Irani Committee Report on Company Law Concept Paper - Mahavir Lunawat Reliance Industries Limited

1. Irani Committee Report on Company Law Concept Paper - Mahavir Lunawat Reliance Industries Limited

2. Historical Background Companies Bill, 1997 + R. D. Joshi Committee Report Accounting Scams in US US Sarbanes Oxley Act, 2002 Naresh Chandra Committee Amendment Bill, 2003 Concept Paper on Company Law White Paper on Modern Company Law, UK J. J. Irani Committee

3. Approach of the Concept Paper To bring the Corporate Law in consonance with changes that have occurred in economic development To delete redundant provisions and regroup the scattered provisions To simplify and rationalise provisions of the Act To delink procedural aspects from the substantive law

4. Concept Paper � A quick recap Draft Bill not vetted by Law Ministry 1956 Act + 2003 Amendment Bill Notes on Chapters (in the form of overview) 289 Sections in 25 Chapters Penalties to be prescribed in separate schedule provisions to be prescribed by way of Rules - more than 300 times

5. Concept Paper - Major Changes No new step-down subsidiary [cl.2(38)] Definition of Independent Director, attributes as suggested by NCC to be prescribed [cl.2(45)] Definition of Promoter [cl. 2(67)] Sections 108A to 108H to be removed Share Warrants - Abolished

6. Major Changes contd... General Meetings Statutory Meeting - Abolished No Gifts to members in GMs; discount coupon, food and beverages to be allowed GMs on Public Holidays to be permitted All business other than Ordinary Business (AMBP) shall be Special Business;

7. Major Changes contd... Dividend Dividend once declared cannot be modified/ rescinded Interim Dividend - Subject to shareholders� approval Dividend out of reserves, in case of inadequacy / absence of profits - in terms of Rules AMBP + with following approvals: Directors present at the meeting FIs which have made term loans Shareholders by way of Special Resolution Consolidated Financial Statements in place of individual accounts of the company and subsidiaries

8. Major Changes contd... Audit Non-audit Services AMBP - to be prohibited Special Audit - to be made more exhaustive Cost Auditor - to be appointed by general body; CG approval will not be required. Additional disqualifications based on NCC recommendations

9. Major Changes contd... Audit Committee Composition - not less than 2 independent directors; max no. AMBP; existing cos to reconstitute within 1 year Disclosure of composition in Directors� Report Directors