i 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
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
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.
take it to capital reserve.
T R SOOD & CO
New Delhi
CA Inter
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