Cash flow is required to be prepared for Small Companies only. Definition of Small Company as per Companies Act is Paid up Capital below 50 lacs and Turn over 2 Crores in the last year. What does it mean? For the FY 2014-15, whether turn over for 2014-15 or 2013-14 is required to be considered? If T.O for 2013-14 is 90 lacs and for 2014-15 is 5 crores, is there any requirement to prepare cash flow ? (Paid up Capital is below 50 lacs)
26 September 2015
1. Turn over and paid up capital of the year under audit has to be considered.
2. If any one of turnover or capital or both exceeds the limits as in section 2(85), cash flow statement becomes mandatory being not a 'small company'.
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