at Prasad Nagar, New Delhi BORROWINGS by CS Sharad Rajwanshi at NIRC Of ICSI at Prasad Nagar, New Delhi 28th March 2017 3/28/2017 S.RAJWANSHI & CO. 9811193114

POWERS OF BOARD AND RESTRICTIONS ON POWER OF BOARD (SECTION 179 & 180) 3/28/2017 S.RAJWANSHI & CO. 9811193114

OVERLOOK SEC. 179 Section 179 provides that board of directors of a company are entitled to exercise such powers and to do all such acts as may be authorized by the Company. The above referred powers are subject to provisions specified in the Memorandum of Association [or] Articles of Association and other regulations as may be applicable. Section 179(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and Companies (Meetings of Board and its Powers), Amendment Rules, 2015, deals with the powers of the Board of Directors which are required to be passed by means of resolutions at board meetings. SEC. 180 Section 180 of the Companies Act, 2013, empowers the board of directors to exercise the following the powers only with the approval of the members by means of special resolution at a general meeting 3/28/2017 S.RAJWANSHI & CO. 9811193114

companiesactnotification27march2014 902(e) of 26 march 2014.pdf SECTION 179 OF COMPANIES ACT, 2013 EFFECTIVE FROM 1ST APRIL, 2014 companiesactnotification27march2014 902(e) of 26 march 2014.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

SECTION 291 & 292 SECTION 179 COMPANIES ACT. 1956 COMPANIES ACT. 2013 3/28/2017 S.RAJWANSHI & CO. 9811193114

PROVISIONS OF SECTION 179 OF COMPANIES ACT, 2013 (1) The Board of Directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do: 3/28/2017 S.RAJWANSHI & CO. 9811193114

(FIRST) Provided that in exercising such power or doing such act or thing, the Board shall be subject to the provisions contained in that behalf in this Act, or in the Memorandum or Articles, or in any regulations not inconsistent therewith and duly made there under, including regulations made by the company in general meeting 3/28/2017 S.RAJWANSHI & CO. 9811193114

(SECOND) Provided further that the Board shall not exercise any power or do any act or thing which is directed or required, whether under this Act or by the Memorandum or Articles of the company or otherwise, to be exercised or done by the company in General meeting.(ONLY) 3/28/2017 S.RAJWANSHI & CO. 9811193114

(2) No regulation made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made. 3/28/2017 S.RAJWANSHI & CO. 9811193114

3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions (only) passed at Meetings of the Board, namely:—   (a) to make calls on shareholders in respect of money unpaid on their shares; 3/28/2017 S.RAJWANSHI & CO. 9811193114

3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:— (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; 3/28/2017 S.RAJWANSHI & CO. 9811193114

3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:— (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) to authorize buy-back of securities under section 68; 3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—   (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) to authorize buy-back of securities under section 68; 3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—   (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; 3/28/2017 S.RAJWANSHI & CO. 9811193114

3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:— (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) to authorize buy-back of securities under section 68; 3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—   (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board’s report; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) to authorize buy-back of securities under section 68; 3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—   (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board’s report; (h) to diversify the business of the company; 3/28/2017 S.RAJWANSHI & CO. 9811193114

3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:— (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board’s report; (h) to diversify the business of the company; (i) to approve amalgamation, merger or reconstruction; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) to authorize buy-back of securities under section 68; 3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—   (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board’s report; (h) to diversify the business of the company; (i) to approve amalgamation, merger or reconstruction; (j) to take over a “company” or acquire a controlling or substantial stake in another company; 3/28/2017 S.RAJWANSHI & CO. 9811193114

3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:— (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board’s report; (h) to diversify the business of the company; (i) to approve amalgamation, merger or reconstruction; (j) to take over a company or acquire a controlling or substantial stake in another company; (k) any other matter which “may be prescribed” 3/28/2017 S.RAJWANSHI & CO. 9811193114

(THIRD)Provided that the Board may, by a resolution passed at a meeting (Board), delegate to any committee of Directors, OR the managing director, OR the manager OR any other principal officer of the company OR in the case of a branch office of the company, the principal officer of the branch office, the powers specified in clauses (d) to (f) on such conditions as it (Board) may specify:   3/28/2017 S.RAJWANSHI & CO. 9811193114

(FOURTH) Provided further that the acceptance by a banking company in the ordinary course of its business of deposits of money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise, or the placing of monies on deposit by a banking company with another banking company on such conditions As the Board may prescribe, shall not be deemed to be a borrowing of monies or, as the case may be, a making of loans by a banking company within the meaning of this section. 3/28/2017 S.RAJWANSHI & CO. 9811193114

Explanation I.—Nothing in clause (d) shall apply to borrowings by a banking Company from other banking companies or from the Reserve Bank of India, the State Bank of India or any other banks established by or under any Act. Explanation II.—In respect of dealings between a company and its bankers, the exercise by the company of the power specified in clause (d) shall mean the arrangement made by the company with its bankers for the borrowing of money by way of overdraft or cash credit or otherwise and not the actual day-to-day Operation on overdraft, cash credit or other accounts by means of which the arrangement so made is actually availed of.   3/28/2017 S.RAJWANSHI & CO. 9811193114

(4) Nothing in this section shall be deemed to affect the right of the company in general meeting to impose (reasonable) restrictions and conditions on the exercise by the Board of any of the powers specified in this section. (ENDS HERE) 3/28/2017 S.RAJWANSHI & CO. 9811193114

APPLICABLE RULE TO SECTION 179 OF COMPANIES ACT, 2013 (Meeting of Board and its Power) Rules, 2014 Companies Rule 8 Amendment Meetings and power of board notification 240 first rules.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

(1) to make political contributions; In addition to the powers specified under sub-section (3) of Section 179 of the Act, the following powers shall also be exercised by the Board of Directors only by means of resolutions passed at meetings of the Board.- (1) to make political contributions; (2) to appoint or remove key managerial personnel (KMP); (3) to take note of appointment(s) or removal(s) of one level below the Key Management Personnel; (4) to appoint internal auditors and secretarial auditor; (5) to take note of the disclosure of director’s interest and shareholding; (6) to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid up share capital and free reserves of the investee company; (7) to invite or accept or renew public deposits and related matters; (8) to review or change the terms and conditions of public deposit; (9) to approve quarterly, half yearly and annual financial statements or financial results as the case may be. Companies Rule 8 Amendment Meetings and power of board notification 206.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

EXEMPTIONS In case of a Section 8 Company, matters referred to in Clause (d), (e) and (f) of Section 179(3) may be decided by the Board by Circulation instead of a meeting, vide Notification G.S.R. 466(E) dated 5Th June, 2015. NOTIFICATION: Exemptions_to_Section8_companies_Notification 466_05.06.2015 466(e).pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

MAJOR DIFFERENCES BETWEEN SECTION 179 OF COMPANIES ACT, 2013 AND CORRESPONDING SECTION 291 & 292 OF COMPANIES ACT, 1956 Following powers have been introduced to be exercised by the Board only at their meeting: To issue securities whether in India or outside; To grant loans or give guarantee or provide security in respect of loans; To approve financial statement and the Director’s report; To diversify the business of the Company; To approve amalgamation, merger or reconstruction; To take over a Company or acquire a controlling or substantial stake in another Company; and Such other matters as may be prescribed. Now the requirement that while delegating the power to any committee or any specified person, it is necessary to also specify the amount up to which that power can be exercised, has been dispensed with. 3/28/2017 S.RAJWANSHI & CO. 9811193114

COMPLIANCE ACTIONS & TIMELINES Board to pass Resolution for the matters mentioned in Section 179(3) only at the Meeting of Board (No Resolution by circulation) APPLICABLE E-FORM E-form MGT-14 for filling of Resolution with registrar within 30 days from date of passing the Board Resolution along with Board Resolution. Form_MGT-14 PRESENTATION.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

PENALTY General Penalty under Section 450- Company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to Rs. 10,000 and where the contravention is continuing one with a further fine which may extend to Rs. 1,000 for every day during which the contravention continues . 3/28/2017 S.RAJWANSHI & CO. 9811193114

SECTION 180 OF COMPANIES ACT, 2013 3/28/2017 S.RAJWANSHI & CO. 9811193114

SECTION 180 OF COMPANIES ACT, 2013 EFFECTIVE FROM 12th SEPTEMBER, 2013 E_2138_2013_004 2754 OF 2013.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

SECTION 293 SECTION 180 COMPANIES ACT. 1956 COMPANIES ACT. 2013 3/28/2017 S.RAJWANSHI & CO. 9811193114

PROVISIONS OF SECTION 180 OF COMPANIES ACT, 2013 (1) The Board of Directors of a company shall exercise the following powers only with the consent of the company by a Special resolution, namely:—   (a) to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings. 3/28/2017 S.RAJWANSHI & CO. 9811193114

Explanation.—For the purposes of this clause,— (i) “undertaking” shall mean an undertaking in which the investment of the company exceeds twenty per cent of its net worth as per the audited balance sheet of the preceding financial year OR an undertaking which generates twenty per cent of the total income of the company during the previous financial year; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(ii) the expression “substantially the whole of the undertaking” in any financial year shall mean twenty per cent or more of the value of the undertaking as per the audited balance sheet of the preceding financial year;   3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) to invest otherwise in trust securities the amount of compensation received by it as a result of any merger or amalgamation; 3/28/2017 S.RAJWANSHI & CO. 9811193114

(c) to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company’s bankers in the ordinary course of business: 3/28/2017 S.RAJWANSHI & CO. 9811193114

(FIRST)Provided that the acceptance by a banking company, in the ordinary course of its business, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise, shall not be deemed to be a borrowing of monies by the banking company within the meaning of this clause. 3/28/2017 S.RAJWANSHI & CO. 9811193114

(2) Every special resolution passed by the company in general meeting in relation to the exercise of the powers referred to in clause (c) of subsection (1) shall specify the total amount up to which monies may be borrowed by the Board of Directors.   3/28/2017 S.RAJWANSHI & CO. 9811193114

(3) Nothing contained in clause (a) of sub-section (1) shall affect—   (a) the title of a buyer or other person who buys or takes on lease any property, investment or undertaking as is referred to in that clause, in good faith; or 3/28/2017 S.RAJWANSHI & CO. 9811193114

(b) the sale or lease of any property of the company where the ordinary business of the company consists of, or comprises, such selling or leasing.   3/28/2017 S.RAJWANSHI & CO. 9811193114

(4) Any special resolution passed by the company consenting to the transaction as is referred to in clause (a) of sub-section (1) may stipulate such conditions as may be specified in such resolution, including conditions regarding the use, disposal or investment of the sale proceeds which may result from the transactions: 3/28/2017 S.RAJWANSHI & CO. 9811193114

(SECOND)Provided that this sub-section shall not be deemed to authorize the company to effect any reduction in its capital except in accordance with the provisions contained in this Act. 3/28/2017 S.RAJWANSHI & CO. 9811193114

(5) No debt incurred by the company in excess of the limit imposed by clause (c) of sub-section (1) shall be valid or effectual, unless the lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by that clause had been exceeded. 3/28/2017 S.RAJWANSHI & CO. 9811193114

EXEMPTIONS Section 180 shall not apply to a Private Company, vide Notification No. G.S.R. 464(E) dated 5th June, 2015 NOTIFICATION: Exemptions_to_private_companies_05062015 (1) 464.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

APPLICABLE CIRCULARS Clarification on the Notification dated 12-09-2013 regarding implementation of p5rovisions of Companies Act, 2013. General Circular No. 15/2013 dated 13-09-2013: General_Circular_15 OF 2013 13.09.2013.pdf.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

APPLICABLE CIRCULARS Clarification with regard to Section 180 of the Companies Act, 2013. General Circular No. 04/2014 dated 25-03-2014: gencircular_042014 04 OF 2014.pdf 3/28/2017 S.RAJWANSHI & CO. 9811193114

MAJOR DIFFERENCES BETWEEN SECTION 180 OF COMPANIES ACT, 2013 AND CORRESPONDING SECTION 293 OF COMPANIES ACT, 1956 Certain powers which under Section 293 of the Companies Act, 1956 can be exercised by the Board with the approval of general meeting only, are now applicable to all the Companies instead of only public companies and its subsidiaries. The clause now specifically provides the definition of the words “undertaking” and “substantially the whole undertaking”. Certain powers which under Section 293 of the Companies Act, 1956 can be exercised by the Board with the approval of general meeting only, are now to be approved by passing a special resolution instead of ordinary resolution as provided in the aforesaid Act. 3/28/2017 S.RAJWANSHI & CO. 9811193114

Now the approval of general meeting is only required when the Board wants to invest otherwise in trust securities, the compensation received by it as a result of Merger and Amalgamation only and not on compulsory acquisition of any undertaking or property or premises, as provided under the Companies Act, 1956. The power to contribute to charitable and other funds as donation in any financial year for an amount in excess of five percent of its average net profits for three immediately preceding financial years is now outside the preview of its clause, and is included separately in the next clause. 3/28/2017 S.RAJWANSHI & CO. 9811193114

A separate clause has been provided for to deal with the powers of the Board to contribute to charitable and other funds. Now the permission shall not be required where contribution to political party exceeds the limit of 5% of the average net profits for the three immediately preceding financial years and the limits of monetary value has been dispensed with. 3/28/2017 S.RAJWANSHI & CO. 9811193114

COMPLIANCE ACTIONS & TIMELINES Board Resolution for proposing matter for approval of members if exceeding the mentioned threshold limit. Special Resolution for approval of Members. APPLICABLE E-FORM Form_MGT-14 PRESENTATION.pdf E-form MGT-14 for filling of Resolution with registrar within 30 days from date of passing the Board Resolution along with Special Resolution, Notice and Explanatory Statement. 3/28/2017 S.RAJWANSHI & CO. 9811193114

PENALTY General Penalty under Section 450- Company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to Rs. 10,000 and where the contravention is continuing one with a further fine which may extend to Rs. 1,000 for every day during which the contravention continues . 3/28/2017 S.RAJWANSHI & CO. 9811193114

ROLE OF COMPANY SECRETARY FOR DISCHARGING THE DUTIES OF BOARD A "Company Secretary" plays a vital role in executing the powers and duties of the Corporate Secretary. A key responsibility of the Corporate Secretary is to ensure that Board members have the proper advice and resources for discharging their fiduciary duties towards the Company and shareholders. A Company Secretary is responsible for ensuring that the records, or minutes of the Board's actions during a Board meeting, reflect the proper exercise of those fiduciary duties. While the duty of recording accurate and sufficient documentation to meet legal requirements (record management) is of primary importance, the Company Secretary is also a confident and resource to the Board and senior management, providing advice and counsel on board responsibilities and logistics. In recent years the Corporate Secretary has emerged as a senior, strategic-level corporate officer who plays a leading role in the company's corporate governance. 3/28/2017 S.RAJWANSHI & CO. 9811193114

Qs & As 3/28/2017 S.RAJWANSHI & CO. 9811193114

S.RAJWANSHI & CO. COMPANY SECRETARIES C-19, Ashoka Enclave, PEERA GARHI, NEW DELHI 110087 011-25270734, 93125-93114, 98111-93114, 98115-13911. sharad@rajwanshi.com 3/28/2017 S.RAJWANSHI & CO. 9811193114