SECRETARIAL AUDIT - as per new amendment

sir

For the purpose of Secretarial Audit of Private companies as per new amendment one of the condition is

  • Every Company having outstanding loans or borrowings from banks or public financial institutions of Rs. 100 crore or more.


My query is Whether the borrowings include Bank guarantees?

Replies (3)
Quick Summary
This discussion clarifies a condition for the Secretarial Audit of private companies under a new amendment: companies with outstanding loans or borrowings from banks or financial institutions of Rs. 100 crore or more. The key question is whether bank guarantees are considered borrowings for this purpose. While bank guarantees are contingent liabilities and noted separately, they are generally not treated as direct borrowings in this context.

Bank Guarantee may be included

But - BG is Contingent Liability and shown only in Notes to the Accounts. 

In this scenario, is there any logic or provision regarding considering it as borrowing?

A bank guarantee is a promise from a lending institution that ensures the bank will step up if a debtor can't cover a debt....so it's not included

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