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MATERIAL STATUTORY UPDATES

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MCA CIRCULARS

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CLARIFICATION ON HOLDING OF AGM THROUGH VC OR OVAM

  • MCA has permitted companies whose AGMs are due in the year 2023, to conduct their AGMs on or before 30th September, 2023 through VC or OVAM, in accordance with the requirements laid down in Para 3 and Para 4 of the General Circular No. 20/2020 dated May 5, 2020.
  • MCA also clarified that this extension shall not be construed as an extension of time for holding AGMs. (MCA General Circular No. 10/2022 dated December 28, 2022)

Applicability on the Company: Applicable

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EXTENSION IN TIMELINES TO CONDUCT EGM OR TO TRANSACT ITEMS THROUGH POSTAL BALLOT

  • MCA vide its General Circular No. 11/2022 dated December 28, 2022 has permitted companies to conduct their EGMs through VC or OAVM or to transact items through postal ballot in accordance with the framework provided in the earlier circulars issued by MCA up to 30th September, 2023.
  • All the other requirements provided in the earlier circulars shall remain unchanged.

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Applicability on the Company: Applicable

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MCA-21 V3 PORTAL

  • MCA has launched a new way of e-filing and is planning to shift all Company related forms from its earlier MCA-21 V2 portal to its new MCA-21 V3 portal.
  • The V3 portal of the MCA21 portal is an upgraded version with the objective of better service facilities as well as use of data analytics. 
  • All the forms shall be migrated to the new portal by January 23, 2023.
  • (MCA General Circular No. 01/2023 dated 09.01.2023)

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Applicability on the Company: Applicable

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SEBI CIRCULARS

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GUIDANCE NOTE ON INVESTOR COMPLAINTS REPORT

  • NSE vide its Circular No. NSE/CML/2022/33 dated July 7, 2022 has clarified that a listed entity shall include all the investor complaints received by the company from different sources such as SEBI SCORES, Exchanges, hardcopies or emails to officials handling investor complaints, etc. while determining the number of complaints to be submitted to the Stock exchanges in a quarterly report as provided under Regulation 13(3) of SEBI (LODR) Regulations, 2015.
  • NSE has also clarified that in case of deviation observed, necessary action may be initiated against the Company.

Applicability on the Company: Applicable

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REDRESSAL OF INVESTOR GRIEVANCES THROUGH SEBI SCORES PLATFORM

  • SEBI has launched a centralized web based complaints redressal system in 2011 to provide an administrative platform for aggrieved investors whose grievances pertaining to the securities market remain unsolved by the concerned listed company, registered intermediary or registered market infrastructure institutions.
  • The circular highlights the process through which an investor can lodge a complaint on SCORES, the types of complaints which shall not be dealt through SCORES, handling of complaints by stock exchanges against certain listed companies and action for failure to redress investor complaints by such listed companies, other general provisions regarding investor grievance redressal. (SEBI Circular No. SEBI/HO/OIAE/IGRD/P/CIR/2022/0150 dated November 7, 2022)

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REDRESSAL OF INVESTOR GRIEVANCES THROUGH SEBI SCORES PLATFORM (CONTD)

  • A complainant may use SCORES to submit the complaint or grievance directly to the listed companies.
  • Such Direct Complaint shall be redressed by the entity within 30 days without any intervention of SEBI, failing which the complaint shall be registered on SCORES. Thereafter, SEBI shall take it up with the entity concerned.
  • All listed companies shall review their investor grievance redressal mechanism from time to time and shall take immediate efforts on receipt of a complaint from the complainant within 30 days of receipt of such complaint.

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REDRESSAL OF INVESTOR GRIEVANCES THROUGH SEBI SCORES PLATFORM (CONTD)

  • Action taken by the listed company will not be considered as complete if the relevant details/ supporting documents are not uploaded on SCORES and consequently the complaints will be treated as pending.
  • A complaint shall be treated as resolved/disposed/closed only when SEBI disposes/closes the complaint in SCORES.
  • Mere filing of ATR by a list company will not mean that the complaint is not pending.

Applicability on the Company: Applicable

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SUSPENSE ESCROW DEMAT ACCOUNT

  • SEBI vide its circular no. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated January 25, 2022 and circular no. SEBI/HO/MIRSD/PoD-1/OW/P/2022/64923 dated December 30, 2022 has directed the listed entities to issue the securities in dematerialized form only while processing various investor service requests.
  • In cases where the securities holder/claimant fails to submit the dematerialization request within 120 days from the date of issuance of letter of confirmation in lieu of the securities certificate (s) with respect to certain investor service requests, RTA/companies are required to open a separate demat account with the nomenclature “Suspense Escrow Demat Account” and transfer such securities to the said account.

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SUSPENSE ESCROW DEMAT ACCOUNT (CONTD.)

  • Also, SEBI vide its circular no. SEBI/HO/MIRSD/PoD-1/OWP/2022/64923 dated December 30, 2022 has issued Operational guidelines with respect to procedural aspects of Suspense Escrow Demat Account.
  • The securities pertaining to Letter of Confirmation cases shall be moved to the said account latest by January 31, 2023.

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Applicability on the Company: Applicable

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RELAXATION IN DISPTACH OF PHYSICAL COPIES OF FINANCIAL STATEMENTS, ETC.

  • SEBI vide its circular no. SEBI/HO/CFD/PoD-2/P/CIR/2023/4 dated January 5, 2023 has provided a relaxation to the listed entities relating to dispatch of hard copies of Annual report containing financial statements, Board’s report, Auditor’s report, etc. till September 30, 2023.
  • However, the listed entities are required to send the hard copy of the full annual reports to those shareholders who request for the same.
  • The listed entity shall ensure that the notice of AGM published by advertisement, discloses the web-link to the annual report.

Applicability on the Company: Applicable

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APPOINTMENT OF AN INDPENDENT DIRECTOR VIDE A SPECIAL RESOLUTION

  • Regulation 25 (2A) of SEBI (LODR) Regulations, 2015 states:

The appointment, re-appointment or removal of an independent director of a listed entity, shall be subject to the approval of shareholders by way of a special resolution.

  • SEBI on January 17, 2023 vide SEBI (LODR) (Amendment) Regulations, 2023 has amended inserted two provisos to this sub-regulation which imply that:

If majority of votes cast in favour (provided the positive votes of public shareholders is in majority) even if the same is less than the threshold required for special resolution will be considered as valid approval.

Applicability on the Company: Applicable

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DEFINITION OF SENIOR MANAGEMENT

  • SEBI on January 17, 2023 vide SEBI (LODR) (Amendment) Regulations, 2023 has amended the definition of ‘Senior Management’:
  • Applicability on the Company: Applicable

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Applicability on the Company: Applicable

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Pre- Amendment

Post Amendment

“senior management” shall mean officers/personnel of the listed entity who are members of its core management team excluding board of directors and normally this shall comprise all members of management one level below the chief executive officer/managing director/whole time director/manager (including chief executive officer/manager, in case they are not part of the board) and shall specifically include company secretary and chief financial officer.

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“senior management” shall mean the officers and personnel of the listed entity who are members of its core management team, excluding the Board of Directors, and shall also comprise all the members of the management one level below the Chief Executive Officer or Managing Director or Whole Time Director or Manager (including Chief Executive Officer and Manager, in case they are not part of the Board of Directors) and shall specifically include the functional heads, by whatever name called and the Company Secretary and the Chief Financial Officer.”

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REQUIREMENT OF APPROVAL OF SHAREHOLDERS

Following insertion has been made in sub-regulation (1C) of Regulation 17 on January 17, 2023 vide SEBI (LODR) (Amendment) Regulations, 2023 has :

  • The listed entity shall ensure that approval of shareholders for appointment or re-appointment of a person on the Board of Directors or as a manager is taken at the next general meeting or within a time period of three months from the date of appointment, whichever is earlier.

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Applicability on the Company: Applicable

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CORPORATE GOVERNANCE REPORT

The following additional disclosure shall be made in the Corporate Governance report of the Annual Report along with the existing disclosures as specified in Paragraph C of Schedule V:

  • Details of material subsidiaries of the listed entity; including the date and place of incorporation and the name and date of appointment of the statutory auditors of such subsidiaries.

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Applicability on the Company: Applicable

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DISPUTE RESOLUTION MECHANISM AT STOCK EXCHANGES AGAINST LISTED COMPANIES/ RTA

  • SEBI in order to enhance awareness amongst investors about the availability of arbitration facility at Stock Exchanges for their dispute, if any, against listed companies/ RTAs, has instructed the listed entities to issue an intimation highlighting the availability of this right, either by email or SMS, to all investors, who hold shares in physical form.
  • Accordingly, the listed entities shall co-ordinate with their RTAs and arrange to issue the intimation, latest by February 20, 2023.
  • RTAs shall submit an action taken report on the same to SEBI, latest by February 27, 2023.
  • SEBI Circular No. SEBI/HO/OIAE/2023/03394 dated January 27, 2023

Applicability on the Company: Applicable

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