Companies (Management and Administration) Amendment Rules, 2015

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;

© 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

© 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;

© 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;

© 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;

© 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

© 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.