SECP issued SRO No. 573 (I)/2019 dated May 23, 2019 to notify amendments in the Companies (further issue of shares) Regulations, 2018,
Through above said notification SECP relaxed the conditions for bonus issue by omitting the following clauses: –
Regulation # 4(1)(iv) a listed company making bonus issue out of free reserves, calculated in the manner as specified under regulation 3, shall retain at least fifteen per cent of the enhanced paid up capital as free reserves; and
Regulation # 4(1)(v) a certificate shall be obtained by the listed company from the auditor certifying that-
- the free reserves retained after the issue of bonus shares are not less than fifteen per cent of the increased paid up capital of the company; and
- all contingent liabilities have been deducted while calculating the minimum residual reserve of fifteen per cent.
Regulation # 4(1) (vi) the auditor’s certificate as provided in clause (v), shall be sent to the Commission for information and to the securities exchange on the day of decision by board for the public dissemination.
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