Additional regulatory information under Schedule III: all 14 items explained with examples

Additional regulatory information under Schedule III is the block of fourteen disclosures that G.S.R. 207(E) of 24 March 2021 added to Division I with effect from 1 April 2021. They sit at heading Y of the general instructions for the Balance Sheet. Most are "if any" items. For a typical small company the answer to most is no, but somebody still has to check, and the auditor still answers the matching CARO 2020 clauses. This guide covers each item: what it requires, the format where one is prescribed, sample nil wording, the evidence to keep, and the CARO or Rule 11 clause it links to. For the rest of the format, see our Schedule III guide.

The 14 items of additional regulatory information under Schedule III

The 2021 Schedule III amendment disclosures, in the order of heading Y. Ind AS companies have a similar but longer list, numbered differently, under Division II; this article uses the Division I text.

Property items: title deeds, revaluation, CWIP

(i) Title deeds. The company gives details of all immovable property whose title deeds are not held in its name; jointly held property is reported to the extent of the company's share. The prescribed rows are PPE, investment property and PPE retired from active use and held for disposal (each split into land and building) and others. ICAI's Guidance Note on Division I excludes immovable property held as inventory by a real estate company, and treats the lease agreement as the title deed for leased property.

Nil wording: "The title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company." Evidence: copies of registered sale, conveyance or lease deeds, matched to the fixed asset register, including land shown under investments.

(ii) Revaluation. If PPE has been revalued, state whether the valuation was by a registered valuer under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017; the Guidance Note says the fact is disclosed where one was not used. Nil wording: "The Company has not revalued its property, plant and equipment during the year." Evidence: the valuation report and valuer's registration, or an asset register with no revaluation entries.

(iv) and (v) CWIP and intangible assets under development. Each gets an ageing schedule (projects in progress and projects temporarily suspended, in four buckets: less than 1 year, 1–2, 2–3 and more than 3 years, with a total that tallies with the balance sheet) and, for projects that are overdue or over their original budget, a completion schedule. Worked example: CWIP ageing schedule and PPE disclosure. Nil wording where there is none: "The Company has no capital work-in-progress or intangible assets under development."

Loans to promoters, directors, KMPs and related parties

Item (iii) applies to loans or advances in the nature of loans granted to promoters, directors, KMPs and related parties (as defined in the Act), alone or jointly with others, that are (a) repayable on demand or (b) without any terms or period of repayment. The prescribed table shows the amount outstanding and its percentage of total loans and advances in the nature of loans. The Guidance Note adds comparatives, separate presentation of the two categories, and gross amounts before any provision. It also says the relationship is tested on the date of the loan and the amount at the balance sheet date.

Here total loans and advances in the nature of loans are ₹50.00 lakh (previous year ₹40.00 lakh). A second table follows for loans without terms or period of repayment, if any. Per the Guidance Note, a normal trade advance is not "in the nature of a loan", but one far above the order value or kept far beyond trade practice may be, to the extent of the excess.

Nil wording: "The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs or related parties that are repayable on demand or without specifying any terms or period of repayment." Evidence: loan agreements or board resolutions showing terms, the AS 18 related party list, and ledger balances at the year end. A loan to a director here should also be tested against section 185 (CARO 3(iv)), and CARO 3(iii)(f) asks for overlapping figures (all such loans, not only to related parties, with the promoter and related party portion), so the auditor should review this note before answering the clause and reconcile any difference.

Benami property disclosure under Schedule III

Item (vi) applies only where proceedings have been initiated or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (renamed the Prohibition of Benami Property Transactions Act, 1988 in 2016). If proceedings exist, disclose: (a) the property and year of acquisition, (b) the amount, (c) the beneficiaries, (d) the balance sheet line item if the property is in the books, (e) if not, that fact with reasons, (f) details of any proceedings against the company as abettor or transferor, and (g) the nature and status of the proceedings and the company's view. The Guidance Note expands "details of beneficiaries" to name, address, an identification number such as PAN or CIN, and relationship.

Nil wording: "No proceedings have been initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) and the rules made thereunder." Evidence: a management representation, and a check of the income-tax portal and correspondence for any show-cause notice. CARO 3(i)(e) asks whether proceedings exist and whether the company has disclosed them properly.

Quarterly returns, wilful defaulter and charges

These sit with the bank file; see also borrowings under Schedule III.

(vii) Quarterly returns. Where the company borrows from banks or financial institutions on the security of current assets, it states whether the quarterly returns or statements filed with them agree with the books and, if not, gives a summary reconciliation and the reasons for material discrepancies. The Guidance Note applies it to borrowings at any time in the year, including unused sanctioned limits and non-fund-based facilities; for monthly filers, only quarter-end statements count. Unlike CARO 3(ii)(b), which applies only where working capital limits above ₹5 crore were sanctioned, Schedule III has no threshold and is not limited to working capital limits, as ICAI's CARO Guidance Note itself points out: a ₹50 lakh cash credit still needs the disclosure. The Guidance Note's illustrative format:

Nil wording (where statements agree): "The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of account." Evidence: the four quarter-end stock and book-debt statements, the sanction letter, and the books as at the same dates.

(viii) Wilful defaulter. If declared a wilful defaulter by any bank, financial institution or other lender, give the date of declaration and details of the defaults. The Guidance Note says events up to approval of the financial statements count. Nil wording: "The Company has not been declared a wilful defaulter by any bank, financial institution or other lender." Evidence: a representation, bank correspondence and, where available, a credit report. CARO 3(ix)(b) asks the same question.

(x) Charges. Disclose any charge or satisfaction not registered with the ROC beyond the statutory period, with details and reasons. Section 77 requires registration within 30 days of creation; the Registrar may allow it within 60 days on additional fees, and then within a further 60 days on ad valorem fees. Section 82 requires intimation of satisfaction within 30 days, which the Registrar may extend to 300 days on additional fees. A common case in small-company files is a loan repaid during the year whose charge is still open on the MCA register. Nil wording: "There are no charges or satisfaction yet to be registered with the Registrar of Companies beyond the statutory period." Evidence: the MCA index of charges, compared with loans opened and closed during the year. No CARO clause covers this.

Struck-off companies, layers, schemes and intermediaries

(ix) Struck-off companies. Where the company has transactions with companies struck off under section 248 (or section 560 of the 1956 Act), the prescribed table applies (shown here in the Guidance Note's format, with comparatives):

The other prescribed natures are investments in securities, payables, shares held by the struck-off company and other balances. The Guidance Note asks for gross balances. Transactions settled within the year still need disclosing even though the year-end balance is nil. The relationship is tested as a related party under s.2(76), and a company struck off during the year but restored by an order (for example, of the NCLT) before the financial statements are approved is left out. Nil wording: "The Company has no transactions or balances with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956." Evidence: the customer and supplier masters checked against company status on the MCA portal. No CARO clause covers it.

(xi) Layers. Only a company that has not complied with the layer limit under s.2(87) read with the Companies (Restriction on number of Layers) Rules, 2017 discloses the names and CINs of the companies beyond the limit and its holding in them. For a company with no subsidiaries the item does not arise, and a one-line "not applicable" says so.

(xiii) Schemes of arrangement. Where a scheme under sections 230 to 237 has been approved, state that its effect has been accounted for "in accordance with the Scheme" and "in accordance with accounting standards", and explain any deviation. This includes earlier schemes that still affect the figures. Evidence: the NCLT order and the auditor's certificate on accounting treatment filed under section 232.

(xiv) Utilisation of borrowed funds and share premium. This covers funds given to an intermediary on an understanding, written or not, that it will lend or invest in ultimate beneficiaries identified by the company or guarantee them (part A), and funds received on such an understanding from a funding party (part B). Disclose dates, amounts, complete party details and a declaration of FEMA, Companies Act and PMLA compliance. The Guidance Note excludes ordinary-course advances to employees, customers and suppliers. Nil wording: "The Company has not advanced, loaned or invested funds, or received funds, with the understanding that the recipient or the Company shall lend or invest in, or provide any guarantee or security to or on behalf of, ultimate beneficiaries." The auditor's side is Rule 11(e), which rests on management's representation "other than as disclosed in the notes to the accounts", so the note and the representation letter must match; see the Rule 11 auditor's report checklist.

Ratios, and the P&L additional information

(xii) Ratios. The eleven ratios (current, debt-equity, debt service coverage, return on equity, inventory turnover, trade receivables turnover, trade payables turnover, net capital turnover, net profit, return on capital employed and return on investment), with the numerator and denominator explained and a reason for any change of more than 25%. Formulas and sample explanations are in Schedule III ratios and the 25% variance.

The same amendment added three items to paragraph 5 ("Additional information") of the P&L instructions in Schedule 3, which are covered in a separate guide in this series:

• Undisclosed income: transactions not recorded in the books but surrendered or disclosed as income in tax assessments (search, survey or otherwise), unless immunity applies under a scheme, and whether the income and related assets are now recorded. The text cites the Income-tax Act, 1961, which still governs FY 2025-26; the Income-tax Act, 2025 applies from tax year 2026-27. Auditor's link: CARO 3(viii).
• CSR: for companies covered by section 135 (net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more in the preceding year): amount required and spent, shortfall and reasons, nature of activities, related party contributions and provision movements. Auditor's link: CARO 3(xx).
• Crypto or virtual currency: profit or loss on such transactions, holdings at the reporting date, and deposits or advances received for trading or investing in it. No CARO clause.

Nil statements and the audit file

Schedule III asks for details where an item applies. It does not prescribe nil statements, but many companies give a short negative statement for each item so the reader can see it was considered. The risk is the statement copied from last year's accounts. Before it goes in, each "no" should rest on something:

Where CARO applies, read the note and the report together: a nil benami statement beside a CARO answer mentioning a notice is an inconsistency a reviewer spots at once. Our list of CARO 2020 clauses that are easy to get wrong covers the auditor's side.

Frequently asked questions

Sources

• Schedule III amendment — G.S.R. 207(E), 24 March 2021 (Gazette)
• Companies Act, 2013 — Schedule III Division I, sections 77, 82 and 135 (India Code, as amended)
• ICAI — Guidance Note on Division I – Non Ind AS Schedule III to the Companies Act, 2013 (Revised January 2022), para 8.9
• ICAI — Guidance Note on CARO 2020 (Revised 2022 Edition)
• ICAI — Implementation Guide on reporting under Rule 11(e) and 11(f)

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