Presentation On Companies Bill Aug 26

Conference Call on Companies Bill
In association with
Companies Bill 2012| 1
All rights reserved | Preliminary & Tentative
SPEAKERS FROM BMR ADVISORS

Vivek Gupta Rajendra Nalam Kalpesh Maroo
Companies Bill 2012 | 2
CONTENTS
I. II. Introduction Governance & Others
III. M&A IV. Closing remarks and Q&A
I. INTRODUCTION
INTRODUCTION
Companies Bill 2012 (Bill) was passed by Upper House of the Parliament on August 8, 2013 (the Lower House of the Parliament had approved the Bill on December 18, 2012) The Bill now needs presidential assent and notification in the Official Gazette to replace the existing Companies Act, 1956 (the Act)
The Bill consists of 29 Chapters, 470 Clauses and 7 Schedules. It is important to note here that most of the provisions of the Bill are subject to rules, which are yet to be formalized
Based on press releases, the Ministry of Corporate Affairs expects all rules regarding the Bill to be in place by March 31, 2014 after taking in account the suggestions from various stakeholders
The Bill marks a decisive change in India's corporate law regime in view of the changing economic and commercial environment, and for an alignment with other Indian regulations
TRANSITION TO THE BILL

On enactment and notification of the Bill, the Act (except for certain specified provisions) shall stand repealed Repeal of the Act
and transition to the Bill Any action under the Act including those taken by any authority will continue to be valid and in force so long as the same is not inconsistent with the provisions of the Bill Any principle or rule of law, form or course of pleading, practice or procedure etc shall not be affected Bill envisages that all powers and functions of the Company Law Board, Company Court and those of BIFR under the Sick Industrial Companies Act would be exercised by the National Company Law Tribunal (the Tribunal) Bill provides that until the Government notifies a date for transfer of all matters, proceedings or cases to the Tribunal, the provisions of Act in regard to the jurisdiction, powers, authority and function of the current Company Law Board and the Company Court shall continue to apply
II. GOVERNANCE & OTHERS
CONSTITUTION AND CAPITAL
New Concepts
Capital Raising
Rights
Changes
CONSTITUTION AND CAPITAL (1/7)

New Concepts
Active Company
Capital Raising
Dormant Company
Rights
Changes
Small Company
Company other than a public company Paid up capital does not exceed 50 lakh rupees or the amount prescribed Turnover as per last profit and loss account does not exceed INR 2 crore or such higher amount as prescribed Cannot be a holding company or a subsidiary company
Small Company
One Person Company Dormant Company
Public Company
Private Company
Company which only has a single member Ambiguity on whether the membership of an One Person Company (OPC) is restricted to natural persons only Public companies can be converted into OPCs
Small Company
Min 2 members Max - 200
One Person Company
One Person Company

New Concepts Capital Raising Rights Changes
Dormant Company
Small Company
One Person Company Dormant Company
No business or operation No significant accounting transaction in last 2 Financial Years (FYs) Not filed financial statements and annual returns during the last 2 FYs
Small Company
One Person Company
Dormant Company
Relatively lower level of differentiation between normal private companies and public companies
Relaxation in provisions relating to general and board meetings Cash flow statements not part of Financial statements Dormant Company can opt for strike off from the registrar

Preference shares
Private Placement Further issue Share premium Shares at discount
Preference Shares
Infrastructure companies allowed to issue preference shares with more than 20 year tenure
Private Placement
Offer or invitation to subscribe securities to a select group of persons Private companies could raise capital under private placement Offer cannot be made for more than 50 persons in a financial year except for allotments to Qualified Institutional Buyers, employees etc Plugs loopholes in capital raising practices

Further Issue Preference shares

Private Placement Further issue Share premium Shares at discount Share Premium
Certain class of companies (to be specified) cannot utilize share premium towards premium payable on the redemption of any redeemable preference shares / debentures
Provisions relating to rights issue now applicable to private companies as well If shares are to be issued to persons other than existing shareholders and employees, 3/4th approval required Price of such shares has to be determined by a registered valuer Interplay with FEMA pricing norms Income-tax Valuation Rules

Preference shares
Private Placement Further issue Share premium Shares at discount
Shares at a discount
Company is not allowed to issue shares at a discount except sweat equity Shares issued by a company at a discounted price shall be void Discounted Price vs Discount to Par value??

Differential rights
Variation of rights
Differential rights
Permits issue of shares with differential voting and dividend rights subject to prescribed rules No exemption to private limited companies Impacts capital structuring in private companies
Variation of rights
Variation of rights of a particular class would now require approval from the other class if such variation impacts their rights

Alteration of capital
Transfer of shares
Alteration of capital
Consolidation and division of share capital which results in changes in the voting percentage of shareholders can take effect only after approval from the Tribunal
Transfer of shares
Restriction on transfer of shares of public companies based on shareholder pacts given recognition (Discussed later)
CORPORATE GOVERNANCE
Board
General Meeting
Management
RPT
Loans
Records
CORPORATE GOVERNANCE (1/8)

Board General Meeting Management RPT Loans Records
Composition
Conduct Independent Directors
Composition
Every company to have at least one director who has stayed in India for a total period of 182 days in the previous calendar year Certain class of companies to have at least 1 woman director Minimum Directors Private 2 (1 in the case of OPC) Public - 3
Maximum Directors 15 (can be increased under special resolution)

Conduct
Duties of directors codified to include act ion in good faith and in the best interests of the company Board meetings can be convened through video conferencing/ audio visual means No specific guidelines on compliance with the code specified for directors

Composition
Conduct Independent Directors
Independent Directors
Guidelines similar to Clause 49 in relation to Independent Directors (IDs) now incorporated Applicable for listed companies Stringent eligibility conditions and cap on directors overall 20 with not more than 10 public directorships Minimum term of 5 years prescribed with a maximum of 2 terms To maintain gap of 3 years after 2 terms Remuneration restricted to sitting fees, reimbursement, profit linked commission. Stock options are prohibited Liability of IDs restricted to acts/ omissions that occurred with his knowledge OR where he had not acted diligently

Interval
Electronic Voting Quorum
General Meeting
No statutory meetings First annual general meeting within 9 months from the date of closing of the FY Subsequent annual general meeting within 6 months from the date of closing of the FY Electronic voting allowed in the case of specified companies Quorum requirements Public companies Having < 1,000 members 5 >5,000 50
Having >1000 but <5,000 members 15
Quorum requirements Private companies 2

Appointment
Management
No change in the limits of overall/ individual limits of managerial remuneration Certain class of companies to mandatorily appoint MD / CEO / Manager CFO CS

Board Scope
Related parties additionally include transactions between a company and its:
General Meeting Management
RPT
Loans
Records
Scope
Approvals Violation
Key Managerial Personnel or their relatives Firm in which manager is a partner/ relative of manager is a partner Private company in which manager is a member / director
Public company in which a director/ manager is a director/ holds along with his relatives >2% of the paid-up capital; and
Holding company/ subsidiary company/ associate company/ fellow subsidiaries.
Selling, buying or leasing of property of any kind, appointment of agents for the company now under the related parties transaction net
Transactions at arms length exempt

Scope
Approvals Violation
Approvals and Violation

All related party transactions require Board approval
Central Government approval replaced with shareholders approval for companies having prescribed paid-up capital (to be prescribed) Interested shareholders not allowed to vote Person convicted of an offence in relation to RPTs at any time during the last 5 years barred from becoming a director

Inter-corporate
Directors
Inter-corporate loans / guarantees / investments

Scope expanded to include persons other than body corporate Private companies and wholly owned subsidiaries also covered Rate of interest on loans to be linked to Government securities instead of the prevailing bank rate
Loans/ Guarantees to Directors, others, etc

Loans/ guarantees by a company to its directors/ to persons in whom directors are interested prohibited except
Exemption to rule: Loans to managing directors/ whole-time directors, subject to conditions Loans in the ordinary course of business at rates laid down by RBI
No exemption for issue of guarantees under any circumstances

Private companies and wholly owned subsidiaries also covered

Registers
Records
Records
Foreign register containing the names and particulars of members / debenture holders residing outside India can be kept outside India Enhanced disclosure requirements in annual return Promoters stake changes to be intimated to the Registrar in the case of listed companies
CORPORATE SOCIAL RESPONSIBILITY

Scope Compliance
CORPORATE SOCIAL RESPONSIBILITY (1/2)

Scope CSR Requirement Violation Consequences Compliance
CSR Requirement
Corporate Social Responsibility (CSR) made mandatory for all companies (public and private) meeting the following criteria:
Net-worth of 500 crores (5,000 millions) or more or turnover of 1000 crores (10,000 millions) or more or net profit of 50 million or more in any financial year CSR casts an additional social burden on large companies Comply or report approach adopted to enforce CSR obligations
Qualifying companies to constitute a CSR Committee with 3 or more directors one of whom shall be an ID CSR Committee to formulate and recommend a CSR Policy Board to ensure company spends at least 2% of its average net profits in the last three years
CORPORATE SOCIAL RESPONSIBILITY (2/2)

CSR Requirement Violation Consequences Consequences
Board to give justifications in its report for failure to meet CSR obligations
No penal consequences on failure to meet CSR obligations?
Financial Statements Audit
ACCOUNTS AND AUDIT
ACCOUNTS AND AUDIT (1/3)

Financial Statements FY Consolidation Cash Flow Statement FY
Uniform financial year for all companies period ending March 31 Companies having foreign holding companies/ foreign subsidiaries which are required to follow a different period under the foreign laws for consolidation can follow different FY
Audit
Reopening
NFRA
Consolidation
Consolidation of financial statements of subsidiaries is mandatory Subsidiary shall include Joint Venture & Associates
Holding company to include consolidated financial statements as part of its financials
Cash Flow Statement

Annual return of every company (except one person company, small company and dormant company) to have a cash flow statement

FY
Consolidation Cash Flow Statement
Re-opening
Companies now allowed to recast their financial statements On an order passed by Tribunal / court of competent jurisdiction Voluntarily Application for re-opening can be made by the Central Government, SEBI, Income-tax authority, etc
Reopening
NFRA NFRA
National Financial Reporting Authority to be constituted to prescribe matters in relation to accounting and auditing standards

Term
Rotation Conflicts
Term
Individual auditor not to hold office for > 5 years and audit firm not to hold office for > two terms of 5 years
Rotation
Mandatory rotation of auditors for listed companies and other class of prescribed companies
Conflicts
Prohibition from rendering accounting, book keeping, investment banking, internal audit services, management services, etc directly or indirectly to the company or its holding/ subsidiaries Significant stress on audit function and auditors independence to ensure better quality audits
OTHER SIGNIFICANT CHANGES

Frauds Strike-off
OTHER SIGNIFICANT CHANGES (1/2)

Frauds Strike-off
Fraud
SFIO
Frauds
Fraud defined in a broad manner to include any act or omission or abuse of position with an intent to deceive or obtain undue gain or to injure the interests of the company, its shareholders or its creditors or any other person Persons convicted of fraud subject to severe penal consequences and imprisonment for up to a maximum of ten years
SFIO
Serious Fraud Investigation Office (SFIO), in existence since 2003 as a non-statutory body of the Ministry of Corporate Affairs being recognized Statutory recognition given to SFIO to act as a nodal agency for investigation of frauds SFIO bestowed with the powers of a magistrate
OTHER SIGNIFICANT CHANGES (2/2)

Frauds Strike-off
Strike-off
Strike-off
A companys name can be removed from the register of companies under the following circumstances The company has failed to commence operations within 1 year from incorporation The subscribers to its memorandum have failed to pay the subscription amount within a period of 180 days The Company is not carrying on any business or operations for 2 years and has not applied to be regarded as a dormant company
FOREIGN COMPANIES
Foreign Companies
Foreign Companies
Expanded scope Closure
Definition of Foreign Company widened to include place of business through an agent, physically or electronically; and conducts any business activity in India in any other manner Closure of a foreign company is now a Court process Wide implication for companies operating through agents No distinction between Independent and dependent agencies Foreign companies having agents in India may require registration
III. M&A
M&A RESTRUCTURING/ARRANGEMENTS
New concepts Procedural changes
RESTRUCTURING/ARRANGEMENTS (1/7)
Merger of Indian company into foreign company

Cross border merger Contractual mergers Merger with unlisted company Treasury stock Others
The consideration for merger can either be in cash or Depository Receipts (DR) or partly in cash and partly in DR Merger of an Indian company with a foreign company or vice-versa can be undertaken subject to approval from Reserve Bank of India (RBI) Bill now provides for the merger of an Indian company into a foreign company located in certain jurisdictions (to be notified) Under the Act, foreign companies are allowed to merge into Indian companies, the reverse is not permitted Move would facilitate cross border listing of entities with Indian assets and exits to shareholders/ Investors Key things to watch out will be notification of jurisdictions and amendment of tax laws to facilitate such cross border mergers
Foreign Holding Company
Holding Company
Outside India India Outside India India
Investors
Investors
Holding Company Promoters Promoters

Operating Company
Operating Company
Foreign holding company can be used to tap overseas markets /provide exit to investors
Contractual mergers
The Bill provides that the following mergers may be undertaken without the approval of Tribunal: Merger between small companies (private companies meeting prescribed capital/ turnover); or Merger between holding company and its 100% subsidiary; or Merger between other class or classes of companies as may be prescribed The scheme would be required to be sent to the Registrar of Companies (RoC) and the Official Liquidator (OL) The scheme is then considered in the meeting of shareholders and creditors and should be approved by the shareholders (holding 90% of total number of shares) and creditors (majority in number representing 9/10th in value) Post approval of the scheme by the shareholders and creditors, the same is filed with the OL, RoC and the Central Government (ie the Department of Company Affairs (DCA)) if the OL or the RoC have no further objections, the scheme is registered by the DCA
Merger with unlisted company

On merger of a listed company into an unlisted company, the unlisted company can remain unlisted provided shareholders of the merging listed company are given an exit opportunity Option provided to shareholders of listed entity to opt out of the unlisted company upon payment of cash/other benefits determined in accordance with a pre-determined price formula or valuation report Technically, such a transaction is possible even under the Act (recent precedents include Wipro Ltd. and Sundaram Clayton Ltd)
Treasury stock
Bill creates a restriction on the transferee company from holding shares in its own name or in the name of a trust. Any inter-company investments between the companies involved in merger, would need to be cancelled Can treasury stock on behalf of shareholders be created? Existing treasury stock required to be unwound?
Treasury stock was used by listed companies for raising funds/ managing profitability
Others
Buyback can also be done as part of the restructuring scheme, subject to compliance with buyback provisions under Clause 68 An arrangement can include a takeover offer, subject to compliance with securities laws regulations in respect of listed companies May not be possible to exceed limits specified for buybacks by undertaking a buyback under a scheme of arrangement
Procedural changes
Procedural changes for a Scheme of Arrangement
Notice of meeting for the scheme to be sent to the Central Government (i.e Regional Director, DCA, ROC, OL, Incometax authorities, RBI, SEBI, Competition Commission of India (CCI) and other sectoral regulators for comments within 30 days in case no representation within 30 days, deemed approval Swap report, undertaken by registered valuers, provided to shareholders & creditors Meeting of creditors can be dispensed with if creditors holding 90% agree Objections to scheme can be made only by shareholders holding 10% shareholding or creditors holding 5% of total outstanding debt All companies will have to obtain statutory auditors certificate for compliance with accounting standards
Shareholders/Creditors will have the option to vote for the scheme through postal ballot
Timelines for a restructuring exercise would be clear post notification of the rules
M&A - CASH REPATRIATION
Buy back
Capital reduction
Dividend
CASH REPATRIATION (1/3)

Buy back Capital reduction Dividend
Buy back
Bill provides for a minimum 1 year gap between two buybacks Buyback is not possible in case of following defaults, unless the defaults have been remedied and three years have passed: Repayment of deposit/ interest payable Redemption of debentures or preference shares Payment of dividend Limited buybacks possible due to 1 year gap. Further impacts (post introduction of buyback tax) the use of buyback as a cash repatriation strategy
Repayment of any term loan or interest

Capital reduction
Capital reduction not permitted if company has not repaid deposits/ interest payable Notice of proposed capital reduction to be sent to DCA, RoC, SEBI and creditors; representations, if any, to be made within 3 months Statutory auditors certificate required for confirming compliance with Indian GAAP Timelines will increase due to mandatory 3 months notice period Need for auditors certificate will restrict creative accounting practices

Dividend
Transfer to reserves not mandatory, left to the discretion of companies No declaration of dividends on non-compliance with the provisions for acceptance and repayment of public deposits Where a company has incurred losses in the current FY till the preceding quarter, Interim dividend cannot exceed the average rate of dividends declared by the company during the immediately preceding 3 financial years No locking of funds in general reserve. Increase in pre-tax distributable profits on account of non transfer of 2.5% 10% of profits to reserves
M&A - INVESTOR PROTECTION
Class Acton Suits
Entrenchment
Shareholder pacts
Squeeze-outs
INVESTOR PROTECTION (1/3)

New concepts Squeeze-outs
Class Action Suits

Entrenchment Shareholder pacts
Class Action suits

New provisions relating to class action suits introduced Framework laid down enabling members or depositors to approach the Tribunal directly in case of oppression or mismanagement Suit can be filed against: The Company itself; Its directors; Auditor, including the audit firm; or Any expert, advisor or consultant. In order to mitigate the risk to frivolous suits, minimum applicant size prescribed Does not apply to banking companies
For seeking damages

Class Action Suits

Entrenchment
Entrenchment
Entrenchment provisions, hitherto commercially used but not explicitly provided under corporate law, introduced Articles of Association can contain entrenchment provisions Entrenchment provisions may contain provisions that are more stringent than the provisions under law

Minority stake
Price
Squeeze-outs
Where persons or a group of persons acting in concert hold 90% or more stake in a Company, they shall notify the Company of their intention to buy the remaining stake The price to be paid for the balance stake shall be determined by a registered valuer in accordance with prescribed rules
Enables exit opportunity for minorities at a reasonably determinable price Aims to reduce long drawn litigation in consolidation of stake by majority Dissenting minority must also be given an exit option if in a public issue the company changes the purpose for which capital was raised No provisions for a mandatory squeeze out in case the promoters reach a particular threshold
OTHER M&A RELATED
Sickness
Preference Shares
Sale of an undertaking Multi layered structures

Holding Company Inter-se arrangements
OTHER M&A RELATED (1/4)

Sickness Sale of an undertaking Multi-layered
Preference Shares
Sickness Sale of an undertaking Multi-layered Preference Shares Holding Company Inter-se arrangements Sickness
Holding Company
Inter-se arrangements
Provisions now cover any company instead of industrial company. Net worth criteria (erosion of 50% of net worth) for sickness dispensed Revised criterion is inability to pay 50% of outstanding secured debt within 30 days of service of notice Scheme of revival and rehabilitation should be approved by both secured creditors (holding 75% value) and unsecured creditors (holding 25% value) else, Tribunal can order winding up of the company.
Interests of unsecured creditors and other claimants are not equally protected

Preference Shares
Sickness Sale of an undertaking Multi-layered Preference Shares Holding Company Inter-se arrangements Sale of an undertaking
Holding Company
Transaction will be subject to special resolution for both private and public companies Undertaking clearly defined under the Bill Substantially the whole of the undertaking is defined as 20% or more of the value of the Undertaking as per the audited balance sheet of the preceding financial year
Transfer of undertakings not meeting defined threshold will not require shareholder approval

Preference Shares
Sickness Sale of an undertaking Multi-layered Preference Shares Holding Company Inter-se arrangements Multi-layered structures
Holding Company
The Bill prohibits multi-layered investment structure wherein investment is not permitted through more than 2 layers of investment companies However, overseas multi-layered structure is permitted
Move may impact ability to raise funds Existing structures to be un-wound?
Preference Shares
Companies can issue preference shares for a period exceeding 20 years for specified infrastructure projects Certain percentage of shares are redeemed annually at the option of the shareholder

Preference Shares
Sickness Sale of an undertaking Multi-layered Preference Shares Holding Company Inter-se arrangements Holding Company
Holding Company
In addition to the right to appoint majority directors, paid-up capital (ie equity capital + preference capital) is to be considered for determining the holdingsubsidiary relationship
Any contract or arrangement between two or more persons in respect of transfer of securities of a public company shall be enforceable Key amendment to bring some clarity to the debate on transfer restrictions in public companies was becoming a concern area, with judicial precedents upholding different principles Companies Bill 2012 | 57
IV. CLOSING REMARKS AND Q&A
SPEAKERS PROFILE
VIVEK GUPTA
Vivek is a Partner in the firms Mergers and Acquisitions practice. He specializes in transaction tax and restructuring and also leads the vertical in the firm. Vivek has played a key role in the establishment of the corporate finance practice of the firm and the emergence of BMR as a leading M&A transaction advisor in the mid-market space. He has over 18 years of experience across corporate mergers and acquisitions and private equity transactions as well as business re-organizations, domestic as well as multi-jurisdictional, having participated in a number of cross-border and domestic transactions. He has advised a number of large domestic as well as Fortune 500 companies on complex transactions across sectors such as media and entertainment, information technology, retail, e-commerce and consumer. Vivek brings a blend of strategic, financial, tax & regulatory and commercial skills to such engagements. He finds mention in the ITR World Tax Guide 2004 and 2007, as a leading advisor on M&A transactions in India. He writes for the financial newspapers and is also a regular contributor to various current affairs and news shows on the electronic media. Vivek is a graduate in commerce from the University of Delhi and is a qualified Chartered Accountant.
E: vivek.gupta@bmradvisors.com T: +91 124 339 5052
RAJENDRA NALAM
Rajendra is a Partner in the firms Mergers & Acquisitions practice. With a specialisation in the Infrastructure and Media & Entertainment sectors, he has over 13 years of experience working with a variety of foreign companies in strategizing and executing their expansion into India- including opportunity assessments, organic growth plans as well as acquisition oriented structures. Rajendra blends his deal experience with a deep understanding of local tax, securities laws & regulatory issues to deliver holistic advice. He also works with a large number of domestic companies in relation to their acquisition, reorganization and capital raising efforts. In the course of his experience at BMR and other Big 4 firms, he has helped Indian companies design and implement complex transactions on an end to end basis including restructuring projects, growth plans, repatriation exercises and divestments.
E: rajendra.nalam@bmradvisors.com D: +91 124 339 5023
He is a graduate in Economics from the University of Delhi and a qualified Chartered Accountant
KALPESH MAROO
Kalpesh is a Partner in the firms direct tax practice in Bangalore. With a specialization in corporate and transaction tax, he has over 10 years of experience in advising multinational companies and Indian business houses on a range of tax and regulatory issues such as entry strategy, business reorganization, divestiture, mergers and acquisitions. Kalpesh has specific expertise in SEZs, the real estate and IT sectors, where he has worked with leading industry players on a diverse range of tax and regulatory matters. He presently serves as a member of the Economic and Corporate Affairs expert committee and the direct taxes expert committee of the Bangalore Chamber of Industry and Commerce. Kalpesh is a graduate in Commerce from the University of Bangalore and a qualified Chartered Accountant
E: kalpesh.maroo@bmradvisors.com D: +91 80 403 20090
Disclaimer
This presentation has been prepared for clients, EBG, NFTC and USCIB members and Firm personnel only. The presentation is meant for general guidance and no responsibility for loss arising to any person acting or refraining from acting as a result of any material contained in this presentation will be accepted by BMR Advisors. It is recommended that professional advice be sought based on the specific facts and circumstances. This presentation does not substitute the need to refer to the original pronouncements
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Conference Call on Companies Bill

Companies Bill 2012| 1

All rights reserved | Preliminary & Tentative

SPEAKERS FROM BMR ADVISORS

Companies Bill 2012 | 2

All rights reserved | Preliminary & Tentative

III. M&A IV. Closing remarks and Q&A

Companies Bill 2012 | 3

All rights reserved | Preliminary & Tentative

All rights reserved | Preliminary & Tentative

Companies Bill 2012 | 5

TRANSITION TO THE BILL

Companies Bill 2012 | 6

All rights reserved | Preliminary & Tentative

II. GOVERNANCE & OTHERS

All rights reserved | Preliminary & Tentative

CONSTITUTION AND CAPITAL

All rights reserved | Preliminary & Tentative

CONSTITUTION AND CAPITAL (1/7)

Companies Bill 2012 | 9

All rights reserved | Preliminary & Tentative

Min 2 members Max - 200

One Person Company

One Person Company

CONSTITUTION AND CAPITAL (2/7)

One Person Company

Companies Bill 2012 | 10

All rights reserved | Preliminary & Tentative

CONSTITUTION AND CAPITAL (3/7)

Companies Bill 2012 | 11

All rights reserved | Preliminary & Tentative

CONSTITUTION AND CAPITAL (4/7)

Further Issue Preference shares

Companies Bill 2012 | 12

CONSTITUTION AND CAPITAL (5/7)

Companies Bill 2012 | 13

All rights reserved | Preliminary & Tentative

CONSTITUTION AND CAPITAL (6/7)

Companies Bill 2012 | 14

CONSTITUTION AND CAPITAL (7/7)

Companies Bill 2012 | 15

All rights reserved | Preliminary & Tentative

CORPORATE GOVERNANCE (1/8)

Maximum Directors 15 (can be increased under special resolution)

Companies Bill 2012 | 17

CORPORATE GOVERNANCE (2/8)

Companies Bill 2012 | 18

All rights reserved | Preliminary & Tentative

CORPORATE GOVERNANCE (3/8)

Having >1000 but <5,000 members 15

Quorum requirements Private companies 2

Companies Bill 2012 | 19

CORPORATE GOVERNANCE (4/8)

Companies Bill 2012 | 20

All rights reserved | Preliminary & Tentative

CORPORATE GOVERNANCE (5/8)

General Meeting Management

Transactions at arms length exempt

Companies Bill 2012 | 21

CORPORATE GOVERNANCE (6/8)

Approvals and Violation

Companies Bill 2012 | 22