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The term "differential voting
rights" is defined to include rights as to dividend or voting.
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A company can issue shares with
differential rights as to dividend, voting or otherwise subject to the
conditions hereafter stated.
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The company has distributable profits in
terms of section 205 of the Companies Act, 1956 for three financial years preceding the year in which it was decided to issue such
shares.
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The company
has not defaulted in filing annual accounts and annual returns for three
financial years immediately preceding the financial
year in which it was decided to issue such shares.
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The company has not failed to repay its
deposits or interest thereon on due date or redeem its debentures on due date
or pay dividend.
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The Articles of Association of the company authorises the issue of shares with differential voting
rights.
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The company has not been convicted of any
offence arising under, Securities and Exchange Board of India Act, 1992,
Securities Contracts (Regulation) Act, 1956, Foreign Exchange Management Act,
1999.
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The company has not defaulted in meeting
investors' grievances.
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The company has obtained the approval of
shareholders in General Meeting by passing resolution as required under the
provisions of clause (a) of sub-section (1) of section 94 read with sub-section
(2) of the said section.
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The listed public company obtained approval
of shareholders through Postal Ballot.
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The notice
of the meeting at which resolution is proposed to be passed is accompanied by
an explanatory statement stating –
(a) the rate of voting
rights which the equity share capital with differential voting right shall
carry;
(b) the scale or in
proportion to which the voting rights of such class or type of shares will
vary;
(c) the company shall
not convert its equity capital with voting rights into equity share capital
with differential voting rights and the shares with differential voting rights
into equity share capital with voting rights.
(d) the shares with
differential voting rights shall not exceed 25% of the total share capital
issued;
(e) That a member of the company holding any
equity share with differential voting rights shall be entitled to bonus shares,
right shares of the same class;
(f) the
holders of the equity shares with differential voting rights shall enjoy all
other rights to which the holder is entitled excepting right to vote as
indicated in (a) above.
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Every company
referred to in rule 3 shall maintain a register as required under section 150
of the Act containing the particulars of differential rights to which the
holder is entitled.
