Companies (Management and Administration) Amendment Rules, 2015. - F. No. 01/34/2013-CL-V- Part-I - Companies Law

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)] GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 19 th March, 2015 G.S.R. (E).- In exercise of the powers conferred by section 108 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013) , the Central Government hereby makes the following rules further to amend the Companies (Management and Administration) Rules, 2014 , namely:- 1. (1) These rules may be called the Companies (Management and Administration) Amendment Rules, 2015. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Companies (Management and Administration) Rules, 2014 , for rule 20 , the following rule shall be substituted, namely:- 20 . Voting though electronic means .- (1) The provisions of this rule shall apply in respect of the general meetings for which notices are issued on or after the date of commencement of this rule. (2) Every company other than a company referred to in Chapter XB or Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 having its equity shares listed on a recognised stock exchange or a company having not less than one thousand members, shall provide to its members facility to exercise their right to vote on resolutions proposed to be considered at general meetings by electronic means. Explanation.- For the purposes of this rule, the expression- (i) agency means the National Securities Depository Limited, the Central Depository Services (India) Limited or any other entity approved by the Ministry of Corporate Affairs subject to the condition that the National Securities Depository Limited, the Central Depository Services (India) Limited or such other entity has obtained a certificate from the Standardisation Testing and Quality Certification Directorate, Department of Information Technology, Ministry of Communications and Information Technology, Government of India including with regard to compliance with parameters specified under Explanation (vi); (ii) cut-off date means a date not earlier than seven days before the date of general meeting for determining the eligibility to vote by electronic means or in the general meeting; (iii) cyber security means protecting information, equipment, devices, computer, computer resource, communication device and information stored therein from unauthorised access, use, disclosures, disruption, modification or destruction; (iv) electronic voting system means a secured system based process of display of electronic ballots, recording of votes of the members and the number of votes polled in favour or against, in such a manner that the entire voting exercised by way of electronic means gets registered and counted in an electronic registry in a centralised server with adequate cyber security; (v) remote e-voting means the facility of casting votes by a member using an electronic voting system from a place other than venue of a general meeting; (vi) secured system means computer hardware, software, and procedure that (a) are reasonably secure from unauthorised access and misuse; (b) provide a reasonable level of reliability and correct operation; (c) are reasonably suited to performing the intended functions; and (d) adhere to generally accepted security procedures; (vii) voting by electronic means includes remote e-voting and voting at the general meeting through an electronic voting system which may be the same as used for remote e-voting. (3) A member may exercise his right to vote through voting by electronic means on resolutions referred to in sub-rule (2) and the company shall pass such resolutions in accordance with the provisions of this rule. (4) A company which provides the facility to its members to exercise voting by electronic means shall comply with the following procedure, namely:- (i) the notice of the meeting shall be sent to all the members, directors and auditors of the company either (a) by registered post or speed post ; or (b) through electronic means, namely, registered e-mail ID of the recipient; or (c) by courier service; (ii) the notice shall also be placed on the website, if any, of the company and of the agency forthwith after it is sent to the members; (iii) the notice of the meeting shall clearly state - (A) that the company is providing facility for voting by electronic means and the business may be transacted through such voting; (B) that the facility for voting, either through electronic voting system or ballot or polling paper shall also be made available at the meeting and members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting; (C) that the members who have cast their vote by remote e-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again; (iv) the notice shall - (A) indicate the process and manner for voting by electronic means ; (B) indicate the time schedule including the time period during which the votes may be cast by remote e-voting; (C) provide the details about the login ID; (D) specify the process and manner for generating or receiving the password and for casting of vote in a secure manner. (v) the company shall cause a public notice by way of an advertisement to be published, immediately on completion of despatch of notices for the meeting under clause (i) of sub-rule (4) but at least twenty-one days before the date of general meeting, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having country-wide circulation, and specifying in the said advertisement, inter alia, the following matters, namely:- (a) statement that the business may be transacted through voting by electronic means ; (b) the date and time of commencement of remote e-voting; (c) the date and time of end of remote e-voting; (d) cut-off date; (e) the manner in which persons who have acquired shares and become members of the company after the despatch of notice may obtain the login ID and password; (f) the statement that - (A) remote e-voting shall not he allowed beyond the said date and time; (B) the manner in which the company shall provide for voting by members present at the meeting; and (C) a member may participate in the general meeting even after exercising his right to vote through remote e-voting but shall not be allowed to vote again in the meeting; and (D) a person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting in the general meeting; (g) website address of the company, if any, and of the agency where notice of the meeting is displayed; and (h) name, designation, address, email id and phone number of the person responsible to address the grievances connected with facility for voting by electronic means: Provided that the public notice shall be placed on the website of the company, if any, and of the agency; (vi) the facility for remote e-voting shall remain open for not less than three days and shall close at 5.00 p.m. on the date preceding the date of the general meeting; (vii) during the period when facility for remote e-voting is provided, the members of the company, holding shares either in physical form or in dematerialised form, as on the cut-off date, may opt for remote e-voting: Provided that once the vote on a resolution is cast by the member, he shall not be allowed to change it subsequently or cast the vote again: Provided further that a member may participate in the general meeting even after exercising his right to vote through remote e-voting but shall not be allowed to vote again; (viii) at the end of the remote e-voting period, the facility shall forthwith be blocked: Provided that if a company opts to provide the same electronic voting system as used during remote e-voting during the general meeting, the said facility shall be in operation till all the resolutions are considered and voted upon in the meeting and may be used for voting only by the members attending the meeting and who have not exercised their right to vote through remote e-voting. (ix) the Board of Directors shall appoint one or more scrutiniser, who may be Chartered Accountant in practice, Cost Accountant in practice, or Company Secretary in practice or an Advocate, or any other person who is not in employment of the company and is a person of repute who, in the opinion of the Board can scrutinise the voting and remote e-voting process in a fair and transparent manner: Provided that the scrutiniser so appointed may take assistance of a person who is not in employment of the company and who is well-versed with the electronic voting system; (x) the scrutiniser shall be willing to be appointed and he available for the purpose of ascertaining the requisite majority; (xi) the Chairman shall, at the general meeting, at the end of discussion on the resolutions on which voting is to be held, allow voting, as provided in clauses (a) to (h) of sub-rule (1) of rule 21 , as applicable, with the assistance of scrutiniser, by use of ballot or polling paper or by using an electronic voting system for all those members who are present at the general meeting but have not cast their votes by availing the remote e-voting facility. (xii) the scrutiniser shall, immediately after the conclusion of voting at the general meeting, first count the votes cast at the meeting, thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the company and make, not later than three days of conclusion of the meeting, a consolidated scrutiniser's report of the total votes cast in favour or against, if any, to the Chairman or a person authorised by him in writing who shall countersign the same: Provided that the Chairman or a person authorised by him in writing shall declare the result of the voting forthwith; Explanation.- It is hereby clarified that the manner in which members have cast their votes, that is, affirming or negating the resolution, shall remain secret and not available to the Chairman, Scrutiniser or any other person till the votes are cast in the meeting. (xiii) For the purpose of ensuring that members who have cast their votes through remote e-voting do not vote again at the general meeting, the scrutiniser shall have access, after the closure of period for remote e-voting and before the start of general meeting, to details relating to members, such as their names, folios, number of shares held and such other information that the scrutiniser may require, who have cast votes through remote e-voting but not the manner in which they have cast their votes: (xiv) the scrutiniser shall maintain a register either manually or electronically to record the assent or dissent received, mentioning the particulars of name, address, folio number or client ID of the members, number of shares held by them, nominal value of such shares and whether the shares have differential voting rights; (xv) the register and all other papers relating to voting by electronic means shall remain in the safe custody of the scrutiniser until the Chairman considers, approves and signs the minutes and thereafter, the scrutiniser shall hand over the register and other related papers to the company. (xvi) the results declared along with the report of the scrutiniser shall be placed on the website of the company, if any, and on the website of the agency immediately after the result is declared by the Chairman : Provided that in case of companies whose equity shares are listed on a recognised stock exchange, the company shall, simultaneously, forward the results to the concerned stock exchange or exchanges where its equity shares are listed and such stock exchange or exchanges shall place the results on its or their website. (xvii) subject to receipt of requisite number of votes, the resolution shall be deemed to be passed on the date of the relevant general meeting. Explanation.- For the purposes of this clause, the requisite number of votes shall be the votes required to pass the resolution as the ordinary resolution or the `special resolution', as the case may be, under section 114 of the Act . (xviii) a resolution proposed to be considered through voting by electronic means shall not be withdrawn. [F. No. 01/34/2013-CL-V- Part-I] AMARDEEP SINGH BHATIA Joint Secretary to the Government of India Note - The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 260(E), dated the 31 st March, 2014 and subsequently amended vide number G.S.R. 415(E), dated the 23 rd June, 2014 and vide number G.S.R. 537(E), dated the 24 th July, 2014.