Inter Company Loan

This query is : Open

Jitendra (Querist)
Follow

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)
Follow

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)
Follow

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.

Ankur Garg

Ankur Garg (Expert)
Follow

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)
Follow

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.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now