Money received against share warrants' is to be disclosed as a separate item under which head/sub-head

Money received against share warrants is disclosed as per Schedule III of the Companies Act, 2013.

Share warrants are instruments issued by a company giving the holder a right to subscribe to shares of the company at a predetermined price within a specified period. When money is received against these warrants, it represents funds from potential shareholders.

According to Schedule III format, under Equity and Liabilities side of the Balance Sheet, the main head "Shareholder's Funds" comprises three components:

1. Share Capital
2. Reserves and Surplus
3. Money received against share warrants

This amount is shown as a separate line item directly under Shareholder's Funds (not under Reserves and Surplus). It represents equity in nature because:

• It is received from equity holders (warrant holders who will become shareholders)
• It will eventually be converted into share capital when warrants are exercised
• It belongs to the owners of the company, not creditors

The disclosure format appears as:

Shareholder's Funds

• Share Capital: ₹ xxx
• Reserves and Surplus: ₹ xxx
• Money received against share warrants: ₹ xxx

Therefore, Option 1 is correct.