After transferring second preferences in F’s papers to the appropriate candidate, the tally is

A - 200

B - 101 (95+6)

C - 96 (93 + 3)

D - 102 (86 + 16)

E - 92 (62+30)

F - 62

G - 101

Band D get elected having obtained the quota. Now, E, who has got the next lowest first preference of 92, is eliminated. His ballot papers are scrutinised

and it is found that there are 27 second preferences on C. These become C’s votes. Now, C’s votes will be 96 + 27 = 123. Thus, A, B, C, D and G get

elected.

In the case of cumulative voting, a shareholder has, for each share held, as many votes as the number of directors to be elected. H, for example, 4

directors are to be appointed, each share will carry four votes. A shareholder holding 100 shares will have 400 votes. He may cast all the 400 votes

in.favour of one candidate or he may distribute his votes over some candidates. The four candidates getting the higher number of votes will get elected.

Thus, minority shareholders may cast all their votes in favour of their nominees and shall be able to place a number of directors on the Board

proportionate to their shareholdings.

Discuss the mode of appointment of non-rotational nominee directors on the Board of an assisted company by a financial institution.

Section 255 of the Companies Act, 1956 provides that unless the Articles provide for the retirement of all directors at every annual general meeting, not

lessthan 2/3rds of the total number of directors shall be liable to retire by rotation. Sub-section (2) of Section 255 provides that the remaining directors shall, in

default of and subject to any regulation in the Articles of the company, also be appointed by the company in general meeting. Therefore, it would be

necessary for the company to specifically provide in its Articles, or amend its Articles to provide, for appointment of a non-rotational director by the

assisting financial institution. Therefore, the Articles have to be first amended and only subsequently the appointment can be made. It should be ensured

that the total number of non-rotational directors does not exceed 1/3^rd of the total strength of the Board.