We have given a loan to our wholly owned ovreases subsidiary in US $. We have also taken a forward cover to mitigate the forex risk on the same day when we had provided the loan. For the year ended March 31, 2011 what should be the scheme of entries and disclosure needs to ebe made by us.
Matter Urgent, Please advise
Regards
Madhavan
loan given to subsidy
subsidy ac dr 123
to bank a/c 123
it will reflect in ur balance sheet as loan or advance to subsidy
and for the subsidy it will be a liability
in case of forex matter u have take the closing rate of 31 march 2011
if any increase or decrease reflect it to p&l account
An Indian company can give loan to foreign company .
Loan can be extended to an overseas entity only if there is already existing equity participation by way of direct investment, within the overall ceiling of 400% of the Indian party's net worth as on the date of the last audited balance sheet.
You have to report by way of ODI form through online to RBI . The physical copy has to be given to your authorised dealer and he will file it the same through online.
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