Investments, Guarantees, Security, Loans / Advances

Reporting requirement

Report whether the company has during the year (a) provided loans / advances / guarantees / security to subsidiaries, JVs, associates or parties other than subsidiaries / JVs / associates; (b) whether terms and conditions are not prejudicial; (c) regularity in repayment of principal and interest; (d) amounts overdue for more than 90 days; (e) renewals or fresh loans to settle overdue; (f) loans repayable on demand or without stipulation of repayment terms.

What to verify before signing

• Loan / advance / guarantee / security register with party-wise tabulation
• Board / committee approvals for each sanction
• Terms documentation — interest rate, repayment schedule, security
• Aging of receivables; identification of overdue beyond 90 days
• Pattern of evergreening — fresh loans extended to settle overdue ones

Sample observation — applicable

The Company has not made investments in, provided any guarantee or security, or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year.

Related standards