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E-voting Provisions Under Secretarial Standards-2

The phrase ‘voting by electronic means’ is defined in the Companies (Management & Administration) Rules, 2014 as substituted by the Companies (Management and Administration) Amendment Rules, 2015 and the SS – 2 as to 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. ‘Electronic voting system’ means a secured system-based process of display of electronic ballots, recording votes of members and number of votes polled in favour / against in such a manner that the entire voting exercised by electronic means gets registered and counted in electronic registry. ‘Remote e-voting’ means the facility of casting votes by a member using an electronic voting system from a place other than the venue of a general meeting. Applicability: As per section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as substituted by the Companies (Management and Administration) Amendment Rules, 2015 the following Companies should provide e-voting facility to their members to vote in general meeting:
  • Every listed Company (irrespective of number of members) except those companies whose shares are listed in SME Exchange or on the Institutional Trading Platform.
  • Every Company having 1000 or more shareholders.
Secretarial Standards Secretarial Standard-2 (SS-2)  on “General Meetings”, issued by the Council of the Institute of Company Secretaries of India (ICSI) and approved by the Central Government, ensures that members of a company receive the Notice of the meeting within prescribed time, the Notice of the general meeting contains particulars required by a member for deciding whether or not to vote for / against the resolution, members have proper opportunity to attend the general meeting, vote with or without attending the meeting physically either for / against the resolution, proper counting of the votes for the purpose of declaration of the voting results, the conduct of general meeting in a fair manner, and the proceedings at the meeting are recorded in the minutes of the meeting. Brief contents of SS-2 pertaining to e-voting are analyzed below:
  1. Agenda items for providing e-voting facility to be approved by the Board of Directors
    1. Appointment of one or more scrutinizers for e-voting or the ballot process.
    2. Appointment of an Agency.
    3. Deciding the cut-off date for the purpose of reckoning the names of Members who are entitled to Voting Rights which shall be a date not earlier than seven days prior to the date fixed for the meeting.
    4. Authorizing the Chairman or in his absence, any other Director to receive the scrutinizer’s register, report on e-voting and other related papers with requisite details.
  2. Notice & Publication of Newsletter advertisement
    1. Notice of the Meeting, wherein the facility of e-voting is provided, shall be sent either by registered post or speed post or by courier or by e-mail or by any other electronic means.
    2. An advertisement shall be published, immediately on completion of dispatch of notices for meeting but atleast 21 days before the date of general meeting, one in  vernacular language and one in English language which shall contain the following matters:
      1. a statement to the effect that the business be transacted by e-voting;
      2. the date and time of commencement of remote e-voting;
      3. the date and time of end of remote e-voting;
      4. cut-off date as on which the right of voting of the Members shall be reckoned;
      5. manner in which persons who have acquired shares and become Members after the dispatch of Notice may obtain the login ID and password.
      6. manner in which company shall provide for evoting by Members present at the Meeting.
      7. Statement that (1) remote e-voting shall not be allowed beyond the said date and time (2) Member may participate remote e-voting but shall not be entitled to vote again and (3) Member as on the cut-off date shall only be entitled for availing the remote e-voting facility or vote, as the case may be, in the General Meeting.
      8. Website address of the Company and Agency where Notice id displayed
      9. Name, designation, address, email ID and phone number of the person responsible to address the grievances connected with the e-voting.
    Advertisement shall be placed on the website of the Company and of the Agency which shall remain on the website till the date of the General Meeting.
  3. Conduct of voting, e-voting & quorum:
    1. Company providing e-voting facility to its members, shall also put every resolution to vote through ballot process at the meeting.
    2. The company shall, at the meeting, put every resolution (except a resolution which has been put to Remote e-voting), to vote on a show of hands at the first instance, unless a poll is validly demanded.
    3. Every company providing e-voting facility shall offer such facility to all Members, irrespective of whether they hold shares in physical form or in dematerialized form.
    4. The facility for remote e-voting shall remain open for not less than 3 days. The voting period shall close at 5 p.m. on the day preceding the date of the General Meeting.
    5. Members who have voted by remote e-voting have the right to attend the General Meeting. The presence of such members shall be counted for the purpose of quorum.
    6. The Resolution, if passed by requisite majority, shall be deemed to have been passed on the last date specified by the company for receipt of duly completed postal ballot forms or e-voting.
  4. Scrutinizer’s Report & declaration of results
    1. Scrutinizer 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 two witnesses and make a consolidates scrutinizer report of the total votes cast.
    2. Scrutinizer report shall be countersigned by the Chairman or any other authorized director and declare the result of the voting with details of the number of votes cast for and against the Resolution, invalid votes and whether the resolution has been carried or not.
    3. E-voting results shall be submit to the stock exchanges where the company shares are listed and shall be displayed on the notice board of the company at its registered office, head office & the corporate office, if any and shall be placed on the website of the company and agency.
    4. The scrutinizers’ register, report and other related papers received from the scrutinizer(s) shall be kept in the custody of the Company Secretary or any other person authorized by the Board for this purpose.
    5. For the resolutions passed by e-voting or postal ballot, a brief report on e-voting or postal ballot conducted including the resolution proposed, result of voting and the summary of the scrutinizer’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 30-days from the date passing of resolution by e-voting or postal ballot.
  5. Prohibition on resolution withdrawal & its modification:SS-2 states that the resolutions which have already passed by remote e-voting & which are likely have influence in the market price shall neither be withdrawn nor be modified.
Conclusion: SS have not only covered aspects & lacuna for which there was no obvious provision in the Companies Act & rules made there under but also protect the interest of shareholders regarding casting of votes. ICSI issued a notification dated 26th June, 2015 stating that when there is any contradiction between the act and Secretarial Standard, then the provision of act shall prevail.
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Disclaimer: The entire contents of this document have been developed on the basis of relevant information and are purely the views of the authors. Though the authors have made utmost efforts to provide authentic information however, the authors and the company expressly disclaim all and any liability to any person who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document.

 
  • By CS P. Surya Prakash  0 Comments   

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