LISTING AGREEMENT -- P.JAGANNATHAM M.Com., LL.B., FCS Corporate Advocate Compiled by: PUTTAPARTHI JAGANNATHAM &CO COMPANY SECRETARIES

 MSOP is meant for an interaction with experienced faculty which will enhance the students self-confidence prior to their becoming members.  FOCUS: Among other things build a bridge between knowledge acquired and its application in actual work situation. Puttaparthi Jagannatham & Co., Company Secretaries OVERVIEW WELCOME TO MSOP

WHAT IS COVERED ?  Importance  Agreement  Important Clauses:  Notifications to be given  Compliances to be made  Consequences for default.

Is it different Agreement ?  Agreement is an act in the eye of law where two persons have common intention to do or not to do any act, deed or thing may be oral or written.  Interestingly However LA entered with the Stock Exchanges, execution is done only by the Director on behalf of the Company and the signature of party representing the Stock exchanges is not found. We need to take that there is oral agreement/ understanding to that effect by their actions.

Listing Agreement-what is it all about?  Listing means admission of the securities to dealings on a recognised stock exchange.  Separate Listing Department to grant approval for listing of securities of Companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the Exchange.  Companies enter into an Listing agreement with the Exchange and make certain disclosures and perform certain acts.  Listing Department monitors the compliance of the companies.

IMPORTANT CLAUSES OF LISTING AGREEMENT

Clause 16 – Book Closure / Record date  Atleast 7 working days before book closure/record date and  Atleast 7 working days before corporate actions like mergers, demergers, splits and Bonus shares.

 Clause 19 – Convening of Board meeting for declaration / decision regarding dividend/Bonus shares/ Rights shares/debentures/ buyback of securities  Clause 21- Interest on debentures, bonds, redemption amount of redeemable shares or debentures.  Atleast 2 working days in advance of a Board meeting to decide the matters of the clause.  No prior intimation is required about Board meeting in respect of issue of bonus shares if the issue is not in the Agenda of board meeting.  Atleast 21 days in advance, of the date on and from which the amounts will be paid.

.  Clause 24 – a. ‘In-principle’ approval for further issues. b. That it shall file any scheme/petition proposed to be filed before any Court or Tribunal; Auditor’s Certificate also needs to be filed. c. To ensure that any scheme of merger/amalgamation,etc., does not violate or override the provisions of Securities Laws.

 Clause 28 – Change in the form or nature of listed securities or change in the rights/ privileges thereof.  Clause 29 & 30 – (a)Change in general characters or nature of company’s business (b)Change in the Companies directors / Managing Director / Auditors/secretaries  Give 21 days prior notice.  Apply to exchange for listing of the securities as changed, if exchange so requires.  Promptly notify the changes.

 Clause 31 – Further issue of securities & other documents to be forwarded.  Six Copies of the annual reports, notices, resolutions and circulars relating to new issue of capital  3 copies of all the notices, call letters etc.,  Copy of proceedings at all Annual and Extraordinary General meeting of the Company  Three copies of all notices, circulars etc., issued or advertised in the press in connection with any merger, amalgamation, reconstruction, reduction of capital, scheme of arrangement.

Clause 32 –  Complete set of B/S,P&L a/c, Director’s Report to each shareholder. (single copy if shareholders are residing in single household.)  In case name change suggesting any new line of business, continual disclosure of net sales or income, expenditure and net profit or loss after tax figures, etc., for three years succeeding the date of change in name. Disclose new name along with old name for 1 year through the websites of respective stock exchange(s).  CFS (as per AS-3; ICAI) shall be presented only under indirect method and is to be mandatorily published in Annual Report in addition to individual financial statements.  Disclosure of Related party, loans and advances and investments in its own shares, their subsidiaries, associates etc.,

Clause 35- * The company agrees to file the following statements showing… a. shareholding pattern b. details of locked in shares c. details of Depository Receipts (DRs) d. details of shares pledged or otherwise encumbered, etc., * with the Exchange on a quarterly basis, within 21 days from the end of each quarter, in the format specified. * Details of holding held under ‘Partly paid –up shares’, ‘outstanding convertible securities’ and ‘warrants’ – if so present, need to be given – as per the amended format.

 Clause 36 – Events such as strikes, lock-outs, e.t.c., disruption of operations due to natural calamity, decision regarding issue of shares, forfeiture of shares, alteration of shares, cancellation of declared dividend, merger, amalgamation, demerger, hiving off, voluntary delisting and other material decisions.  Immediately.

Clause 40 A  The company agrees to comply with the requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules,  Where the company is required to achieve the minimum level of public shareholding specified in Rule 19(2)(b) and/or Rule 19A of the Securities Contracts (Regulation) Rules, 1957, it shall adopt any of the following methods to raise the public shareholding to the required level:-  (a) issuance of shares to public through prospectus; or  (b) offer for sale of shares held by promoters to public through prospectus; or  (c) sale of shares held by promoters through the secondary market.

Clause 41  Quarterly financial results approved by the Board/ or by a committee thereof, other than the audit committee Along with Limited review report within 45 days from end of the quarter (other than the last quarter).  In respect of the last quarter, the company has an option either to submit unaudited financial results for the quarter within forty-five days of end of the financial year or to submit audited financial results for the entire financial year within sixty days of end of the financial year, subject to the provision.  Atleast 7 clear calendar days in advance of the Board meeting fixed for taking Un audited / Audited results on record. (excluding date of intimation and date of meeting)  Advertise atleast 7 days in advance in atleast one national newspaper in English and in regional language, the day of Board meeting.  Fax the results to the stock exchange with in 15 minutes.  Recently amended to include the details of pledge shares of the Promoters and Promoter group.

Contd.,  Limited review report placed before the Board of directors or the Committee, before being submitted to the stock exchange where the variation between un-audited financials and financials amended pursuant to limited review for the same period, exceeds 10%.  Financial results shall be signed by the Chairman or managing director, or a whole time director. In the absence of all of them, it shall be signed by any other director of the company who is duly authorized by the Board to sign the financial results.  Variance in Net profit or loss after tax and exceptional/extra ordinary items of 10% or Rs.10 lakhs whichever is higher shall trigger reporting.  Option given to publish either stand alone or consolidated financial statements subject to condition that the choice once exercised cannot be changed during the year. If the option is changed in the subsequent financial year, comparative figures for the previous financial year shall be furnished.  Companies have flexibility to choose any 3 months for a quarter.

Clause 49  Board of Directors and composition of Board  Code of conduct of Directors to be published on the website  Audit Committee and its composition and frequency of its meetings.  Mandatory review of certain information by Audit Committee.  Subsidiary Companies  Disclosures  CEO/CFO certification  Report on Corporate Governance  Compliance * Approval of appointment of CFO

*Clause 35 –  Shareholding pattern containing details of promoters holding and non promoters holding  Clause 47(c) – Appointment of Company Secretary as Compliance officer  File with in 21 days from the end of the quarter on a quarterly basis.  Recently amended to include the details of pledge shares of Promoters and Promoters group  *Details of holding held under ‘Partly paid –up shares’, ‘outstanding convertible securities’ and ‘warrants’ – if so present, need to be given – as per the amended format.  Obtain certificate from Company Secretary in Practice on half yearly basis that the securities lodged for transfer have been registered and dispatched within 30 days from the date of lodgment with the company within 30 days from the end of the half year.

 *Clause 49 – Corporate Governance  Corporate Filing and Dissemination System (CFDS), viz.,  File the Corporate Governance report in the prescribed form with in 15 days from the end of the quarter on a quarterly basis.  * Approval of appointment of CFO  Not required for information, statement or report which has already been filed on the Corporate Filing and Dissemination System in pursuance of clause 52.

NEWLY INSERTED CLAUSES  Clause 53 - To notify the stock exchange and also disseminate through its own website, immediately upon entering into agreements with media companies and/or their associates, the information like, Disclosures regarding the shareholding (if any) of such media companies/associates in the company, etc.,  Clause 54 - To maintain functional website containing basic information about the company e.g. details of its business, financial information, shareholding pattern, etc., The Company also agrees to ensure that the contents of the said website are updated at any given point of time.

Consequences for default  Suspension  Delisting  Penalties

First things first-  Read the Listing Agreement Completely  Consultation with colleagues  Attitude to learn  Careful dealing with the officials  Communication skills and drafting skills.

THANK YOU P.JAGANNATHAM M.Com., LL.B., FCS Corporate Advocate