The balance sheet of Neeraj Fertilizer Ltd. as at 31st March, 2015 disclosed the following details: (in crore) Authorised shares capital (equity shares) 500 Paid-up share capital 200 Statement of profit and loss (Cr.) 30

Section 180(1)(c) of the Companies Act, 2013 prohibits the Board of directors of a company from borrowing a sum which together with the monies already borrowed exceeds the aggregate of the paid-up share capital of the company and its free reserves apart from temporary loans obtained from the company's bankers in the ordinary course of business unless they have received the prior sanction of the company by a special resolution in general meeting. Explanation to section 180(1) (c) provides that the expression "temporary loans" means loans repayable on demand or within six months from the date of the loan such as short-term, cash credit arrangements, the discounting of bills and the issue of other short-term loans of a seasonal character, but does not include loans raised for the purpose of financial expenditure of a capital nature. According to the above provisions, the board of directors of Neeraj Fertilizer Ltd. can borrow without the approval of the shareholders in the general meeting, up to an amount calculated as follows: Paid up share capital = ₹200 crores Free reserves (Profit & and loss+ General reserve) - 30+70 = ₹100 crores ₹300 crores Further, the company has long term loan of ₹50 crores - ₹50 crores Total amount up to which the company can borrow = ₹250 crores So, in the given case, the board of directors of Neeraj Fertilizer Ltd. wishes to borrow an additional sum of ₹300 crores from the company's financial institution. Thus, the objection of one of director is correct and the said borrowing will be beyond the powers of the Board of directors. So, in order to borrow the said amount the company has to comply with the following requirements: Hold the Board Meeting and issue the notice of general meeting. Hold general meeting and pass the special resolution for transacting the matter stated above. File Form No. MGT-14 with the fee or additional fee as provided in the Companies (Registration of Offices and fees) Rules, 2014 with the ROC within 30 days of passing the special resolution.