the auditor's own reporting. For example, rule 11(e) of the Companies (Audit and Auditors) Rules, 2014 asks about funds routed through intermediaries. The Schedule III note covers the same funds. Our note on the [audit trail rule](/insights/audit-trail-edit-log-accounting-software-india) covers another rule 11 item.

## What changed in 2026

We trace no change to Schedule III itself in 2026. The latest amendment we can find is G.S.R. 207(E) of 24 Mar 2021, and the Income Tax Department's copy of the schedule carries those 2021 changes. MCA keeps the official list, so check its notifications page for anything newer. The standards and laws behind several notes did change. The table lists them.

| Item | Old position | New position | Date | Instrument |
|---|---|---|---|---|
| Small company limits | INR 4 crore paid up capital, INR 40 crore turnover | INR 10 crore paid up capital, INR 100 crore turnover | 1 Dec 2025 | G.S.R. 880(E) |
| AS 22 for Division I companies | No Pillar Two relief | No deferred tax on Pillar Two income taxes, with new disclosures | 10 Mar 2026 | Companies (Accounting Standards) Amendment Rules, 2026, G.S.R. 169(E) |
| Income tax law behind the undisclosed income note | Income Tax Act, 1961 | Income Tax Act, 2025 | 1 Apr 2026 | Act 30 of 2025 |
| Ind AS 101, 107, 109, 110 and 7 for Division II companies | Earlier text | Contingent features in financial assets, electricity contracts that depend on nature, annual improvements | 12 Aug 2026, for periods from 1 Apr 2026 | Companies (Indian Accounting Standards) Amendment Rules, 2026, G.S.R. 725(E) |
| MSMED Act behind the MSME notes | MSMED Act, 2006 | MSMED (Amendment) Act, 2026: new section 27 penalty for missing the section 22 disclosure; each provision starts on notification | Gazette 13 Aug 2026 | Act 16 of 2026 |
| Schedule III formats | 2021 text | No change that we can trace | None | None |

### What has happened since

This page was first published on 29 Mar 2026. Since then:

1. The Income Tax Act, 2025 came into force on 1 Apr 2026. The Schedule III undisclosed income note still names the Income Tax Act, 1961. We read it as covering assessments under the 2025 Act for later years, until MCA amends the wording.
2. MCA notified G.S.R. 725(E) on 12 Aug 2026, amending several Ind AS for periods from 1 Apr 2026. Division II companies apply it in FY 2026-27 accounts.
3. The MSMED (Amendment) Act, 2026 was published in the Gazette on 13 Aug 2026. Sections 15 to 17 and 22 to 24 are unchanged. The new section 27 penalty for failing to make the section 22 disclosure starts only when notified. We had found no commencement notification by 1 Oct 2026.

## Worked example

Take a hypothetical Indian subsidiary of a UK group, on Indian AS and so on Division I. Its figures for FY 2025-26 are below, in INR crore.

### Rounding

1. Revenue from operations is INR 120 crore and other income is INR 2 crore.
2. Total income is 120 plus 2, which is INR 122 crore.
3. That is INR 100 crore or more, so the company presents in lakhs, millions or crores.
4. It picks INR crore to two decimals and uses that unit in every statement and note.

### Two ratios

| Ratio | FY 2025-26 | FY 2024-25 | Change | Explanation needed? |
|---|---|---|---|---|
| Debt equity: total debt over equity | 25 over 50 is 0.50 | 10 over 45 is 0.22 | Up 125 percent | Yes: a new loan from the parent |
| Return on equity: profit after tax over average equity | 6 over 47.5 is 12.6 percent | 7 over 42.5 is 16.5 percent | Down 23.3 percent | No, as it is below 25 percent |

The debt equity change is (0.50 minus 0.22) divided by 0.22, which is about 125 percent on the unrounded figures. The note says the company drew a new loan from its parent in FY 2025-26. The return on equity change is (12.63 minus 16.47) divided by 16.47, about 23.3 percent, so no explanation is required.

### MSME interest

The company paid a micro enterprise's invoice of INR 10,00,000 two months after the 45 day limit, without interest. Assume the bank rate stood at 5.50 percent for the whole delay; use the actual rate for your own period.

1. Annual rate: three times the bank rate of 5.50 percent is 16.5 percent.
2. Monthly rate: 16.5 divided by 12 is 1.375 percent.
3. Compound interest for two months: 10,00,000 times (1.01375 squared minus 1) is about INR 27,689.
4. The note shows INR 27,689 as interest due and payable for the delay, and as accrued and unpaid at 31 Mar 2026.
5. Section 23 of the MSMED Act bars a tax deduction for that interest.

## Common mistakes

1. **Filing the parent's pack format.** Fix: present Schedule III accounts in rupees and map the pack to Schedule III lines.
2. **Using thousands above INR 100 crore of total income.** Fix: test total income each year and switch to lakhs, millions or crores.
3. **Leaving out the parent's promoter shareholding.** Fix: treat a controlling parent as a promoter under section 2(69) and show its percentage and change.
4. **No MSME split.** Fix: collect Udyam numbers at vendor onboarding and tag micro and small suppliers in the vendor master.
5. **Ageing receivables from invoice date without disputed buckets.** Fix: age from the due date where one exists, and split disputed and undisputed balances.
6. **Ratios without formulas.** Fix: state numerator and denominator, keep them stable and explain every change above 25 percent.
7. **Ignoring struck off counterparties.** Fix: check vendor and customer CINs against the MCA register before year end.
8. **Forgetting unregistered charges.** Fix: reconcile every secured loan with the charge register and file CHG-1 on time.
9. **Treating CSR as a group matter.** Fix: test section 135 on the Indian company's own figures each year.
10. **Copying last year's Additional Regulatory Information.** Fix: rerun the questionnaire every year with fresh answers and evidence.

## Checklist

1. Confirm whether the company uses Division I or Division II for the year.
2. Compute total income and choose the rounding unit.
3. Map every group pack account to a Schedule III line in the ledger.
4. Prepare the promoter shareholding table, naming the parent and any nominee.
5. Build the trade receivables, trade payables, CWIP and intangibles ageing schedules from the ledger.
6. Tag micro and small suppliers and compute section 16 interest on late payments.
7. Compute the 11 ratios with stated formulas and explain changes above 25 percent.
8. Collect answers and evidence for each Additional Regulatory Information item.
9. Complete the CSR note if section 135 applied in the preceding year.
10. Reconcile the related party note with the section 188 register and Form AOC-2.
11. Check the statements against the XBRL taxonomy before the AOC-4 filing.
12. Share the draft accounts and the questionnaire with the auditor before fieldwork.

Our [accounting and bookkeeping service](/services/accounting-bookkeeping.html) prepares Schedule III accounts and group packs from one ledger for foreign owned subsidiaries.

To have us review a draft set, email business@krystal7.com with last year's filed accounts and the group pack template.

## Key terms

- **Schedule III (Companies Act, 2013)**: The schedule that sets the form of the balance sheet, statement of profit and loss and notes for Indian companies, under section 129(1) of the Companies Act, 2013. Division I applies to companies on Indian AS, Division II to Ind AS companies and Division III to Ind AS NBFCs. (https://krystal7.com/glossary#schedule-iii-companies-act-2013)
- **Additional Regulatory Information**: The set of Schedule III notes, added from 1 Apr 2021, on matters such as title deeds, loans to promoters and directors, benami proceedings, wilful defaulter status, struck off companies, unregistered charges, layers of subsidiaries, ratios and funds routed through intermediaries. (https://krystal7.com/glossary#additional-regulatory-information)
- **Promoter (section 2(69))**: A person named as promoter in a prospectus or the annual return, a person with control over the company's affairs, or a person on whose advice the board usually acts, under section 2(69) of the Companies Act, 2013. A controlling foreign parent is usually a promoter. (https://krystal7.com/glossary#promoter-section-2)
- **Micro and small enterprise (MSE) dues**: Amounts a company owes to suppliers registered as micro or small enterprises under the MSMED Act, 2006. Schedule III shows them separately within trade payables, and section 22 of that Act requires notes on unpaid principal, interest paid and interest still due. (https://krystal7.com/glossary#micro-and-small-enterprise-dues)
- **Wilful defaulter**: A borrower that a bank, financial institution or other lender has declared a wilful defaulter under the Reserve Bank of India's framework. Schedule III requires a company so declared to disclose the date of declaration and the nature and amount of the defaults. (https://krystal7.com/glossary#wilful-defaulter)
- **Total income (for Schedule III rounding)**: The figure that decides the rounding units in Schedule III financial statements since 1 Apr 2021. In practice it is revenue from operations plus other income in the statement of profit and loss, with INR 100 crore as the dividing line. (https://krystal7.com/glossary#total-income-for-schedule-iii-rounding)

## Frequently Asked Questions

### What is Schedule III of the Companies Act, 2013?

Schedule III is the format for Indian company financial statements under section 129(1) of the Companies Act, 2013. It sets the balance sheet, the statement of profit and loss and the notes. Division I covers companies on Indian AS, Division II covers Ind AS companies and Division III covers Ind AS NBFCs.

### Which Schedule III division applies to a foreign owned subsidiary?

It depends on the accounting standards the Indian subsidiary uses. A subsidiary on the Companies (Accounting Standards) Rules, 2021 uses Division I. A subsidiary on Ind AS under rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 uses Division II. An Ind AS NBFC uses Division III.

### When did the Schedule III amendments take effect?

MCA notified the amendments on 24 Mar 2021, for financial years from 1 Apr 2021. FY 2021-22 accounts were the first to carry them in full, with comparatives for FY 2020-21. They added ageing schedules, promoter shareholding, 11 ratios, title deeds, benami, wilful defaulter, CSR and crypto disclosures.

### How do I round figures under Schedule III?

Use total income. Below INR 100 crore, round to the nearest hundreds, thousands, lakhs or millions, or decimals of them. At INR 100 crore or more, round to the nearest lakhs, millions or crores, or decimals of them. Use one unit uniformly across all statements and notes.

### Does Schedule III require an MSME disclosure?

Yes. Trade payables split dues to micro and small enterprises from others. The notes also give five figures under section 22 of the MSMED Act, 2006. They cover unpaid principal and interest, interest paid under section 16, and interest due, accrued and carried forward. Section 16 interest is three times the RBI bank rate.

### Which ratios must be disclosed under Schedule III?

Schedule III names eleven. They are the current, debt equity and debt service coverage ratios, return on equity, and inventory, receivables, payables and net capital turnover. The rest are net profit ratio, return on capital employed and return on investment. The company explains any change above 25 percent.

### Is a foreign parent a promoter for the Schedule III shareholding note?

Usually yes. Section 2(69) of the Companies Act, 2013 includes a person who controls the company's affairs, directly or indirectly. A parent holding all or most of the shares has that control. The note shows its shares, percentage and change in the year, along with any nominee shareholder.

### Can an Indian subsidiary file its accounts in the parent's IFRS format?

No. Section 129(1) of the Companies Act, 2013 requires financial statements that comply with notified Indian accounting standards in Schedule III form. The subsidiary files Indian AS or Ind AS accounts in Division I or Division II. It sends the parent a separate IFRS or US GAAP reporting pack.

### What is the trade receivables ageing schedule?

It is a Schedule III table that splits trade receivables into undisputed and disputed balances, each considered good or doubtful. It ages them in five bands, from less than 6 months to more than 3 years. Division II adds credit risk categories.

### What are the title deed disclosures in Schedule III?

A company lists immovable property whose title deeds are not in its own name. The note gives the balance sheet line, the property, the gross carrying value and the title holder. It states whether the holder is a promoter, director, relative or employee, the date held and the reason.

### Does Schedule III need a statement of changes in equity?

Only under Division II. Ind AS companies present a statement of changes in equity for equity share capital and other equity, for the current and previous periods. Division I companies on Indian AS do not, though they show movements in reserves and surplus in the notes.

### What must the CSR note under Schedule III show?

A company covered by section 135 shows the amount required to be spent, the amount spent and any shortfall at the year end. It adds the total of earlier shortfalls, the reasons, the nature of activities, related party spend and any provision movement. The note sits under the statement of profit and loss.

### Does Schedule III apply to an LLP?

No. Schedule III is part of the Companies Act, 2013 and applies to companies through section 129(1). An LLP keeps its books and prepares its statement of accounts and solvency under the LLP Act, 2008 and the LLP Rules, 2009. A foreign owned LLP therefore does not use Division I or Division II.

### Do the Schedule III notes go into the XBRL filing?

Yes, for companies that file AOC-4 in XBRL. The taxonomy follows Schedule III line by line, including the Additional Regulatory Information. Ind AS companies, listed companies and companies above INR 5 crore paid up capital or INR 100 crore turnover file in XBRL.

## Sources

- Income Tax Department (Companies Act, 2013 text), Schedule III, Divisions I and II, accessed 23 Oct 2026, https://www.incometaxindia.gov.in/w/schedule-iii
- Income Tax Department (Companies Act, 2013 text), Section 129, financial statement, accessed 23 Oct 2026, https://www.incometaxindia.gov.in/w/section-129-81
- Income Tax Department (Companies Act, 2013 text), Section 2, definitions including clauses 41, 69 and 87, accessed 23 Oct 2026, https://www.incometaxindia.gov.in/w/section-2-148
- Ministry of Corporate Affairs, Notifications: Schedule III amendment of 24 Mar 2021; G.S.R. 880(E) of 1 Dec 2025; G.S.R. 169(E) of 10 Mar 2026; G.S.R. 725(E) of 12 Aug 2026, https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/notifications.html
- India Code, Companies Act, 2013 (sections 129, 135 and 188), https://www.indiacode.nic.in/handle/123456789/2114
- Companies (Indian Accounting Standards) Rules, 2015, G.S.R. 111(E) of 16 Feb 2015, High Court of Tripura rules library, https://thc.nic.in/Central%20Governmental%20Rules/Companies%20(Indian%20Accounting%20Standards)%20Rules,2015.pdf
- Reserve Bank of India, homepage bank rate of 5.50 percent on 25 Sep 2026 and 5.75 percent on 23 Oct 2026, https://www.rbi.org.in

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