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Section 2(43)

(43) Free Reserves

“free reserves” means such reserves which, as per the latest audited balance sheet of a company, are available for distribution as dividend:

Proviso

Provided that—

(i)
any amount representing unrealised gains, notional gains or revaluation of assets, whether shown as a reserve or otherwise, or
(ii)
any change in carrying amount of an asset or of a liability recognized in equity, including surplus in profit and loss account on measurement of the asset or the liability at fair value, shall not be treated as free reserves