In this guide · 10 sections
- Where the requirement sits
- Items (a) to (l): what each one asks for
- Share capital note format with figures
- Promoters' shareholding disclosure format
- Shares held by promoters under Schedule III: who counts
- Worked example: the promoters' table with a rights issue
- Common slips in the share capital note
- The audit angle
- FAQs
- Sources
- Division I of Schedule III lists thirteen items, (a) to (m), for the share capital note, given for each class of shares (each class of preference shares separately).
- ICAI's Guidance Note asks for amounts as well as numbers in the issued / subscribed disclosure and in the reconciliation of shares, and for the previous year too.
- Holders of more than 5% are tested at the balance sheet date, class by class, with comparatives.
- The promoters' shareholding table (item (m), inserted by G.S.R. 207(E) from 1 April 2021) uses "promoter" as defined in section 2(69) of the Companies Act, 2013. The Guidance Note recommends adding beginning-of-year columns.
- Slips to check for: no reconciliation because "nothing changed", the promoters' table left out in a closely held company, and the 5% list taken from an old register.
Try SignReady: Draft Schedule III statements from the TB, then FinalCheck the notes before signing.
Start freeThe share capital note is usually the first note in a company's financial statements, and in a small private company it is often the shortest: authorised capital, paid-up capital, done. That is rarely enough. The share capital note under Schedule III (Division I, for companies not on Ind AS) has thirteen required items, and since 1 April 2021 it includes a table of shares held by promoters. This guide goes through every item, gives the format tables as they appear in the notes, works through an example with a rights issue during FY 2025-26, and lists the slips worth checking before you sign. For the rest of the statements, see our Schedule III guide.
Where the requirement sits
Share capital is the first line under Shareholders' funds on the face of the balance sheet. The detail goes in the notes: paragraph 6, heading A of the General Instructions for preparation of the Balance Sheet in Division I lists items (a) to (m). Item (m), the promoters' shareholding, was inserted by G.S.R. 207(E) dated 24 March 2021, with effect from 1 April 2021. The opening line applies to all of them: the disclosures are given for each class of share capital, with different classes of preference shares treated separately.
ICAI's Guidance Note on Division I (revised January 2022) adds interpretation that matters in practice. Three points recur below: give amounts and not just numbers, give the previous year, and work out percentages class by class. Ind AS companies follow Division II, which has its own share capital items and a statement of changes in equity; this article covers Division I only.
Items (a) to (l): what each one asks for
| Item | What Schedule III requires | Guidance Note points |
|---|---|---|
| (a) | Number and amount of shares authorised | Authorised capital is the maximum stated in the memorandum. |
| (b) | Number of shares issued, subscribed and fully paid, and subscribed but not fully paid | Give the amount for each category too. If shares are not fully called, state the amount called per share. |
| (c) | Par value per share | The face value in the capital clause of the memorandum. |
| (d) | Reconciliation of the number of shares outstanding at the beginning and end of the period | Opening, issued, bought back, other movements, closing. Give it for the amount too, for the previous period as well, and for each class. |
| (e) | Rights, preferences and restrictions for each class, including restrictions on dividends and repayment of capital | Voting rights or differential rights for equity; for preference shares, dividend rate, cumulative or not, redemption and conversion terms. |
| (f) | Shares held by the holding company or ultimate holding company, including their subsidiaries and associates, in aggregate | Aggregate for each category separately, across the whole chain up to the ultimate holding company; terms read as in AS 21 and AS 18. |
| (g) | Each shareholder holding more than 5% shares, with the number held | Tested at the balance sheet date; class by class; with comparatives. |
| (h) | Shares reserved for issue under options and contracts or commitments for sale of shares or disinvestment, with terms and amounts | For example ESOPs, conversion of preference shares or debentures, loan agreements. Only the unissued portion. |
| (i) | For the five years before the balance sheet date: aggregate number and class of shares allotted as fully paid for consideration other than cash, as bonus shares, and bought back | Aggregate for the five years, no year-wise break-up needed. Shares against a bona fide debt payable at once, or a loan converted on default, count as allotted for cash. |
| (j) | Terms of securities convertible into equity or preference shares, with the earliest date of conversion, in descending order from the farthest date | For convertible debentures, a cross-reference to the borrowings note is acceptable. |
| (k) | Calls unpaid, showing the aggregate unpaid by directors and officers | Show the total, and the directors' and officers' figure separately. |
| (l) | Forfeited shares (amount originally paid up) | Profit on re-issue of forfeited shares is of a capital nature and goes to capital reserve. |
Two further points from the Guidance Note are easy to miss. First, preference shares stay under share capital until actually redeemed or converted, even where redemption is overdue. Second, shares taken by the subscribers to the memorandum are shown as subscribed and paid-up capital even if the subscribers have not yet paid for them; the amount due from them is shown as an asset, not left out.
Share application money pending allotment is not share capital. It has its own line on the face, between Shareholders' funds and Non-current liabilities, to the extent it does not exceed the issued capital and is not refundable; the refundable part goes to Other current liabilities. Money received against share warrants is a separate line within Shareholders' funds.
Share capital note format with figures
The example: a private company with one class of equity shares of ₹10 each. During FY 2025-26 it made a rights issue of 50,000 shares at par. Figures in ₹.
| Particulars | As at 31 March 2026 Number | ₹ | As at 31 March 2025 Number | ₹ |
|---|---|---|---|---|
| Authorised Equity shares of ₹10 each | 5,00,000 | 50,00,000 | 5,00,000 | 50,00,000 |
| Issued, subscribed and fully paid up Equity shares of ₹10 each | 2,50,000 | 25,00,000 | 2,00,000 | 20,00,000 |
| Total | 2,50,000 | 25,00,000 | 2,00,000 | 20,00,000 |
(a) Reconciliation of shares outstanding
| Equity shares | 2025-26 Number | ₹ | 2024-25 Number | ₹ |
|---|---|---|---|---|
| At the beginning of the year | 2,00,000 | 20,00,000 | 2,00,000 | 20,00,000 |
| Add: issued during the year (rights issue) | 50,000 | 5,00,000 | – | – |
| Less: bought back during the year | – | – | – | – |
| At the end of the year | 2,50,000 | 25,00,000 | 2,00,000 | 20,00,000 |
(b) Rights, preferences and restrictions. A typical wording: "The company has one class of equity shares with a par value of ₹10 per share. Each holder is entitled to one vote per share. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to the number of shares held." Adapt it to the articles. A private company's articles restrict the transfer of shares (section 2(68)), so mention that, along with any restriction on dividends.
(c) Shareholders holding more than 5%
| Name | 31 March 2026 Number | % | 31 March 2025 Number | % |
|---|---|---|---|---|
| Ramesh Kumar | 1,50,000 | 60.00 | 1,20,000 | 60.00 |
| Sunita Kumar | 60,000 | 24.00 | 60,000 | 30.00 |
| Vikram Shah | 40,000 | 16.00 | 20,000 | 10.00 |
Items (f), (h), (i), (j), (k) and (l) do not apply here. A one-line "Nil" against each, or a single sentence saying the company has none of these, shows the reader that each item was considered.
SignReady's FinalCheck reads the finished statements in Excel and flags arithmetic and cross-reference differences, notes that do not total to the face, and key figures that do not agree to the trial balance.
Promoters' shareholding disclosure format
Item (m) prescribes this table, with three footnotes: "promoter" means promoter as defined in the Companies Act, 2013; details are given separately for each class of shares; and the percentage change is computed with respect to the number at the beginning of the year, or from the date of issue if the shares were issued for the first time during the year.
| S. No. | Promoter name | Shares held by promoters at the end of the year | % change during the year | |
|---|---|---|---|---|
| No. of shares | % of total shares | |||
| Total | ||||
The prescribed format shows only the year-end holding. The Guidance Note says companies should also disclose the number and percentage of shares at the beginning of the year as additional columns, so readers can understand the percentage change. It also says the percentage of total shares is computed on the total shares issued of that class, and that the table is given separately for each class of equity and preference shares. Comparatives apply here as for every other note, so the previous year's table is also needed.
Shares held by promoters under Schedule III: who counts
Section 2(69) of the Companies Act, 2013 defines a promoter as a person:
- who has been named as such in a prospectus, or is identified by the company in the annual return under section 92; or
- who has control over the affairs of the company, directly or indirectly, whether as a shareholder, director or otherwise; or
- in accordance with whose advice, directions or instructions the Board is accustomed to act (not a person acting merely in a professional capacity).
In a small private company, the founder-directors who control it will usually fall within the second limb, whether or not anyone has ever called them promoters. Start with whoever the company has identified as promoters in its annual return, then ask whether anyone else controls the company. Two points to keep in mind:
- The test is the Companies Act definition, not SEBI's "promoter group". A relative who holds shares is not a promoter for this table merely because of the relationship; the test is applied to each person.
- A large investor is not a promoter just because they hold more than 5%. They appear in the 5% list but not in the promoters' table, unless they meet the definition.
Whoever you treat as promoters, the list should agree with the annual return and with other places promoters appear in the statements, such as the Additional Regulatory Information on loans to promoters and title deeds, and the related party note. See our related party disclosures (AS 18) checklist for that note.
Worked example: the promoters' table with a rights issue
Continuing the example, Ramesh Kumar and Sunita Kumar are the promoters. The rights issue was one share for every four held. Ramesh took up his 30,000 shares. Sunita renounced her entitlement of 15,000 in favour of Vikram Shah, an investor who is not a promoter, so Vikram took 20,000 in all (his own 5,000 plus her 15,000). The table with the Guidance Note's additional columns:
| S. No. | Promoter name | Shares at 1 April 2025 | % of total | Shares at 31 March 2026 | % of total | % change during the year |
|---|---|---|---|---|---|---|
| 1 | Ramesh Kumar | 1,20,000 | 60.00 | 1,50,000 | 60.00 | 25.00 |
| 2 | Sunita Kumar | 60,000 | 30.00 | 60,000 | 24.00 | – |
| Total | 1,80,000 | 90.00 | 2,10,000 | 84.00 | ||
The % change column here follows the footnote's wording: the change in the number of shares against the number at the beginning of the year (30,000 ÷ 1,20,000 = 25%). Note what it does to Sunita: her shares did not change, so the change is nil, though her share of the company fell from 30% to 24%. Some companies instead show the change in percentage holding (here, nil for Ramesh and −6 percentage points for Sunita). Schedule III does not settle the point beyond the footnote, which is exactly why the beginning-of-year columns help: with both years' numbers and percentages visible, the reader can see both. Whichever basis you use, state it in a footnote and apply it the same way in both years.
Check the tie-outs: the year-end numbers agree with the 5% list and the reconciliation (1,50,000 + 60,000 + 40,000 = 2,50,000), and the percentages are on the 2,50,000 shares of the class.
Common slips in the share capital note
| Slip | What to do |
|---|---|
| No reconciliation because the number did not change | Item (d) applies every year; show opening and closing with nil movements, for both years |
| Promoters' table missing in a two- or three-shareholder company | It applies to every Division I company; identify promoters under section 2(69) |
| Promoters' table without the previous year | Give comparatives; the Guidance Note also recommends beginning-of-year columns |
| 5% list based on the highest holding during the year | Test at the balance sheet date; a holder who fell below 5% by year end is not listed |
| Percentages worked out on total capital where there are two classes | Compute class by class, on the total shares of that class |
| Share application money included in share capital | Show it on its own line; any refundable part goes to Other current liabilities |
| Bonus issue three years ago not mentioned | Item (i) covers the five years before the balance sheet date, in aggregate |
| Issued capital exceeds authorised after an allotment | Check that authorised capital was increased under section 61 before the allotment, and that the notice was filed with the Registrar within 30 days under section 64 |
The audit angle
The figures in this note come from the company's statutory records, not from the trial balance alone. In practice, agree the closing number of shares and each holder's shares to the register of members, and agree each allotment during the year to the board and shareholder resolutions and the return of allotment filed with the Registrar. Agree the promoters' names to the annual return. Where there was a preferential allotment or private placement of shares or convertible debentures during the year, CARO 2020 clause 3(x)(b) asks whether sections 42 and 62 were complied with and the funds used for the purposes for which they were raised, if CARO applies to the company. A rights issue to existing shareholders, like the one in our example, is not a preferential allotment (see our note on small company limits for one of the exclusions). A share capital note that is correct but incomplete is still a presentation slip; it is one of the items in our list of Schedule III mistakes in small company accounts, and the order of notes is covered in notes to accounts format under Schedule III.
For a company with one class of equity shares and a handful of shareholders, the whole note fits on one page. With the register of members open it is quick to get right, and it is the first note the reader sees.
Try SignReady: Keep both years side by side so the reconciliation and promoters' table tie up.
Start free- MSME dues and section 43B(h)
- Receivables & payables ageing
- Borrowings & current maturities
- PPE note & CWIP ageing
- Loans and advances
- Reserves and surplus
Frequently asked questions
What disclosures are required for share capital under Schedule III?
Division I lists items (a) to (m) for each class of shares: authorised, issued and subscribed shares, par value, a reconciliation of shares at the beginning and end of the year, rights and restrictions, shares held by the holding company and its group, holders of more than 5%, shares reserved, bonus, non-cash and bought-back shares in the last five years, convertible securities, calls unpaid, forfeited shares and the promoters' shareholding.
What is the format for promoters' shareholding disclosure?
A table with S. No., promoter name, number of shares and % of total shares at the end of the year, and % change during the year, separately for each class of shares. ICAI's Guidance Note recommends adding the number and percentage at the beginning of the year as additional columns.
Who is a promoter for the Schedule III shareholding table?
A promoter as defined in section 2(69) of the Companies Act, 2013: a person named as such in a prospectus or identified in the annual return, a person who controls the company's affairs, or a person on whose advice the Board is accustomed to act (other than in a professional capacity).
Is the reconciliation of shares required if there was no change during the year?
Yes. Item (d) requires a reconciliation of the number of shares at the beginning and end of the period. ICAI's Guidance Note asks for the amount as well, for the previous year too, and for each class of shares.
Is the 5% shareholder list based on the year-end holding?
Yes. ICAI's Guidance Note says that, in the absence of any specified date, the percentage is computed at the balance sheet date, separately for each class of shares, with the previous year also given.
Sources
- Companies Act, 2013 (India Code, amended) — section 2(69) and Schedule III, Division I, paragraph 6A
- Schedule III amendment — G.S.R. 207(E), 24 March 2021 (Gazette)
- ICAI — Guidance Note on Division I – Non Ind AS Schedule III to the Companies Act, 2013 (Revised January 2022)
- ICAI — Guidance Note on CARO 2020 (Revised 2022 edition) — clause 3(x)(b)
SignReady generates an editable Excel draft of the Balance Sheet, Statement of Profit and Loss, cash flow and notes from the trial balances, with previous-year figures and formulas linking the notes to the statements. Add the share capital details, then run FinalCheck. First 3 finalisations free.
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Version history: 17 Oct 2026 — first published.
