All you need to know on Amendments in Schedule III of the Companies Act, 2013

Amendments in Schedule III of the Companies Act, 2013

On March 24, 2021, changes to Schedule III of the Companies Act of 2013 were made to enhance the accuracy and dependability of financial accounts. Schedule III also includes some new disclosures, such as loans to promoters, Benami transactions, disclosures about promoter shareholding and subsidiaries, and reconciliation of working capital filings with banks. In this article, we will look into the Amendments in Schedule III of the Companies Act, 2013.



To ensure consistency in financial statements, Schedule III offers a common reporting format. Amendments in Schedule III to the Companies Act, 2013 consist of 3 divisions that are discussed below:

  • Companies (Accounting Standards) Rules, 2006 apply to businesses who prepare their financial statements in accordance with Division I;
  • Entities compiling their financial accounts in accordance with the Companies Indian Accounting Standards Rules, 2015 are subject to Division II; and
  • Non-banking financial institutions that prepare their financial statements in accordance with Indian Accounting Standards are covered by Division III.

Amendments in Schedule III of the Companies Act, 2013

1. Companies amendments in Division I

  • The modifications to Division I are more minor and largely concern the terminology used on the balance sheet of an AS (Accounting Standard) compliant businesses, such as the substitution of “Property, Plant, and Equipment” for “Fixed Assets” under “Non-current Assets.”

2. Companies amendments in Division II

Several changes have been made to businesses that are compliant with Indian AS. The changes made to Indian AS compliant enterprises with regard to the creation and presentation of their financial statements are as follows:

  • At the top of the balance sheet, the trade payable to micro and small businesses as well as businesses other than micro and small businesses will be disclosed under the heading “Equity and Liabilities.”
  • Trade receivables, both current and non-current, are further divided into the following categories:
    • Secured trade receivables.
    • Good trade receivables that are not secured.
    • Trade receivables that have a noticeable rise in credit risk.
    • Trade Receivables – Impaired Credit
  • Current and non-current loans are further divided into the following categories:
    • Good-quality secured loans receivable.
    • Considered to be Good Unsecured Loan Receivables.
    • Loans with receivables that have an elevated credit risk.
    • Loans Receivables – Impaired Credit.
  • The extra MSME-related disclosures that must be disclosed include the following:
    • The principal balance and interest due that are outstanding at the end of the financial year.
    • The total amount paid to the supplier past the designated day throughout each accounting year, as well as the interest paid in line with Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.
    • The amount of interest that is due and payable for the time of the payment delay (which has been paid but past the day designated during the year), but without adding the interest stipulated under the Micro, Small and Medium Enterprises Development Act 2006.

3. Companies amendments in Division III

Financial Statements for an NBFC that are prepared in accordance with the 2015 Companies (Indian Accounting Standards) Rules. NBFCs subject to Indian AS – General Requirements is explained below:

  • Every NBFC that is governed by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and to which the Indian Accounting Standards apply, is required to prepare its financial statements in accordance with this schedule or with any modifications that maybe necessary in specific situations.
  • The disclosure obligations listed here are in addition to those in Indian Accounting Standards, and unless and until they are needed to be declared on the face of the financial statements, they will be made in the Notes to Accounts or through other statements.

In addition to what is shown in the financial statements, the Notes must include the following provisions:

  • Narrative descriptions or disaggregation of the objects mentioned in financial statements.
  • Details regarding things that are not eligible for recognition in the financial statements. There must be a cross-reference between each item on the balance sheet, a statement of changes in equity, and a statement of profit and loss and any pertinent data in the notes.
  • It is important to strike a balance when writing notes between including too much information that may slow down viewers of financial statements and omitting important data due to aggregation.

Amendments related to the Benami Property of a Company

Under the Benami Transactions (Prohibition) Act of 1988 and the rules made thereafter, the company is required to disclose all Benami property in respect of which legal action has been taken or is pending against the company for possessing any Benami property.


The following must be disclosed by the Company:

  • Information about the property, such as the price and the year of purchase
  • Information on Beneficiaries,
  • Refer to the information on the Balance Sheet if the property is recorded in the books.
  • If the property is not listed, the fact must be reported along with explanations.
  • The nature of the proceedings, their status, and the company’s opinion on them
  • Voluntarily defaults
  • If a bank, financial institution, or another lender declares a firm to be in willful default, the corporation must make the required disclosures.


As per the amendments in Schedule III, it is important for an entity to specify the minimal information that must be disclosed in the Notes, Balance Sheet, Statement of Profit or Loss for the Period, and Statement of Changes in Equity for the Period. According to the applicable Indian Accounting Standard, a cash flow statement needs to be formed by an accountant so that a complete view of cash flows of a company can be known.

Zarana Mehta: Zarana Mehta is an MBA in Finance from Gujarat Technology University. Though having a masters degree in Business Administration, her upbeat and optimistic approach for changes led her to pursue her passion i.e. Creative writing. She is currently working as Content Writer at Ebizfiling.
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