COMPANY PROFILE

(For Companies Already Listed at other Exchanges)

Name of Company:________________________________________________________

Address (Registered Office): _________________________________________________

Telephone Numbers:________________________________________________________

Mills – Other Addresses:_____________________________________________________

Telephone Numbers:________________________________________________________

Board of Directors:_________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

Auditors:_________________________________________________________________

________________________________________________________________________

Legal Advisors:____________________________________________________________

________________________________________________________________________

Bankers:_________________________________________________________________

________________________________________________________________________

________________________________________________________________________

Registrar of Shares:_________________________________________________________

F O R M – II

FORM FOR SUBMISSION OF UNDERTAKING AND PAYMENT OF FEES*

Dated:________________

The Secretary

Islamabad Stock Exchange (Guarantee) Limited

Islamabad.

Re: LISTING ON THE STOCK EXCHANGE

With reference to our Listing application under Section 9 of the Securities and Exchange Ordinance, 1969, we enclose herewith the following:-

(1) An unconditional undertaking under the Common Seal of the Company duly signed in accordance with the provisions contained in our Articles of Association.

(2) *A cheque of Rs.__________________ towards annual Listing Fee as per your Listing Regulations.

 

Yours faithfully

____________

SIGNATURE 

 

Note: *If Initial Listing Fee have not been waived by ISE

 

 

 

ANNEXURE TO FORM – II

FORM OF UNCONDITIONAL UNDERTAKING UNDER LISTING REGULATION NO. 5

ON NON-JUDICIAL STAMP PAPER

Dated: _______________       

The Governing Board of Directors

Islamabad Stock Exchange (Guarantee) Limited

Islamabad.

U N D E R T A K I N G

We undertake, unconditionally, to abide by the Listing Regulations of the Islamabad Stock Exchange (Guarantee) Limited which presently are, or hereinafter may be in force.

We further undertake:-

(1) That our shares and securities shall be quoted on the Ready Quotation Board and/or the Cleared List at the discretion of the Exchange.

(2) That the Exchange shall not be bound by our request to remove the shares of securities from the Ready Quotation Board and/or the Cleared List.

(3) That the Exchange shall have the right, at any time to suspend or remove the said shares or securities for any reason which the Exchange consider sufficient in public interest.

(4) That such provisions in the Articles of Association of our company or in any declaration or agreement relating to any other security as are or otherwise not deemed by the Exchange to be in conformity with the Listing Regulations of the Exchange shall, upon being called upon by the Exchange, be amended to supersede the Articles of Association of our company or the nominee relating to the other securities to the extent indicated by the Exchange for purposes of amendment and we shall not raise any objection in relation to a direction by the Exchange for such amendment; and

(5) That our company and/or the security may be de-listed by the Exchange in the event of non-compliance and breach of this undertaking.

Yours faithfully,             

                                                          (Signature of authorized person)         Common seal of the company

F O R M – I

FORM OF APPLICATION UNDER SECTION 9 OF THE SECURITIES AND EXCHANGE ORDINANCE 1969 FOR LISTING A SECURITY ON STOCK EXCHANGE.

Dated:______________

The Secretary

Islamabad Stock Exchange (Guarantee) Limited

Islamabad.

Dear Sir,

We hereby apply for the listing of our ________________________________________ on your Stock Exchange. (Name of Company)

2. Necessary information and documents as required in the annexure to this form are furnished.

Yours faithfully,

____________________

SIGNATURE & ADDRESS

Copy to: 

The Securities and Exchange Commission, ISLAMABAD.

ANNEXURE TO FORM – I

The following particulars and documents shall be annexed to the listing application, namely:

*1. Memorandum & Articles of Association and, in case of Participatory redeemable Capital, a copy of the trust deed.

*2. Copies of prospectus issued by the Company in respect of any security already listed on the Stock Exchange.

*3. Copies of the balance sheets and audited accounts for the last five completed years or for a shorter number of years if the company has been in existence only for such years.

**4. A brief history of the company since incorporation giving details of its activities including any re-organization, changes in its capital structure and borrowings.

**5. A statement showing:-

(a) dividends and cash bonuses paid during the last 10 years or such shorter period as the company may have been in existence;

(b) dividends or interest in arrears, if any.

**6. Certified copies of agreements or other documents relating to arrangements with or between:

(a) vendors and/or promoters

(b) underwriters

(c) brokers

**7. Certified copies of agreements with:-

(a) managing agents

(b) selling agents

(c) managing director and technical directors

**8. A statement containing particulars, dates of and all parties to all material contracts agreements (including agreements for technical advice and collaboration), concessions and similar other documents except those entered into in the normal course of the company’s business or intended business together with a brief description of the terms of such agreements.

**9. Certified copies of the agreements with the NIT, ICP, PICIC, IDBP and any other financial institution.

**10. Names and Addresses of the directors and persons holding ten percent or more of any class of equity security as on the date of application together with the number of share or debentures held by each.

*11. Particulars of security for which listing is sought.
*12. Additional information/documents that may be called by the Exchange.

Note:
* To be submitted alongwith the application.
** May be submitted at your convenience.

XII. TRANSFER PRICING

1. No listed company shall use a price other than the arm’s length price except in rare circumstances where, subject to the approval of the Board of Directors and for reasons to be recorded in writing, it is in the interest of the company to do so.
2. The Board of Directors of a listed company shall approve the transfer pricing policy for a related party transaction before such transaction is entered into.
3. For each related party, every listed company shall prepare a statement to record the methods for determining transfer prices of various types of transactions with such party, which shall form the basis on which these transactions are entered into.
4. Every listed company shall maintain a party wise record of transactions, in each financial year, entered into with related parties in that year along with all such documents and explanations as shall enable the ascertainment of arm’s length price of the transactions. The record of related party transaction shall include the following particulars in respect of each transaction: 

1. Name of related party;
2. Nature of relationship with related party;
3. Nature of transaction;
4. Amount of transaction;
5. Terms and conditions of transaction, including the amount of consideration received or given;
6. Basis or method for determining such consideration;
7. Detailed assumption and estimates underlying the transfer price and details of computation of transfer price; and
8. A statement whether, in management’s opinion, such consideration is an arm’s length price along with appropriate explanation in case of an exception to arm’s length price.

5. Where an officer (as defined in the Companies Ordinance, 1984) of a listed company possesses knowledge that a transaction may not be consummated at an arm’s length price, he/she shall inform the same to the Company Secretary at least 15 business days before the execution of transaction, giving reasons for departure from the arm’s length price. The Company Secretary shall immediately notify the matter to the Board of Directors.
6. The record of all related party transactions (including exceptional transactions that are not executed at arm’s length price) shall be placed before the ­Audit Committee of the company.
7. The record of all related party transaction shall also be placed before the Board of Directors at each Board meeting for formal approval.
8. The related party transactions which are not executed at arm’s length price will also be placed separately at each Board meeting along with necessary justification for consideration and approval of the Board and before the Audit Committee of the company.
9. The listed companies shall present the record of related party transactions together with all relevant documents, agreements, calculations and explanations to the statutory auditor for the purposes of the statutory audit.
10. All listed companies shall publish and circulate a statement along with their annual reports to setout the status of their compliance with the best practices on Transfer Pricing as setout above.
11. All listed companies shall ensure that statement of compliance with the best practices of Transfer Pricing is reviewed and certified by statutory auditors.

AUDIT COMMITTEE

COMPOSITION

1. The Board of Directors of every listed company shall establish an Audit Committee, which shall comprise not less than three members, including the chairman. Majority of the members of the Committee shall be from among the non-executive directors of the listed company and the chairman of the Audit Committee shall preferably be a non-executive director. The names of members of the Audit Committee shall be disclosed in each annual report of the listed company.

FREQUENCY OF MEETINGS

1. The Audit Committee of a listed company shall meet at least once every quarter of the financial year. These meetings shall be held prior to the approval of interim results of the listed company by its Board of Directors and before and after completion of external audit. A meeting of the Audit Committee shall also be held, if requested by the external auditors or the head of internal audit.

ATTENDANCE AT MEETINGS

1. The CFO, the head of internal audit and a representative of the external auditors shall attend meetings of the Audit Committee at which issues relating to accounts and audit are discussed.Provided that at least once a year, the Audit Committee shall meet the external auditors without the CFO and the head of internal audit being present.

   Provided further that at least once a year, the Audit Committee shall meet the head of internal audit and other members of the internal audit function without the CFO and the external auditors being present.

TERMS OF REFERENCE

1. The Board of Directors of every listed company shall determine the terms of reference of the Audit Committee. The Audit Committee shall, among other things, be responsible for recommending to the Board of Directors the appointment of external auditors by the listed company’s shareholders and shall consider any questions of resignation or removal of external auditors, audit fees and provision by external auditors of any service to the listed company in addition to audit of its financial statements. In the absence of strong grounds to proceed otherwise, the Board of Directors shall act in accordance with the recommendations of the Audit Committee in all these matters.

The terms of reference of the Audit Committee shall also include the following:

1. determination of appropriate measures to safeguard the listed company’s assets;
2. review of preliminary announcements of results prior to publication;
3. review of quarterly, half-yearly and annual financial statements of the listed company, prior to their approval by the Board of Directors, focusing on:

• major judgmental areas;
• significant adjustments resulting from the audit;
• the going-concern assumption;
• any changes in accounting policies and practices;
• compliance with applicable accounting standards; and
• compliance with listing regulations and other statutory and regulatory requirements.

 

1. facilitating the external audit and discussion with external auditors of major observations arising from interim and final audits and any matter that the auditors may wish to highlight (in the absence of management, where necessary);
2. review of management letter issued by external auditors and management’s response thereto;
3. ensuring coordination between the internal and external auditors of the listed company;
4. review of the scope and extent of internal audit and ensuring that the internal audit function has adequate resources and is appropriately placed within the listed company;
5. consideration of major findings of internal investigations and management’s response thereto;
6. ascertaining that the internal control system including financial and operational controls, accounting system and reporting structure are adequate and effective;
7. review of the listed company’s statement on internal control systems prior to endorsement by the Board of Directors;
8. instituting special projects, value for money studies or other investigations on any matter specified by the Board of Directors, in consultation with the Chief Executive and to consider remittance of any matter to the external auditors or to any other external body;
9. determination of compliance with relevant statutory requirements;
10. monitoring compliance with the best practices of corporate governance and identification of significant violations thereof; and
11. consideration of any other issue or matter as may be assigned by the Board of Directors.

REPORTING PROCEDURE

1. The Audit Committee of a listed company shall appoint a secretary of the Committee. The secretary shall circulate minutes of meetings of the Audit Committee to all members, directors and the CFO within a fortnight.

INTERNAL AUDIT

1. There shall be an internal audit function in every listed company. The head of internal audit shall have access to the chair of the Audit Committee.
2. All listed companies shall ensure that internal audit reports are provided for the review of external auditors. The auditors shall discuss any major findings in relation to the reports with the Audit Committee, which shall report matters of significance to the Board of Directors.

EXTERNAL AUDITORS

1. No listed company shall appoint as external auditors a firm of auditors which has not been given a satisfactory rating under the Quality Control Review programme of the Institute of Chartered Accountants of Pakistan.
2. No listed company shall appoint as external auditors a firm of auditors which firm or a partner of which firm is non-compliant with the International Federation of Accountants’ (IFAC) Guidelines on Code of Ethics, as adopted by the Institute of Chartered Accountants of Pakistan.
3. The Board of Directors of a listed company shall recommend appointment of external auditors for a year, as suggested by the Audit Committee. The recommendations of the Audit Committee for appointment of retiring auditors or otherwise shall be included in the Directors’ Report. In case of a recommendation for change of external auditors before the elapse of three consecutive financial years, the reasons for the same shall be included in the Directors’ Report.
4. No listed company shall appoint its auditors to provide services in addition to audit except in accordance with the regulations and shall require the auditors to observe applicable IFAC guidelines in this regard and shall ensure that the auditors do not perform management functions or make management decisions, responsibility for which remains with the Board of Directors and management of the listed company.
5. 1. All Listed Companies in the Financial Sector shall change there External Auditor every five years. Financial Sector, for this purpose, means Banks, Non Banking Finance Company (NBFCs), Modarabas and Insurance Company; and
   2. All Listed Companies other than those in the financial sector shall, at a minimum rotate the engagement partner after every five year

1. No listed company shall appoint a person as the CEO, the CFO, an internal auditor or a director of the listed company who was a partner of the firm of its external auditors (or an employee involved in the audit of the listed company) at any time during the two years preceding such appointment or is a close relative, i.e. spouse, parents, dependents and non-dependent children, of such partner (or employee).
2. Every listed company shall require external auditors to furnish a Management Letter to its Board of Directors not later than 30 days from the date of audit report.
3. Every listed company shall require a partner of the firm of its external auditors to attend the Annual General Meeting at which audited accounts are placed for consideration and approval of shareholders.

COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

1. All listed companies shall publish and circulate a statement along with their annual reports to set out the status of their compliance with the best practices of corporate governance set out above.
2. All listed companies shall ensure that the statement of compliance with the best practices of corporate governance is reviewed and certified by statutory auditors, where such compliance can be objectively verified, before publication by listed companies.
3. Where the Securities and Exchange Commission of Pakistan is satisfied that it is not practicable to comply with any of the best practices of corporate governance in a particular case, the Commission may, for reasons to be recorded, relax the same subject to such conditions as it may deem fit.

Appendix
Clause Reference	Brief Description	Manner of Enforcement	Effective Date
(i)	Representation of independent non-executive directors, including those representing minority interests, on the Board of Directors of listed companies	Voluntary	When next election is due
(ii)	Filing of consent by directors	Mandatory	When next election is due
(iii) and (iv)	Qualification and eligibility to act as a director	Mandatory	When next election is due
(v)	Election/ nomination of a broker on the Board of Directors	Voluntary	When next election is due
(vi)	Tenure of office of directors	Mandatory	Immediate
(vii), (viii)and (ix)	Responsibilities, powers and functions of the Board of Directors	Mandatory	July 1, 2002
(x), (xi)and (xii)	Meetings of the Board of Directors	Mandatory	Immediate
(xiii)	Significant issues to be placed for decision by the Board of Directors	Mandatory	July 1, 2002
(xiv)	Orientation courses	Mandatory	July 1, 2002
(xv)	Appointment and removal of CFO and Company Secretary	Mandatory	July 1, 2002
(xvi) and(xvii)	Qualification of CFO and Company Secretary	Mandatory	Immediately for new appointments
(xviii)	Requirement for CFO and Company Secretary to attend Board meetings	Mandatory	Immediate
(xix)	The directors’ report to shareholders	Mandatory	For accounting periods ending on or after June 30, 2002
(xx), (xxi),(xxii) and (xxiii)	Frequency of financial reporting	Mandatory	For accounting periods ending on or after June 30, 2002
(xxiv) and(xxv)	Responsibility for financial reporting and corporate compliance	Mandatory	For accounting periods ending on or after June 30, 2002
(xxvi)	Disclosure of interest by a director holding company’s shares	Mandatory	Immediate
(xxvii)	Auditors not to hold shares	Mandatory	Immediate
(xxviii)	Corporate ownership structure	Mandatory	July 1, 2002
(xxix)	Divestiture of shares by sponsors/ controlling interest	Mandatory	July 1, 2002
(xxx),(xxxi),(xxxii),	Audit Committee	Mandatory	July 1, 2002
(xxxiii) and(xxxiv)
(xxxv) and (xxxvi)	Internal Audit	Mandatory	July 1, 2002
(xxxvii), (xxxviii),	Appointment of external auditors	Mandatory	When next appointment of auditors is due
(xxxix) and (xl)
(xli)	Rotation of external auditors	Mandatory	When next appointment of auditors is due
(xlii)	Appointment of a partner or employee of the external auditors in a key position within the listed company	Mandatory	Immediately for new appointments
(xliii)	Management letter issued by external auditors	Mandatory	For accounting periods ending on or after June 30, 2002
(xliv)	Attendance of external auditors at Annual General Meeting	Mandatory	For accounting periods ending on or after June 30, 2002
(xlv) and (xlvi)	Compliance with the Code of Corporate Governance	Mandatory	For accounting periods ending on or after June 30, 2002

 

 

XI. CODE OF CORPORATE GOVERNANCE

BOARD OF   DIRECTORS</strong></p>
<ol start=”36″>
  <li>All listed companies shall   encourage effective representation of independent non-executive directors,   including those representing minority interests, on their Boards of Directors so   that the Board as a group includes core competencies considered relevant in the   context of each listed company. For the purpose, listed companies may take   necessary steps such that: </li>
</ol>
<ol type=”a”>
  <li> Minority shareholders as a class   are facilitated to contest election of directors by proxy solicitation, for   which purpose the listed companies may:
    <ul>
      <li> annex to the notice of general   meeting at which directors are to be elected, a statement by a candidate(s) from   among the minority shareholders who seeks to contest election to the Board of   Directors, which statement may include a profile of the candidate(s); </li>
      <li>provide information regarding   shareholding structure and copies of register of members to the candidate(s)   representing minority shareholders; and on a request by the candidate(s)   representing minority shareholders and at the cost of the company, annex to the   notice of general meeting at which?      </li>
      <li>directors are to be elected an additional   copy of proxy form duly filled in by such candidate(s) and transmit the same to   all shareholders in terms of section 178 (4) of the Companies Ordinance, 1984; </li>
    </ul>
  </li>
  <li>the Board of Directors of each   listed company includes at least one independent director representing   institutional equity interest of a banking company, Development Financial   Institution, Non-Banking Financial Institution (including a modaraba, leasing   company or investment bank), mutual fund or insurance company; and <br>
    <br>
  <strong><em>[Explanation: </em></strong>For the purpose of this clause, the   expression “independent director” means a director who is not connected with the   listed company or its promoters or directors on the basis of family relationship   and who does not have any other relationship, whether pecuniary or otherwise,   with the listed company, its associated companies, directors, executives or   related parties. The test of independence principally emanates from the fact   whether such person can be reasonably perceived as being able to exercise   independent business judgment without being subservient to any apparent form of   interference.<br>
  <br>
  Any person nominated as a director   under sections 182 and 183 of the Companies Ordinance, 1984 shall not be taken   to be an “independent director” for the above-said purposes.<br>
  <br>
  The independent director   representing an institutional investor shall be selected by such investor   through a resolution of its Board of Directors and the policy with regard to   selection of such person for election on the Board of Directors of the investee   company shall be disclosed in the Directors’ Report of the investor   company.<strong>]</strong><br>
  <br>
  executive directors, i.e.   working or whole time directors, are not more than 75% of the elected directors   including the Chief Executive: <br>
    <br>
  Provided that in special   circumstances, this condition may be relaxed by the Securities and Exchange   Commission of Pakistan.<br>
  <br>
  Provided further that nothing   contained in this clause shall apply to banking companies, which are required by   Prudential Regulation No.9 for Banks to have not more than 25% of the directors   as paid executives of the banks. </li>
</ol>
<p>ii.       The directors of listed companies   shall, at the time of filing their consent to act as such, give a declaration in   such consent that they are aware of their duties and powers under the relevant   law(s) and the listed companies’ Memorandum and Articles of Association and   the listing regulations of stock exchanges in Pakistan. </p>
<h2>QUALIFICATION AND ELIGIBILITY TO   ACT AS A DIRECTOR</h2>
<ol start=”3″ type=”i”>
  <li> No listed company shall have<strong> </strong>as a director<em>,</em> a person who is serving as a director of ten other   listed companies. </li>
  <li> No person shall be elected or   nominated as a director of a listed company if: </li>
</ol>
<ol type=”a”>
  <li> his name is not borne on the   register of National Tax Payers except where such person is a non-resident; and </li>
  <li> he has been convicted by a court of   competent jurisdiction as a defaulter in payment of any loan to a banking   company, a Development Financial Institution or a Non-Banking Financial   Institution or he, being a member of a stock exchange, has been declared as a   defaulter by such the stock exchange; and</li>
</ol>
<ol start=”5″ type=”i”>
  <li> A listed company shall endeavour   that no person is elected or nominated as a director if he or his spouse is   engaged in the business of stock brokerage (unless specifically exempted by the   Securities and Exchange Commission of Pakistan). </li>
</ol>
<h2>TENURE OF OFFICE OF DIRECTORS </h2>
<ol start=”6″ type=”i”>
  <li> The tenure of office of Directors   shall be three years. Any casual vacancy in the Board of Directors of a listed   company shall be filled up by the directors within 30 days thereof. </li>
</ol>
<h2>RESPONSIBILITIES, POWERS AND   FUNCTIONS OF BOARD OF DIRECTORS</h2>
<ol start=”7″ type=”i”>
  <li> The directors of listed companies   shall exercise their powers and carry out their fiduciary duties with a sense of   objective judgement and independence in the best interests of the listed   company. </li>
  <li> Every listed company shall ensure   that:
    <ol type=”a”>
      <li> a “Statement of Ethics and   Business Practices” is prepared and circulated annually by its Board of   Directors to establish a standard of conduct for directors and employees, which   Statement shall be signed by each director and employee in acknowledgement of   his understanding and acceptance of the standard of conduct;</li>
      <li> the Board of Directors adopt a   vision/ mission statement and overall corporate strategy for the listed company   and also formulate significant policies, having regard to the level of   materiality, as may be determined it.</li>
    </ol>
  </li>
</ol>
<p><strong>Explanation:</strong></p>
<p>Significant policies for this   purpose may include:</p>
<ul>
  <li>risk management; </li>
  <li> human resource management including   preparation of a succession plan; </li>
  <li> procurement of goods and services; </li>
  <li> marketing; </li>
  <li> determination of terms of credit   and discount to customers; </li>
  <li> write-off of bad/ doubtful debts,   advances and receivables; </li>
  <li> acquisition/ disposal of fixed   assets; </li>
  <li> investments; </li>
  <li> borrowing of moneys and the amount   in excess of which borrowings shall be sanctioned/ ratified by a general meeting   of shareholders; </li>
  <li> donations, charities, contributions   and other payments of a similar nature; </li>
  <li> determination and delegation of   financial powers; </li>
  <li> transactions or contracts with   associated companies and related parties; and    health, safety and environment </li>
</ul>
<p>A complete record of particulars of   the above-mentioned policies along with the dates on which they were approved or   amended by the Board of Directors shall be maintained.</p>
<p>The Board of Directors shall define   the level of materiality, keeping in view the specific circumstances of the   company and the recommendations of any technical or executive sub-committee of   the Board that may be set up for the purpose;</p>
<ol start=”3″ type=”a”>
  <li> the Board of Directors   establish a system of sound internal control, which is effectively implemented   at all levels within the company; </li>
  <li> the following powers are   exercised by the Board of Directors on behalf of the company and decisions on   material transactions or significant matters are documented by a resolution   passed at a meeting of the Board:
    <ul>
      <li>investment and disinvestment of   funds where the maturity period of such investments is six months or more,   except in the case of banking companies, trusts, mutual funds and insurance   companies;</li>
      <li> determination of the nature of   loans and advances made by the company and fixing a monetary limit thereof; </li>
      <li> write-off of bad debts, advances   and receivables and determination of a reasonable provision for doubtful debts; </li>
      <li>write-off of inventories and other   assets; and </li>
      <li>determination of the terms of and   the circumstances in which a law suit may be compromised and a claim/ right in   favour of the company may be waived, released, extinguished or relinquished;</li>
    </ul>
  </li>
  <li> appointment, remuneration and   terms and conditions of employment of the Chief Executive Officer (CEO) and   other executive directors of the listed company are determined and approved by   the Board of Directors; and</li>
  <li> in the case of a modaraba or a   Non-Banking Financial Institution, whose main business is investment in listed   securities, the Board of Directors approve and adopt an investment policy, which   is stated in each annual report of the modaraba/ Non-Banking Financial   Institution. </li>
</ol>
<p><strong><em>Explanation:</em></strong></p>
<p>The investment policy shall inter   alia state:</p>
<ul>
  <li>that the modaraba/ Non-Banking   Financial Institution shall not invest in a connected person, as defined in the   Asset Management Companies Rules, 1995, and shall provide a list of all such   connected persons; </li>
  <li>that the modaraba/ Non-Banking   Financial Institution shall not invest in shares of unlisted companies; and </li>
  <li>the criteria for investment in   listed securities. </li>
</ul>
<p>The Net Asset Value of each   modaraba/ Non-Banking Financial Institution shall be provided for publication on   a monthly basis to the stock exchange on which its shares/ certificates are   listed. </p>
<ol start=”9″ type=”i”>
  <li>The Chairman of a listed company   shall preferably be elected from among the non-executive directors of the listed   company. The Board of Directors shall clearly define the respective roles and   responsibilities of the Chairman and Chief Executive, whether or not these   offices are held by separate individuals or the same individual. </li>
</ol>
<p><strong>MEETINGS OF THE   BOARD</strong></p>
<ol start=”10″ type=”i”>
  <li>The Chairman of a listed company,   if present, shall preside over meetings of the Board of Directors. </li>
  <li>The Board of Directors of a listed   company shall meet at least once in every quarter of the financial year. Written   notices (including agenda) of meetings shall be circulated not less than seven   days before the meetings, except in the case of emergency meetings, where the   notice period may be reduced or waived. </li>
  <li> The Chairman of a listed   company shall ensure that minutes of meetings of the Board of Directors are   appropriately recorded. The minutes of meetings shall be circulated to directors   and officers entitled to attend Board meetings not later than 30 days thereof,   unless a shorter period is provided in the listed company’s Articles of   Association. </li>
</ol>
<p>In the event that a director of a   listed company is of the view that his dissenting note has not been   satisfactorily recorded in the minutes of a meeting of the Board of Directors,   he may refer the matter to the Company Secretary. The director may require the   note to be appended to the minutes, failing which he may file an objection with   the Securities and Exchange Commission of Pakistan in the form of a statement to   that effect.</p>
<p><strong>KEY INFORMATION TO BE PLACED FOR   DECISION BY BOARD OF DIRECTORS</strong> </p>
<p>xiii.  In order to strengthen and   formalize corporate decision-making process, significant issues shall be placed   for the information, consideration and decision of the Boards of Directors of   listed companies. </p>
<p>Significant issues for this purpose   may include:</p>
<ul>
  <li>annual business plans, cash flow   projections, forecasts and long term plans; </li>
  <li>budgets including capital, manpower   and overhead budgets, along with variance analyses; </li>
  <li>quarterly operating results of the   listed company as a whole and in terms of its operating divisions or business   segments; </li>
  <li>internal audit reports, including   cases of fraud or irregularities of a material nature; </li>
  <li>management letter issued by the   external auditors; </li>
  <li>details of joint venture or   collaboration agreements or agreements with distributors, agents, etc; </li>
  <li>promulgation or amendment of a law,   rule or regulation, enforcement of an accounting standard and such other matters   as may affect the listed company; </li>
  <li>status and implications of any law   suit or proceedings of material nature, filed by or against the listed company; </li>
  <li>any show cause, demand or   prosecution notice received from revenue or regulatory authorities, which may be   material; </li>
  <li>default in payment of principal   and/or interest, including penalties on late payments and other dues, to a   creditor, bank or financial institution or default in payment of public deposit; </li>
  <li>failure to recover material amounts   of loans, advances, and deposits made by the listed company, including trade   debts and inter-corporate finances; </li>
  <li>any significant accidents,   dangerous occurrences and instances of pollution and environmental problems   involving the listed company; </li>
  <li>significant public or product   liability claims likely to be made against the listed company, including any   adverse judgement or order made on the conduct of the listed company or of   another company that may bear negatively on the listed company; </li>
  <li>disputes with labour and their   proposed solutions, any agreement with the labour union or Collective Bargaining   Agent and any charter of demands on the listed company; and </li>
  <li>payment for   goodwill, brand equity or intellectual property. </li>
</ul>
<p><strong>ORIENTATION COURSES</strong></p>
<ol start=”14″ type=”i”>
  <li> All listed companies shall make   appropriate arrangements to carry out orientation courses for their directors to   acquaint them with their duties and responsibilities and enable them to manage   the affairs of the listed companies on behalf of shareholders. </li>
</ol>
<h2>CHIEF FINANCIAL OFFICER (CFO) AND   COMPANY SECRETARY</h2>
<p><strong>APPOINTMENT AND   APPROVAL</strong></p>
<ol start=”15″ type=”i”>
  <li> The appointment, remuneration and   terms and conditions of employment of the Chief Financial Officer (CFO), the   Company Secretary and the head of internal audit of listed companies shall be   determined by the CEO with the approval of the Board of Directors. <br>
    <br>
  The CFO or the Company Secretary of   listed companies shall not be removed except by the CEO with the approval of the   Board of Directors.</li>
</ol>
<p><strong>QUALIFICATION OF CFO AND COMPANY   SECRETARY</strong></p>
<ol start=”16″ type=”i”>
  <li>No person shall be appointed as the   CFO of a listed company unless: </li>
</ol>
<ol type=”a”>
  <li> he is a member of a recognized body   of professional accountants; or </li>
  <li> he is a graduate from a recognized   university or equivalent, having at least five years experience in handling   financial or corporate affairs of a listed public company or a bank or a   financial institution. </li>
</ol>
<ol start=”17″ type=”i”>
  <li>No person shall be appointed as the   Company Secretary of a listed company unless he is:
    <ol type=”a”>
      <li> a member of a recognized body of   professional accountants; or</li>
      <li> a member of a recognized body of   corporate/ chartered secretaries; or </li>
      <li> a lawyer; or</li>
      <li>a graduate from a recognized   university or equivalent, having at least five years experience of handling   corporate affairs of a listed public company or corporation. </li>
    </ol>
  </li>
</ol>
<p><strong>REQUIREMENT TO ATTEND BOARD   MEETINGS</strong></p>
<ol start=”18″ type=”i”>
  <li>The CFO and the Company Secretary   of a listed company shall attend meetings of the Board of Directors. <br>
    <br>
  Provided that unless elected as a   director, the CFO or the Company Secretary shall not be deemed to be a director   or entitled to cast a vote at meetings of the Board of Directors for the purpose   of this clause. Provided further that the CFO and/ or the Company Secretary   shall not attend such part of a meeting of the Board of Directors, which   involves consideration of an agenda item relating to the CFO, Company Secretary,   CEO or any director.</li>
</ol>
<h2>CORPORATE AND FINANCIAL REPORTING   FRAMEWORK</h2>
<p><strong>THE DIRECTORS’ REPORT TO   SHAREHOLDERS</strong></p>
<ol start=”19″ type=”i”>
  <li> The directors of listed companies   shall include statements to the following effect in the Directors’ Report,   prepared under section 236 of the Companies Ordinance, 1984:
    <ol type=”a”>
      <li> The financial statements, prepared   by the management of the listed company, present fairly its state of affairs,   the result of its operations, cash flows and changes in equity.</li>
      <li>Proper books of account of the   listed company have been maintained.</li>
      <li>Appropriate accounting policies   have been consistently applied in preparation of financial statements and   accounting estimates are based on reasonable and prudent judgment. </li>
      <li> International Accounting Standards,   as applicable in Pakistan, have been followed in preparation of financial   statements and any departure therefrom has been adequately disclosed.</li>
      <li> The system of internal control is   sound in design and has been effectively implemented and monitored. </li>
      <li> There are no significant doubts   upon the <em>listed</em> company’s ability to continue as a going concern. </li>
      <li> There has been no material   departure from the best practices of corporate governance, as detailed in the   listing regulations. </li>
    </ol>
    </li>
</ol>
<p>The Directors’ Reports of listed   companies shall also include the following, where necessary:</p>
<ol type=”a”>
  <li> If the listed company is not   considered to be a going concern, the fact along with reasons shall be   disclosed. </li>
  <li> Significant deviations from last   year in operating results of the listed company shall be highlighted and reasons   thereof shall be explained.</li>
  <li>Key operating and financial data of   last six years shall be summarised. </li>
  <li>If the listed company has not   declared dividend or issued bonus shares for any year, the reasons thereof shall   be given. </li>
  <li>Where any statutory payment on   account of taxes, duties, levies and charges is outstanding, the amount together   with a brief description and reasons for the same shall be disclosed. </li>
  <li>Significant plans and decisions,   such as corporate restructuring, business expansion and discontinuance of   operations, shall be outlined along with future prospects, risks and   uncertainties surrounding the listed company. </li>
  <li>A statement as to the value of   investments of provident, gratuity and pension funds, based on their respective   audited accounts, shall be included.</li>
  <li>The number of Board meetings held   during the year and attendance by each director shall be disclosed. </li>
  <li>The pattern of shareholding shall   be reported to disclose the aggregate number of shares (along with name wise   details where stated below) held by: </li>
</ol>
<ul>
  <li>associated companies, undertakings   and related parties (name wise details); </li>
  <li>NIT and ICP (name wise details); </li>
  <li>directors, CEO and their spouse and   minor children (name wise details); </li>
  <li>executives; </li>
  <li>public sector companies and   corporations; </li>
  <li>banks, Development Finance   Institutions, Non-Banking Finance Institutions, insurance companies, modarabas   and mutual funds; and </li>
  <li>shareholders holding ten percent or   more voting interest in the<em> listed </em>company (name wise details). </li>
</ul>
<p><strong><em>Explanation: </em></strong>For the purpose of this clause,   clause (b) of direction (i) and direction (xxiii), the expression   “executive” means an employee of a listed company other than the CEO and   directors whose basic salary exceeds five hundred thousand rupees in a financial   year.</p>
<ol start=”10″ type=”a”>
  <li> All trades in the shares of the   listed company, carried out by its directors, CEO, CFO, Company Secretary and   their spouses and minor children shall also be disclosed.</li>
</ol>
<p><strong>FREQUENCY OF FINANCIAL   REPORTING</strong></p>
<ol start=”20″ type=”i”>
  <li> The quarterly unaudited financial   statements of listed companies shall be published and circulated along with   directors’ review on the affairs of the listed company for the quarter. </li>
  <li> All listed companies shall ensure   that half-yearly financial statements are subjected to a limited scope review by   the statutory auditors in such manner and according to such terms and conditions   as may be determined by the Institute of Chartered Accountants of Pakistan and   approved by the Securities and Exchange Commission of Pakistan.</li>
  <li> All listed companies shall ensure   that the annual audited financial statements are circulated not later than four   months from the close of the financial year. </li>
  <li>Every listed company shall   immediately disseminate to the Securities and Exchange Commission of Pakistan   and the stock exchange on which its shares are listed all material information   relating to the business and other affairs of the listed company that will   affect the market price of its shares. Mode of dissemination of information   shall be prescribed by the stock exchange on which shares of the company are   listed. <br>
    <br>
  This information may include but   shall not be restricted to information regarding a joint venture, merger or   acquisition or loss of any material contract; purchase or sale of significant   assets; any unforeseen or undisclosed impairment of assets due to technological   obsolescence, etc.; delay/ loss of production due to strike, fire, natural   calamities, major breakdown, etc.; issue or redemption of any securities; a   major change in borrowings including any default in repayment or rescheduling of   loans; and change in directors, Chairman or CEO of the listed   company.</li>
</ol>
<p><strong>RESPONSIBILITY FOR FINANCIAL   REPORTING AND CORPORATE COMPLIANCE</strong></p>
<ol start=”24″ type=”i”>
  <li>No listed company shall circulate   its financial statements unless the CEO and the CFO present the financial   statements, duly endorsed under their respective signatures, for consideration   and approval of the Board of Directors and the Board, after consideration and   approval, authorize the signing of financial statements for issuance and   circulation. </li>
  <li>The Company Secretary of a listed   company shall furnish a Secretarial Compliance Certificate, in the prescribed   form, as part of the annual return filed with the Reg-istrar of Companies to   certify that the secretarial and corporate requirements of the Companies   Ordinance, 1984 have been duly complied with. </li>
</ol>
<p><strong>DISCLOSURE OF INTEREST BY A   DIRECTOR HOLDING COMPANY’S SHARES</strong></p>
<ol start=”26″ type=”i”>
  <li>Where any director, CEO or   executive of a listed company or their spouses sell, buy or take any position,   whether directly or indirectly, in shares of the listed company of which he is a   director, CEO or executive, as the case may be, he shall immediately notify in   writing the Company Secretary of his intentions. Such director, CEO or   executive, as the case may be, shall also deliver a written record of the price,   number of shares, form of share certificates (i.e. whether physical or   electronic within the Central Depository System) and nature of transaction to   the Company Secretary within four days of effecting the transaction. The notice   of the director, CEO or executive, as the case may be, shall be presented by the   Company Secretary at the meeting of the Board of Directors immediately   subsequent to such transaction. In the event of default by a director, CEO or   executive to give a written notice or deliver a written record, the Company   Secretary shall place the matter before the Board of Directors in its immediate   next meeting: <br>
    <br>
  Provided that each listed company   shall determine a closed period prior to the announcement of interim/ final   results and any business decision, which may materially affect the market price   of its shares. No director, CEO or executive shall, directly or indirectly, deal   in the shares of the listed company in any manner during the closed   period.</li>
</ol>
<p><strong>AUDITORS NOT TO HOLD   SHARES</strong></p>
<ol start=”27″ type=”i”>
  <li>All listed companies shall ensure   that the firm of external auditors or any partner in the firm of external   auditors and his spouse and minor children do not at any time hold, purchase,   sell or take any position in shares of the listed company or any of its   associated companies or undertakings: <br>
    <br>
  Provided that where a firm or a   partner or his spouse or minor child owns shares in a listed company, being the   audit client, prior to the appointment as auditors, such listed company shall   take measures to ensure that the auditors disclose the interest to the listed   company within 14 days of appointment and divest themselves of such interest not   later than 90 days thereof.</li>
</ol>
<p><strong>CORPORATE OWNERSHIP   STRUCTURE</strong></p>
<ol start=”28″ type=”i”>
  <li>Every company which is proposed to   be listed shall, at the time of public offering, offer not less than Rs. 100   million or 20% of the share capital of the company, whichever is higher, to the   general public unless the limit is relaxed by the stock exchange with the   approval of the Securities and Exchange Commission of Pakistan. </li>
</ol>
<p><strong>DIVESTURE OF SHARES BY   SPONSORS/CONTROLLING INTEREST</strong></p>
<ol start=”29″ type=”i”>
  <li> In the event of divestiture of not   less than 75% of the total shareholding of a listed company, other than a   divestiture by non-resident shareholder(s) in favour of other non-resident   shareholder(s) or a disinvestment through the process of privatization by the   Federal or Provincial Government, at a price higher than the market value ruling   at the time of divestiture, it shall be desirable and expected of the directors   of the listed company to allow the transfer of shares after it has been   ascertained that an offer in writing has been made to the minority shareholders   for acquisition of their shares at the same price at which the divestiture of   majority shares was contemplated. Where the offer price to minority shareholders   is lower than the price offered for acquisition of controlling interest, such   offer price shall be subject to the approval of the Securities and Exchange   Commission of Pakistan. </li>
</ol>

X. LISTING AND ANNUAL FEES

1. A company applying for listing on the Exchange, shall pay an initial listing fee equivalent to 0.1% of the PAID‑UP‑CAPITAL subject to a respective minimum and maximum limit of rupees one hundred thousand or rupees one million as the case may be.

   Provided that in case of debt instruments or mutual funds, the initial listing fee shall be charged at the rate of 1/25th of 1% of the total value of such instrument/fund subject to a maximum of Rs. 200,000/-

2. Whenever a listed company increases the paid‑up‑capital of any class or class of its shares, or securities listed on the Exchange, it shall pay to the Exchange a fee equivalent to 0.1% of such increase.
3. Every listed company shall pay, in respect of each financial year of the Exchange, commencing from 1st July and ending on the 30th June next, an annual listing fee, which shall be payable by or before 30th September in each calendar year, as per following Schedule:

   Provided that the issuers of debt instruments would be required to pay a flat amount of Rs. 10,000/- irrespective of the size of the total issue

   Provided that the Board may revise the above fees or any of the slabs or add new slabs with the approval of the Authority.

   Provided further that every company applying for listing shall pay annual listing fee for the entire financial year of the Exchange along with the listing application irrespective of the date of its listing during that financial year.

4. The above listing fee or any other sum fixed by the Board shall be payable by 30th September in advance for every financial year.
5. Failure to pay the annual fee by 30th September shall make the company liable to pay a surcharge at the rate of 1.5% (one and a half percent) per month or part thereof, until payment. However, if reasonable grounds are adduced for non or delayed payment of annual fee, the Exchange may, reduce or, waive the surcharge liability.
6. A company, applying for enlistment on the Exchange shall, in addition to other fees, pay a sum of Rs. 10,000/‑ as service charges.

1. All Exchange dues shall be paid by, cheques, pay orders or bank drafts payable to the Exchange at any bank branch located in Islamabad.
2. Without prejudice to the action with the Exchange may take under these Regulations in the event of default in payment of its dues, nothing shall prevent the Exchange from recovering such dues through posting defaulters names on the notice board of the Exchange or by invoking the process of law and obtaining order of a competent court.

1. Without prejudice to various specific or other penalties provided or available under these Regulations the Exchange shall have powers to suspend, or de-list a company or place it on the "Defaulters’ Counter"
   which in the opinion of the Exchange, such company has defaulted or contravened any Listing Regulations;
2. The suspension of delisting under the preceding sub‑regulation shall be communicated to the company and simultaneously notified to the trade, inter alia, by posting it on the notice board of the Exchange and publishing it, if deemed necessary, in the official Quotation List or a Circular or intimation issued by the Exchange
3. Trading in the shares and securities of the suspended or delisted company shall forthwith cease and shall not be recommenced until the suspension is withdrawn or the listing restored by order of the Board.

31-D Time Frame for Completion for Requirements

1. The company shall immediately convey the decision of its Board of Directors to de-list the securities, provided that intimation of such decision to the Exchange shall be supported with a copy of the relevant resolution passed by the Board of Directors in this regard.
2. Within one week of the aforementioned intimation, the company will furnish its sponsors’ undertaking to purchase the securities owned by persons other than the sponsors at a purchase price. On receipt of such undertaking, the Exchange shall be empowered by the company within 15 days of the date of such request by the Exchange.
3. The Board on its own or on the basis of recommendations of the Special Committee, will determine/approve the purchase price. The decision of the Board will be communicated to the sponsors/company and shall also be notified and announced immediately.

   Provided that any member of the Board and/or Special Committee holding 2% or more shares of the company applying for voluntary de-listing will not participate in the deliberations while the case of the company is considered by the Board/Committee.

4. The sponsors will be required to convey their acceptance/refusal to the purchase price approved by the Board within 7 days of conveying of the relevant decision to them.

   If the company wishes to appeal this decision to the Commission it must do so within 10 days of the decision in which case no further steps will betaken on the de-listing application until the Commission determines the purchase price.

5. Once the purchase price has been finalised either by determination by the Commission in appeal or by the sponsors accepting the price stipulated by the Exchange, the company will be required to comply with the following procedure: – 

1. To obtain approval of the proposal of voluntary de-listing in the general meeting of the holders of the securities within 30 days of the acceptance of sponsors.
2. After approval of the general meeting, the requirements under Voluntary Delisting Regulations shall be completed within 7 days of the general meeting, to commence the purchase of shares.
3. The sponsors will purchase the securities for a period of 60 days.
4. Upon expiry of the said purchase period, the company will submit the relevant documents/information to the Exchange within a period of 21 days.
5. After receipt of the required documents/information and compliance of the relevant requirements as stipulated by the Exchange, the securities shall stand delisted after a period of 30 days. 
6. In case of non-acceptance of the price determined by the Exchange as the purchase price, the company shall file an appeal with the Commission within 10 days of the date of refusal for determining the price under intimation to the Exchange. On finalizing the price by the Commission, the procedure as laid-down above will be followed.

 

31. -E Relaxation of Rules:

Where the Exchange is satisfied that it is not practicable to comply with any requirement of these Regulations in a particular case or class of cases, the Exchange may, for any reason to be recorded, relax such requirement subject to such conditions as it may deem fit.

32. -F Penalty:

Whoever fails or refuses to comply with, or contravenes any provision of these Regulations, or knowingly and willfully authorizes or permits such failure, refusal or contravention shall, in addition to any other liability under the Regulations, be also liable to fine not exceeding two hundred thousand rupees for each default, and, in case of continuous failure, refusal or contravention, to a further fine not exceeding five thousand rupees for every day after the first during which such contravention continues.

31 -C Procedure for voluntary de-listing:-

31. -C    Procedure for voluntary de-listing: –
    1. A formal application shall be made by the company for de-listing supported by reasons thereof and the proposed purchase price along with non- refundable application fee of Rs. 100,000/- (Rupees One Hundred Thousand only) to be paid by the sponsors.
    2. On approval by the Exchange of the application, the company shall call a general meeting of its security holders and pass a special resolution approved by not less than ¾ of their number present at such meeting resolving that the securities be de-listed on the terms stipulated by the Exchange. The sponsors will not vote against buy-back/de-listing resolution in the general meeting.
    3. A copy of special resolution referred to above shall be sent to the Exchange immediately along with a complete list of holders of the security held by the majority security holders and others, their names/category, the number of securities and addresses.
    4. Together with the application for de-listing, the company must submit an undertaking from a Purchase Agent (who may be a commercial bank, or an investment bank or a member of the Exchange) on behalf of the majority security holders which will constitute an irrevocable open offer to purchase at the relevant purchase price the securities from the other security holders. The said offer to remain valid at least for a period of 60 days or as may be fixed by the Exchange from the date of commencement of purchase. The purchasing agent will provide a bank guarantee in an amount and such format as is demanded by the Exchange to secure this obligation and the said bank guarantee will remain valid till at least 15 days from the expiry date of the said open offer or when all outstanding securities have been purchased by the majority security holders whichever is earlier

       Provided that where a member of the Exchange is appointed as Purchase Agent and the total buy-back amount does not exceed Rs. 2.5 million, the requirement of bank guarantee can be replaced with the undertaking of such member of the Exchange on the prescribed format.

       Provided further that in case of appointment of purchase agent other than a member of the Exchange, all trade shall be routed through a member of the Exchange.

       Provided further that all the trades during the initial period of 60 days will be conducted on ISE Computerized Trading System only irrespective of marketable lot. The purchase agent will be required to maintain a live bid in the system at the minimum purchase price approved by the Exchange. The purchase price shall be based on market forces, subject to minimum purchase price determined by the Exchange

    5. The application for de-listing shall be supported by a written consent of the purchase agent to act as agent for purchase of the securities to be de-listed on behalf of the majority security holders as contemplated by these Regulations.
    6. The company shall convey to all the holders securities other than majority holders on their addresses available in the records of the company through registered post the decision taken in their General Meeting to purchase the securities together with a copy of the special resolution and also publish a notice in this behalf duly approved by the Exchange through two widely circulated newspapers including one of Islamabad.
    7. The company shall also submit the following information on completion of the period of purchase of securities to be de-listed:

1. Total number of issued securities (with percentage)
2. Securities owned by majority security holders before the offer (with percentage)
3. Securities bought under the offer (with percentage)
4. Total securities currently owned by majority security holders (with percentage)
5. Securities still outstanding with majority holders (with percentage)
6. Amount of Bank Guarantee required @ Rs. ________ calculated as higher of minimum purchase price or the price on the day of closing of the initial offer of the sponsors per outstanding security.

8. a) With regard to the outstanding securities identified in para (e) above, the sponsors shall continue to remain obliged to purchase the same at the higher of minimum purchase price or the price on the day of closing of the initial offer of the sponsors for a  period of 12 months from the day following the expiry of initial buy-back period of 60 days and the sponsors shall submit a bank guarantee in an amount and format acceptable to the Exchange to secure such obligation. 

   Provided that the requirement of submission of bank guarantee will not be applicable where a member of the Exchange act as purchase agent on behalf of the sponsors. In such a situation, the purchase agent will be required to submit an undertaking in the format prescribed by the Exchange.

   b) The company once allowed de-listing under these Regulations will not be allowed re-listing of any of it’s securities which have been de-listed at least for a period of five years from the date of delisting. However, the Exchange may allow, on case to case basis, listing of such securities on Over-the Counter (OTC) market.

IX. DE­LISTING, SUSPENSION AND DEFAULTERS' COUNTER

1. A listed company may be de-listed, suspended or placed on the Defaulters’ Counter for any of the following reasons:-
   1. if its securities are quoted below 50% of face value for a continuous period of three years.

      Provided that if the shares of the company quoted at 50% or above of their face value then such a rate is maintained for a continuous period of thirty working days;

   2. if it has failed to declare dividend or bonus:-

1. for five years from the date of declaration of last dividend or bonus; or
2. in the case of manufacturing companies, for 5 years from the date of commencement of production; and
3. for five years from the date of commencement of business in all other cases.
   3. if it has failed to hold its Annual General Meeting for a continuous period of 3 years;
   4. if it has gone into liquidation either voluntarily or under court order;
   5. if it has failed to pay the annual listing fees as prescribed in these regulations payable to the Exchange for a period of 2 years or penalty imposed under these regulations or any other dues payable to the Exchange;
   6. if it has failed to comply with the requirements of any of these regulations;
      if the company for any reason whatsoever refuses to join CDS after its securities have been declared eligible securities by the CDC;
   7. no company which has been de‑listed or suspended shall be restored and its shares re-quoted until it removes the causes of de‑listing/suspension and receives the assent of the Board for the restoration

2. No company will be de-listed or placed on Defaulters’ Counter, under these Listing Regulations, unless such company has been given an opportunity of being heard.

   Provided, however, placement of a company on the Defaulters’ Counter for reasons mentioned above in sub-regulation (1) above, shall not impair the power of the Exchange to de-list such company subsequently, if causes mentioned in paras (a) & (b) of sub-regulation (1) are not removed within a reasonable time, or if in the opinion of the Board, such causes will not be removed by the company within a reasonable time, and/or de-listing of such company becomes necessary in the public interest.

31. -A Voluntary de-listing: –
1. Any company intending to seek voluntary de-listing from the Exchange shall intimate to the Exchange, immediately, of the intention of the majority security holders/sponsors to purchase all securities, without exception, from all the security holders with the purpose to de-list the security along with the reasons thereof. Such intimation shall also include minimum price at which the securities are proposed to be purchased.

   Provided that the minimum purchase price are proposed by the sponsors will be the highest of the benchmark price based on any of the following:

1. Current Market Price
2. Average Market Price (Annualized)
3. Break-up Value based on revaluation of assets.
4. Earnings Multiplier approach (for profitable companies)
5. The maximum price at which the Sponsors had purchased these shares from the open market in the preceding one year.

Explanation:

1. Current Market Price:

Current Market Price shall be the closing price on the date the application for de-listing of the company is received by the Exchange.

2. Average Market Price (Annualized):

Average Market Price shall be the daily closing price of shares of the company for the period of three years immediately preceding the date of application for de-listing is received by the Exchange.

3. Break-up Value based on revaluation of assets:

The adjusted Break-up Value which shall be determined by the auditors of the company in accordance with the International Accounting Standards on the basis of the latest audited accounts of the company which must be made to a date not less than 6 months from the date the application is received by the Exchange, on the basis of revalued assets, and such revaluation of the assets must have been undertaken not more than one year prior to the date of the application by category ‘A’ Professional Valuer approved by the Pakistan Banks Association.

4. Earning Multiplier approach (for profitable companies)

Profitable Companies:

Profitable companies shall be the companies that have earned after tax profit in their last audited accounts or their weighted average EPS of last three years is positive.

Fair value = Estimated Earnings * P/E ratio.

This approach is based on the identity that a stock’s current price is the product of its actual earning per share and the P/E ratio. The P/E ratio is calculated by dividing the current price by the actual earning per share. To determine the value of stock, both the earnings and the P/E ratio will have to be estimated.

Price may be determined as a multiple of the P/E ratio of the related sector as on the date of application for the voluntary buy-back of shares is received by the Exchange. Earning per share may be based on the higher of the latest audited accounts of the companies in that sector or a weighted average earning per share of last 3 years of 50%, 33% and 17% for the latest, second latest and third accounting period respectively of those companies.

1. The final minimum purchase price of the securities to be de-listed shall be fixed with the approval of the Exchange.

At the same time the Exchange shall determine the minimum percentage of securities to be purchased by sponsors to qualify for de-listing and the same will be communicated to the company.

2. In case of disagreement of sponsors on minimum percentage to be purchased as determined by the Exchange, the sponsors will file an appeal with the commission within 10 days of receipt of communication of such determination under intimation to the Exchange. The decision taken by the Commission will be final and binding.
3. The sponsors/majority shareholders shall submit an undertaking that they will abide by these Regulations which pertain to buy-back of shares/voluntary de-listing of securities.

iv) Until the decision on the sponsors’ offer for buy-back of shares is taken by the Exchange or the commission, as the case may be, the sponsors will not be allowed to withdraw their such offer.

31. -B Voluntary de-listing of a security shall be subject to the following: –

1. Approval of the proposal in general meeting of the company by not less than ¾ of the security holders present in person or by the proxy at such general meeting.
2. Compliance by the company with the prescribed procedure, guidelines/criteria and other terms and conditions may be laid down by the Exchange.

The Exchange may for any reason whatsoever refuse to accept the proposal of the company, the purchase price and/or the request to de-list the securities.