Restrictions on corporate loans and investments: transactions beyond limits require prior special resolution and disclosure.

Where aggregate existing and proposed loans, investments, guarantees or securities exceed statutory limits, no further transactions may be made unless previously authorised by a special resolution in a general meeting; such transactions must be disclosed in the financial statements. The term person excludes employees. Exemptions include ordinary-course activities of banks, insurers, housing finance companies, industrial/infrastructure financing companies, investment companies, certain share allotments and registered non-banking financial companies principally engaged in acquisition of securities. A company is principally engaged in securities acquisition if such investments or investment income constitute at least fifty per cent of assets or gross income.

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