Schedule III Division II explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
MCA Notification G.S.R. 207(E) dated 24 March 2021 inserted a substantial block of additional regulatory disclosures into Division II of Schedule III to the Companies Act, 2013 — ageing schedules for receivables, payables, capital work in progress and intangible assets under development; title deeds not held in the company's name; eleven analytical ratios; and disclosures on benami property, wilful defaulter status, struck-off companies, undisclosed income and crypto currency.
What Division II is
Schedule III prescribes the format in which a company presents its financial statements. It is divided by the accounting framework the company follows:
| Division | Applies to |
|---|---|
| Division I | Companies whose financial statements are drawn up in compliance with the Companies (Accounting Standards) Rules |
| Division II | Companies whose financial statements are drawn up in compliance with the Indian Accounting Standards |
| Division III | Non-banking financial companies required to comply with Ind AS |
The scale of the 2021 change
Before G.S.R. 207(E) dated 24 March 2021, Schedule III was essentially a presentation format. The amendment turned a block of it into a regulatory disclosure regime — requiring companies to state things about their conduct and their counterparties that had never appeared in a balance sheet before: whether they hold property whose title deeds are in someone else's name, whether they have been declared a wilful defaulter, whether they transact with struck-off companies, and whether they have dealt in crypto currency.
Anything written on Schedule III from a pre-amendment source omits all of it. That is why the Division I guidance note of July 2019 cannot be used, and why this Revised January 2022 Division II edition can.
The additional regulatory information — the full set
| # | Disclosure | What it requires |
|---|---|---|
| 1 | Title deeds of immovable property not held in the name of the company | Details of all immovable property whose title deeds are not held in the company's name, in a prescribed format — excluding properties where the company is the lessee under a duly executed lease |
| 2 | Revaluation of property, plant and equipment | Whether revaluation is based on the valuation of a registered valuer |
| 3 | Loans or advances to promoters, directors, KMPs and related parties | Amounts and percentage of total loans |
| 4 | Capital work in progress ageing | Ageing, with projects in progress and projects temporarily suspended shown separately |
| 5 | Intangible assets under development ageing | Same ageing structure, tallying to the balance sheet figure |
| 6 | Benami property held | Where proceedings have been initiated or are pending under the Benami Transactions (Prohibitions) Act, 1988 |
| 7 | Borrowings secured against current assets | Whether quarterly returns or statements filed with banks agree with the books, and a reconciliation if not |
| 8 | Wilful defaulter | Date of declaration and details of defaults, where the company is declared a wilful defaulter |
| 9 | Relationship with struck-off companies | Transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 |
| 10 | Registration of charges or satisfaction with the Registrar of Companies | Charges or satisfactions yet to be registered, and reasons |
| 11 | Compliance with number of layers of companies | — |
| 12 | Analytical ratios | Eleven prescribed ratios, with numerator and denominator explained and variances over 25% explained |
| 13 | Undisclosed income | Income surrendered or disclosed in a tax assessment under the Income-tax Act |
| 14 | Crypto currency or virtual currency | Profit or loss, amount held at the reporting date and deposits or advances for trading |
| 15 | Trade receivables and trade payables ageing schedules | Prescribed ageing buckets, split by disputed and undisputed |
The CFS carve-outs — a point that is regularly missed
Not every disclosure carries into consolidated financial statements. The guidance note states expressly that certain requirements are not relevant at the CFS level and need not be disclosed in the CFS, including:
- Registration of charges or satisfaction with the Registrar of Companies; and
- Analytical ratios.
Others do apply at CFS level, but only after applying the principles of consolidation — the guidance note says the trade payables ageing schedule and the trade receivables ageing schedule should each be prepared at the CFS level after applying the principles of consolidation.
A consolidated ageing schedule built by summing the subsidiaries' standalone schedules will include intra-group receivables and payables that consolidation eliminates. The schedule has to be constructed from the consolidated balances, not aggregated from the components.
Why this matters beyond compliance
Several of these disclosures are read by people outside the finance function:
- Lenders use the quarterly-returns reconciliation and the receivables ageing.
- Acquirers and their diligence teams read title deeds, struck-off relationships and benami proceedings first.
- Insolvency professionals reviewing a corporate debtor's last filed accounts find the related-party loan and struck-off disclosures directly useful in a transaction review.
- Auditors have to obtain evidence for each — a disclosure the company cannot support is a reporting problem.
Compliance checklist
- Work from a post-amendment guidance note; a pre-2021 source omits the entire block.
- Build a disclosure schedule covering all fifteen items and assign an owner to each.
- Distinguish the items that do not apply at CFS level from those that do.
- Prepare consolidated ageing schedules from consolidated balances, not by aggregation.
- Start the title deed and struck-off data collection early — both require information the finance team does not hold.
- Cite G.S.R. 207(E) dated 24 March 2021 where the basis of a disclosure is questioned.
Common mistakes
- Using a pre-2021 Schedule III reference and omitting the additional regulatory information entirely.
- Repeating every standalone disclosure in the CFS.
- Aggregating subsidiary ageing schedules for the consolidated one.
- Treating the disclosures as a year-end exercise when several need data collected through the year.