Katare Spinning Mills Seeks Exemption from SEBI Regulation 24A Due to Low Financials

Katare Spinning Mills Limited has formally sought an exemption from compliance with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, citing its low financial thresholds as the primary reason. This move aligns with SEBI provisions that allow smaller companies to seek relief from certain regulatory requirements based on their financial metrics.

What is Regulation 24A?

Regulation 24A mandates listed companies to submit an annual secretarial compliance report confirming adherence to various corporate governance and regulatory norms. This report is intended to enhance transparency and accountability in listed entities. However, SEBI allows companies with relatively low net worth or turnover to apply for exemption from this requirement, recognizing the disproportionate compliance burden on smaller firms.

Katare Spinning Mills’ Exemption Request

On June 30, 2023, Katare Spinning Mills Limited requested The Bombay Stock Exchange (BSE) exemption from submitting the annual secretarial compliance report under Regulation 24A for the financial year 2023-24. The company substantiated its application by highlighting its modest financial position, which falls below the thresholds specified by SEBI for mandatory compliance. The company reported moderate revenue and net worth figures, which underpin its eligibility for exemption consideration.

Financial Snapshot and Corporate Governance

According to the Annual Report 2023-24, Katare Spinning Mills continues to maintain a lean operational structure with a focus on compliance and governance within its capacity. The Board of Directors includes experienced professionals such as Managing Director Mr. Kishore T. Katare and Independent Directors appointed in April 2024, reflecting the company’s commitment to governance.

Broader Implications for Small and Mid-Sized Companies

Katare Spinning Mills’ approach reflects a broader trend among smaller listed companies seeking regulatory relief to balance compliance costs with business priorities. SEBI’s framework provides flexibility for such entities, fostering an environment where governance standards are maintained without imposing undue burdens. This exemption, if granted, will allow Katare Spinning Mills to focus more on operational growth and financial strengthening while continuing to meet essential disclosure requirements.

Conclusion

Katare Spinning Mills Limited’s application for exemption from Regulation 24A compliance underscores the challenges faced by smaller listed companies in navigating complex regulatory landscapes. By leveraging SEBI’s provisions for low financial thresholds, the company aims to optimize its compliance efforts without compromising governance standards.

Investors and stakeholders will closely watch the outcome of this exemption request, as it sets a precedent for similar companies balancing regulatory adherence with operational efficiency.

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