Sedemac Mechatronics schedules 19th AGM for September 9, 2026

Sedemac Mechatronics Limited has scheduled its 19th Annual General Meeting (AGM) for Wednesday, September 9, 2026. The meeting will commence at 10:30 am and will be conducted through Video Conferencing or Other Audio-Visual Means in compliance with regulations from the Ministry of Corporate Affairs and the Securities and Exchange Board of India.

Meeting Details

The company designated Monday, August 31, 2026, as the cut-off date to determine the list of members eligible to vote on the resolutions outlined in the AGM notice. Shareholders are advised to ensure their contact information is current to receive further communications regarding the event.

Shareholder Instructions

Members are requested to update their email addresses and mobile numbers with MUFG Intime India Private Limited, the company’s Registrar and Share Transfer Agent, or directly with their Depository Participants. This ensures accurate record-keeping for voting purposes.

The intimation was issued by Prasad Rajendra Chavan, Company Secretary and Compliance Officer of Sedemac Mechatronics Limited.

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Sedemac Mechatronics has responded to concerns raised by proxy advisor Institutional Investor Advisory Services India Limited (IIAS) regarding the pricing and terms of its employee stock option schemes. In a filing dated August 7, 2026, under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company addressed IIAS’s recommendation to vote against the ratification of the SEDEMAC Employee Stock Option Plan 2014 (ESOP 2014) and the SEDEMAC Mechatronics Employee Stock Option Scheme 2025 (ESOS 2025). The core dispute centers on whether the Nomination and Remuneration Committee (NRC) should retain the discretion to grant options at significant discounts to market price and over extended periods.

IIAS had recommended voting against the resolutions due to fears that options could be granted at a discount greater than 20% to the prevailing market price, potentially misaligning employee and investor interests. Additionally, for the ESOS 2025, the proxy advisor cited concerns over a potential 15-year exercise period from the date of vesting and the lack of a disclosed performance-linked vesting framework. Sedemac submitted that these structures are compliant with Section 62(1)(b) of the Companies Act, 2013, Rule 12(3) of the Companies (Share Capital and Debentures) Rules, 2014, and Regulation 17 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Key Clarifications on ESOP Structures

The company provided detailed justifications for the flexibility embedded in both schemes, emphasizing the need to retain skilled talent in a research and development-intensive industry. The following table outlines the specific parameters contested by IIAS and Sedemac’s response:

Parameter	IIAS Concern	Sedemac Mechatronics Response
Exercise Price Discount	Potential grants >20% discount to market price reduce 'pay at risk'	NRC may set price between face value and Fair Market Value; no regulatory cap on discount
ESOP 2014 Pricing Range	Deep discounts misalign interests	Price can be 30%-60% of Last Round Securities Price or higher/lower than Fair Market Value
ESOS 2025 Exercise Period	15-year period from vesting is excessive	NRC determines period based on performance and engagement; flexibility aids retention
Performance Vesting	Non-disclosure of metrics for ESOS 2025	Vesting linked to individual/company performance, revenue, profitability, or ranks

Regarding the ESOP 2014, Sedemac clarified that the NRC can determine the exercise price to be between 30% and 60% of the applicable Last Round Securities Price, or any amount not lower than the face value of the shares. The company argued that a fixed exercise price would be counterintuitive for retaining specialized technical expertise critical to its innovation capabilities. It further noted that the ability to tailor options based on individual performance ensures high-performing employees are adequately remunerated, reducing attrition.

Historical Grant Data and Governance

To address dilution concerns, Sedemac highlighted that the maximum dilution from both schemes was already approved by shareholders upon adoption. The actual dilution depends on the number of options exercised. The company disclosed that previously, only 52,500 options (representing 2.24% of the maximum 23,44,500 options available under ESOP 2014) were granted at the face value of the shares. These grants were made during the COVID-19 pandemic as compensation for employees who forgone portions of their salary. In all other cases until February 28, 2024, options were granted at fair market value or reasonable discounts.

For the ESOS 2025, the company reiterated that it is a performance-driven scheme. The NRC will assess eligibility and vesting criteria based on factors such as enrolments, ranks, revenue, and profitability. The Board and NRC, comprising independent and non-executive directors, affirmed that these decisions are made in the best interests of the company and stakeholders, ensuring alignment with long-term value creation.

What the Numbers Show

The data reveals a strategic reliance on discretionary equity compensation rather than rigid formulaic approaches. With only 2.24% of the ESOP 2014 pool utilized at face value, the majority of historical grants appear to have been priced closer to market rates, suggesting the deep discount provision is a contingency rather than standard practice. The emphasis on a 15-year exercise window for the new scheme indicates a focus on long-term retention over short-term liquidity for employees, aligning with the company’s R&D-heavy business model where intellectual property development cycles are extended.