Inter Company Loan

This query is : Open

Jitendra (Querist)
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15 June 2009 Hi,

A Pvt. Ltd. has taken a loan from B Pvt. Ltd. company.

Both companies A Pvt. Ltd. & B Pvt. Ltd. are group companies.

Can you please tell me what documents are needed to explain this loan transaction to Auditors.

Ankur Garg

Ankur Garg (Expert)
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16 June 2009 1. Minutes of Board meeting covering the above transaction.

2. Resolution covering Disclosure of interest by directors u/s 299.

3. Board resolution for the same.

Regards

Jitendra

Jitendra (Querist)
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16 June 2009 Hi Ankur,

Thanks for the reply.

Auditors are asking for Executed copy of loan agreement stating commercial terms
for this transaction.

Can I get the draft format of agreement.

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Ankur Garg

Ankur Garg (Expert)
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16 June 2009 Hi,

As the transaction is between 2 group companies there is no need for a agreement & board resulution would be enough for the transaction.

As per my opinion agreement is not mandatory in such transaction between 2 group companies.

You may apprise your auditors accordingly.

Regards

Jitendra

Jitendra (Querist)
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16 June 2009 Hi Ankur,

Thanks for the reply.

Auditors are askinf for some kind of documentation apart from board resulution.

Can you please help me out.