RAMAMURTHY

The terminology used in Rule 4 is "outstanding loans". It has to be interpreted to mean both long and short term borrowings, i.e. the term loans as well as OD/CC/Bills limit outstandings etc. and only thing that could be excluded is L/C limits as these are non fund based and non crystallised liabilities. The position has to be reckoned with respect to the date on which the accounts are approved by the board before adoption in Annual General Meeting and if any of the threshold limits have been crossed on the date of the adoption of accounts, the independent directors are required to be adopted. Unless the balance sheet is signed, there is no finality. Hence only on signing the balance sheet, position should be reckoned.