eGovernance & Companies Act, 2013 Agenda What is eGovernance. - - PowerPoint PPT Presentation

eGovernance & Companies Act, 2013

Agenda

 What is eGovernance.  Extensive use of IT under Companies Act, 2013  Key Provisions facilitating eGovernance  Rationale behind introducing eGovernance

What is eGovernance?

eGovernance in the context of companies, is commonly understood as technology driven governance by application of information and communication technology for automation of process, which facilitates efficient functioning, transparency and accountability.

Extensive use of IT terms under Companies Act, 2013

S No. Words Used in Act Used in Rules Total 1. Video Conferencing 3 18 21 2. Audio Visual Means 3 17 20 3. Electronic Form (e-form) 14 70 84 4. Electronic Mode 10 30 40 5. Electronic Means 6 20 26 6. Electronic Record 1 18 19 7. Databank /Database  for Independent Directors (150)  For Interim administrator(259) 2 5 7 8. Electronic Inspection 1 1

Extensive use of IT terms under Companies Act, 2013 (contd.)

S No. Words Used in Act Used in Rules Total 9. Voting by electronic means and electronic voting system 2 7 9 10 Electronic Filing

• Almost all the

filings in the Act is e-filing 11. Information to be put on website(s) 12 39 51 12. Electronic evidence (397) 1 1 13. Director Identification Number 9 65 74 14. Electronic Mail 1 75 76 15. Digital signature certificate Used in filing all the e-forms

Extensive use of IT terms under Companies Act, 2013 (contd.)

S No. Words Used in Act Used in Rules Total 16. Electronic Registry 12 12 17. Electronic Transmission 4 4 18. Electronic Request 1 1 19. Electronic link or Uniform Resource Locator 2 2 20. Electronic System 1 1 21. Electronic Recording Mechanism 1 1 22. Electronic Register and entries therein 1 1 23. Electronic Media 1 1

Key provisions facilitating eGovernance

Sending notice of meeting via e-mail Issuance of financial statement – e-mode eVoting Board Meeting through video conferencing Database for Independent Directors Disclosures

• n the

website eFiling/ eInspection eRecords

eRecords - Eligibility

Section 120 Any document, record, register, minutes required to be kept by any company or allowed to be inspected or copies to be given to any person, may be kept copied and inspected, in electronic form in such form and manner as may be prescribed. “Every Listed Company or a company having 1000 or more shareholders , debentures holders and other security holders, may maintain its records in electronic format” Section 128 Any company may keep its books of accounts and other relevant books and papers and financial statement for every financial year in electronic mode.

eRecords – Key Requirement

The eRecords shall be maintained in the manner as the Board may think fit.

 Maintained in the same formats and in accordance with the requirements of the Act and rules;  Must be capable of being readable, retrievable and reproducible in simple form;  Must be capable of being dated and signed digitally;  Once dated and signed, shall not be capable of being edited or altered;  Must be capable of being updated and the date of updating shall be capable of being recording on every updating.

Security of eRecords

 The Managing Director, Company Secretary or any other director or officer of company as the Board may decide shall be responsible for the maintenance and security of eRecords.

eRecords – Key Requirement

Manner of books of accounts to be kept in electronic mode

 Books of accounts and other relevant books and papers maintained in e-mode shall remain accessible in India so as to be usable for subsequent reference;  Books of accounts shall be retained completely in the format they were originally generated, sent or received;  The information received from branch offices shall not be altered and shall be kept in a manner where it shall depict what was originally received from the branches;

eRecords – Key Requirement

Manner of books of accounts to be kept in electronic mode

 eRecords of books of accounts shall be capable of being displayed in legible form;  The company shall intimate to Registrar on annual basis at the time of filing financial statement-

• Name and IP address of service provider;
• Location of service provider
• Where the books are maintained on cloud, such address as provided by the

service provider.

eVoting - Eligibility

• Every Listed Company; or
• Every company having not less than

1000 shareholders. Shall provide to its members facility to exercise their right to vote at general meetings by electronic means. (Sec 108)

eVoting – Key Requirements

 The notice of the meeting shall-

• clearly mention that the business may be transacted through electronic

voting system and the company is providing such facility;

• Indicate the process and manner for voting, time schedule and shall

provide login ID and create facility for generating password and keeping it secure.  An advertisement to be published at least 5 days before the beginning of voting period stating the matters provided in the Act;  The voting shall be kept open for minimum 1 day and maximum 3 days. The voting shall be completed 3 days before the date of the meeting.

eVoting – Key Requirements

 Once the vote on the resolution is cast, it cannot be changed subsequently.  Board shall appoint one scrutinizer to scrutinize the e- voting process in a fair and transparent manner;  Scrutinizer shall within a period of 3 days from the conclusion of e-voting period, unblock the votes in presence of atleast 2 witnesses and make a scrutinizer’s report to the chairman.

eVoting – Key Requirements

 Scrutinizer shall maintain a register to record the assent or dissent received, mentioning the particulars of the shareholders;  The register and all other papers shall remain in the safe custody of the scrutinizer until the chairman considers, approves and signs the minutes;  The results declared along with the scrutinizer’s report shall be placed on the website of the company and agency within two days of passing resolution at the relevant meeting;  Subject to the receipt of sufficient votes, the resolution shall be deemed to be passed on the date of the relevant general meeting of members.

The e-voting facility provided under the poll and postal ballot shall comply with the same requirements as provided above.

Board Meeting through video conferencing - Eligibility

A director may participate in the meeting of the board of directors in person or through video conferencing or other audio visual means. (Sec 173)

Board Meeting through video conferencing – Key Requirements

Company

• Every company shall make necessary arrangements to avoid failure
• f video or audio visual connection.

Chairperson

• f

meeting and Company Secretary, if any

• Safeguard the integrity of meeting by securing sufficient security

and identification procedures;

• Ensure availability of proper equipment or facilities for providing

transmission of communication for effective participation;

• Record proceedings and prepare minutes of the meeting;
• To store for safekeeping and marking the tape recordings as part of

the records of the company;

• To ensure no person other than director are attending or have access

to proceedings;

• To ensure that participants are able to hear and see other participants

clearly during the course of meeting.

Board Meeting through video conferencing – Key Requirements

• Director intending to participate through video conferencing or audio visual

means shall communicate his intention to chairperson or company secretary of the company;

• The

director who desire to participate may intimate his intention

• f

participation through electronic mode in the beginning of the calendar year and such declaration shall be valid for one calendar year;

• Every meeting conducted through electronic mode, the scheduled venue of the

meeting as set forth in the notice, shall be deemed to be place of the said meeting and all recordings of the proceeding at the meeting shall be deemed to be made at such place;

Board Meeting through video conferencing – Key Requirements

• Chairman

required to make a roll call with respect to every director participating through video conferencing;

• Company to send draft minutes to all directors within 15 days of the meeting;
• Confirmation of

accuracy of draft minutes by every directors who attended meeting within 7 days (or some reasonable time decided by the Board) of receipt of draft minutes, failing which it will be deemed approved.

Matters not to be dealt through video conferencing

Matters not to be dealt in meeting through video conferencing  To approve the annual financial statements;  To approve the board’s report;  To approve prospectus;  To approve merger, amalgamation, demerger, acquisition and takeover; and  The audit committee meetings for consideration

• f

financial statement including consolidated financial statement, if any, to be approved by the Board under the Act.

Whether it is necessary to provide the option

• f video conferencing

No, it is necessary to provide the option of video conferencing

• r audio visual means facility.

Sending notice of general meeting through e-mail - Eligibility

Any company may call its general meeting by giving notice through e- mail as a text or as an attachment to email or as a notification providing electronic link or Uniform Resource Locator (URL) for accessing such

• notice. (Sec. 101)

Sending notice of general meeting through e-mail – Key Requirements (contd.)

 The email shall be addressed to the person entitled to receive such e- mail as per the records of the company;  Provide an advance opportunity to members atleast once in a year to register the email id and changes therein  The subject line in e-mail shall state the name of the company, notice of the type of the meeting, place and date on which the meeting is scheduled;  The company shall ensure that it shall keep a record of each recipient to whom the notice has been sent and the copy of each record and any notices of failed transmissions and subsequent re-sending shall be retained as “proof of sending”;

Sending notice of general meeting through e-mail – Key Requirements (contd.)

 The company’s obligations shall be satisfied when it transmits the e- mail and the company shall not be held responsible for a failure in transmission beyond its control;  The company may send e-mail through in-house facility or its registrar and transfer agent or authorize any third party agency providing bulk e- mail facility;  Such notice shall be simultaneously placed on the website (if any) of the company and on the website as may be notified by the Central Government.

Issuance

• f

financial statements by electronic mode- Eligibility (contd.)

All listed companies and such public companies which have a Net Worth of more than Rs 1 crore and turnover of more than Rs 10 crore, may sent the financial statements :  by electronic mode to such members whose shareholding is in dematerialised format and whose email Ids are registered with Depository for communication purposes;  where Shareholding is held otherwise than by dematerialised format, to such members who have positively consented in writing for receiving by electronic mode; and  by dispatch of physical copies through any recognized mode of delivery as specified under section 20 of the Act, in all other cases. (Sec. 136)

Database for Independent Directors

 An independent director may be selected from a data bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, maintained by any body, institute or association, as may by notified by the Central Government  Any person who desires to get his name included in the data bank of independent directors shall make an application to “the agency”. The agency may charge reasonable fee for this purpose.  Any person who has applied for inclusion of his name in the data bank of independent directors or any person whose name appears in the data bank , shall intimate to the agency about any changes in his particulars within 15 days of such change

Database for Independent Directors (contd.)

Details of Independent Directors in the database includes:  Occupation;  Full Address with PIN Code (present and permanent);  Phone number;  E-mail id;  The educational and professional qualifications;  Experience or expertise, if any;  Any legal proceedings initiated or pending against such person;  The nature of industry; (Sec. 150)

Database for Independent Directors (contd.)

www.independentdirector.in

Repository of Independent Directors created jointly under section 150 by the Institute of Chartered Accountants of India (ICAI) , Institute of Company Secretaries of India (ICSI) and the Institute of Cost Accountants of India (ICAI) and is approved by the Ministry of Corporate Affairs .

Admissibility as evidence

Any document reproducing or derived from returns and documents filed by a company with the Registrar on paper or in electronic form or stored on any electronic data storage device or computer readable media by the Registrar, and authenticated by the Registrar or any other officer empowered by the Central Government in such manner as may be prescribed, shall be deemed to be a document for the purposes of this Act and the rules made thereunder and shall be admissible in any proceedings thereunder without further proof or production of the original as evidence of any contents of the original or of any fact stated therein of which direct evidence is admissible. (sec 397)

Section Event Information/Documents to be placed on The website of the company(if any) On Any other website

8(6) - Formation of companies with charitable objects , etc. On conversion of an company registered under section 8 into company of other kind Notice in form no INC 19 containing the following: · Current and proposed Principal objects of the company · Place where present and proposed memorandum and article can be inspected · Inviting objections towards the application Notice in form no INC 19 on any other Website as notified by the central government 13(8) -Alteration of memorandum On change of object for which money is raised through Prospectus and the money raised is The notice of general meeting. 27(1) - Variation in terms

• f contract or objects in

prospectus On change terms of contracts referred to in the prospectus or

• bjects for which

prospectus was issued The notice of the general meeting

Key Disclosures on the website

Section Event

Information/Documents to be placed on

The website of the company(if any) On Any other website

73(2) Prohibition on acceptance of deposits from public, On inviting deposits from public Copy of circular in Form DPT-1 , issued for inviting deposits from the Public 101 - Notice of meeting

• f Companies

When notice of general meeting is sent through electronic means The notice of general meeting sent through electronic means Notice of general meeting on website as notified by the central 108- Voting through electronic means Where there is facility of electronic voting in general meeting The notice of the meeting and the result of the scrutinizer The notice of the meeting on website

• f the agency

whose electronic platform is being used.

Key Disclosures on the website (contd.)

Section Event Information/Documents to be placed on The website of the company(if any) On Any other website

135(4) (a)-Corporate Social Responsibility Company is required to comply with provisions regarding CSR Corporate Social Responsibility policy N.A. 136(1)-Right of member to copies of audited financial statement. N.A. Only on the website of Listed Company: · Financial statements including consolidated financial statement · Board & Auditors reports · All documents required to be attached thereto. · Separate audited accounts

• f each subsidiary

N.A. 149- Company to have Board of Directors On appointment of Independent Directors Terms and conditions of appointment of Independent Directors N.A.

Key Disclosures on the website (contd.)

Section Event Information/Documents to be placed on The website of the company(if any) On Any other website

160(2)-Right of persons

• ther than retiring

directors to stand for directorship, On receipt of candidature of any person for appointment as Director Notice of candidature or intention for the appointment as Director N.A. 168 (1)- Resignation of Director On resignation of any Director Information about resignation of the Director N.A.

Key Disclosures on the website (contd.)

eFiling

Filing of all the forms is to be made electronically with payment of fees as prescribed for each form. (Sec. 398)

eInspection

Anyone can inspect the documents of any company electronically by payment of Rs. 100/- on the MCA portal. (Sec. 399)

Rationale behind introducing eGovernance

 Wider participation of shareholders and other stakeholders in the decision making process.  Proper dissemination of information to shareholders and

• ther stakeholders

 Transparency in the affairs of the Company  Minimization of chances of fraud and irregularities.  To be in sync with the technological advancements

Corporate Professionals eSolutions Pvt. Ltd D-38, South Extension -I, New Delhi-110 049

• Mr. Ankit Singhi (Director)

Email: ankit@indiacp.com Ph: +91 9910888952

Thank You..