Companies Act_Practical Problems_46

Balance sheet of DEF Ltd. as at 31st March, 2005 shows among others the following information :

Paid-up share capital 20 crore
Reserves and surplus 35 crore
Reserve for redemption of debentures 15 crore
Capital reserves 5 crore

The company has already given following loans/stood guarantees for loans to other companies :
— Loan to GHI Ltd. : Rs.12 crore.
— Guarantee given on behalf of JKL Ltd. : Rs.11 crore.

MNO Ltd. has approached DEF Ltd. for loan of Rs.15 crore. Advise the management whether DEF Ltd. can give the loan of Rs.15 crore to MNO Ltd. and if yes, set out the procedure therefor.