Ashley (cs) (178 Points)
28 June 2008i would like to know if subsidy recd from state govt shown under capital reseve a part of free resereve. wt if same is recd from central govt and if it is recd from state govt. are both coverered . any notification/circular/
above is required for the purpose of calculation of limits under Deposit rules
CA. Atindra A. Prabhu Bhatikar
(practising CA)
(68 Points)
Replied 28 June 2008
Subsidy recd from Govt or any other agency for a specific purpose is never a part of the free reserves of the company. In general parlance, what comes out of the profits company whether current or accumulated is a free reserve. Again general reserve is a free reserve. However, capital reserves are not free reserves. Any capital grant recd from govt - state or central is definitely not a free reserve. For more free reserves check the definition under the relevant act
Ashley
(cs)
(178 Points)
Replied 28 June 2008
As far as I know Subsidy grant by Central Govt is counted as part of free reserve provide it satisfies 3 conditions laid down in the circular issued by Deptt of company affairs, am not sure about subsidy grant by state govt.
Rishubh Mathur
(Analyst -Taxation)
(442 Points)
Replied 28 June 2008
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