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Applicability of Clause - 49 of Listing Agreement

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Applicability of Clause - 49 of Listing Agreement

Postby Shivani kakkar » Mon Jun 01, 2009 10:08 am

Dear Sir/ Madam,

I have a query regarding applicability of clause - 49 of LA. Ours is public limited company listed on two se - DSE & MPSE having paid up capital of les than RS. 3 Crore.

Do we need to comply with the provisions of Clause 49 of LA. Is there any limit on the paid up capital for applicability of clause of LA.

Thanx & Regards
Shivani Kakkar
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Re: Applicability of Clause - 49 of Listing Agreement

Postby Reena Raje » Mon Jun 01, 2009 10:13 am

Hi,

Every Listed Comapny has to comply with the provisions of LA. You have to check the LA of DSE and MPSE applicable to your Company. It doesnot depend upon the Capital but upon listing, as the Company enteres into an agreement with the SE upon Listing. Hence we have to comply with it.
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CS Reena Raje
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Re: Applicability of Clause - 49 of Listing Agreement

Postby amarkakaria » Mon Jun 01, 2009 11:13 am

Hi Shivani,

I agree with above mentioned views. Being a listed company, you need to comply with Listing Agreement. Since, your company is listed on regional stock exchanges, please go through their listing agreement and do necessary compliances. However, ideally speaking, listing agreement of all stock exchanges are usually in similar format.
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Amar Kakaria
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Re: Applicability of Clause - 49 of Listing Agreement

Postby Shivani kakkar » Mon Jun 01, 2009 11:37 am

Thanx a lot for your prompt reply.

Sebi issued Clause 49 in February ’00. All Group A companies had to comply with its provisions by March 31, ’01. All other listed companies with a minimum paid-up capital of Rs 10 crore and net worth of Rs 25 crore had to comply by March 31, ’02 and the remaining listed companies with a minimum paid-up capital of Rs 3 crore or net worth of Rs 25 crore had to comply by March 31, ’03.

Subsequently, on 29 October ,04, Sebi amended the original Clause 49 and issued a new Clause 49.

But the schedule of Implementation mentioned in the Circular No. SEBI/CFD/DIL/CG/1/2004/12/10 October 29, 2004 states that
a) For entities seeking listing for the first time, at the time of seeking in- principle approval for such listing.

b) For existing listed entities which were required to comply with clause 49 which is being revised i.e. those having a paid up share capital of Rs. 3 crores and above or net worth of Rs. 25 crores or more at any time in the history of the Company, by April, 2005

I have read all the circulars till date all refer to Circular No. SEBI/CFD/DIL/CG/1/004/12/10 October 29, 2004.

So, is Clause 49 applicable to the Companies having a paid up share capital of Rs. 3 crores and above or net worth of Rs. 25 crores or more at any time in the history of the Company or to all the listed Comapnies. If it is applicable to all the listed Companies then please let me know the circular which states the same.

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Shivani Kakkar
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Re: Applicability of Clause - 49 of Listing Agreement

Postby Navneet.Raghuvanshi » Tue Jun 02, 2009 10:37 am

Dear Shivani

The circular which you are referring to was aimed at helping companies to adopt the requirements of Clause 49 in a phased manner as there were number of requirements which specially small companies were finding difficult to comply. However since then SEBI had not made any distinction based on the share capital and all listed companies are required to comply with Clause 49 of the Listing Agreement. Perhaps if you want to check the circular there is none more importantly, there has been no exception which have been provided in the Listing Agreement or subsequent SEBI circulars amending Clause 49.

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Re: Applicability of Clause - 49 of Listing Agreement

Postby Shivani kakkar » Tue Jun 02, 2009 11:50 am

Sir,
Thanx a lot for your prompt reply.

Can you pls. refer to the attachment of SEBI circular as on 29 oct, 2004. In 3 point, It talks about the implementation Schedule of applicability of Listing Agreement.

Can you pls explain that for clearing my doubt.
Thanx & regards
Shivani.
Attachments
Clause 49- Listing Agreement.pdf
(151.52 KiB) Downloaded 267 times
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Re: Applicability of Clause - 49 of Listing Agreement

Postby Navneet.Raghuvanshi » Sun Jun 07, 2009 3:26 pm

Thats what I was precisely trying to convey earlier. This SEBI Circular was introducing a new concept which was difficult for all the companies to follow so for better implementation , SEBI directed variuos phases in which the said circular had to be followed. However if you see any subsequent SEBI Circulars, there are no time limes given there, these are applicable to all the companies. The general rule is if there is no specific exception given, it is binding for all the companies.

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Re: Applicability of Clause - 49 of Listing Agreement

Postby Shivani kakkar » Mon Jun 08, 2009 9:41 am

thanks to everyone who have shared their knowledge and spend time in answering my query.
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