The Ministry of Corporate Affairs (MCA) has amended Schedule III of the Companies Act, 2013, revising financial reporting requirements for private limited companies, effective from June 1, 2025. The changes are aimed at enhancing the granularity and transparency of financial disclosures, aligning them more closely with international accounting standards. Private firms, particularly those meeting specified thresholds for turnover or borrowings, will now be required to present detailed notes on immovable properties, related party transactions, and ageing schedules for payables and receivables.

Under the revised norms, private companies must now disclose transactions with struck-off companies, capital advances pending utilization, and undisclosed income reported under tax authorities’ assessments. Additional reporting on crypto-asset holdings, CSR obligations (if applicable), and compliance with prescribed ratios such as current and debt-equity ratios has also been introduced. These disclosures are now mandatory in the annual financial statements, including the balance sheet and profit & loss account, and must be certified by the statutory auditor.

Experts believe these amendments will improve the quality of financial reporting, enable better risk assessment by stakeholders, and support greater accountability among private enterprises. The MCA has issued implementation guidelines and clarified that non-compliance may attract penalties under Sections 129 and 134 of the Act, including penalties for officers in default. Companies are advised to conduct a review of their current reporting formats, consult auditors, and update internal controls to ensure adherence to the amended disclosure framework.