Postal Ballot Provisions

Postal Ballot- Applicable Provisions:

♠ Sec 110 of Companies Act,2013

♠ Rule 20 and 22 of Companies (Management and Administration) Rules, 2014

♠ SS-2 (Secretarial Standard on General Meeting)

♠ SEBI (LODR) Regulation, 2015

Meaning: Postal Ballot means voting by ballot, post or through electronic means.

Applicability: It applies on all Companies whether Private or Public having more than 200 members, companies which provide E-voting facility to its members  and on listed Companies other than which are listed on SME Exchange or Institutional Trading Platform.

But One Person Companies and other companies having members upto two hundred are not required to transact any business through postal ballot.

Provision:

As per Companies Act, 2013 and SS-2

♣ A company transact following items only by means of Postal Ballot:

• Items prescribed by Central Govt by notification.
  • Exception: these items can be transacted at General Meeting other than postal ballot by Companies which has provided E-voting facility to its members.
• Any item
  • Exception: Postal Ballot is not applicable on Ordinary Business and any business in respect of which directors or auditors have a right to be heard at any meeting.

♣  If a resolution is assented by the requisite majority of the shareholders postal ballot, it shall be deemed to have been duly passed at a general meeting.

♣ The stipulation regarding the presence of a Quorum does not apply with respect to item by postal ballot.

♣ In case of appointment of representative(s) of the President of India or the Governor of a State letter of appointment/ authorisation shall be submitted to the scrutiniser alongwith physical ballot form.

The following items of business shall be transacted by means of voting through a postal ballot –

• alteration of the objects clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration of the main objects of the memorandum.
• alteration of articles of association in relation to insertion or removal of provisions under Sec 2(68) are required to be included in the articles of a company.
• change in place of registered office outside the local limits of any city, town or village u/s 12(5).
• change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised u/s 13(8).
• issue of shares with differential rights as to voting or dividend or otherwise u/s 43(a)(ii).
• variation in the rights attached to a class of shares or debentures or other securities as specified u/s 48.
• buy-back of shares u/s 68.
• election of a director by Small Shareholders u/s 151.
• sale of the whole or substantially the whole of an undertaking of a company as specified u/s 180(1)(a).
• giving loans or extending guarantee or providing security in excess of the limit specified u/s 186(3).
• Any other Resolution prescribed under any applicable law, rules or regulations.

These items can be transacted at General Meeting other than postal ballot by Companies which has provided E-voting facility to its members.

When a postal ballot form is considered as invalid:

• A form other than one issued by the company has been used.
• It has not been signed by or on behalf of the Member
• Signature on the postal ballot form doesn’t match the specimen signatures with the company.
• It is not possible to determine without any doubt the assent or dissent of the Member.
• Neither assent nor dissent is mentioned
• Any competent authority has given directions in writing to the company to freeze the Voting Rights of the Member
• The envelope containing the postal ballot form is received after the last date prescribed
• The postal ballot form, signed in a representative capacity, is not accompanied by a certified copy of the relevant specific authority.
• It is received from a Member who is in arrears of payment of calls.
• It is defaced or mutilated in such a way that its identity as a genuine form cannot be established.
• Member has made any amendment to the Resolution or imposed any condition while exercising his vote.

Procedure :

♣ First Board of Directors approve the following:

• Businesses to be transacted through postal ballot.
• Notice of postal ballot incorporating proposed Resolution(s) and explanatory statement thereto.
• authorize the CS or where there is no CS, any Director of the company to conduct postal ballot process and sign and send the Notice along with other documents.
• appoint one scrutiniser for the postal ballot.
  • Who can be scrutinizer: CS in Practice,CA in Practice and Cost Accountant in Practice, Advocate or any other person of repute who is not in the employment of the company who can scrutinize the process in fair and transparent manner.
  • Prior consent to act as a scrutiniser shall be obtained from the scrutiniser and placed before the Board for noting.
• appoint an Agency in respect of e-voting for the postal ballot.
• decide the cut-off date for reckoning Voting Rights and ascertaining Members to whom the Notice and postal ballot forms shall be sent.

♣ Notice of the postal ballot shall be given to every Member, Directors, Auditors,Secretarial Auditor and Debenture Trustees,if any,or any other person if required of the company along with a draft resolution explaining the reasons therefore.

♣  Notice shall be sent either

• Registered post or speed post or
• by courier or
• by e-mail or by any other electronic means like registered email id

for facilitating the communication of the assent or dissent of the shareholder in writing to the resolution within the period of 30 days from dispatch of notice.

♣ Notice of the postal ballot shall inform the Members about availability of e-voting facility, if any, and provide necessary information thereof to enable them to access such facility. If facility of e-voting available then provisions of e-voting needs to be followed.

• Notice shall describe clearly the e-voting procedure.
• Notice shall also clearly specify the date and time of commencement and end of e-voting.
• the notice shall –
  • indicate the process and manner for voting by electronic means
  • 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 lD
  • specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.
• Notice shall also contain contact details of the official responsible to address the grievances connected with the e-voting for postal ballot.

♣ Notice shall clearly specify that any Member cannot vote both by post and e-voting and if he votes both by post and e-voting, his vote by post shall be treated as invalid.

♣ Notice shall specify the day, date, time and venue where the results of the voting by postal ballot will be announced, mode of declaration and the link of the website where such results will be displayed.

♣ In case of companies having a website, Notice shall simultaneously be placed on the website. It shall remain on the website till the last date for receipt of the postal ballot forms from the Members.

♣ An advertisement shall be published 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 a wide circulation in that district, about having dispatched the ballot papers and specifying therein, inter alia, the following matters, namely:-

• a statement to the effect that the business is to be transacted by postal ballot which includes voting by electronic means;
• the date of completion of dispatch of notices;
• the date of commencement of voting;
• the date of end of voting;
• the statement that any postal ballot received from the member beyond the said date will be invalid and voting will not be allowed beyond the date.
• a statement to the effect that members, who have not received postal ballot forms may apply to the company and obtain a duplicate thereof; and
• contact details of the person responsible to address the grievances connected with the voting by postal ballot including voting by electronic means.
• day, date, time and venue of declaration of results and the link of the website where such results will be displayed

♣ Notice and the advertisement shall clearly mention the cut-off date.

♣ The postal ballot form shall be accompanied by a postage prepaid reply envelope addressed to the scrutiniser.

♣ A single postal ballot form may provide for multiple items of business to be transacted.

♣ The scrutinizer shall be willing to be appointed and be available for the purpose of ascertaining the requisite majority.

♣ The scrutiniser shall submit his report within seven days from the last date of receipt of postal ballot forms to the Chairman or a person authorised by him, who shall countersign the same and declare the result of the postal ballot with details of the number of votes cast for and against the Resolution, invalid votes and the final result as to whether the Resolution has been carried or not.

♣ The result of the voting along with the scrutiniser’s report shall be displayed for at least three days on the Notice Board of the company at its Registered Office and its Head Office as well as Corporate Office, if any, if such office is situated elsewhere, and also be placed on the website of the company.

♣ The scrutinizer shall maintain a register either manually or electronically to record

• assent or dissent received
• mentioning the particulars of name, address, folio number or client ID of the shareholder
• number of shares held by them
• nominal value of such shares
• whether the shares have differential voting rights, if any,
• details of postal ballots which are received in defaced or mutilated form and postal ballot forms which are invalid.

♣ The postal ballot and all other papers relating to postal ballot including voting by electronic means, shall be under the safe custody of the scrutinizer till the chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall return the ballot papers and other related papers or register to the company who shall preserve such ballot papers and other related papers or register safely.

♣ The assent or dissent received after thirty days from the date of issue of notice shall be treated as if reply from the member has not been received.

♣ A Resolution passed by postal ballot shall not be rescinded otherwise than by a Resolution passed subsequently through postal ballot.

♣ No amendment or modification shall be made to any Resolution circulated to the Members for passing by means of postal ballot.

♣ Minutes

• minutes of Postal ballot shall be drafted and signed within 30 days from the date of resolution by Postal ballot. Minutes shall be recorded in minute book of General Meetings.
• In respect of Resolutions passed by postal ballot, a brief report on the postal ballot conducted including the Resolution proposed, the result of the voting thereon and the summary of the scrutiniser’s report shall be recorded in the Minutes Book and signed by the Chairman or in the event of death or inability of the Chairman, by any Director duly authorised by the Board for the purpose, within thirty days from the date of passing of Resolution by postal ballot.
• Directors and Members are entitled to inspect the Minutes of Resolutions passed by postal ballot.
• Where the minutes have been kept then, until the contrary is proved, the resolutions passed by postal ballot to have been duly passed shall be deemed to be valid.

As per SEBI (LODR) Regulation,2015

• The listed entity shall submit to the stock exchange, within forty eight hours of conclusion details regarding the voting results in the format specified by the Board. Reg 44(3).
• Intimation to stock exchanges pursuant to Reg 29 and 30 for intimation of publication of newspaper notice regarding postal ballot.
• Disclosure in Annual Report as Schedule-V.