Companies Act_Practical Problems_70

Following information has been extracted from the balance sheet of Richy Rich Ltd. :
(i) Paid-up share capital Rs.20 crore
(ii) Reserves and surplus Rs.80 crore
(iii) Capital reserve Rs.5 crore
(iv) Investment in securities Rs.10 crore
(v) Loan to companies Rs.30 crore

DEF Ltd. has requested Richy Rich Ltd. for a loan of Rs.50 crore which the Board
of directors will consider at its ensuing meeting. Explain the legal position and
advise the Board.

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.

Companies Act_Practical Problems_29

From the following information extracted from the balance sheet of VCD Ltd. as at 31st March, 2006, Board of directors of the company decide to grant a loan of Rs. 80 crores to another company JN Ltd.


Paid-up Share Capital:
Equity Share Capital Rs. 50 crores
Preference Share Capital Rs. 10 crores
General Reserves Rs. 100 crores
Debentures Rs. 5 crores
Debenture Redemption Reserve Rs. 5 crores

The company has already given loans to the following companies:
(i) Peters Ltd. Rs. 5 crores
(ii) Steel India Ltd Rs. 10 crores

The company has also given a corporate guarantee of Rs. 10 crores to NR & Co. Ltd. Advise whether the Board can go ahead with the above proposal.

Companies Act_Practical Problems_28

The Board of Directors of XYZ Ltd. has agreed in principle to grant loan worth Rs. 38 lakhs to MNC Ltd. on the basis of the following information.

Advise XYZ Ltd. about the requirements to be complied with under the Companies Act, 1956 for the proposed inter-corporate loan to MNC Ltd.
(i) Authorised share capital Rs. 1,00,00,000
(ii) Issued, subscribed and paid up capital Rs. 50,00,000
(iii) Free reserves Rs. 10,00,000

Companies Act_Practical Problems_11

The Board of Directors of M/s Greenfield Projects Limited, a company whose shares are listed on the Delhi Stock Exchange, propose to give loans to a sister company in excess of the limit prescribed under section 372A(1) of the Companies Act, 1956. The next annual general meeting of the company is due only after six months. Since the board is anxious to complete the formalities quickly without waiting for the date of next annual general meeting, advice the Board about the steps to be taken to comply with the legal requirements under the Companies Act, 1956.