NEWSPAPER ADVERTISEMENT- NO MORE???

Regulation 47 (Advertisements in Newspapers) of SEBI LODR, 2015 was substituted in the SEBI LODR (THIRD AMENDMENT) REGULATIONS, 2024, where we can see the following:

1. Publishing of Financials containing a Quick Response code.
2. Omission of Publishing in notices given to shareholders by advertisement.

The question is, does this mean we no longer have to publish Newspaper ads of any kind of General meeting or Postal ballot notices?

Let's see…

On the 12^th of December 2024, in Regulation 47,

i the existing sub-regulation (1) shall be substituted with the following sub-regulation, namely,-

“(1) The listed entity shall publish an advertisement in the newspaper, within forty eight hours of conclusion of the meeting of board of directors at which the financial results were approved, containing a Quick Response code and the details of the webpage where complete financial results of the listed entity, as specified in regulation 33, along-with the modified opinion(s) or reservation(s), if any, expressed by the auditor, is accessible to the investors:

Nothing provided under this regulation shall preclude a listed entity from publishing, if it so chooses, the financial results in terms of regulation 33 along-with the modified opinion(s) or reservation(s), if any, expressed by the auditor in the newspaper as per the format specified within 48 hours of conclusion of the meeting of the board of directors at which the financial results were approved.”

ii. Sub-regulations (2) and (3) and the proviso thereto shall be omitted;

The earlier existing “notices given to shareholders by advertisement” is nowhere to be found, so does this mean the publishing of the same is exempt? 

My answer is absolutely not.

Even though the above is omitted in the SEBI LODR, when we refer to Rule 22 of the Companies (Management and Administration) Rule, 2014 – PROCEDURE TO BE FOLLOWED FOR CONDUCTING BUSINESS THROUGH POSTAL BALLOT

In sub clause 3 it is clearly mentioned that,

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) a statement to the effect that the business is to be transacted by postal ballot which includes voting by electronic means;

(b) the date of completion of dispatch of notices;

(c) the date of commencement of voting;

(d) the date of end of voting;

(e) the statement that any postal ballot received from the member beyond the said date will not be valid and voting whether by post or by electronic means shall not be allowed beyond the said date;

(f) 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

(g) contact details of the person responsible to address the grievances connected with the voting by postal ballot including voting by electronic means.

Further w.r.t to General Meetings, in SS-2 (SECRETARIAL STANDARD ON GENERAL MEETINGS) issued by ICSI in Para 8.5 it clearly says,

An advertisement containing prescribed details shall be published, immediately on completion of despatch of Notices for Meeting but atleast twenty one days before the date of the General Meeting, 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 country-wide circulation, and specifying therein, inter-alia the following matters, namely: 

(a) A statement to the effect that the business may be transacted by e-voting; 

(b) The date and time of commencement of Remote e-voting; 

(c) The date and time of end of Remote e-voting;

 (d) The cut-off date as on which the right of voting of the Members shall be reckoned;

 (e) The manner in which persons who have acquired shares and become Members after the despatch of Notice may obtain the login ID and password;

 (f) The manner in which company shall provide for voting by Members present at the Meeting; 

(g) The statement that: 

(i) Remote e-voting shall not be allowed beyond the said date and time; 

(ii) a Member may participate in the General Meeting even after exercising his right to vote through Remote e-voting but shall not be entitled to vote again; and

(iii) a 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; 

(h) Website address of the company, in case of companies having a website and Agency where Notice is displayed; and 

(i) Name, designation, address, e-mail ID and phone number of the person responsible to address the grievances connected with the e-voting. 

Advertisement shall simultaneously be placed on the website of the company till the conclusion of Meeting, in case of companies having a website and of the Agency.

 

In conclusion, despite the omission in SEBI LODR, as per the above mentioned Rule 22 & SS-2, it is evident that "notices given to shareholders by advertisement" must undoubtedly be published in newspapers.

 

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From the desk of CS Sharath

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