Ministry of Corporate Affairs ('MCA') vide its circular dt: December 28, 2022 allowed Companies to convene EGM or AGM through Video Conferencing (VC) of Other Audio Visual Means ('OAVM'). This extension is allowed till September 30, 2023. It has been seen that whenever MCA had allowed Companies to conduct meetings through VC or OAVM mode SEBI has granted relaxation in compliance with certain relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ['SEBI LODR'].
This time SEBI has granted relaxation in compliance with certain provisions of SEBI LODR in line with the extension given by MCA till September 30, 2023. Below is the list of compliances that are exempted and that needs to be complied with by Listed Entities:
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Exemptions - Compliances that need not be done if AGM or EGM is held through VC or OAVM mode |
Compliances that need to be done if AGM or EGM is held through VC or OAVM mode |
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Sending a hard copy of the annual report containing salient features of all the documents prescribed in Section 136 of the Companies Act, 2013 to the shareholders who have not registered their email addresses. |
In terms of regulation 36(1)(c) of the SEBI LODR, listed entities are required to send hard copies of full annual reports to those shareholders who request for the same. |
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The requirement of sending proxy forms under Regulation 44 (4) of the SEBI LODR is dispensed with up to December 31, 2022, in case of general meetings held through electronic mode only. |
The notice of AGM published by advertisement in terms of regulation 47 of the SEBI LODR shall disclose the web-link to the annual report so as to enable shareholders to have access to the full annual report |
The above exemption is applicable with immediate effect. Similar exemptions have been granted by SEBI for debt-listed entities too.
What action listed entities need to take now?
Further, it is now clear that for shareholders holding shares in physical form SEBI has directed listed entities to send general meeting notices through electronic form only. So, to receive the notice and actively participate in the activities of the company shareholders holding shares in physical form, they will have to update their email ids directly with the company or through the company's RTA. Also, this forces us to highlight that the deadline for updating KYC norms and linking PAN with Aadhar by shareholders holding shares in physical form is also approaching, i.e. March 31, 2023. SEBI mandated this vide its circular dt: November 3, 2021.
So now shareholders holding shares in physical form shall as soon as possible update their KYC details and link PAN with Aadhar by March 31, 2023, failing which their folios would be frozen by companies and the company would not resolve their investor service requests. Also, companies should by sending letters or any other form of communication reach out to shareholders and ask them to comply with these norms. Companies with a large number of shareholders holding shares in the physical form need to act fast.
Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement
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