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Research: Schedule III (Companies Act 2013), 2021 amendment and Division II

This page supports docs/india-schedule-3.md and the code in crates/khata-in/src/schedule3.rs and schedule3_notes.rs. It adds to §3 of docs/research/india-compliance.md.

Each finding has a confidence tag:

  • [PRIMARY]: read in the MCA notification or an ICAI Guidance Note.
  • [SECONDARY]: from commentary.
  • [UNCERTAIN]: not confirmed. Check it before general availability.

Research date: October 2026.

Sources

Source What it is Tag
MCA notification of 24 Mar 2021 amending Schedule III, "with effect from 1st day of April, 2021" The original link, http://www.mca.gov.in/Ministry/pdf/ScheduleIIIAmendmentNotification_24032021.pdf, returned 403 to our fetcher. We read an identical mirror: https://ca2013.com/wp-content/uploads/2021/03/ScheduleIIIAmendmentNotification_24032021.pdf. The G.S.R. number is blank in that copy. [PRIMARY]
G.S.R. number 207(E) Given in MCA's later clarification on rounding, as quoted at https://studycafe.in/mca-issued-clarification-on-mandating-companies-to-round-off-figures-appearing-in-financial-statements-163147.html [SECONDARY]
ICAI Guidance Note on Division I, revised January 2022 https://resource.cdn.icai.org/68981clcgc55147-gnd1.pdf [PRIMARY]
ICAI Guidance Note on Division II, July 2019 (before the 2021 amendment; used only for the base formats) https://live.icai.org/bos/vcc-2nd-batch-recorded-lectures/pdf/6.%20ICAI%20Guidance%20Note%20on%20Division%20II-%20Ind%20AS%20Schedule%20III_Revised.pdf [PRIMARY]
ICAI Guidance Note on Division II, January 2022 edition Listed at https://publication.icai.org/publication/77. Not read. [UNCERTAIN]

1. Rounding off

  • The 2021 amendment changed General Instruction 4(i) of Division I from "may" to "shall", and from "Turnover" to "Total Income". [PRIMARY: notification]
  • The amended text: "Depending upon the Total Income of the company, the figures appearing in the Financial Statements shall be rounded off". The units are: [PRIMARY: GN Div I]
  • total income less than ₹100 crore: "To the nearest hundreds, thousands, lakhs or millions, or decimals thereof";
  • total income of ₹100 crore or more: "To the nearest lakhs, millions or crores, or decimals thereof".
  • "Once a unit of measurement is used, it should be used uniformly in the Financial Statements." The notes count: GN para 6.14. [PRIMARY]
  • Division II already said "shall" before 2021. In 2021 only "Turnover" became "Total Income". [PRIMARY]
  • GN para 6.15: "It is now compulsory to apply rounding off and a company cannot continue to disclose full figures." Exact rupees are therefore not a permitted unit. [PRIMARY]
  • MCA has said that absolute figures in the AOC-4 e-form are not incorrect certification (Sep 2022). [SECONDARY: studycafe]

In KhataOS: Rounding offers rupees, hundreds, thousands, lakhs, millions and crores. Figures are shown to two decimals in the chosen unit. Rupees remain the default for working papers, but the statements show a warning until a permitted unit is chosen. The warning also appears when the unit does not suit the company's total income (Rounding::allowed). Each figure is rounded on its own, so a rounded total can differ from the sum of the rounded lines. [UNCERTAIN] How rounding differences should be presented is not set out in the text.

2. Trade receivables ageing

  • Division I [PRIMARY: notification]
  • Location: under heading P "Trade Receivables", item (i). The same table appears for long-term receivables under M "Other non-current assets".
  • The table is "Outstanding for following periods from due date of payment".
  • Columns: Less than 6 months | 6 months - 1 year | 1-2 years | 2-3 years | More than 3 years | Total.
  • Rows:
    • (i) Undisputed Trade receivables – considered good
    • (ii) Undisputed Trade Receivables – considered doubtful
    • (iii) Disputed Trade Receivables considered good
    • (iv) Disputed Trade Receivables considered doubtful
  • Footnote: where no due date is specified, the disclosure is "from the date of the transaction". "Unbilled dues shall be disclosed separately."
  • ICAI Guidance Note [PRIMARY: GN Div I]
  • Add "Unbilled" and "Not due" columns before the ageing columns, so that the total ties to the balance sheet.
  • The due date comes from the terms agreed between buyer and supplier.
  • With no due date, use the date the right to consideration becomes unconditional.
  • Division II uses the same columns, with six rows [PRIMARY: notification]:
  • (i) Undisputed – considered good
  • (ii) Undisputed – which have significant increase in credit risk
  • (iii) Undisputed – credit impaired
  • (iv) to (vi): the same three for disputed receivables
  • Classification [PRIMARY]
  • Division I: "(a) Secured, considered good; (b) Unsecured considered good; (c) Doubtful". The allowance for bad and doubtful debts is shown separately.
  • Division II: "Considered good – Secured; Considered good – Unsecured; significant increase in credit risk; credit impaired".

In KhataOS:

  • Ages are taken from bill-wise outstanding. Each item ages from its due date, or from its bill date when there is none.
  • Items whose due date has not arrived go in a "Not due" column.
  • Opening balances age from the start of the books (the financial year of the first voucher). [UNCERTAIN] The books hold no earlier date.
  • Unbilled dues are not tracked; a remark asks for them.
  • Disputed and doubtful are group-level classifications (trade_receivables:disputed, :doubtful).
  • In Division II, "doubtful" is shown as credit impaired. The "significant increase in credit risk" rows are always nil.

3. Trade payables ageing

  • Location: the new heading "FB. Trade payables due for payment". [PRIMARY: notification]
  • Columns: Less than 1 year | 1-2 years | 2-3 years | More than 3 years | Total. They run from the due date of payment, with the same footnote as receivables. [PRIMARY]
  • Rows:
  • (i) MSME
  • (ii) Others
  • (iii) Disputed dues – MSME
  • (iv) Disputed dues – Others
  • The GN says: [PRIMARY: GN Div I]
  • rows (i) and (ii) are undisputed dues only;
  • unbilled payables include accruals but not provisions;
  • a "Not due" column is added, and ageing does not apply to dues that are not yet due.
  • The face of both divisions splits trade payables into "(A) total outstanding dues of micro enterprises and small enterprises; and (B) total outstanding dues of creditors other than micro enterprises and small enterprises". [PRIMARY: GN Div II 2019] [SECONDARY] We believe Division I got the same split in the October 2018 amendment, G.S.R. 1022(E), but did not confirm the number.

In KhataOS: a supplier counts as MSME in either of two ways. It can be marked as an MSME party in the profile (msme_parties), or it can sit under a group mapped to trade_payables:msme. The face shows the (A)/(B) split as detail rows. The note gives the split and the ageing for both dates. A remark asks for the MSMED Act s.22 interest disclosures.

4. Capital work-in-progress and intangible assets under development

  • CWIP ageing schedule [PRIMARY: notification]
  • Columns: "Amount in CWIP for a period of" Less than 1 year | 1-2 years | 2-3 years | More than 3 years | Total.
  • Rows: Projects in progress; Projects temporarily suspended.
  • The total "shall tally with CWIP amount in the balance sheet".
  • Completion schedule [PRIMARY]: needed for projects that are overdue or over their original cost, with columns "To be completed in" < 1, 1-2, 2-3, > 3 years.
  • Intangible assets under development have the same two tables. [PRIMARY]

In KhataOS: the ageing treats the oldest debits as used up first: what remains is the newest debits. Every project is shown as "in progress". Suspended projects and the completion schedule are remarks for the company to supply.

5. Share capital and promoter shareholding

  • Table "Shares held by promoters at the end of the year": [PRIMARY]
  • Columns: Promoter name | No. of Shares | % of total shares | % Change during the year.
  • The table is given for each class of shares.
  • The change is measured against the number at the beginning of the year.
  • The other share-capital particulars (classes, par value, reconciliation, holders of more than 5%) are long-standing Division I requirements. [PRIMARY: GN Div I]

In KhataOS: the books hold amounts only. The note lists the Capital Account ledgers, gives an empty promoter table, and lists the particulars the company must supply.

6. Borrowings

  • "Current maturities of Long term borrowings shall be disclosed separately" under short-term borrowings. Old item G(a) under other current liabilities was omitted. Division II made the same change. [PRIMARY: notification]
  • Borrowings are "sub-classified as secured and unsecured", and the nature of security is stated. The following are also disclosed: [PRIMARY: GN Div I]
  • loans guaranteed by directors or others;
  • terms of repayment;
  • the period and amount of any continuing default.

In KhataOS:

  • A group mapped to short_term_borrowings:current_maturities is shown on its own. Users move the current portion into such a group with a journal.
  • Secured and unsecured come from the default groups (Secured Loans, Unsecured Loans) or a :secured / :unsecured tag.
  • Assumption [UNCERTAIN]: Bank OCC (cash credit) is treated as secured.
  • Bank OD and other loans are "not classified" until tagged, and a warning names them.

7. Ratios (eleven, with reasons for changes over 25%)

  • Requirement [PRIMARY: notification]: the eleven ratios (a)–(k). "The company shall explain the items included in numerator and denominator… Further explanation shall be provided for any change in the ratio by more than 25% as compared to the preceding year."
  • Formulas: ICAI GN Div I 2022, Annexure B [PRIMARY]
Ratio Formula in the GN KhataOS
Current ratio Current assets / current liabilities Schedule III sections
Debt-equity Total debt / shareholders' equity Long-term + short-term borrowings / shareholders' funds
Debt service coverage (PBT + non-cash expenses such as depreciation + interest + other adjustments) / (interest and lease payments + principal repayments) Principal repaid = debits to long-term borrowing ledgers in vouchers that move no other borrowing; lease payments are not identified [UNCERTAIN]
Return on equity (PAT − preference dividend) / average equity Preference dividend is not identified
Inventory turnover COGS or sales / average inventory COGS = materials + purchases + changes in inventories
Trade receivables turnover Net credit sales / average receivables All revenue from operations (credit sales are not separated)
Trade payables turnover Net credit purchases / average payables All purchases of stock-in-trade and materials
Net capital turnover Net sales / average working capital Revenue from operations
Net profit ratio PAT / net sales Revenue from operations
Return on capital employed EBIT / (tangible net worth + total debt + deferred tax liability) Intangibles are taken off net worth
Return on investment Time-weighted rate of return Not computed; needs market values and cash-flow timing
  • Averages: (opening + closing) / 2. The GN says to use the closing balance when no opening is available. [PRIMARY] KhataOS does the same for a first year.
  • Reuse of khata-core analysis. The ratios are built from the Schedule III statements, so they tie to the face. khata_core::analysis::ratio_analysis follows Tally's groups, and its definitions differ: its current liabilities exclude bank OD, and its sales exclude direct incomes. So it was not reused.

8. Additional regulatory information and P&L disclosures

  • Division I para 6, heading "Y. Additional Regulatory Information" [PRIMARY: notification]:
  • (i) title deeds;
  • (ii) PPE revaluation by a registered valuer;
  • (iii) loans to promoters, directors, KMPs and related parties that are repayable on demand or have no terms;
  • (iv) CWIP;
  • (v) intangibles under development;
  • (vi) benami property;
  • (vii) quarterly returns to banks for borrowings secured on current assets;
  • (viii) wilful defaulter;
  • (ix) struck-off companies;
  • (x) charges not registered;
  • (xi) layers;
  • (xii) ratios;
  • (xiii) schemes of arrangement;
  • (xiv) utilisation of borrowed funds and share premium.
  • Division II, heading "L" runs (i)–(xvi). It adds investment-property fair value and the revaluation of right-of-use assets and intangibles. [PRIMARY]
  • Statement of Profit and Loss, Division I para 5 [PRIMARY]:
  • (ix) undisclosed income;
  • (x) CSR, items (a)–(h);
  • (xi) crypto or virtual currency.
  • Title-deeds table columns [PRIMARY]: line item | description | gross carrying value | held in the name of | whether the holder is a promoter or director (or a relative or employee of one) | held since | reason (and whether in dispute).

In KhataOS: none of these facts are in the books. The "Additional regulatory information" note lists each one as to be supplied.

9. Division II (Ind AS) formats

  • Balance sheet [PRIMARY: GN Div II 2019 plus the 2021 change]
  • Order: ASSETS first, then EQUITY AND LIABILITIES.
  • Non-current assets: PPE; CWIP; Investment Property; Goodwill; Other Intangible assets; Intangible assets under development; Biological Assets other than bearer plants; Financial Assets (Investments, Trade receivables, Loans, Others); Deferred tax assets (net); Other non-current assets.
  • Current assets: Inventories; Financial Assets (Investments, Trade receivables, Cash and cash equivalents, Bank balances other than (iii) above, Loans, Others); Current Tax Assets (Net); Other current assets.
  • Equity: Equity Share capital; Other Equity.
  • Liabilities: Financial Liabilities (Borrowings, (ia) Lease liabilities, added in 2021, Trade Payables (MSME / others), Other financial liabilities); Provisions; Deferred tax liabilities (Net); Other non-current liabilities. The current side is the same, plus Current Tax Liabilities (Net).
  • Statement of Profit and Loss [PRIMARY]
  • I to IV: revenue, other income, total income, expenses.
  • V: profit before exceptional items and tax.
  • VI: exceptional items.
  • VII: profit before tax.
  • VIII: tax expense.
  • IX to XIII: continuing and discontinued operations, then profit for the period.
  • XIV: Other Comprehensive Income. A (i) items that will not be reclassified, (ii) their income tax. B (i) items that will be reclassified, (ii) their income tax.
  • XV: Total Comprehensive Income.
  • XVI to XVIII: EPS.
  • Statement of Changes in Equity [PRIMARY]: Part A, equity share capital, and Part B, other equity by component. The format was replaced in 2021.

In KhataOS:

  • The same placement drives both divisions. Each Division I line has a fixed Division II equivalent, so totals are equal by construction. Division II-only codes, such as other_financial_liabilities_current, lease_liabilities_non_current and oci_not_reclassified, map to a Division I fallback.
  • "Deposits (Asset)" default to other financial assets in Division II.
  • OCI is shown net of tax: map the tax on OCI items to the same OCI line. The section is nil unless a group is mapped to it.
  • Not built: biological assets, exceptional items, discontinued operations, EPS and the Statement of Changes in Equity.
  • [UNCERTAIN] Where Division I shows the current part of lease liabilities. We used other current liabilities.
  • [UNCERTAIN] Advance tax (current tax assets) is placed with short-term loans and advances in Division I.

10. Amendments after 2021