MCA fixes debt to capital, free reserves ratio for certain cos

Ministry of Corporate Affairs has notified the debt to capital and free reserves ratio for government companies that are into housing finance activities.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
Real-time Stock quotes, portfolio, LIVE TV and more.
GeStepAhead Travelcafe SME Special
moneycontrol.com

Home » News » Economy

Mar 23, 2016, 05.46 PM | Source: PTI

MCA fixes debt to capital, free reserves ratio for certain cos

Ministry of Corporate Affairs has notified the debt to capital and free reserves ratio for government companies that are into housing finance activities.

Like this story, share it with millions of investors on M3

MCA fixes debt to capital, free reserves ratio for certain cos

Ministry of Corporate Affairs has notified the debt to capital and free reserves ratio for government companies that are into housing finance activities.

Post Your Comments

Share Cancel

MCA fixes debt to capital, free reserves ratio for certain cos
Ministry of Corporate Affairs has notified the debt to capital and free reserves ratio for government companies that are into housing finance activities.

The ratio provides an indication of a company's financial strength.

The Ministry has now fixed the debt to capital and free reserves ratio for government companies that are into non-banking finance and housing finance activities.

As per a recent notification, "the debt to capital and free reserves ratio shall be 6:1 for government companies within the meaning of clause (45) of section 2 of the Companies Act, 2013 which carry on non-banking finance institution activities and housing finance activities".

Under the Companies Act, 2013, the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back should not be more than twice the paid-up capital and its free reserves.

The Ministry has powers to notify a higher ratio of the debt to capital and free reserves for a class or classes of companies.

Meanwhile, in recent times, the Ministry has come out with changes to various norms under the Companies Act, 2013.

Among others, a new rule has been put in place whereby entities can take into consideration unaudited accounts -- that have been subject to limited review by auditors -- while making calculation for buy-back offers.

Earlier this month, the government introduced in the Lok Sabha a bill to further amend the Companies Act as part of efforts to address difficulties faced by stakeholders and improve the the ease of doing business in the country.

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
MCA fixes debt to capital, free reserves ratio for certain cos

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login