note on 372A

Section 372 A : Inter - corporate Loans:

1. No Body Corporate can give loan or guarantee to another exceeding 60 % of its paid up capital ( till called up) and

100% of its free reserves. Free reserves; Free reserves shall include Dividened Distribution reserve , Dividened

Distribution reserve & Credit of Securities premium account as per Previous Year Audited Balance sheet and shall

not include Share application money account.

2. Unanimous consent by all directors present in meting is required, if the corporate Guarantee doesnot exceed

60 % of its paid up capital ( till called up) and 100% of its free reserves & Such if the Guaranteed property is So

hypothecated , Filing of Form-8 is required.

3. Besides, if it's decided to give guarantee or loan, exceeding 60% of its paid up capital ( till called up) and 100% of

its free reserves, in such case, EGM should be convened with proper notice & Should be Passed by Special

resolution.

4. Rate of Interest on Loan advanced should not below the Prevailing Bank rate.