Corporate Laws (Other laws and regulations 2)

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KSE Listing RegulationsSYLLABUSStock Exchange Listing Rules and Guidelines especially those relating to secretarialmatters, public issue of shares, Code of Corporate Governance and Transfer pricing.

LISTING OF COMPANIES AND SECURITIES [3, 4]DEALING NOT ALLOWED WITHOUT PERMISSIONThe securities of the company are not allowed for dealing on KSE on Ready QuotationBoard (RQB) or Future Counter UNLESS:

(a) company or the securities are listed; and(b) permission for such dealings granted under Regulations.

APPLICATION FOR PERMISSIONThe permission shall be granted on application made to KSE. The application shall be onprescribed form and with prescribed fee.

DECISION ABOUT PERMISSIONKSE shall decide about permission within 3 months. In case of refusal, reasons thereof shallbe communicated to SECP and applicant within 2 weeks.

AUTHORITY TO GRANT PERMISSIONThe KSE BOD shall be sole authority for granting or refusing permission. The KSE BODmay relax these regulations if 2/3rd of KSE BOD so resolve. KSE shall consider publicinterest while granting permission.

CALLING FOR ADDITIONAL INFORMATIONThe KSE BOD may require additional evidence, declarations, affirmations and information. Ifadditional information is not submitted, the application shall stand refused.

The applicant may move fresh application after 6 months of refusal unless BOD of KSEdirects otherwise.

Applicant company shall provide full and authentic information. All routine particulars may becalled for by the secretary of KSE.

OFFER TO PUBLIC BY COMPANIES AND MODARABAS [6A]MINIMUM OFFERIf capital of company is upto Rs. 200 Million, at least 50% shall be offered to public.

If capital of company beyond Rs. 200 Million, higher of following shall be offered to public: Rs. 100 Million 25% of capital

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MAXIMUM ALLOCATION OF CAPITALAllocation of capital to overseas Pakistanis shall not exceed 20% of public offer. Allocationof share capital to employees shall not exceed 5% of public offer.

MODARABAIn case of Modaraba applying for listing: 30% of paid up capital shall be subscribed by sponsors, associates, friends, relatives

etc. 70% of paid up capital shall be offered to general public

RELAXATION OF REGULATIONSThe KSE may relax the regulation if satisfied that such requirements are not practicable in aparticular case or class of cases.

PROSPECTUS, ALLOTMENT, ISSUE OF SHARES, ETC [7 - 15]CONDITIONS FOR LISTINGA company shall not be listed unless:

(a) it is a public company or enacted company;(b) its minimum paid up capital is Rs. 50 Million; and(c) it has made a public issue which was subscribed by at least 500 applicants.

The above requirements only apply to shares unless FG directs otherwise. Companiesregistered in AJK shall also be eligible for listing. Companies may make a public offer ofsecurities to be eligible securities in the CDS.

SUBMISSION OF PROSPECTUS TO KSEThe prospectus or offer for sale shall be submitted to KSE for clearance before its approvalseeking application is made to SECP.

PUBLICATION OF PROSPECTUSThe prospectus/offer for sale alongwith proforma application shall be published innewspaper (at Karachi, Lahore, Rawalpindi, Islamabad and at place where KSE requires) atleast 7 days before but not more than 30 days before the subscription list opening.

The issuer shall make available such number of copies of prospectus etc. as KSE maydetermine.

APPLICATIONS FOR ALLOTMENTThe company shall accept application on identical forms. Applications shall be acceptedonly through banker to the issue.

The directors or the officers shall not participate in subscription of shares offered to generalpublic.

Corporate Laws (Other laws and regulations 2)

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ISSUE OF SHARE CERTIFICATESThe share certificates shall be issued in such marketable lots as KSE may require.

INFORMING KSE ABOUT SUBSCRIPTION RECEIVEDThe company shall inform KSE of subscription received (with certificate from bankers to theissue) within 3 working days of subscription list closing.

DISPATCH OF SHARE CERTIFICATESThe company shall dispatch all share certificates, in marketable lots, within 30 days ofclosing of subscription list to successful applicants under intimation to KSE. However, incase of eligible securities, share certificates shall be directly deposited to CDC.

BROKERAGE RATE AND TIMEThe offeror company shall pay brokerage (minimum 1%) to members of KSE within 30 daysof subscription list closing.

SPLITTING AND CONSOLIDATINGThe company shall split/consolidate the following in marketable lots on application of holder: Allotment letter or letters of right (within 7 days) Security certificates (within 30 days)

VERIFICATION OF SIGNATURESThe company shall verify the signature of shareholders within 48 hours of his requestincluding request to transfer shares.

NOTICE FOR CLOSURE OF BOOKSThe company shall give a notice of at least 21 days before closure of share transfer booksto KSE. Provided that in case of company quoted at Future Counter, notice shall be givenon or before 20th day of month, of at least 21 days for book closure after the said 20th.

The closure of share transfer register shall be for: Minimum 07 days at one time Maximum 15 days at one time Maximum 45 days in a whole year

The company shall treat the date of posting as date of lodgment if posted documents arereceived by the company before the relevant action has been taken by the company.

TRANSFER OF SHARESThe company shall issue transfer receipts immediately on receiving the shares for transfer.The company shall not charge any transfer fee.

A listed company shall not exercise any lien or put any restriction on transfer of fully paid upshares.

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DIVIDENDS AND ENTITLEMENTS [16 - 19]PRICE SENSITIVE INFORMATION TO KSEEvery listed company shall keep informed KSE all decisions of its BOD related to cashdividend, bonus issue, right issue or any other entitlement or corporate action or other pricesensitive information.

The KSE shall also be informed about the following in the manner prescribed: Intimation of dividend and other entitlements shall be sent to KSE at least 21 days

before closure. Every issuer of listed security shall send quarterly and annual financial results to

KSE. The company shall send to KSE 300 copies of statutory report, annual report,

and audited accounts at least 21 days before general meeting. The company shall send to KSE copies of all the notices and resolutions before

their publication and dispatch to shareholders. The company shall send to KSE such number of copies of quarterly accounts as

prescribed by KSE.

DIVIDEND WARRANTSEvery listed company shall: dispatch interim dividend warrants within 45 days of start of book closure; dispatch final dividend warrants within 45 days of AGM; intimate the KSE immediately about dispatch; and dispatch by registered post unless required by holders otherwise.

All dividend warrants shall be encashable for 3 months from the date of issue at: the place of registered office. Karachi, Hyderabad, Sukker, Quetta, Multan, Lahore, Faisalabad, Rawalpindi and

Peshawar.

The KSE BOD may suspend or delist a company in case of default of regulation involvingdispatch and encashment of dividend warrants.

ANNUAL GENERAL MEETINGS ETC. [20, 21]HOLDING OF ANNUAL MEETINGA listed company shall hold its AGM and present financial statements within 4 months ofclose of financial year. A Modaraba shall hold its Annual Review Meeting of its certificateholders and present financial statements within 4 months of financial year end. Extensionmay be granted by KSE if prior approval/extension from SECP has been obtained.

FURNISHING OF INFORMATION TO KSEThe company shall furnish copies of minutes AGM and EGM to KSE within 60 days.Thecompany shall furnish to KSE the list of its security holders as at 31st December of eachcalendar year within 30 days thereof. However, in case of security on CDS the list is madeas at 31st January and is submitted latest by 19th February.

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INCREASE OF CAPITAL AND ALLIED MATTERS [22 24]A listed company shall immediately inform the KSE of all decisions of its BOD regardingchange in authorized or paid up capital, bonus shares, right issue or refund of capital etc.

A listed company shall issue entitlement letters or right offers in marketable lots within 30days of re-opening of books. (in case of CDS, procedure of CDC to be followed). The bonusshare certificates shall be issued within 45 days of re-opening of books.

CODE OF CORPORATE GOVERNANCE [37]

TRANSFER PRICING [38]ARMS LENGTH PRICEA listed company shall use arms length price. However, in rare circumstances other pricemay be used subject to approval of BOD, for reasons recorder, in the interest of company.

POLICY AND METHOD OF DETERMINING TRANSFER PRICES RPThe BOD of listed company shall approve the transfer pricing policy for a related partytransaction before such transaction. For each related party, methods for determiningtransfer prices of various types of transactions shall be recorded.

PARTY WISE RECORDA party wise record of related party (RP) transactions alongwith documents and applicationof arms length price shall be maintained:

(i) Name of RP(ii) Nature of relationship with RP(iii) Nature of transaction(iv) Amount of transaction(v) Terms and conditions(vi) Basis or method for determining considerations(vii) Detailed assumptions and estimates(viii) A statement by management about arms length price.

The record of RP transactions shall be placed before Audit Committee and BOD for formalapproval (alongwith justification of departure). The record of RP transaction alongwith allrelevant documents, agreements, calculations and explanations shall be made available tothe statutory auditors for audit purposes.

INFORMING NON-ARMS LENGTH PRICEAny officer having knowledge of non-arms length price shall inform company secretary 15days before execution of transaction. The secretary shall notify BOD immediately.

STATEMENT OF COMPLIANCEThe companies shall publish the status of their compliance with best practice on transferpricing in their annual reports. The statement of compliance with best practices of transferpricing shall be reviewed and certified by statutory auditors.

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