Caro

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Sandeep Kumar Gupta (Querist)
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22 November 2012 dear all,
i want to know that weather security premium will be added in share capital while chacking applicability of caro.
thanks

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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22 November 2012 The Guidance Note on Terms used in Financial Statements defines the term "reserve" as the portion of earnings, receipts or other surplus of an enterprise (whether capital or revenue) appropriated by management for a general or specific purpose other than provision for depreciation or diminution in the value of assets or for a known liability. Here the word APPROPRIATED should be dealt with carefully. If a broader view is taken securities premium can be considered for checking CARO eligibility. If looked at a different perspective,reference may be made to clause 6B of General Instructions for preparation of Balance Sheet under revised schedule VI wherein securities premium is grouped under 'reserves and surplus', meaning thereby it can be counted for checking CARO eligibility.

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