Loans and borrowing

This query is : Resolved

Niral Sodvadiya (Querist)
Follow

10 March 2026 As per the company Act and rules made there under,
one of the condition for the applicability of secreterial Audit is
Outstanding loans and borrowing more then 100 CR.

My question is
if the company has non fund based loan of more then 100 CR but actual fund utilisation is less then 100 CR.
(Example. company has LC limit more then 100 CR, but actual utilisation is below the threshold.)

Does company is required to have secreterial Audit or Internal Audit ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

11 March 2026 For both Secretarial and Internal Audit, the ₹100 crore threshold is calculated based on actual fund utilization (outstanding debt) and not the sanctioned non-fund limits like Letters of Credit or Bank Guarantees. Since your actual utilization is below the threshold, you are not required to conduct these audits based solely on the borrowing criteria.

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

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok