As of 31st March 2025, the balance sheet of Supreme Limited shows the following: Particulars Amount (₹ in crore) Paid up capital 30 Reserves & Surplus 40 Debenture Redemption Reserve 20 Capital Reserve 10 The company

Paid up capital of Supreme Limited = ₹30 crores Free Reserves of Supreme Limited = ₹40 crores Securities premium of Supreme Limited = Nil As per Section 186 of the Companies Act, 2013, no company shall directly or indirectly (a) give any loan to any person or other body corporate; (b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and (c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate, exceeding 60% of its paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account, whichever is more. Accordingly, the calculation of overall limit: (i) (₹30 crore + ₹40 crore) x 60% = ₹42 crores (ii) ₹40 crores x 100% = ₹40 crores Therefore, limit is ₹42 crores. Supreme Limited can give loan upto ₹42 crores. Loan and Investment already made: Loan to DEF Ltd. = ₹15 crore Guarantee given on behalf of GHK Ltd. = ₹15 crore Total existing exposure = ₹15 crore + ₹15 crore = ₹30 crore Proposed loan of ₹20 crore to LKP Ltd Since the investment/loan/guarantee already made or given ₹30 crore along with the proposed loan ₹20 crore exceeds the prescribed limit of ₹42 crore (₹30 + ₹20 = ₹50 crore > ₹42 crore), the proposed loan can be given by taking prior approval by means of a special resolution passed at a general meeting under Section 186(3) of the Companies Act, 2013 and after complying with other requirements under Section 186 of the Companies Act, 2013.