BMR Edge Special

Companies Bill, 2012 An Analysis

Foreword
Companies Bill 2012 approved by Lower House of Parliament on December 18, 2012 -
Comprehensive overhaul of corporate laws on the cards

Dear Readers,

We are pleased to bring to you the BMR Edge Special on Companies Bill 2012. The Companies Bill has
been finally passed by the Lower House of Parliament (Lok Sabha) on December 18, 2012, seven years
after it was first proposed. The Companies Bill is still not a law and is yet to be approved by the Upper
House of Parliament (Rajya Sabha). Once approved by Rajya Sabha, presidential assent would be
required to notify the Companies Bill as a statute replacing the existing Companies Act, 1956.

A comprehensive revision was warranted in view of the changing economic and commercial environment,
and for an alignment with other Indian regulations. The proposed law is an interesting blend of forward
looking measures, enhanced responsibilities on gatekeepers (auditors, advisors etc) of law, and plugging
loopholes in current legislation. Given the recent corporate scandals, there is a heightened focus on
corporate governance and transparency in various areas. There has been substantial changes in the
restructuring provisions with greater focus on disclosures and compliances. However, the need for
grandfathering provisions, if any, should be addressed.

To conclude, the Companies Bill is finally here and has made it through the first round in its approval
process. We expect it to be enacted by the first half of 2013, followed by various supporting rules being
issued through separate notifications.

This special edition takes a deep dive and analyses the impact of various key provisions introduced. We
hope you enjoy reading the newsletter, and it provides you with useful insights.

Rohit Berry
National Leader, M&A
C O N T E N T S
New concepts introduced
Shareholder and funding related
Restructuring provisions
Other key amendments
1. Directors
2. Financial statements/ Audit
3. Related party transactions
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7
13
16
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Contributors: Nitin Savara, Pankaj Jain, Vaidehi Dhuldhoya, Samudra Acharyya, Saurabh Agrawal and Kanchan Garg
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Abbreviation Meaning
BIFR Board for Industrial and Financial Reconstruction
Bill Companies Bill 2012
CCI Competition Commission of India
CG Central Government
Co Act Companies Act 1956
ICAI Institute of Chartered Accountants of India
IT Income Tax
KMP Key Managerial Persons
NFRA National Financial Reporting Authority
NCALT National Company Law Appellate Tribunal
NCLT or Tribunal National Company Law Tribunal
OL Official Liquidator
RoC Registrar of Companies
RBI Reserve Bank of India
SARFAESI Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest
SEBI Securities & Exchange Board of India
SPV Special Purpose Vehicle
Glossary of terms
New concepts
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3. Corporate Social Responsibility (CSR)
Introduction of CSR has been one of the most widely debated provisions, over the past
few years. Corporates continued to oppose the mandatory nature of these provisions,
while the law makers themselves had differing views, with some suggesting CSR as a
recommendatory provision. CSR has finally been introduced as a mandatory
provision, making India the first country to include CSR in corporate laws. Key
highlights of CSR legislation:
Requirements
CSR is mandatory for a company fulfilling any of the following criteria:
o Net worth > INR 5 Billion (INR 500 crores), or
o Turnover > INR 10 Billion (INR 1,000 crores) or
o Net profit > INR 50 Million (INR 5 crores)
Minimum annual CSR spend - 2% of average net profits made during last three
financial years
Implementation of CSR
Corporate Social Responsibility Committee (CSRC) to be appointed. CSRC to have
3 directors, of which at least 1 director shall be an independent director
CSRC to formulate Corporate Social Responsibility Policy indicating the prescribed
corporate social activities to be undertaken, and recommend CSR expenditure, as
also monitor the same
Companies to give preference to the local area(s) of operations, for CSR spend
Non-compliance Follow a comply or report policy
No specific penalty provisions incorporated in law
Company required to specify reasons in the directors report
BMR comments
Consequences of default are not clearly laid out, since there is no specific penalty or
prosecution prescribed.
No clarity on treatment of unutilized CSR budget and whether it should be carried
forward for use to next year - The Standing Committee had suggested deposit of
unutilized amount in a fund, however, this suggestion has not been accepted
Need to align provisions for linkage to current year cash flows and current year
profits There may be situations, where a company does not have positive cash
flows in the current year, or a loss in the current year. Ideally, CSR spend in such
years should be deferred
1. Class Action Suits
In India, the basic concept of a class action lawsuit is captured to an extent in
corporate laws, where oppression and mismanagement claims can be filed by a
class of small shareholders, and broadly in the Civil Code. It is, however, applied
very sparingly.
The Companies Bill now provides for recognition of class action suits as a part of
Oppression and Mismanagement provisions, and lays down an enabling
framework, where stakeholders (shareholders or depositors) can directly approach
the Tribunal. Damages/ compensation can be sought against the company, its
directors, auditors or advisors, who have knowingly assisted in
wrongdoings. Orders of the Tribunal would be binding, with stringent penalties and
imprisonment for non-compliance with directions.
It remains to be seen how Indian thought process on this subject would evolve and
the time involved in settlement of a class action suit, but as a starting point, the
framework is clearly laid out.
This new provision seems to be an outcome of the Satyam corporate scandal - to
pin responsibility not only on insiders but also on various gatekeepers who are
responsible for ensuring compliance with the law. Further, it is also in alignment
with similar provisions in matured economies.
2. Dispute resolution framework
Currently, corporate law matters are dealt by numerous judicial/ quasi-judicial
forums like District Court, High Court, BIFR and Company Law Board. This results
in time consuming litigation.
With a view to streamline the process and also put in place a single forum with
subject matter experts, it is now proposed that all corporate law matters would be
administered through NCLT and NCALT, which shall be granted requisite powers
for speedy and efficient decision making.
Time taken to settle litigation in India has always been a key concern. Accordingly,
initiatives are being taken to address the same:
o Special Courts - CG has been empowered to set up Special Courts to settle
disputes, across the country. Special Courts shall try summary proceedings for
offences punishable with imprisonment for a term not exceeding three years.
The appeal against the Special Court judgments would lie with the High Court
o Mediation and Conciliation panel - A panel of experts would be set up to
facilitate arbitration and mediation between the parties during the pendency of
any proceedings before the CG or NCLT or NCALT
Introduction of new concepts
Shareholder and funding
related
Shareholder related
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Maximum
members in
Private Company
200

50

Recognition to
Inter-se
shareholders
arrangements on
transferability
Any contract or arrangement between two or more persons in
respect of transfer of securities of a public company shall be
enforceable
Shareholders generally incorporate such
clauses in Articles of the company, for
enforceability
Divergent views exist on legal
enforceability of transfer restrictions
typically forming part of JV / investment
agreements in case of public companies
Further, a public company is required to
register all share transfers, and cannot
refuse the same
Provisions suggest that any transfer
restrictions agreed between shareholders
of a public company would be valid and
binding as a contract inter-se the
shareholders
Important amendment to bring some
clarity to the entire debate on transfer
restrictions in public companies This
was becoming a concern area, with
various judicial precedents upholding
different principles
Entrenchment -
Inclusion of
provisions,
which are more
stringent than
existing law
Articles can contain entrenchment provisions, which provide a
more stringent mechanism than the mechanism contained in
existing law for certain provisions i.e. Provisions requiring higher
shareholder approval % in voting than the prescribed majority
(51% or 75%) for certain matters
Articles currently also include commercial
provisions more stringent than existing law,
and this is a validly accepted norm
Concept of entrenchment more clearly
recognized in law. This would provide an
additional layer of protection for investors
with respect to voting and other commercial
terms agreed
Insider Trading Insider trading prohibited No specific provisions Alignment of corporate laws with securities
laws Penal provisions under corporate
laws would also apply to insider trading
Voting by
shareholders
Postal Ballot - Applies to all companies, public and private
Electronic voting introduced, for certain classes of companies
Postal ballot is applicable only to listed
public companies
Electronic voting applies only to top 500
listed companies, under securities laws
These modes are expected to increase
participation by members
Enabling provisions for electronic voting
included Expected to become a norm for
all companies over a period of time
Quorum for
shareholder
meetings of a
public company
Upto 1000 members 5 members present in person
1001 - 5000 members 15 members present in person
>5001 members 30 members present in person
5 members present in person
Concept of One Person Company and Small Company have been introduced for new corporate entrants, who are small in size. Such companies would be subjected to reduced compliances
Holding company
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Investment
through multiple
layers
Investment not permitted through more than two layers of
investment companies
Overseas multi-layered structures would be permitted
No restrictions on holding structures Transparency in flow of funds &
transactions sought to be achieved
Move may impact ability to raise funds
Large groups are usually structured in
various layers including a group holding
company, sector focused holding
company, region specific holding company
and SPVs
Impact on existing multi-layered
structures?
Classification as
holding
company
50% threshold to be based on share capital (i.e. both equity and
preference share capital) of the target company
Only equity shares are to be considered for
evaluating holding-subsidiary relationship
Companies with preference shares to
re-look shareholding
Conflict with the consolidation principles
under the Accounting Standards [which
are based on voting power or composition
of Board of Directors] and other laws
Share Capital/ Other securities (1/3)
Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Fresh issue of securities
Private
Placement
Applicable to public and private companies with various
conditions prescribed
Apply only to public companies Prescribed
conditions are broadly similar


Concerns for private companies as they are
now required to comply with stringent norms
while raising funds through Private
Placement mode
Variation in
terms of contract
or objects in
Prospectus for
public offer
Permitted, subject to:
Shareholder approval through special resolution
Newspaper publication stating rationale
Exit opportunity for dissenting shareholders
Prior shareholder approval through ordinary
resolution
Aims to curb misuse of funds raised
Exit opportunity and newspaper
publication to act as deterrents for
arbitrary variation of prospectus
Issue of shares
at discount
Not permitted, except for sweat equity Permitted No significant impact - Issuance at discount
is not a regular feature; even current
provisions have limited utility
Bonus Shares Prior compliance with prescribed conditions, including:
Authorization in articles
Board and Shareholder approval
No default in payment of interest or principal in respect of
fixed deposits or debt securities issued by it
No default in payment of statutory dues of employees
Bonus share issuance is permitted and
recognized, though there are no
additional conditions prescribed in Co Act
However, similar conditions are already
prescribed for listed entities by SEBI
Creates additional pressure on unlisted
company to be regular in certain payments,
even though a bonus issue is a mere
capitalization of reserves, and does not even
result in any cash payout, or reduction in net
worth
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Reducing existing share capital
Redemption of
preference
shares
Companies can issue preference shares for a period
exceeding 20 years for specified infrastructure projects,
provided a certain % of shares are redeemed annually at the
option of the shareholder no upper limit is prescribed
Fresh preference shares can be issued to redeem existing
preference shares, which are due for redemption, and to pay
dividend on such preference shares, subject to:
o Approval of majority of preference shareholders
o Tribunal approval
o Cash redemption for dissenting preference shareholder
Preference shares to be redeemed within 20
years
Another flexible source of funds created for
Infrastructure companies, which go through
a long gestation period
Buy back of
shares
Minimum 1 year gap required between two buybacks
Buyback possible in case of following defaults, provided the
defaults have been remedied, and 3 years have passed:
o Repayment of deposit/ interest payable
o Redemption of debentures or preference shares
o Payment of dividend
o Repayment of any term loan or interest
No time gap prescribed for shareholder
approved buybacks
365 day time gap required between Board
approved buybacks
Buy back is not permitted, where any of
the defaults is subsisting
Limited buybacks possible due to 1 year
gap
Adversely impacts strategies used earlier
for cash repatriation through buyback
Capital
Reduction
Capital reduction not permitted if company has not repaid
deposits or interest payable
Notice of proposed capital reduction to be sent to CG, RoC,
SEBI and creditors; representations if any, to be made within
3 months
Statutory auditors certificate required for confirming
accounting treatment is in accordance with Indian GAAP
Specific authorization in Articles not required
Addition of words and reduced not required
Specific provisions for effecting capital
reduction
Additional compliances prescribed in
Listing Agreement, including auditors
certificate, applicable only to listed
companies
Overall timelines will increase due to
mandatory 3 months notice period
Restricted planning opportunities in
accounting treatment for unlisted
companies, since auditors certificate is
required upfront
Creates additional pressure on public
companies to settle any outstanding public
deposits
Share Capital Reducing existing capital (2/3)
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Capital Erosion - Sick Companies
Eligibility Criteria Provisions now cover any company instead of industrial
company
Only industrial companies covered within
the provisions of Sick Industrial Companies
Act
Enhanced coverage of law; now extends to
service companies as well
Sickness of a
company
Dispensation of net worth criteria (erosion of 50% of net worth)
for qualifying as a sick company
Now, if the company fails to repay or secure debt of secured
creditors of a company representing 50% of total debt, then
application can be made to tribunal for declaring the company
as sick company
Sickness of an industrial company
dependent on its:
Incorporation must be in existence for
minimum 5 years
Net worth Accumulated losses > Net
Worth

Positive move to remove the net worth
criteria A number of companies (including
many subsidiaries of large foreign parents)
were classified as sick companies on this
count and subjected to various compliances,
though business continued normally
Existing sickness law needs to be repealed,
once Bill is enacted
SARFAESI Act,
2002
Application for sickness can be made to Tribunal even when
financial assets have been acquired under SARFAESI Act, after
obtaining consent of securitisation/ reconstruction company
Application cannot be made, if financial
assets have been acquired by any
securitisation or reconstruction company
Increased scope for applying for sickness
Return on Capital Dividend
Restrictions on
declaration of
dividend / interim
dividend
No dividend declaration permitted, in the event of
non-compliance with provisions for acceptance and repayment
of public deposits
No specific provisions Introduced to curb situations where
shareholders receive dividends, despite
non-compliances in payment of public
deposits
Interim dividend In case company has incurred losses upto preceding quarter of
current financial year, then interim dividend shall not be
declared at a rate higher than average dividends declared by
company during immediately preceding 3 financial years
No specific provisions Restrictions imposed on interim dividend
payout for companies with recent history of
losses
Transfer to
reserves, upon
dividend
declaration
No requirement for mandatory transfer of % of profits to
reserves, at the time of declaration of dividend
Company to compulsorily transfer certain
amount of profits to reserves upon dividend
declaration, maximum being 10% of profits
Welcome move - Now possible to repatriate
entire profits of the company as dividend
Share Capital Erosion, Returns (3/3)
Restructuring Conceptual and
Procedural amendments
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Conceptual amendments
Cross Border
Merger
Merger of Indian company with foreign companies (in
specified jurisdictions - To be notified) permitted
Additional rules to be framed by CG with RBI
Merger of Indian company into overseas
company is not permitted
Only overseas company is permitted to
merge into an Indian company
Move would facilitate cross border listing
of entities with Indian assets and exits to
shareholders/ Investors
Exchange control policy and tax laws to be
aligned to facilitate mergers
Contractual
Mergers
Concept of contractual mergers introduced, where no prior
NCLT approval is required. Contractual merger permitted for:
o Small companies
o Parent company and wholly owned subsidiary
All companies required to obtain High Court/
CG approval for restructuring (merger,
demerger etc)
Reduction in administrative burden,
timelines and costs for companies within
the threshold limits
Technically, provisions can be interpreted
to include only mergers, and not
applicable to demergers, though both are
restructuring routes. Some clarity on this
area may be required
Merger of listed
company with
unlisted
company
Specific provisions included for such mergers
Enabling provisions allowing transferee company to remain
an unlisted company, even post-merger
Exit opportunity to be provided to shareholders of listed
transferor company
No specific provisions for such reverse
mergers, involving a listed and an unlisted
company
Technically possible under Co Act,
though it may have certain securities laws
considerations
Formally recognized in law now - Provision
would facilitate delisting of a company/
major business through the scheme
Shareholders interest sought to be
protected through exit opportunity
Securities laws to be aligned for
implementation
Treasury shares
- Companies
holding their own
shares instead of
cancellation of
inter-co
shareholding
Any inter-company investments between the companies
involved in merger, would need to be cancelled. Holding
treasury stock would not be permitted
Companies generally prohibited from
holding own shares under normal course
No specific provisions or requirement for
cancellation of inter company stakes on
merger. Treasury stock can be created
instead of cancellation of inter-company
shareholdings
Treasury stock was often used to retain a
company's equity stake within its own
control for different purposes, including
liquidity and to increase promoter control
Prohibition on creation of treasury stock
on merger is in line with other corporate
law provisions, wherein a company is not
allowed to hold its own shares
Takeover and
Buyback, as part
of restructuring
scheme
An arrangement can include a takeover offer, subject to
compliance with securities laws regulations in respect of
listed companies
Buyback can also be done as part of the restructuring
scheme, subject to compliance with buyback provisions
No specific provisions for inclusion or
exclusion of buyback or takeover as part of
a scheme. There have been instances
where buyback was sought to be
undertaken as part of a scheme
Buyback through restructuring scheme
would now require specific compliance with
the buyback provisions
Restructuring schemes Conceptual amendments 1/2
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Procedural amendments
Valuation report
for Scheme
Valuation to be undertaken by registered valuers
Valuation report to be provided to shareholders/ creditors
along with notice convening meeting for considering the
scheme
No specific provisions Valuation is
undertaken by independent valuers
Share swap report need not be sent along
with the notice for meeting
Listed companies are required to send
fairness opinion with meeting notice
Level of detail in share swap/ valuation
report would need to be considered, since
there may be certain confidential
information
What if meetings are dispensed?
Objections to
Scheme
Objections to scheme can be made only by shareholders
holding 10% shareholding or creditors holding 5% of total
outstanding debt

No specific provisions defining a threshold
limit Objections can be raised by any
shareholder/ creditor and are then
appropriately considered by the Court
A rational step - There have been instances
in the past, when minority shareholders
holding very nominal shares have delayed
restructuring by raising objections
Method of voting Shareholder/ creditors to be provided option to vote by postal
ballot, in addition to voting physically at a meeting, in person or
by proxy
Physical meeting of shareholders/
creditors is required to be convened
Voting is allowed in person or by proxy at
such meeting
Postal ballot would lead to increased
participation by shareholders/ creditors,
while considering a scheme
Electronic voting has already been
introduced, and it is expected that this
would be followed for restructuring
schemes also
Auditors
certificate
mandatory
Mandatory for all companies (whether listed or unlisted) to
obtain statutory auditors certificate stating that the accounting
treatment in the scheme is compliant with Accounting
Standards
No specific provisions
As per listing agreement, listed
companies are required to submit such
certificate to the stock exchange
Presently, unlisted companies tend to
adopt varied accounting treatments in a
restructuring scheme, for meeting various
objectives
Going forward, reduced flexibility for
accounting treatment
Mandatory
notification of
Scheme
Scheme to be notified to various regulatory authorities,
including the CG, OL, IT authorities, SEBI, RBI, Stock
Exchanges, CCI, as may be necessary and to other
regulators
Notice to authorities to be circulated simultaneous to notice of
meeting. Timeline of 30 days provided to respond to the
notice
Notice of scheme is to be served to the CG,
RoC and OL as per directions of High Court,
after meetings have been convened
Will bring increased attention to
restructuring schemes and possible
scrutiny by authorities
Restructuring schemes Procedural amendments 2/2
Other key amendments
Board of Directors
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Maximum
number of
directorships by
a single person
Maximum 20 companies, including alternate directors Within
this limit, maximum of 10 public companies permitted
Maximum of 15 companies
Directorship in private companies,
unlimited company, non profit making
companies and alternate director excluded
from above limit
Maximum
directors in a
company;
women director
Maximum directors increased to 15 Increase beyond 15 is
subject to special resolution by shareholders
Certain class of companies to appoint 1 woman director
Public companies required to take CG
approval for appointing more than 12
directors
No requirement to appoint woman
directors
Shifting of powers from the government to
the shareholders, reduced administrative
burden
Stay of director
in India
At least 1 director should stay in India for 182 days or more in
the previous calendar year
No specific provision Discourages practice of companies being
wholly controlled by non-resident directors,
who may not be accessible in case of any
defaults or concerns raised
Independent
Directors
Listed company to have atleast 1/3 Independent Directors;
CG to specify minimum number of Independent Directors for
certain public companies
Independent Directors to be appointed only from approved
data banks maintained by institutions notified by CG; CG may
prescribe procedure for their selection
Diligence on the directors to be carried out by company
Maximum term in a company is 10 years Post 10 years, 3
years cooling off period required for re-appointment
No stock options can be given to Independent Directors
No specific provision prescribed in Co Act
Listed companies governed by Clause 49
of the Listing Agreement
o If Chairman is non executive director,
1/3 of the board should be independent
o If Chairman is executive director, then
1/2 of the board should be independent
o Allowed to hold stock options subject to
shareholders resolution
Positive step to ensure improved
transparency in conduct of business
Move to ensure that only qualified persons
can be appointed as Independent
Directors
Rotation of Independent Directors
envisaged
Notice for calling
Board Meetings
Minimum 7 days notice required; Shorter notice possible, if
atleast 1 Independent Director (if any) is present
No specific provision regarding notice period
for board meeting. Listing agreement
requires listed companies to issue prior
notice for certain matters
Improves operational transparency by
allowing adequate time for all directors to be
present; Typically included as a good
governance measure by many companies
under current law also
Resolution by
circulation
Possible for directors (1/3 of total) to require that a resolution
proposed to be passed by circulation, should not be passed by
circulation, and instead, be considered at a Board meeting
No such provision in the Co Act, for
circulation resolution to be considered at a
board meeting, even if certain directors
require
Ensures key decisions are not passed by
way of circular resolution, if certain directors
prefer a discussion on such matters at the
board meeting
Financial statements/ Audit
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Financial Statements
Accounting year Uniform accounting year ending 31st March of every year
Exception carved out for holding or subsidiary of a company
incorporated outside India and required to follow a different
financial year for consolidation of accounts prior approval of
Tribunal required
No provision for extension of financial year
Company can adopt any accounting year for
maintaining its accounts; Extension possible
Subsidiaries of overseas companies may
be able to maintain a different accounting
year in line with overseas parent
No avenues possible for stand alone
Indian companies or companies with
minority foreign holding to change
financial year
Accounting &
Auditing
Standards
Appointment of NFRA for formulating accounting and auditing
standards
NFRA to ensure compliance of accounting and auditing
standards
National Advisory Committee on Accounting
Standards examines the Accounting
Standards, and these standards are notified
Introduction of NFRA for auditing standards.
Earlier, this role was played only by ICAI
Audit
Secretarial Audit
and Internal
audit
Listed company and other prescribed companies to annex
secretarial audit report along with Directors report
Prescribed companies to appoint professionals for internal
audit
No specific provisions for secretarial audit,
or for conducting internal audit
Positive step to ensure more transparency
and scrutiny in companys dealings
Maximum tenure
of auditors
For listed companies and other prescribed companies
individual auditors to be rotated after every 5 years and audit
firm after every 10 years
No specific provision Mandatory rotation of auditors expected to
enhance auditors independence
Auditing
standards
Auditors required to comply with auditing standards No specific provision Positive step to ensure more transparency
and scrutiny in companys dealings
Restriction on
other services by
auditors
List of services (such as advisory, consultancy, investment
banking), which auditors cannot render, either directly or
indirectly, to the company and its affiliates
No specific provision Restrictions are in line with global audit
norms, which seek to remove conflict of
interest
Liability of
auditors
Prescribed penal actions against the auditors, if found involved
in fraud or has abetted or colluded in any fraud
Nominal penalty under law and action by
ICAI
Provisions introduced for increased liability
of auditors
Related Party Transactions
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Provision New provisions Co Bill 2012 Existing law Co Act BMR Comments
Related party
transaction
Enhanced scope of transactions
Enhanced scope of related parties to include KMP and
relatives, directors with certain shareholding, persons in
advisory capacity (other than professional advice) to Board
Prior approval of shareholders in case paid-up capital
exceeds prescribed limit
Limited scope of transactions and persons
covered under Co Act
Prior approval of CG required in case
paid-up capital exceeds INR 10 Million
(INR 1 crore)
Increased scope for reporting transactions
enables greater transparency in
operations with key persons
Administrative burden of obtaining CG
approval dispensed
Loan and
investment by
company
Loans and investment to any person covered
Rate of interest benchmarked to interest on Government
Securities
Applicable to loans and investments made
only to body corporates
Rate of interest benchmarked to bank rate
Provision to curb managements power to
make investments, including loans to
promoters, beyond specified limits, unless
approved by shareholders
Loan to directors Applicable to both private and public companies
Prior shareholder consent required
Applicable to public companies
Prior approval of CG required
Private companies also included -
Increased compliances
Administrative burden of obtaining CG
approval dispensed
Transactions
with directors
Prior shareholder approval required for contracts with directors
to acquire assets for non-cash consideration
No specific provision Ensure fairness and transparency in
dealings
M&A Service Line Overview
M&A Service Offerings
M&A Advisory

Transaction Advisory and Support

Business Restructuring

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M&A Leadership
Rohit Berry
DID: 91 124 339 5030
rohit.berry@bmradvisors.com

Amit Jain
DID: 91 124 339 5025
amit.jain@bmradvisors.com

Rajendra Nalam
DID: 91 124 339 5023
rajendra.nalam@bmradvisors.com

Shivani Nagpaul
DID: 91 22 3021 7165
shivani.nagpaul@bmradvisors.com

Ashish Gulati
DID: 91 124 339 5007
ashish.gulati@bmradvisors.com


Vivek Gupta
DID: 91 124 339 5052
vivek.gupta@bmradvisors.com

Seiji Ota
DID: 91 124 339 5024
seiji.ota@bmradvisors.com

Nitin Savara
DID: 91 124 339 5015
nitin.savara@bmradvisors.com

Sujata Mody
DID: 91 22 3021 7027
sujata.mody@bmradvisors.com

Jagdeep Sharma
DID: 91 22 3021 7141
jagdeep.sharma@bmradvisors.com

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2012 BMR Advisors, Published in India.
All rights reserved

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for
detailed research or the exercise of professional judgment. Neither BMR Advisors nor its associate concerns can accept any responsibility for loss
occassioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be
made to the appropriate advisor.

About BMR Advisors
Gurgaon
22nd Floor, Building No. 5
Tower A
DLF Cyber City, DLF Phase III
Gurgaon 122 002
Tel: 91 124 339 5000
Fax: 91 124 339 5001
Mumbai
BMR House
36B Dr . RK Shirodkar Marg
Parel
Mumbai - 400 012
Tel: 91 22 3021 7000
Fax: 91 22 3021 7070
Bangalore
Level 3, Prestige Nebula - I
No 8-12, Cubbon Road
Opp Income Tax office
Bangalore 560 001
Tel: 91 80 4032 0000

Chennai
No.33 South Beach Avenue
MRC Nagar
Chennai 600 028
Tel: 91 44 4298 7000
Fax: 91 44 4298 7001

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