External commercial borrowings

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Dear Colleagues

Pls advise :-

In case of external commercial borrowings is it absolute neccessary that a one to one co-relation between ecb money inflow and capex outflow has to be shown. OR is suffices if for the financial year i can demonstrate a broad reconciliation as regarding

Money recd - Capex expenses from Money recd date = Funds in hand in deposits/current accounts etc.

I think broad reconciliation is enough and that it is not at all neccessary to have an absolute one to one co-relation between ecb money recd and capex spent.

Pls advise

Rohit Mujumdar

Replies (2)

One to one co-relation should be given, So, the Investor and others can figure out the exact expense incurred every time, when the money is received by the company

Dear Ankur

I tend to dis-agree bcos money is fungible, money has no color - it would be sufficient if on a broad basis one can identify that ecb money was used for capital expenditure. Day to day tracking is just not possible nor is the intention of the regulator.

regds

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