Effective capital

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Pankaj (Querist)
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23 April 2011 Dear All,

Can you please guide me on what treatment can be given to following in calculation of effective capital under sch XIII of Companies Act:

1. Capital Redemption Reserve
2. Capital Reserve
3. short Term investments in mutual funds and shares
4. Cash Credit Loan ( even though its repayable on demand, in last 10 years company not paid it, rather enhanced the limit)

I will be really great-full if any one can guide on above,

Thanks,
Pankaj

Pankaj

Pankaj (Querist)
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23 April 2011 .... please also answer for below

Pankaj

Pankaj (Querist)
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23 April 2011 And also if a WTD is appointed in the year May 2008, in which company was in profits, however resolution for Minimum Remuneration was passed in the General Meeting in august 2008, which balance sheet should be considered for calculation of effective capital?

Balance sheet for 31.03.2009/31.03.2010/31.03.2011? for payment of remuneration for the year 2010-2011

Pravin Gupta CS

Pravin Gupta CS (Expert)
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23 April 2011 according to Sch. XIII of Companies Act,1956 effective capital means aggregate of paid-up share capital (excluding share application money), share premium account, reserves & Surpluses (excluding revaluation reserve), long-term loan and deposits repayable after one year minus investments, accumulated losses & preliminary exp. not written off.
so . 1. Capital Redemption Reserve 2.Capital reserve (except revaluavation resereve) are included in Effective capital calculation..but short term loans and borrowing (cash credit loan repayble on demand) are not included in such case..... however long term borrowing are considered here.

Pravin Gupta CS

Pravin Gupta CS (Expert)
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23 April 2011 for second quetion... the latest audited balance sheeet are required to be considered for calculation of effective capital. i.e. 31st march 2008

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