Corporate Action General Procedure - CDC...Corporate Action General Procedure 1 Corporate Actions For all purposes and in particular for the purpose of Corporate Actions, the records

October 09, 2017 External Page 1 of 13

Corporate Action General Procedure

1 Corporate Actions

For all purposes and in particular for the purpose of Corporate Actions, the records of the

Depository will, in fact be considered an extension of the Members’/Securities

Holders’ Register maintained by the Issuer/Transfer Agent (R/TA). In other words the

details of the beneficial owners of the CDC’s nominee holding will be obtained from the

records of the Depository and shareholder entitlements will be determined, as far as the

securities held in the Depository are concerned, on the basis of the Beneficial Owners

Report provided by the CDC.

Detailed procedures by means of which the Depository will handle the various corporate

actions involved are given in the following paragraphs.

1.1 Book Closure

A book closure period is a period during which the Issuer/Transfer Agent (R/TA) does not

accept for processing any certificates for the purpose of recording their transfer of

ownership. Traditionally, the book closure period is a device whereby, in the absence of

depository systems, the Issuer/Transfer Agent (R/TA) were given adequate time to process

the large numbers of security transfers which were invariably submitted before the cut-off

date for carrying out corporate actions.

In this regard, Issuer / R/TA shall notify to CDC (as per standard format-Annexure CA-1)

of any Book Closure period fixed by them, specifying therein the Book Closure start date

and the Book Closure end date as well as other relevant corporate action details (if

applicable).

The notice mentioned above, should in accordance with the provision 12.1.1 of the CDC

Regulations be provided to CDC atleast seven (7) Business Days prior to the book closure

start date.

The Depository is required to provide to the Issuer/Transfer Agent (R/TA) a detailed

breakdown of the balance of securities standing to the credit of the CDC nominee holding

in the Members’/Securities Holders’ Register maintained by the Issuer/Transfer Agent

(R/TA), in order to enable them to distribute the benefits accruing as a result of the

corporate actions to each beneficial owners according to his entitlement and/or to forward

such communication to each beneficial owners as is required under Corporate Laws. In

addition to this, the Depository does not allow the initiation of fresh Deposit and

Withdrawal requests during a book closure period. This is to make sure that the balance of

securities in the CDC’s folio in the Members’/Securities Holders’ Register remains frozen

/ intact during the book closure period.

Deposit and Withdrawal requests which are pending at the end of Issuer/Transfer Agent

(R/TA) as at the first day of book closure are processed during the book closure period in

accordance with the provisions of Chapter 8 of the Central Depository Company of

Pakistan Limited Regulations, i.e. within five (5) days from the receipt of the Registerable

Transfer documents.


Unit Transaction Report Version 1.2

However, Provision of the regulation 8.3A.3 states that where Registerable transfer

documents are not received by the Issuer / R/TA by the 2nd Business Day after the start of

book closure date then for the purpose of the said provision it shall be deemed that dispatch

of the Registerable transfer documents & deposit request transaction was made after the

book closure end date.

1.2 Notices of Meetings or other Notices

Where the Notice of General Meetings (GM) or any other Notice is to be given by the

Issuer to its shareholders in accordance with the requirements of the Companies Ordinance

- 1984, such Issuer shall notify to CDC at least 7 business days before sending the statutory

Notice to the shareholder, as per Annexure CA-1.

The notice to CDC shall specify:

The date on which statutory Notice is to be sent, and Details of security (ies) to which statutory Notice relates.

On the End of Day - EoD of 4th Business Day before the relevant time, CDC shall provide

the Beneficial Owner Report (titled “List of Beneficial Owners - LOBO”) correct as of

EoD on the 7th Business Day before the relevant time via download facility which contains

the Registration Details & Holding Balances of each Holder within the CDS. On the basis

of the “Beneficial Owners Report”, the Issuer shall circulate the notices to its shareholders. *Relevant time for the purpose of 1.2 means the date on which the Issuer intends to sent

notices of meeting to the share holders

1.3 Attendance of General Meeting and/or determination of Dividend Entitlement

and / or Redemption

Issuers to distribute dividend or make redemption to Account Holders and Sub-Account

Holders on the basis of their Holding Balances and Registration Details provided in the

Central Depository Register (LOBO/SBD) as of the end of the day preceding the

commencement of Book Closure Period (Relevant Time). CDC shall provide the above

details to the Issuer/Transfer Agent (R/TA) in accordance with CDC Regulation No.

12.3.5.

The Beneficial Owners Report (titled ‘Share Book Details’ -SBD) and the gross entitlement

list will be made available to the Issuer/Transfer Agent (R/TA) immediately succeeding

Business Day after the Relevant Time.

The above Beneficial Owners Report and Gross Entitlement List will have all the

adjustments relating to Change in Registration Details as well as Change in Holding

Balances arising from Deposit Approval Transactions & Withdrawal Approval

Transactions which were existing in the Deposit Pending Position and Withdrawal Pending

Position as on the Relevant Time.



1.4 Bonus Shares

Part “A”:

When the Board of Directors of an Issuer of Book Entry Securities recommends bonus

issue on such Book Entry Securities, the Issuer shall forthwith but in any event before book

closure date notify CDC as per Annexure CA-1 providing therein necessary details along

with certified true copy of Board Resolution and latest audited accounts or Form-7

for verification of authorized capital as per the procedure of “Input of paid-up capital /

total issue in CDS”.

The Beneficial Owners Report (titled ‘Share Book Details’ - SBD) and the gross

Entitlement List will be made available to the Issuer / R/TA immediately succeeding

Business Day after the Relevant Time. Further, specimen confirmation letter is also

provided to Issuer / R/TA along with reporting letter.

The above Beneficial Owners Report and the Entitlement List will have the adjustments

relating to Change in Registration Details as well as Change in Holding Balances arising

from Deposit Approval Transactions & Withdrawal Approval Transactions which were

existing in the Deposit Pending Position and Withdrawal Pending Position as on the

Relevant Time. Subsequent to Board of Directors approval for the allotment of bonus shares, Issuer to:

a) Allot and register the integer portion of the bonus issue, as provided in the

entitlement list, in the name of the Central Depository Company of Pakistan

Limited;

b) Dispose of the fractional entitlement of account holders and sub-account holders as per

entitlement list in accordance with the relevant laws; and

c) Distribute the proceeds of fractional entitlement in accordance with relevant Rules &

Regulations.

The Issuer shall forthwith notify the CDC as per Annexure CA-2 (for final Bonus) & CA-

3 (Interim Bonus) once the bonus shares have been allotted and registered in the name of

CDC.

Upon receipt of confirmation letter & other documents as per the requirement of the

procedure of “Input of paid-up capital / total issue in CDS”, the CDC shall credit the integer

bonus entitlement to the respective Accounts and Sub Accounts immediately after the end

of Business Day on which such confirmation letter has been received.



Part “B”:

Process for remaining 5% of the proposed bonus shares:

At the time of Upload:

Issuer to provide Letter for Authorization to Upload Data as “Annexure CA-4” (shall be

signed by authorized signatories.)

At the time of Credit of Bonus 5%:

1. Allotment of Confirmation Letter signed by authorized signatories along with

undertaking as referred as “Annexure CA-5 (I, II and III) & CA-6”.

OR A Representation Letter in case where no shareholders are in the litigation as referred

in “Annexure CA-7”.

2. Credit of shares will be processed once all the requirements will be fulfilled

Note: 1) Notice of allotment will be construed as received on the date when all

requirements is fulfilled by the issuer.

2) Credit in suspended and blocked accounts will be allowed.

Cancellation of Bonus Shares in Central Depository System (CDS):

As per the CDC Regulations 12.4.8 for cancellation of Bonus issue following Procedure

shall be followed:

1. Issuer before the defined credit date of Bonus shares may send a request letter duly

signed by authorized signatory (ies) to CDC along with the certified copy of Board

Resolution for cancelation of Bonus entitlement to process cancellation into CDS.

2. A copy of intimation letter sent to PSX and SECP should also be provided prior to

cancellation of Bonus.



Annexure CA-1

(ON COMPANY’S LETTER HEAD)

Date:__________

Head of Operations

Central Depository Company of Pakistan Limited CDC House, 99-B, Block-B, S.M.C.H.C. Main Shahrah-e-Faisal, Karachi. Dear Sir,

With reference to the provisions of Regulation Nos. 12.1.1, 12.2.1 and 12.4.1 of the CDC Regulations, we are pleased to inform you as follows:

Name of Eligible Security: _________________

CORPORATE ACTION

Regulation No. 12.2.1

Date on which Notice of Annual / Extra Ordinary General Meeting/ARM (including Accounts) will be sent to the share holders.

Date of Annual / Extra Ordinary General Meeting/ARM.


Closure of Share Transfer Books.


Entitlements, as recommended by the Board of Directors.

Interim / Final Cash Dividend at Rs.____ per shares i.e. ___%.

Issuance of Bonus in the proportion of “____” shares for every “_____” shares held i.e.____ %. The credit of 95% i.e._____% may please be defined in the system. The

remaining 5% i.e. _____% may be dealt with in due course as per rules to be made under the law.

Date on which allotment of bonus securities is proposed to be made.

You are advised to provide us the registration details of account holders and sub-account holders in accordance with the provisions of the Central Depositories Act, 1997 and the CDC Regulations.

Yours sincerely,

AUTHORIZED SIGNATORY (ies)



For Final Bonus (ON COMPANY’S LETTER HEAD)

Annexure CA-2 Date:__________

Head of Operations

Central Depository Company of Pakistan Limited

CDC House, 99-B, Block-B,

S.M.C.H.S. Main Shahrah-e-Faisal,

Karachi.

Dear Sir,

In compliance with the provisions of Regulation No.12.4.5 of the CDC Regulations, we are hereby writing

to confirm as follows:

The General Body in its General Meeting held on _________________, has approved ___________% Bonus

Shares, as recommended by the Board of Directors of the Company.

The above mentioned pay-out i.e. ___________% Bonus Shares shall be distributed to the shareholders

(including Account Holders and Sub-Account Holders in the Central Depository System) whose names are

appearing on the Members’ Register of the Company as at close of business on ________________.

We further confirm that the CDC has been allotted Bonus Shares __________% in the manner as follows:

CDC’s base nominee holding in the Members’ Register as at close of

business on _____________, subject to valid adjustments of Deposit

Requests and/or Withdrawal Requests approved / rejected during the book

closure period:

XXXXXXXXX

Gross CDC’s Bonus Entitlement @ _______%:

Less: Fractional Entitlement to be distributed through Fractional Warrants:

XXXXXXXXX

XXXXXXXXX

Net Bonus Entitlement allotted to CDC: For the Security PK____________________________________

XXXXXXXXX

CDC Nominee Shareholding in the Members’ Register of the Company:

XXXXXXXXX

,

You are advised to credit the integer number of bonus shares to respective accounts of the Account Holders

and Sub-Account Holders in accordance with the Bonus Entitlement List submitted to us. The proceeds of

the Fractional Entitlement of the Account Holders and Sub-Account Holders as provided in the Bonus

Entitlement List shall be disbursed in due course in the manner prescribed under the provisions of the relevant

corporate laws & regulations.

We also confirm that an amount of Rs._____________ in respect of _____________ bonus shares credited

in CDS had been paid by us via Cheque #____________against Invoice #- _______________ and as of

today, no payment to CDC is pending at our end.

We will be pleased to provide you with any other information / clarification should you so require.

Yours sincerely,

(AUTHORIZED SIGNATORY)

Encl: Annual Audited Accounts



For Interim bonus


Annexure CA-3 Head of Operations Date:___________

Central Depository Company of Pakistan Limited CDC House, 99-B, Block-B,


Karachi.

Dear Sir,

In compliance with the provisions of Regulation No.12.4.5 of the CDC Regulations, we are hereby writing

to confirm as follows:

The Board of Directors of the company has approved Interim Bonus Shares ___________%.

The above mentioned pay-out i.e. _________% Interim Bonus Shares shall be distributed to the shareholders

(including Account Holders and Sub-Account Holders in the Central Depository System) whose names are

appearing on the Members’ Register of the Company as at close of business on ________________.

We further confirm that the CDC has been allotted Interim Bonus Shares _________% in the manner as

follows:

CDC’s base nominee holding in the Members’ Register as at close of

business on ____________, subject to valid adjustments of Deposit

Requests and/or Withdrawal Requests approved / rejected during the book

closure period:

XXXXXXXXX

Gross CDC’s Bonus Entitlement @ _______%:

Less: Fractional Entitlement to be distributed through Fractional Warrants:

XXXXXXXXX

XXXXXXXXX

Net Bonus Entitlement allotted to CDC: For the Security

__________________________________

XXXXXXXXX

CDC Nominee Shareholding in the Members’ Register of the Company:

XXXXXXXXX

You are advised to credit the integer number of bonus shares to respective accounts of the Account Holders and Sub-Account Holders in accordance with the Bonus Entitlement List submitted to us. The proceeds of

the Fractional Entitlement of the Account Holders and Sub-Account Holders as provided in the Bonus

Entitlement List shall be disbursed in due course in the manner prescribed under the provisions of the relevant

corporate laws & regulations.

We also confirm that an amount of Rs._____________ in respect of _____________ bonus shares credited

in CDS had been paid by us via Cheque #____________against Invoice #- _______________ and as of

today, no payment to CDC is pending at our end.

We will be pleased to provide you with any other information / clarification should you so require.

Yours sincerely,

(AUTHORIZED SIGNATORY)

Encl. Half yearly (reviewed) accounts required) for Interim Bonus.

For Issuance of Bonus Shares after 1st & 3rd Quarter, “Original Auditor’s Certificate” is required.



<On Company Letterhead>

“Annexure CA-4”

Date: _____________

Head of Operations & Customer Support Services

Central depository Company of Pakistan Limited

CDC House,

99-B, Block-B,


Karachi.

Sub: Authorization to Upload data.

Dear Sir,

Under section 12.4.5 of the CDC Regulation, you are requested to please enable us to upload the data

related to the change of 5% tax on the bonus shares which were withheld as per Finance Act, 2014,

for the following security.

Name of security ISIN

<ABC Limited> <PK0000000000>

Please note the revised Paid-up Capital of our Company <no. of shares / certificates> after issuance

bonus shares.

Also please note for billing purposes, approximate __________ shares / certificates are expected to

be credited into CDS.

We confirm that we will upload data on the following format (extracted from the original data):

001,01111,123,“PK0012301010”,11111

002,01111,123,“PK0012301010”,22222

Regards,

Authorized Signatory(ies)



“Annexure CA-5(i)”

Bonus Confirmation Letter for ONLY Remaining 5% shares (Who have paid Tax)


Date: ___________



CDC House,

99-B, Block-B,


Karachi.

Dear Sir,

CONFIRMATION LETTER

In continuation of our earlier bonus confirmation letter dated ___________, we hereby confirm

that the data of remaining 5% shares for the credit of Book-entry Securities to those shareholders

Accounts and/or Sub-Accounts who have paid the tax equal to 5% of the value of bonus shares

has been prepared by us in accordance with the requirements of section 236M or 236N in the

Income Tax Ordinance, 2001 through Finance Act, 2014 whereby tax has been levied on bonus

shares by listed companies, particularly considering the following requirements:

Ensuring that credit is only allowed to those shareholder’s Accounts and/or Sub-Accounts who paid tax equal to 5% of the value of bonus shares; and

We hereby also confirm the allotment of [insert aggregate number of securities allotted in the name of CDC in the Members’/Certificate Holders’ Register] securities of the [insert name of eligible security] in the name of the Central Depository Company of Pakistan Limited in the Members’/Certificate Holders’ Register.

Please credit the Book-entry Securities to respective Accounts and / or Sub-Accounts in

accordance with the List of successful allottees after final upload, containing inter alia names,

Account Holder/Participant IDs, Account Nos. and the number of Book-entry Securities to be

credited therein.

We also confirm that an amount of Rs._____________ in respect of _____________ remaining

5% bonus shares credited into CDS had been paid by us via Cheque #____________against Invoice

#- _______________ and as of today, no payment to CDC is pending at our end.

We shall be pleased to provide you with any other information / clarification should you so

require.

Yours Sincerely,

[Authorized Signatory]



“Annexure CA-5(ii)”

Bonus Confirmation Letter for Remaining 5% shares (FBR Portion Only)


Date: ___________



CDC House,

99-B, Block-B,


Karachi.

Dear Sir,

CONFIRMATION LETTER

In continuation of our earlier bonus confirmation letter dated ___________, we hereby confirm

that the data of remaining 5% shares for the credit of Book-entry Securities to those shareholders

Accounts and/or Sub-Accounts who have NOT paid the tax equal to 5% of the value of bonus

shares has been prepared by us in accordance with the requirements of section 236M or 236N in

the Income Tax Ordinance, 2001 through Finance Act, 2014 whereby tax has been levied on bonus

shares by listed companies, particularly considering the following requirements:

Ensuring that the shares of those shareholders who have Not paid the tax amount equal to 5% of the value of bonus shares shall be deposited into the account of FBR in CDS under Sub-Section 236(4) of the Income Tax Ordinance, 2001 and

Ensuring that the remaining shares shall remain in the separate account in CDS.

We hereby also confirm the allotment of [insert aggregate number of securities allotted in the

name of CDC in the Members’/Certificate Holders’ Register] securities of the [insert name

of eligible security] (Security ID PK______________) in the name of the Central Depository

Company of Pakistan Limited in the Members’/Certificate Holders’ Register.

Please credit the Book-entry Securities to respective Accounts and / or Sub-Accounts in

accordance with the List of successful allottees after final upload, containing inter alia names,

Account Holder/Participant IDs, Account Nos. and the number of Book-entry Securities to be

credited therein.

We also confirm that an amount of Rs._____________ in respect of _____________ remaining

5% bonus shares credited into CDS had been paid by us via Cheque #____________against Invoice

#- _______________ and as of today, no payment to CDC is pending at our end.

We shall be pleased to provide you with any other information / clarification should you so

require.

Yours Sincerely,




“Annexure CA-5(iii)”

Bonus Confirmation Letter for Remaining 5% shares (Who have paid Tax & FBR Portion Only)


Date: ___________



CDC House,

99-B, Block-B,


Karachi.

Dear Sir,

CONFIRMATION LETTER

In continuation of our earlier bonus confirmation letter dated ___________, we hereby confirm that

the data of remaining 5% shares for the credit of Book-entry Securities to those shareholders Accounts

and/or Sub-Accounts who have paid the tax equal to 5% of the value of bonus shares and in FBR

accounts which has been prepared by us in accordance with the requirements of section 236M or

236N in the Income Tax Ordinance, 2001 through Finance Act, 2014 whereby tax has been levied on

bonus shares by listed companies, particularly considering the following requirements:

Ensuring that the shares of those shareholders who have NOT paid the tax amount equal to 5% of the value of bonus shares shall be deposited into the account of FBR in CDS under Sub-Section 236(4) of the Income Tax Ordinance, 2001.

Ensuring that credit is only allowed to those shareholder’s Accounts and/or Sub-Accounts who paid tax equal to 5% of the value of bonus shares.

We hereby also confirm the allotment of [insert aggregate number of securities allotted in the name of CDC in the Members’/Certificate Holders’ Register] securities of the [insert name of eligible security] in the name of the Central Depository Company of Pakistan Limited in the Members’/Certificate Holders’ Register.

Please credit the Book-entry Securities to respective Accounts and / or Sub-Accounts in accordance

with the List of successful allottees after final upload, containing inter alia names, Account

Holder/Participant IDs, Account Nos. and the number of Book-entry Securities to be credited therein.

We also confirm that an amount of Rs._____________ in respect of _____________ remaining 5%

bonus shares credited into CDS had been paid by us via Cheque #____________against Invoice #

_______________ and as of today, no payment to CDC is pending at our end.

We shall be pleased to provide you with any other information / clarification should you so require.

Yours Sincerely,




“Annexure CA-6”


Date: _____________



Karachi

U N D E R T A K I N G

Dear Sir,

This is to confirm that we have withheld bonus shares to the extent of 5% of those shareholder

who have filed an appeal and have been granted interim stay which to our knowledge is still valid

and the request for credit of the shares to the FBR account does not include shares of the above

referred shareholders.

We further undertake that we will keep CDC and its officer harmless against any claim due to

credit of any shares of the above referred shareholders into the account of FBR.

We shall be pleased to provide you with any other information/ clarification, should you so

require.

Yours sincerely

(Authorized Signatory (ies))



“Annexure CA-7”


Date: _____________



Karachi

Representation Letter

Dear Sir,

This is further to our letter ref. ______________ dated _____________.

We hereby confirm that till to date none of our shareholder has filed any suit against Company in

any Court of Law against tax on bonus shares (imposed under section 236M or 236N of Income

Tax Ordinance 2001, inserted through Finance Act, 2014). Accordingly, we hereby requests CDC

to credit 5% bonus shares (of those share holder who have not paid the required amount of tax

to FBR) to the FBR Account no. _________ titled _____________.

We shall be pleased to provide you with any other information/ clarification, should you so

require.

Yours sincerely

Authorized Signatory (ies)

Documents

Corporate Action General Procedure - CDC...Corporate Action General Procedure 1 Corporate Actions For all purposes and in particular for the purpose of Corporate Actions, the records