1. Companies Act, 2013 Industry’s perspective on M&A Provisions 22 February 2014

2. Page 2 ► Equity shares with DVRs - Commonly used instrument for PE/ VC funding ► Used for various commercial reasons – typically to separate economicinterest and voting rights ▼ New provisions applicable to private companies also – Draft rules provide: ▼ 3 year dividend (≥10%) track record ▼ 25% limit on issuance ▼ No default in annual filings for 5 years ▼ Impact on future capital structuring for investments in private companies ► Grandfathering provisions for past? Not Notified Funding - Differential equity instruments

3. Page 3 ► Convertible Preference Shares popular for PE/ VC funding ► Allows for conversion to equity in future, based on agreed valuationparameters ▼ Pro-rata voting rights to accrue, where dividends are not paid for 2 years –Applicable to private companies as well ▼ Impact on commercial arrangement regarding voting rights ▼ Challenges in issuing 0% Preference Shares ▼ Waive voting rights? ▼ Change instrument to Convertible Debentures? ► Grandfathering provisions for past? Funding - Voting rights for preference shares Not Notified

4. Page 4 Dealing in shares by KMPs and other personnel Prohibition on insider trading► Extended to unlisted companies ► How to quantify impact? ► Definition of ‘Securities’ referenced to SCRA – “Marketable securities” ► Applicable to Private Companies? ► SEBI Insider Trading Regulations – Cooling off period, disclosures, tradingwindow, model code of conduct Prohibition on forward dealings► No director or KMP to enter into a forward contract for deliveryof shares or debentures ► Standard provisions in M&A deals - Permitted by RBI and SEBI ► Impact assessment required Notified

5. Page 5 New merger tools + Fast track mergers + Cross border mergers Not Notified ▲ Simplified procedure - Internal restructuring more time and cost efficient ► Clarity required on certain concepts ▲ Fund raising opportunities, Efficient cash repatriation, un-winding of holding companies etc ► Awaiting alignment of other regulations

6. Page 6 Merger – Procedural aspects ▲ Imperative for schemes to receive concerned regulators’ buy-in ▼ Clarity required on regulators, who would receive scheme – Less discretion ▼ Intimation to all the authorities may increase time, cost and effort - Intimation to multiple regulators prior to shareholders’ meeting ▲ Threshold prescribed for objections (10% shareholding or 5% debt) - Avoidsfrivolous litigation and reduces unnecessary delays ▲ Dispensation from creditor meetings – Welcome step; Different positionsadopted by different state courts/ judges ► Dispensation from shareholder meetings - Thresholds? + Objections to scheme Not Notified Migration from High Court to NCLT – Any grandfathering provisions?

7. Page 7 Investment perspectives + Recognition to contractual shareholder rights ▲ Basic requirement in M&A deals ▲ Entrenchment provisions introduced for Articles ▲ Transfer restrictions inter-se shareholders enforceable in a public company ▲ Correlation of sickness with inability to pay debts – favourable forstakeholders ► Earlier “erosion of net worth” criteria subjected to accounting vagaries - Not anappropriate measure; Now removed ► Classification as sick company and reference to BIFR ► Discomforting for bankers and investors + Revival and rehabilitation of sick companies Not Notified

8. Thank you!