POSTAL BALLOT – PROCEDURE.

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

                                The affairs of the company are being conducted by the Board of Directors.   Most of the powers are vested in the Board of Directors.   Some powers are given to the shareholders.  The affairs of the company are being conducted by means of resolutions either passed in Board or in general meetings.   There are two types of resolutions, special resolution and ordinary resolution.   For passing special resolution two third majority is required.   While issuing notice to the shareholders for passing special resolution, explanatory statement is to be sent for passing the special resolution.  The Companies Act provides for passing resolution by postal ballot in respect of  listed companies.

APPLICABILITY:

                        The following are the businesses in which the resolutions shall be passed through postal ballot:

• Alteration in the Object Clause of Memorandum;
• Alteration of Articles of Associations in relation to insertion of provisions defining private company;
• Buy back of own shares by the company under Sec. 77A(1);
• Issue of shares with differential voting rights as to voting or dividend or otherwise under Section 86(1)(a);
• Sale of whole or substantially the whole of undertaking of a company as specified in Section 293(1);
• Giving loans or extending guarantee or providing security in excess of the limit prescribed under Section 372A(1);
• Election of a director under proviso to Section 252(1) of the Act;
• Variation in the rights attached to a class of shares or debentures or other securities as specified under Section 106.

PROCEDURE:

Issuing Notice:

                        The company may issue notices to all the members whose names would appear in the Register of Members/Record of Depositories as on the prescribed date, either-

• Under Registered Post Acknowledgement due; or
• Through any other secured mode of posting provided by Department of Post; or
• Through electronic mail provided the company has obtained e-mail address of its member for sending the notices through e-mail, after giving an advance opportunity to the member to register his e-mail address and changes therein from time to time with the concerned depository; and

The notice shall clearly mention that whether the company is providing voting through postal ballot or by electronic mode.  If the company is opting for providing voting by electronic mode, then the notice shall clearly indicate the process and the manner for voting by electronic mode provided by the agency.   The company shall place an advertisement to be published in a leading English news paper and in one vernacular newspaper circulating in the state in which the registered office of the company is situated, about having dispatched the ballot papers duly specifying therein, inter alia the following matters:

• The date of completion of dispatch of notices;
• The date of commencement of voting through postal ballot or by electronic mode;
• The date of end of voting through postal ballot or by electronic mode;
• The notice shall further state that any postal ballot received from member beyond the said date will not be valid;
• The members, who have received postal ballot forms may apply to the company and obtain a duplicate thereof.

The company may make a note below the notice of meeting for understanding of the members that the transactions at Sl. No requires consent of shareholders through postal ballot.  Explanatory statement and reasons for the proposed special businesses pursuant to Section 173(2) read with Section 192A(2) of the Companies Act are to be given.  A copy of each of the documents referred to in the accompanying Explanatory Statement is open for inspection at the Registered Office of the company on all working days, except holidays between the time fixed by the company up to the date of declaration of the results of postal ballots.

Appointment of Scrutinizer:

                        The Board of Directors shall appoint one scrutinizer, who is not in employment of the company, may be a retired judge or any person of repute who, in the opinion of the board can conduct the postal ballot voting process in a fair and transparent manner.  An alternate scrutinizer may also be appointed for the purpose of postal ballot exercise.  The scrutinizer will be willing to be appointed and he is available at the registered office of the company for the purpose of ascertaining the requisite majority.

Voting:

                        A member desiring to exercise vote by postal ballot may complete the enclosed postal ballot form and send it to the Scrutinizer in the enclosed addressed business reply envelope.   Members are to carefully read the instructions printed on the backside of postal ballot form before exercising their vote.  Postage will be borne and paid by the company.   If the envelope containing postal ballots is sent by courier or by the Registered Post at the expense of the registered member will also be accepted.   The envelopes may also be deposited personally at the address given thereon.   The envelope containing the postal ballot should reach the company not later the close of working hours of the prescribed date.   If the ballots are received thereafter they shall be deemed to be not received.  If the member wants to e-voting he may adopt the procedure mentioned in the notice for this purpose.

Scrutinizer’s Report:

                        The Scrutinizer shall maintain a register to record the consent or otherwise received, including media, mentioning the particulars of name, address, folio number, number of shares, nominal value of shares, whether the shares have voting, differential voting or non voting rights.   The Scrutinizer also shall maintain record for postal ballot which are received defaced or mutilated form.   The Postal ballot and all other papers relating to postal ballot will be under the safe custody of the Scrutinizer till the Chairman considers, approves and sign minutes of the meeting. 

                        The Scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots.

Declaration of result:

                        The result of the postal ballot shall be declared by the Chairman or in his absence by any other person, so authorized by the Chairman on the prescribed date at the Registered Office of the company.   The resolutions will be taken as passed effectively on the date of announcement of the result by the Chairman, if the results of the postal ballots indicate that the requisite majority of the shareholders had assented to the resolutions.   Members who wish to be present at the venue at the time of declaration of the result may also be present.  The result of the postal ballot shall also be announced through a newspaper advertisement and hosted on the website of the company.  The Scrutinizer shall return the ballot papers and other related papers/register to the company so as to preserve such ballot papers and other related papers/register safely till the resolution is given effect to.