Analysis of a.p dir series circular no.32

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Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2011 Dear Sir,

I have to issue a auditor certificate to a infrastructure company.

i am not able to analyze the applicability of A.P(DIR Series)Circular No.32 dated 28 December 2010.

the guidelines given to "person resident in india "in circular is applicable to the company.

we have to certify that "contracts outstanding at any point of time with all AD category 1 banks during the quarter did not exceed the value of underlying exposure"

Our client has 2 types of foriegn currency exposures:-

1.ECB-fully hedged by cross currency swaps
2.Buyers credit.

I have doubt with respect to:-

1.what is outstanding contract value means.
2.what is underlying exposure means.

please help me as soon as possible.

The company does not have any exports.does the circular applies to it.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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07 August 2011 outstanding contract value means - All exports made on any day the payment must be received within 6 months. If 6 months have not passed then that outstanding is to be reported as outstanding contract value.
underlying exposure means - further exports to be done and value in Indian rupees.

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2011 Sir
Company does not have exports.
Does the borrowings like ECB & buyers credit
are treated as foreign currency exposure.

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