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  • Note to the Financial Statements: Disclosure under Section 22 of the MSMED Act
  • Mehak Chanotiya
  • img October 10, 2026

Note to the Financial Statements: Disclosure under Section 22 of the MSMED Act

When used: Inserted in the notes to the annual accounts of a company whose accounts are audited, supported by a supplier-wise schedule that also feeds MSME-1.

NOTE [__]: DUES TO MICRO AND SMALL ENTERPRISES

The information required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 is given below. It has been determined on the basis of the information about suppliers’ status available with the Company and relied upon by the auditors.

Sl.

Particulars

As at 31 March 20__ (₹)

As at 31 March 20__ (₹)

(i)a

Principal amount remaining unpaid to any supplier at the end of the year

[ ]

[ ]

(i)b

Interest due on the above principal remaining unpaid at the end of the year

[ ]

[ ]

(ii)

Interest paid by the Company in terms of section 16, with the amount of payments made to suppliers beyond the appointed day during the year

[ ]

[ ]

(iii)

Interest due and payable for the period of delay in making payment (paid beyond the appointed day during the year) but without adding the interest specified under the Act

[ ]

[ ]

(iv)

Interest accrued and remaining unpaid at the end of the year

[ ]

[ ]

(v)

Further interest remaining due and payable even in the succeeding years, until the interest dues are actually paid, for the purpose of disallowance as a deductible expenditure under section 23

[ ]

[ ]

 

[Optional, only where factually correct and supportable: Amounts shown as disputed are disputed on the grounds stated in Note [__].]

 

Drafting notes

•      The wording of each row follows section 22. Compare it with the current Schedule III line items for trade payables and their ageing before finalising (Article 6).

•      Do not add a disclaimer that the balances are not an acknowledgement of debt unless it is accurate. Sonali Power treats the effect of the disclosure on limitation as a case-by-case question.

•      Reconcile this note with the MSME-1 schedule. The note covers all unpaid principal at year-end, while MSME-1 covers only dues beyond 45 days.

 

 

Author Bio
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Mehak Chanotiya

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CS Trainee dedicated to mastering the nuances of Indian corporate law and secretarial practice. View Full Profile

My Published Posts
→ Audit Committee Note and Board Resolution: Related-Party Purchase from an MSE Supplier → Board Resolution for Onboarding on a TReDS Platform View More Published Posts

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