query on charge

Page no : 2

Preety (Company Secretary) (96 Points)
Replied 21 May 2010

Hello Fiends

Our Company has given Corporate Guarnatee to the Bank for sanctioning Bank Guarnatee limits to one of its Sister concern. My Query is whether this Corporate Gurantee would be covered under Sec 372A of the Companies Act because this Corporate Guaranatee is not given in connection with any loan . This Corp Gua. is given in connection with Bank Gaurantee limits. Pl clarify.

Thanks in advance

Regards

Preety

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Basab (CA) (32 Points)
Replied 21 May 2010

Dear Friend,

BG is not a fund based facility, but essentially is a non fund based one. Accordingly, Form 8 is required to be filed, though in the notes we are required to disclose the same as contingent liability.

Thanks