Royal Ltd. raised external commercial borrowings with prepayment plan for an amount of USD 600 million under approval route. You are required to prepare a check-list for conducting secretarial audit.

ECBs refer to commercial loans in the form of bank loans, securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares), buyers' credit, suppliers' credit availed of from non-resident lenders with a minimum average maturity of 3 years. In the given question Royal Ltd. raised ECB with prepayment plan for an amount of USD 600 million under approval route. Prepayment of ECB beyond USD 500 million is considered by the Reserve Bank of India which is subject to compliance with the stipulated minimum average maturity period as applicable to the loan under the Approval Route. The following points should be included in the checklist for the purpose of secretarial audit: Check the recognition of lender. Check whether total outstanding stock of ECBs (including the proposed ECBs) from a foreign equity lender should not exceed seven times the equity holding, either directly or indirectly of the lender (in case of lending by a group company, equity holdings by the common parent would be reckoned). Check the all in cost ceiling. Check the permitted end use requirements. Check whether the parking of ECB funds is as per the norms. Check whether the company has taken prior approval from Reserve Bank at the time of receipt of ECB. Check the provisions regarding refinancing/rescheduling of ECB, if any. Check whether provisions regarding stipulated minimum average maturity as applicable to the contracted loan has been complied with. Check for the Approval of the Concerned Sectoral / Prudential Regulator Security for the ECB Check for the Borrowing powers limits under Section 180 of the Companies Act, 2013. Check the returns filed by the company.