Certificate Finance and Accounting Professional 02

CORPORATE LAW
BY
SIR MUHAMMAD IBRAHIM

VOLUME 02

COMPILED BY: SIR MUHAMMAD IBRAHIM

ABOUT the BOOK CFAP 02 – Corporate Law

"Corporate Law, being an extensive and complex subject, is often challenging for students to
comprehend and connect. Collaborating with my team, I have compiled a comprehensive book that
addresses this difficulty by encompassing all relevant sections, interpretations, illustrations, case studies
and practical examples. Moreover, the book facilitates a seamless understanding through effective
linking of various sections and regulations."

ABOUT THE AUTHOR

SIR IBRAHIM is a great poet and a sports loving person. He is a Qualified CHARTERED ACCOUNTANT. He

qualified in 2013 and is associated with Deloitte Since 2009 and is currently working as a

Director in Audit and Assurance Section of Yousuf Adil Chartered Accountants (ICF Deloitte).

With his 14 years of practical experience in an audit firm, he engaged in the audit of clients from
versatile

sectors such as:

• Oil and Gas Sector

• Banking Sector

• Financial Institution – AMC and Mutual Funds

• FMCG

• Manufacturing Sector

• Trading Sector

• Service Industry

• NPO

He was also associated with Deloitte London and Deloitte Qatar.

In addition to audit, He is also the learning manager of Deloitte where his primary responsibility is to

obtain training and implement the Deloitte Global methodologies and conduct the training for all

employees and students.

Sir Ibrahim is the International Certified Trainer as per Deloitte Global Criteria based on the training

conducted and obtained in Deloitte Spain, Barcelona.

He is also a certified Deloitte Global Practice Reviewer to carry out practice review of international

member firms.
One of the key reasons why he is teaching to CA students is to transfer his knowledge and skills to

students, assist them to better understanding of Law and help them not only to pass exams but to

gain insight on practical applications.

This book is dedicated to all my Students who have always been so eager and passionate to understand

with logical linking and drafting, that motivated me to learn and research more.

A Special thanks to all my Special Students for their love, respect and support.
Table of Content

Table of Content
Chapters Topics Page

1 Accounts and Annual Return 1

2 SHARE CAPITAL 79

3 TRANSFER OF SHARES AND OTHER SECURITIES (SECTION: 71 – 80) 97

4 BOOK CLOSURE AND CLOSE PERIOD 111

5 PROSPECTUS AND COMMENCEMENT OF BUSINESS 121

6 BUY BACK OF SHARES REGULATIONS 145

7 CONVERSION OF TYPES OF COMPANIES 175

8 REDUCTION OF SHARE CAPITAL 213

9 TAKEOVERS 221

10 INSIDER TRADINGINFORMATION 271

11 PRICE SENSITIVE 283

12 REVERSE MERGER 315

13 INVITATION OF DEPOSIT 329

14 SHARES CONCEPT - 335

15 – SECURITIES ACT, 2015

PUBLIC OFFERING 347

16 PSX RULE BOOK LISTING REGULATIONS PORTION 357

17 FREE FLOAT DEFINITION 365

18 PUBLIC OFFERING REGULATIONS, 2017 369

19 PUBLIC OFFERING OF DEBT SECURITIES 417

20 SPECIAL PURPOSE ACQUISITION COMPANY 431

21 REMAINING AREAS OF PSX RULE BOOK 447

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CHAPTER
01

ACCOUNTS AND
ANNUAL RETURN

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Section 220 & 223

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Practice Question from Study Text

Practice Question 01:

SQL Plastics Limited is a wholly owned subsidiary of a foreign company and has its registered office in
Karachi.
(a) List the books of account the company is required to maintain.
(b) State the conditions which the directors shall be required to comply with if they want to keep the books
of account at SQL's factory located in Peshawar.
Solution;
(a) SQL Plastic Limited must keep proper books of account and other relevant books and papers and
financial statements for every financial year which give a true and fair view of the state of the affairs of
the company, in the case of a company engaged in production, processing, manufacturing or mining
activities, such particulars relating to utilisation of material or labour or the other inputs or items of cost
shall also be maintained.
(b) As the directors of SQL Plastic Limited intend to keep the books of account at a place other than the
registered office, SQL Plastic Limited must file with the registrar a notice in writing within 7 days of the
derision, giving the full address of the other place.

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Practical Example

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The accounting policies adopted in preparation of these unconsolidated financial statements are
consistent with those of the previous financial year.
5.1 Cash and Cash Equivalents
Cash and cash equivalents include cash and balances with treasury banks, balances with other banks
and call money lendings, less call borrowings and overdrawn nostro accounts.
5.3 Investments
Investments other than those categorised as held-for-trading are initially recognised at fair value which
includes transaction costs associated with the investments. Investments classified as held-for-trading
are initially recognised at fair value, and transaction costs are expensed in the profit and loss account.
All regular way purchases / sales of investments are recognised on the trade date, i.e., the date the
Bank commits to purchase / sell the investments. Regular way purchases or sales of investments
require delivery of securities within the time frame generally established by regulation or convention in
the market place.
The Bank has classified its investment portfolio, except for investments in subsidiaries, associates and
joint ventures into ‘held-for-trading’, ‘held-to-maturity’ and ‘available-for-sale’ as follows:
• Held-for-trading – These are securities which are acquired with the intention to trade by taking
advantage of short-term market / interest rate movements and are to be sold within ninety (90)
days. These are carried at market value, with the related unrealised gain / (loss) on revaluation
being taken to profit and loss account.
• Held-to-maturity – These are securities with fixed or determinable payments and fixed maturity
that are held with the intention and ability to hold to maturity. These are carried at amortised cost.
• Available-for-sale – These are investments that do not fall under the held-for-trading or held-to-
maturity categories. These are carried at market value except in case of unquoted securities
where market value is not available, which are carried at cost less provision for diminution in
value, if any. Surplus / (deficit) on revaluation is taken to ‘surplus / (deficit) on revaluation of
assets’ account shown in equity. Provision for diminution in value of investments in respect of
unquoted shares is calculated with reference to break-up value of the same. On derecognition or
impairment in quoted available-for-sale investments, the cumulative gain or loss previously
reported as ‘surplus / (deficit) on revaluation of assets’ in equity is included in the profit and loss
account for the year.
• Provision for diminution in value of investments in unquoted debt securities is calculated as per
the SBP’s Prudential Regulations.
• Held-for-trading and quoted available-for-sale securities are marked to market with reference to
ready quotes on Reuters page or MUFAP (PKRV / PKISRV / PKFRV) or the Stock Exchanges,
as the case may be.
• Investments in subsidiaries, associates and joint venture companies are stated at cost. Provision
is made for impairment in value, if any.
5.3 Repurchase and resale agreements
Securities sold with a simultaneous commitment to repurchase at a specified future date (repos)
continue to be recognised in the statement of financial position and are measured in accordance with
accounting policies for investment securities. The counterparty liability for amounts received under
these agreements is included in borrowings. The difference between sale and repurchase price is
treated as mark-up / return / interest expense and accrued over the life of the repo agreement using
effective yield method.
Securities purchased with a corresponding commitment to resell at a specified future date (reverse
repos) are not recognised in the statement of financial position, as the Bank does not obtain control
over the securities. Amounts paid under these agreements are included in lendings to financial
institutions. The difference between purchase and resale price is treated as mark-up / return / interest
income and accrued over the life of the reverse repo agreement using effective yield method.

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Practical Example of Company Formed Under Section 42

KARANDAAZ PAKISTAN
(A Company under section 42 of the Companies Act, 2017)
STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, 2018

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KARANDAAZ PAKISTAN Example of Income and Expenditure

(A Company under section 42 of the Companies Act, 2017)
STATEMENT OF INCOME AND EXPENDITURE
FOR THE YEAR ENDED JUNE 30, 2018

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KARANDAAZ PAKISTAN
(A Company under section 42 of the Companies Act, 2017)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2018

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KARANDAAZ PAKISTAN
(A Company under section 42 of the Companies Act, 2017)
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2018

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Practical Example of Director’s Report

Directors' Report to the Members

Dear Shareholders,
The Board of Directors are pleased to present the Annual Report of National Bank of Pakistan "NBP" "the
Bank" together with the audited financial statements for the year-ended December 31, 2022 and the
independent Auditors' Report thereon. Proper books of account have been maintained and these financial
statements fairly present its state of affairs, the result of its operations, cash flows and changes in equity
during the year.
Operating Context
The global economy continues to face slowing growth; high inflationary pressures and geo-political tensions
which, it seems will persist in the near-to-short term. In most countries (especially the developed economies),
central banks are responding aggressively to manage the rising inflationary pressures with a tight monetary
stance and the consequence of exchange rate pressures on most emerging market currencies. Consequently,
most countries are facing a multi-year slow growth trend in which rising debt burdens and weak investment
are being observed.
Pakistan's economy is also beset by multidimensional challenges due to long-term macro imbalances and
policy uncertainties. In early FY23, Pakistan's economy had just recovered from the COVID-19 pandemic and
was undergoing structural adjustments. Supported by accommodative macroeconomic policies, the GDP grew
by 6.0% in FY22. However, strong domestic demand, coupled with low productivity growth, high world
commodity prices, and the global economic slowdown has exacerbated the external imbalances. To stabilize
the economy, the Government began implementing a range of corrective policy measures to constrain
aggregate demand, including a contractionary budget, increase in the local energy prices and a free floating
exchange rate. As a result of these stabilization measures, growth is expected to slowdown, the exchange
rate to stabilize and appropriate macroeconomic space would be created to adjust the size of the public debt,
while the country's foreign exchange reserves were expected to gradually rise.
However, the economy suffered a setback due to catastrophic floods which have left nearly 33 million people
devastated in the country and severely raised the economy's requirement of funding (domestic and foreign) to
cope with the relief and rehabilitation of the flood affected as well the adverse impact on the domestic
economy. The Government faces difficulty in continuing its social protection programs for these relief &
rehabilitation efforts while maintaining progress towards achieving macroeconomic stabilization that was
needed on its own merits. Based on currently available information, GDP growth could fall to around 2% in
FY23, compared to the previous forecast of 3-4% before the floods. Meanwhile, higher food prices have
raised the headline inflation around 25% YoY, somewhat above the pre-flood projection of 18-20%. In the
prevailing inflationary environment, the State Bank of Pakistan has increased the policy rate from 9.75% at the
beginning of 2022 to currently 17.0%. SBP has projected Large Scale Manufacturing to further slow down due
to supply constraints and production cuts.
While removal of Pakistan from the FATF grey list was a positive development, the current account deficit, the
external sector remains under stress due to delay in realization of official financial inflows and debt
repayments. The Government is taking effective policy measures to address domestic and external
imbalances. Key priorities include strengthening the fiscal position, continuing social protection to the poor,
allowing free floating exchange rate and shifting from general subsidies (especially in terms of energy pricing)
to a regime where subsidies are targeted. The timely implementation of these macro measures along with the
revival of the IMF's Extended Fund Facility should resume the flow of multilateral support which is critical for
Pakistan to successfully regain macroeconomic stability and advance its sustainable development agenda.
Performance and Outlook of the Banking Sector
Pakistan's banking sector has performed well and remained resilient during 2022. Spreads have improved on
the back of higher average policy rate. However, continuity of the stress in the macroeconomic environment
may have adverse implications on asset quality and overall banking industry's performance in 2023.
Performance may also be affected by certain policy decisions like incremental tax regime (with particular
reference to Advance-to-Deposit Ratio based tax) and the implementation of the Treasury Single Account.
These fiscal measures can push the banks either to follow aggressive lending strategies, or to shed their
deposits to avoid higher tax rates.
In the meanwhile, as per the SBP directives, IFRS 9 stands implemented effective January 01, 2023 which
will change the computation of credit cost for banks - based on expected losses, resulting in, (i) a one-time
provision on existing assets, routed through Equity and (ii) recurring provisions cost on P&L depending on

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each bank's asset book quality, and reclassification of certain investment. Also, it will lead to reclassification of
certain investments with related income routed through 'Other Comprehensive Income' instead of the Profit &
Loss Account. However, no major impact is expected on capital adequacy of the banks, as SBP has allowed
banks to opt for a 'transitional arrangement' staggering the impact over 5 years.
However, effective internal controls, customer confidence and robust regulatory monitoring by the SBP makes
the Pakistan banking industry agile and resilient enough to adjust to changing regulatory requirements and
emerging economic & regulatory environment.
NBP's Strong Financial Delivery in 2022
The following financial discussion and analysis is based on statutory information unless otherwise stated.
Despite the continued challenging environment, the Bank has delivered strong financial results for the year
ended December 31, 2022. For the year under review, NBP has recorded after-tax profit of PKR 30.4 bn.
• Profitability (PKR 'Bn)
Better / (Worse)
No. Key Items 2022 2021
Amount %
1 NiI 116.8 97.6 19.2 19.7% ▲
2 NFI 36.7 36.9 (0.3) (0.7%) ▼
3 Total Income 153.5 134.6 19.0 14.1% ▲
4 Admin Expense 78.2 60.0 (18.2) 30.3% ▲
5 Pre- Provision Profit 75.3 74.6 0.8 1.0% ▲
6 Provision Charge 12.6 11.9 (0.7) 5.7% ▲
7 Extraordinary Item - 9.8 (9.8) (100.0%) ▼
8 Pre-Tax Profit 62.7 52.9 9.9 18.7°% ▲
9 Tax 32.3 24.9 (7.5) 30.1% ▲
10 After-Tax Profit 30.4 28.0 2.4 8.6% ▲
11 EPS (Rs.) 14.29 13.16 1.13 8.6% ▲
In the backdrop of higher average policy rates coupled with a major volumetric growth in interest bearing
assets, the Bank generated a gross mark-up/interest income of PKR 503.3 Bn which is more than double the
PKR 231.9 Bn of prior year. Likewise, interest/mark-up expense amounted to PKR 386.5 Bn, of which PKR
209.6 Bn or 54.2% was paid to the depositors. Consequently, net interest/mark-up income "NII" closed at PKR
116.8 Bn which is 19.7% higher, YoY. Despite a lacklustre trade & business activity during the year, the Bank
succeeded in maintaining its non-mark-up / interest earning "NFI" stream that closed at PKR 36.7 Bn
(2021:PKR 36.9 Bn). Accordingly, total revenue of the Bank closed 14.1% high YoY at PKR 153.5 Bn
(2021:PKR 134.6 Bn).
Operating & other expenses for the year amounted to PKR 78.2 Bn depicting a YoY increase 30.3%. HR
costs that constitute around 62.5% of the total operating expenses amounted to PKR 48.8 Bn i.e. 31.8% up
against PKR 37.0 Bn in 2021. Pertinent to mention this YoY increase in HR costs is mainly due to the fact that
the year 2021 cost was on a lower side as compared to 2020 due to reversals of certain accruals created in
the prior years which were no longer required. Excluding the impact of such reversals, the cumulative average
growth in staff cost stood 11%.
The Bank invests appropriate funds in the uplift and maintenance of its business premises, providing a secure
& healthy work environment to its workforce and customers. This year we spent a sum of PKR 1.1 'Bn on
repair and maintenance of our business premises. Overall property-related expenses amounted to PKR 10.7
'Bn, which is 26.7% more than the prior year. Since Information Technology is pivotal for the Bank to achieve
its strategic goals, we continue to invest in upgrading our core banking application, systems, and applications
architecture. In 2022, we spent PKR 2.0 'Bn on software maintenance and PKR 0.8 'Bn on network
enhancement. In line with our prudent strategy to buttress the Bank's balance sheet against possible stress,
PKR 12.6 Bn provisions have been taken, of which PKR 8.1 Bn are against advances (mostly being general
provisions in view of the credit risks associated with certain sectoral pressures which are becoming evident)
and PKR 3.8 Bn against investments. Consequently, profit before tax amounted to PKR 62.7 Bn which is
18.7% higher YoY.
With the recent changes in taxation laws, the effective tax rate stood at 51.5% (2021:47.0%) and amounted to
PKR 32.3 Bn. While the banking industry is already subject to a super tax charge of 10% with incremental 4%
statutory tax rate, this additional tax has impacted after-tax profitability of the banks (including NBP).
Furthermore, the Finance Act-2022 imposed 10% additional tax on banks if their Advances to Deposit Ratio
falls below 50%; and 16% if the ADR goes below 40%. Accordingly, the Bank has in this regard recognized a
prior year tax charge of PKR 3.8 Bn.

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Accordingly, the Bank's after-tax profit closed at PKR 30.4 Bn which is 8.6% higher than PKR 28.0 Bn of
previous year (in which the applicable tax rates and charges on banks were significantly lower).
• Balance Sheet Growth
The Bank's end of year total assets closed at PKR 5,240.4 Bn which is a massive 36.2% increase from PKR
3,846.7 Bn at the end of 2022. Capital & reserve closed at PKR 300.8 Bn i.e. PKR 14.6 Bn or 5.1% up from
PKR 286.2 Bn on December 31, 2021.
Key Item 2022 2021 Growth
Investments – Net 3,477.4 1,938.2 79.4%
Advances (net) 1,230.5 1,113.4 10.5%
Total Assets 5,240.4 3,846.7 36.2%
Deposits 2,666.2 3,019.2 (11.7%)
Borrowings 1,940.5 312.9 520.1%
Net Assets 300.8 286.2 5.1%
Break-up Value Per Share 141.4 134.5 5.1%
Islamic Baking Total Assets 109.3 100.9 8.3%
Gross loans & advances stood at PKR 1,438.6 Bn depicting a modest YoY increase of 10.2% or PKR 133.4
Bn; whereas, net advances stood at PKR 1,230.5 Bn. Growth in advances was achieved in most of our
products including corporate, commodity, agriculture and Islamic. Consequently, the advance-to-deposit ratio
improved to 54.0% at the end of 2022 as compared to 43.2% at the end of 2021. Non-performing loans
recorded a small increase of 3.7% and amounted to PKR 205.3 Bn (2021:PKR 197.9 Bn). With PKR 190.7 Bn
of specific provisions held, NPL coverage ratio stood high at 93%.
The Bank's investments (at cost) amounted to PKR 3,509.0 Bn (2021:PKR 1,924.2 Bn) with a carrying value
of PKR 3,477.4 Bn (2021:PKR 1,938.2 Bn). Pursuant to an effective yield/interest rate risk and liquidity
management strategy, the Bank is maintaining a diversified investment portfolio across zero risk weighted
GoP instruments, high dividend yielding equities and other interest-bearing financial assets with interest
sensitive maturity pattern.
As of December 31, 2022, total deposits with the Bank amounted to PKR 2,666.2 Bn as compared to PKR
3,019.2 billion at the end of 2021. This reduction in deposits is based on a focussed strategy to reduce the
ADR based tax imposition so as to deliver a higher after-tax profit to our shareholders. Major share of the
Bank's funding comes from sticky customer deposits that contribute 98.1% of the total deposits. With current
deposits amounting to PKR 1,310.2 Bn or 49.1% of the total deposits, the Bank maintains a strong liquidity
profile. The Bank maintained its CASA ratio high at 79.4%. Detailed coverage of the financial performance
and other organizational development is also given elsewhere in this Annual Report. The Bank has enough
resources to meet all its financial obligations and hasn't defaulted in payment of any debt or other financial
obligation.
Appropriation of Profit
Profit for the year ended December 31, 2022 after carry forward of accumulated profit of 2021 is proposed to
be appropriated as follows:
(PKR 'Mn)
Profit after tax for the year ended December31, 2022 30,410.3
Un-appropriated profit brought forward 140,073.8
Other comprehensive income - net of tax (3,129.1)
Transfer from surplus on revaluation of fixed assets-net of tax 197.7
Transfer from general loan loss reserve 8,000.0
Profit available for appropriations 175,552.7

Appropriation:
Transfer to Statutory Reserve (3,041.0)
Un-appropriated profit carried forward 172,511.7
• Capital Adequacy & Strength
The Bank's financial soundness continues to improve significantly annually. While Common Equity Tier 1
(CET1) Capital ratio stood at 16.30% (2021:15.42%), the Total Capital Ratio stood at 21.59% (2021:20.39%).
The Bank's Leverage ratio was 3.08% at the end of 2022 (2021:3.47%). The Bank's liquidity coverage and net
stable funding ratios also improved to 195% (2021:164%) and 251% (2021:278%) respectively against their
regulatory requirement of 100%.

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Credit Ratings
NBP is rated as 'AAA' by both the recognised credit rating agencies in Pakistan. In June 2022, M/s VIS Credit
Rating Company re-affirmed the Bank's standalone credit rating as "AAA", the highest credit rating awarded
by the company for a bank in Pakistan. Similarly, M/s PACRA Credit Rating Company also assigned the Bank
long-term entity rating as 'AAA' (Triple AAA) and short-term credit rating as 'A1+' (A-one Plus).
Principal Activities
Principal activities of NBP during the year remained same as in prior year and included general banking
services, credit, ATM and debit cards facilities, investment banking advisory, treasury and capital markets,
housing and general finance, transaction banking, cash management, digital banking, international trade &
remittances, etc. The Bank's subsidiaries offer financial services to their customers including currency
exchange, modaraba, fund management and securities brokerage services.
Governance & Stewardship by the Board
The Board remained focused on delivering its role of stewardship through providing effective leadership and
strategic insight. As an integral part of the country's financial ecosystem, we are cognizant of our duties as a
corporate citizen to act in a manner that benefits the Nation at large. A detailed overview of the functioning of
the Board is given in the Corporate Governance section of this Report. Also a statement has been separately
made regarding Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019.
For better corporate governance, the Board forms sub-committees, currently including:
(i) Board Audit Committee
(ii) Board Risk & Compliance Committee
(iii) Board HR & Remunerations Committee
(iv) Board Technology & Development Committee
(v) Board Inclusive Development Finance Committee
Changes in the Board of Directors
Details of the changes in the Board of Directors during the year are given under Statement of Compliance with
the Public Sector Companies (Corporate Governance) Rules, 2013, And the Listed Companies (Code of
Corporate Governance) Regulations, 2019 included in this Annual Report.
Meeting of the BoD and BoD Committees Held during 2022
Details of the meetings of the Board and the Board Committees held during the year are included in this
Annual Report.
Remuneration to the Directors
Remuneration Policy for the non-executive independent Directors for attending the Board and Board
Committee meetings was approved by the shareholders in their general meeting held on July 27, 2020. The
Policy is compliant with the applicable laws including NBP's bye-laws, the Banks' (Nationalisation) Act 1974,
and instructions of the State Bank of Pakistan. In terms of this Policy, the Board shall, from time to time,
determine and approve such level of remuneration for the members of the Board, for attending meetings of
the Board or meetings of the Committees thereof, as may be within the limits for such remuneration as
prescribed by the SBP from time to time and determined to be an adequate measure of remuneration for the
performance of relevant duties by such members. In terms of the policy, the Board shall also ensure that such
remuneration is not determined in a manner that may undermine the independence of the Board or
Committee members. The details of compensation paid to the Directors in 2022 are disclosed in Note 41 to
the unconsolidated financial statements.
Explanation with regards to emphasis of mater in the Auditors' Report
The external Auditors of the Bank have included emphasis of matter by drawing attention to Note 25.3.4.1 to
the financial statements which explains the contingency in relation to litigation by retired employees of the
Bank for pension benefits. As opined by its legal counsels, the Bank has reasonably strong legal grounds to
convince the Honourable Supreme Court of Pakistan for reviewing its earlier judgement. Therefore, pending
the decision on the review petitions, the financial impact of the subject case has not been included in the
financial statements for the year ended December 31, 2022.
Proposed Dividend for the Year Ended December 31, 2021
As explained in note 48 of the annual audited unconsolidated financial statements of the Bank for the year
ended December 31, 2021, the recommended cash dividend of Re.1 per share which amounted to Rs. 2,128
million, was not approved in the annual general meeting held on March 30, 2022.

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Material changes subsequent to the Balance Sheet Date

No material event has occurred subsequent to the Balance Sheet date that requires adjustments to the
enclosed financial statements.
Contribution in SBP-led Initiatives
In pursuit of its Vision to enable inclusive development, NBP has been actively supporting the Government
and SBP-led initiatives for increasing financial inclusion and has extended financings under various refinance
schemes and initiatives.
Impact of the Government Policies on the Bank Performance
Certain policies of the Government, while these create challenges as well as opportunities for the Bank, have
a considerable impact on its performance. Key relevant policies include, e.g. mandatory participation in
subsidised lending schemes, higher tax rates in relation to ADR, deposit protection premium, commission/fee
income on government treasury business, and implementation of the treasury single account. Also, the Bank
is a major lender to certain public sector companies which have been unable to meet their debt obligations to
the Bank in a timely manner or in some cases are unable to service their debt at all. This causes a significant
drag on the Bank's income. However, the Bank remains committed to fulfilling its role as a national institution
and supporting the government and its initiatives in a manner that it also delivers profitability to its other
shareholders.
Major Developments during the Year
Major progress was made during the year in the area of business & product development, market outreach, IT
systems & infrastructure, human capital management, etc. Such development initiatives and their outcomes
are discussed under respective sections elsewhere in this annual report.
Principal Risks & Uncertainties Facing the Bank
By the very nature of its business model, the Bank is exposed to certain principal risks. As part of its
oversight, the Board ensures that adequate policies and risk management frameworks are in place to
recognize all significant/material risks to which the Bank is or may be exposed to and that adequate resources
and strategies have been deployed to mitigate such risks. The Bank is continuously reviewing its credit
portfolio, to identify accounts and industries susceptible to higher risk, in these challenging times. Further, with
respect to information security risk management arising as a result of Covid-19 and recent incident of cyber-
attack on NBP servers, the Bank took appropriate actions to respond & monitor the evolving cybersecurity
risks. Key risks to which the Bank is or may be exposed to include (i) Credit Risk; (ii) Treasury & Capital Risk;
(iii) Market Risk; (iv) Operational Risk, and (v) Cybersecurity Risk. With increasing magnitude of floods and its
impact on the agricultural sector, NBP's exposure to environmental risk is also becoming considerable
because of its portfolio exposure to both carbon transition and physical climate risks as the largest and a
most-diversified bank in Pakistan. A detailed indication of the principal risks and uncertainties as well as the
future prospects is discussed in Note 47 to the financial statements.
Governance & Risk
Progressing with the Board's HR strategy, the Bank has continued to induct talent at senior levels. Also, the
outdated Staff Service Rules (1973) have been repealed pursuant to the approval of the Federal Cabinet on
April 01, 2021 and replaced by the Staff Service Rules-2021 which are more in consonance with the
contemporary HR practices and procedures. This will set the foundation for promoting a culture of
accountability & meritocracy in the Bank. This Board acknowledges and appreciates the support of the
Federal Government in this regard.
The Bank remains committed to ensure compliance with all the applicable laws, rules, regulations, and codes
in the spirit of good governance, and recognises the need to continually improve its compliance & control
capacity within its domestic as well as overseas network. A major revamping of the network structure has
been implemented in 2021 to strengthen the control & compliance. Also, significant funds have been invested
in acquiring new technological platforms for effective internal controls, , Anti Money Laundering /Know Your
Customers, data accuracy & authenticity and generating quality MIS for efficient decision making.
Compliance & Risk Matters in the New York Branch
The Bank continues to remain committed to ensure compliance with all the applicable laws, rules, regulations,
and codes in the spirit of good governance. To this end, the Board continued to effectively challenge
management to ensure strategic directions to investments throughout the Bank's operations in new
technological platforms for effective AML/CFT/CPF controls, data accuracy and authenticity, internal controls,
etc. were well-throughout. As widely reported and disclosed in previous reporting periods, in February 2022,
the Bank entered into consent orders with The Federal Reserve Bank of New York, and the New York State
Department of Financial Services (NYDFS), the US regulators of NBP's New York branch. These orders

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included two civil money penalties totalling USD 55.4 Mn (PKR 9.8 Bn) that focused on historical weaknesses
in the Compliance Program that persisted from 2016 and beyond, which were paid within the deadline. It is
important to note that the US Regulators made no findings of improper transactions or wilful misconduct.
Since then, substantial improvements have been made to comply with the orders and to the branch's controls.
Going forward, the Board remains fully committed to satisfying the regulators' expectations.
Ongoing Investigation by the FIA
In July, 2021, the Federal Investigation Agency initiated an enquiry in the matter of M/s Hascol Petroleum's
'HPL' banking arrangements with the NBP as well as several private and other public sector banks. On
January 21, 2022, several serving/former employees of the Bank were incriminated under various charges. At
NBP, credit decisions were based on a set of published audited financial statements of HPL, and were made
as per the applicable policies of the Bank and SBP regulations. NBP extended its full cooperation with the FIA
on this investigation and has made available all relevant records required by the FIA. NBP's own stance on
this matter was documented in submissions made to the State Bank of Pakistan and also to the FIA.
Subsequently, the FIA cleared several of the Bank's serving employees on the grounds that 'no element of
wrongdoing or illegal gratification was found on their part'. It is pertinent to mention that HPL has
acknowledged its indebtedness to NBP for the full amount of outstanding loans and the same reflected in the
books of accounts of the Bank.
IT Network & System Security
Subsequent to a major cyberattack on October 30th, 2021, that impacted some of the Bank's services, major
steps were taken during 2022 to strengthen the IT Network & Systems security. Expert cyber security
consultants were engaged in various capacities to contain the damage and formulate an incident response
posture, based on which projects procurements and implementations were planned.
Visible improvement has taken place on the major technology initiative approved by the Board in 2022 for
upgradation of the Bank's Core Baking Application. As stated in our prior year's report, for 2022 and 2023,
focus remains on the task of upgrading the Core Banking Application and all necessary processes and
procedures are being followed by the Bank to ensure its timely implementation. With the upgrade to the latest
version, the Bank will have the latest technology, updated functionalities and performance improvements the
vendor has built into the succeeding versions. The Core Banking Application upgrade will position the Bank
well against its competitors to better serve its customers in today's increasingly digital environment.
Progress on Closure of Foreign Subsidiaries/Branches
In line with our strategy on international franchises of consolidation, the NBP Board has approved closure of
presence in Central Asia Operations which comprised of two overseas Subsidiaries being in Almaty
(Kazakhstan) and Dushanbe (Tajikistan) along with three overseas branches located in Baku (Azerbaijan),
Bishkek (Kyrgyzstan) and Ashgabat (Turkmenistan). It also included closure of the representative office at
Tashkent (Uzbekistan). Further, closure of the representative office at Toronto (Canada) and branches in
Sylhet (Bangladesh), Jalalabad (Afghanistan) was also approved.
As of year-end 2022, NBP entities in Dushanbe Subsidiary (Tajikistan) and Ashgabat branch (Turkmenistan)
stand closed whereas closure of Baku (Azerbaijan), Bishkek (Kyrgyzstan), Almaty (Kazakhstan) is under
process. Further, Bank had already closed Jalalabad (Afghanistan) and Sylhet (Bangladesh) and 2 Rep.
Offices, Tashkent (Uzbekistan) and Toronto (Canada) during the year 2021. Additionally, the BoD in their
meeting dated January 17, 2022 had also approved the closure of the Paris Branch which is under process.
Contingency Regarding the Pension Case
Status of the case is the same as disclosed in Note 25.3.4.1 to the Annual Financial Statements for the year
ended December 31, 2021. The Bank estimates an overall increase in pension liability, based on the
independent actuarial firm report, amounted to PKR 89.7 Bn, excluding any penal interest / profit payment (if
any) due to delayed payment. Further, the potential pension expense for the year 2022 onward will also
increase by PKR 12.1 Bn due to an adverse decision. Based on the opinion of legal counsel, no provision for
any additional pension liability has been made in these annual financial statements for the above mentioned
amount as the Bank is confident about a favourable outcome on the matter. External auditors of the Bank
have inserted an emphasis of matter para in their Audit report.
Impact of the Bank's Business on the Environment
The Bank is cognizant of the environmental consequences of its operations and its obligation to safeguard
against environmental vulnerabilities. While the Bank's business operations do not have a direct impact on the
environment, the Bank has taken measures for implementation of the Green Banking initiatives under the
SBP's Green Banking Guidelines to provide finance to transform the economy into a resource efficient and
climate resilient one. We have embedded the consideration of social, economic and environmental impacts
into our business strategy and decision-making processes. In line with the Environmental & Social Risk

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Management Implementation Manual issued by the State Bank of Pakistan, the Board and the Management
are committed to develop an Environmental and Social Management System to understand, monitor and
manage its social, environmental and economic impact to enable it to contribute to society's wider goal of
sustainable development. A detailed report on the activities undertaken by the Bank with regard to corporate
social responsibility during the year is given separately elsewhere in this report.
Appointment of Auditors
The existing auditors of the Bank M/s Yousuf Adil Chartered Accountants and M/s A. F. Ferguson & Co.
Chartered Accountants will be retiring this year. The Board is pleased to endorse the recommendation of the
Board Audit Committee for re-appointment of M/s PwC A. F. Ferguson & Co. Chartered Accountants, and
appointment of M/s BDO Ebrahim & Co. Chartered Accountants to be the auditors of the Bank for the year
ending December 31, 2023, in place of the retiring auditors namely M/s Yousuf Adil, Chartered Accountants.
M/s PwC A.F. Ferguson being eligible and have offered themselves for re-appointment as external auditors of
the Bank for the year ending December 31, 2023; whereas Yousuf Adil Chartered Accountants shall have
completed their 5 years at the end of 74th AGM.
Endorsement
The following information has been provided elsewhere in this Annual Report. The Board is pleased to
endorse the same:
(i) Statement of Compliance with the Public Sector Companies (Corporate Governance) Rules, 2013, And
the Listed Companies (Code of Corporate Governance) Regulations, 2019 included in this Annual
Report.
(ii) The Management Statement of Internal Controls
(iii) Risk Management Overview
(iv) Review of the performance of various business and support functions
(v) Report on Corporate Social Responsibility initiatives
(vi) Pattern of Shareholding
(vii) Credit Rating and Awards.
Future Outlook
We anticipate 2023 to be challenging as the macroeconomic expectations are that effects of the large-scale
flooding and aftershocks of the COVID-19 pandemic will be long lasting and the pace of economic recovery
remains uncertain. This, coupled with the policy uncertainties, may have a significant impact on how
businesses are run in 2023 and beyond. It may also have the effect on the Bank's portfolio risk profile, earning
potentials and resilience.
Despite such headwinds, your Bank will continue to play its due role in supporting a robust economic recovery
in the country, while also maintaining a strong & resilient balance sheet to sustainably create value for its
shareholders. The Bank's business strategy will remain focused on financing and supporting underserved
sectors including SME, Microfinance, Agriculture finance and the Government initiated subsidised schemes as
well as Islamic financing.
Acknowledgement & Appreciation
We appreciate the continued efforts & dedication of our employees towards ensuring continuity of
uninterrupted service to the Nation. We would like to acknowledge the Government of Pakistan, the State
Bank of Pakistan, the SECP and other regulatory bodies for their continued support in enabling the Bank to
achieve its true potential and contribute towards the socio-economic development of Pakistan.
We would also like to thank our present teammates and the retiring Chairman Mr. Zubyr Soomro and retiring
President/CEO Mr. Arif Usmani for their contributions towards making the Bank resilient and capable of
creating inclusive growth opportunities for the Nation.

For and on behalf of the Board of Directors

Rehmat Ali Hasnie Farid Malik

President & CEO (A) Director

Karachi
Dated: February 28, 2023

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Practical Example of Auditor’s Report

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Practical Example of Chairman Review Report

Chairman's Review
Dear Shareholders,
I am pleased to present this Review Report as the new Chairman of this major National Institution that has
been partnering and contributing to Nation's growth for over seven decades.
Your Bank
NBP, stakeholders will join me in appreciating that NBP has always embraced its responsibility in putting the
country first as Pakistan's leading financial institution over the decades. The Bank's business model is evolved
as an institution which primarily handles the banking needs of the government its entities and their employees.
We are now working towards redefining this traditional role to include main stream commercial and retail
banking business with more focus on the ever growing SME mid-market segment including the needs of small
businesses, agricultural and related farming sector and the supply chain segment which has the capacity to
generate short cycle cash flows.
Operating Context
Global economy is facing multiple challenges. The World Bank has slashed the global economic growth
outlook to 1.7% for 2023 from its earlier projection of 3%. High inflation has triggered rapid and synchronous
monetary policy tightening globally. The spill over of sluggish growth is exacerbating headwinds faced by
emerging markets and developing economies.
Pakistan's economy is also confronted with multiple challenges like high inflation, low growth, and low levels
of official foreign exchange reserves. To stem the rising inflation, the State Bank of Pakistan has increased
the policy rate from 7.5% in September'21 to 17%. GDP growth is projected to fall below 2% in FY23.
The Banking industry is now subject to higher base tax rates, additional taxes related to income from
government securities, lower ADR and higher minimum lending targets for various segments.
Conventional banking systems are facing competition from the innovative Fintech and less regulated non-
bank institutions.
Let me concede at present, our preparation to meet the aforementioned challenges is not adequate. We need
to acquire new technology and enhance our skills set and aggressively strategize to retain our prominent role
in the competitive market place.
The Board
In April 2022 four Directors on the Board including the Chairman completed their tenure and to fill the vacant
positions, Government of Pakistan appointed myself and two other Directors in January 2023.
The Board is an optimum mix of non-executive, executive and independent Directors which fully meets the
regulatory requirement. My fellow directors are accomplished professionals and bring diversity and rich
experience to the Bank.
The Board is cognizant of the current economic situation in the country and its effects on the Banking and
Financial sector. This together with the critical interdependency that exists between our socio-economic
environment, the well-being of our stakeholders and under the circumstances the sustainability of the Bank
shall create immense challenges. The Bank will have to proactively manage these critical challenges
effectively by implementing planned strategies.
Against this backdrop, the Bank will continue to play an important contributory role towards the country's
economic stability by managing desirable growth and value creation for the stakeholders.
We are mindful of the current and legacy issues that persist and remain our crucial challenges. Going forward
the Bank is committed to address and resolve these challenges while protecting its capital and franchise and
to the satisfaction of its stakeholders.
The Board is also aware of the Bank's Corporate Social responsibilities and its commitments towards
environmental preservation and wellbeing of its employees who are the key stakeholders, and this shall
remain one of the foremost priority.
Compliance
The Board is fully committed to instil and implement industry best practices, state of the art technology and
requisite skills to augment the Bank's standing as one of the largest banks in Pakistan.

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The Bank has in the past faced key compliance issues largely due to outdated systems and controls,
inadequate technologies, weak processing and lack of skills. This has led to numerous regulatory actions and
heavy penalties and reputational concerns.
The Enforcement Action by Regulators (NYDFS & FRB) at NBP US Operations has been under remediation.
Annual Examination Report issued by Regulators in April 2022 acknowledged that the previous regulatory
observations have been met and there are no new AML/CFT and sanctions related observations. As part of
the de-risking, the Bank is in the process of moving USD clearing business to the correspondents.
This will be taken up under a carefully planned and structured methodology and in full compliance with all
regulatory requirements.
Global Franchise
The Bank's international franchise has historically lacked strategic direction and the overall control structure is
not considered sufficient to meet the ever-increasing challenges in the global marketplace. The inherent risks
of value erosion from these international operations clearly outweigh the opportunities for value creation.
Accordingly, and in view of huge operational and compliance risk, the Bank has implemented an exit strategy
from various markets which shall be continued in a planned manner and completed effectively at the earliest.
A strong franchise in key global markets built around correspondent banking relationships, investments, trade
linkages with Pakistan, abilities to extend quality service to overseas Pakistani diaspora supported by a strong
technology platform replacing weak systems, strengthening controls and placement of skilled HR shall remain
the ultimate goal for the Bank. This shall be the hallmark of our future strategy for Bank's franchise in global
markets.
Public Sector Entities
The Bank shall continue its support for the public sector entities however Bank will endeavour to revisit its
credit underwriting strategies, strengthen assets monitoring procedures and realize loan restructuring
opportunities. We shall be seeking recovery of overdue mark-up from public sector entities which is
considered essential for Bank's financial soundness.
Looking Ahead
We understand the inevitable Macro Economic challenges are likely to prevail in the short-term; however, we
remain confident of the Bank's resilience to meet the challenges.
I trust the measures adopted by the Government will drive the country's economic revival and help us succeed
in positioning the country to achieve its full potential in the medium to long term.
As the Nation's Bank NBP remains firmly committed towards supporting the Government's national
development agenda through strengthening the Agriculture, SME and the Export sectors, building capacity
and encouraging the farmers and local manufacturers to meet the Macro Economic targets.
Full implementation of Treasury Single Account (TSA) will create new challenges for the Banking and
Financial sector. TSA is being implemented under a phased plan. On its completion this would result in
withdrawal of Federal Government and related departments deposits from the banking system estimated
between PKR 150 Bn to PKR 200 Bn.
NBP by virtue of its business with Government and related departments will face large deposit withdrawals.
This will not cause serious liquidity issues however Bank's lending objectives will be temporarily affected.
Bank has developed strategies to deal with these sensitivities and maintain liquidity and other key ratios within
the acceptable limits. Bank is also working on targeting retail and institutional deposits to strengthen our
market share and accordingly substitute the TSA withdrawals.
As we navigate the Bank through these challenging times, we look forward to continued support from the
Government of Pakistan.
In particular, we request appointment of a fulltime President & CEO of the Bank. This will strengthen the
leadership of the Bank and bring in the necessary and key functional and operational efficiencies. We also
request appointment of Directors to the vacant Board Room positions; a complete Board will further
strengthen the oversight and operational support to the management.
Board shall encourage the management to expedite transformation to achieve excellence in Islamic and
Digital Banking product offerings, stronger focus on Consumer, SME, s, Housing Finance for low-income
groups and the Agricultural Finance segments. This shall deepen our role as the Nation's Bank, and enhance
our presence in market niches which remain largely untapped.

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The Board shall prioritise integrating social and environmental consciousness into the Banks overall business
strategy. Strengthening Risk Management framework, Technology Platform and proactively addressing the
anomalies in HR governance shall feature prominently in our key priorities for the Bank.
My Message:
- To Our Key Partners & Regulators
I am thankful to the Federal Government for the confidence reposed in me. I am also thankful to the Governor
and Officials of the State Bank of Pakistan for their guidance and support.
I wish to convey our firm resolve to ensure strong governance within the Bank; Implement a strong control and
compliance structure throughout the Bank and ensure that the Bank remains a good and compliant corporate
citizen.
I extend assurance to our Regulators both in Pakistan and around the world that we continue to prioritize and
build standards of Governance and operational discipline in our Bank to meet their expectations.
- To Our Staff
The Bank shall be fair, equitable and transparent in its dealings which shall all be based on the principle of
meritocracy.
We are focussed on resolution of legacy issues, though this may take time, however we have set our direction
and would take a prioritized approach to resolve the issues. I appreciate efforts and contribution of all staff
toward the continuing success of the Bank and I firmly believe that good and robust financial results would not
have been possible without teamwork and the dedicated efforts of all employees of the Bank.
Appreciation
I extend my gratitude to the retiring Chairman Mr. Zubyr Soomro, the outgoing Directors and the retiring
President Mr. Arif Usmani for their leadership and guidance in making the Bank strong and more resilient. The
Bank's leading position, its market outreach, economic value generation and contribution to the national
exchequer is a testimony of effective management and leadership and oversight of the Chairman and the
Board of Directors.
Finally, I would like to thank all our valuable customers and business partners for their continued loyalty and
support.

Ashraf Mahmood Wathra

Chairman

February 28, 2023

Karachi.

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Section 232 & 233

Section 232.

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Section 237

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Section 228

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Illustration:

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Practical Example of Auditor’s Report on Consolidated Financial Statements

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Additional Interim Financial Statements

Example 04:

On January 1, 2020 River Pakistan Limited (RPL) became the holding company of Green Pakistan Limited
(GPL) by acquiring 51% shares. The financial year-end of RPL is 30th June and that of GPL is 31st
December. GPL shall be required to make an interim closing on 30th June 2020 to prepare financial
statements from 1 July 2019 to 30 June 2020 for consolidation purposes. These financial statements shall be
in addition to those prepared from 1 January to 31 December by GPL.

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Section 229

Example from Study Text

Example 05:

On October 1, 2021 Food Festival Limited (FFL) became the holding company of Oregano Limited (OL) by
acquiring 60% shares. The financial year-end of FFL is 31st December and that of OL is 31st October. OL
applied for extension of its financial year so that its financial year coincides with that of FFL (its holding
company). The Commission may allow the extension.

Example 06:

On October 1, 2021 Food Festival Limited (FFL) became the holding company of Oregano Limited (OL) by
acquiring 60% shares. The financial year-end of FFL is 31st December and that of OL is 31st October. OL
applied for extension of its financial year so that its financial year coincides with that of FFL (its holding
company). The Commission may allow the extension. The Commission may also allow other relaxations e.g.
holding of AGM and other filing requirements.

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Section 226

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Section 227

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Some Practical Example Director’s Report

Directors’ Report to the Shareholders

Standalone Financial Statements
Dear Shareholders,
On behalf of the Board of Directors "the Board", we have pleasure in presenting to you the Annual Report of
the National Bank of Pakistan "NBP" "the Bank" together with the audited financial statements for the year
ended December 31, 2021 and the independent Auditors' Report thereon. These financial statements of the
Bank fairly present its state of affairs, the result of its operations, cash flows and changes in equity.
Macroeconomic Environment
The V-shaped recovery initially observed in 2021, enters 2022 in a weaker position as the Global growth is
now expected to moderate from 5.9% in FY21 to 4.4% in FY22. Driven by accommodative monetary and
fiscal policies, the Pakistani economy recorded robust growth in 2021 which has been revised upwards to
5.37% from earlier 3.9% (due to change of base year for GDP at constant basic prices from 2005-06 to 2015-
16), while the size of the economy is reported up at $346.8 Bn from the provisional estimate of USD 296 Bn.
During 1H'22, macro indicators maintained momentum growth in Jul-Dec. LSM growth, which was 14.9% in
FY'21 (-10.2% during FY'20), posted 3.3% growth during Jul-Nov FY'22. As agriculture credit disbursement
recorded a 3.9% increase and reached PKR 641 Bn (PKR 617 Bn SPLY), output situation is expected to
remain smooth. Fiscal deficit during Jul-Nov FY'22 stood at PKR 951 Bn i.e. 15.7% up against PKR 822 Bn in
SPLY. In terms of GDP, it has been contained at 1.5% i.e. similar to that of SPLY. Whereas, the primary
balance posted a deficit of PKR 36 Bn (0.15% of GDP) during Jul-Nov FY'22 against the surplus of PKR 216
Bn (0.45% of GDP) last year. The Ministry of Finance has reported a 35% growth in tax collections during Jul-
Dec FY'22, leading to a net 7% increase in federal revenues to PKR 1,482 Bn against PKR 1,391 Bn of SPLY.
On the other hand, total expenditures increased by 21% mainly due to sharp rise in subsidies and grants.
As worker's remittances continued their unprecedented streak of above USD 2.0 Bn for the 19 th consecutive
month in December 2021, Pakistan ended CY'21 with a strong 19.3% YoY growth in remittance to achieve
$31 Bn compared to USD 25.96 Bn in CY'20. A healthy trend is also observed in DFl as the same increased
by 20.1% during Jul-Dec FY'22 and reached $1,056.6 Mn ($879.7 Mn last year). Amid inflows into the Roshan
Digital Accounts (which have crossed $2 Bn in the one year since launch), Pakistan's total liquid FX reserves
stood at $22.1 Bn at end Jan'21 and are expected to strengthen as talks between the IMF and the Pakistan
government on the review of the $6 Bn Extended Fund Facility are believed to be progressing in the right
direction. During this period, while exports (mainly driven by textiles) grew by 24.9% to $15.1 Bn, total imports
in Jul-Dec FY'22 increased to $40.6 Bn, posting almost 70% growths.
However, this economic pick-up has triggered micro imbalances as the current account deficit widened to $9.0
Bn (5.7% of GDP) during Jul-Dec FY'22. Also, average headline inflation during Jul-Dec FY'22 was 9.8%
(8.6% during SPLY), somewhat higher than the SBP's initially projected range of 7.0% - 9.0% for FY'22. SBP
has recently revised expected inflation to linger in the near-term at 9%-11% in FY'22 and to ease to 5%-7% in
FY'23.
Faced with serious choices in balancing the short-term needs of fighting the pandemic and the long-term
challenges to maintain sustainable growth, SBP has taken measures to lower the inflation and correct the
macro imbalances. These measures include a cumulative 275bps increase (from 7% kept since Jun'20) in the
policy rate since Sep'21, higher bank cash reserve requirements, regulatory tightening of consumer finance,
and curtailment of non-essential imports. Subsequent to these measures, the current account deficit appears
to have stopped growing since Nov'21 and the non-oil current account balance is expected to achieve a small
surplus for FY'22. Finally, and importantly, the enactment of the recent Finance (Supplementary) Act, 2022
represents significant additional fiscal consolidation compared to the budget and has lowered the outlook for
inflation elevated over the next few months, close to the upper end of the average inflation forecast of 9%-
11% in FY'22.
Pakistan stock market witnessed a challenging year in 2021 underperforming to regional markets as well
asset classes amid concerns on external accounts, currency depreciation, geopolitical uncertainty, delay in
IMF program, and MSCI's announcement of Pakistan's reclassification to Frontier Markets - which further
spurred foreign selling. Share prices of the top 100 companies listed at the PSX improved by a net 2% during
2021, pushing the benchmark KSE-100 index to 44,596 points at the close of trading on the last day of the
CY'21.

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Banking industry reported healthy profits made not only on investment in government debt securities but also
on private sector credit as net lending to the private sector got a boost on the back of extraordinary monetary
easing and fiscal stimulus package of the government During the first half of FY22, private sector credit
cumulatively grew by 13.4%, largely driven by increased demand for working capital loans especially by rice,
textile, petroleum and steel industries.
Principal Activities
Principal activities of NBP during the year remained same as in prior year and included general banking
services, credit, ATM and debit cards facilities, investment banking advisory, treasury and capital markets,
housing and general finance, transaction banking, cash management, digital banking, international trade &
remittances, etc. The Bank's subsidiaries offer banking services, currency exchange, modarba, fund
management and securities brokerage services.
The Board, Board Committees and Board Meetings
The Board continues to have oversight of management's ongoing efforts to improve outcomes for customers
and colleagues and get the basics right, including a strong focus on the remediation work required in financial
crime risk management. It is the responsibility of the Board to ensure that adequate policies and frameworks
are in place to recognize all significant / material risks to which the Bank is / may be exposed and that the
required human resource, culture, practices and systems are adequate to address such risks. The Board and
its relevant committee, i.e. BRCC and the executive management along with its relevant committees i.e.
Management Credit Committee, Enterprise Risk Committee, ALCO etc. are responsible to ensure
implementation of the risk management framework. A Statement in compliance with the Listed Companies
(Code of Corporate Governance) Regulations has been made separately.
Explanation in regard to modification in the Auditors' Report in their Report
The external Auditors have included Emphasis of Matter by drawing attention to Note 25.3.3.1 to the financial
statements which explains the contingency in relation to litigation by retired employees of the Bank for
pension benefits. Based on the advice of the legal counsels, the Bank has reasonably strong legal grounds to
convince the Honourable Supreme Court for reviewing its earlier judgement. Therefore, pending the decision
on the review petitions, the financial impact of the subject case has not been included in the financial
statements for the year ended December 31, 2021.
Material changes subsequent to the Balance Sheet Date
In February, 2022, the Bank and its New York Branch agreed to a consent order with the Federal Reserve
Bank of New York and the New York State Department of Financial Services. These agreements include civil
penalty totalling USD 55.4 Mn (PKR 9.8 Bn) which have been recognised into the Financial Statements for the
year ended December 31, 2021.
No other material event has occurred subsequent to the date of the Balance Sheet that requires adjustments
to the enclosed financial statements.
Financial Performance - 2021
The following financial discussion and analysis is based on statutory information unless otherwise stated.
Despite the continued challenging environment, the Bank has delivered strong financial results for the year
ended December 31, 2021. This demonstrates resilience of the Bank's business model and the efforts of its
staff during this period. For the year under review, NBP has recorded after-tax profit of PKR 28.0 bn.
Profitability (PKR 'Bn)
KPI (PKR) ‘Bn) 2021 2020 Better / (Worse)
Nil 97.62 104.16 (6.5) (6.3%)
NFl 36.94 36.08 0.86 2.4%
Total Income 134.56 140.23 (5.67) (4.0%)
Operating & Other Expenses 60.00 63.11 3.11 4.9%
Profit Before Provisions 74.56 77.12 (2.57) (3.3%)
Provisions and write Offs – Net 11.92 30.90 18.98 61.4%
Extraordinary Item 9.78 - - -
Profit Before Tax 52.86 46.22 6.64 14.4%
Profit After Tax 28.01 30.56 (2.55) (8.3%)
Earnings Per Share (Rs.) 13.16 14.36 (1.20) (8.3%)

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The Bank recorded profit before tax amounting to PKR 52.9 Bn i.e. the highest ever in history of the Bank.
Whereas, due to a significant impact of extraordinary item amounting to PKR 9.8 Bn, the after-tax profit closed
at PKR 28.0 Bn which is 8.3% down YoY. For the year 2021, gross mark-up/interest income closed 10.1%
lower YoY at PKR 231.9 Billion "bn" (2020:PKR 257.8 bn); whereas the interest/mark-up expense amounted
to PKR 134.3 bn, of which PKR 87.8 bn or 65.4% was paid to the depositors. Consequently, net interest/mark-
up income "Nil" closed at PKR 97.62 bn which is 6.3% lower, YoY. Despite a lacklustre trade & business
activity during the year, the Bank succeeded in maintaining its non-mark-up/interest earning "NFl" stream that
closed at PKR 36.9 bn (2020:PKR 36.1 bn). Accordingly, total revenue of the Bank closed 4.0% down YoY at
PKR 134.6 bn (2020:PKR 140.2 bn).
Operating & other expenses dropped by 4.9% down YoY to close at PKR 60.0 bn as against PKR 63.11 bn of
prior year. This translates into a cost-to-income ratio improving 40bps YoY, from 45.0% in 2020 to 44.6% in
2021. Consequently, profit before provision stood at PKR 74.6 bn, marginally 3.3% lower than PKR 77.1 bn of
2020. However, this drop in revenue was off-set by a favourable variance in provision charge that dropped
61.4% to PKR 11.9 bn as compared to PKR 30.9 bn in the prior year. This year, NPLs recorded an increase of
15.6% or PKR 26.6 bn, totalling to PKR 197.9 bn (2020:PKR 171.3 bn). This was mainly triggered by an
industry wide default by a major oil marketing company.
Consequently, profit before tax closed 14.4% higher YoY at PKR 52.9 bn (2020: PKR 46.2 bn). As PKR 9.8 of
civil penalty is imposed in US operations, profit after tax closed at PKR 28.0 bn which is 8.3% lower than PKR
30.6 bn of previous year. Pertinent to mention, the Bank's income is also subject to a PKR 4.0 bn drag on
account of certain legacy public-sector non-performing loans as well as the impact of additional tax due to
lower Advance to deposit ratio. The Federal Government, in the Federal Budget-2022, has imposed a 2.5%
additional tax on banks if their Advances to Deposit Ratio falls below 50%; and 5% if the ADR goes below
40%. While the banking industry is already subject to a super tax charge of 4%, this additional tax has
adversely affected the after-tax profitability of the banks.
The Bank's end of year total assets closed at PKR 3,846.7 bn which is a massive 27.9% increase from
PKR 3,008.5 bn at end of 2020. This was mainly driven by a growth of PKR 600.2 bn in the deposits and a
growth of PKR 174.4 bn in the borrowings. Capital & reserve closed at PKR 286.2 bn i.e. PKR 18.6 Bn or
7.0% up from PKR 267.6 billion on December 31, 2020.
The Bank's financial soundness also improved significantly during the year 2021. While Common Equity Tier 1
(CET1) Capital ratio improved to 15.42% (2020:14.99%), the Total Capita! Ratio also improved at 20.39%
(2020:19.78%). Similarly, the Bank's Leverage ratio was 3.47% at the end of 2021(2020:4.06%). The Bank's
liquidity coverage and net stable funding ratios improved to 164% (2020:180%) and 278% (2020:256%),
respectively against regulatory requirements of 100%. On a positive note, the Bank maintained its CASA ratio
at 83%. Detailed coverage of the financial performance and other organizational development is also given
elsewhere in this Annual Report.
Appropriation of Profit
Profit for the year ended December 31, 2021 after carry forward of accumulated profit of 2020 is proposed to
be appropriated as follows:
(PKR 'Mn)
Profit after tax for the year ended December 31, 2021 28,008.0

Un-appropriated profit brought forward 116,021.3

Other comprehensive loss - net of tax (1,362.8)
Transfer from surplus on revaluation of fixed assets 208.1
Profit available for appropriations 142,874.6

Appropriation:
Transfer to Statutory Reserve (2,800.8)
Un-appropriated profit carried forward 140,073.8

Principal Risks & Uncertainties Facing the Bank

By the very nature of its business model, the Bank is exposed to certain principal risks being (i) Credit Risk; (ii)
Treasury & Capita! Risk; (iii) Market Risk; (iv) Operational Risk, and (v) Information Security Risk.
The Bank has established a robust framework to effectively manage these risks and keep the Bank resilient &
sustainable. As part of its oversight, the Board ensures that adequate policies and frameworks are in place to
recognize all significant/material risks to which the Bank is or may be exposed to and that the required

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resources i.e. human capital, culture, practices, and systems are adequate enough to mitigate and address
such risks. The Board and its relevant committee i.e. Board Risk & Compliance Committee and the senior
management along with its committees i.e. Enterprise Risk Management Committee, Assets & Liability
Committee, etc. are responsible to ensure formulation and implementation of a comprehensive risk
management framework.
The Bank is continuously reviewing its credit portfolio, to identify accounts and industries susceptible to higher
risk, in these challenging times. Further, with respect to information security risk management arising as a
result of Covid-19 and recent incident of cyber-attack on NBP servers, the Bank took appropriate actions to
respond & monitor the evolving cybersecurity risks. A detailed indication of the principal risks and
uncertainties as well as the future prospects is discussed in the financial statements.
Governance, Internal Controls and Compliance
Progressing with the Board's HR strategy, the Bank has continued to induct talent at senior levels. Also, the
outdated Staff Service Rules that enabled staff to file frivolous suits directly at the High Court levels, have
been repealed by the Staff Service Rules-2021 pursuant to the approval of the Federal Cabinet on April 01,
2021. This will significantly reduce the number of frivolous & nuisance suits filed by the employees that
distract the management from pursuing necessary reforms. This will also set the foundation for promoting a
culture of accountability & meritocracy in the Bank. This Board acknowledges & appreciates the support of the
government in this regard.
The Bank remains committed to ensure compliance with ail the applicable laws, rules, regulations, and codes
in the spirit of good governance, and recognises the need to improve its compliance & control capacity within
its domestic as well as overseas network. A major revamping of the network structure has been implemented
in 2021 to strengthen the control & compliance. Also, significant funds have been invested in acquiring new
technological platforms for effective ICFR, AML/KYC, data accuracy & authenticity and generating quality MIS
for efficient decision making.
To promote a culture of effective control & compliance, the Board has remained frequently involved in
addressing the issues related to accountability and meritocracy. As stated in our prior year's report, priority
focus is being accorded to the major task of upgrading the Core Banking Application. Necessary in-principle
approvals have been granted by the Board and the management will be moving soon to implement the
project.
Compliance & Risk Matters in the New York Branch
The Bank remains committed to ensure compliance with all the applicable laws, rules, regulations, and codes
in the spirit of good governance. To this end, the Board has given strategic directions to invest, throughout the
Bank's operations, in new technological platforms for effective AML/CFT/CPF controls, data accuracy and
authenticity, internal controls over the financial reporting, etc. Our Branch in New York, which is licensed by
the New York State Department of Financial Services (NYSDFS), and is subject to oversight and supervision
by the Federal Reserve Bank of New York (FRBNY), as in the case of all foreign banks. Initially, the 2014
examination uncovered certain compliance & risk management deficiencies in the NY Branch, in 2016 the
Bank and the Branch entered into a Written Agreement with FRBNY to acknowledge and remediate identified
deficiencies relating to Anti-Money Laundering and the US Bank Secrecy Act requirements, as well as
implementation of requisite systems, enhancement of controls and allocation of adequate resources to ensure
full compliance with such requirements.
As these issues persisted, we took serious steps in February 2020, by hiring entire new leadership including
the Branch manager and the senior compliance officer, and tripled the number of compliance staff, increasing
from 7 in May'20 to 24 in Nov'21. We also implemented new policies and procedures, began enhancing the
compliance, internal audit, and managerial oversight functions to close open issues from the Written
Agreement and past examinations. We also hired outside counsel to help guide the Bank in remediating past
problems. These enhancements were completed recently and validated by an independent third party.
In 2020, while U.S. regulators recognized many positive changes resulting from new management, it however
it concluded that the Bank had yet to fully address prior examination findings and the BSA/AML provisions of
the Written Agreement. Consequently, in February 2022, the Bank agreed to consent orders with The Federal
Reserve Bank of New York, and the New York State Department of Financial Services (NYDFS), the US
regulators of NBP's New York branch. The agreements include civil penalty totalling USD 55.4 Mn (PKR 9.8
Bn) focused on historical weaknesses in the compliance program as discussed above. There were no findings
of improper transactions or wilful misconduct. Going forward, the Bank and the New York branch remain fully
committed to satisfying the regulators' expectations.

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Ongoing Investigation by the FIA

The FIA is conducting an investigation in the matter of M/s Hascol Petroleum's banking arrangements with the
NBP as well as several private and other public sector banks. NBP has been and continues to cooperate fully
with the FIA on this investigation and has made available all relevant records and transactional history,
including arranging meetings with its employees who have managed Hascol's relationship with the Bank.
NBP's own stance on this matter has been documented in a submission made to the State Bank of Pakistan
and also subsequently to the FIA. The fundamental challenges identified by NBP stemmed from a material
negative re-statement of the company's financial records with acknowledgement of fraud by Hascol
management at that time. At NBP, credit decisions were based on a set of published audited financial
statements of Hascol, and were made as per the policies of the Bank and SBP regulations then in vogue. As
the fraud unfolded, two of the company's auditors resigned, citing financial irregularities within Hascol.
However, it is pertinent to mention that Hascol has acknowledged its indebtedness to NBP for the entire
outstanding loans of PKR 18.80 Bn and the same are reflected in the books of accounts of the Bank. NBP, in
consultation with its primary regulator i.e. State Bank of Pakistan, continues to support the FIA investigation to
its rightful conclusion of the investigation.
IT Network & System Security
On October 30th, 2021, a cyberattack was detected on the Bank's servers which impacted some of its
services. While continuity of business operations was ensured with minimal possible disruption, the Bank
decided to shut down IT Network to avoid damage to systems. Expert cyber security consultants were
engaged in various capacities to contain the damage and formulate an incident response posture, based on
which projects procurements and implementations are underway. The cyber-incident impacted the Bank's
Microsoft Visualization Platform only, whereas no financial loss or data loss was identified on the Core
Banking front. To-date, the systems are up and running and the Bank has normalized operations.
Moreover, as a major technology initiative, the Board has also recently approved the upgradation of the
Bank's Core Baking Application. This will enable the Bank to better serve its customers, introduce additional
products especially in the digital space and above all significantly enhance its operational controls.
Progress on Closure of Foreign Subsidiaries/Branches
In line with our revised strategy on international franchises, the Board has approved closure of two overseas
Subsidiaries being in Almaty (Kazakhstan) and Dushanbe (Tajikistan) along with three overseas branches
located in Baku (Azerbaijan), Bishkek (Kyrgyzstan) and Ashgabat (Turkmenistan) so their carrying amount will
be recovered principally through continuing use. Necessary approvals in this regard have been sought from
the Ministry of Finance and the State Bank of Pakistan. Further, it has been decided to restrict the country
operations in Afghanistan and Bangladesh only to one branch in each country located in Kabul and Dhaka
respectively.
As of December 31, 2021, Bank has closed down its operations in Tashkent (Uzbekistan), Jalalabad
(Afghanistan) and Sylhet (Bangladesh). The licenses of Ashgabat (Turkmenistan), Dushanbe (Tajikistan) and
Almaty (Kazakhstan) have been cancelled and these locations are under closure process. Further, as of
January 17, 2022, the BoD has approved the closure of its operation of Paris branch.
Contingency Regarding the Pension Case
Status of the case is the same as disclosed in Note 25.3.3.1 to the Annual Financial Statements for the year
ended December 31, 2020. The Bank's estimate overall increase in pension liability, based on the
independent actuarial firm report, amounted to PKR 74.4Bn, excluding any penal interest / profit payment (if
any) due to delayed payment. Further, the potential pension expense for the year 2021 onward will also
increase by PKR 8.4 Bn due to this decision. Based on the opinion of legal counsel, no provision for any
additional pension liability has been made in these annual financial statements for the above mentioned
amount as the Bank is confident about a favourable outcome on the matter. External auditors of the Bank
have inserted an emphasis of matter para in their Audit report.
Changes in the Board of Directors
In exercise of powers conferred under Section 11(3) (a) of the Banks (Nationalization) Act, 1947, the Federal
Government appointed Mr. Ahsan Ali Chughtai as an Independent Director on the Board of National Bank of
Pakistan. Whereas, Mr. Muhammad Suhail Rajput resigned from the NBP Board. Further details are given in
the Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulation, 2019

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Credit Ratings
NBP is rated as 'AAA' by both the recognised credit rating agencies in Pakistan. In June 2021, M/s VIS Credit
Rating Company re-affirmed the Bank's standalone credit rating as "AAA", the highest credit rating awarded
by the company for a bank in Pakistan. Similarly, M/s PACRA Credit Rating Company also assigned the Bank
long-term entity rating as 'AAA' (Triple AAA) and short-term credit rating as 'AlV (A-one Plus).
Our Response to Covid-19
Covid-19 continues to pose health and financial risks to the Bank, its employees and its customers, with
varied impacts across industries, communities and states. NBP has remained open for business, and
continues to work alongside governments, regulators and the broader industry to support customers and the
community. During these challenging times, the Board stood with the Management in framing responses to
emerging risks related to e.g. (i) Employee Health & Safety; (ii) Customer Relief; (iii) Operational Resilience;
(iv) Financial Soundness of the Bank; and (v) effective AML/CTF/KCY monitoring, etc. In these challenging
times, Your Board and the Management are actively monitoring the situation and adapting responses required
to build resilience of the Bank, while creating opportunities for the Bank's customers and the communities it
serves.
Impact of the Bank's Business on the Environment
The Bank is cognizant of the environmental consequences of its operations and its obligation to safeguard
against environmental vulnerabilities. While the Bank's business operations do not have a direct impact on the
environment, the Bank has taken measures for implementation of the Green Banking initiatives under the
SBP's Green Banking Guidelines to provide finance to transform the economy into a resource efficient and
climate resilient one. We are putting in place appropriate mechanisms to identify, assess and mitigate
environmental risks.
Appointment of Auditors
The existing auditors of the Bank M/s Yousuf Adil Chartered Accountants and M/s A. F. Ferguson & Co.
Chartered Accountants will be retiring this year. The Board is pleased to endorse the recommendation of the
Board Audit Committee for re-appointment of M/s A. F. Ferguson & Co. Chartered Accountants and M/s
Yousuf Adil Chartered Accountants, both having offered and eligible for the same, as external auditors of the
Bank for the year ending December 31, 2022 on such remuneration as approved by the shareholders in the
73rd Annual General Meeting to be held on March 30, 2022.
Endorsement
The Board of Directors is pleased to endorse following statements included in this Annual Report:
• Statement of Internal Controls
• Pattern of holding of the Shareholding
• Corporate Sustainability initiatives as disclosed separately in the Annual Report
Future Outlook
The continued rollout of the COVID-19 vaccination program, structural reforms, and the expansion of social
protection programs are all key to ensuring inclusive and sustainable growth towards achieving the forecast
growth of ~5%. Fiscal incentives and policies to boost export competitiveness bolster the performance of the
manufacturing sector and augment private investment will continue to play an instrumental role in
strengthening the economic outlook. However, some volatility may be expected amidst the recent geo-political
changes in the region. While policy responses are expected to remain accommodative and soften the blow
dealt to businesses by the pandemic outbreak, these may not fully offset the effects.
Your Bank will continue to play its National role towards supporting a robust economic recovery in the country,
while also maintaining a strong & resilient balance sheet to deliver performance for its shareholders. The
Bank's business strategy will remain focused on financing and supporting underserved sectors including SME,
Microfinance, Agriculture Finance and the PM's Low-Cost Housing initiative as well as Islamic financing on a
priority basis.
Acknowledgement & Appreciation
We appreciate the continued efforts & dedication of our employees towards ensuring continuity of
uninterrupted service to the Nation amidst the pandemic. We pay special respect and tribute to all those NBP
staff members who lost their lives in the line of duty during the Covid-19. May Allah grant them the highest
place in Jannah.

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We would like to acknowledge the Government of Pakistan, the State Bank of Pakistan, the SECP and other
regulatory bodies for their continued support in enabling the Bank to achieve its true potential and contribute
towards the socio-economic development of Pakistan.
We would also like to thank our present teammates and the retiring teammate, Mr. Muhammad Suhail Rajput
for his contributions on the Board towards making the Bank resilient and capable of creating inclusive growth
opportunities for the Nation. We welcome Mr. Ahsan Ali Chugtai on the Board.
For and on behalf of the Board of Directors

Karachi
Dated: March 08, 2022

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Anther Practical Example

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Example 07:

The state of the affairs may be summarised by the directors in one broad paragraph or it may be discussed by
them at length, depending upon the quality of information available to share with the members of the
company.

Example 08:

Auditor's report of the company is addressed to the members of the company, if the auditor has pointed out
any observation or has in any way modified his opinion, the directors should address the matter and provide
the members with their version of situation so that the members can better assess the situation as highlighted
by the auditor's report.

Example 09:

Say, the year-end date of company is 30th June 2012 and directors' report is dated for 01 st October 2012. On
3rd September company has entered into a major joint venture with a foreign company. This joint, venture is a
matter that needs to be discussed in the directors' report; similarly, if government has imposed certain
additional taxation on the company between the end of financial year and the date of directors' report,
directors' report would have addressed this matter as well.

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Accounts and Annual Return Chapter-01

Section 130

Specified Form = Form A of Companies (General Provisions and Forms)

Regulations, 2018 = For company having Share Capital

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INSTRUCTIONS FOR FILLING FORM-A

1. The Form shall be made upto the date of last AGM of the Company or the last date of the
calendar year where no AGM is held during the year.
2. Under S. No.2.17 above, the aggregate number of shares held by each member should be
stated.
3. When the shares are of different classes the columns should be subdivided so that the number
of each class held, is shown separately against S. Nos. 2.7, 2.8 and 2.17
4. If the space provided in the Form is insufficient, the required information should be listed in a
separate statement attached to this return which should be similarly signed.
5. In case a body corporate is a member, registration number may be mentioned instead of NIC
number.
6. In case of foreign nationals, indicate “passport number” in the space provided for “NIC No.”
Pakistani nationals will only indicate “NIC No.”
7. This form is to be filed within 30 days of the date indicated in S.No.1.4.

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Specified Form = Form B of Companies (General Provisions and Forms)

Regulations, 2018 = For company not having Share Capital

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From C  Practical Example

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 Accounts and Annual Return Chapter-01

Practical Example of Contravention and Penalty Thereon

Date of Name of Penalty Imposed Current

S. No. Name of Company Name of Offence Action Taken
Action Individuals (In Rupees) Status of Order

Penalty was imposed on the company.

The Company failed to file its
IZZATULLAH AND UMRA Moreover, the company and its
Annual Return (Form A/B in Final order
529 4-Jan-21 SERVICES (PRIVATE) N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
UMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
Moreover, the company and its
JAZIRA HAJJ SERVICES Annual Return (Form A/B in Final order
530 4-Jan-21 N/A management were directed to comply 25,000
(PRIVATE) UMITED violation of Section 130 (3) of the (no appeal filed)
with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KARWAN-E-AL-HAMMAD Moreover, the company and its
Annual Return (Form A/B in Final order
531 4-Jan-21 HAJJ SERVICES N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
(PRIVATE) UMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KARWAN-E-ASHAR HAJJ Moreover, the company and its
Annual Return (Form A/B in Final order
532 4-Jan-21 SERVICES (PRIVATE) N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
UMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KARWAN-E-BALOCHIA Moreover, the company and its
Annual Return (Form A/B in Final order
533 4-Jan-21 TRAVELS & TOURS N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
(PRAVATE) LIMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KARWAN-E-KECH HAJJ & Moreover, the company and its
Annual Return (Form A/B in Final order
534 4-Jan-21 UMRAH SERVICES N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
(PRAVATE) LIMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KARWAN-E-MAZ BIN Moreover, the company and its
Annual Return (Form A/B in Final order
535 4-Jan-21 JABAL HAJJ SERVICES N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
(PRAVATE) LIMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KHURAI NOORZAI Moreover, the company and its
Annual Return (Form A/B in Final order
536 4-Jan-21 TRAVEL & TOURS N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
(PRIVATE) LIMITED with the provisions of law in letter and
companies Act, 2017.
spirit in future

Penalty was imposed on the company.

The Company failed to file its
KIFAYATULLAH HAJJ AND Moreover, the company and its
Annual Return (Form A/B in Final order
537 4-Jan-21 UMRAH SERVICES N/A management were directed to comply 25,000
violation of Section 130 (3) of the (no appeal filed)
(PRIVATE) UMFFCD with the provisions of law in letter and
companies Act, 2017.
spirit in future

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Example 12:

ABC Limited recent financial year ended on 30th June 2021 and AGM was held on 24th October 2021. The
particulars of annual return shall be prepared as on 24th October 2021. The annual return must be filed with
the registrar by 22nd November.

Example 13:

DEF Limited financial year ended on 30th June 2021, however, its AGM was not held, and hence it shall be a
contravention of the provisions of the Companies Act, 2017. Even if AGM was not held the particulars of
annual return must be prepared by DEF Limited as on 31st December 2021 and must be filed with the
registrar. Failure to file such annual return by 29th January 2022 shall be another contravention of the law.

Example 14:

ABC Limited recent financial year ended on 30th June 2022 and AGM was held on 24th October 2022. There is
no change since in any particulars of annual return since the last date of annual return. ABC Limited must
inform the registrar on Form C by 22nd November 2022 that there is no change of particulars in the last annual
return filed with the registrar.

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CHAPTER
2

SHARE CAPITAL

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Section 58, 60, 61 and 62

It is very IMPORTANT. It means that partly paid shares are not allowed. The concept of partly paid exist in
Companies Act, 1913 but it was deleted in Companies Ordinance, 1984.

58. Classes and kinds of share capital.—

A company having share capital shall issue only fully paid shares which may be of different kinds and classes as
provided by its; memorandum and articles:
Provided that different rights and privileges in relation to the different kinds and classes of shares may only be conferred in
such I manner as may be specified.
Example 01:
ABC Limited, a public company has authorised share capital of 800,000 ordinary shares of Rs.10 each (Rs. 8,000,000 in
total). The nominal value of the shares is Rs.10 per share. The issued share capital is 400,000 ordinary shares. All of
these, 400,000 shares are fully paid.
Authorised share capital is Rs. 8,000,000 (800,000 shares of Rs. 10). Issued share capital is 4,000,000 (400,000 shares of
Rs. 10). The maximum liability of the shareholders for the unpaid debts of the company, in the event of the company's
liquidation, is zero as all of the nominal value is fully paid.
Nominal Value
This is face value of shares, also called par value and stated value.
Market Value
This is the value at which share are traded at stock exchange or otherwise. This is usually higher than nominal value.
Example 02:
The ordinary shares in a company may be divided into 500,000 shares, all of Rs.10 each. Within the same class, there
cannot be shares for differing nominal amounts and all the shares carry equal rights and privileges.
Example 03:
A company limited by shares may have different kinds (ordinary and preference etc.) of share capital and various classes
(class A, class B etc.) under each kind.
Explanation
A company shall have more than one kind of share capital only if it has authorised capital (in memorandum) of all those
kinds.
Ordinary Shares vs. Preference Shares

Ordinary Shares Preference Shares

Voting rights The ordinary shareholders are entitled to vote at The preference shareholders are usually not
general meetings of the company. Usually, entitled to vote at general meetings of the
different class of ordinary shares have different company or are entitled to vote for only on certain
voting rights. issues as mentioned in articles.

Dividend They are entitled to residual profit after payment of They are entitled to prior right (ahead of ordinary
rights preference dividend. shares) to dividend which is usually fixed and
cumulative.

Winding up They are entitled to all surplus assets after return They have prior right of return of nominal value,
of nominal value to preference shareholders. but no further participation in surplus.

Basis of Ordinary shares may be of different classes on the Preference shares may be of different classes on
different basis of different voting rights, rights the basis of accumulation or otherwise of the
classes disproportionate to paid up shares, or different dividend on preference shares, on the basis of
entitlements of dividend, right issue and issue of redemption or conversion of preference shares
bonus into

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< Each share certificate shall be unique from another one in respect of
<The section is talking about physical shares>
unique number >

60. Numbering of shares.—

Every share in a company having a share capital shall be distinguished by its distinctive number:
Provided that nothing in this section shall apply to a share held by a person whose name is entered as holder
of beneficial interest I in such share in the records of a central depository system.

Reason = Where any share certificate is lost, it is addressed by its distinctive number. If no
distinctive number, then how to address a specific share certificate which is lost.

This section does not apply to shares that are held in book entry form.
In book entry form, the holder is Central Depository Company but the beneficial interest (Owner) is respective
"Shareholder".

61. Nature of shares or other securities.—

The shares or other securities of any member in a company shall be movable property transferable in the
manner provided by the articles of the company.

62. Shares certificate to be evidence. —

< Other than Listed Companies >
(1) A certificate, if issued in physical form under signature of authorized officer of the company as may be
specified or issued in book-entry form, specifying the shares held by any person or shares held in
<Central Depository Company>
central depository system shall be prima facie evidence of the title of the person to such shares.
< On the face >

The law is overriding Articles of Company

(2) Notwithstanding anything contained in the articles of a company, the manner of issue of a
certificate of shares, the form of such certificate and other matters shall be such as may be specified.

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Section 25

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Alteration of Articles - Section 38 and 59

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Section 85

(1) A company having share capital may, if so authorised by its articles, alter the conditions of its memorandum through
a special resolution, so as to-

Generally, this clause exist in Articles of Association. If this is not exist then, first we amend our articles and then amend
our memorandum

ALTERATION OF CAPITAL
15. The company may, by special resolution—
(a) increase its authorised capital by such amount as it thinks expedient; 1
(b) consolidate and divide the whole or any part of its share capital into shares of larger amount than its
existing shares;
(c) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum;
(d) cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or
agreed to be taken by any person, and diminish the amount of its share capital by the amount of the share
so cancelled.

Format of Memorandum of Association

Memorandum of Association:
- Authorized Share Capital xxxx
Ordinary Shares
Class A xxxx
Class B xxxx
Preference Shares
Class A xxxx
Class B xxxx

(a) increase its authorised capital by such amount as it thinks expedient;

< If company want to increase its Paid-Up Capital in future >
(b) consolidate and divide the whole or any part of its share capital into shares of larger amount than its existing
shares;
(c) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum:
(d) cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to
be taken by any person, and diminish the amount of its share capital by the amount of the share so cancelled:

For Example:
If authorized capital of the company is 10,000 Shares of Rs. 10 each 100,000
Issued, Subscribed and Paid-Up Capital (5,000 Shares of Rs. 10 each) 50,000
A company may by passing special resolution cancel its share capital by 50,000 (i.e. share not taken up)

Provided that, in the event of consolidation or sub-division of shares, the rights attaching to the new shares shall be
strictly proportional to the rights attached to the previous shares so consolidated or sub-divided:

Provided further that, where any shares issued are of a class which is the same as that of shares previously
issued, the rights attaching to the new shares shall be the same as those attached to the shares previously held.

For Example: If a company has authorized capital of Rs. 100,000 (10,000 Shares of Rs. 10 each) and all its
shares are subscribed and it wants to issue further share capital and wants to issue the same class as previously
held then rights of new shares to be issued shall be same as previous one.

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Effect of rights of share holders:

In case of consolidation or subdivision of shares, rights shall be strictly proportional to previous shares.
This means that if class A of ordinary shareholders, having a right of 2 votes in general meeting, then:
A) In case of Consolidation of 2 shares into one, shareholder have the right of 4 votes.
B) In case of sub-division of a share into 2 shares, shareholder have the right of 1 vote.

It means “Equal”

(2) The new shares issued by a company shall rank pari passu with the existing shares of the class to which the new
shares belong in all matters, including the right to such bonus or right issue and dividend as may be declared by the
company subsequent to the date of issue of such new shares.

< This is the case when new shares are issued having class same as previous one >

(3) A cancellation of shares in pursuance of sub-section (1) shall not be deemed to be a reduction of share capital within
the meaning of this Act. Section 89 (Not in Course)

(4) The company shall file with the registrar notice of the exercise of any power referred to in sub-section (1) within
fifteen days from the exercise thereof.

Example 06:
JKL Limited has authorised and paid up share capital of Rs. 500 million divided into 5 million shares of Rs. 100 each. In
order to increase the marketability of the company's shares, the board of directors suggested the sub-division of shares
into shares of smaller par value of Rs. 10 each without changing the total paid up value of the share capital. A special
resolution to this effect was passed by the company in its annual general meeting held on 24th October 2022.
JKL Limited must file the copy of such special resolution and altered copy of memorandum with the registrar by 7 th
November 2022 (i.e. 15 days from the date of passing the resolution).

(5) Any violation of this section shall be an offence liable to a penalty of level 1 on the standard scale.

Example 04:
ABC (Pvt) Limited has got an authorised and paid up share capital of Rs. 500 million divided into 5 million shares of Rs.
100 each. The company may alter this capital by special resolution and declare that the authorised and paid up share
capital of the company is Rs. 500 Million but now it is divided into 50 million shares of Rs. 10 each. This is division of
capital into shares of a smaller amount than originally fixed by the memorandum. Every member possessing one share
shall now possess 10 shares but overall paid up value of shares will remain the same.
Example 05:
ABC (Pvt) Limited has got an authorised ordinary share capital of Rs. 500 million divided into 50 million ordinary shares of
Rs. 10 each, out of total authorised capital Rs. 200 million is already paid up. The company if so resolve in the general
meeting may subdivide the unissued authorised capital into preference and ordinary shares by stating in the authorised
capital clause of the memorandum that the authorised capital of the company is Rs. 500 Million divided into 25 million
ordinary shares for Rs. 10 each and 25 million preference shares of Rs. 10 each.
Example 07:
ABC (Pvt) Limited has got an authorised and paid up share capital of Rs. 500 million divided into 5 million shares of Rs.
100 each. The company may alter this capital by special resolution and declare that the authorised and paid up share
capital of the company is Rs. 500 Million but now it is divided into 50 million shares of Rs. 10 each. This is division of
capital into shares of a smaller amount than originally fixed by the memorandum. Every member possessing one share
shall now possess 10 shares but overall paid up value of shares will remain the same.
The rights attaching to the new shares shall be strictly proportional to the rights attached to the previous shares i.e. sub-
division of shares shall not affect the rights of shareholders.

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PRACTICAL EXAMPLE IN RELATION TO THIS

1. Notice of General Meeting

Ref: SMBL/CSD/2021/10-21 FORM-4

Date: 14.10.2021

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Notice of 14th Annual General Meeting of Summit Bank Limited

Dear Sir,

Enclosed please find a copy of the Notice of the Annual General Meeting to be held on November 04, 2021
for circulation amongst the TRE Certificate Holders of the Exchange.
Thanking you,
Yours truly,

For and on behalf of

Summit Bank Limited

Encl:
(i) Newspaper Clipping of 'Daily The Nation' English, October 14, 2021 edition (KHI/LHR/ISB).
(ii) Newspaper Clipping of 'Daily Nawa-i-Waqt' Urdu, October 14, 2021 edition (KHI/LHR/ISB).

COMMITED TO YOU
Corporate Affairs Division
Summit Tower  Head Office
Level-11, Plot No. G-2, Block – 2, Clifton, Karachi
Direct: +9221-32410851 / 32473205 PABX: +9221-32468400 Ext. 2861 Fax: +9221-32472193
Email: companysecretary@summitabank.com.pk Website: www.summitabank.com.pk

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NOTICE OF THE FOURTEENTH ANNUAL GENERAL MEETING

OF THE SHAREHOLDERS OF SUMMIT BANK LIMITED
NOTICE is hereby given that the Fourteenth Annual General Meeting of the Shareholders (the "Shareholders") of Summit Bank Limited (the "Bank") will be
held on November 04, 2021 at 11:00 a.m. at Serena Hotel, Islamabad to transact the following business:

AGENDA
Ordinary Business:

1. To confirm the minutes of the Annual General Meeting of the Bank held on October 26, 2020.

2. To receive, consider and adopt the audited financial statements of the Bank together with the Directors' and Auditors' Reports for the year ended
December 31, 2019.

3. To appoint External Auditors of the Bank for the financial year ended December 31, 2020 till the conclusion of the next Annual General Meeting and
fix their remuneration (present Auditors', M/s. Baker Tilly Mehmood Idrees Qamar, Chartered Accountants being eligible, have offered themselves
for re-appointment).

Special Business:

4. To consider and approve the increase in the Authorized Share Capital of the Bank together with the necessary changes in the relevant clauses of
the Memorandum and Articles of Association of the Bank by passing the following resolutions, with or without modification, as a Special Resolution:

'RESOLVED THAT in compliance with section 85 of the Companies Act, 2017 read with other applicable provisions, the Authorized Capital of the
Bank be and is hereby increased from PKR 28,000,000,000/- (Rupees Twenty-Eight Billion Only) divided into 2,800,000,000 shares of PKR 10/-
(Rupees Ten) to PKR 90,000,000,000/- (Rupees Ninety Billion Only) divided into 9,000,000,000 shares of PKR 10/- (Rupees Ten) each and the
Memorandum and Articles of Association be amended and read as under:

Clause V of the Memorandum of Association:

The Share Capital of the Bank is PKR 90,000,000,000/- (Rupees Ninety Billion Only) divided into 9,000,000,000 shares of PKR 10/- (Rupees Ten)
each with power to the Bank from time to time increase, reduce or reorganize its capital or to sub-divide the shares in the capital for the time being
into several classes. The share capital shall comprise of one or more kinds of shares and different classes of shares under each kind as permitted
by the Companies Share Capital (Variation in Rights and Privileges) Rules, 2000 as amended from time to time, with such rights and privileges
attached thereto as may be approved by the members from time to time by a Special Resolution.

Article 6 of the Articles of Association:

The Capital of the Bank is PKR 90,000,000,000/- (Rupees Ninety Billion Only) divided into 9,000,000,000 shares of PKR 10/- (Rupees Ten) each
with power to increase or reduce the capital and to divide the share in the capital for the time being into several classes provided however, that
rights as between various classes of ordinary shares (if any) as to profits, votes and other benefits shall be strictly proportionate to the paid-up value
of the shares.

5. To consider and if thought fit, to pass with or without modification, addition or deletion, the following resolution as Special Resolution:

'RESOLVED THAT subject to acquiring requisite regulatory approvals and ensuring compliance with Section 82 of the Companies Act, 2017 read
with applicable requirements of Companies (Further Issue of Shares), Regulations, 2020 (Regulations) and the Guidelines issued by the Securities
and Exchange Commission of Pakistan for Issue of Shares at a Discount (Guidelines), the Bank be and is hereby authorized to issue 5,976,095,618
new ordinary shares (Five Billion Nine Hundred Seventy-Six Million Ninety-Five Thousand Six Hundred Eighteen) by way of without rights offer to
His Excellency Nasser Abdulla Hussain Lootah (the Acquirer) and the minority shareholders at a discounted price of PKR 2.51 (Rupees Two and
Fifty-One Paisas Only) per share for fresh equity injection in the Bank (the Transaction).

'FURTHER RESOLVED THAT the President and CEO and/or the Company Secretary of the Bank, be and are hereby jointly and / or severally
authorized, to take all steps necessary, ancillary and incidental for the issuance of new ordinary shares of the Bank at a Discount, including but not
limited to obtaining all requisite regulatory approvals; filing of all the requisite statutory forms and all other documents as may be required to be filed
with the Companies Registration Office of the Securities and Exchange Commission of Pakistan, submitting all such documents as may be required
with the State Bank of Pakistan, executing all such certificates, applications, notices, reports, letters and any other document or instrument including
any amendments or substitutions to any of the foregoing as may be required in respect of the issue of shares at Discount under Section 82 of the
Companies Act, 2017, the related Regulations and Guidelines and all other matters incidental or ancillary thereto for the Transaction.

6. To consider and if thought fit, to pass with or without modification, addition or deletion, the following resolution as Special Resolution:

'RESOLVED THAT subject to applicable regulatory approvals and in accordance with the provisions of Section 83 of the Companies Act, 2017, the
Bank be and is hereby authorized (acting through the authorized representative) to issue further share capital of the Bank, to the extent of PKR
59,760,956,180 (Rupees Fifty-Nine Billion Seven Hundred Sixty Million Nine Hundred Fifty-Six Thousand One Hundred Eighty only) by the issuance
of 5,976,095,618 new ordinary shares (Five Billion Nine Hundred Seventy-Six Million Ninety-Five Thousand Six Hundred Eighteen) by way of other
than Rights Issue at the discounted price of PKR 2.51 (Rupees Two and Fifty-One Paisas Only) per share in favour of the Acquirer and the minority
shareholders pursuant to the share subscription agreement entered into between the Acquirer and the Bank (the Subscription Agreement) and that
such new shares shall rank pari passu with the existing shares of the Bank for fresh equity injection in the Bank (the Transaction).

'FURTHER RESOLVED THAT the President and CEO and/or the Company Secretary of the Bank, be and are hereby jointly and / or severally
authorized, to take all steps necessary, ancillary and incidental for the issuance of further shares of the Bank, including but not limited to obtaining
all requisite regulatory approvals; filing of all the requisite statutory forms and all other documents as may be required to be filed with the Companies
Registration Office of the Securities and Exchange Commission of Pakistan, submitting all such documents as may be required with the State Bank
of Pakistan, executing all such certificates, applications, notices, reports, letters and any other document or instrument including any amendments
or substitutions to any of the foregoing as may be required in respect of the issue of shares by way of other than Rights under Section 83 of the
Companies Act, 2017 and all other matters incidental or ancillary thereto for the Transaction.

Other Business:

7. To transact any other business with the permission of the chair.

By order of the Board

Place: Karachi Syed Muhammad Talib Raza

Date: October 14, 2021 Company Secretary

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Notes:

1. The share transfer books of the Bank will be closed from October 29, 2021 to November 04, 2021 (both days inclusive). Transfers
received by our Shares Registrar, M/s. THK Associates (Private) Limited, 32-C, Jami Commercial Street No.2, D.H.A, Phase 7, Karachi at
the close of business i.e. October 28, 2021 shall be treated in time for the purpose of entitlement to attend the said AGM.

2. A member entitled to attend and vote at this meeting may appoint another member as his / her proxy to attend, speak and vote on his / her
behalf. A corporation being a member may appoint as its proxy any of its official or any other person whether a member of the Bank or
otherwise.

3. An instrument of proxy and Power of Attorney or other authority (if any) under which it is signed or notarized, copy of such Power of
Attorney must be valid and deposited with the Share Registrar of the Bank, M/s. THK Associates (Private) Limited, 32-C, Jami
Commercial Street No.2, D.H.A, Phase 7, Karachi duly stamped, signed and witnessed not less than 48 hours before the time of the
meeting.

4. Members are requested to notify any change in their addresses immediately.

5. In accordance with SECP's directives, it is mandatory for all the shareholders to have their valid CNIC number recorded with the Bank.
Members who have not yet submitted photocopies of their CNICs to the Registrar are requested once again to submit a valid attested
copy of their CNICs with our Share Registrar, M/s. THK Associates (Private) Limited.

6. Those shareholders whose shares are deposited with Central Depository Company of Pakistan Limited (CDC) are requested to bring their
original Computerized National Identity Card (CNIC) along with the participant ID number and their account/sub-account numbers in CDC
to facilitate identification at the time of AGM. In case of proxy, attested copies of proxy CNIC or passport, Account and Participant ID
number must be deposited along with the Form of Proxy with our Share Registrar. In case of proxy for corporate members, the Board of
Directors' Resolution / Power of Attorney with specimen signature of the nominee shall be produced at the time of the meeting unless it
has been provided earlier to the Share Registrar.

7. Shareholders having physical scrip of shares are requested to promptly notify change in their postal address and / or email address if any,
to our Share Registrar, in writing, whereas CDC account holders are requested to contact their CDC Participant / CDC Account Services.

8. Pursuant to SECP S.R.O No. 43(l)/2016 dated January 22, 2016, members can also exercise their right to vote through e-voting by giving
their consent in writing at least 10 days before the date of the meeting to the Bank on the appointment by the Intermediary as a Proxy.

For Attending the Meeting:

i. In case of individuals, the account holders or sub-account holder and/or the person whose securities are in group account and
their registration details are uploaded as per the Regulations, shall authenticate his/her identity by showing his/her original
Computerized National Identity Card ("CNIC") or original passport at the time of attending the Meeting.

ii. In case of corporate entity, the Board of Directors' Resolution/Power of Attorney with specimen signature of the nominee shall be
produced (unless it has been provided earlier) at the time of the Meeting.

For Appointing of Proxies:

i. In case of individuals, the accountholder or sub-accountholder and/or the person whose securities are in group account and their
registration details are uploaded as per the CDC Regulations, shall submit the proxy form as per the above requirement.

ii. The proxy form shall be witnessed by the two persons whose names, addresses and CNIC numbers shall be mentioned on the
form.

iii. Attested copy of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form.

iv. The proxy shall produce his/her original CNIC or passport at the time of the meeting.

v. In case of corporate entity, the Board of Directors Resolution/ Power of Attorney with specimen signature shall be submitted
along with proxy form of the Bank.

9. A Proxy Form, both in English and Urdu language, is being separately sent to the members, along with the Notice of AGM.

10. In accordance with SECP Circular No. 10 of 2014 dated May 21, 2014 (the Circular), member holding in an aggregate of 10% or more
shareholding in the paid-up capital of the Bank residing in a city, may avail video conference facility to attend the meeting.

Requirement and procedure for availing video conference facility as stipulated in the Circular are detailed here as under:

The member should provide their consent as per the following format and submit to the registered address of the Bank 10 days before
holding of general meeting. Consent Form for Video Conference Facility

I/We __________________of ________________being a member of Summit Bank Limited, holder of ______________________ordinary

shares as per Register Folio / CDC Account No __________________________________ hereby opt for video conference facility at
______________________________ (geographical location).

11. As per Section 72 of the Companies Act, 2017, every existing listed company shall be required to replace its physical shares with book-
entry form in a manner as may be specified and from the date notified by the Commission, within a period not exceeding four years from
the commencement of this Act, i.e., May 30, 2017.

The Shareholders having physical shareholding are encouraged to open CDC sub-account with any of the brokers or Investor Account
directly with CDC to place their physical shares into scrip less form, this will facilitate them in many ways, including safe custody and sale
of shares, any time they want, as the trading of physical shares is not permitted as per existing regulations of the Pakistan Stock
Exchange.

12. Shareholders who could not collect their dividend / physical shares are advised to contact our Share Registrar to collect/enquire about
their unclaimed dividend or shares, if any. In compliance with Section 244 of the Companies Act, 2017, after having completed the
stipulated procedure, all such dividend and shares outstanding for a period of three (3) years or more from the date due and payable shall
be deposited to the credit of the Federal Government in case of unclaimed dividend and in case of shares, shall be delivered to the SECP.

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13. Copies of the Notice of AGM and the latest annual audited/quarterly financial statements of the Bank have been kept at the
Registered Office of the Bank which can be obtained and/or inspected during the business hours on any working day from the
date of publication of this Notice till the conclusion of the AGM by the members and other persons entitled to attend the Meeting.
Notice of the Fourteenth (14th) AGM and the latest annual audited/quarterly financial statements have further been placed on the
website of the Bank: www.summitbank.com.pk.
14. The Securities & Exchange Commission of Pakistan (SECP) through its SRO 470(1)/2016 dated May 31, 2016 has allowed the
companies to circulate its Annual Audited Financial Statements to its members through CD/DVD/USB or any electronic media at
their registered addresses.
However, shareholders who wish to receive the hard copy of the Financial Statements shall have to fill out the 'Standard Request
Form' available on the Bank's website and send to us at the given addresses.
Statement of Material Facts under Section 134 (3) of the Companies Act. 2017 relating to Special Business
Agenda Item No. 4
The increase in authorized capital of the Bank is necessitated to absorb the increase in the paid up capital and to have sufficient cushion
available for new ordinary shares accruing out of issue of shares by way of other than rights and at discount to His Excellency Nasser
Abdulla Hussain Lootah (the Acquirer) and the minority shareholders for fresh equity injection in the Bank (the Transaction) pursuant to
the share subscription agreement entered into between the Acquirer and the Bank (the Subscription Agreement) subject to the approval
of the competent authorities and the shareholders of the Bank.
The Board of Directors of the Bank in their meeting held on October 08, 2021 have recommended for the increase in the authorized
capital from PKR 28 BN to PKR 90 BN subject to the approval of the regulatory authorities and the shareholders of the Bank in their
general meeting.
The proposed increase in the authorized capital of the Bank shall be followed with the changes in the relevant capital clauses of the
Memorandum and Articles of Association of the Bank which shall accordingly be amended.
Agenda Item No. 5
In order to facilitate the Bank in increasing its paid-up capital, His Excellency Nasser Abdulla Hussain Lootah, as the Acquirer, conveyed
his Offer for fresh equity injection in the Bank through subscribing new ordinary shares by way of other than rights and at a discount
together with acquiring at least 51 % voting shares and controlling interest of the Bank in accordance with the provisions of the
Companies Act, 2017, Securities Act, 2015, the PSX Rule Book and the Listed Companies (Substantial Acquisition of Voting Shares and
Takeovers) Regulations, 2017.
The justification for the issuance of shares at a discount is as follows:
(a), the strategic value of the proposed Transaction by the Acquirer is for achieving financial viability of the Bank;
(b). to give a positive signal to the banking sector / market from such investment;
(c). to inject the substantial equity aiming to assist the Bank in achieving its growth plans.
The Board of Directors of the Bank in their meeting held on October 08, 2021 have recommended for the issue of shares at discount
subject to the approval of the regulatory authorities and the shareholders of the Bank in their general meeting.
Agenda item No. 6
The Board of Directors approved the Offer and the subscription of new ordinary shares for fresh equity injection in the Bank (the
Transaction) by issue of shares other than rights and at a discount price pursuant to the share subscription agreement entered into
between the Acquirer and the Bank (the Subscription Agreement).
The details of issue of shares by way of other than rights are as follows:
(a), the quantum of the issue of shares is to the extent of 5,976,095,618 new ordinary shares (Five Billion Nine Hundred Seventy-Six
Million Ninety-Five Thousand Six Hundred Eighteen) by way of other than Rights Issue,
(b). the new shares shall be issued at the discounted price of PKR 2.51 (Rupees Two and Fifty-One Paisas Only) per share,
(c). the consideration for the issue of new shares shall be cash.
(d). the new ordinary shares shall be issued to the Acquirer and the minority shareholders.
Interest of Directors
The Directors of the Bank have no direct or indirect interest in the Special Resolution, except and to the extent of their shareholding in the
Bank.
Inspection of Documents
The copies of the Memorandum and Articles of Association of the Bank and the minutes of the last AGM may be inspected / procured free
of cost during the business hours on any working day from the Registered Office / Head Office of the Bank from the date of publication of
the accompanying notice till the conclusion of the Annual General Meeting of the Bank.

www.summitbank.com.pk, 021-1111-24365

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2. Certified True of Resolution Passed in General Meeting

Certified that the following resolutions was passed by the shareholder, of Summit Bank Limited in the
14th (Adjourned) Annual General Meeting held on November 11, 2021 at Serena Hotel, Islamabad.

4. "RESOLVED THAT in compliance with section 85 of the Companies Act, 2017 read with other
applicable provisions, the Authorized Capital of the Bank be and is hereby increased from PKR
28,000,000,000/- (Rupees Twenty-Eight Billion Only) divided into 2,800,(100,000 shares of PKR 10/-
(Rupees Ten) to PKR 90,000,000,000/- (Rupees Ninety Billion Only) divided into 9,000,000,000 shares
of PKR 10/- (Rupees Ten) each and the Memorandum and Articles of Association be amended and read
as under:

Clause V of the Memorandum of Association:

The Share Capital of the Bank is PKR 90,000.000,000/- (Rupees Ninety Billion Only) divided into
9,000,000,000 Shares of PKR 10/- (Rupees Ten) each with power to the Bank from lime to lime
increase, reduce or reorganize its capital or to sub-divide the shares in the capital for the time being into
several classes. The share capital shall comprise of one or more kinds of shares and different classes of
shares under each kind as permitted by the Companies Share Capital (Variation in Rights and
Privileges) Rules, 2000 as amended from time to lime, with such rights and privileges attached thereto
as may be approved by the members from time to time by a Special Resolution.

Article 6 of the Articles of Association:

The Capital of the Bank is PKR 90,000,000,000/- (Rupees Ninety Billion Only) divided into
9,000,000,000 shares of PKR 10/- (Rupees Ten) each with power to increase or reduce the capital and
to divide the share in the capital for the time being into several classes provided however, that rights as
between various classes of ordinary shares (if any) as to profits, votes and other benefits shall be strictly
proportionate to the paid-up value of the shares."

COMMITED TO YOU
Corporate Affairs Division
Summit Tower  Head Office
Level-11, Plot No. G-2, Block – 2, Clifton, Karachi
Direct: +9221-32410851 / 32473205 PABX: +9221-32468400 Ext. 2861 Fax: +9221-32472193
Email: companysecretary@summitabank.com.pk Website: www.summitabank.com.pk

Page 95 CORPORATE LAW BY SIR IBRAHIM

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Transfer of Shares and other Securities (Section: 71 – 80) Chapter-03

CHAPTER
3

TRANSFER OF SHARES AND OTHER

SECURITIES (SECTION: 71 – 80)

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 Transfer of Shares and other Securities (Section: 71 – 80) Chapter-03

Transfer of Shares and other Securities (Section: 71 – 80)

74. Transfer of shares and other securities.—

(1)
(1) An application for registration of transfer of shares and other transferable (2)securities along with
(3)
proper instrument of transfer duly stamped and executed by the transferor and the transferee may be
made to the company either by the transferor or the transferee, and subject to the provisions of this
section, the company shall within fifteen days after the application for the registration of the transfer of
any such securities, complete the process and—
(a) ensure delivery of the certificates to the transferee at his registered address; and
(b) enter in its (4)register of members the name of the transferee:
(5)
Provided that in case of conversion of physical shares and other transferable securities into
book-entry form, the company shall, within ten days after an application is made for the
registration of the transfer of any shares or other securities to a central depository, register such
transfer in the name of the central depository:
(6)
Provided further that nothing in this section shall apply to any transfer of shares or other
securities pursuant to a transaction executed on the securities exchange.
(2) Where a transfer deed is lost, destroyed or mutilated before its lodgment, the company may on an
application made by the (7)transferee and bearing the (8)stamp required by an instrument of transfer,
register the transfer of shares or other securities if the transferee proves to the satisfaction of the
(9)
board that the transfer deed duly executed has been lost, destroyed or mutilated:
(10)
Provided that before registering the transfer of shares or other securities, the company may demand
such indemnity as it may think fit.
(3) All references to the shares or other securities in this section, shall in case of a company not having
share capital, be deemed to be references (11)to interest of the members in the company.
(4) Every company shall maintain at its registered office a register of transfers of shares and other
securities and such register shall be open to inspection by the members and supply of copy thereof in
the manner stated in section 124.
(5) Nothing in sub-section (1) shall prevent a company from registering as shareholder or other securities
holder a person to whom the right to any share or security of the company has been transmitted (12)by
operation of law.
(6) Any violation of this section shall be an offence liable to a penalty of level 2 on the standard scale.

(1) Application may be made by transferor or transferee, there is no restriction in law regarding this
(2) Examples of Transferable Securities:
1. Debenture
2. Sukuk
3. Term Finance Certificate
(3) Transfer Deed
Transferor  The person whose shares and other securities are to be transferred.
Transferee  The person to whom shares and other securities are to be transferred.
(4) In accordance with section 119, of Companies Act, 2017
119. Register of members.—
(1) Every company shall keep a register of its members and any contravention or default in complying with requirement of
this section shall be an offence punishable under this Act.
(2) There must be entered in the register such particulars of each member as may be specified.
(3) In the case of joint holders of shares or stock in a company, the company's register of members shall state the names of
each joint holder. In other respects joint holders shall be regarded for the purposes of this Part as a single member and
the address of the person named first shall be entered in the register:
(4) A person guilty of an offence under this section shall be liable to a penalty of level 1 on the standard scale.

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(5) Conversion of physical shares and other transferable securities into book-entry form:
Example:
Mr. A had purchased shares of ABC Limited (a listed company in Pakistan Stock Exchange) in the year 2000 now want to
dispose his investment. In order to sell his shares in Pakistan Stock Exchange, he shall be required to convert it's physical shares
into book-entry-form (CDC), then he would be able to sale his shares in open market.
In this case
Transferor = Mr. A
Transferee = CDC
Points to be noted, although transferee is CDC but the beneficial owner of shares shall be Mr. A only.
(6) Transfer of shares or other securities where the transaction is executed on securities exchange means normal buying and selling
in ready market in Pakistan Securities Exchange. In this case, this section shall not be applied.
(7) Here the application shall made be by transferee only.
(8) On transfer of shares and other certificates, provincial stamp duty shall be paid.
(9) Board of Directors
Satisfaction of board:
1. Transferee may report a FIR and show it to the board for the board's satisfaction.
2. Another possible way is to make a notice in the news Paper regarding lost of such transfer deed.
Exactly not defined in law.
(10) A type of guarantee that in case of any issue in relation to this transfer in future, transferee shall be fully liable.
(11) In case of company not having share capital, there shall be an agreement of membership. In this case, agreement of
membership shall be transferred from transferor to transferee.
(12) “Transfer by virtue of will, inheritance”
Will be discussed in Section 78.

75. Board not to (13)refuse transfer of shares.—

The board shall not refuse to transfer any shares or securities unless the transfer deed is, for any reason,
defective or invalid:
*Provided that the company shall within fifteen days or, where the transferee is a central depository, within five
days from the date on which the instrument of transfer was lodged with it notify the defect or invalidity to the
transferee who shall, after the removal of such defect or invalidity, be entitled to re-lodge the transfer deed
with the company:
**Provided further that the provisions of this section shall, in relation to a (14)private company, be subject to
such limitations and restrictions as may have been imposed by the articles of such company.

Time period for notifying defect for refusal:

In case of CDC  Within 5 Days
In case of physical certificates  Within 15 Days

(13) “It means each application for transfer shall be given importance and shall not be refused unless otherwise.”
(14) "Remember Private Company Definition"
(49) “private company” means a company which, by its articles-
(a) restricts the right to transfer its shares [,save as otherwise provided under this Act]:
(b) limits the number of its members to fifty not including persons who are in the employment of the company; and
(c) prohibits any invitation to the public to subscribe for the shares, if any. or debentures or redeemable capital of the
company:
Provided that, where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of
this definition, be treated as a single member:

Question: How members of private company will transfer their shares???

"Section 76 of Companies Act, 2017 and Regulation 13 of Companies (General Provisions and Forms)
Regulations, 2018" will guide us in relation to this

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76. Restriction on transfer of shares by the members of a private company.—

(1) Notwithstanding anything contained in section 75,(15) a member of a private company desirous of selling
any shares held by him, shall intimate to the board of his intention through a notice.
[(2) On receipt of such notice, the board shall, within a period of ten days, offer those shares for sale to the
members in proportion to their existing shareholding:
*Provided that a private company may transfer or sell its shares in accordance with its articles of
association and agreement among the shareholders, if any, entered into prior to the commencement of
this Act:
**Provided further that any such agreement will be valid only if it is filed with the registrar within ninety
days of the commencement of this Act.](16)
(3) The letter of offer for sale specifying the number of shares to which the member is entitled, price per
share and specifying the time limit, within which the offer, if not accepted, be deemed as declined, shall
be dispatched to the members through registered post or courier or through electronic mode.
(4) If the whole or any part of the shares offered is declined or is not taken, the board may offer such
shares to the other members in proportion to their shareholding.
(5) If all the members decline to accept the offer or if any shares are left over, the shares may be sold to
any other person as determined by the member, who initiated the offer.
(6) For the purpose of this section, the mechanism to determine the price of shares shall be such, as may
be specified.

Sequence of Transfer
(1) All members in accordance to their existing shareholding.
(2) If some stares are left, remaining shares shall be offered to remaining members in proportion to their
shareholding in the company.
(3) If all members declined, than sale to any to any other person as determined by seller.

(15) This section has overruled Section 75 as referred

(16)
3 Cases:

Company Registered Before the Company Registered Before the

commencement of Companies Act, 2017 (i.e on commencement of Companies Act, 2017 (i.e on
Company Registered after or after 30 May 2017) and it has an agreement or after 30 May 2017) and it has an agreement
the commencement of governing transfer of shares and it is also governing transfer of shares and it is also
Companies Act, 2017 (i.e provided by articles of association + such provided by articles of association + such
on or after 30 May 2017) agreement is filed with the registrar within 90 agreement is not filed with the registrar within
days of commencement of Companies Act, 90 days of commencement of Companies Act,
2017. 2017.

Mandatory Application of Optional Application. It may transfer shares a/c

Mandatory Application of Section 76 of
Section 76 of Companies to such agreement or a/c to section 76 of the
Companies Act, 2017.
Act, 2017. Act.

As agreement was not registered within 90

days of commencement of the act.

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13. Transfer of shares by member of a private company.—

(1) Subject to the provisions of sub-section (1) of section 76 of the Act, a member of a private company,
not being a single member company, desirous to sell any share(s) held by him shall intimate the board
of his intention through a notice.
(16)
(2) The transferor shall offer shares for sale at a specific price or at some other price arrived at through
negotiation between the offering member and the board of directors of the company.
(3) In case all the members decline to accept the offer or if any of the shares are left over, the shares may
be (17)sold to any other person:
Provided that shares shall not be offered to outsiders at a price lower than the offered price.
(4) Nothing in this regulation shall apply to—
(i) the transfer of qualification shares which are required to be held by the director under section
200 of the Act; or(18)
(19)
(ii) the shares, which are required to be transferred by operation of law; or
(20)
(iii) the shares, which have been gifted to family;
Explanation: For the purpose of this clause the word "family"(20) means ''spouse" "children",
"siblings", lineal ascendants and descendants.

(16) Price
1. Price by transferor; or
2. Negotiated price between transferor and Board of Directors of the company.
Sale to outsider:
The price as referred is the minimum price in case of sale to outsider.
If there arises a case of sale to outsider, then this price shall be the benchmark price. Price above this may be charged by
transferor but price below this shall not be allowed under the law.
(17) Covered in above section.
(18) Public Limited Company
(19) Inheritance, Will
(20) Definition of family is provided here for the purpose of this regulation and it shall be used exclusively No other definition of family
shall be included here.

Subsidiary ABC Private Limited.

In case of private limited company, minimum no. of members shall be two.

Question: ??
Are children of siblings fall under the exception?
Answer:
No, as under this regulation children of siblings are not included, they were included under relative definition in
takeover. BUT WE SHALL RESTRICT TO THIS DEFINITION FOR THE PURPOSE OF REG.13

In this case, the company will transfer some shares to Mr. C. THIS TRANSFER WILL FALL UNDER THE
EXCEPTION OF REGULATION 13. AND THIS TRANSFER IS FREE FROM NONCOMPLIANCE UNDER
THE LAW.

New member shall be admitted, otherwise the company fall under the category as mentioned in Section 301,
and the court may wound up the company.

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77. Notice of refusal to transfer.—

(1) If a company refuses to register a transfer of any shares or other securities, the company shall, within
fifteen days after the date on which the instrument of transfer was lodged with the company, send to
the transferee notice of the refusal indicating reasons for such refusal:
Provided that failure of the company to give notice of refusal after the expiry of the period mentioned in
this section or section 75, shall be deemed refusal of transfer.
(2) Any violation of this section shall be an offence liable to a penalty of level 2 on the standard scale.

78. Transfer to successor-in-interest.—

The shares or other securities of a deceased member shall be transferred on application duly supported by
succession certificate or by lawful award, as the case may be, in favour of the successors to the extent of their
interests and their names shall be entered in the register of members. (21)

(21) “Succession Certificate or Legal Award is the key”

79. Transfer to nominee of a deceased member.—

(1) Notwithstanding anything contained in any other law for the time being in force or in any disposition by
a member of a company of his interest represented by the shares held by him as a member of the
company, a person may on acquiring interest in a company as member, represented by shares, at any
time after acquisition of such interest deposit with the company a nomination conferring on a person the
right to protect the interest of the legal heirs in the shares of the deceased in the event of his death, as
a trustee and to facilitate the transfer of shares to the legal heirs of the deceased subject to succession
to be determined under the Islamic law of inheritance and in case of a non-Muslim members, as per
their respective law.
(2) The person nominated under this section shall, after the death of the member, be deemed as a
(22)
member of company till the shares are transferred to the legal heirs and if the deceased was a
director of the company, not being a listed company, the nominee shall also act as director of the
company to protect the interest of the legal heirs.
(3) The person to be nominated under this section shall not be a person other than the relatives of the
member, namely, a spouse, father, mother, brother, sister and son or daughter.(23)
(4) The nomination as aforesaid, shall in no way prejudice the right of the member making the nomination
to transfer, dispose of or otherwise deal in the shares owned by him during his lifetime and, shall have
effect in respect of the shares owned by the said member on the day of his death.

(22) Deemed member

(23) (It must be a relative) List provided here

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80. Appeal against refusal for registration of transfer.—

(1) The transferor or transferee, or the (24)person who gives intimation of the transmission by (25)operation of
law, as the case may be, aggrieved by the refusal of transfer under section 75 to 79 may appeal to the
Commission within a period of sixty days of the date of refusal.
(2) The Commission shall, provide opportunity of hearing to the parties concerned and may, by an order in
writing, direct that the transfer or transmission should be registered by the company and the company
shall give effect to the decision within fifteen days of the receipt of the order.
(3) The Commission may, in its aforesaid order, give such incidental and consequential directions as to the
payment of costs or otherwise as it deems fit.
(4) If default is made in giving effect to the order of the Commission within the period specified in sub-
section (2), every director and officer of the company shall be liable to a penalty of level 3 on the
standard scale.

(24) Legal heirs of deceased under section 78

(25) Will, inheritance

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 Transfer of Shares and other Securities (Section: 71 – 80) Chapter-03

CERTIFICATE OF SHARES AND OTHER SECURITIES

71. Limitation of time for issue of certificates.—

(1) Every company shall issue certificates of shares or other securities within thirty days after the allotment
of any of its shares or other securities and ensure delivery of the certificates to the person entitled
thereto at his registered address.
(2) Any violation of this section shall be an offence liable to a penalty of level 1 on the standard scale.
72. Issuance of shares in book-entry form.—
(1) After the commencement of this Act from a date notified by the Commission,(26) a company having
share capital, shall have shares in book-entry form only.
[(2) Every existing company shall be required to replace its physical shares with book-entry form in a
manner as may be specified and from the date notified by the Commission, within a period not
exceeding four years from the commencement of this Act:
Provided that the Commission may notify different dates for different classes of companies:](27)
(28)
Provided further that the Commission may, if it deems appropriate, extend the period for another two
years besides the period stated herein.
(3) Nothing contained in this section shall apply to the shares of such companies or class of companies as
may be notified by the Commission.

(26) 30 May, 2017

(27) Only listed companies are obliged to issue shares in book entry from in accordance to the provisions of Public Offering
Regulations.
Rest of the companies will be obliged after the notification of the commission.
(28) Reason
As there are many members of listed company and in order to track each and every member, it will be difficult and it takes times
therefore this extension is provided here.

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Example of Notice to PSX

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 Transfer of Shares and other Securities (Section: 71 – 80) Chapter-03

73. Issue of duplicate certificates.—

(1) A duplicate of a certificate of shares, or other securities, shall be issued by the company within thirty
days from the date of application if the original-
(a) is proved to have been lost or destroyed, or
(b) having been defaced or mutilated or torn is surrendered to the company.
(2) The company, after making such inquiry as to the loss, destruction, defacement or mutilation of the
original, as it may deem fit to make, shall, subject to such terms and conditions, if any, as it may
consider necessary, issue the duplicate:
*Provided that the company may charge fee and the actual expenses incurred on such inquiry.
(3) If the company for any reasonable cause is unable to issue duplicate certificate, it shall notify this fact,
along with the reasons within twenty days from the date of the application, to the applicant.
(4) Any violation of this section shall be an offence liable to a penalty of level 1 on the standard scale.
(5) If a company with intent to defraud, issues a duplicate certificate thereof, the company shall be
punishable with fine which may extend to one hundred thousand rupees and every officer of the
company who is in default shall be punishable with imprisonment for a term which may extend to one
hundred and eighty days, or with fine which may extend to fifty thousand rupees, or with both.

(29) Not defined under the law

As part of corporate practice:
1. FIR
2. Notice in newspaper regarding the same
3. Giving notice to PSX

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Example of Notice to PSX

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 Transfer of Shares and other Securities (Section: 71 – 80) Chapter-03

Another Example

Ref. : THK/BOK-LOS/659270/2022
Dated : January 18, 2022

The General Manager

Pakistan Stock Exchange Limited
(Formerly Karachi Stock Exchange Limited)
Stock Exchange Building
Stock Exchange Road
Karachi

Dear Sir,

THE BANK OF KHYBER

LOSS OF SHARES

We have to inform you that the following Certificate(s) have been reported lost.

Folio Person notified the Certificate No Distinctive Number (s)

Address Quantity
Number loss From To From To
24827 Abdur Raoof Hafiz A-1, Erum Palace, 25951 * 136059449 136059948 500
Block-13-A, Gulshan-e- 92001 193355795 193355903 109
Iqbal, Karachi.
0344-2002040

Please circulate the above information amongst the members of the Exchange advising them not to deal in the
Certificate(s) if the company does not receive any objection within 07 days of the notice, Duplicate Certificates will be
issued to the concerned.
Yours truly,

ASSISTANT MANAGER
REGISTRARS: THE BANK OF KHYBER

Head Office – Karachi

Plot No. 32-C, Jami Commercial Street 2, D.H.A Phase VII, Karachi-75500 Pakistan.
UAN : +92 (021) 111-000-322, Ext. 111 to 115, Tel: Direct: +92 (021) 35310191-192-193, Fax : +92 (021) 35310190
Email: sfc@thk.com.pk Web : www.thk.com.pk

Branch Office - Lahore

Siddique Trade, Office No. PL-29, PL Floor 72 Main Boulevard Gulberg, Lahore.
Tel: +92 (042) 35458461, Email: thklhr@thk.com.pk

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One Another Example

Ref. : THK/KAPCO-LOS/659340/2022
Dated : January 18, 2022

The General Manager

Pakistan Stock Exchange Limited
(Formerly Karachi Stock Exchange Limited)
Stock Exchange Building
Stock Exchange Road
Karachi

Dear Sir,

KOT ADDU POWER COMPANY LIMITED

LOSS OF SHARES

We have to inform you that the following Certificate(s) have been reported lost, the details of which are follows:

Folio Certificate Distinctive Number (s)

Person notified the loss Address Quantity
Number Number(s) From To
21481 Syed Mohammad Iqbal B-87, Block-13-D-1, 21481 98993323 98993822 500
Gulshan-e-lqbal,
Karachi. 0331/3370011

Please circulate the above information amongst the members of the Exchange advising them not to deal in the
Certificate(s) if the company does not receive any objection within 7 days of the notice, Duplicate Certificates will be
issued to the concerned.
Yours truly,

ASSISTANT MANAGER
KOT ADDU POWER COMPANY LIMITED

Head Office – Karachi

Plot No. 32-C, Jami Commercial Street 2, D.H.A Phase VII, Karachi-75500 Pakistan.
UAN : +92 (021) 111-000-322, Ext. 111 to 115, Tel: Direct: +92 (021) 35310191-192-193, Fax : +92 (021) 35310190
Email: sfc@thk.com.pk Web : www.thk.com.pk

Branch Office - Lahore

Siddique Trade, Office No. PL-29, PL Floor 72 Main Boulevard Gulberg, Lahore.
Tel: +92 (042) 35458461, Email: thklhr@thk.com.pk

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Book Closure and Close Period Chapter-04

CHAPTER
4

BOOK CLOSURE AND

CLOSE PERIOD

Page 111 CORPORATE LAW BY SIR IBRAHIM

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 Book Closure and Close Period Chapter-04

Book Closure and Close Period

Book Closure  Purpose  is to decide the entitlement (Section 125 + 5.5.11 of PSX Rule Book Chapter Number 5)
Close Period  Purpose  In order to prevent insider trading. (5.6.4 of PSX Rule Book Chapter Number 5)

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Book Closure and Close Period Chapter-04

CLOSE PERIOD

Extracts of 5.6.4 of PSX Rule Book:

Each listed company, excluding open-end mutual funds, (1)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 closed period. The closed period shall start from the day when any
document/statement, which forms the basis of price sensitive information, is sent to the board of directors and
terminate after the information is made public. Every listed company shall advise its directors about the closed
period at the time of circulating agenda and working papers for the board meetings, along with sending
intimation of the same to the Exchange.

Example in case of approval of financial statements:

From date of notice to board till the approval of financial statements in board meeting.

(1) Mandatory

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Book Closure and Close Period Chapter-04

Let’s Move On Practical Example:

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Book Closure and Close Period Chapter-04

BOOK CLOSURE

125. Power to close register. — <Register of members (Section 119 of Companies Act, 2017)>
(1) A company may, on giving not less than seven days’ previous notice close its register of members, or
the part of it relating to members holding shares of any class, for any period or periods not exceeding in
the whole thirty days in each year:
Provided that the Commission may, on the application of the company extend the period mentioned in
sub-section (1), for a further period of fifteen days.
(2) In the case of listed company, notice for the purposes of sub-section (1), must be given by
advertisement in English and Urdu languages at least in one issue each of a daily newspaper of
respective language having wide circulation.
(3) The provision of this section shall also apply for the purpose of closure of register of debenture-holders
of a company.
(4) Any contravention or default in complying with requirement of this section shall be an offence liable to a
penalty of level 2 on the standard scale.
Purpose: Listed Companies usually have huge number of shareholder and there is a very huge share
transfer turnover. It would be very difficult for a listed company to determine who are the share holders of the
company and who are entitled to participate in the general meeting and eligible for any entitlement.

PSX Rule Book: 5.5.11

5.5.11. CLOSURE OF SHARE TRANSFER BOOKS:

(a) A company, excluding open-end mutual funds, may close its share transfer books for any purpose and
shall give a minimum of seven (7) days’ notice to the Exchange prior to closure of Share Transfer
Books, provided that the maximum period of closure of books during a year shall not exceed the period
specified in section (2)125 of the Companies Act.
Provided that the Companies quoted on the Futures Market shall intimate to the Exchange the dates of
their book closure and corporate actions, if any, on or before twentieth (20th) day of the month with a
notice period of at least twenty one (21) days after the said twentieth (20th) day for commencement of
book closure.
(b) The company shall treat the date of posting as the date of lodgment of shares for the purpose for which
shares transfer register is closed, provided that the posted documents are received by the Company
before relevant action has been taken by the Company.(3)
(c) The company shall issue transfer receipts immediately on receiving the shares for transfer.
(d) The company shall not charge any transfer fee for transfer of shares.

(2) 130

(3) No T + 2 concept, T + 0 concept from date of notice to shareholder to the start of book closure date.

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 Book Closure and Close Period Chapter-04

(4)
Notice of Annual General Meeting Depicting Book Closure Clause

(formerly known as GlaxoSmithKline Consumer Healthcare Pakistan Limited)

NOTICE OF THE 8TH ANNUAL GENERAL MEETING 2022
Notice is hereby given to shareholders that the 8th Annual General Meeting ('AGM') of Haleon Pakistan Limited (formerly
known as GlaxoSmithKline Consumer Healthcare Pakistan Limited) (the 'Company') will be held at 10:00 am on Thursday,
27 April 2023 at the Avari Towers, Karachi and virtually to transact the following business:
ORDINARY BUSINESS
1) To receive, consider and adopt the audited financial statements together with the Directors' and Auditors' Report
thereon for the year ended 31 December 2022 and to consider and approve the circulation of the subsequent
annual audited financial statements through QR enabled code and weblink.
2) To appoint External Auditors of the Company for the ensuing year, and to fix their remuneration. The Board of
Directors, on the recommendation of the Board Audit Committee of the Company, has proposed the appointment
of KPMG Taseer Hadi & Co. as External Auditors, for the year ending 31 December 2023.
ANY OTHER BUSINESS
3) To transact any other business with the permission of the Chair.

Karachi
6 April 2023
Notes:
1. Virtual / Physical AGM and Attendance Protocols
a) Pursuant to the SECP Circular No. 4 of 2021 dated 15 February 2021, Circular No. 6 of 2021 dated 3
March 2021, and the clarification issued by SECP bearing no. SMD/SE/2(20)/2021/117 dated 15 December
2021, the proceedings of the AGM shall be held both physically and virtually The Company continues to
monitor the impact of COVID-19 and any government directives in this regard. Any relevant updates
regarding the AGM will be announced on the Company's website (www.pk-consumerhealthcare.gsk.com)
and through PUCARS, as applicable.
b) Shareholders attending the AGM virtually must register their intent beforehand and no later than close of
business on 26 April 2023. Shareholders, who wish to attend virtually, are requested to email their
respective name, folio number, CNIC number, and scanned copy of their CNIC (front and back) to the
Company's email address pakistan.shareinfo@haleon.com, and following necessary verification, a link to
access the AGM will be emailed to him / her.
c) Please scan the QR code or access the link below to post any questions for the AGM as the telecon will
automatically mute all microphones:

https://vevox.app/#/m/140196023
Session ID: 140-196-023
Email address: pakistan.shareinfo@haleon.com

d) Please note that those members attending virtually will be able to view the Directors and hear the live
proceedings of the AGM but will remain on mute so as to avoid any connectivity disruptions. Those
shareholders attending the AGM may submit their respective questions / comments / suggestions along
with their name and folio number on the link/QR Code/email address, provided above in this notice ahead
of or during the AGM.

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2. Book Closure
The share transfer books of the Company will be closed from 20 April 2023 to 27 April 2023 (both days inclusive).
Requests received at the office of the Share Registrar of the Company at CDC Share Registrar Services Limited,
CDC House, 99-B, Block-B, S.M.C.H.S., Main Shahrah-e-Faisal, Karachi - 74000 at the close of business on 19
April 2023 will be treated in time for the purpose of attendance of the Annual General Meeting and as applicable.
3. Appointment of Proxies
Shareholders entitled to attend and vote at the AGM may appoint another shareholder as his/her proxy to attend,
speak and vote at the AGM on his / her behalf. The instrument appointing proxy must be deposited duly signed and
stamped at the Office of the Share Registrar of the Company at CDC Share Registrar Services Limited, CDC
House, 99-B, Block — B, S.M.C.H.S., Main Shahrah-e-Faisal, Karachi not later than forty eight (48) hours before
the time of the AGM. An attested copy of the shareholder's Computerized National Identity Card (CNIC) must be
attached with the proxy form. Please refer to section 137 of the Companies Act, 2017 for further information.
Shareholders holding physical shares are also required to bring their original CNIC and / or copy of CNIC of
shareholder(s) of whom he / she / they hold proxy(ies). Such shareholder(s) shall not be allowed to attend and / or
sign the Register of Shareholder/Shareholders at the AGM without such CNIC(s). The proxy form is available on
the Company's website (www.pk-consumerhealthcare.gsk.com).
4. CDC Account Holders
CDC Account Holders will further have to follow the below guidelines as specified by the Securities and Exchange
Commission of Pakistan (SECP).
a) Attending the AGM
• In case of individuals, the account holder or sub-account holder and / or the person whose securities
are in a group account, and their registration details are uploaded as per the applicable regulations,
and shall authenticate his / her identity by showing his / her original Computerized National Identity
Card (CNIC) or original passport at the time of attending the meeting.
• In case of corporate entity, the Board of Directors' Resolution / Power of Attorney with the specimen
signature of the nominee shall be produced (unless it has been provided earlier) at the time of the
meeting.
b) Appointing Proxies
• In case of individuals, the account holder or sub-account holder and/or the person whose securities
are in group account and their registration details are uploaded as per the CDC Regulations, shall
submit the proxy form as per the above requirement.
• The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers
shall be mentioned on the form.
• Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished
with the proxy form.
• The proxy shall produce his / her original CNIC or original passport at the time of the AGM.
• In case of a corporate entity, the Board of Directors' Resolution / Power of Attorney with the
specimen signature shall be submitted (unless it has been provided earlier) along with proxy form to
the Company.
The proxy form is available on the Company's website: www.pk-consumerhealthcare.gsk.com
5. Circulation of Annual Audited Accounts
SECP, through its SRO 470(1)/2016 dated 31 May 2016, has allowed companies to circulate the annual balance
sheet, profit and loss account, Auditors' Report and Directors' Report etc. to its shareholders through CD/DVD/USB
at their registered addresses. In view of the above, the Company had obtained shareholders' approval in its
Extraordinary General Meeting held on 20 November 2017 in this regard.
Pursuant to SRO 787(1)/2014 dated 8 September 2014, SRO 470(1)/2016 dated 31 May 2016, and under Section
223(6) of the Companies Act 2017, circulation of audited financial statements and notice of annual general meeting
has been allowed in electronic format, including through email. Accordingly, the audited financial statements of the
Company for the year ended 31 December 2022, are available on the Company's website: www.pk-
consumerhealthcare.gsk.com. The Annual Report shall be circulated via email to those shareholders whose email
addresses are present in the records / database of the Share Registrar. Those shareholders requiring a printed
copy or electronic format through email of Annual Report may send a request using the Standard Request Form
provided in the Annual Report and placed on the Company's website: www.pk-consumerhealthcare.gsk.com.
Hardcopies shall be provided free of cost.
6. Postal Ballot / E-Voting
Further to the Companies (Postal Ballot) Regulations, 2018, for the purpose of election of Directors and for any
other agenda item subject to the requirements of Section 143 and 144 of the Companies Act, 2017, shareholders
holding in aggregate 10% or more shareholding as per law, will be allowed to exercise their right of vote through
postal ballot i.e. by post or e-voting, in the manner and subject to conditions contained In the said Regulations.

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7. Deposit of Physical Shares into CDC Account

As per Section 72 of the Companies Act, 2017, every existing listed company shall be required to replace its
physical shares with book-entry form in a manner as may be specified and from the date notified by the SECP,
within a period not exceeding four (4) years from the commencement of the Act, i.e., 30 May 2017. Those
shareholders having physical shareholding(s) are encouraged to open a CDC sub - account with any broker or
Investor Account directly with CDC to place their physical shares into scrip less form. This is beneficial in many
ways, including safe custody and sale of shares at any time, as the trading of physical shares is not permitted as
per the existing regulations of the Pakistan Stock Exchange.
8. Change of Address and Zakat Status
Shareholders are requested to notify the Company's Share Registrar if there is any change in their registered
postal address or email address. Shareholders with physical shareholding are requested to submit non-deduction
of Zakat form, if applicable to them. Further, shareholders holding their shares through CDC are requested to
update their participants.
9. Unclaimed Dividend(s) / Share Certificates
The Company has previously discharged its responsibility under Section 244 of the Companies Act, 2017 whereby
the Company approached shareholders to claim their unclaimed dividends in accordance with the law. Those
shareholders, whose dividends / share certificates still remain unclaimed, are hereby once again requested to
approach the Company to claim their outstanding dividend amounts and / or undelivered share certificates.
10. Statutory Code of Conduct at AGM
Section 215 of the Companies Act, 2017 and Regulation 28 of the Companies (General Provisions and Forms)
Regulations, 2018, state the Code of Conduct of Shareholders, as follows: Shareholders are not permitted to exert
influence or approach the management directly for decisions which may lead to creation of hurdles in the smooth
functioning of management. The law states that Shareholders shall not bring material that may cause threat to
participants or premises where the AGM is being held, confine themselves to the agenda items covered in the
notice of the AGM and shall not conduct themselves in a manner to disclose any political affiliation. Additionally,
the Company is not permitted to distribute gifts in any form to its shareholders in its meetings as per Section 185 of
Companies Act, 2017.

(4) Revision of Section 12 and 13 of Companies Act, 2017

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CHAPTER
5

BASIC SERIES - PROSPECTUS AND

COMMENCEMENT OF BUSINESS

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Basic Series – Prospectus and Commencement of Business

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Practical Example in relation to Risk Factors from the prospectus secure logistics Groups

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Section 87 of Securities Act, 2015

Section 87 (5)

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Hint: First decide the Public Subscription Commencement Date,

Prospectus Timeline then work back and find out respective dates.

AIR LINK COMMUNICATION LIMITED PROSPECTUS

NEW ISSUE AND OFFER FOR SALE
Date and Place of Incorporation: January 2, 2014 in Lahore. | Registration Number: 0086378 | Registered Address: LG-2, Al – Qadeer Heights, Babar Block, New Garden Town, Lahore. |
Contact Person: Mr. Amer Latif – Company Secretary | Website: www.airlinkcommunication.net | Email: amer.latif@airlinkcommunication.net | Telephone: (+42) 35844063-4 Ext. 118
Issue Size: The Issue consists of 90,000,000 Ordinary Shares, of face value of PKR 10.00/- each, which constitutes 25.0% of the total post-IPO paid-up capital of Air Link Communication Limited
excluding mandatory conversion of TFCs amounting to PKR 400 million as mentioned under Section 11.1.1. Out of total issue size, 60, 000,000 ordinary shares are being issued by Airlink
Communication Limited and remaining 30,000,000 ordinary shares are being offered by sponsor of Air link Communication Limited i.e Mr. Muzzaffar Hayat Piracha from his current share holding.
Method of Offering: 100% Book Building Method.
Book Building Method and Floor Price: The entire issue will be offered through 100% Book Building at a Floor Price of PKR 65.00/- per share (including a premium of PKR 55.00/- per share) with a
price band of 40% above the floor price i.e. Rs. 91/- per share (Justification of premium is given under “Valuation Section” in Section 4A. The bidders shall be allowed to place b ids for hundred percent
(100%) of the Issue size and the Strike Price shall be the price at which the hundred percent (100%) of the Issue is subscribed. However, the successful bidders shall be provisionally allotted only
seventy-five percent (75%) of the issue size i.e. 67,500,000 shares and the remaining twenty five percent (25%) i.e. 22,500,000 shares shall be offered to the retail investors. In case retail portion of the
issue remains unsubscribed, the unsubscribed portion will be allotted to the successful bidders on pro-rata basis.
General Public/Retail portion: General Public portion of the Issue comprises of 22,500,000 ordinary shares (25% of the total issue) at the Strike Price. In case retail portion of the Issue remains
unsubscribed, the unsubscribed shares will be allotted to the successful bidders of book building on a pro rata basis.
Public Comments: The Draft Prospectus was placed on PSX’s website for seeking public comments for seven (7) working days starting from December 02, 2020 to December 10, 2020. The
comments received have been duly incorporated / responded by the Consultant to the Issue.
REGISTRATION OF ELIGIBLE INVESTORS: The registration of eligible investors will commence at 9:00 am on 25/08/2021 and will close at 3:00 pm on 31/08/2021
BIDDING PERIOD DATES: From 30/08/2021 to 31/08/2021 (From: 9:00 am to 5:00 pm)
DATE OF PUBLIC SUBSCRIPTION: From 06/09/2021 to 07/09/2021 (both days inclusive) From: 9:00 am to 5:00 pm

Example 1: Airlink Communications Limited

Approval Date 16 Jul-21
Add: 60 Days 60
Valid Till 14-Sep-21

PANTHER TYRES LIMITED (Formerly Mian Tyre And Rubber Company Limited)
PROSPECTUS/OFFER FOR SALE DOCUMENT NEW ISSUE AND OFFER FOR SALE
Date and place of incorporation: Lahore, October 24, 1983, Incorporation number: 0010858, Registered and Corporate Office: Panther House, 97-B Aziz Avenue, Jail Road, Lahore, Pakistan,
Website: www.panthertyres.com,
Issue Size: The Issue consists of 40,000,000 Ordinary Shares (i.e. 28.57% of the total post-IPO paid up capital of Panther Tyres Limited) of face value of PKR 10/- each,. Out of total issue size ,
30,000,000 (21.42% of the total post-IPO paid up capital of Panther Tyres Limited) ordinary shares are being issued by Panther Tyres Limited and 10,000,000 (7.14% of the total post – IPO paid up
capital of Panther Tyres Limited) ordinary shares are being offered by sponsor of panther tyres i.e. Mian Iftikhar Ahmed from his current shareholding.
Method of Offering: 100% Book Building Method
Book Building method and Floor Price: The entire Issue will be offered through book building method at a Floor Price of PKR 47/- per share (including premium of PKR 37/- per share) with a price
band of upto 40%. Justification of premium is given under “Valuation Section”, i.e. Section 4A). The bidders shall be allowed to place bids for hundred percent (100%) of the Issue size and the Strike
Price shall be the price at which the hundred percent (100%) of the Issue is subscribed. However, the successful bidders shall be provisionally allotted only seventy-five percent (75%) of the Issue size
i.e. 30,000,000 shares and the remaining twenty five percent (25%) i.e. 10,000,000 shares shall be offered to the retail investors.
Retail/general public portion: General Public portion of the Issue comprises of 10,000,000 ordinary shares (25% of the total issue) at the Strike Price. In case retail portion of the Issue remains
unsubscribed, the unsubscribed shares will be allotted to the successful bidders of book building on a pro rata basis.
Public Comments: Draft Prospectus was placed on PSX’s website for seeking public comments starting from November 18, 2020 to November 26, 2020. The comments received have been duly
responded by the Lead Manager.
REGISTERATION OF ELIGIBLE INVESTORS: The registration of eligible investors will commence at 9:00 am on January 22, 2021 and will close at 3:00 pm on January 28, 2021
BIDDING PERIOD DATES: From January 27, 2021 to January 28, 2021 (From: 9:00 am to 5:00 pm)
DATE OF PUBLIC SUBSCRIPTION: From February 03, 2021 to February 04, 2021 (both days inclusive) From: 9:00 am to 5:00 pm

Example 2: Panther Tyres Limited

Approval Date 13 Jan-21
Add: 60 Days 60
Valid Till 14-Mar-21

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Example:
Obtaining Loan From Bank
Issuing Term Finance Certificates

Section 19. Commencement of business by a public company.

(1) A public company shall not start its operations or exercise any borrowing powers unless—
(a) shares held subject to payment of the whole amount thereof in cash have been allotted to an
amount not less in the whole than the minimum subscription and the money has been received
by the company;

Minimum Subscription → Given in Section 19 as Explanation

Minimum subscription means the amount if any, fixed by the memorandum or articles upon
which the directors may proceed to allotment. If no amount is fixed, the whole amount of share
capital (other than that to be issued not for rash) is minimum subscription.
Example 02:
That minimum amount which is required to commence the business, for example, company
would need a building, machinery, equipment and working capital budget for starting the
business, without sufficient funds for all this, company is nor able to commence its business.

(b) every director of the company has paid to the company full amount on each of the shares taken
or contracted to be taken by him and for which he Is liable to pay in cash;
(c) no money is or may become liable to be repaid to applicants for any shares which have been
offered for public subscription;

Example 03: A very good example on above condition

Whenever the company issues shares or debentures to the general public, it is required to get
those shares or debentures listed on an exchange before allotment of shares. The procedure is
as follows:
• Company issues prospectus and fixes a date for payments from applicants against its
securities and simultaneously files an application for listing of securities to the exchange.
• People deposit money into the hanks as required by company.
• Company waits for the listing from exchange and provides for any further information or
deficiencies as pointed out by the exchange.
• The company is given certificate of listing and it can now use the money of applicants
and allot them shares.
• If listing is refused, the money from applicants must be repaid forthwith.
Until such money is repaid, company shall not be allowed to commence business.

(d) there has been filed with the registrar a duly verified declaration by the chief executive or one
of the directors and the secretary in the specified form that the aforesaid conditions have been
complied with; and

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Buy Back of Shares Regulations Chapter-06

CHAPTER
6

BUY BACK OF SHARES

REGULATIONS

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Buy Back of Shares Regulations

(Section 86)

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Certified Copy Resolutions passed and Adopted by the Shareholders

In the 74th Annual General Meeting at Movenpick Hotel, Club Road, Karachi
held on March 30, 2023 at Karachi.
1. To confirm minutes of the 73rd Annual General Meeting (AGM) of Shareholders held
on March 30, 2022:
"RESOLVED THAT the Minutes of the 73rd Annual General Meeting held on March
30, 2022, physically and through electronic means, be and are hereby confirmed."
2. To receive, consider and adopt the annual audited financial statements of National
Bank of Pakistan and consolidated accounts of National Bank of Pakistan and its
subsidiaries for the year ended December 31, 2022, together with the Directors'
Report. Auditors' Report and Chairman's Review Report thereon:
"RESOLVED THAT the annual audited standalone financial statements of National
Bank of Pakistan and audited consolidated financial statements of National Bank of
Pakistan and its subsidiaries for the year ended December 31, 2022, together with
the notes and annexures forming part thereof, along with the Directors' Report,
Auditors' Report and Chairman's Review Report thereon, be and are hereby
approved."

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(Section 87)

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Practical Example in Relation to this

Company Name = JDW Sugar Mills Limited

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(5) The purchase of shares shall be made only under authority of a special resolution. .

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Practical Example in Relation to this

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(6) The purchase of shares shall be made within a period as specified in the regulations.
(7) The proposal of the board to purchase shares shall, on conclusion of the board's meeting, be
communicated to the Commission and to the securities exchange on which shares of the company are
listed.

Above examples are extracted from PSX. These are easily available at PSX Data Portal.

(8) The purchase of shares shall always be made in cash and shall be out of the distributable profits or
reserves specifically maintained for the purpose.(1)

CONDENSED INTERIM UNCONSOLIDATED

STATEMENT OF CHANGES EQUITY (UN-AUDITED)
For the quarter ended 31 December 2022
Premium Resources
Share
Share Resource for Net
Premium Accumulated Total Equity
Note Capital Cancellation of Accumulated
Resources Profit
own Shares Profit
Rupees Rupees Rupees Rupees Rupees Rupees

Balance as at 01 October 2021 697,766,810 678,316,983 13,171,462,931 13,171,462,931 13,750,229,641

Total Comprehension Profit for the Quarter - - 918,420,575 - 918,420,575 918,420,575

Balance as at 31 December 2021 697,766,810 678,316,983 14,089,883,506 14,089,883,506 14,668,650,216

Balance as at 01 October 2022 697,766,810 678,316,983 15,628,973,589 - 15,628,973,580 16,905,057,127

Total comprehension income for the quarter - - 454,851,672 - 454,851,681 454,851,872

Reserve for Cancellation of own Shares 7* - - - 1,890,000,000 1,890,000,000 1,890,000,000

Balance as at 31 December 2022 697,766,810 678,316,983 16,083,825,261 1,890,000,000 15,193,826,251 16,406,602,796

The announced note from too 26 form an internal part of the condensed inform uncured dated financial
statements
*7. RESERVE FOR CANCELLATION OF OWN SHARES
This represents the reserve for purchase of own shares for cancellation purpose during the period. The
Company, with the approval of the Company's shareholders in extraordinary general meeting held on
November 03, 2022 and in compliance of Section 88 of the Companies Act, 2017 read in conjunction with the
Listing Companies (Buy Back of Shares) Regulations, 2019, accorded to buy back upto to a maximum of its
2,000,000 issued, subscribed and paid-up ordinary shares through the Pakistan Stock Exchange Limited at
the spot/current price prevailing during purchase period e.g. 11 November 2022 to 02 May 2023 or till such
date that the Buy-back of shares is completed, whichever is earlier. However, the Buy back of shares has
been completed on date 02 January 2023.
(9) The purchase of shares shall be made through the securities exchange as may be specified.(2)
(10) The company may dispose of the treasury shares in a manner as may be specified.(3)
(11) Where a purchase of shares has been made under this section, the company shall maintain a register
of shares so purchased and enter therein the following particulars, namely—
(a) number of shares purchased;
(b) consideration paid for the shares purchased;
(c) mode of the purchase;
(d) the date of cancellation or re-issuance of such shares;
(e) number of bonus shares issued in respect of treasury shares; and
(f) number and amount of treasury shares redeemed, if redeemable._

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Listed Companies (Buy-Back of Shares) Regulations, 2019

1. Short title, commencement and applicability.-
(1) These regulations shall be called the Listed Companies (Buy-Back of Shares) Regulations, 2019.
(2) They shall come into force at once.
(3) These regulations shall be applicable to buy-back of shares of companies listed on the securities
exchange, in pursuance of section 88 of the Companies Act, 2017 (XIX of 2017).

(1) Buy Back by way other than cash not allowed under the law.
Example:
Buy Back of shares and given “Property, Plant and Equipment” as a consideration is not allowed.
(2) Specified in the regulations.
(3) Specified in the regulations.

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Listed Companies (Buy-Back of Shares) Regulations, 2019.

1. Short title, commencement and applicability.-

(1) These regulations shall be called the Listed Companies (Buy-Back of Shares) Regulations, 2019.
(2) They shall come into force at once.
(3) These regulations shall be applicable to buy-back of shares of companies listed on the securities
exchange, in pursuance of section 88 of the Companies Act, 2017 (XIX of 2017).
2. Definitions.-
(1) In these regulations, unless there is anything repugnant in the subject or context,-
(a) "Act" means the Companies Act, 2017 (XIX of 2017);
(4)
(b) "authorized officer" mean an officer of the company appointed by the board of directors to act
as manager to the offer;
(e) "public announcement' means an announcement made by the purchasing company for
purchase or sale of its shares as per the format prescribed in these regulations;
(f) "purchase" means buy-back of its own shares by a purchasing company under section 88 of the
Act and these regulations;
(g) "purchasing company" means a listed company that buy-back its own shares under section 88 of
the Act and these regulations;
(h) "purchase period" means the time period specified in regulation 7 of these regulations within
which the purchase is to be made;
(i) "Schedule" means schedule annexed to these regulations;
(j) "Securities Act" means the Securities Act, 2015 (III of 2015);
(k) "treasury shares" means the shares purchased and held by the purchasing company in its own
name in accordance with section 88 of the Act and these regulations.

(4) It means appointed on Board of Director meeting held for the purpose.

3. Eligibility Requirements for the Purchase.-

(1) A company shall be eligible to purchase if it fulfils the following conditions, namely:-
(a) it is listed on the securities exchange for a period of not less than three years;
(b) it is compliant with the (5)minimum capital or equity requirements or licensing requirements, if
any, after the purchase;
(c) it has obtained approval of its members for purchase through special resolution;
(d) board has undertaken that
the funds specified for the purchase by the board of directors of the purchasing company are
available with the company; and after the purchase, the purchasing company is capable of
meeting its obligations on time during the period up to the end of the immediately succeeding
twelve months
(e) the purchasing company shall not be on the default counter and has not defaulted on any debt
instrument supported by auditors' certificate
(f) board of directors of a purchasing company shall not propose or recommend a purchase in any
of the following namely:-
(i) winding up proceedings has commenced;

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(ii) a scheme of arrangement, compromise, reconstruction, merger or de-merger is approved

by the board of directors unless the Purchase is a part of such arrangement, compromise,
reconstruction,
(ii) a scheme of arrangement, compromise, reconstruction, merger or de-merger is approved
by the board of directors unless the Purchase is a part of such arrangement, compromise,
reconstruction, merger or de-merger;(6)
(iii) a (7)public offer for acquisition of shares of the purchasing company under the Securities
Act has been announced; (8)and
(g) before the expiry of six months from the date of an earlier general meeting in which the purchase
was disapproved by the members.

(5) Extracts of Chapter 5 of Pakistan Stock Exchange Rule Book

5.5. PROSPECTUS, ALLOTMENT, ISSUE AND TRANSFER OF SHARES:
5.5.1. No Company will be listed unless it is registered under the Companies Act as a public limited company and its minimum
post issue paid-up capital is Rs.200 million.
Issued, Subscribed and Paid-Up Capital 220,000,000
Less: Buy Back of Shares (20%) (44,000,000)
Post Buy Back Issued, Subscribed and Paid-up Capital 176,000,000
Less than 200 Million, it is Not ALLOWED.
(6) Refer Section 279 to 285
(7) Public Offer will be discussed in detail in Listed Companies (Substantial Acquisition of voting shares and Takeovers) Regulations,
2017
(8) ALL CONDITIONS ARE MANDATORY

4. Procedure for Purchase.-

(9)
(1) The general meeting in which the special resolution is to be passed shall be held not later than forty-five
days of the date of the meeting of the board of directors in which the purchase is recommended.
(2) The purchasing company shall make a public announcement as per Schedule II within two working
days of passing of the special resolution.
(3) The board of directors of purchasing company shall, before making the public announcement, authorize
an officer of the company to act as manager to the offer who shall ensure compliance with the legal
requirements pertaining to purchase of shares.
(5) The authorized officer shall, within fifteen days of the closing of the purchase period, submit a final
report on the purchase to the Commission and the securities exchange on the format specified in
Schedule IV.

(9) Time Period for holding general meeting of members for the purpose of passing special resolution.

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Name, phone number, postal and

email addresses of the authorized
officer appointed by purchasing
Company

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Final Report – Practical Example

FINAL REPORT ON THE PURCHASE OF 2,000,000 ORDINARY SHARES

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6. Purchase through securities exchange.-

Purchase shall be made through securities exchange subject to the following procedure, in addition to the
purchase procedure provided in regulation 4, namely,-
(a) the purchase shall be made through the automated trading system of the securities exchange;
(b) the purchasing company shall open an Investor Account Service (IAS) at CDC for the purpose of the
purchase.
(c) the authorized officer shall open a sub-account of the purchasing company with any licensed brokerage
house which can only be utilized for purchase of shares during the purchase period.
(d) the purchasing company shall ensure that sufficient funds are available for settlement in the designated
clearing bank account of the company
(e) The purchasing company shall intimate to the securities exchange, the number of shares purchased,
along with the purchase price on daily basis for public dissemination;
(f) The shares purchased on daily basis shall be placed in the blocked IAS account of the purchasing
company maintained with CDC; and
(g) CDC shall ensure that the shares shall remain in Blocked account until the company decides to sell the
treasury shares in accordance with these regulations.

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Practical Example for intimation to securities exchange for public dissemination

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7. Purchase Period
(2) The purchase period for purchase through securities exchange shall start not later than seven days
from the date of public announcement and shall close within one hundred and eighty (180) days from
the date of passing of special resolution wherein members have given approval of the Purchase or till
such date that the purchase is completed, whichever is earlier.
Clarification:
Public Announcement (Regulation 4 (2)) (10)
Public announcement within two working days of passing of the special resolution.
Purchase Period
Start Date
Not later than seven days from the date of public announcement. Close Date
Earlier of:
180 Days from the date of passing of special resolution for buy back; or
Such date when the purchase is completed
Purchase Price
Purchase through securities exchange shall be made at the spot/current share price *Provided that this
should not include purchase through (11)negotiated deals market.

(10) Public announcement publish at least seven days before the commencement of the purchase period (Regulation 10(b)
(11) Negotiation Not Allowed

9. Maximum holding of Treasury Shares.—

(12)
(1) Treasury shares shall not at any time exceed twenty percent of the total paid up share capital of the
purchasing company.
(13)
(2) Where the purchasing company has different classes of shares, the treasury shares for any class of
shares shall not exceed twenty percent of total issued at any time and paid up shares of such class of
Shares
(3) The treasury shares shall be held in the name of the purchasing company in a CDC blocked account in
freeze form.
(14)
(4) The treasury shares shall not be placed under collateral either directly or indirectly
(5) Any shares allotted as fully paid bonus shares in respect of the treasury shares, shall be treated as
treasury shares for the purposes of these regulations and shall be held in the name of the company in
CDC blocked account in freeze form.

(12) Case 1: ABC Company Limited

Issued, Subscribed and Paid-Up Capital 400 Million → Buy Back of Treasury Shares shall not exceed 80 Million Rupees.
(13) Case 2: ABC Company Limited
Issued, Subscribed and Paid-Up Capital
Class A 200 Million → (200  20%) = Buy Back of Class A Shares shall not 40 Million
Class B 300 Million → (300  20%) = Buy Back of Class B Shares shall not 60 Million
We shall evaluate limit Class Wise
(14) Example: It shall not be placed in bank as a collateral for loan etc.

10. Obligations of the Purchasing Company.-

The purchasing company shall-
(a) communicate to the Commission and the securities exchange simultaneously, the decision of the board
of directors regarding recommendation of the purchase on the day the decision is made;

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The General Manager The Executive Director/HOD

Pakistan Stock Exchange Limited Off Site-II Department,
Stock Exchange Building, Supervision Division
Stock Exchange Road, Securities & Exchange Commission of Pakistan
Karachi 63-NIC Building, Jinnah Avenue, Blue Area,
Islamabad.

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(b) make public announcement on the format specified in Schedule II and publish it in at least two daily
newspapers, one each in Urdu and English languages having nationwide circulation at least seven days
before the commencement of the purchase period.

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(d) cancel the shares within ten days of the closing of the purchase period where the purchase is made for
the purpose of cancellation
*Provided that for cancellation of shares, the purchasing company has to follows the filing requirements
of the Act, the Companies (General Provisions and Forms) Regulations, 2018 and the procedure
prescribed by CDC
(e) submit to the Commission, the securities exchange and CDC, a copy of the special resolution
authorizing the purchasing company to purchase on next working day of the general meeting in which it
is passed and such resolution shall specify the indicative number and percentage of shares to be
purchased, mode of the purchase, allocated funds and the purchase period;
(f) submit to the Commission and the securities exchange, the published copies of the public
announcement within two days of its publication;
(g) intimate to the Commission and the securities exchange on the day of the closing of the purchase
period, the number of shares purchased, and advertise the same within two days of the closure of
purchase period in same newspapers in which the public announcement was published;
(h) disclose in its annual report, detail of the shares purchased and detail of the treasury shares disposed
of and such disclosures shall contain at least the number of shares purchased or sold and the price of
the purchase or sale; and
(i) file with the registrar concerned within thirty days of the closing of the purchase period the following
documents-
(i) copy of the board of directors resolution regarding the purchase;
(ii) copy of the special resolution authorizing the purchase;
(iii) copy of the notice of the general meeting in which the special resolution was passed; and
(iv) copy of the public announcement;
11. Restriction on the purchasing company
The purchasing company shall not-
(a) apply for voluntary delisting or voluntary winding up within a period of two years of the close of the
purchase period;
Voluntary Delisting to be covered in 5.14 (Chapter 5 of Pakistan Stock Exchange Rule Book)
Voluntary Winding-Up to be covered in winding-up sections in Companies Act, 2017
(b) engage in the sale of the already held treasury shares through the securities exchange-
(i) during the purchase period and during six months after the closing of the purchase period; and
(ii) during the period it is in possession of price sensitive information;
(c) save as provided in regulation 12, withdraw, cancel or postpone the purchase once announced; (15)
(d) make a purchase before the expiry of six months from the last date of subscription by shareholders in
respect of any further issue of capital
[Explanation: further issue of capital shall not include bonus issue of shares]
(e) make a new purchase before the expiry of at-least one year from the date of submission of the final
report of the previous purchase to the Commission by authorized officer for the purchase in accordance
with these regulations:
“Provided, if the purchasing company is able to maintains 25% free float at the Securities Exchange,
subsequent to the second buy back, it may offer the buy back during the above stated period.
**Explanation: For the purposes of clause (d) and (e), the purchase or the new purchase shall be
deemed to commence from the date of general meeting of the purchasing company wherein the
purchase is approved.

(15) Regulation 12(1)

Except where the recommendation for the purchase is not approved by the members in the general meeting, the
recommendation for the purchase by the board of directors shall not be Withdrawn.

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General Restriction
(2) The sponsors, directors, officers, associated companies and undertakings of the purchasing company
shall not directly or indirectly trade in shares of the purchasing company during the following periods:
[(a) from the date of meeting of the board of directors in which the purchase is recommended till
completion of the purchase; and
(b) from the date of meeting of the board of directors in which the disposal of treasury shares is
recommended till completion of the sale.](16)

(16) There are two Restrictions here:

(a) Trading not allowed when there is a Buy Back of Shares
(b) Trading not allowed when treasury shares are being disposed of

13. Disposal of the Treasury Shares and procedure

(1) The treasury shares shall not be sold, transferred or otherwise disposed of by the purchasing company
within a period of six months from the closure of the purchase period.
(2) The treasury shares shall not be sold by the purchasing company unless it has obtained approval of its
board of directors.
(3) The purchasing company shall make a public announcement as per Schedule V within two working
days of decision of board of directors
(4) The board of directors of the purchasing company shall before making the public announcement,
designate an authorized officer for completion of sale of treasury shares.
(5) The purchasing company shall not issue further capital, other than bonus shares unless the treasury
shares held by it are disposed of.
(6) The purchasing company may, subject to sub-regulation (1), dispose of treasury shares in full or any
part thereof in any of the following manners or combination thereof:
(a) sell the treasury shares against consideration in the market through the securities exchange's
automated trading system in transparent manner, as approved by board of directors; and
(b) Sell the treasury shares to its employees under section (17)83A of the Act read with the
Companies
(Further Issue of Shares) Regulations, 2020 under the authority of a special resolution in
accordance with its articles of association;
(7) In case of sale of treasury shares the following procedure shall be followed,-
(a) the decision of sale shall be made by the board of directors shall be communicated to the
Commission and the securities exchange on the day the decision is made;
(b) sale of treasury shares shall start not later than seven days from the date of public
announcement and shall close within forty-five days from the date of decision of board or till such
date that the sale is completed, whichever is earlier.
(8) The purchasing company shall not dispose of the treasury shares in any manner from the date of a
public announcement of offer for acquisition of shares of the purchasing company made by an acquirer
under the Securities Act till the time the acquisition process is complete.
(9) The purchasing company shall file the following information with the registrar concerned within thirty
days of the disposal of the treasury shares-
(a) mode of disposal;
(b) maximum number of treasury shares available for sale;
(c) total number of shares sold;
(d) date-wise and price-wise breakup of shares sold;
(e) total consideration received;
(f) cumulative number of treasury shares sold to date;
(g) number of balance treasury shares if any; and
(h) cumulative number of shares cancelled to date.

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(10) The purchasing company shall report to the securities exchange the number of shares sold on daily
basis for public dissemination.

(17) Employee Share Scheme

14. Power to give directions:-

Where the Commission is satisfied, on its own motion or on the basis of any information received by it, that it
is necessary and expedient so to do-
(a) in the interest of the shareholders of the purchasing company;
(b) in the interest of investors or the market generally; or
(c) to prevent the abuse of law or the process laid down in these regulations; it may issue directions to the
purchasing company, any of its directors, officers, or any other person; including but not limited to-
(i) stopping the purchasing company at any stage from making the purchase or sale, as applicable;
(ii) to do or desist from doing such acts as the Commission may determine; and
(iii) carry out such steps as are necessary to rectify the situation

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Conversion of Types of Companies Chapter-07

CHAPTER
7

CONVERSION OF TYPES
OF COMPANIES

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Conversion of Types of Companies

Which of the constitutional documents of the company defines the type of Company?

It is Articles of Association

So eventually, Conversion of Type of a company is the matter of Alternation of “Articles of Association”

Example:

Refer Definition of Private Company 2(1)(49)

(49) “private company” means a company which, by its articles-
(a) restricts the right to transfer its shares 1[, save as otherwise provided under this Act];
(b) limits the number of its members to fifty not including persons who are in the employment of the
company; and
(c) prohibits any invitation to the public to subscribe for the shares, if any, or debentures or
redeemable capital of the company:
Provided that, where two or more persons hold one or more shares in a company jointly, they
shall, for the purposes of this definition, be treated as a single member;

Refer Articles of Association of Single Member Company Table A First Schedule

SINGLE MEMBER COMPANY
4. The company is a single member company and as such being a private company limited by shares—
(a) it shall not invite the public to subscribe for any shares of the company;
(b) the company shall not register any share(s) in the name of two or more persons to hold one or
more shares jointly; and
(c) number of the members of the company shall be limited to one.

Types of Companies:

1. Single Member Company

2. Private Company
3. Public Company
(a) Listed Company
(b) Unlisted Company

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*Private Limited Also Includes SMC

Section 46. Conversion of public company into private company and vice-versa.
Conversion of Public company to Private Company
1) A public company may be converted into a private company with the prior approval of the
(1)
Commission in writing by passing a special resolution in this behalf by the public company amending
its (2)memorandum and articles of association in such a manner that they include the provisions relating
to a private company in the articles and complying with all the requirements as may be specified:
(3)
Provided that in case of conversion of a listed company into a private company, the Commission shall
give notice of every application made to it, to the securities exchange and shall take into consideration
the representation if any, made to it by the securities exchange.
(2) On an application for change in status of a company under subsection (1), if the Commission is
satisfied that the company is entitled to be so converted, such conversion shall be allowed by an order
in writing.
(3) A copy of the order, confirming the conversion under sub-section (2), duly certified by an authorised
officer of the Commission shall be forwarded to the company and to the registrar within seven days
from the date of the order.
(4) A copy of the memorandum and articles of association as altered pursuant to the order under sub-
section (2) shall, within fifteen days from the date of the order, be filed by the company with the registrar
and he shall register the same and thenceforth the memorandum and articles so filed shall be the
memorandum and articles of the newly converted company.

(1) Refer to Regulation 11. of Companies General Provision and Forms Regulations, 2018
(2) What to change in Memorandum and Articles??
(3) Will be discussed below.

11. Conversion of status of a company.—

(1) Subject to the requirements of sections 46, 47, 48 and 49 of the Act, a company desirous of converting
its status shall, not later than sixty days from the date on which the special resolution was passed,
make an application on Form 2 to the Commission for its approval, in any of the following
circumstances, namely—
(i) conversion of a public company into a private company or a single member company; or
(ii) conversion of a private company into a single-member company; or
(iii) conversion of an unlimited company into a limited company; or
(iv) conversion of a company limited by guarantee into a company limited by shares.
(2) The company shall file a copy of the memorandum and articles of association as altered on Form 2A
with the registrar within fifteen days from the date of the order of the Commission.

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Memorandum of Association

Refer Section 27 regarding contents of MoA Relevant this topic is

27. Memorandum of company limited by shares.— In the case of a company limited by shares-
(A) the memorandum shall state—
(i) the name of the company with the word “Limited” as last word of the name in the case of a public
limited company, the parenthesis and words “(Private) Limited” as last words of the name in the
case of a private limited company, and the parenthesis and words “(SMC-Private) Limited” as
last words of the name in the case of a single member company;

When the type of the company will change, the name of the company shall also change.
Example:
From ABC Limited  ABC (Private) Limited
From ABC (Private) Limited  ABC Limited

No need to pass Separate Special Resolution for this change as it is the exception of Section.12

Articles of Association

Removal or Addition of 3 Conditions of Private Company in Articles of Association.

(49) “private company” means a company which, by its articles-
(a) restricts the right to transfer its shares 1[, save as otherwise provided under this Act];
(b) limits the number of its members to fifty not including persons who are in the employment of the
company; and
(c) prohibits any invitation to the public to subscribe for the shares, if any, or debentures or
redeemable capital of the company:
Provided that, where two or more persons hold one or more shares in a company jointly, they
shall, for the purposes of this definition, be treated as a single member;

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Conversion of Private Company to Public Company

(5) If a company, being a private company, alters its articles in such a manner that they no longer include
the (4)provisions which, under sub-section (1) of section 2, are required to be included in the articles of a
company in order to constitute it a private company, the company shall—
(a) as on the date of the alteration, cease to be a private company; and
(b) file with the registrar a copy of the memorandum and articles of association as altered along with
the special resolution.

(4) Question: Which Provision of Section 2(1)(49)??

Question:
Write down the corporate compliances in case of change from Public Limited Company to Private Company.
Answer:
1) Board of Directors(BoD)(5) resolution shall be passed to propose the alterations in Memorandum of
Association (MoA) and Articles of Association (AoA).-
a) AoA shall be altered in order to include such conditions as mentioned in Section 2(1)(49); and
b) MoA shall be altered in order to change the name of the company (i.e from XYZ Limited to XYZ
(Private) Limited).
2) Notice of general meeting shall be sent to the members at least 21 days before the date of general
meeting along with statement of all material facts under section 134(3). (6)
3) Holding of general meeting and passing of special resolution thereof.
4) Filing of altered copy of MoA and AoA and special resolution with the registrar within 15 days of passing
of special resolution under section 150.
150. Filing of resolution.—
(1) Every special resolution passed by a company shall, within fifteen days from the passing thereof, be
filed with the registrar duly authenticated by a director or secretary of the company.
(2) Where articles have been registered, a copy of every special resolution for the time being in force shall
be embodied in or annexed to every copy of the articles issued after the date of the resolution.
(3) A copy of every special resolution shall be forwarded to any member at his request on payment of such
fee not exceeding the amount as the company may determine.
(4) Any contravention or default in complying with requirement of this section shall be an offence liable to a
penalty of level 1 on the standard scale.
5) Filing of application to the Commission on Form 2 for its approval, in respect of conversion, not later
than 60 days from the date of special resolution.
6) Filing of order of commission along with altered copy of MoA and AoA with the registrar within 15 days
from the date of order of commission.
7) Issuance of certificate of conversion by the registrar under section 50.

(5) Whenever a special resolution or ordinary resolution need to be passed from the members of the company, BoD Resolution shall
also be required.
(6) 134(3) Where any special business is to be transacted at a general meeting, there shall be annexed to the notice of the meeting a
statement setting out all material facts concerning such business, including, in particular, the nature and extent of the interest, if
any, therein of every director, whether directly or indirectly, and, where any item of business consists of the according of an
approval to any document by the meeting, the time when and the place where the document may be inspected, shall be specified
in the statement.

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Alterations in Memorandum
Alterations in Articles of Association
of Association

The name of the company will The company is the private company and as such being a private company it
change from "XYZ Limited" to shall:
"XYZ Private Limited" (a) restricts the right to transfer its shares
(b) limits the number of its members to fifty not including persons who are
in the employment of the company; and
(c) prohibits any invitation to the public to subscribe for the shares, if any,
or debentures or redeemable capital of the company:
*Provided that, where two or more persons hold one or more shares
in a company jointly, they shall, for the purposes of this definition, be
treated as a single member.

(7)
*Provided that in case of conversion of a listed company into a private company, the Commission shall give
notice of every application made to it, to the securities exchange and shall take into consideration the
representation if any, made to it by the securities exchange.

5.14. VOLUNTARY DE-LISTING (VD):

5.14.1. Intimation of VD:
A company shall intimate the Exchange immediately subsequent to its Board’s decision to buy back shares from the
minority shareholders and voluntarily delist from the Exchange. The intimation may also include the proposed purchase
price, in line with the Buyback Price Criteria given in clause 5.14.2 below and the reasons for delisting.
5.14.2. Buyback Price Criteria:
The proposed purchase price shall not be less than the highest of the following:

(a) Weighted Average Closing Market Price of the last 5 days preceding the date of the board meeting in which the
company resolves to delist from the Exchange;
(b) 3-year Weighted Average Market Price one day preceding the date of the board meeting in which the company
resolves to delist from the Exchange (using Closing Market Prices);

(c) Intrinsic Value Per Share on the basis of the revaluation of assets of the company. (The revaluation shall be conducted
by an Independent Valuator shortlisted by the Exchange, and shall not be older than 3 months from the date of
complete submission of all documentation which shall accompany the formal application for voluntary delisting.
Intrinsic Value per share shall be certified by an Audit Firm falling in Category ‘A’ or ‘B’ of SBP’s Panel of Auditors.
The intrinsic value may also include any other factor in addition to tangible and intangible assets of company which
may be considered appropriate while fixing the price of shares.);

(d) P/E Multiple approach (for profitable companies reporting a Profit after Tax at least in the year preceding the intimation
of delisting);

(e) The maximum price at which the Sponsors had purchased these shares from the open market in the preceding one
year.

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5.14.3. Formal Application for VD:

The company shall submit a formal application for voluntary delisting within 45 days of the date of intimation, stating the
proposed purchase price and the reasons for delisting. The following shall be submitted along with the formal application
of delisting:
(a) Non-refundable Voluntary Delisting Application Fee of Rs. 500,000/-;
(b) Any outstanding dues of the Exchange;
(c) Valuation Report by the Independent Valuator, and Auditor’s Certificate certifying the Intrinsic Value per share;
(d) Sponsors’ Undertaking that they would purchase the shares of minority shareholders at a price to be approved in their
general meeting of shareholders for an initial buy-back period of 60 days and for a further period of one year;
(e) Sponsors’ Undertaking that they shall abide by PSX Regulations/ Procedures/ Guidelines/ Terms & Conditions
pertaining to Voluntary Delisting;
(f) Sponsors’ Undertaking that all material disclosures relating to the affairs of the company have been made to the
shareholders and the Exchange, and that they do not have any information which will constitute an offence under Part
X of the Securities Act;
(g) Consent of Purchase Agent, who acts as an agent for purchase of the securities to be de-listed on behalf of the
majority security holders as contemplated by these Regulations and who shall be a Securities Broker of the Exchange;
(h) Undertaking of Purchase Agent which will constitute an irrevocable open offer to purchase securities from minority
shareholders at a price approved in the general meeting, valid for an initial buy-back period of 60 days and for a further
period of 12 months;
(i) Complete list of majority shareholders, along with shareholding details;
(j) Complete list of minority shareholders, along with shareholding details;
(k) Statement from the Sponsors (giving details such as price and number of shares) of the shares they purchased from
the open market in the one year preceding the date of intimation.
The Exchange shall be empowered to ask for any additional information/ details, which shall be provided by the
company within 7 days of the date of such request by the Exchange.
5.14.4. Minimum Purchase Price:
The Exchange shall determine the minimum purchase price which shall not be less than the Buyback Price Criteria given
in PSX Regulation 5.14.2. The determination shall take into account any other factor which may be considered appropriate
while fixing the price of shares.
5.14.5. Quantum to qualify for delisting:
(a) Where the Sponsors’ shareholding is less than 90%, the Sponsors shall be required to increase their shareholding to
at least 90% of the total shares of the company to qualify for delisting.
(b) Where the Sponsors’ shareholding is 90% or above, it shall not be mandatory for them to purchase any minimum
quantum of the shares outstanding to qualify for delisting. However, the sponsors shall be obligated to purchase shares
from the minority shareholders during the initial buyback period and for a further period of one year as per the
requirements of these Regulations.
5.14.6. Condition for Voluntary Delisting:
The company shall be bound to comply with the Procedures, Guidelines, and any Terms & Conditions laid down by the
Exchange for voluntary delisting. The Exchange may, for any reason whatsoever, refuse to accept the voluntary delisting
application of the company.
5.14.7. Sponsors’ Acceptance / Appeal:
The Sponsors shall be required to convey their acceptance to the purchase price and quantum fixed by the Exchange
within 10 days of being informed of the Exchange’s decision. The purchase price accepted by the Sponsors shall be the
Opening Price as well as the Floor Price from the next trading day.
The company may file an appeal against the Exchange’s decision with the Commission within 10 days of being informed
of the Exchange’s decision. The decision taken by the Commission shall be final and binding.
If the Sponsors do not convey their acceptance to the purchase price and quantum fixed by the Exchange and also do not
file an appeal with the Commission within the stipulated time under PSX Regulations, the voluntary delisting application
shall stand withdrawn.
5.14.8. General meeting of shareholders:
The company shall call a general meeting of its shareholders, within 30 days of the Sponsor’s Acceptance, and pass a
special resolution resolving that the securities be delisted on the price and terms stipulated by the Exchange. A copy of
the special resolution shall be submitted to the Exchange.
The Sponsors shall not withdraw their voluntary delisting application after the voluntary delisting proposal has been
approved by the company’s shareholders in a general meeting.

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5.14.9. Post-General Meeting:

Within 7 days of the approval of the shareholders in a general meeting, the company shall submit the following to the
Exchange:
(a) Sponsors’ Bank Guarantee to secure their obligation valid for a period of 15 days from the expiry date of the Initial
Buyback Period. (Bank Guarantee Amount = Number of Shares held with Minority Shareholders * Purchase Price);
and
(b) Draft notice containing the Terms & Conditions of buyback to be published in two widely circulated newspapers.

Moreover, within 7 days of the approval of the shareholders in a general meeting, the company shall:
(a) Convey to all the minority shareholders the decision taken in the general meeting along with a copy of the special
resolution; and
(b) Publish notice containing the Terms & Conditions of buyback in two widely circulated newspapers.

5.14.10. Initial Buyback Period:

For a period of 60 days, the Sponsors shall be obliged to purchase shares from minority shareholders through the Purchase
Agent at the price approved in the company’s general meeting. All trades shall be conducted only through the Exchange’s
Trading System irrespective of marketable lot. The Purchase Agent shall be required to maintain a live bid in the Trading
System at the minimum purchase price approved in the company’s general meeting and any executed trade shall be based
on market forces.
5.14.11. Post-Initial Buyback Period:

Within 7 days of completion of the Initial Buyback Period or such extended number of days as may be specified by the
Exchange, the company shall submit the following information to the Exchange in tabular form:
Pre-Initial Buyback Period During Initial Buyback Period Post-Initial Buyback Period
No. of % of No. of % of No. of % of
Particulars Particulars Particulars
Shares Shares Shares Shares Shares Shares
Sponsors Shares Sponsors
Minority purchased by Minority
Shareholders the Sponsor Shareholders

5.14.12. Successful Buyback:

If the Sponsor successfully acquires the quantum determined under PSX Regulation 5.14.5. and approved by the
shareholders in a general meeting, the Sponsors’ offer for buyback shall be deemed successful. The company shall be
subsequently delisted from the Exchange.
5.14.13. Public Notice Post-Successful Buyback:

The company shall publish a notice in two widely circulated newspapers informing the remaining minority shareholders
that the Initial Buyback Period has lapsed and any minority shareholder who still wishes to sell his shares may do so within
a further period of one year from the conclusion of the 60-day Initial Buyback Period by contacting the Purchase Agent.
The same information shall also be intimated to minority shareholders via email and/or registered post, as may be
appropriate.
5.14.14. Sponsors’ Ongoing Obligation:

The Sponsors shall remain obliged to purchase shares from minority shareholders through their Purchase Agent at the
price approved in the company’s general meeting for a further period of one year from the 60-day Initial Buyback Period.
5.14.15. Regulation 5.14. shall not be applicable on SPACs.

5.15. DELETED:

5.16. DELETED:

5.17. DELETED:

5.18. RELAXATION:

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

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Question:
Write down the corporate compliances if the company intends to voluntary delist its securities from PSX!!
Answer:
1. Board of directors resolution shall be passed to consider and decide the voluntary delisting.
2. The decision of the board along with it's resolution shall immediately be communicated to securities
exchange during trading hours if the decision is made before trading hours or during the trading hours,
however, if the decision is made after the trading hours, the communication to PSX shall be made
before the opening of trading hours of exchange on next working day.
3. Within one week of the above communication, the company shall made a formal application to PSX for
delisting supported by reasons thereof and the proposed purchase price along with non-refundable
application fee of Rs. 500,000 (which will be paid by sponsors). Further, the application shall be
supported by a written consent of the purchase agent to act as an agent for purchase. Moreover, the
company must submit an undertaking from a Purchase Agent on behalf of the majority security holders
which will constitute an irrevocable open offer to purchase securities from the other security holders at
the purchase price approved in the general meeting.
4. Receiving of communication from PSX in relation to determination or approval of purchase price along
with minimum percentage of securities to be purchased by sponsors/majority shareholders to qualify
the delisting.
5. Further, the sponsors shall convey the acceptance or refusal of price approved by board to Pakistan
Stock Exchange within 7 days of communication of price by Pakistan Stock Exchange .Furthermore,
Board of director's resolution shall be passed to propose the voluntary delisting to members of the
company within 30 days.
6. Notice of general meeting shall be sent to the members at least 21 days before the date of general
meeting along with statement of all material facts under section 134(3) as it is a special business.
7. Holding of general meeting and passing of special resolution thereof. (It shall be held within 30 days of
BoD resolution in respect of acceptance of price of delisting)
8. Filing of altered copy of MoA and AoA and special resolution with the registrar within 15 days of
passing of special resolution under section 150.
9. A copy of special resolution passed in general meeting of the company shall be sent to the Exchange
immediately along with a complete list of holders of the security to be de-listed, containing information
with regard to securities held by the majority security holders and others, their names/category, the
number of securities and addresses.

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 Conversion of Types of Companies Chapter-07

10. The company shall submit bank guarantee of the Purchase Agent in an amount and such format as is
demanded by the Exchange to secure its obligation within a period of 7 days of general meeting.
11. The company shall convey to all the holders of the securities other than majority security 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 in Karachi, Lahore and Islamabad within a period of 7 days of general meeting.
12. The sponsors will purchase the securities for a period of 60-days.
13. Commencement of purchase period and closure thereof.
14. The company shall also be required to submit the following information within twenty one (21) days of
completion of the purchase period:
(a) Total number of issued securities (with percentage)
(b) Securities owned by majority security holders before the offer (with percentage)
(c) Securities bought under the offer (with percentage)
(d) Total securities currently owned by majority security holders (with percentage)
(e) Securities still outstanding with minority holders (with percentage)
(f) Amount of Bank Guarantee required @ Rs._(at the purchase price approved by the
Exchange/Commission) per outstanding security.
15. After receipt of the required documents/information and compliance of the relevant requirements as
stipulated by the Exchange, the securities of the company shall stand de-listed after a period of 30
days.

Let's Move on Some Practical Example

ADOS Pakistan

ADOS Pakistan has been involved in the supply of oil and gas field related equipment, fabrication and
refurbishment of equipment and spare parts used in oil and gas industry. It is also engaged in fabrication of
vehicles in respect of bullet proofing protection.

Page 185 CORPORATE LAW BY SIR IBRAHIM

Conversion of Types of Companies Chapter-07

Study Material Reference

1. Notice of Board Meeting

Compliance of 5.5.11 of Chapter 5 of Pakistan Stock Exchange Rule Book (A)

2. Disclosure of Price Sensitive Information

Compliance of 5.6.1 of Chapter 5 of Pakistan Stock Exchange Rule Book (B)

3. Communication of Board Resolution

Compliance of 5.17.1 and 5.14.1 of Chapter 5 of Pakistan Stock Exchange Rule Book (C)

4. Application to PSX Regarding Delisting

Compliance of 5.16.1, 5.16.2, 5.16.3 and 5.17.2 of Chapter 5 of Pakistan Stock Exchange Rule Book (D)

5. Communication of Purchase Price

By law, it is to be communicated with formal application as mentioned above, but in this case, it is exception (E)
to this company as PSX has exercised it's powers in accordance to 5.18 of Chapter 5 of Pakistan Stock
Exchange Rule Book.

6. Communication of approved Purchase Price and Purchase Quantity by PSX

Compliance of 5.17.4 of Chapter 5 of Pakistan Stock Exchange Rule Book (F)

7. Communication of Sponsor w.r.t Price

Compliance of 5.17.5 of Chapter 5 of Pakistan Stock Exchange Rule Book (G)

8. Notice of Board Meeting

Compliance of 5.5.11 of Chapter 5 of Pakistan Stock Exchange Rule Book (H)

9. Communication of Board Resolution

Not Mentioned in law (I)

10. Notice of Extra Ordinary General Meeting of Members

Compliance of Section. 133 of Companies Act, 2017 (J)

11. Communication of Special Resolution of Members

Compliance of 5.16.6 of Chapter 5 of Pakistan Stock Exchange Rule Book (K)

12. Public Notice for Buy Back/Purchase

Compliance of 5.16.7 of Chapter 5 of Pakistan Stock Exchange Rule Book (L)

13. Public Notice after Buy Back/Purchase

Not specific mentioned any where but this relates to 5.16.9 of Chapter 5 of Pakistan Stock Exchange Rule (M)
Book

14. Delisting by PSX

Compliance of 5.17.6 (e)of Pakistan Stock Exchange Rule Book Chapter 5 (N)

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 Conversion of Types of Companies Chapter-07

(A)

ADOS PAKISTAN LIMITED

House # 88, Khayaban-e-Iqbal F-8/2 Islamabad Pakistan
Tel: 2264308-2255560, Fax: 2281678
Email:ados@akbarassociates.com Website:

Post-ID: 178555
December 10, 2021, 15:05:26

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Board Meeting Other Than Financial Results

Dear Sir,

This is to inform you that a meeting of the Board of Directors of the Company will be held on 2021-12-20 at
11:00, at Islamabad to consider the future strategy of the company.

The Company has declared the "Closed Period" from 2021-12-11 to 2021-12-20 as required under Clause
5.6.1(d) of PSX Regulations. Accordingly, no Director, CEO or Executive shall, directly / indirectly, deal in the
shares of the Company in any manner during the Closed Period.

Please inform the TRE Certificate Holders of the Exchange accordingly.

Yours Sincerely,

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

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(B)

PAKISTAN LIMITED
Date: 20-12-2021

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Material Information

Dear Sir,

In accordance with Section 96 of the Securities Act, 2015 and Clause 5.6.1(a) of PSX. Regulations, we
hereby convey the following information:

A meeting of Board of Directors BoD of ADOS Pakistan Limited, the Company, was held today at 11 a.m., at
ADOS Pakistan's Head Office, to consider delisting of the shares under rule 5.14 of Voluntary Delisting rules
of the Pakistan Stock Exchange (PSX) Rule Book (the Rule Book). The BoD of the Company has resolved to
delist the Company from PSX under rule 5.14 of Voluntary Delisting rules of the Rule Book for which the
Company shall submit a formal application to the PSX. and for which the sponsors have been authorized to
buy-back ordinary shares held by the minority shareholders of the Company to an extent and at a price to be
determined in accordance with the regulations or as may be determined by the PSX or the Securities &
Exchange Commission of Pakistan for the purposes of voluntary Delisting of the Company from the PSX, A
disclosure form along with the Board Resolution is attached herewith.

Yours sincerely,
Sabina Ansari
Company Secretary

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

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(C)

PAKISTAN LIMITED

RESOLUTION OF THE BOARD OF DIRECTORS

A meeting of the Board of Directors of ADOS Pakistan Limited (the 'Company') was held on December 20,
2021 at its head office situated at 2nd Floor, Block 2, FJ Plaza, College Road, F-7 Markaz, Islamabad at 11.00
A.M.
The following resolution was passed in the meeting of the Board:
RESOLVED THAT ADOS Pakistan Limited be delisted from Pakistan Stock Exchange ("PSX") under rule
5.14 of Voluntary Delisting rules of the PSX Rule Book (the "Rule Book")
WHEREAS, the Company has been suffering losses since financial year ended 2017
WHEREAS, the Company's value proposition is not sustainable due to the severe reduction in Oil & Gas
drilling activity in Pakistan, as mentioned in the directors report.
WHEREAS, the company's products are being sold at dumping rates by foreign firms trying to capture market
share. Change in government policies has acted against the interest of local manufacturers in the oil in gas
sector. Specifically SRO 678 & SRO 821
WHEREAS, the nature of the product and market has changed so significantly, that the company will not
reasonably be able to generate enough revenue to cover minimum operational requirements, even if the local
Oil & Gas sector recovers.
WHEREAS, the majority shareholder and CEO of the company has invested approximately PKR 158 million
(2x the amount of paid up share capital of the company, & 71% of total equity & liability of the company) in the
past few years by means of interest free directors loans to the company, due to his desire to support its
survival.
WHEREAS, the manufacturing facility is becoming obsolete, resulting in high input costs and low profit
margins
WHEREAS, company has been unable to gain access to working capital due to declining revenues.
WHEREAS, the external product & quality certification required to manufacture products for customers has
been lost due to limited financial and human resources. Drastically affecting the scope of work that can be
accessed in the next 05-10 years.
WHEREAS, the sponsors have a serious concern on the ability to operate profitably in the future. The
sponsors now lack the funds required to ensure survival of the company.
WHEREAS,
(a) The Company shall make a formal application to the PSX for the delisting of the shares of the Company
from PSX
(b) Upon acceptance of the application for delisting its shares from PSX, in accordance the Rule book, a
general meeting of the shareholders of the Company be convened to seek approval through a special
resolution for the delisting of the shares of the Company form PSX, which general meeting of the
shareholders shall be held on such date as may be determined by Mr. Zia Akbar Ansari, Chief
Executive of the Company, or at any time after the approval of the application for the delisting of the
shares of the Company by PSX.

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

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Conversion of Types of Companies Chapter-07

PAKISTAN LIMITED
(c) The sponsors believe that the net realizable value of company assets results in a share price which is
below par value, according to PSX Rules 5.14.1, the expected buyback price is multiples higher. Thus
the sponsors shall seek relaxation as per clause 5.18 of PSX Rules in order to determine pricing for buy
back. The sponsors reserve the right to withdraw their delisting application, if the price determined by
the delisting committee is unreasonable.

(d) For the purposes of the general meeting of the shareholders as aforesaid, the Register of the Members
and Share Transfer Books, of the Company be closed for a period of 7 days prior to the said general
meeting of the shareholders, the dates of such closure being determined by Mr. Zia Akbar Ansari, Chief
Executive of the Company;

RESOLVED FURTHER THAT the delisting and subsequent buy-back of ordinary shares held by the minority
shareholders of the Company shall take place to an extent and at a price to be determined in accordance with
the Rule Book or as may be determined by the PSX or the Securities & Exchange Commission of Pakistan for
the purposes of voluntary Delisting of the Company from the PSX.

RESOLVED FURTHER THAT CEO Zia Ansari & Director Shehryar Ansari are hereby authorized to appoint a
purchase agent as required under the regulations.

RESOLVED FURTHER THAT Mr. Shehryar Akbar Ansari, Director, Mr. Zia Akbar Ansari, Chief Executive and
Miss Sabina, Company Secretary, (the "Authorized Officers") be and are hereby authorized to sign singly,
execute and deliver any document, and to do any other act, deed or thing for and on behalf of the Company
as may from time to time be required by the Central Depository Company ("CDC"), PSX and/or Securities &
Exchange Commission of Pakistan ("SECP") and to fulfill all requisite legal and procedural formalities for
accomplishing the delisting of the Company from the PSX, to appoint Advisor & Purchase Agent for the
delisting of the Company and make application, to appoint Share Registrar, sign and submit requisite
documents as may be necessary, negotiate the price with the PSX and so to effectuate the delisting of the
Company and to take all actions and do necessary acts, deeds and things for implementation of this
resolution.

RESOLVED FURTHER THAT all actions taken and/or to be taken by and on behalf of the Company by any
Authorized Officers in respect of the above are hereby ratified and confirmed by the Company.

Sabina Ansari Zia Akbar Ansari

Company Secretary Chief Executive Officer & Director

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

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 Conversion of Types of Companies Chapter-07

(D)

PAKISTAN LIMITED
Date: 27th December 2021

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Application for Voluntary Delisting of ADOS Pakistan Limited from Pakistan Stock Exchange
Limited

Dear Sir,
We refer to the Material Information Notice dated December 20th, 2021 submitted to Pakistan Stock Exchange
("PSX") and submission of the Sponsors/majority shareholders undertaking dated 20 th December 21, whereby
we have conveyed you the intension of the sponsors to buy back 1,701,700 ordinary shares comprising of
25.85% of the total paid up capital of ADOS Pakistan Limited (“ADOS” or the "Company") and the decision of
the Board of Directors of the Company to delist the Company from PSX under regulation 5.14 of the PSX Rule
Book - Voluntary Delisting Regulations (the "Regulation").
We submit herewith the formal application under regulation 5.16.1 of the PSX Rule Book with the request to
delist the company and approve the purchase of shares from the minority shareholders under the
Regulations.
We hereby submit as under:
1. The Company is a Public Company Limited by shares and is listed on PSX. The registered office is
situated at 2nd Floor, FJ Plaza, Block 2 College Road, Markaz F-7, Islamabad.
2. The Company has an authorized share Capital of PKR 70,000,000 (Pak Rupees seventy million only)
divided into 7,000,000 (seven million ordinary shares of PKR 10 each, out of which 6,582,600 (Six
million five hundred eighty two thousand and six hundred) ordinary shares of the aggregate nominal
value of PKR 65,826,000 (Pak Rupees sixty five million eight hundred twenty six thousand) are issued
and fully paid up. The shares of the Company are eligible for the purpose of Central Depository System
of the Central Depository Company of Pakistan.
3. The Following are the reasons for delisting of the Company from PSX:
a. The Company's profitability is not expected to improve in the near term due to prevailing adverse
market conditions, the Sponsors believe it would be in the best interest of the minority
shareholders who hold only 25.85% of the paid up share capital of the Company, to be provided
a fair opportunity to exit, so that they can invest the fund in other profitable avenues.
b. The Company has been suffering losses since financial year ended 2017
c. The Company's value proposition is not sustainable due to the severe reduction in Oil & Gas
drilling activity in Pakistan, as mentioned in the directors report
d. The company's products are being sold at dumping rates by foreign firms trying to capture
market share. Change in government policies has acted against the interest of local
manufacturers.
e. The nature of the product and market has changed so significantly, that the company will not
reasonably be able to generate revenue to cover minimum operational requirements, even if the
local Oil & Gas sector recovers.

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

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PAKISTAN LIMITED
f. The majority shareholder and CEO of the company has invested substantial funds of
approximately PKR 126,440,877 in the past few years by means of interest free directors loans
to the company, due to his desire to support its survival.
g. The manufacturing facility is becoming obsolete, resulting in high input costs and low profit
margins
h. The sponsors have a serious concern on the ability to operate profitably in the future. The
sponsors now lack the funds required to ensure survival of the company.
4. The Sponsors propose to purchase 1,701,700 ordinary shares (25.85% of the paid up share capital of
the Company) held by the minority shareholders of the Company at a minimum purchase price of PKR
10 per share.
5. JS Global Capital Limited has been appointed as the Purchase Agent.
6. Further and as required under the regulation, annexed hereto are the following documents
a. A certified copy of the resolution of Board of Directors passed on December 20, 2021
b. Sponsors'/ majority shareholders' undertaking as per regulation 5.14 of PSX Rule Book
c. Consent of Purchase Agent as per regulation 5.16.2 of PSX Rule Book
d. Purchase Agent's undertaking as per regulation 5.16.3 of PSX Rule Book
7. A cheque of PKR 485,000/- dated 27-12-2021 on account of application fee under regulation 5.16.1 of
PSX Rule Book after deduction of tax of Rs. 15,000/- as withholding tax.
8. The intrinsic Value per share of the Company is determined on the basis of revaluation of fixed assets
carried out by Iqbal A. Nanjee & Co. (Pvt) Ltd. who are approved valuators by Pakistan Banking
Association and one of the Valuators under PSX's approved valuators list. Due to the short timeline
allowed by PSX Rules for this activity, the final valuation report & Auditor certificate is in progress and
shall be shared with the PSX in due course.
9. Attached hereto is a summary of the shares held by majority and minority shareholders along with the
percentage of total issued shares
10. Attached hereto is a list of majority shareholders
You are requested to kindly process the application for delisting of the Company and Purchase of Shares from
minority shareholders.
We shall remain available in case you need any further information or documents in this regard.
Yours Sincerely,
Yours truly,
For ADOS PAKISTAN LIMITED

SHEHRYAR AKBAR ANSARI

DIRECTOR

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

Page 192 CORPORATE LAW BY SIR IBRAHIM

 Conversion of Types of Companies Chapter-07

(E)

PAKISTAN LIMITED
Ref: ADOS/PSX/DA/2022/05
Date: June 23, 2022

Pakistan Stock Exchange (G) Limited,

Stock Exchange Building, Stock Exchange Road.
Karachi.
Attention: Mr. Wasim A. Sattar – Senior Manager, Listing Department
Subject: Voluntary Delisting Application of ADOS Pakistan Limited

Dear Sir,

This is with reference to the formal application of Voluntary Delisting dated December 27, 2021 submitted to
the Exchange.
In this regard, following points of our application for delisting are now being revised/updated as at present.
Point 3(f)
As at March 31, 2022 the substantial amount of interest free directors loan extended to the Company to
support its survival has been majorly repaid by the Company.
Point 3(g)
Land and building of the Manufacturing facility becoming obsolete situated at Plot No. 43, Phase III, Hattar
Industrial Estate. KPK has been sold after getting approval through a special resolution passed in the EOGM.
1st Para, Point 3a & Point 4
The Sponsors propose to purchase 1,371,200 ordinary shares (20.83% of the paid up share capital of the
Company) held by the minority shareholders of the Company at a minimum purchase price of PKR 10 per
share.
The above is for information of all concerned.
Best Regards.

Yours truly,
For ADOS PAKISTAN LIMITED

SHEHRYAR AKBAR ANSARI

DIRECTOR

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

Page 193 CORPORATE LAW BY SIR IBRAHIM

Conversion of Types of Companies Chapter-07

(F)

PSX/N-783 Dated: August 11, 2022

Reproduced hereunder letter, dated August 11, 2022 received from Ados Pakistan Limited, and the letter
No. PSX/C-923-1580 dated August letter, 11, 2022 of the Exchange in relation to Buy-Back of Shares by the
Sponsors and Voluntary Delisting of the Company, for information of all concerned.

Stock Exchange Building, Exchange Road, Karachi – 74000, Pakistan.

UAN: 111-001-122 Fax: 32410825
Website: www.psx.com.pk Email: info@psx.com.pk

Ref: No. PSX/ C-923-1580 August 11, 2022

The Chief Executive

Ados Pakistan Limited
2nd Floor, FJ Plaza,
Block 2 College Road, Markaz F-7
Islamabad
Subject: Voluntary Delisting of Ados Pakistan Limited
Dear Sir,
Reference to the Voluntary Delisting application of your Company dated December 27, 2021.
In accordance with PSX Regulation No. 5.14.2, the Voluntary Delisting Committee of the Exchange in its
meeting held today has approved the minimum buy-back price of PKR 29/- per share. Moreover, the
Committee has also determined the minimum quantum of purchase of at least 342,800 Ordinary Shares
(i.e. 25%) out of the total 1,371,200 Ordinary Shares outstanding with the minority shareholders, to quality for
delisting.
You are requested to convey us the acceptance of the Sponsor immediately.

Yours sincerely,

Asmaa Saleem Malik

Chief Listing Officer

Copy to:
The Director (SM)
Securities & Exchange Commission of Pakistan
NIC Building, Jinnah Avenue, Blue Area
Islamabad

Regulatory Affairs Division | UAN:+9221 111-00-11-22 | E-mail: info@psx.com.pk | Web: psx.com.pk

Page 194 CORPORATE LAW BY SIR IBRAHIM

 Conversion of Types of Companies Chapter-07

(G)

August 11, 2022

Ms. Asmaa Sales in Malik
Chief Listing Officer
Pakistan Stock Exchange Limited
Stock Exchange Road
Karachi

Subject: Voluntary Delisting of Ados Pakistan Limited

Dear Madam,

We refer to your letter dated August 11, 2022 on the subject.

We hereby convey acceptance of the Sponsors to purchase the Ordinary Shares of Ados Pakistan Limited at
the buyback price of PKR 29/- per share, subject to purchase of at least 342,800 shares (i.e. 25%) out of the
total Ordinary Shares outstanding with the minority shareholders of the Company to qualify for delisting as
approved by the Voluntary Delisting Committee of the Exchange.

Your sincerely,

Shehryar Akbar Ansari

Director

HEAD OFFICE 2nd Floor, FJ Plaza College Road F-7 ISLAMABAD – PAKISTAN

ADOS@AKBARASSOCIATES.COM

www.ados.com.pk +92-51-2651701

Page 195 CORPORATE LAW BY SIR IBRAHIM

Conversion of Types of Companies Chapter-07

(H)

ADOS PAKISTAN LIMITED

House # 88, Khayaban-e-Iqbal F-8/2 Islamabad Pakistan
Tel: 2264308-2255560, Fax: 2281678
Email:ados@akbarassociates.com Website:

Post-ID: 190572
August 12, 2022, 15:24:56

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Board Meeting Other Than Financial Results

Dear Sir,

This is to inform you that a meeting of the Board of Directors of the Company will be held on 2022-08-16 at
11:30, at Islamabad to consider the date time and place for holding the Extra Ordinary General Meeting of the
Company regarding Voluntary Delisting of the Company from Pakistan Stock Exchange Limited.

The Company has declared the "Closed Period" from 2022-08-12 to 2022-08-16 as required under Clause
5.6.1(d) of PSX Regulations. Accordingly, no Director, CEO or Executive shall, directly / indirectly, deal in the
shares of the Company in any manner during the Closed Period.

Please inform the TRE Certificate Holders of the Exchange accordingly.

Yours Sincerely,

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

Page 196 CORPORATE LAW BY SIR IBRAHIM

 Conversion of Types of Companies Chapter-07

(I)

PAKISTAN LIMITED

RESOLUTION OF THE BOARD OF DIRECTORS

An urgent meeting of the Board of Directors of ADOS Pakistan Limited (the 'Company') is held on August 16,
2022 at its head office situated at 2nd Floor, Block 2, FJ Plaza, College Road, F-7 Markaz. Islamabad at
11:30 A.M.

The following resolution is duly passed in the meeting of the Board of Directors:

RESOLVED THAT an Extra Ordinary General meeting of the Company be held on September 08, 2022 at
11:00 A.M at 2nd Floor, Block 2, FJ Plaza, College Road, F-7 Markaz, Islamabad regarding Voluntary
Delisting of the Company from Pakistan Stock Exchange (G) Limited.

Shehryar Akbar Ansari Asfandyar Akbar Ansari

Director Director

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

Page 197 CORPORATE LAW BY SIR IBRAHIM

Conversion of Types of Companies Chapter-07

(J)

NOTICE OF EXTRAORDINARY
GENERAL MEETING
Notice is hereby given that the Extraordinary General Meeting of the shareholders of ADOS Pakistan Limited
(the "Company”) will Insha' Allah be held in-person as well via video link arrangement on Thursday,
September 08, 2022 at 11.00 A.M at its registered office at 2nd Floor, Block 2, FJ-Plaza, College Road,
Markaz F-7, Islamabad to transact the following business: SPECIAL BUSINESS:
To consider and, if thought fit, pass the following resolutions as special resolutions for the voluntary de-listing
of the Company:
"RESOLVED THAT the Company be delisted from the Pakistan Stock Exchange Limited("Exchange") in
accordance with the Voluntary De-listing Regulations of the Exchange, subject to the majority shareholders /
sponsors of the Company: (i) purchasing ordinary shares of the Company, having face value of PKR 10/- (Pak
Rupees Ten Only) each, at a buyback price of PKR 29/- (Pak Rupees Twenty Nine Only); and (ii) having
purchased at least 25%(twenty five percent) (i.e. 342,800 ordinary shares) of the total 1,371,200 ordinary
shares of the Company held by the shareholders (other than the majority shareholders/sponsors), as
approved by the Voluntary Delisting Committee of the Exchange on August 11, 2022 and upon completion of
all regulatory requirements as prescribed by the Exchange.
FURTHER RESOLVED THAT Mr. Zia Akbar Ansari, the Chief Executive Officer & Director of the Company
and / or Mr. Shehryar Akbar Ansari the Director of the Company, be and are hereby severally authorized to do
all acts, deeds and take all necessary actions, including to complete all legal formalities and file all documents
as may be necessary, to implement the aforementioned resolutions, as well as carry out any other act which
may be ancillary and/or incidental to the above and necessary to achieve the objective of the aforesaid
resolutions." A Statement of Material Facts under section 134(3) of the Companies Act, 2017 in connection
with the Special Business above is being sent to the Shareholders along with this notice.

By Order of the Board

SABINA ANSARI
Company Secretary
Islamabad: August 17, 2022
Notes:
1. Share Transfer Book will remain closed from September 01, 2022 to September 08, 2022 [Both days
inclusive]. Transfers received at Share Registrar, M/s JWAFFS Registrar Services (Private) Limited,
407-408, Al-Ameera Center, Shahrah-e-Iraq,Saddar, Karachi at the close of business on August 31,
2022 will be treated in time for the determination of entitlement of shareholders to attend and vote at the
Extraordinary General Meeting.
2. A member entitled to be present and vote at the meeting may appoint another member, as his/her
proxy to attend, speak and vote on his/her behalf. The instrument appointing proxy and the power of
attorney or other authority under which it is signed or a notarially certified copy of power of attorney
must be deposited at the registered office of the Company at least 48 hours before the time of meeting.
3. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature
shall be submitted along with proxy form to the Company.
4. Members who have deposited their shares in the Central Depository system of the Central Depository
Company of Pakistan Limited will have to follow the under mentioned guidelines as laid down by the
Securities & Exchange Commission of Pakistan:
A. For attending the meeting:
(i) In case of individuals, the account holder or sub-account holder and /or the person whose
securities are in group account and their registration details are uploaded as per the
Regulations, shall authenticate his/her identity by showing his/her original Computerized
National Identity Card (CNIC) or original passport at the time of attending the meeting.
(ii) In case of corporate entity, the Board of Director's resolution / Power of attorney with
specimen signature of the nominee shall be produced at the time of meeting.

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B. For Appointing proxies:

(i) In case of individuals, the account holder or sub-account holder and /or the person whose
securities are in group account and their registration details are uploaded as per the
Regulations, shall submit the proxy form as per the above requirement.

(ii) The proxy form shall be witnessed by two persons whose names, addresses and CNIC
numbers shall be mentioned on the form.

(iii) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be
furnished with the proxy form.

(iv) The proxy shall produce his/her original CNIC or original passport at the time of meeting.

(v) In case of corporate entity, the Board of Director's Resolution/ Power of attorney with
specimen signatures shall be submitted (unless it has been provided earlier) along with
proxy form to the Company.

5. Shareholders are also requested to notify any change in their address to the Company's share
Registrars M/s JWAFFS Registrar Services (Pvt.) Limited.

6. The shareholders holding physical shares are also required to bring their original CNIC and attested
copy of CNIC of shareholders(s) of whom he/she/they hold proxy(ies) without which such
shareholder(s) shall not be allowed to attend and/or sign the Register of shareholders/Members at the
Extraordinary General Meeting.

7. Video Conferencing facility: If the Company receives consent (as stated below) from members holding
aggregate 10% or more shareholding, residing in geographical location to participate in the meeting
through video conference at least seven (7) days prior to the date of extraordinary general meeting, the
company will arrange video conference facility in that city subject to availability of such facility in that
city. In this regard, please fill the following and send at registered address of the Company:

I/we,_____________ of_____________, being a member of ADOS Pakistan Limited, holder

of_____________ordinary share(s) as per registered Folio/CDC Account /No_____________ hereby
opt for video conference facility at _____________. Signature of member_____________.

8. Corona virus Contingency Planning for Extraordinary General Meeting (EOGM):

In the wake of situation caused by COVID-19 pandemic, shareholders are also entitled to attend the
meeting through electronic facility managed by the Company. In order to attend the EOGM through
electronic facility, the shareholders are requested to get themselves registered with M/s. JWAFFS
Registrar Services (Pvt.) Ltd. at least 48 hours before the time of EOGM at jwaffs@live.com. The
shareholders are requested to provide the information as per below format. The details of the video link
will be sent to the shareholders on the email address provided in the below table:

Sr. No. Name of the Shareholder CNIC Number Folio Number Cell Number Email Address

STATEMENT OF MATERIAL FACTS UNDER SECTION 134(3) OF THE COMPANIES ACT, 2017

IN CONNECTION WITH SPECIAL BUSINESS

This statement sets out the material facts concerning the special business to be transacted at the
Extraordinary General Meeting of ADOS Pakistan Limited (the "Company") to be held in-person as well via
video link arrangement on Thursday, September 08, 2022 at 11.00 A.M at its registered office at 2 nd Floor,
Block 2, FJ-Plaza, College Road, Markaz F-7, Islamabad. The majority shareholders/sponsors of the
Company intend to buy back / purchase all outstanding ordinary securities and shares of the Company
presently listed on the Pakistan Stock Exchange Limited ("Exchange") from all minority shareholders,
comprising approximately of 1,371,200 ordinary shares, being approximately 20.83% of the total paid up
share capital of the Company. Furthermore, it is sought that the Company be delisted from the Exchange for
the following reasons:

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a. The majority shareholders/sponsors, intends to obtain full ownership of the Company by purchasing all
outstanding ordinary shares held by minority shareholders.

b. The Company's value proposition is not sustainable due to the severe reduction in Oil & Gas drilling
activity in Pakistan.

c. The nature of the product and market has changed so significantly, that the company will not
reasonably be able to generate enough revenue to cover minimum operational requirements.

d. The Company's manufacturing facility is becoming obsolete, resulting in high input costs and low profit
margins.

e. The Company's net sales have continuously declined over the past four years (2017 to 2021) and the
Company has reported net losses (2017 to 2021).

The sponsors believes that it would be in the best interest of the minority shareholders to be provided a fair
opportunity to exit. Accordingly, upon the intimation of sponsors and majority shareholders/sponsors to
purchase the securities and shares of the Company listed on the Exchange, the Board of Directors of the
Company approved the voluntary delisting of the Company on December 20, 2021 in accordance with the
Rule Book of the Exchange.

The Voluntary Delisting Committee of the Exchange has, in its meeting held on August 11, 2022, approved a
buy-back price of PKR 29/- (Pak Rupees Twenty Nine Only) per ordinary share of the Company, and the
majority shareholders/sponsors of the Company, proposes to buy back / purchase ordinary shares of the
Company at the said price, subject to purchase of at least 25% (twenty five percent) (i.e. 342,800 ordinary
shares) of the total 1,371,200 ordinary shares of the Company held by the shareholders other than the
majority shareholders/sponsors, for the purpose of voluntary delisting of the Company from the Exchange.

In view of these factors, it is proposed to pass the resolutions stipulated under the agenda item in the notice
under "Special Business", as special resolutions.

The Directors have an interest to the extent of their respective shareholding.

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 Conversion of Types of Companies Chapter-07

(K)

PAKISTAN LIMITED

SPECIAL RESOLUTIONS PASSED IN THE EXTRA ORDINARY GENERAL MEETING OF THE MEMBERS
OF ADOS PAKISTAN LIMITED HELD ON SEPTEMBER 08, 2022 AT 11:00 A.M. AT THE REGISTERED
OFFICE OF THE COMPANY LOCATED AT 2ND FLOOR, BLOCK 2, FJ-PLAZA, COLLEGE ROAD,
MARKAZ F-7, ISLAMABAD

RESOLVED that

Mr. Zia Akbar Ansari, Mrs. Shoobarna Zia, Mr. Shehryar Akbar Ansari, Mr. Asfandyar Akbar Ansari,
Mr. Bakhtiyar Akbar Ansari, Mrs. Alylin Ansari, Mrs. Aysha Masood, Mrs. Razia Akbar Ansari, Mrs. Roohi
Rashid, Ms. Suboohi, Ms. Sabina Ansari and Mrs. Mobina Zahid, the majority Shareholders/Sponsors of
ADOS Pakistan Limited ("ADOS" or the "Company") be and are hereby authorized to buy back ordinary
shares of the Company at a buy back price of PKR 29/- per share as approved by Pakistan Stock Exchange
Limited (the "Exchange"), subject to purchase of at least 342,800 ordinary shares (25%) out of the total
1,371,200 ordinary shares outstanding with the shareholders other than Majority Shareholders/Sponsors, in
order to qualify for delisting as approved by the Voluntary Delisting Committee of the Exchange.

FURTHER RESOLVED that the Company be delisted from the Exchange under the Voluntary Delisting
Regulations of the Exchange upon fulfillment of all applicable regulatory requirements.

FURTHER RESOLVED that Mr. Zia Akbar Ansari, Chief Executive Officer & Director and Mr. Shehryar Akbar
Ansari, Director of the Company respectively be and are hereby authorized to take all necessary steps/actions
required to complete and to achieve the objectives of the aforesaid approved special resolutions.

Certified True Copy

Sabina Ansari
Company Secretary

HEAD OFFICE: 2ND FLOOR. F.J PLAZA, BLOCK 2. COLLAGE ROAD MARKAZ F-7, P.O. BOX 1416. ISLAMABAD - PAKISTAN
TEL: +92-51-2651365 & +92-51-2651368, FAX +92-51-2651368. E-MAIL: ados@akbarassociates.com
PLANT LOCATION: # 43, PHASE III, HATTAR INDUSTRIAL ESTATE, K.P.K. TEL: (0995) 617364 - 617192 FAX: + 92-995-617193

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(L)

NOTICE ADOS
PAKISTAN LIMITED
2ND FLOOR, BLOCK 2, FJ-PLAZA, COLLEGE ROAD, MARKAZ F-7, ISLAMABAD
TERMS, CONDITIONS AND PROCEDURE FOR PURCHASE OF 1,371,200
SHARES OF ADOS PAKISTAN LIMITED BY:
Mr. Ziaakbar Ansari Mrs. Shoobarna Zia Mr. Shehryar Akbar Ansari
Mr. Asfandyar Akbar Ansari Mr. Bakhtiyar Akbar Ansari Mrs. Roohi Rashid Ms. Suboohi
Mrs. Alylin Ansari Mrs. Aysha Masood Mrs. Raziaakbar Ansari Ms. Sabinaansari
Mrs. Mobina Zahid
This is to inform to all the shareholders that Mr. Zia Akbar Ansari, Mrs. Shoobarna Zia, Mr. Shehryar Akbar Ansari, Mr.
Asfandyar Akbar Ansari, Mr. Bakhtiyar Akbar Ansari, Mrs. Alylin Ansari, Mrs. Aysha Masood, Mrs. Razia Akbar Ansari,
Mrs. Roohi Rashid, Ms. Suboohi, Ms. Sabina Ansari and Mrs. Mobina Zahid, the majority shareholders/sponsors of ADOS
Pakistan Limited (the Company) have decided to purchase all the shares of the Company held by others. The
shareholders of the Company passed a special resolution for de-listing of the Company from the Pakistan Stock Exchange
at the Extraordinary General Meeting held on September 08, 2022 at 11:00 A.M, copy of Special Resolution is being sent
to the members separately.
Below are the set out terms, conditions and procedures for purchase of the shares of the Company by Mr. Zia Akbar
Ansari, Mrs. Shoobarna Zia, Mr. Shehryar Akbar Ansari, Mr. Asfandyar Akbar Ansari, Mr. Bakhtiyar Akbar Ansari, Mrs.
Alylin Ansari, Mrs. Aysha Masood, Mrs. Razia Akbar Ansari, Mrs. Roohi Rashid, Ms. Suboohi, Ms. Sabina Ansari and Mrs.
Mobina Zahid:
1. Mr. Zia Akbar Ansari, Mrs. Shoobarna Zia, Mr. Shehryar Akbar Ansari, Mr. Asfandyar Akbar Ansari, Mr. Bakhtiyar
Akbar Ansari, Mrs. Alylin Ansari, Mrs. Aysha Masood, Mrs. Razia Akbar Ansari, Mrs. Roohi Rashid, Ms. Suboohi,
Ms. Sabina Ansari and Mrs. Mobina Zahidare offering to buy the shares of the Company at a price of Rs. 29 per
share. This purchase price has also been approved by the Pakistan Stock Exchange Limited in accordance with its
Regulations.
2. The share purchase offer will be valid from September 19, 2022 to November 17, 2022 both days inclusive. After
this period, it is intended that the Company will be de listed from the Pakistan Stock Exchange Limited.
3. This offer is valid for all shareholders of the company (i.e., those shareholders holding physical share certificates
and those shareholders whose shares are held as book-entry security in the Central Depository System of the
Central Depository Company of Pakistan Limited (CDC).
4. In order to avail the offer, shareholders need to send (by either registered mail or courier service) or personally
take the following documents to our authorized Purchase Agent, M/s JS Global Capital Limited, The Centre, 17th
and 18th Floor, Plot No. 28, SB-5, Abdullah Haroon Road, Karachi, Phone: 021-32799005, UAN:111547111.
A. Physical Shares
(i) For registered Shareholders:
Shares certificates with verified transfer deeds.
(ii) For shareholders with open transfer deeds:
Share certificates with verified transfer deeds.
Copy of National Identity Card of the person who owns the shares.
(iii) JS Global Capital Limited will issue a receipt in exchange for the above documents. Once the share
certificates, transfer deeds and other documents have been verified by the Company's Shares
Registrar, M/s JWAFFS Registrar Services (Private) Limited, 407-408, Al-Ameera Center, Shahrah-
e-Iraq, Saddar, Karachi Phone: 021-35662023, shareholders will be requested to collect payment for
their shares at the rate of Rs. 29 per share less the TREC Holder's commission from JS Global
Capital Limited.
Payment to the shareholders will be made within three weeks of the date of issuance of the receipt.
B. Shares through the CDC
The Purchase Agent would purchase the shares through Karachi Automated Trading System (KATS).
Payment to sellers will be made as per the Clearing Schedule notified by the Pakistan Stock Exchange.

Sabina Ansari
Islamabad:
Company Secretary Dated: September 16, 2022

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(M)

NOTICE
VOLUNTARY DELISTING OF
M/S. ADOS PAKISTAN LIMITED
FROM PAKISTAN STOCK EXCHANGE LIMITED

All the shareholders are hereby informed that the initial buy-back period of purchase of shares of the company
by the sponsors has already been expired on November 17, 2022. The remaining minority shareholders of the
company, who could not avail the opportunity earlier and desire to sale the shares are requested to approach
the Sponsors of the company at 2nd Floor, FJ Plaza, Block 2, College Road, F7 Markaz, Islamabad, Phone:
051-2651701 for the purpose.
The Sponsors of the company have submitted an undertaking and bank guarantee to the Pakistan Stock
Exchange for purchase of the remaining shares at the price of Rs. 29/- per share approved by the Exchange
for a further period up to 12 months.

Sabina Ansari

Islamabad:
Company Secretary Dated: December 06, 2022

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(N)

PSX/N-1283 Dated: December 20, 2022

DELISTING OF ADOS PAKISTAN LIMITED (ADOS)

It is hereby informed to all concerned that Pakistan Stock Exchange, in exercise of the powers vested in it in
terms of PSX Regulation No. 5.14 and Section 19(5) of the Securities Act 2015, has accepted the request for
Voluntary Delisting of Ados Pakistan Limited and has decided to delist the Company from the Exchange with
effect from Monday, January 09, 2023.

The shareholders of the Company, who may desire to avail the opportunity of buy-back of shares by the
Sponsors, are advised to approach the Sponsors of the Company whose contact details are as follows:

Address: 2nd Floor, FJ Plaza, Block 2, College Road, F7 Markaz, Islamabad

Phone: (+92-51) 265 1701

The Sponsors of the Company have already submitted an Undertaking to purchase the remaining shares held
with the minority shareholders at a price of PKR 29/- per share, which is valid up to November 17, 2023.

The table summarizing the timelines of the buyback transaction is given hereunder:

Initial Buyback Period September 19, 2022 to November 17, 2022

Date of completion of Voluntary Delisting requirements December 07, 2022

Date of Delisting from PSX January 09, 2023

Offer of Buyback of Shares valid till November 17, 2023

General Manager | Chief Listing Officer

Listing Department

Copy to:
Additional Director / HOD, PMADD (SMD), SECP
Chief Executive, Ados Pakistan Limited
Head of Operations, CDC
Head of Operations, National Clearing Company of Pakistan Limited
PSX Website

Regulatory Affairs Division | UAN:+9221 111-00-11-22 | E-mail: info@psx.com.pk | Web: psx.com.pk

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Additional Reading Material

ADOS PAKISTAN TO GO PRIVATE NEXT MONTH

KARACHI: Engineering firm Ados Pakistan Ltd is going to delist from the Pakistan Stock Exchange (PSX) on
Jan 9 after the bourse accepted its request on Thursday forgoing private.

Engaged in the supply of oil and gas field–related equipment, Ados grappled with “serious concerns” about its
ability to continue its regular operations following low sales and “structural changes” in the energy exploration
and production (E&P) industry.

The PSX’s Voluntary Delisting Committee approved in August the minimum buyback price of Rs29per share.
The exchange advised minority shareholders on Tuesday to approach the company’s sponsors if they want to
participate in the share buy-back exercise.

The sponsors have already submitted an undertaking to the regulator under which they are bound to purchase
the remaining shares held with minority shareholders at Rs. 29 apiece until Nov 17 next year.

The company’s current stock price is also Rs. 29 per share.

According to company CEO Zia Akbar Ansari, the sponsors are taking Ados private because they wish to
protect the interest of the minority shareholders amid an “extremely uncertain” future.

The state-owned E&P companies stopped buying equipment from Ados after declaring it disqualified “on the
basis of experience”. Declining sales and long-term net losses left the company unable to service the
licensing and certification costs for its manufacturing licence from the American Petroleum Institute — a
prerequisite for doing business with state-owned E&P firms.

Published in Dawn, December 21st, 2022

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Question:
Write down the corporate compliances in case of change from Public Limited Company to Single Member
Company (SMC).
Answer:
1. Board of Directors) BoD) resolution shall be passed to propose the alterations in Memorandum of
Association (MoA) and Articles of Association (AoA).
(a) AoA shall be altered in order to include such clause as mentioned in articles of *SMC; and
(b) MoA shall be altered in order to change the name of the company (i.e from XYZ Limited to XYZ
(SMC-Private) Limited).
2. Notice of general meeting shall be sent to the members at least 21 days before the date of general
meeting along with statement of all material facts under section 134(3).
3. Holding of general meeting and passing of special resolution thereof.
4. Filing of altered copy of MoA and AoA and special resolution with the registrar within 15 days of passing
of special resolution under section 150.
5. Filing of application to the Commission on Form 2 for its approval, in respect of conversion, not later
than 60 days from the date of special resolution.
6. Filing of order of commission along with altered copy of MoA and AoA with the registrar within 15 days
from the date of order of commission.
7. Issuance of certificate of conversion by the registrar under section 50.

Alterations in Memorandum of
Alterations in Articles of Association
Association

The name of the company will The company is a single member company and as such being a private
change from “XYZ Limited” to company limited by shares-
“XYZ (SMC-Private) Limited”
(a) it shall not invite the public to subscribe for any shares of the
company;
(b) the company shall not register any share(s) in the name of two or
more persons to hold one or more shares jointly; and
(c) number of the members of the company shall be limited to one.

*Refer Part II of Table A First Schedule of Companies Act, 2017

SINGLE MEMBER COMPANY
4. The company is a single member company and as such being a private company limited by shares—
(a) it shall not invite the public to subscribe for any shares of the company;
(b) the company shall not register any share(s) in the name of two or more persons to hold one or
more shares jointly; and
(c) number of the members of the company shall be limited to one.

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Section 47. Conversion of status of private company into a single-member company and
vice-versa.
Private Limited Company to Single-Member Company
(1) A private company may be converted into a single-member company with prior approval of the
Commission in writing by passing a special resolution in this behalf by the private company amending
its memorandum and articles of association, in such a manner that they include the provisions relating
to a single-member company in the articles and complying with all the requirements as may be
specified.
(2) On an application for change in status of a company under subsection (1), if the (26)Commission is
satisfied that the company is entitled to be so converted, such conversion shall be allowed by an order
in writing.
(3) A copy of the order, confirming the conversion under sub-section (2), duly certified by an authorised
officer of the Commission shall be forwarded to the company and to the registrar within seven days
from the date of the order. (Responsibility of Commission not the Company)
(4) A copy of the memorandum and articles of association as altered pursuant to the order under sub-
section (2) shall, within fifteen days from the date of the order, be filed by the company with the registrar
and he shall register the same and thenceforth the memorandum and articles so filed shall be the
memorandum and articles of the newly converted company.

(26) Refer Regulation 11 of Companies General Provision and Forms Regulations, 2018

Single-Member Company to Private Limited Company

(27)
(5) If a company, being a single member company, alters its articles in such a manner that they no longer
include the provisions which are required to be included in the articles of a company in order to
constitute it a single member company, the company shall—
(a) as on the date of the alteration, cease to be a single member company; and
(b) file with the registrar a copy of the memorandum and articles of association as altered along with
the special resolution.

(27) No requirement of Regulation 11 of Companies General Provision and Forms Regulation. 2018

(Corporate compliances for change shall be same as from public company to private company as
mentioned earlier, but, the only change is alterations in clauses of articles of association and changes
in name of the company)

Changes in case of Private Company to Single Member Company

Alterations in Memorandum of Association Alterations in Articles of Association

The name of the company will change from The company is a single member company and as
”XYZ Private Limited” to “XYZ (SMC-Private) Limited” such being a private company limited by shares-
(a) it shall not invite the public to subscribe for any
shares of the company;
(b) the company shall not register any share(s) in
the name of two or more persons to hold one or
more shares jointly; and
(c) number of the members of the company shall
be limited to one.

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Changes in case of Single Member Company to Private Company

Alterations in Memorandum of Association Alterations in Articles of Association
The name of the company will change from The company is a private company and as such being
"XYZ (SMC-Private) Limited" to "XYZ Private Limited" a private company limited by shares-
(a) restricts the right to transfer its shares, save as
otherwise provided under this Act;
(b) limits the number of its members to fifty not
including persons who are in the employment
of the company; and
(c) prohibits any invitation to the public to
subscribe for the shares, if any, or debentures
or redeemable capital of the company:
*Provided that, where two or more persons hold one
or more shares in a company jointly, they shall, for the
purposes of this definition, be treated as a single
member.

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Conversion of Structure of Company

Which of the constitutional documents of the company define the structure of the company??
It is the memorandum of association.

This is the case where the liability of members will

Think which of the case is not covered above?
be increased. So Section 35 will be linked.

Conversion from unlimited Company to Company Limited by Guarantee is not covered under law!!
Solution:
“First convert to Unlimited Company to Company Limited by Shares and then convert Company Limited by
Shares to Company Limited by Guarantee.”

35. Effect of alteration in memorandum or articles.—

Notwithstanding anything contained in the memorandum or articles of a company, no member of the company
shall be bound by an alteration made in the memorandum or articles after the date on which he became a
member if and so far as the alteration requires him to take or subscribe for more shares than the number held
by him at the date on which the alteration is made or in any way increases his liability as at that date to
contribute to the share capital of or otherwise to pay money to the company:
Provided that this section shall not apply in any case where the member agrees in writing either before or after
the alteration is made to be bound thereby.
Section 48. Conversion of status of unlimited company as limited company and vice-versa
“Conversion of Unlimited Company to Company Limited by Shares”
(1) An unlimited company may be converted into a limited company with (28)prior approval of the
Commission in writing by passing (29)a special resolution in this behalf by the unlimited company
amending its memorandum and articles of association in such a manner that they include the provisions
relating to a company limited by shares in the articles and complying with all the requirements as may
be specified.
(2) On an application for change in status of a company under subsection (1), if the Commission is
satisfied that the company is entitled to be so converted, such conversion shall be allowed by an order
in writing.
(3) A copy of the order, confirming the conversion under sub-section (2) duly certified by an authorised
officer of the Commission shall be forwarded to the company and to the registrar within seven days
from the date of the order.

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“Conversion of Limited by shares / guarantee to Unlimited Company”

(4) If a company, being a limited company, alters its memorandum and articles in such a manner that they
include the provisions which constitute it as a company having unlimited liability of its members, the
company shall—
(a) as on the date of the alteration, cease to be a limited company; and
(b) file with the registrar a copy of the memorandum and articles of association as altered along with
the special resolution.

(28) Refer Regulation 11 of Companies General Provision and Forms Regulation, 2018
(29) Here each member of the company shall be required to give consent to proposed alteration under section 35 as this is the case
where the liability of the member will be increased.

Section 49. Conversion of a company limited by guarantee to a company limited by shares and vice-
versa.
Conversion of Limited By Guarantee to Limited By Shares:
(1) A company limited by guarantee may be converted into a company limited by shares with (30)prior
approval of the Commission in writing by passing a (31)special resolution in this behalf by the company
limited by guarantee amending its memorandum and articles of association in such a manner that they
include the provisions relating to a company limited by shares in the articles and complying with all the
requirements as may be specified.
(2) On an application for change in status of a company under subsection (1), if the Commission is
satisfied that the company is entitled to be so converted, such conversion shall be allowed by an order
in writing.
(3) A copy of the order, confirming the conversion under sub-section (2) duly certified by an authorised
officer of the Commission shall be forwarded to the company and to the registrar within seven days
from the date of the order.
(4) A copy of the memorandum and articles of association as altered pursuant to the order under sub-
section (2) shall within fifteen days from the date of the order be filed by the company with the registrar
and he shall register the same and thenceforth the memorandum and articles so filed shall be the
memorandum and articles of the newly converted company.

(30) Refer Regulation 11 of Companies General Provision and Forms Regulation, 2018
(31) Here each member of the company shall be required to give consent to proposed alteration under section 35 as this is the case
where the liability of the member will be increased.

Conversion for Limited by Shares to Limited By Guarantee:

(5) If a company, being limited by shares, alters its memorandum and articles in such a manner that they
include the provisions which constitute it a company limited by guarantee, the company shall—
(a) as on the date of the alteration, cease to be a company limited by shares; and
(b) file with the registrar a copy of the memorandum and articles of association as altered along with
the special resolution.
Section 50. Issue of certificate and effects of conversion.—
(1) The registrar upon registration of the memorandum and articles of association as altered by the
company upon conversion under sections 46 to 49, shall issue a certificate to that effect.
(2) The conversion of status of a company under sections 46 to 49 shall not affect—
(a) any debts, liabilities, obligations or contracts incurred or entered into, by or on behalf of the
company before conversion and such debts, liabilities, obligations and contracts may be
enforced in the manner as if such registration had not been done; and
(b) any rights or obligations of the company or render defective any legal proceedings by or against
the company and any legal proceedings that might have been continued or commenced against
the company before conversion may be continued or commenced upon its conversion.

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Section 51. Power of unlimited company to provide for reserve share capital on conversion of status
to a limited company.—
An unlimited company having a share capital may, by its resolution for registration as a limited company in
pursuance of this Act, increase the nominal amount of its share capital by increasing the nominal amount of
each of its shares, subject to the condition that no part of the amount by which its capital is so increased shall
be capable of being called up except in the event and for the purpose of the company being wound up.
Example:
Incorporation of a Company as a limited company (01 – February – 2022)
Loan of (32)Rs.10 Million from National Bank of Pakistan (01 – May – 2022)
(33)
Conversion from unlimited into limited by shares (01 – July – 2022)
Reserve Share Capital:
ABC Unlimited has Rs.50 Million of share capital before conversion into Limited Company. (5 Million Shares of
Rs.10 Each)
It May By (34)Resolution Make A Reserve Share Capital.
Note: It can be called ONLY in case of winding-up from the concerned shareholder for repayment of
loan to NBP.

(32) This resolution will be passed along with special resolution passed for alterations of memorandum and articles under section
48(1)
(33) On this day, nevertheless of the fact that the company is limited, the loan of National Bank of Pakistan shall still be dealt in
accordance as the company is an unlimited company.
(34) The company may increase the face value to Rs.20 and therefore make below entry:
Call Receivable Debit 10 Million This amount will be equal to the loan that was given by National Bank of Pakistan.
Reserve Share Capital Credit 10 Million

Related to Topic “UNLIMITED LIABILITY OF DIRECTORS”

98. Limited company may have directors with unlimited liability.—
(35) (36)
(1) In a limited company, the liability of the directors or of any director may, if so provided by the
memorandum, be unlimited.
(2) In a limited company in which the liability of any director is unlimited, the directors of the company, if
any, and the member who proposes a person for election or appointment to the office of director, shall
add to that proposal a statement that the liability of the person holding that office will be unlimited and
the promoters and officers of the company, or one of them shall, before that person accepts the office
or acts therein, give him notice in writing that his liability will be unlimited.
(3) Any violation of this section shall be an offence liable to a penalty of level 1 on the standard scale and
shall also be liable for any damage which the person so elected or appointed may sustain from the
default, but the liability of the person elected or appointed shall not be affected by the default.

(35) All directors or any director

(36) All directors or any director

99. Special resolution of limited company making liability of directors unlimited.—

A limited company, if so authorised by its articles, may, by special resolution, alter its memorandum so as to
render unlimited the liability of its directors or of any director:
Provided that an alteration of the memorandum making the liability of any of the directors unlimited shall not
apply, without his consent, to a director who was holding the office from before the date of the alteration, until
the expiry of the term for which he was holding office on that date.

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Reduction of Share Capital Chapter-08

CHAPTER
8

REDUCTION OF SHARE CAPITAL

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Reduction of Share Capital

89. Reduction of share capital.—

Subject to confirmation by the Court a company limited by shares, if so authorised by its articles, may by
special resolution reduce its share capital in any way, namely—
(a) cancel any paid-up share capital which is lost or un-represented by available assets;
(b) pay off any paid-up share capital which is in excess of the needs of the company.

Court Confirmation + Authority in articles + Special Resolution

(a) Cancellation of Share Capital

"In order to wipe off accumulated losses, scheme is prepared so as to cancel Share Capital"

(1)(A) (2)(B)

Cancellation of Share Cancellation of Share

Capital through Capital through
alteration in Face Cancellation of no. of
Value shares in circulation

Example: ABC Company Limited

Balance Sheet of ABC Company Limited

Authorised Capital 500,000 Fixed Assets 100,000
ROUA 20,000
Intangibles 45,000
Issued, Subscribed & Paid-up Capital 300,000 Current Assets 90,000
(30,000 Shares of Rupees 10/each)
Less: Accumulated
Losses (45,000)
255,000 255,000

In this case, Rupees 45,000/- in share capital is such which is not representing available asset.

(1) Issued & Paid-Up Capital Debit 30,000  10 300,000

Accumulated Losses Credit 45,000
Issued & Paid-Up Capital Credit 30,000  8.5 255,000
Disadvantages:
In this scenario, Earnings Per Share will not change.
(2) Issued & Paid-Up Capital Debit 4,500  10 45,000
Accumulated Losses Credit 45,000
15% cancellation of share capital for each shareholder.
Benefits:
No. of shares are reducing in this case, therefore it is beneficial for the company as it’s EPS will get better.

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(3)
(b) Paying off of Share Capital which is in excess of needs of the Company

(A) (B)
Cancellation of Share Cancellation of Share
Capital through Capital through
alteration in Face Cancellation of no. of
Value shares in circulation

Example: XYZ Company Limited

Balance Sheet of XYZ Limited
Authorised Capital 500,000 Fixed Assets 100,000
(4)
Cash 200,000
Issued, Subscribed & Paid-up Capital 300,000
(30,000 Shares of Rupees 10/each)
300,000 300,000
Corporate Revamping
Section 89: Legality(5)
Section 90 and 91: Role of creditor's in scheme
Section 92: Confirmation of order of reduction
Section 93: Registration and Completion of the process
Section 94: Partly paid shares (Not Applicable)
Section 95, 96 and 97: Miscellaneous Sections.

(3) Same entries will be passed as mentioned above

(4) Excess Cash
(5) Covered Above

(6)[90. Objection by creditors and settlement of list of objecting creditors.—(7)

(1) Where the proposed reduction of share capital involves the payment to any shareholder of any paid-up
share capital, and in any other case if the Court so directs, every creditor of the company who is entitled
to any debt or claim, shall be entitled to object to the reduction.
(2) The Court (8)shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as
far as possible without requiring an application from any creditor, the names of those creditors and the
nature and amount of their debts or claims, and may publish notices fixing a period within which
creditors not entered on the list are to claim to be so entered or are to be excluded from the right of
objecting to the reduction.
91. Power to (9)dispense with consent of creditor on security being given for his debt.—
Where a creditor entered on the list of creditors whose debt or claim is not discharged or determined does not
consent to the reduction, the Court may, if it thinks fit, dispense with the consent of that creditor, on the
company securing payment of his debt or claim by appropriating as the Court may direct, the following
amount, that is to say-
(a) if the company admits the full amount of his debt or claim, or, though not admitting it, is willing to
provide for it, then the full amount of the debt or claim; and
(b) if the company does not admit or is not willing to provide for the full amount of the debt or claim, or if the
amount is contingent or not ascertained, then an amount fixed by the Court after the like inquiry, and
adjudication as if the company were being wound up by the Court.]

(6) Seeking Creditor’s Consent

(7) In case of Section 89(b)
(8) (Ultimately, this list to be prepared by the company)
(9) Distribute

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92. Order confirming reduction.—(10)

If the Court is satisfied with respect to every creditor of the company who under this Act is entitled to object to
the reduction that either his consent to the reduction has been obtained or his debt or claim has been
discharged or has been determined or has been secured, the Court may make an order confirming the
reduction on such terms and conditions as it thinks fit.

Consent to Debt or Claim Debt or Claim Debt or Claim

Reduction has Or has been Or has been Or has been
been Obtained Discharged Determined Secured

(10) (Seeking Court’s Confirmation)

Seeking Registrar’s Registration Order

93. Registration of order of reduction.—
(1) The registrar on the filing with him of a certified copy of order of the Court confirming the reduction of
the share capital of the company, shall register the same.
(2) A (11)resolution for reducing share capital as confirmed by an order of the Court registered under sub-
section (1) shall (12)take effect on such registration and not before.
(3) The registrar shall certify under his hand the registration of the order and his certificate shall be
conclusive evidence that all the requirements of this Act with respect to reduction of share capital have
been complied with, and that the share capital of the company is such as is stated in the order.

(11) Passed under Section 89

(12) Important:
Only passing of special resolution will not suffice the matter, Registration of Court Order shall be required.

94. Liability of members in respect of reduced shares.—

Not Applicable as from the commencement of Companies Ordinance, 1984, this concept (Party Paid Shares)
was wiped off.
95. Penalty on concealment of name of creditor.—
If any officer of the company conceals the name of any creditor entitled to object to the reduction, or willfully
misrepresents the nature or amount of the debt or claim of any creditor, or if any officer of the company abets
any such concealment or misrepresentation as aforesaid, every such officer shall be punishable with
imprisonment for a term which may extend to one year, or with fine which may extend to five million rupees, or
with both.
96. Publication of reasons for reduction.—
In the case of reduction of share capital, the Court may require the company to publish in the manner
specified by the Court the reasons for reduction, or such other information in regard thereto as the Court may
think expedient with a view to giving proper information to the public, and, if the Court thinks fit, the causes
which led to the reduction.
97. Increase and reduction of share capital in case of a company limited by guarantee having a share
capital.—
A company limited by guarantee may, if it has a share capital and is so authorised by its articles, increase or
reduce its share capital in the same manner and on the same conditions subject to which a company limited
by shares may increase or reduce its share capital under the provisions of this Act.

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Question:
Write down the corporate compliance for reduction of share capital under section 89 of Companies Act, 2017.
Answer:
1. Board Resolution shall be passed to:
(a) To ensure the authority in Articles of Association for reduction in share capital under section 89
of Companies Act, 2017
(b) To propose the reduction of capital to members and to seek the special resolution thereof
2. Notice of general meeting shall be sent to the members at least 21 days before the date of general
meeting along with statement of all material facts under section 134(3) as it is special business.
3. Holding of general meeting and passing of special resolution thereof.
4. Filing of special resolution with the registrar within 15 days of passing of special resolution under
section 150 (if articles of the company are amended, then amended copy of (12)AoA shall also be
submitted)
5. To seek creditor's consent as applicable under section 90 and 91.
6. To seek court's confirmation on the basis of section 92.
7. Filing of court's confirmation order with the registrar under section 93 in order to seek registrar's
registration order.
8. Follow the requirement of publication as applicable under section 96 (If the court thinks expedient)

(13) This is the case where authority is not in AoA regarding the reduction of share capital.

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 Reduction of Share Capital Chapter-08

Practical Example of Case Laws

IN THE HIGH COURT OF SINDH AT KARACHI

Present:
Mr. Justice Muhammad Shafi Siddiqui

J.C.M. No. 3 of 2020

Ali Hussain Rajabali Limited

Date of Hearing: 28.01.2022

Petitioner: Through Mr. Sikandr Khan Advocate.
On Court notice: Security & Exchange Commissioner of Pakistan through Mr. Saad-ur-Rasheed Abbasi,
Law Officer.

JUDGMENT

Muhammad Shafi Siddiqui, J.- This petition is being filed by the petitioner company under section 89, 92 and
93 of Companies Act, 2017 for confirmation of the reduction of paid up capital. Security & Exchange
Commission of Pakistan has responded in terms of its parawise comments.
2. I have heard learned counsel for petitioner as well as law officer SECP and perused material available
on record.
3. The company was incorporated somewhere in November 1995 as limited by shares under the then
provisions of Companies Ordinance, 1984, by SECP, having its object to conduct trading in the
commodities as authorized by Pakistan Mercantile Exchange Limited and other allied objects, as
disclosed in the Companies Memorandum of Association. The authorized capital was 100,000,000
divided into 10,000,000 ordinary shares of Rs.10 each of which 5,000,000 ordinary shares were issued
as fully paid. Consequently the issued and paid up capital of the petitioner company was Rs.
50,000,000.
4. It appears that after its incorporation the company acquired membership card of Karachi Stock
Exchange, as it then was, and became an active member and commenced its operation of share
brokerage as well. However due to demutualization of the stock exchange, company the (petitioner)
was issued Trading Right Entitlement (TRE) certificates in response to the corporate requirement of
demutualization of the stock exchange. It appears that on account of business crunch that concerns
with stock Exchange the directors have decided to reduce scale of brokerage business and since they
were operating company with their own investment from their own funds and without any borrowing with
some selected clients, they opted to reduce the capital and hence this petition.
5. The Company also claimed to have surrendered the TRE and decided to quit Pakistan Stock Exchange
brokerage business and to act as member of Pakistan Mercantile Exchange (PME) with business of
trading in commodities etc. on account of their reduced business size, now they seek reduction in its
paid up share capital as it does not need a substantial paid up share capital which was earlier felt while
business of the company was in full swing. The proposed reduction of paid up capital is being done
inasmuch as it is not being utilized and is being surplus to the requirement of the company.
6. The company issued paid up capital of Rs.50,000,000 on June 30, 2019 with bonus shares of
Rs.10,000,000 by issuance of 1,000,000 ordinary shares of Rs.10/- each as on January 22, 2020
making a total paid up capital of Rs.60,000,000. The company now seeks reduction in its paid up share
capital from Rs. 60,000,000 to Rs.20,000,000/- i.e. from 6,000,000 to 2,000,000 ordinary shares for the
aforesaid reasons and such reduction shall be effected by reducing Rs. 40,000,000/- which
consequently reduced 4,000,000 million ordinary shares of Rs.10/- each by proportionately
(14)
distributing cash to the existing shareholders to the extent of their holdings.
7. The company claimed to have been authorized under Article 6.4 of its Articles of Association to pass
special resolution in this regard which it did subject to confirmation of this Court, as required under
section 89 of Companies Act, 2017. The Extraordinary General Meeting (EGM) was carried out on

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30.01.2020 after issuance of notices dated January 8, 2020 and on the recommendation of the Board of
Directors the resolution was passed on 08.01.2020. The Board unanimously through a special
resolution passed on 30.06.2020 in terms of Section 89 of the Companies Act, 2017 resolved that the
paid up share capital of the company be reduced in terms of the above.
8. From the record in terms of statement as available of 30.06.2019, it is also evident that the current
liabilities being accrued expenses and other payable in the sum of Rs.1,09,181/- cash and bank
balance of Rs.1,132,094/- have the capacity to pay of all liabilities of the company.
9. The petition was advertised in "Daily News" of March 10, 2020 and was also gazetted on 25.03.2020
but none has appeared to oppose or contest the petition. Notice was also issued to Securities &
Exchange Commission of Pakistan who did not raise any objection of any nature whatsoever rather
they confirmed to the extent that current liabilities and bank balance disclosed by the petitioner are in
conformity with the accounts filed by it for the year ended on 30.06.2019. The regulator SECP also
confirmed that there is no secured creditor as per their record.
10. In case for confirmation of resolution of reduced share capital the question for consideration are, should
the Court refuse its sanction to the reduction out of regard to the interest of those members of the public
who may be induced to take shares in the company; is the reduction fair and equitable between
different classes of shareholders; whether the reduction is shared by all; and is it designed to work
justly and equitably and whether it does not involve diminution of the liability in respect of unpaid capital
or payment of any shareholder of any paid up capital; and there is evidence regarding loss of capital
and non-representation of available assets. None of these impediments exist in the case of the
petitioner's company and consequently in view of above proposed reduction in the share capital, as
resolved by the company itself, apparently seems to be just, fair and reasonable and not likely to
adversely affect the interests of shareholders who have themselves resolved to the approval of this
scheme of reduction. The proposal for reduction of share capital is therefore confirmed in terms of the
requirements of Companies Act, 2017.
11. Petition stands disposed of in the above terms.

Dated: Judge

(14) Example of 89(b)

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Takeovers Chapter-09

CHAPTER
9

TAKEOVERS

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 Takeovers Chapter-09

Takeovers
Sequence of Topic
Section 108 to 126 of Securities Act, 2015
&
Limited Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017
(Purpose of Takeover = Continue Listing with changed Management and Changed Control)
108. Interpretation.— In this Part, —
(a) “acquirer” means any person who, directly or (1)indirectly, acquires or (1)intends to acquire voting shares
or voting rights in, or control of the target company, cither by himself or through any person acting in
concert;
(b) “manager to the offer” means a bank, securities broker or an investment bank licensed by the
Commission, appointed as per requirements of this Part;
(c) “offer period” means the period from the date of (2)public announcement of public offer to the date of
(3)
closure of public offer or (3)earlier withdrawal thereof;
(d) “persons acting in concert” means —
(i) persons who, with a common objective or purpose of acquisition of voting shares or voting rights
in, or control over a target company, pursuant to an agreement or understanding, formal or
informal, directly or indirectly co-operate for acquisition of such shares or voting rights in, or
control over the target company.
(ii) without prejudice to the generality of the foregoing, the persons falling within the following
categories shall be deemed to be persons acting in concert with other persons within the same
category, unless the contrary is established,—
(4)
(A) a company, its holding company, subsidiary company and any company under the same
management or control;
(5)
(B) a company, its promoters or sponsors or its directors, and any person entrusted with the
management of the company;
(C) directors of companies referred to in item (A) of this sub-clause and associates of such
directors;
(D) relatives of the acquirer or persons acting in concert with the acquirer;
(E) a securities manager and its client, who is an acquirer; and
(6)
(F) banks, financial advisors and securities brokers of the acquirer, or of any company which
is a holding company or subsidiary of the acquirer, and where the acquirer is an individual,
of the relative of such individual:
Provided that this sub-clause shall not apply to a bank whose sole role is that of providing
normal commercial banking services or activities in relation to a public offer under this Act;
Explanation.— For the purposes of this clause “associate” of a person means,—
(i) any relative of such person; and
(7)
(ii) trusts of which such person or his relative is a trustee;
(iii) partnership firm in which such person or his relative is a partner; or
(iv) private company in which the person or his relative is director or a member;(8)

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(10)
(e) “public announcement” means the announcement of intention to acquire or offer to acquire (9)voting
shares of the target company made to the public by the acquirer pursuant to this Part in the prescribed
manner and includes the announcement made in relation to a competitive bid;
(f) “public offer” means the public offer for acquisition of voting shares of a target company and includes
any competitive bid or bids made for this purpose;
(g) “relative” means spouse, real and half siblings and their children, and lineal ascendants and
descendants of a person;
(h) “voting shares” means shares in the equity share capital of a target company carrying voting rights and
includes any security which entitles the holder thereof to obtain or exercise voting rights;
(11)
Explanation.— For the purpose of this clause shares also include all depository receipts carrying an
entitlement to exercise voting rights in the target company; and
(i) “target company” means a listed company or holding company of a listed company whose voting
shares or control are (12)directly or indirectly acquired or intended to be acquired.

(1) Refer Section 108(d) below

(2) Public Announcement and public offer is defined below
(3) Earlier of:
(A) Closure of Public Offer
(B) Withdrawal of Public Offer
(4) Associated Company Under Section 2(4)
(5) Executive Directors, CEO
(6) (Ivi) "securities manager" means a person who manages or offers or agrees to manage, with or without remuneration, a
portfolio of securities belonging to another person, whether on a discretionary authority granted by that other person or
otherwise;
In case of acquirer being a natural person relatives of such acquirer shall be deemed to persons acting in concert.
(Ilv) "securities broker" means a trading right entitlement certificate holder or "TRE" certificate holder who, by way of
business, —
(a) makes or offers to make with any person or induces or attempts to induce any person to enter into or to offer to
enter Into, any agreement for or with a view to buying, selling, exchanging or subscribing for, securities; or
(b) solicits or accepts any order for or otherwise trading in, or effects transactions in, securities for clients or on its
own account.
(7) Company Name - ABC Limited
“Director of ABC limited = Mr. A”
Mutual Fund Formed Under Trust Act
“Trustee of this fund = Mr. A”
XYZ Employees Provident Fund (A fund of another company)
Mr. A + XYZ Employees Provident Fund + Relatives of Mr. A + ABC Limited (it self) + Any trust where relatives of Mr. A is a
trustee.
Persons Acting in Concert
(8) Important Word “Member” (IN CASE OF PRIVATE COMPANY)
(9) Most Important = Voting Shares
(10) 1. Announcement of intention to acquire
2. Anncuncement of Offer to Acquire
3. Announcement of a competitive bid (S.120)
(11) Box 1: Depository Receipts
A depositary receipt (DR) is a negotiable instrument representing ownership of a given number of a company's shares and can
be listed and traded independently of the underlying stock, in a different jurisdiction. Since the 1920s, American Depositary
Receipt (ADR) is one of the most common types of DRs which provide opportunities to companies to raise funds from
international markets, while also diversifying their portfolios. Global Depositary Receipts (GDRs), European DRs and International
DRs are other types of DRs traded at international bourses. GDRs are commonly listed on European stock exchanges, but
offerings do occur elsewhere. In April 2007, the first ever listing on the Singapore stock exchange took place. Both ADRs and
GDRs are usually denominated in U.S. dollars, but can also be denominated in other currencies.
(12) Listed Company (Directly or Through Holding (Company) + Voting Shares

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 Takeovers Chapter-09

109. This Part not to apply to certain transactions.—

(1) Except as provided otherwise in (13)sub-section (2), nothing contained in this Part shall apply to—
(a) allotment of voting shares pursuant to a right issue to existing members of a company in
proportion to their shareholding, except voting shares allotted and issued under (14)sub-section
(7) of section 86 of the Companies Ordinance, 1984 (XLVII of 1984);
(15) (15)
(b) allotment of voting shares to the licenced underwriters pursuant to any underwriting
agreement;
(c) acquisition of voting shares in the ordinary course of business by banks and financial institutions
as enforcement of (16)security;
(d) acquisition of voting shares by succession or inheritance;
(17)
(e) a scheme of arrangement or reconstruction including amalgamation or merger or de-merger
under any law for the time being in force;
(18)
(f) exercise of option by a bank or a financial institution in pursuance of a conversion option under a
loan agreement;
(g) sale of shares in consequence of privatization of a unit or its management rights within the
meaning of Privatization Commission Ordinance, 2000 (LII of 2000);
(h) acquisition pursuant to (19)inter se transfer of shares amongst qualifying persons, being,—
(20)
(i) relatives;
(ii) persons named as promoters or sponsors in the memorandum of Association of target
company holding not less than twenty five percent of the equity securities of the target
company;
(iii) a company, its subsidiaries, its holding company, other subsidiaries of such holding
company;
(21)
(iv) major shareholders of a target company collectively exercising management control for
a continuous period of three years prior to the proposed acquisition;
Explanation:— For the purposes of this clause the expression “major shareholder” means
person directly holding more than twenty per cent of voting shares of the target company;
(j) a scheme of rehabilitation of a company approved under any law for the time being in force.(22)
(2) After the acquirer acquires voting shares pursuant to sub-section (1), the acquirer shall make a
disclosure of the acquisition in the prescribed manner. (23)

(13) Only there is a requirement of disclosure

(14) It is replace with Section 83(1)(a)(iv) of Companies Act, 2017
(15) It will be discussed in detail in Public Offering Regulations, The concept is that when public offering is conducted, there is a risk
that shares, might not be subscribed by Public. In this case underwriters will subscribe whole unsubscribed shares.
(16) In case of default by borrower, exercise of clause in loan agreement in relation to acquisition of shares of borrower. (Voting
Shares)
(17) Section 279 to 292
(18) In case of default by borrower, exercise of clause in loan agreement in relation to conversion of loan into shares.
(19) (Between / Among Themselves)
(20) (Refer Definition As Mentioned Above)
(21) Major Share Holder = Holding More than 20% of voting shares + Exercising Management Control For CONTINUOUS period of
three years.
(22) 1. For Pubic Sector Company Refer Section 292 of Companies Act, 2017
2. For Other Than Public Sector Company Refer Rehabilitation Act and Regulations
(23) Only there is a requirement of disclosure

166 Corporate Law

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110. Acquisition of more than ten per cent voting shares of a company.—
(1) Any acquirer who acquires voting shares, which, taken together with voting shares, if any, held by the
acquirer, would entitle the acquirer to more than ten per cent voting shares in a listed company, shall
(24)
disclose the aggregate of his shareholding in that company to the said company, the securities
exchange on which the voting shares of the said company are listed and the Commission as provided
in sub-section (2).
(2) The disclosure mentioned in sub-section (1) shall be made within two working days of—(25)
(a) the receipt of intimation of allotment of voting shares; or
(26)
(b) the acquisition of voting shares, as the case may be.
Explanation.— For the purposes of this section the expression “acquisition” shall include
purchases confirmed by the TRE certificate holder of a stock exchange in accordance with
applicable rules or regulations.
(3) An acquirer may acquire additional voting shares within a period of twelve months after acquisition of
voting shares pursuant to sub-section (1) without making disclosure as required by sub-section (1) (27)in
case the total acquisition does not exceed an aggregate of thirty per cent.
Mr. A  Member of XYZ Limited (Listed in Securities Exchange)
Holding 6,000 Shares of XYZ Limited (3% Shareholding)
XYZ Limited = Issued, Subscribed and Paid-Up Capital = 200,000
Shares of Rs. 10/per share  Rs. 2,000,000/-
Below are the further details provided:

Date of No. of % of Issued, Subscribed

Aggregate % Any Disclosure Requirement
Acquisition Shares & Paid-Up Capital

01-January-22 10,000 5% (5 + 3)% = 8% There is no any disclosure requirement under the law

03-February-22 2,000 1% (8 + 1)% = 9% Still there is no any disclosure requirement under the law

06-February-22 2,000 1% (9 + 1)% = 10% Still there is no any requirement under the law.

Because Under Section 110 of Securities Act, 2015

there is requirement of more than 10%.

10-March-22 2,000 1% (10 + 1)% = 11% Disclosure Requirement is applicable

20-April-22 10,000 5% (11 + 5)% = 16% There is no any disclosure requirement under the law as
excluded under Section 110(3) of Securities Act, 2015

11-March-23 10,000 5% (16 + 5)% = 21% Yes, there is a disclosure requirement as time period of
12 months has passed.

(24) Disclosure: (3 Recipient)

1. The Company
2. Securities Exchange (PSX)
3. SECP (Commission)
(25) In case of 83(1) (a) (iv)
(iv) if the whole or any part of the shares offered under this section is declined or is not subscribed, the directors may allot
such shares in such manner as they may deem fit within a period of thirty days from the clone of the offer as provided
under sub-clause (ii) above or within such extended time not exceeding thirty day with the approval of the Commission.
(26) Securities are traded at T+2 to disclosure shall be made within 2 working days of confirmation of securities broker.
(27) < In case of additional acquisition after 12 months, once again disclosure under this section will be required if aggregate % falls
not more than 30% >

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111. Acquisition of voting shares beyond prescribed limits or control of a company.— No person shall,
directly or indirectly,—
(28)
(a) acquire voting shares, which (taken together with voting shares, if any, held by such person) would
entitle such person to more than thirty per cent voting shares in a listed company; or
(29)
(b) acquire additional voting shares in case the acquirer already holds more than thirty per cent but less
than fifty-one per cent of the voting shares of a listed company:
Provided that such acquirer shall not be required to make a fresh public offer within a period of twelve
months from the date of the previous public offer; or
(30)
(c) acquire control of a listed company,
(31)
unless such person makes a public offer to acquire voting shares of the listed company in accordance with
this Part.

(28) This is the case where acquirer would have already disclosed under section 110 of securities act, 2015 in relation to acquisition of
more than 10% and then further acquire share to become aggregate to more than 30%
(29) This is the case where acquirer would have already make a public offer in relation to acquisition of more than thirty percent prior
to the time period of twelve months and then further acquires bringing the aggregate to less than 50%.
(30) This is the case of acquisition of more than 50% of voting shares in the company.
(31) “Process of offer is given in Takeover Regulations”

A First time acquisition of more than 10% of Voting securities Disclosure under Section 110 of Securities Act, 20015

B Afterwards acquisition of more shares due to which cumulative Public Offer shall be required under Section 11 Securities
holding will become more than 30% Act, 2015

Considering the above Illustration

Case A If within a time period of 12 months, further shares are acquired bringing the total to less than 51% then no requirement of
public offer as excluded under Section 111 of Securities Act, 2015

Case B B If after a time period of 12 months, further shares are acquired bring the total to less than 51% then yes there is a
requirement of Public Offer under section 111 of Securities Act, 2015

Case C If within a time period of 12 months, further shares are acquired bringing the aggregate to more than 51% then there is a
requirement of Public Offer under section 111 of Securities Act, 2015

112. Number of voting shares and offer price.—

(1) The public offer by the acquirer shall be made for such minimum number of voting shares and for such
minimum offer price as may be prescribed.(32)
(2) Where the number of voting shares offered for sale by the shareholders are more than the voting
shares offered to be acquired by the acquirer, the acquirer shall, in consultation with the manager to the
offer, accept the public offer or offers received from the shareholders on a proportional basis:
(33)
Provided that acquisition of voting shares from a shareholder shall not be less than the minimum
marketable lot or the entire holding if it is less than the marketable lot.

(32) < Prescribed in Takeover Regulations >

(33) Lower of:
– Minimum Marketable Lot (Provided By PSX); or
– Entire Holding (if less than above minimum marketable lot)

113. Appointment of manager to the offer.— Before making any public offer the acquirer shall appoint a
manager to the offer who shall not be an associate, or a group company, of the acquirer or the target
company.(34)

(34) < Conflict of interest check >

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114. Timing of the public announcement of intention.— Any person intending to acquire control or voting
shares of the target company which may attract the provisions of section 111, shall make a public
announcement of its intention to acquire in such manner as may be prescribed.(35)

(35) < Prescribed in Takeover Regulations >

115. Public announcement of intention and public offer not to contain misleading material.— The
public announcement of intention, the public offer, any other advertisement, circular, brochure or any
publicity material issued in respect of, or in relation to, the acquisition of voting shares shall not contain
any misleading or incorrect information.
(36)
116. Conditional offer.—
(1) A public offer by the acquirer may be made conditional upon minimum level of acceptances:
Provided that such level shall not be less than the limit prescribed by the Commission.
(2) Where a public offer is made conditional upon minimum level of acceptance, the acquirer may reject all
such acceptances if the same do not reach the minimum level specified in the public offer:
Provided that the acquirer shall be free to accept the acceptances even if such acceptances, put
together, do not reach the specified minimum level.

(36) Optional
It may reject all acceptance if minimum level not reached
It may even accept all such acceptances in above case

(37)
117. Persons to whom public offer shall be made.— The acquirer shall ensure that the offer letter is
sent to all the shareholders of the target company whose names appear on the register of members of
the company as on the date specified in the public announcement:
(38)
Provided that where the public announcement is made pursuant to an agreement to acquire voting
shares or control of the target company, the offer letter shall be sent to the shareholders other than the
parties to the agreement.

(37) In case of absence of agreement as mentioned below

(38) 1. Mr. A Acquirer Holding = 3%
2. Agreement to acquire from Mr. B = 33%
3. Section 111 applies accordingly and public offer is required
4. (100-3-33) = 64% (Offer Letters shall be sent to all 64%)

(39)
118. Prohibition for acquirer.— Where the acquirer has, neither in the public announcement nor in the
offer letter, stated his intention to dispose of the undertaking or a sizeable part thereof, of the target
company except in the ordinary course of business of the target company, the acquirer, where he has
proceeded to acquire control of the target company, shall not dispose of the undertaking or a sizeable
part thereof, of the target company for a period of two years from the date of acquisition of the control.

(39) These are restrictions of acquirer

119. Prohibitions on board of directors of the target company.—

(1) The board of directors of the target company, during the offer period, shall not—
(40)
(a) sell, transfer, or otherwise dispose of or enter into an agreement for sale, transfer, or for disposal
of the undertaking or a sizeable part thereof, not being sale or disposal of assets in the ordinary
course of business of the company or its subsidiaries;
(41)
(b) encumber any asset of the company or its subsidiary;
(c) issue any further shares during the offer period; or
(d) enter into any material contract.(42)
(2) Once the public announcement of intention has been made, the board of directors of the target
company shall not appoint any person who represents or has an interest in the acquirer as an additional
director or against a casual vacancy on the board of directors, till acquisition is completed.

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(3) The target Company shall not transfer the securities acquired by the acquirer unless all obligations
have been fulfilled by the acquirer under this chapter as certified by the manager to the offer.
(4) Notwithstanding anything contained in the Companies Ordinance, 1984 (XLVII of 1984), once the
acquisition of shares has been completed in accordance with this Part, the target company (43)shall
allow such changes in the board of directors 'as would give the acquirer proportionate representation on
the board or control of the company.
(5) In case the acquirer does not get a proportionate representation on the board of directors of the target
company or the number of casual vacancies so created to complete the board on the basis of
proportional representation are not sufficient, the acquirer may serve a notice on the target company for
holding of fresh elections and shall submit a copy of such notice to the Commission forthwith. (44)
(6) The board of directors of the target company shall cause the election of directors to be held within thirty
days from the receipt of the notice under sub-section (5), and the elections shall be held in accordance
with the provisions of (45)sub-sections (2) to (5) of section 178 of the Companies Ordinance, 1984 (XLVII
of 1984).
(7) The board of directors so elected shall hold office during the remainder of the term of the outgoing
directors of the target company.

(40) These are restriction on BoD of Target Company

(41) Mortgage / Pledge
Example: Giving to bank as a collateral to the loan
(42) Remember one thing which we have covered in Buy Back of Shares, that the company whose public offer for acquisition of
shares has been announced shall not recommend a buy back of shares.
(43) (Purpose of Takeover = Continued Listing with changed management and changed control)
As it is the purpose of takeover to have continued listing with changed management and changed control.
(44) Refer Section 162
Time period of 3 years for election of directors is overruled and one of the example for case of holding fresh election of directors.
(45) Companies Act, 2017

(46)
120. Competitive bid.—
(1) Any person, other than the acquirer who has made the first public announcement, who is desirous of
making a competitive bid, shall, within twenty-one days of the public announcement of the first offer,
make a public announcement of his offer for acquisition of at least same number of voting shares of the
target company.
Explanation— For the purpose of this section a bid shall be deemed as competitive only if it offers a
higher purchase price.
(2) A competitive bid (47)shall not be for less than the number of voting shares for which, the earlier public
offer has been made.
(48)
(3) The provisions of this Part shall, mutatis-mutandis, apply to the competitive bid made under sub-
section (1).

(46) In case of lack of response, an acquirer may make an upward revision in his offer in relation to the price or no. of voting shares
irrespective of the fact that whether or not a competitive bid has been made under section 120 of the Securities Act, 2017.
(47) (At-least same number of shares with higher purchase price)
(48) < With necessary changes >

(49)
121. Upward revision of offer.— Irrespective of whether or not there is a competitive bid, the acquirer,
who has made the public announcement, may make upward revision in his offer in respect to the price
or the number of voting shares to be acquired, at any time up to seven working days prior to the date of
the closure of public offer.

(49) In case of lack of response, an acquirer may make an upward revision in his offer in relation to the price or no. of voting shares
irrespective of the fact that whether or not a competitive bid has been made under section 120 of the Securities Act, 2017.

170 Corporate Law

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122. Withdrawal of public offer.—

(1) Except as provided in sub-section (2), a public offer, once made, shall not be withdrawn.
(2) A public offer may be withdrawn,-
(a) if a competitive bid has been made;(50)
(b) if the sole acquirer, being a natural person, has died or has been declared to be of unsound mind
before the completion of the acquisition process; or
(c) in such circumstances as may be prescribed.
(3) If the acquirer who made the first public offer does not withdraw his offer within seven working days of
the public announcement of the competitive bid or docs not make an upward revision of his offer within
the time specified in section 121, the earlier offer on the original terms (51)shall continue to be valid and
binding on the acquirer, except that the closing date of such public offer shall stand extended to the
date of closure of public offer under the last subsisting competitive bid.

(50) < It means that the first public offer by an acquirer may be withdrawn >
(51) < To be linked with Regulations as mentioned below >

123. Security to be furnished by the acquirer.—

(52)
(1) The acquirer shall furnish a security for performance of his obligations on such terms and conditions
as may be prescribed.
(2) The total consideration payable under the public offer shall be calculated assuming full acceptances
irrespective of whether the consideration for the public offer is payable in cash or otherwise.
(3) In case there is any upward revision of offer, consequent upon a competitive bid or otherwise, the value
of the security shall be increased as may be prescribed under sub-section (1).(53)
(4) The security furnished shall be released in such manner as may be prescribed.

(52) [Obligation for purchase of shares]

(53) < Refer Takeover Regulations >

124. Conduct of takeovers.—

(1) The Commission (54)shall make regulations with respect to the making and conduct of takeover offers
and matters incidental and connected therewith.
(2) Without prejudice to the generality of sub-section (1), the Commission may make regulations for or with
respect to —
(a) the form, manner, timing and submission of offers;
(b) public announcements of intention and public offer;
(c) independent advice to shareholders;
(d) the obligations of directors;
(e) the standard of care and responsibility;
(f) the timing and content of documents;
(g) the offer timetable;
(h) asset valuations and offer pricing;
(i) restrictions on trading before and during the offer;
(j) security to ensure completion of a takeover offer;
(k) mandatory offers, offer size and acquisition;
(l) squeeze outs;
(m) competitive bids;
(n) conditional offers; and
(o) any other matter that the Commission considers necessary to ensure the proper conduct of
takeovers.

(54) Takeover Regulations

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125. Powers of Commission to issue directions under this Part.—

The Commission may, in the interest of the securities market, give such directions as it deems fit including—
(a) directing the person concerned not to further deal in securities;
(b) prohibiting the person concerned from disposing of any of the securities acquired in violation of
provisions of this Part;
(c) directing the person concerned to sell the voting shares acquired in violation of the provisions of this
Part; and/or
(d) taking such action against the person concerned as may be necessary.
126. Penalties for non-compliance.—
(1) In the event of withdrawal of public offer, except as provided in section 122, or contravention of any
provision of this Part, the Commission may, after providing reasonable opportunity of hearing, by an
order in writing, debar the acquirer and any person acting in concert from acquiring voting shares of a
listed company for a period of three years.
(2) In case any member of the board of directors or management of the target company contravenes any
provision of this Part, such person shall, on a finding by the Commission, after providing reasonable
opportunity of hearing, stand disqualified to hold the office of director, chief executive officer, by
whatever name called, chief financial officer or company secretary in a listed company for a period of
two years.
(3) If any person —
(a) refuses or fails to furnish, any document, paper or information which he is required to furnish by,
or under, this Part;
(b) refuses or fails to comply with any order or direction of the Commission made or issued under
this Part; or
(c) contravenes or otherwise fails to comply with the provisions of this Part, the Commission may, if
satisfied, after giving the person an opportunity of being heard, that the refusal, failure or
contravention was willful, impose penalty which may extend to one hundred million rupees as
may be specified in the order.

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Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017

1. Short title and commencement. -

(1) These regulations shall be called the Listed Companies (Substantial Acquisition of Voting Shares and
Takeovers) Regulations, 2017.
(2) They shall come into force at once.
2. Definitions. -
(1) In these regulations, unless there is anything repugnant in the subject or context, —
(a) “acceptance period” means the period commencing on the forty eighth day of the public
announcement of offer and closing with the close of the public offer which shall not be later
(55)
than the fifty fourth day from the date of the public announcement of offer;
(b) “Act” means the Securities Act, 2015 (III of 2015);
(c) “date of public announcement” means the date on which the public announcement is
published in newspapers;
(d) “offer letter” means the letter to be issued by the acquirer to the shareholders whose names
appear on the register of members of the target company as on the date of book closure, the
custodians of Global Depository Receipt(s), the custodians of American Depository Receipt(s)
and holders of convertible securities (where the period of conversion falls within the offer period)
in pursuance of section 117 of the Act and in accordance with the specifications provided in
Schedule I; and
(e) “schedule” means the schedules attached to these regulations;
(2) Words and expressions used but not defined in these regulations shall have the same meaning as
assigned to them in the Act, the Companies Act, 2017, the Central Depositories Act, 1997 (XXIX of
1997) and the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997).

(55) < In case of competitive bids, time period of 54 days will start from last bid >

3. Eligibility. -
(56)
(1) A person who is a shareholder of the target company as on the date of book closure shall be
eligible to participate in the public offer.
(2) All Global Depository Receipt and American Depositary Receipt holder(s) Entitled to participate in the
public offer as on the date of book closure and convertible security holders (where the period of
conversion falls within the offer period) shall be eligible to participate in the public offer.

(56) Refer Regulation 9

(1) On the twenty second day of the public announcement of offer, the target company shall announce its book closure
from the thirty sixth day of the public announcement of offer to determine the eligibility of persons to receive the offer
letter.
(2) The books of the target company shall remain closed for a period of seven days from the date of book closure i.e. from
thirty sixth day till the forty second day of the public announcement of offer. (Both Days Inclusive)

4. Mandatory disclosure for transactions under (57)section 109 and 110 of the Act-
(1) An acquirer who acquires voting shares pursuant to (58)section 109 of the Act within two working days of
the acquisition of shares shall make a disclosure of the acquisition to the target company, the securities
exchange and the Commission containing the information as prescribed in Schedule II.
(2) An acquirer who acquires voting shares (59)beyond the thresholds prescribed under sub-section (1) of
section 110 the Act, shall within two working days of the acquisition of shares make a disclosure of the
acquisition to the target company, the securities exchange and the Commission containing the
information prescribed in Schedule III.
(3) An acquirer who acquires (60)additional voting shares after a period of twelve months under sub-section
(3) of section 110 of Act shall within two working days of the acquisition of shares make a disclosure of
the acquisition to the target company, the securities exchange and the Commission containing the
information prescribed in Schedule IV.

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(57) As discussed in Securities Act, 2015

(58) < Recap: Only the requirement of disclosure >
(59) < More than 10% of voting shares >
(60) < More than 10% to not more than 30% after time period of twelve months of above (first) disclosure >

Important Discussion

Acquisition of shares in unlisted company  Out of Scope

Acquisition of shares in listed company not having voting rights  Out of Scope
Acquisition of shares in listed company with voting rights having aggregate % not exceeding 10%  Out of Scope
Acquisition of shares in listed company with voting rights having aggregate % exceeding 10% but not exceeding 30%  Section No. 110
of Securities Act, 2015 to be complied with & {Only to the extent of regulation 4 of takeover regulation will be applied}.
Acquisition of shares in listed company with voting rights having aggregate % exceeding 30%  Section 111 of Securities Act, 2015 and
{Takeover Regulations to be complied with}
Acquisition of shares to acquire control of a listed company  Section 111 of Securities Act, 2015 and
{Takeover Regulations to be complied with}

5. Disclosure by the target company-

(1) A target company shall immediately, in writing, inform the securities exchange and the Commission,
(61)
(a) of a firm intention to acquire control or voting shares of the target company, beyond the limits
prescribed in section 111 of the Act, is notified to the target company;
(b) when the target company is subject of rumor and speculation or there is an unusual movement in
its share price or traded volume and there are reasonable grounds for concluding that it is the
potential acquirer's actions which has led to the situation;
(c) when negotiations or discussions are about to commence with a person(s) for acquiring control
or voting shares of the target company beyond the limits prescribed in section 111 of the Act; or
(d) when a director, chief executive and/ or majority shareholder of a target company informs the
target company that they individually or in concert with each other or their family members or
associates are entering into negotiations for sale of their shareholding beyond the limits
prescribed in section 111 of the Act.
(2) The disclosure required to be made under sub-regulation (1) shall contain the information as prescribed
in Schedule V
(3) The securities exchange on being informed by the target company under sub-regulation (1) shall make
the information available on the same day to the shareholders of the target company and prospective
investors by placing the information on its website, posting it on its notice board through notification on
the automated information system and by making an announcement on the house of the securities
exchange.
(4) If any information given by the target company under these regulations is found to be false and the
target company gains any benefit from the false information, the target company shall be liable to a
penalty under the Act
Example of 5 (4)
ABC limited has made fake disclosure to PSX under regulation 5 that negotiation are about to commence with
persons for acquiring control or voting shares of the target company beyond the limits as prescribed in Section
111 of Securities Act, 2015 and as a result of this announcement the share price of the company has gone
from Rs. 100/ share to Rs.250/Share.
After 2 to 3 days, directors have sold their shares in order to have get undue gain from sale. In this case,
target company shall be liable to a penalty.

(61) As notified by compliance of < Regulations 6. Public Announcement of Intention >

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Takeovers Chapter-09

August 10, 2020

The Manager Director

Pakistan Stock Exchange Limited

Securities Markets Division

Securities and Exchange Commission of Pakistan

Subject: Disclosure under Takeover Regulations

(i) This is to inform that Hum Network Limited ("Target Company") is the subject of rumour and
speculation, details of which are as follows:

1. A magazine namely Profit Pakistan, in its issue of July 27, 2020, has published an article titled
"Is Sultana Siddiqui about to lose control over Hum TV" speculating that Kingsway Capital and
Mr. Jahangir Siddiqui and JS Group companies may be increasing their shareholding in the
Target Company to takeover control of the Target Company at the forthcoming elections of the
Target Company, implying that the aforesaid parties are acting in concert. There are, however, a
number of inaccuracies in the said article. (Copy attached as Annex 1)

2. Another magazine namely Treasure in its issue of July 29, 2020, “SECP urged to disclose names
behind Hum Network's share price hike" has also speculated regarding the change of control of
the Target Company. (Copy attached as Annex 2)

(ii) Furthermore, there is undue movement in the share price of the Target Company. The price of the share
has increased from Rs. 2.31 per share to Rs. 17.05 per share during the period starting from April 03,
2020 to June 18, 2020. It may be clarified that the face value of the shares of the Target Company is Re.
1 per share. Further, there are reasonable grounds which are mentioned below for concluding that it is
the potential acquirers actions which has led to the situation:

In view of the speculation regarding the change of control of the Target Company and very unusual and
unwarranted steps taken by Kingsway Capital, the record of the share transfers in the last few months
was scrutinized, which has shoved the following transactions by Kingsway Capital and JS Group and their
associated persons:

HUM NETWORK LIMITED

Karachi Office Lahore Office Islamabad Office

Building No. 10/11, Hassan All Street, 24-A, Plot # 2A, Sector G-6/1-1
Off II. Chundngar Road Karachi-74000 Masson Road, Khayabane-Suhrwardy Road
UAN: 111-486-111 Lahore. Aabpara, Islamabad
Fax : +92 21-3262 8840 Ph: +92-42-36312501-3 Ph: +92-51-8777000 www.humnetwork.tv

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 Takeovers Chapter-09

6. Public announcement of intention. -

(1) Before making any public announcement of intention, the acquirer shall appoint a "Consultant to the
Issue" duly licensed by the Commission, as (62)manager to the offer to assist it in the acquisition of
shareholding beyond the limits prescribed in section 111 of the Act or control of the target company;
(2) Before an acquirer, -
[(63)(a) enters into negotiations for a share purchase agreement;
(b) in the case or a company, passes a board resolution;
(c) starts raising funds; or
(d) commences a due diligence process to evaluate the share price of the target company;]
For the purpose of the acquisition of voting shares beyond the limits prescribed in section 111 of
the Act or control of the target company, the acquirer through the manager to the offer shall, after
careful and responsible consideration, make a public announcement of intention in the
newspapers.
(3) Notice of the public announcement of intention shall be submitted to the target company (at its
registered office for placement before the board of directors of such company), the securities exchange
and the Commission.
(4) The securities exchange shall make the information about the public announcement of intention
available, on the same day, by placing the information on its website, posting it on its notice board,
through notification on the automated information system and by making an announcement on the
house of the securities exchange.
(5) Within two working days of submission of notice of the public announcement of intention to the target
company, the securities exchange and the Commission, the public announcement of intention shall be
published in English and Urdu language, in at least two daily newspapers having circulation in all
provinces. Published copy of public announcement of intention shall be submitted to the Commission,
the target company (at its registered office) and the securities exchange on the same day of its
publication.
(6) The public announcement of intention shall contain such information as prescribed in Schedule VI.
(7) Where an acquirer makes a public announcement of intention in order to deceive any other person, or
to induce or influence any other person to act in a particular manner or withdraws the public
announcement of intention without any reasonable cause or reason, such person shall be liable to a
penalty under the Act.
(8) All persons concerned with public announcement of intention shall make full and prompt disclosure of
all relevant information and take every precaution to avoid the creation or continuance of an uninformed
market and the parties involved in such announcement shall take care that statements which may
mislead the shareholders or the market are not made.

(62) Compliance of Section 113 of Securities Act, 2015

113. Appointment of manager to the offer. – Before making any public offer the acquirer shall appoint a manager to the offer
who shall not be an associate, or a group company, of the acquirer or the target company.
(63) < These are the cases which shall be done before the public announcement of intention >

7. Public announcement of offer. —

(1) A public announcement of offer shall be made by the acquirer through the manager to the offer within
one hundred and eighty days of making the public announcement of intention in the newspapers.(64)
Provided that the acquirer may extend the aforementioned time period for a maximum of ninety days
under intimation to the Commission and the Securities Exchange and such intimation shall be made on
or before the expiry of 180 days for making the public offer.
(2) Notice of the public announcement of offer shall be submitted through manager to the offer to the target
company (at its registered office for being placed before the board of directors of such company), the
securities exchange and the Commission.
(3) The securities exchange shall make the information about the public announcement of offer available,
on the same day by placing the information on its website, posting it on its notice board through

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notification on the automated information system and by making an announcement on the house of the
securities exchange.
(4) The public announcement of offer shall contain the information as prescribed in schedule VII.
(5) Notice of public announcement of offer shall be submitted to the Commission along with the document
prescribed in Schedule VIII along with a non-refundable fee of Rs. 500,000/- to be deposited in the
designated account of the Commission.
(6) Within two working days of the submission of notice of the public announcement of offer to the target
company, the securities exchange and Commission, the public announcement of offer shall be
published in English and Urdu language in at least two daily newspapers having circulation in all
provinces. Published copy of public announcement of offer shall be submitted to the Commission, the
target company (at its registered office) and the securities exchange, on the same day of its publication.

(64) Please note that it is the date of publication in newspaper not the date of intimation to the company. <IMP>

8. Offer Timetable. –
The acquirer, manager to the offer, target company or any person making a competitive bid shall comply with
the offer timetable prescribed under Schedule IX. In the said schedule, Time (T) stands for date of
announcement of public offer.

(65) To be discussed later while discussing timelines.

9. Book closure. —
(1) On the twenty second day of the public announcement of offer, the target company shall announce its
book closure from the thirty sixth day of the public announcement of offer to determine the eligibility of
persons to receive the offer letter.
(2) The books of the target company shall remain closed for a period of seven days from the date of book
closure i.e. from thirty sixth day till the forty second day of the public announcement of offer.
10. Determination of entitlement. — After announcement of book closure determination of entitlement will
take place in accordance with respective regulations of Pakistan Stock Exchange.
5.5.1.1. CLOSURE OF SHARE TRANSFER BOOKS:
(a) A company, excluding open-end mutual funds, may close its share transfer books for any purpose and
shall give a minimum of seven (7) days' notice to the Exchange prior to closure of Share Transfer
Books, provided that the maximum period of closure of books during a year shall not exceed the period
specified in section 125 of the Companies Act.
Provided that the Companies quoted on the Futures Market shall intimate to the Exchange the dates of
their book closure and corporate actions, if any, on or before twentieth (20th) day of the month with a
notice period of at least twenty one (21) days after the said twentieth (20th) day for commencement of
book closure.
(b) The company shall treat the date of posting as the date of lodgment of shares for the purpose for which
shares transfer register is closed, provided that the posted documents are received by the Company
before relevant action has been taken by the Company.
(c) The company shall issue transfer receipts immediately on receiving the shares for transfer.
(d) The company shall not charge any transfer fee for transfer of shares.

"Related Regulations of Pakistan Stock Exchange" and Companies

Act governing Book Closure and Close Period

125. Power to close register. —

(1) A company may, on giving not less than seven days' previous notice close its register of members, or
the part of it relating to members holding shares of any class, for any period or periods not exceeding in
the whole thirty days in each year:
Provided that the Commission may, on the application of the company extend the period mentioned in
sub-section (1), for a further period of fifteen days

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(2) In the case of listed company, notice for the purposes of sub-section (1), must be given by
advertisement in English and Urdu languages at least in one issue each of a daily newspaper of
respective language having wide circulation.
(3) The provision of this section shall also apply for the purpose of closure of register of debenture-holders
of a company.
(4) Any contravention or default in complying with requirement of this section shall be an offence liable to a
penalty of level 2 on the standard scale.
11. Provision of list of shareholders and issuance of offer letters. —
(1) On the forty third day of the public announcement of offer, the target company shall provide an updated
and certified list of its shareholders to the acquirer to enable the acquirer to send the offer letters as
required under (66)section 117 of the Act.
(2) On the forty fourth and forty fifth day of the public announcement of offer, the acquirer shall issue offer
letters to the shareholders of the target company, the custodians of Global Depository Receipts or
American Depository Receipts and the convertible security holders (where the period of conversion falls
within the offer periods).

(66) 117. Persons to whom public offer shall be made.— The acquirer shall ensure that the offer letter is sent as all the
shareholders of the target company whose names appear on the register of members of the company as on the dale specified in
the public announcement:
Provided, that where the public announcement is made pursuant to an agreement to acquire voting shares or control of the target
company, the offer letter shall be sent to the shareholders other than the, parties to the agreement.

12. Date of closure of public offer.— The date of closure of public offer for the acquisition of voting shares
of the target company by the acquirer shall not be later than fifty four day from the date of public
announcement of offer:
Provided that where an addendum or corrigendum the public announcement of offer is published by the
acquirer, whether on the acquirer's own motion or on the direction of the Commission, the offer period shall re-
commence from the date of the publication of the addendum or the corrigendum as the case may be.
< Corrigendum = To rectify the mistake and providing revised document Addendum = To clarify the matter or
to provide an additional information >
13. Minimum offer price. —.
(1) If the shares of the target company are frequently traded, the public announcement of offer shall be at
the price which is highest amongst the following:-
(a) the (67)negotiated weighted average price under share purchase agreement(s) for the acquisition
of voting shares of the target company;
Provided that the expression “negotiated weighted average price” shall include total
consideration paid in whatsoever manner, including the liabilities settled whether taken over or
not, personal liabilities of sellers and consideration paid either in cash or otherwise against the
shares purchased;
(b) the highest price paid by the acquirer for acquiring the voting shares of target company during six
months prior to the date of public announcement of offer;
(c) the weighted average share price of target company as quoted on the securities exchange
during the last 180 days preceding the date of announcement of public offer;
(d) the weighted average share price of target company as quoted on the securities exchange
during 28 days preceding the date of public announcement of intention:
Provided that the weighted average share price shall be calculated as total value/total volume of
the Target Company in the ready market and only those days shall be incorporated where the
shares of the Target Company have been traded; and
(e) the price per share arrived at on the basis of net assets value carried out by a Chartered
Accountant firm based on of audited financial data not older than six months from the date of
public announcement of offer made by the manager to the offer. In case of fixed assets, being
part of total assets, the Chartered Accountant firm shall obtain the services of a value to carry-
out value of fixed assets, whose name appears on the list of panel of valuers maintained by
Pakistan Banks' Association.

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(2) If the shares are not frequently traded, the public announcement of offer to acquire shares under
section 111 of the Act shall be at the price which is highest amongst the following, -
(a) the negotiated weighted average price under share purchase agreement(s) for the acquisition of
voting shares of the target company;
Provided that the expression "negotiated weighted average price" shall include total
consideration paid in whatsoever manner, including the liabilities settled whether taken over or
not, personal liabilities of sellers and consideration paid either in cash or otherwise against the
shares purchased;
(b) the highest price paid by the acquirer for acquiring the voting shares of target company during six
months prior to the date of public announcement of offer; or
(c) the price per share arrived at on the basis of net assets value carried-out by a Chartered
Accountant Firm based on the audited financial data not older than six months from the date of
public announcement of offer made by the manager to the offer. In case of fixed assets, being
part of total assets, the Chartered Accountant firm shall obtain the services of a valuer to carry-
out value of fixed assets, whose name appears on the list of panel of valuers maintained by
Pakistan Bank's Association
Explanation-
For the purpose of this regulation, shares shall be deemed to be frequently traded if they have been
traded for at least 80 percent of the trading days during six months prior to the date of public
announcement of offer and their average daily trading volume in the ready market is not less than 0.5
percent of its free float or 100,000 shares whichever is higher.
Frequently Traded:
Average Daily Trading Volume = *(0.5% of Free Float) = XXXX
Higher of
100,000
AND
It should be traded for at least 80% of Trading days during six months. It means that
During Six months period  Total of trading days  80% = XXXX (Average Daily Volume is also required.
80% Trading is mandatory
*For the time being, there is no requirement of minimum free float for a listed company

(67) In case of negotiation

14. Number of voting shares to be acquired. —

(1) The acquirer may acquire any number of voting shares through an (68)agreement but where the but
where the acquisition attracts the provisions of section 111 of the Act, the acquirer shall make a public
announcement of offer to acquire at least fifty percent of the remaining voting shares of the target
company.
(2) Where the public offer is made conditional upon minimum level of acceptances, such minimum level
shall not be more than thirty-five percent of the remaining voting shares.

(68) Private Negotiation

Illustration:
Where the acquirer holds 10 percent voting shares of the target company and enters into an agreement to
acquire another 20 ^ percent voting shares, then such acquirer shall make a public announcement of offer for
fifty percent of the remaining 70 percent voting shares of the target company. In such a case the minimum
level of acceptances for the public offer cannot be more than 24.5 percent which is 35 percent of the 70
percent offered to be acquired through the public offer.
Description Case A Case B
Existing % of Holding of Mr. A 1% 11%
Quantity of Agreement 32% 21%
Remaining Quantity (100-1-32)% = 67% (100-11-21)% = 68%
Minimum Offer Size for public announcement (67  50%) = 33.5% (68  50%) = 34%
Maximum Percentage of conditional offer for minimum level of acceptances (67  35%) = 23.45% (68  35%) = 23.8%

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15. Security to be furnished by the acquirer. -

(1) For performance of obligations under the public offer, the acquirer shall provide security in the following
forms to the manager to the offer:
(a) cash deposited in an escrow account with a commercial bank with a minimum rating of "A" and
to be operated by the manager to the offer; or
(b) government securities with minimum (69)ten percent margin shall be deposited as a security.; or
(c) bank guarantee in favor of the manager to the offer from a commercial bank with a minimum
rating of "A" and valid till all obligations of the acquirer are fulfilled as certified by the manager to
the offer; or
(d) margin trading system eligible shares with thirty percent haircut based on their current market
value. The manager to the offer shall mark to market the shares on a weekly basis and any
shortfall after mark to market shall be notified by the manager to the offer to the acquirer in the
form of margin call and the acquirer shall deposit the shortfall on the same day of receipt of the
margin call from the manager to the offer.
(e) the spares or a listed company that are proposed to be offered as non-cash consideration in the
takeover transaction shall be subject to following requirements:-
(i) such company is listed for at least two years before the date of announcement of offer;
and
(ii) shares of such listed company are presently being traded at normal counter of securities
exchange:
Provided that this requirement shall not be applicable on proposed further issuance of
shares offered under section 83 of the Companies Act, 2017, as consideration, if any, in
the take over transaction;
(f) Government debt securities owned/held by the acquirer or by any person acting in concert,
offered as consideration in the takeover transaction; or
(g) a combination thereof.
(2) The security referred in sub-regulation (1) shall be provided by the acquirer on or before the date of
issue of public announcement of offer; and
(3) In case of any upward revision of offer, the security deposited shall be increased accordingly.

(69) < PIB, T-Bills having yield of minimum 10% >

16. Release of security. -

(1) The security deposited by the acquirer shall be released by the manager to the offer, within a period of
seven days,-
(a) after all payments to the shareholders have been made and completion of all obligations of the
acquirer under the Act and these regulations; and
(b) in the case of withdrawal of public offer, upon certification by the manager to the offer that the
offer has been validly withdrawn.
(2) In the event of non-fulfillment of obligations by the acquirer the manager to the offer shall realize the
security amount by way of withdrawal of cash, foreclosure of deposit, calling of bank guarantee or sale
of government securities and shares and the proceeds so obtained shall be utilized by the manager to
offer to meet all obligations under the Act and these Regulations.
(3) Where the security is not released by the manager to the offer with seven days, the manager to the
offer shall pay a surcharge at the rate of 6 months KIBOR + 4 percent.
17. Procedure for making competitive bid.-
(1) The public announcement of first and subsequent competitive bids shall be made within twenty-one
days of the public announcement of first offer.
(2) The public announcement of competitive bid shall be published in the same newspapers in which the
first public announcement of offer was published. A copy of the public announcement of competitive bid
shall be submitted, through the manager to the offer, to the Commission, the acquirer who made the

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previous public announcement of offer, the target company (at its registered office for being placed
before the board of directors of such company) and the securities exchange (for being notified on the
notice board and on the automated information system thereof), at least four days prior to the date of
publication in newspapers.
(3) The public announcement of a competitive bid shall contain the information as prescribed in Schedule VII.
(4) Where competitive bid(s) has been made, the manager to the offer of the competitive bidder(s) and the
manager to the offer of the acquirer who made the first public announcement of offer shall jointly, one
day before the commencement of the acceptance period for the public offer, publish a comparative
statement containing details of the first public announcement of the offer and subsequent competitive
bid(s) in the same newspapers in which the first public announcement of offer and the competitive
bid(s) were published.
(5) Upon the public announcement of a competitive bid, the aciquirer, who has made a public
announcement of the earlier offer, shall have the option to make another announcement,—
(a) revising the public offer in respect of the price and the number of voting shares to be acquired
without changing any other terms and conditions of the said public offer; or
(b) withdrawing the public offer:
Provided that if no such announcement is made within the time lines prescribed with reference to
competitive bids and upward revision, the earlier offer on the original terms shall continue to be
valid and binding on the acquirer who has made the earlier public offer, except that the date of
closing of such public offer shall stand extended to the date of closure of public offer under the
last subsisting competitive bid(s).
(6) Where there is a competitive bid, the date of closure of the earlier bid, as also the date of closure of all
the subsequent competitive bids, shall be the date of closure of public offer under the last subsisting
competitive bid and the public offers under all the subsisting competitive bids shall close on the same
date.
122. Withdrawal of public offer.—
(1) Except as provided in sub-section (2), a public offer, once made, shall not be withdrawn.
(2) A public offer may be withdrawn,-
(a) if a competitive bid has been made;
(b) if the sole acquirer, being a natural person, has died or has been declared to be of unsound mind
before the completion of the acquisition process; or
(c) in such circumstances as may be prescribed.
(3) If the acquirer who made the first public offer does not withdraw his offer within seven working days of
the public announcement of the competitive bid or docs not make an upward revision of his offer within
the time specified in section 121, the earlier offer on the original terms shall continue to be valid and
binding on the acquirer, except that the closing date of such public offer shall stand extended to the
date of closure of public offer under the last subsisting competitive bid.

T = Public announcement of offer in the newspapers Time Period of 54 Days Start

54 Days in accordance to Regulation 12
T + 54 Days = Close of offer
If in case of competitive bids, and no announcement of any revision of offer by acquirer, the earlier offer on
original terms shall be valid except that the date of closure of public offer shall be the date starting from 54
days from last competitive bids.

Regulation 17(5) and 17(6)

01 June 2021 19 June 2021

First Public Offer by acquirer Competitive Bid

< Time period of 54 days will start from 19 June 2021 not 01 June 2021 >

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18. Acceptance of public offer —

(1) On forty sixth day, the acquirer through an advertisement in the newspapers in which the public
announcement of offer or competitive bid, as the case may be, was published, shall inform the
shareholders of the target company of the commencement of the acceptance period.
(2) The advertisement referred to in sub-regulation (1) shall be in the form prescribed under Schedule X.
(70)
(3) The shareholders of the target company may accept the public offer during the acceptance period by
tendering their shares physically to the manager to the offer or in a designated CDC account specified
for the purpose in the public announcement of offer.
(71)
(4) Convertible security holder intending to accept the public offer shall convert their securities into shares
and tender the same to the manager to the offer during the acceptance period in the designated CDC
account.
(72)
(5) The custodians of Global Depository Receipts holders or American Depositary Receipts holders shall
upon the request of the respective holders convert the Global Depository Receipts or American
Depositary Receipts, as the case may be, into shares and tender the same to the manager to the offer
during the acceptance period in the designated CDC account.
(73)
(6) The manager to the offer shall send a written confirmation of receipt to the custodians of Global
Depository Receipts holders or American Depositary Receipts holders, the shareholders of the target
company and convertible security holders who have tendered their shares to the manager to the offer
as acceptance of the public announcement of offer.

(70) Shares
(71) Convertible Security conversion into shares then…..
(72) Conversion of Depository Receipts to shares and then……
(73) Conversion of Depository Receipts to shares and then……

19. Mode of payment. — The consideration for the voting shares to be acquired by the acquirer shall be
payable in the form of-
(a) cash; or
(b) By exchange or transfer of shares of listed company (74)owned or held or proposed further issuance of
shares by the acquirer or any person acting in concert subject to the following conditions
(i) such company is listed for at least two years before the date of announcement of offer; and
(ii) shares of such listed company are presently being traded at normal counter of securities
exchange:
Provided that in case of proposed further issuance of shares, appropriate regulatory approvals in
accordance with the requirements of the Companies Act, 2017 are in place prior to the Public
Announcement of Offer;
(c) By exchange or transfer of listed debt instruments owned/issued by the acquirer or held by any person
acting in concert; or
(d) By exchange or transfer of listed convertible debt securities owned/issued by the acquirer or held by
any person acting in concert; or
(e) By exchange of transfer of Government debt securities owned/held by the acquirer or by any person
acting in concert; or
(f) a combination of the modes of payment for consideration stated in clause (a), clause (b), clause (c),
clause (d) and clause (e) above.
Explanation:- For the purpose of calculating the consideration for (75)existing as well as new securities,
90 days average closing price of respective security before the public offer shall be considered.

(74) < Barter trade Shares with shares >

(75) In case of barter trade

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20. Procedure for payment. —

The acquirer shall, within a period of two days from the date of closure of public offer, open a special bank
account and deposit therein such sum as would, together with the security furnished under regulation 15,
make up the entire sum due and payable to the shareholders as consideration for acceptances received and
accepted in terms of public offer; (:)
Provided that in the case where the consideration involves only securities, or a combination of cash and
securities, as the case may be, the offeror shall post or credit the non-cash consideration to the persons'
securities account, as the case may be, accepting the take-over offer within 2 days from the date of closure of
public offer.
21. Withdrawal of public announcement of intention. -
(1) A public announcement of intention shall be withdrawn,-
(a) where the sole acquirer being a natural person, has died or has been declared bankrupt or has
been declared to be of unsound mind;
(b) where the negotiations to acquire voting shares of the target company have failed;
(c) where the results of the due diligence carried out by the acquirer for the acquisition of shares of
the target company are unfavorable;
(d) in case the acquirer is a company and it has gone into liquidation or its board of directors have
passed a resolution not to acquire the voting shares of the target company;
(e) the time period for making the public announcement of offer and extension thereof, if availed,
has lapsed;
Provided that the withdrawal notice shall be submitted to the Securities Exchange and the
Commission not later than one working day of expiry of time period for making the public offer or
extension thereof if availed, has lapsed
(f) in case of regulated/licensed entity the requisite approval have not been granted by the
concerned regulatory authority.
(2) In the event of withdrawal of the public announcement of intention under any of the circumstances
specified under sub-regulation (1), the acquirer shall immediately-
(a) make a public announcement of withdrawal in all the newspapers in which the public
announcement of intention was made and disclose reasons for withdrawal; and
(b) inform the Commission, the securities exchange and the target company at its registered office
along with reasons.
22. Withdrawal of public announcement of offer -
(1) In terms of clause (c) of subsection (2) of section 122 of the Act, a public announcement of offer once
made, may be withdrawn,-
(a) in case the acquirer is a company and it has gone into liquidation or has been declared bankrupt
before the completion of the acquisition process; or
(b) where the acquirer is an individual and he has been declared as an undischarged insolvent or
has applied to be adjudicated as insolvent before the completion of the acquisition process; or
(c) the acquirer has been declared by a Court of competent jurisdiction as a defaulter in repayment
of loans to financial institutions.
(3) Where there is a withdrawal of public offer, the manager to the offer shall,-
(a) return the shares, if any, tendered by the shareholders of the target company to the respective
shareholders of the target company within a period of three days from the date of the public
announcement of withdrawal in the newspapers; and
(b) thereafter release the security deposited to the acquirer or the Court in case of insolvency or
bankruptcy of the acquirer as the case may be.

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23. Conditions for upward revision of offer.

Any upward revision of offer under section 121 of the Act shall be made on the following conditions, namely:—
(a) making of a public announcement in respect of such changes or amendments in all the newspapers in
which the earlier public announcement was made;
(b) informing the Commission, the securities exchange and the target company at its registered office,
simultaneous with the issue of public announcement referred in clause (a); and
(c) increase in the value of the security accordingly.
24. General obligations of the acquirer. —
(1) The acquirer shall announce its public announcement of offer only after careful and responsible
consideration and the acquirer and its Manager to the Offer must be satisfied that it can and would
continue to be able to implement the takeover offer in full.
(2) The acquirer shall at the time of the public announcement of offer ensure that the identities of all the
persons interested in the acquisition of voting shares beyond the limit prescribed in section 111 of the
Act or control of the target company including the persons who makes arrangement for all the funding
requirements including payments and would exercise ultimate control over the target company is
disclosed to the public and the target company.
(3) If any director of an acquirer that is a public company is faced with a conflict of interest as a result of a
proposed acquisition, the acquirer's board of directors shall establish an independent committee to
assess the proposed public offer.
(4) Within two working days of the public announcement of offer, the acquirer shall send a copy of the
proposed offer letter to the target company at its registered office address, securities exchange and the
Commission.
(5) In case the acquirer is a company, whether incorporated in Pakistan or outside Pakistan, the public
announcement, brochure, circular, offer letter or any other advertisement or publicity material issued to
shareholders in connection with a public offer shall state that the directors accept the responsibility for
the information contained in such documents:
Provided that if any of the directors desires to exempt himself from responsibility for the information in
such documents, such director shall issue a statement to that effect together with reasons thereof in the
public announcement of offer.
(6) Persons, other than the acquirer, representing or having interest in the target company or an insider or
a beneficial owner of more than ten per cent of the voting shares during the last twelve months, shall
not participate in any matters concerning or relating to a public offer including any preparatory steps
leading to the offer.
(7) On or before the date of issue of public announcement of offer, the acquirer shall arrange the requisite
security as provided under the Act and these regulations.
(8) The acquirer shall ensure that firm financial arrangements for fulfilment of the obligations under the
public offer and suitable disclosures in this regard have been made in the public announcement.
(9) The acquirer shall, within a period of ten days from the date of the closure of public offer, complete all
procedures relating to the public offer including payment of consideration to the shareholders who have
accepted the public offer.
(10) The acquirer shall comply with all the requirements of the Act, these regulations and the regulations of
the securities exchange at all times.
(11) All acts of the acquirer shall be in good faith and in the best interest of the target company and its
shareholders considering the long term viability of the target company.

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25. General Obligations of the Board of Directors of the target company.-

(1) The target company shall furnish to the acquirer, within seven days of the request of the acquirer or
within seven days from the date mentioned in the public announcement of offer, whichever is later, a list
of convertible security holders as are eligible for participation containing name, address, shareholding
and folio number, and of those persons whose applications for registration of transfer of the securities
are pending with the company.
(2) The target company shall ensure that the acquirer and the Manager to the Offer are provided with all
relevant and material information which they require for the purposes of due diligence.
(3) The board of directors of the target company shall send its unbiased comments and recommendations
on the public offer to the shareholders if so desired by the acquirer(s) or shareholder(s) of the target
company.
(4) The board of directors of the target company shall facilitate the acquirer in verification of securities
tendered for acceptance.
(5) Where an acquirer, in compliance with the provisions of the Act has acquired requisite percentage of
the voting shares of the target company after completing the process of public offer, shall be entitled to
a proportionate representation on the board of directors or control of the company as prescribed under
the Act.
(6) The target company shall comply with all the requirements of the Act, these regulations and the
regulations of the securities exchange at all times.
26. General obligations of the manager to the offer. —
(1) The manager to the offer shall deemed to be the agent of the acquirer.
(2) Before the public announcement of offer is made, the manager to the offer shall—
(a) ensure that the acquirer, its sponsors, promoters, substantial shareholders, directors and
associates have no over dues or defaults, irrespective of the amount, appearing in the report
obtained from the credit information bureau.
(b) ensure that the acquirer or its directors, sponsors or substantial shareholders have not been
holding the office of the directors, or have been sponsors or substantial shareholders in any
company,
(i) which had been declared defaulter by the securities exchange or futures exchange; or
(ii) whose TRE certificate has been cancelled or forfeited by the securities exchange; or
(76)
(iii) which has been de-listed by the securities exchange due to non-compliance of its
regulations.
Provided that Commission may grant relaxation upon reasons to be recorded, and
rectification of cause leading to such Compulsory delisting
(c) ensure that the acquirer is able to implement the public offer;
(d) ensure that firm arrangements for funds and money have been made to fulfil the obligations
under the public offer;
(e) ensure that the public announcement is made in accordance with the Act and these regulations;
(f) furnish to the Commission on format provided in Schedule XI a due diligence certificate which
shall accompany a copy of the proposed offer letter;
(g) ensure that the contents of the public announcement and offer letter are true, fair and adequate
and based on reliable sources, quoting the source wherever necessary;
(3) The manager to the offer shall,-
(a) on the day of the public announcement of offer ensure that the proposed public announcement
of offer is filed with the Commission, target company and also sent to the securities exchange on

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which the voting shares of the target company are listed in accordance with the Act and these
regulations;
(b) upon fulfillment of the necessary obligations by the acquirer under the Act and these regulations,
cause the release of the balance amount of the security to the acquirer; and
(c) after ensuring compliance with the provisions of the Act and any other laws or rules and
regulations as may be applicable, send a report to the Commission within twenty days from the
date of closure of public offer or earlier withdrawal thereof.

(76) Compulsory delisting

27. Changes in the office of manager to the offer. —

(1) Any change in the office of manager to the offer shall be immediately intimated to the Commission, the
securities exchange and the target company.
(2) The manager to the offer shall be liable for any default/non-compliance for the relevant period of
appointment.
28. Equality of treatment.-
All shareholders of the target company are to be treated equally and all shareholders of the same class are to
be treated similarly.
29. Oppression of minority.-
Rights of control shall be exercised in good faith and the oppression of minority or non-controlling
shareholders shall be unacceptable.

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VERY IMPORTANT LINKAGE OF TIME PERIODS

SCHEDULE IX
[Ref regulation 8] Offer Timetable-T

*Time (T) stands for date of announcement of public offer Compliance of Regulation 5(1)(3) (A)

Prior to T* (i) Notice of public announcement of intention in the newspapers under regulations (B)

(ii) Disclosures, if any, by the target company required under regulation (C)

(iii) Appointment of the manager to the offer under section 113 of the Act read with regulation 6.
(iv) Sign agreement, if any, to acquire shares.
(v) Compliance by the manager to the offer with the applicable provisions of Act and these
Regulations.

2 days prior to T Provision of a copy of public announcement of offer to the Commission, target company and the (D)
securities exchange (Reference Regulation 7(2) and Regulation 7(5)).

T (i) Public announcement of offer in the newspapers in accordance with the Act and these (E)
Regulations. (Reference
(ii) Final date for the creation of security for the public offer (Reference Regulation 15(2).

T + 2 days Sending of copies of the proposed offer letter to the Commission target company and the securities (F)
exchange. (Reference Regulation 24(4))
T + 21 days Last date for making a competitive bid. Competitive bids may be made anytime from T to T + 21 (21
days). (Reference section 120 (1) of the Act and regulation 17(1))

T + 22 days Notice of book closure to the securities exchange (Reference regulation 9(1) and regulation 5.5.14 (a) (G)
of the Rule Book of Pakistan stock Exchange)

T + 36 days Book closure for 7 days i.e. from T + 36 to T + 42 (Reference Regulation 9(2))
T + 43 days Final date for the target company to
(i) provide the list of members for sending offer letters;
(ii) list of custodians of Global Depository Receipts or American Depository Receipts; and
(iii) list of convertible security holders to the acquirers (Reference Regulation 11(1))

T + 45 days Acquirer or manager to the offer on the acquirer's behalf to issue offer letters to all registered (H)
shareholders entitled to accept the offer. Also acquirer to send a copy of the offer letter to the
custodians of Global Depository Receipts or American Depository Receipts and convertible security
holders, where the conversion period falls within the offer period. (Reference Regulation 11(2))

T + 46 days Advertisement in the newspapers by the acquirer for submission of acceptances, (reference (I)
Regulation 18(a))
T + 47 days Final date for the acquirer to make an upward revision in earlier offer price. (Reference section 121 of
the Act)

T + 48 days Acceptance period for the public offer commences (Reference Regulation 2(1)(a)) (J)

T + 54 days Public offer expires i.e. the last day for acceptance of offer by shareholders and convertible securities
holders. (Reference Regulation 12)
T + 56 days Final date for the opening of account in accordance with regulation 20.
T + 64 days The final date for completion of all procedures relating to public offer by the acquirer including
payment of consideration to shareholders who have accepted the public offer. (Reference Regulation
24(9))
T + 75 days Final date for the manager to the offer to:
(a) Certify that the acquirer has fulfilled all obligations of the acquirer under the Act and these
regulations.
(b) Send a report to the Commission (Reference Regulation 26 (3) (c))
T + 76 days The BOD of the target company may transfer securities acquired by the acquirer whether through
agreement or open market purchases. (Reference section 119(3) of the Act)

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(A)

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

June 3, 2021
Deputy General Manager
Pakistan Stock Exchange
Stock Exchange Building
Stock Exchange Road
Karachi
Executive Director
Public Offering and regulated Persons Department
Securities Market Division
Securities & Exchange Commission of Pakistan
NIC Building, Jinnah Avenue, Blue Area
Islamabad, Pakistan
Chief Executive Officer
Hallmark Company Limited
Plot # 38/A Opposite The Intellect School,
Ground Floor, Korangi Creek,
Karachi, Pakistan
Subject: Public Announcement of Intention to acquire more than 50% shares and control of Hallmark Company
Limited under Securities Act, 2015 (Act) and Listed Companies (Substantial Acquisition of Voting Shares and
Takeovers) Regulations, 2017 ("Regulations")

Dear Sir,

We M. Munir M. Ahmed Khanani Securities Ltd have been appointed as the Manager to the Offer by Mr. Irtaza Zafar
Sheikh, Mr. Kamran Ahmed, Mr. Khalid Farooq And Gazpak (Private) Limited ("Acquirers"), in accordance with the
provisions of the Securities Act, 2015 and Listed Companies (Substantial Acquisition of Voting Shares and Takeovers)
Regulations, 2017.

On behalf of the Acquirers, we would like to submit a Public Announcement of intention to acquire more than 50%
shares and control of Hallmark Company Limited ("Target Company").

This Public Announcement of Intention is intended to be published in one English and one Urdu newspaper within Two
days, in accordance with the Regulations and the Act.

M. Munir M. Ahmed Khanani Securities Ltd

Enclosure: Copy of Public Announcement of Intention

624-627, Pakistan Stock Exchange Building, Stock 021 - 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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Takeovers Chapter-09

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

PUBLIC ANNOUNCEMENT OF INTENTION TO ACQUIRE MORE THAN 50% SHARES AND

CONTROL OF HALLMARK COMPANY LIMITED

BY

MR. IRTAZA ZAFAR SHEIKH, MR. KAMRAN AHMED, MR. KHALID FAROOQ AND GAZPAK
(PRIVATE) LIMITED.
UNDER SECURITIES ACT 2015

PART A

Brief description of the intended acquisition

Intended acquisition through Number of Shares Percentage
Agreement(s) Not determinable at this stage Expected to be more than 50% of the Issued and Paid-
up Capital of the Company
Public offer Not determinable at this stage To be determined after finalization of Agreement(s)

PART B

(1) Information about the Acquirer(s)

(a) Name and address of Acquirer(s) along with persons acting in concert, if any.
(1) Name: GAZPAK (Private) Limited
Address: 23-B, Lalazar, off M. T. Khan Road, Karachi, Pakistan
(2) Name: Irtaza Zafar Sheikh
Address: Villa 136, Frond C, Palm Jumeirah, Dubai, UAE
(3) Name: Kamran Ahmed
Address: Apartment 505, Azizi IRIS, Al Furjan, Dubai, UAE
(4) Name: Khalid Farooq
Address: House No. 133, A-One Township Lahore
(b) Name of the ultimate acquirer or the ultimate controlling shareholder.
Ultimate controlling shareholders of GAZPAK (Private) Limited
Mr. Salim Chamdia
Mrs. Zainab

Individuals:
Mr. Irtaza Zafar Sheikh
Mr. Kamran Ahmed
Mr. Khalid Farooq

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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 Takeovers Chapter-09

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

(c) Name and address of Manager to the Offer of the Acquirer.

Name: M. Munir M. Ahmed Khanani Securities Ltd
Address: Room// 624, 6th Floor, PSX Building, Karachi

(d) Principal areas of business of the Acquirer(s) and relevant experience.

The individual acquirers are principally involved in the business of IT related services, including in
planning, management, and direction of technology initiatives in support of both academic and
administrative operations.

GAZPAK (Private) Limited: The principal line of business of the company is to carry on the business of
services which are legally permissible, and also to make sale, purchase, import, export and to act as
general traders for products commodities.

(e) In case the Acquirer is a fund / company(s):

i. Names of the Chief Executive and Directors of the company(s)
Chief Executive Officer of GAZPAK (Private) Limited: Salim Chamdia.
Directors of GAZPAK (Private) Limited:
(1) Salim Chamdia
(2) Zainab

ii. Names of substantial shareholders of the company

(1) Mr. Salim Chamdia
(2) Mrs. Zainab

iii. Date of incorporation

22nd day of March 2021

iv. Jurisdiction of incorporation

Pakistan

v. Authorized and paid up capital

Authorized Share Capital of the company: PKR 30,000,000 divided into 3,000,000 ordinary shares
of PKR 10/- each
Paid-up Share Capital of the company: PKR 20,000,000 divided into 2,000,000 Ordinary shares of
PKR 10/- each

(f) Detail of companies, where the intended acquirer(s) holds more than 30% voting shares.

Nature Listed Description held

Name of Registration Nature of Jurisdiction of
No. / Unlisted / control/more than thirty
Company No. Business Incorporation
Private % shares or both
Not Applicable

(g) Information about ultimate beneficial owner of the intended Acquirer(s):

In case of Individuals:

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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Takeovers Chapter-09

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

No. Name CNIC Nationality Address

Villa 136, Frond C Palm Jumeirah,
1. Irtaza Zafar Sheikh 35201-0686874-7 Pakistan
Dubai, UAE
Apartment 505, Azizi IRIS, Al Furjan,
2. Kamran Ahmed 42201-0812935-1 Pakistan
Dubai, UAE
House No. 133, A-One Township
3. Khalid Farooq 35202-2476110-5 Pakistan
Lahore
House No. 14/1, Gizri Street, Phase 4,
4. Salim Chamdia 42301-2766820-3 Pakistan and Canada
DHA, Karachi.
House No. 14/1, Gizri Street, Phase 4,
5. Zainab 42301-8215126-4 Pakistan and Canada
DHA, Karachi.

In case of Fund/Company etc.:

Not Applicable.
(h) Details of any existing holding of voting rights in the target company:

Description Remarks
(i) Which the acquirer owns or over which it has control or direction NIL
(ii) Which is owned or controlled or directed by any person acting in concert with the NIL
acquirer(s)
(iii) In respect of which the acquirer or any person acting in concert with him has received an NIL
irrevocable commitment to accept the takeover offer; and in respect of which the
acquirer or any person acting in concert with him holds an option to purchase or warrants
or other convertible securities.
(i) All conditions (including normal conditions relating to acceptance, listing and increase of capital) to
which the public offer or the posting of it is subject.
Not Applicable.
PART C
(2) Information about the Target Company
(a) Name of the target company, its directors and major shareholders along with number of shares and
percentage of paid-up capital.
Name of Target Company: Hallmark Company Limited
Name of Directors (as per unaudited accounts for the period ended March 31, 2021):
Mr. Jawad Muhammad Rauf
Mr. Salman Muhammad Yousuf
Mr. Muhammad Ashfaq
Ms. Areej Rafique
Ms. Irsa Faruqui
Mr. Muhammad Saad Iqbal
Mr. Sharjeel Abdul Sattar

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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 Takeovers Chapter-09

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

Major Shareholders of the Target Company along with number of Shares and Percentage of Paid-up
Capital -

Percentage of
Sr. No. Major Shareholders Number of Shares
Paid-up Capital
1. Mrs. Mehnaz Manzoor 49,500 9.90%
2. Mr. Muhammad Adil 48,500 9.70%
3. Mr. Shahab Ahmed 48,500 9.70%
4. Mr. S. M. Imran 48,000 9.60%
5. Mr. Bilal Ahmed 47,300 9.46%
6. Mr. Abdul Rahim 47,000 9.40%
7. Mrs. Chaman Ara 30,920 6.18%
8. Mr. Muhammad Farrukh Bashir 2,500 0.50%
9. Mr. Saad A. Shamsi 2,500 0.50%
10. Mr. Ahtesham Ashraf 2,500 0.50%
11. Mr. Zubair Ahmed Khan 2,500 0.50%
12. Mr. Naveed Hamid 2,500 0.50%
13. Mr. Maris Aftab Shamsi 2,500 0.50%
Note: Shareholding pattern has been taken from the annual audited accounts for the year ended June 30, 2020.

It is understood that subsequent to the last audited accounts, the majority shareholding of the Target
Company was acquired by Mr. Azneem Bilwani after completion of the public offer process. It may be
noted that no information is publicly available pertaining to the current major shareholders of the Target
Company, including the number of shares held. It is understood that Mr. Azneem Bilwani holds the
majority shareholding in the Target Company.

(b) Total number of issued shares of the company

Based on the unaudited accounts for the period ended March 31, 2021, the total number of shares issued
are 500,000 ordinary shares of PKR 10/- each.

(c) Date of listing and offer price at the time of initial public offering
The Target Company was listed in the year 1982. Offer Price at the time of IPO: Not Available.

(d) Opening price at securities exchange at time of listing

Not available

(e) Share price quoted on the securities exchange one day before the public announcement of intention -
PKR 128.00/- per share.

(f) The weighted average share price as quoted on the securities exchange during four weeks preceding
the date of public announcement of intention
PKR 126.61/- per share

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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Takeovers Chapter-09

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

(g) Financial position/performance of the company for the last five years, including profit/loss after tax,
earning per share, pay-outs -

Jan 01 - June
(PKR in Millions, except EPS) FY20 FY19 FY18 CY16
30, 2017
Total Assets 7.501 8.274 8.223 5.287 2.318
Total Equity 6.713 6.630 6.815 4.387 1.309
Total Liabilities 0.788 1.644 1.408 0.900 1.009
Sales - net 15.875 18.121 14.844 4.169 -
Profit after Tax 0.383 1.341 2.128 1.827 0.912
EPS 0.77 2.63 4.26 3.66 1.28
Pay-outs Nil Nil Nil N/A N/A
Source: Pakistan Stock Exchange /Company Financials

Any questions in regard to this announcement can be directed to:

Manager to the Offer

M. Munir M. Ahmed Khanani Securities Ltd
Investment Banking
Room # 624, 6th Floor, PSX Building, Karachi.
Email: abdulhadikhanani@munirkhanani.com
Phone: +92 21 36490034 Ext 302, 304

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

Page 252 CORPORATE LAW BY SIR IBRAHIM

 Takeovers Chapter-09

(B)

Karachi Tuesday, June 8, 2021

PUBLIC ANNOUNCEMENT OF INTENSION TO

ACQUIRE MORE THAN 50% SHARES AND CONTROL OF HALLMARK COMPANY LIMITED
BY
MR. IRTAZA ZAFAR SHEIKH, MR. KAMRAN AHMED, MR. KHALID FAROOQ AND GAZPAK
(PRIVATE) LIMITED UNDER SECURITIES ACT 2015
PART A
Brief description of the intended acquisition
Intended acquisition through Number of shares Percentage
Agreement(s) Not determinable at this stage Expected to be more than 50% of the Issued and Paid-up Capital of
the Company
Public offer Not determinable at this stage To be determined after finalization of Agreement(s)

PART B
(1) Information about the Acquires(s)
(a) Name and address of Acquirers(s) along with persons acting in concert, if any.
(1) Name: GAZPAK (Private) Limited
Address: 23-B, Lalazar, off M. T. Khan Road, Karachi. Pakistan
(2) Name: lrtaza Zafar Sheikh
Address: Villa 136. Frond C. Palm Jumeirah, Dubai. UAE
(3) Name: Kamran Ahmed
Address; Apartment 505, Azizi IRIS, Al Furjan, Dubai, UAE
(4) Name: Khalid Farooq
Address: House No. 133, A-One Township Lahore
(b) Name of the ultimate acquirer or the ultimate controlling shareholder.
Ultimate controlling shareholder of GAZPAK (Private) Limited
Mr. Salim Chamdia
Mrs. Zainab
Individuals:
Mr lrtaza Zafar Sheikh
Mr. Kamran Ahmed
Mr. Khalid Farooq
(c) Name and address of Manager to the Offer of toe Acquirer.
Name: M. Munir M. Ahmed Khanani Securities Ltd
Address: Room # 624, 6th Floor, PSX Building, Karachi
(d) Principal areas of business of the Acquirer(s) and relevant experience.
The individual acquirers are principally involved in the business of IT related services, including in planning, management, and
direction of technology initiatives in support of both academic and administrative operations.
GAZPAK (Private) limited: The principal line of business of the company is to carry on the business of services which are legally
permissible, and also to make sale, purchase, import, export and to act as general traders for products commodities.
(e) In case the Acquirer is a fund / company(s):
I. Names of the Chief Executive and Directors of the company(s)
Chief Executive Officer of GAZPAK (Private) Limited: Salim Chandia
Directors of GAZPAK (Private) Limited: (1) Salim Chandia (2) Zainab
ii. Names of substantial shareholders of the company
Mr Salim Chandia
Mrs. Zainab
iii. Date of Incorporation
22nd day of March 2021
iv. Jurisdiction of incorporation Pakistan
v. Authorized and paid up capital
Authorized Share Capital of the company PKR 30,000,000 divided into 3,000,000 ordinary shares of PKR 10/- each Paid-up
Share Capital of the company: PKR 20,000,000 divided into 2,000,000 Ordinary shares of PKR 10/- each

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Takeovers Chapter-09

(f) Detail of companies, where the intended acquirer(s) holds more than 30% voting shares.

Name of Registration Nature Listed / Nature of Jurisdiction of Description held control/more

No.
Company No. Unlisted / Private Business Incorporation than % shares or both

(g) Information about ultimate beneficial owner of the intended Acquires(s);

In case of Individuals

No. Name CNIC Nationality Address

1. Irtaza Zafar Sheikh 35201-0686874-7 Pakistan Villa 136, Frond C, Palm Jumeirah, Dubai, UAE.
2. Kamran Ahmed 42201-0812935-1 Pakistan Apartment 505, Azizi IRIS, Al Furjan, Dubai, UAE
3. Khalid Farooq 35202-2476110-5 Pakistan House No. 133, A-One Township Lahore
4. Salim Chamdia 42301-2766820-3 Pakistan & Canada House No 14.1, Gizri Street, Phase 4, DILY, Karachi.
5. Zainab 42301-8215126-4 Pakistan & Canada House No.14/1, Gizri Street, Phase 4, DHA, Karachi

In case of Fund/Company etc.:

Not Applicable.
(h) Details of any existing holding of voting rights in the target company:

Description Remarks
(i) Which the acquirer owns or over which it has control or direction NIL
(ii) Which is owned or controlled or directed by am person acting in concert with the acquirer(s) NIL
(iii) In respect of which the acquirer or any person acting in concert with him has received an irrevocable NIL
commitment to accept the takeover offer, and in respect of which the acquirer or any person acting in
concert with him holds an option to purchase or warrants or other convertible securities.

PART C
(1) All conditions (including normal conditions relating to acceptance, listing and increase of capital) to which the public offer or the
posting of it is subject.
Not Applicable.
(2) Information about the Target Company
(a) Name of the target company, its directors and major shareholders along with number of shares and percentage of paid-
up capital
Name of Target Company: Hallmark Company Limited
Name of Directors (as per unaudited accounts for the period ended March 31, 2021):
Mr. Jawad Muhammad Rauf
Mr. Salman Muhammad Yousuf
Mr. Muhammad Ashfaq
Ms. Areej Raftque
Ms. Irsa Faruqui
Mr Muhammad Saad Iqbal
Mr. Sharjeel Abdul Sattar

Sr. No. Major Shareholders Number of Shares Percentage of Paid-up Capital

1. Mrs. Mehnaz Manner 49,500 9.90%
2. Mr. Muhammad Adil 48,500 9.70%
3. Mr. Shahab Ahmed 49,500 9.70%
4. Mr. S M Imran 48,000 9.60%
5. Mr Rilal Ahmed 47,300 9.46%
6. Mr Abdul Rahim 47,000 9.40%
7. Mrs. Chaman Ara 30,920 6.18%
8. Mr. Muhammad Farrukh Bashir 2,500 0.50%
9. Mr. Sand A. Shamsi 2,500 0.50%
10. Mr. Ahtesham Ashraf 2,500 0.50%
11. Mr Zubair Ahmed Khan 2,500 0.50%
12 Mr Naveed Hamid 2,500 0.50%
13. Mr. Hans Aftab Shamsi 2,500 0.50%

Note: Shareholding pattern has been taken from the annual audited accounts for the year ended June 30, 2020.

Page 254 CORPORATE LAW BY SIR IBRAHIM

 Takeovers Chapter-09

It is understood that subsequent to the last audited accounts, the majority shareholding of the Target Company was acquired by
Mr Azneem Bilwani after completion of the public offer process. It may be noted that no information is publicly available pertaining
to the current major shareholders of the Target Company, including the number of shares held. It is understood that Mr. Azneem
Bilwani holds the majority shareholding in the Target Company.
(b) Total number of issued shares of the company
Based on the unaudited accounts for the period ended March 31, 2021, the total number of shares issued are 500,000 ordinary
shares of PKR 10/ each
(c) Dale of listing and offer price at the time of initial public offering
The Target Company was listed in the year 1982.
Offer Price at the lime of IPO; Not Available
(d) Opening price at securities exchange at time of listing
Not available
(e) Share price quoted on the securities exchange one day before the public announcement of intention -
PKR 128.00/- per share
(f) The weighted average share price as quoted on the securities exchange during four weeks preceding the date of public
announcement of intention
PKR 126.61/-per share
(g) Financial position / performance of the company for the last five years, including profit / loss after tax, earning per
share.

(PKR in Millions, except EPS) FY20 FY19 FY 18 Jan 01 - June 30, 2917 CY16
Total Assets 7.501 8.274 8.223 5.287 2.318
Total Equity 6.713 6.630 6.815 4.387 1.309
Total Liabilities 0.788 1.644 1.408 0.900 1.009
Sales – Net 15.875 18.121 14.844 4.169 -
Profit after Tax 0.383 1.341 2.128 1.827 0.912
EPS 0.77 263 4.26 366 1.28
Pay-outs Nil Nil Nil N/A N/A

Source: Pakistan Stock Exchange Company Financials

Any questions in regard to this announcement can be directed to:
Manager to the Offer
M. Munir M. Ahmed Khanani Securities Ltd
Investment Banking
Room # 624, 6th Floor, PSX Building, Karachi
Email: abdulhadikhananifamunirkhanani.com
Phone: +92 21 36490034 Ext: 302, 304

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Takeovers Chapter-09

(C)

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Takeovers Chapter-09

(D)

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Takeovers Chapter-09

(E)

Public Announcement of offer to acquire up to 16.578% shares (82.890 shares to be acquired through public
offer) and control of Hallmark Company Limited by Mr. Irtaza Zafar Sheikh and GAZPAK (Private) Limited
under Securities Act, 2015.
DISCLAIMER CLAUSE
"IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DOCUMENT OF PUBLIC OFFER WITH THE SECURITIES AND EXCHANGE
COMMISSION OF PAKISTAN SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR
APPROVED BY THE COMMISSION. THIS DOCUMENT HAS BEEN SUBMITTED TO THE COMMISSION FOR A LIMITED PURPOSE OF OVERSEEING
WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE LAW/REGULATIONS.
THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF HALLMARK COMPANY LIMITED TO TAKE AN INFORMED DECISION WITH
REGARD TO THE OFFER. THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE
ACQUIRER(S) OR THE COMPANY WHOSE SHARES/CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE
STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DOCUMENT. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT THE ACQUIRER(S) IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS DOCUMENT.
THE MANAGER TO THE OFFER MUHAMMAD MUNIR MUHAMMAD AHMED KHANANI SECURITIES LIMITED IS EXPECTED TO EXERCISE DUE
DILIGENCE TO ENSURE THAT ACQUIRER(S) DULY DISCHARGES THEIR RESPONSIBILITY ADEQUATELY. FOR THIS PURPOSE, THE MANAGER
TO THE OFFER HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED JULY 30, 2021 TO THE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT, 2015".

Public announcement of offer to acquire 16.578% shares (82,890 shares to be acquired through public offer) and control of the Hallmark Company Limited by
Mr. Irtaza Zafar Sheikh and GAZPAK (Private) Limited Under Securities Act, 2015
PART A
Brief description of the acquisition:
Acquisition through Number of shares Percentage Price per share (highest price paid in case of SPA)
Share Purchase Agreement 334,220 66.844% Rs.73.305
Public Offer 82,890 16 578% Rs.73.305

PART B
The following information shall be disclosed:
1. THE ACQUIRER
1.1. If acquirer(s) is a company
(a) Name and registered address of the acquirer.
Name: GAZPAK (Private) Limited
Address: 23-B, Lalazar, off M. T. Khan Road, Karachi, Pakistan
(b) Date and jurisdiction of incorporation.
Date of incorporation: 22 March 2021 Jurisdiction of incorporation: Karachi, Pakistan
(c) The authorized and issued share capital.
Authorized share capital: PKR 30,000,000 divided into 3,000,000 ordinary shares of PKR 10/-each.
Issued share capital: PKR 20,000,000 divided into 2,000,000 ordinary shares of PKR 10/-each.
(d) if there is more than one acquirer their relationship, if any.
Not applicable.
(e) Total number of voting shares of the target company already held by the acquirer and the persons acting in concert, Including any shares
purchased through an agreement and relevant details of such agreement, including the share price agreed.
None
(f) The number of shares issued since the end of the last financial year of the company.
None
(g) Details of any re-organization of the acquirer during the two financial years preceding the public announcement of offer.
Not applicable.
(h) Details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges or other material contingent liabilities of the
acquirer and subsidiaries if any, and if there are no such liabilities a statement to that effect.
The acquirer has no such liabilities.
(i) Financial advisors of the acquirer.
None
(j) Brief history and major areas of operations of the acquirer.
GAZPAK (Private) Limited; The company was incorporated on 22 March 2021. The principal line of business of the company, as per its
Memorandum of Association, is to carry on the business of services which are legally permissible, sale, purchase, import, export and to act as
general traders, general order suppliers of products commodities, material legally permissible in any form or shape, manufactured, semi
manufactured, raw materials supplied by, inter alios, any company or individuals.
(k) Names and addresses of sponsors or persons having control over the acquirer.
1) Name: Mr. Salman Chamdia
Address: House No. 14/1, Gizri, Street Phase 4, DHA, Karachi
2) Name: Mrs. Zainab
Address: House No. 14/1, Gizri, Street Phase 4, DHA, Karachi
(I) Names and addresses of board of directors of acquirer.
1) Name: Mr. Salman Chamdia
Address: House No. 14/1, Gizri Street Phase 4, DHA, Karachi
2) Name: Mrs. Zainab
Address: House No. 14/1, Gizri Street Phase 4, DHA, Karachi

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 Takeovers Chapter-09

(m) Brief audited financial details of the acquirer for a period of at least last five years including income, expenditure, profit before
depreciation, interest and tax, depreciation, profit before and after tax, provision for tax, dividends, earnings per share, return on net
worth and book value per share.
As mentioned in Clause 1.1(b) above, GAZPAK (Private) Limited has been incorporated recently, on 22 March 2021, and therefore no such audited
financial details of GAZPAK (Private) Limited are available.
(n) Details of any agreement or arrangement between the acquirer and the directors of the target company about any benefit which will be
given to any director of the target company as compensation for loss of office or otherwise in connection with the acquisition.
Not applicable.
(o) Details of every material contract entered into not more than two years before the date of public announcement of offer, not being a
contract entered into in the ordinary course of business carried on or intended to be carried on by the company
Not applicable.
1.2. If acquirer(s) is an individual
(a) Name(s) and address (es) of each individual along with the persons acting in concert.
1) Name: Irtaza Zafar Sheikh
Address: 550 Pine haven Dr, Houston, Texas, 77024 United States
(b) CNIC number(s)
1) Name: Irtaza Zafar Sheikh
CNIC Number: 35201-0686874-7
(c) If there is more than one acquirer their relationship, if any.
Not applicable,
(d) Total number of voting shares of the target company already held by the acquirer, including any shares purchased through an agreement
and relevant details of such agreement including the share price agreed.
None.
(e) Financial advisors of the acquirer, if any.
None.
(f) Principal areas of business of the acquirer and relevant experience.
The individual acquirer is principally involved in the business of IT related services, including in planning, management, and direction of technology
initiatives in support of both academic and administrative operations.
(g) Details of any bank overdrafts or loans, or their similar indebtedness, mortgages, charges or other material contingent liabilities of the
acquirer.
The acquirer has no such liabilities.
(h) Details if the acquirer is a director on the board of directors of any listed company(s).
(i) The acquirer is not a director on the board of directors of any listed company(s).
(j) Details of any agreement or arrangement between the acquirer and the directors of the target company about any benefit which will be
given to any director of the target company as compensation for loss of office or otherwise in connection with the acquisition.
Not applicable.
2. DETAILS OF THE PUBLIC OFFER
(a) The names, dates and editions of the newspapers where the public announcement of intention was published.
The Public Announcement of Intention and a corrigendum to the public announcement of Intention to acquire more than 50% shares and control of
the company was published in The Nation & Nawaiwaqt newspapers on Tuesday, June 08, 2021 and Thursday. July 29, 2021 respectively as
required under the law.
(b) The number and percentage of shares proposed to be acquired by the acquirer(s) from the shareholders through agreement, If any, the
offer price per share and the mode of payment of consideration for the shares to be acquired.
The acquirers have entered into a Share Purchase Agreement dated July 29, 2021 with Mr. Azneem Biiwani as the seller, for the purchase of
334,220 ordinary shares representing approximately 66.844% of the total issued number of shares of the target company held by the seller (and his
nominees) at a price of PKR 73.305/- per ordinary share.
The mode of payment of consideration will be pay-order/bankers' cheque.
(c) Reasons for acquiring shares and control of the target company.
The acquirers intend to take control of the target company and re-structure/re-organize the business of the target company. The acquirers will also
evaluate opportunities and explore all available options for expansion that are in the benefit of the target company and its investors.
(d) Details regarding the future plan for the target company, including whether after acquisition the target company would continue as a
listed company or not.
The target company will continue being listed post acquisition.
The acquirers intend to, inter alia, (i) develop, design, import, export, distribute and deal in computer systems, application software and solutions in
all areas of information technology; (is) import, export, sell, purchase, distribute, host (in data centers or over the web) or otherwise deal in own and
third party computer software packages, programs and solutions; (iii) provide internet / web based applications, services and solutions; and (iv)
provide or take up information technology related assignments on sub-contracting basis.
(e) In case of conditional offer, specify the minimum level of acceptance i.e. number and percentage shares.
Not applicable.
(f) In case there is any agreement with the present management, promoters or existing shareholders of the target company, an overview of
the important features of the agreement(s) including acquisition price per share, number and percentage of shares to be acquired under
the agreements), name of the seller(s), complete addresses of sellers, names of parties to the agreement(s), date of agreement(s), manner
of payment of consideration, additional important information, if any.
In terms of the Share Purchase Agreement (SPA) dated Jul/ 29, 2021, executed by and between Mr. Azneem Bilwani (as the seller) and the
acquirers, the acquirers shall acquire 334,220 ordinary shares representing 66.844% of the total issued shares of the target company from the seller
(and his nominees) at a price of PKR 73.305/- per ordinary share, along with management control from the seller, Mr, Azneem Bilwani, by way of
cash consideration through pay-orders/bankers' cheques.
(g) Number of shares already held by the acquirer along with the date(s) of acquisition. Also state whether it was purchased through open
market or acquired through a negotiated deal.
The acquirers do not currently hold any shares in the target company.
(h) Minimum level of acceptance, if any.
Not applicable,

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3. OFFER PRICE AND FINANCIAL ARRANGEMENTS

3.1. Justification for the offer price
(a) Disclosure about the form of consideration for the shares to be acquired through the public offer.
Bank Transfer / Cheque / Pay-order
(b) Disclosure of the total amount of consideration to be paid for the shares to be tendered during the public offer (assuming full
acceptances).
PKR 6,076.251 /- i.e = 82,890 ordinary shares at a price of PKR 73.305/- per ordinary share.
(c) Whether the shares of the target company are frequently traded or infrequently traded in the light of criteria prescribed in regulation 13 of
these regulations.
The shares of the target company are not frequently traded as they have not been traded for more than 80 percent of the trading days in the last six
months prior to the date of public announcement and the average daily trading volume in the ready market is less than 100,000 shares in last six
months.
(d) Justification for the offer price for the shares of the target company, in the light of criteria contained in regulation 13 of these regulations.
Since the shares of the target company are not frequently traded as per the Regulations, the price to be offered to the Public should be highest
amongst the following price:
1. The negotiated weighted average price under share purchase agreement(s) for the acquisition of voting shares of the target company:
PKR 73.305/ share is weighted average price and the highest price paid as well.
2. The highest price paid by the acquirers for acquiring the voting shares of target company during six months prior to the date of public announcement
offer:
Not applicable.
3. The price per share arrived at on the basis of net assets value carried-out by a Chartered Accountant Firm based on the audited financial data not
older than six months from the date of public announcement of offer made by the manager to the offer. In case of fixed assets, being part of total
Assets, the Chartered Accountant Firm shall obtain the services of a valuer to carry-out value of fixed assets, whose name appears on the list of
panel of valuers maintained by Pakistan Bank's Association:
PKR 13.90 per ordinary share based on valuation certificate issued by Hassan Naeem & Co. after taking into account results of fixed asset valuation
conducted by Tristar International Consultant Private Limited.
The highest price amongst the above is Rs. 73.305 per share at which the shares are being offered to be purchased from the public by way of this
public announcement of offer.
3.2. Financial arrangements
(a) Disclosure about the security arrangement made in pursuance of Section 123 of the Act.
The acquirers have deposited 51,000 margin trading system eligible shares of Shell Pakistan Limited with the Manager to the Offer.
(b) Disclosure about the adequate and firm financial resources to fulfill the obligations under the public offer.
The acquirers have made adequate financial arrangements for fulfillment of their obligations under the public offer to the satisfaction of the Manager
to the Offer through the deposit of 51,000 margin trading system eligible shares of Shell Pakistan Limited with the Manager to the Offer.
(c) A statement by the manager to the offer that the manager to the offer is satisfied about the ability of the acquirer to implement the public
offer in accordance with the requirements of the Act and these regulations.
Muhammad Munir Muhammad Ahmed Khanani Securities Limited (Manager to the Offer), confirms that the acquirers are sufficiently capable of
implementing the public offer in accordance with the requirements of the Securities Act, 2015 (the "Act") and Listed Companies (Substantial
Acquisition of Voting Shares and Takeovers) Regulations, 2017 {the "Regulations") and have issued a certificate dated July 30, 2021 in this regard.
4. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT
(a) Detailed procedure for acceptance of offer by shareholder of the target company
1) In order to accept the public offer, the shareholders are required to send the letter of acceptance (attached to the offer letter), duly completed and
signed, along with the requisite documents (as set out below) to the Manager to the Offer, at its registered office i.e. Room# 624, 6th Floor, PSX
Building, Karachi, Pakistan on or before 1700 hours PST on Monday, September 27, 2021. Please ensure that with the letter of ' acceptance, all the
required information is provided including the number of shares to be tendered.
2) in the event that the letter of acceptance and the requisite documents are delivered within the stipulated time, the Manager to the Offer will issue
confirmation of the receipt of documents (provisional receipt)
3) Receipt by the Manager to the Offer by the closing date of the duly completed and signed letter of acceptance along with the required documents
will constitute acceptance of the public offer.
4) Completed letters of acceptance, once submitted cannot be revoked by shareholders selling in the public offer.
5) Copies of letters of acceptance shall also be available at the office of Muhammad Munir Muhammad Ahmed Khanani Securities Limited Room#
624, 6th Floor, PSX Building, Karachi, Pakistan or on the website www.munirkhanani.com
6) The public offer will remain open for acceptance for seven days starting 0900 hours PST on Tuesday, September 21, 2021 to 1700 hours PST on
Monday, September 27, 2021. Acceptances received after working hours on closing date shall not be entertained and the Offer period shall not be
extended.
7) The letter of acceptance must be accompanied by the following documents:
• For Individual Applicants: An attested copy of Computerized National Identity Card, original share certificates and duly executed transfer
deeds along with the duly completed and signed authorization to split to split share(s) certificates letter (for physical shares only), copy of
CDC transferred slip submitted with the CDC investor account for (CDC shares only)
• For Corporate Applicants: A certified copy of the Memorandum and Articles of Association, a certified copy of certificate of incorporation
(and for public companies, certificate of commencement of business, if any), certified copies of Computerized National Identity Card of
signatories, a certified copy of the Board resolution authorizing persons to sell the shares with specimen signatures of such authorized
persons, original share certificates and duly executed transfer deeds along with duly completed and signed authorization to split share
certificate(s) letter (for physical shares only), copy of CDC transfer slips submitted with CDC investor account services (for CDC shares
only)
8) Any letter of acceptance furnished by the shareholder(s) without the requisite documents may be rejected by the Manger to the Offer as being
incomplete and invalid.
9) The acceptance by the acquirers of the shares tendered by the selling shareholders and payment of the offer price is subject to the following
conditions:
(a) The Securities and Exchange Commission of Pakistan ("Commission") or any other competent authority having no objections to any of the
provisions of the public offer.
(b) The payment for shares does not contravene any section of the Foreign Exchange Regulations Act, 1947 and the Foreign Exchange Manual of the
State Bank of Pakistan.

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(c) The letter of acceptance being duly completed and signed along with the required documents and submitted to the Manager to the Offer on or
before the closing date.
(d) The tendered shares being verified by the target company.
(e) The acquirers not withdrawing the public offer in accordance with the provisions of the Act.
10) Payment of the offer price: Upon receipt of duly filled letter of acceptance along with the requisite documents, the Manager to the Offer will send
written acceptance of the tender along with bank draft / pay orders in favor of the shareholder as payment of such shares to the selling shareholders
within 10 (ten) days of the closing date of the acceptance period. No interest, mark-up, surcharge or other increment will be payable for any cause
or reason on the aggregate price for the shares purchased by the acquirers from any selling shareholder for any cause or reason
(b) Details of the CDC account in which shares are required to be tendered by eligible shareholders on acceptance during the acceptance
period.
CDC account holders shall follow the procedure set forth above, as applicable. Additionally, the CDC account holders must transfer these shares to
the CDC account of the Manager to the Offer in accordance with the following details and to provide the CDC transfer slip to the Manager to the
Offer, with respect to transfer of shares:
CDC Account Details:
CDC Account Title: Manager to the Offer Hallmark Company Limited CDC Participant ID: 06684 CDC Account No: 24-4692 Transaction Reason
Code:
- For Intra Account-A021
- For Inter Account - P015
Shareholders with physical share certificate(s) are required to provide the physical share certificate(s) along with duly verified transfer deed(s).
5. STATEMENTS BY THE ACQUIRER
(a) Statement by the acquirer for assuming responsibility for the information contained in the document (In the case where the acquirer is a
company such a statement shall be made by the directors of the company).
The acquirers assume responsibility for the information contained in this document.
(b) A statement by the acquirer to the effect that each of the acquirers including persons in concert, if any, will be severally and jointly
responsible for ensuring compliance with the Act and the Regulations,
The acquirers confirm that they will be responsible for ensuring compliance with the Act and the Regulations.
(c) A statement by the acquirer that the public offer is being made to all the shareholders who have voting shares of the target company and
(except the persons acting in concert with acquirers) whose names appear in the register of shareholders as on the date of book closure.
The acquirers confirm that this public offer is being made to all shareholders who have voting shares of the target company and whose names
appear in the register of shareholders as on the date of book closure in accordance with the requirements of the Act and the Regulations.
(d) A statement by the acquirer that all statutory approvals for the public offer have been obtained.
The acquirers state that all statutory approvals for the public offer as required under the Act and Regulations have been obtained.
(e) Disclosure as to whether relevant provisions of the Act and the regulations have been complied with.
The acquirers confirm that all relevant provisions of the Act and the regulations have been complied with.
(f) A statement to the fact if any director(s) of the acquirer is also a director on the board of directors of the target company.
Mr. Irtaza Zafar Sheikh (individual acquirer) and all directors of GAZPAK (Private) Limited confirm that they are not directors on the board of
directors of the target company.
(g) A statement by the acquirer as to whether or not any voting shares acquired in pursuance to the public offer shall be transferred to
another person and if that is the case the names of such persons shall be disclosed.
The acquirers confirm that the voting shares acquired in pursuance to the public offer are not intended to be transferred to any other person except
as may be transferred to the nominees of the acquirers to be appointed as directors of the target company.

Manager to the Offer

Muhammad Munir Muhammad Ahmed Khanani Securities Ltd
Investment Banking
Room # 624, 6th Floor, PSX Building, Karachi
Email: abdulhadikhanani@munirkhanani.com
Phone: +92 21 36490034 Ext: 302, 304

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(F)

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(G)

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Takeovers Chapter-09

(H)

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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 Takeovers Chapter-09

(I)

PUBLIC ANNOUNCEMENT INFORMING THE SHAREHOLDERS OF

HALLMARK COMPANY LIMITED OF THE COMMENCEMENT OF
ACCEPTANCE PERIOD
Reference to the public announcement of offer made by Mr. Irtaza Zafar Sheikh and GAZPAK (Private)
Limited (the "Acquirers") in The Nation and Nawa-i-Waqt on August 4, 2021, it is hereby informed that the
acceptance period for the acquisition of shares of Hallmark Company Limited ("Target Company") will
commence from September 21, 2021 and will end on September 27, 2021. All shareholders who intend to
tender their shares of Hallmark Company Limited are invited to tender their shares to the manager to the offer
in the following account on or before September 27, 2021 by 5:00 p.m.
CDC Account Details:
CDC Account Title: Manager to the Offer Hallmark Company Limited
CDC Participant ID: 06684 CDC
Account No: 244692
Transaction Reason Code: UIN 35201-0686874-7
- For Intra Account A021
- For Inter Account P015
Contact Details of Acquirers:

Name: GAZPAK (Private) Limited Irtaza Zafar Sheikh

550 Pinehaven Dr, Houston, Texas,
Address: 23-B, Lalazar, off M. T. Khan Road, Karachi, Pakistan.
77024 United States
Phone: 021-38658896 021-38658896
Email: Gazpakpvtltd@outlook.com lrt4za@gmail.com

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(J)

Mohammad Munir Mohammad Ahmed Khanani Securities Limited.

TREC Holder (Code 084): Pakistan Stock Exchange Ltd.
Investment and trust, together! www.munirkhanani.com

September 21, 2021

General Manager Executive Director
Pakistan Stock Exchange Limited Public Offering and Regulated Persons Department
Stack Exchange Building Securities Market Division
Stock Exchange Road, Securities & Exchange Commission of Pakistan
Karachi, Pakistan. NIC Building, 63-Jinnah Avenue, Islamabad,
Pakistan.
Chief Executive Officer
Hallmark Company Limited
Plot ft 38/A Opposite The Intellect School
Ground Floor, Korangi Creek,
Karachi, Pakistan
Subject: Dispatch of Offer letters to the Shareholders of Hallmark Company Limited and Commencement of
Acceptance Period
Dear Sirs/Madam,
Reference is made to the Public Announcement of Offer to acquire 82,890 ordinary shares of Hallmark Company
Limited (the "Target Company") by Mr. Irtaza Zafar Sheikh and GAZPAK (Pvt.) Limited (“The Acquirers") under the
Securities Act, 2015 (the "Act") read with the Listed Companies (Substantial Acquisition of Voting Shares and
Takeovers) Regulations 2017 (the "Regulations"). The Public Announcement of Offer was published in The Nation
and Nawa-i-Waqt newspapers on August 04, 2021.
In this regard, we are pleased to inform you that the Offer Letters have been dispatched along with Acceptance
Forms to all the eligible shareholders of the Target Company (other than the Acquirers and shareholders who are
party to the Share Purchase Agreement) on September 17, 2021.
Further in compliance with requirement of Regulation 18(1) of the Regulations, an advertisement regarding the
commencement of Acceptance Period has also been published in the daily newspapers The Nation (English) and
Nawa-i-Waqt (Urdu) on September 19, 2021. The Acceptance Period commences from September 21, 2021 to
September 27, 2021 (both days inclusive) between 9:00 AM to 5:00 PM. Copy of the advertisement is appended
with the letter.
Should you require further information, feel free to contact the undersigned.

624-627, Pakistan Stock Exchange Building, Stock 021 – 36490034

Exchange Road, Karachi – 74000 info@munirkhanani.com

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 Takeovers Chapter-09

Misc. Important Illustrations

Illustration of competitive bids and time periods thereon.

Regulation 17
(1) The public announcement of first and subsequent competitive bids shall be made within twenty-one
days of the public announcement of first offer.
(2) Where there is a competitive bid, the date of closure of the earlier bid, as also the date of closure of all
the subsequent competitive bids, shall be the date of closure of public offer under the last subsisting
competitive bid and the public offers under all the subsisting competitive bids shall close on the same
date.
Regulation 2
The date of closure of public offer for the acquisition of voting shares of the target company by the acquirer
shall not be later than fifty four day from the date of public announcement of offer.
Case 1: (no competitive bid was made)
T= Date of Public Announcement of Offer in newspaper = 01, July 2022
Case T + 54 = Expiry of public offer = 24, August 2022
Case 2: (1 competitive bid was made)
T + Date of Public Announcement of Offer in newspaper = 01, July 2022
15 July 2022 = Competitive bid was made
It is legal as it is made within 21 days of public announcement of first offer in newspaper
T + 54 = Expiry of public offer = 7 September 2022 (54 Days from the announcement of competitive bid)
Case 3: Maximum Deferment of time in case of competitive bid(s)
T= Date of Public Announcement of Offer in newspaper = 01 July 2022
Last Day for making competitive bid = T + 21 = 22, July 2022 and assume that last day, the competitive bid
was received
So,

Close of public offer = T + 54  from 22, July 2022 not from 01, July 2022

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Practical Examples of Withdrawal of Public Announcement of Intention

November 24, 2020

(i) The Managing Director, Pakistan Stock Exchange
(ii) Securities and Exchange Commission of Pakistan

Subject: Disclosure of Material Information – Public Announcement Of Withdrawal of Intention to acquire more
than 77.12% of issued and paid up capital of BIPL Securities Limited by AKD Securities Ltd. under
the Securities Act, 2015 and the Listed Companies (Substantial Acquisitions of Voting Shares and
Takeover) Regulations, 2017

Dear Sirs,

It is hereby informed that BIPL Securities Limited (the "Target Company") has received a public disclosure/information
from TopLine Securities Limited on behalf of AKD Securities Limited on November 24, 2020, which is re-stated below:

"We, M/s. Topline Securities Limited are writing to you for and on behalf of our Client M/s. AKD Securities Ltd., as their
manager to the offer in reference to the Public Announcement of intention ("PAI") dated 28 th February 2020 to acquire
more than 77.12% of issued and paid up capital along with management control of BIPL Securities Ltd. ("Target
Company"). As per the said PAI, the timeline for making of public announcement of offer was 180 days from the date of
the PAI. The said timeline was duly extended by the SECP vide their letter dated 26 th August 2020, to 24lh November
2020.

Since the time period for making a public announcement of offer i.e. 24 th November 2020 has passed, we pursuant to
regulations 21(e) and 21(2) of the listed Companies (Substantial Acquisition of Voting Shares and Takeover)
Regulations, 2017 read with Securities Act 2015, hereby give notice of withdrawal of the PAI and as of this date today,
the PAI stands withdrawn.

Furthermore, we would like to iterate here that our client remains fully committed to the transaction as detailed above
and has taken and will continue to take appropriates measure to ensure a successful consummation of the above detailed
transaction."

The Pakistan Stock Exchange is requested to make the above information immediately available to the shareholders of
the Target Company under Rule 5.6. l(a)(ii) of the PSX Rule Book by placing it on the notice board and through
notification on automated information system and make an announcement on the house of the Exchange.

Sincerely,

Encl: Letter received from Topline Securities Limited dated November 24, 2020

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 Takeovers Chapter-09

November 24th, 2020

General Manager,
Pakistan Stock Exchange,
Stock Exchange building,
Stock Exchange Road,
Karachi

Executive Director,
Public Offering and Regulated Persons Department,
Securities Market Division,
Security Exchange Commission of Pakistan,
NIC Building, Jinnah Avenue, Blue Area,
Islamabad

Chief Executive Officer,

BIPL Securities Ltd.
5th Floor, Trade Center,
1.1. Chundngar Road, Karachi.

Subject: Public Announcement - Withdrawal of Intention to acquire more than 77.12% of issued and paid up capital
of BIPL Securities Ltd by AKD Securities Ltd. under the Securities Act, 2015 and the Listed Companies
(Substantial Acquisitions of Voting Shares and Takeovers) Regulations, 2017
Dear Sir,
We, M/s. Topline Securities Limited are writing to you for and on behalf of our Client M/s. AKD Securities Ltd. as their
manager to the offer in reference to the Public Announcement of Intention ("PAI") dated 28th February 2020 to acquire
more than 77.12% of issued and paid up capital along with management control of BIPL Securities Ltd. ("Target
Company"). As per the said PAI, the timeline for making of public announcement of offer was 180 days from the date
of the PAI. The said timeline was duly extended by the SECP vide their letter dated 26 th August 2020, to 24th November
2020.
Since the time period for making a public announcement of offer i.e. 24 th November 2020 has passed, we pursuant to
regulations 21(e) and 21(2) of the Listed Companies (Substantial Acquisition of Voting Shares and Takeover)
Regulations, 2017 read with Securities Act 2015, hereby give notice of withdrawal of the PAI and as of this date today,
the PAI stands withdrawn.
Furthermore, we would like to iterate here that our Client remains fully committed to the transaction as detailed above
and has taken and will continue to take appropriates measure to ensure a successful consummation of the above detailed
transaction.
For and on behalf of the Manager to the Offer:

TOPLINE SECURITIES LIMITED

8th Floor, Horizon Tower, Plot 2/6, Block-3, Clifton, Karachi-Pakistan.
Tel: + 92-21-35303330-32, Fax: + 92-21-35303349 www.topline.com.pk

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Question
A Public company has 9% voting shares in XYZ Limited and one of its shareholder has thinking to acquire 2%
in XYZ Limited  Is it deemed to be person acting in concert??? Assuming no formal agreement or
understanding is there between a company and its shareholder.
Answer:
• If the shareholder is the director (let's say representing minority), then YES It is deemed as person
acting in concert.
• If the shareholder is spouse of a director of the company, YES it is deemed as person acting in concert
as she is an associate of director (Relative).

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Insider Trading Chapter-10

CHAPTER
10

INSIDER TRADING

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 Insider Trading Chapter-10

Insider Trading

(1) (1)
127. Application of this Part.— The provisions of this Part shall apply to listed securities traded by listed
companies and insiders described in section 130.
128. Prohibition of insider trading.—
(1) No person shall (2)indulge in insider trading and any contravention of this section shall be an (3)
offence.
(2) Insider trading shall include,—
(a) an insider person transacting any deal, directly or indirectly, using inside information involving
listed securities to which the inside information pertains or using others to transact such deals;
(b) any other person to whom inside information has been passed or disclosed by an insider person
transacting any deal, directly or indirectly, using inside information involving listed securities to
which the inside information pertains or using others to transact such deals;
(c) transaction by any person as specified in clauses (a) and (b) or any other person who knows or
ought to have known under normal and reasonable circumstances, that the information
possessed and used for transacting any deal is inside information; or
(d) an insider person passing on inside information to any other person, or suggesting or
recommending to another person to engage in or dealing in such listed securities with or without
the inside information being disclosed to the person who has dealt in such securities.
(3) The following shall not be deemed as insider trading:
(a) any transaction performed under an agreement that was concluded before the time of gaining
access to inside information; or
(b) the disclosure of inside information by an insider person as required under law.
(4)
(4) No contract shall be void or unenforceable by reason only of an offence under this section.

(1) “Listed Securities traded by listed companies”

(2) Involve
(3) “Crime”
(4) The contract involving inside information will still be valid contract and it is legally binding on parties.

(xxix) “listed company” means a public company, body corporate or other entity and of whose securities are
listed on securities exchange;
Definition of “Securities”
(lii) "securities" in the case of listed instruments includes—
(a) shares and stock of a company (shares);
(b) any instrument creating or acknowledging indebtedness which is issued or proposed to be
issued by a company including, in particular, debentures, debenture stock, loan stock, bonds,
notes, commercial paper, sukuk or any other debt securities of a company, whether constituting
a charge on (he assets of the company or not (debt securities);
(c) loan stock, bonds, sukuk and other instruments creating or acknowledging indebtedness by or on
behalf of a government, central bank or public authority (Government and public debt securities);
(d) modoraba certificates, participation term certificates and term finance certificates;
(e) any right (whether conferred by warrant or otherwise) to subscribe for shares or debt securities
(warrants);

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(f) any option to acquire or dispose of any other security (options);

(g) units in a collective investment scheme, including units in or securities of a trust fund (whether
open-ended or closed end);
(h) the rights under any depository receipt in respect of shares, debt securities and warrants
(custodian receipts); and
(i) any other instrument notified by the Commission to be securities for the purposes of this Act,
but does not include —
(5)

(a) futures contracts;

(b) bills of exchange;
(c) promissory notes; and
(d) certificates of deposit;

(5) These does not fall under the definition of securities

An insider suggesting or recommending any person to deal in listed securities

with or without disclosing such person that this is inside information.

129. Inside information.— For the purposes of this Part the expression “inside information" means—
(6)
(a) information which has not been made public, relating, directly or indirectly, to one or more
issuers of listed securities or to one or more listed securities and which, if it were made public,
would be likely to have an effect on the prices of those listed securities or on the price of related
listed securities;
(b) in relation to derivatives on commodities, information which has not been made public, relating,
directly or indirectly, to one or more such derivatives and which are traded in accordance with
accepted market practices on those markets;
(7)
(c) in relation to persons responsible for the execution of orders concerning listed securities,
information which is conveyed by a client to such person and related to the client's pending
orders; or
(d) information regarding decision or intentions of a person to transact any trade in listed securities.

(6) (1) Information which is not public

(2) If made public, would likely to have an effect on prices
(7) Securities Broker is being communicated by one of its client to halt trading in ABC Limited.

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130. Insiders.-— Insiders shall include—

(8)
(a) any sponsor, executive officer or director of an issuer of listed securities;
(b) any sponsor, executive officer, director or partners of a legal person or unincorporated business
association, in which the issuer holds a share or voting rights, directly or (9)indirectly, of twenty-
five per cent or more;
(c) any sponsor, executive officer director or partner of a legal person or unincorporated business
association who holds, directly or indirectly, a share or voting rights of twenty per cent or more in
an issuer of listed securities;
(10)
(d) any sponsor, executive officer or director of an organization that has been engaged in the
placement of securities or the public offer of securities, as well as any employee of the issuer or
an organization participating in the issuing and marketing of such securities who has had access
to insider information during his employment, for a period of one year after leaving employment;
(e) any person holding (11)a share, directly or indirectly, which enables him to appoint director on the
board, or (12)ten per cent or more shares of an issuer of listed securities;
(13)
(f) any sponsor, executive officer or director of a credit institution in which the issuer of listed
counties has an account;
(14)
(g) any person obtaining inside information as part of his employment or when discharging his usual
duties in an official capacity or in any other way relating to work performed under contract of
employment or otherwise;
(h) any person obtaining inside information through (15)unlawful means;
(i) spouse, lineal ascendant or descendant including stepchildren partner or nominee of a person
referred to in clauses (a) to (h); and
(j) any person obtaining information or advice to trade in a security from any person referred to in
clauses (16)(a) to (i).

(8) Whose listed securities trading are under considerations

Company:
• Sponsor / Promoter
• Executive Officer
• Directors
(9) Not Defined (example: through subsidiary)
(10) Placement of securities meaning  when a listed company raises new equity, this is known as placement of securities.
Public Offer  Offering shares to general public.
Sponsor, Executive Officer, Director of (Consultant to the issue, Book Runner, Underwriter, Balloter, Share registrar and Banker
to the issue) → These are persons that are usually engaged in public offer
Employee of the listed company, whose trading of shares in under consideration, or employee of org participating in issuing &
marketing of securities (Having access to inside information) for a period of one year after leaving employment.
(11) Example: holding company  subsidiary company
(12) 10% 
(13) Example: Banking Company
(14) < External Auditor: It includes even junior of an and firm >
(15) Coercion, undue influence, at Gun Point
(16) Make sure in last clause, (i) is also included (example: any person obtaining advice from spouse of director for trading of shares
in a company where his husband is a director is also consider as insider.

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131. Listed companies’ responsibilities to disclose inside information.—

(1) Whenever a listed company or a person acting on their behalf, discloses any inside information
to any third party in the normal exercise of employment, profession or duties, complete and
effective public disclosure of that information must be made simultaneously:
Provided that the provisions shall not apply if the person receiving the information owes a duty of
confidentiality, regardless of whether such duty is based on a law, regulations, articles of
association or contract.
(2) Listed companies or persons acting on their behalf, shall maintain a list of persons employed,
under contract or otherwise in the prescribed manner, who have access to inside information and
such companies and persons acting on their behalf shall regularly update this list and send it to
the Commission whenever required by the Commission.
(3) Listed company shall in the list of persons that have access to insider information state that the
persons listed have acknowledged the requirements of this Part related to the prohibition to
conclude transactions with the use of inside information and to advise the persons to whom they
provide inside information.
(4) Any person who contravenes the provisions of this section and regulations made hereunder shall
commit an offence.

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Insider Trading Chapter-10

In accordance with Section 96 and Section 131 of the Securities Act, 2015 and Clause 5.6.2 of the Rule
Book of Pakistan Stock Exchange Limited, we hereby convey the following:

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Insider Trading Chapter-10

In accordance with Section 96 and Section 131 of the Securities Act, 2015 and Clause 5.6.2 of the Rule
Book of Pakistan Stock Exchange Limited, we hereby convey the following:

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 Insider Trading Chapter-10

The Hub Power Company Ltd.

11th Floor, Ocean Town T + 92 21 3587 4677-86

Block-9, Main Clifton Road + 92 21 3583 9018
Karachi, Pakistan F + 92 21 3587 0397

PSX-8060 September 30, 2022

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Disclosure of Material Information

Dear Sir,

In accordance with Section 96 and 131 of the Securities Act, 2015 and Regulations 5.6.1(a) of the Pakistan
Stock Exchange Regulations, we hereby disclose the following in respect of our subsidiary, Thar Energy
Limited (TEL):

TEL is a joint venture between The Hub Power Company Limited (HUBCO), Fauji Fertilizer Company
Limited (FFC) and China Machinery Engineering Corporation (CMEC), formed for the purposes of
establishing a 330 MW Mine-Mouth Coal-Fired Power Generation Complex at Thar Block II, District
Tharparkar, Sindh, Pakistan (the "Project") under the China Pakistan Economic Corridor (CPEC).

The Project has successfully achieved commissioning, with the Commercial Operations Date (COD) to take
effect from October 1, 2022, in terms of the Power Purchase Agreement dated July 27, 2017 (the "PPA")
entered into between TEL and the Central Power Purchasing Agency (Guarantee) Limited.

With this achievement, the collective power generation capacity of the HUBCO and its group companies has
increased to 3251 MW through the plants spread over Balochistan, Punjab, Azad Jammu and Kashmir and
Sindh.

The Project will be generating low cost energy from indigenous Thar Coal thus reducing burden on national
foreign exchange resource. Completion of the Project would have not been possible without the support
extended by the Government of Pakistan, Government of Sindh, the Government of China and all other
private stakeholders.

You are requested to disseminate the information to the Members of the Exchange accordingly.

Thank you.

A disclosure form as required pursuant to SRO 143(1)/2012 dated December 5, 2012, is enclosed as
Annexure A.

Yours Sincerely,

Faiza Kapadia Raffay

Company Secretary

CC: Director/HOD Surveillance, Supervision and Enforcement Department, Securities and Exchange
Commission of Pakistan. NIC Building, 64 Jinnah Avenue, Blue Area, Islamabad

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The Hub Power Company Ltd.

11th Floor, Ocean Town T + 92 21 3587 4677-86

Block-9, Main Clifton Road + 92 21 3583 9018
Karachi, Pakistan F + 92 21 3587 0397

Annexure A
Disclosure Form

Name of Company The Hub Power Company Limited

Date of Report September 30, 2022
Exact Name of Company as specified in its The Hub Power Company Limited
Memorandum
Registered Address of the Company 9th Floor, Ocean Tower, Block-9, Main Clifton Road, Karachi,
Pakistan 75600
Contact Information Faiza Kapadia Raffay (Head of Legal & Company Secretary)
Email: faiza.kapadia@hubpower.com

Disclosure of inside information by listed company

TEL is a joint venture between The Hub Power Company Limited (HUBCO), Fauji Fertilizer Company
Limited (FFC) and China Machinery Engineering Corporation (CMEC), formed for the purposes of
establishing a 330 MW Mine-Mouth Coal-Fired Power Generation Complex at Thar Block II, District
Tharparkar, Sindh, Pakistan (the "Project") under the China Pakistan Economic Corridor (CPEC).

The Project has successfully achieved commissioning, with the Commercial Operations Date (COD) to take
effect from October 1, 2022, in terms of the Power Purchase Agreement dated July 27, 2017 (the “PPA”)
entered into between TEL and the Central Power Purchasing Agency (Guarantee) Limited.

With this achievement, the collective power generation capacity of the HUBCO and its group companies has
increased to 3251 MW through the plants spread over Balochistan, Punjab, Azad Jammu and Kashmir and
Sindh.

The Project will be generating low cost energy from indigenous Thar Coal thus reducing burden on national
foreign exchange resource. Completion of the Project would have not been possible without the support
extended by the Government of Pakistan, Government of Sindh, the Government of China and all other
private stakeholders.

You are requested to disseminate the information to the Members of the Exchange accordingly.

Thank you.

Yours Sincerely,

Faiza Kapadia Raffay

Company Secretary

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223. Prohibition of short-selling. - No director, chief executive, managing agent, chief accountant,
secretary or auditor of a listed company, and no person who is directly or indirectly the beneficial owner
of not less than ten per cent of the listed equity securities of such company, shall practise directly or
indirectly short-selling such securities.

KARACHI: The apex regulator, the Securities and Exchange Commission of Pakistan (SECP), has filed a
criminal complaint against a former employee of The Bank of Punjab for his alleged involvement in insider
trading.

SECP files criminal case against brokerage house CEO

Syed Misbahuddin Rizvi served as head of equity and capital market at the bank. Ho was responsible for the
placement of orders for equity investment and/or disinvestment of shares on behalf of the bank.

The accused served the bank for around seven and a half years from June 2009 to November 2016.

The SECP filed the case at the court of the session's judge in Karachi.

"The SECP found that he had inside information regarding the bank's decisions to invest/disinvest as defined
in Section 130 (g) and Section 129 (d) of the Securities Act, 2015 respectively. The accused was found
involved in insider trading in collusion and connivance with his relatives, Uddin Rizvi, Syed Khalid Grami and
Syed Wajid Grami," the regulator said in a statement.

The SECP's investigation revealed that the bank's employee look advantage of inside information and was
involved in active trading in shares, which was also prohibited. The SECP investigation revealed that the
bank’s employee took advantage of inside information and was involved in active trading in shares, which was
also prohibited

The SECP's investigation revealed that the bank's employee took advantage of inside information and was
involved in active trading in shares, which was also prohibited under the Employees' Prudential Regulations of
the bank. "He made a profit of millions of rupees through this illicit trading," it said.

The analysis of the trading data of Karachi Automated Trading System (KATS) for the period from August 24,
2012, to February 2, 2016 (review period) obtained from the Pakistan Stock Exchange revealed that a number
of transactions of Syed Khalid Grami (Khalid) and Syed Wajid Grami matched considerably with the bank in
various scrip’s on different dates in a suspicious manner for their own personal gain.

Crowd funding: SECP warns of false scheme

"Syed Misbah affected a series of transactions in different scrip’s in conjunction with trading activities of the
bank in contravention of Section 128 (1) of the Securities Act, 2015," it said.

The SECP has also taken up the matter of bank employees' involvement in insider trading with the State Bank
of Pakistan for appropriate measures and issuance of policy guidelines, it said.

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Price Sensitive Information Chapter-11

CHAPTER
11

PRICE SENSITIVE
INFORMATION

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Price Sensitive Information

96. Disclosure of price sensitive information.—

(1) Except as provided in sub-section (4), a listed company shall disclose to the public forthwith any price
sensitive information relating to the company or its subsidiaries which has come to the company's
knowledge and which would be material to an investor's investment decision, including information
that—(1)
(2)
(a) is necessary to enable the public to appraise the position of the company and its subsidiaries;
(b) is necessary to avoid the creation or continuation of a false market in the securities of the
company (false market being defined as an uninformed market or one which is based on
incomplete information); or
(c) might reasonably be expected to materially affect the market activity and the price of its
securities.
(2) A listed company shall ensure that, when disclosing information pursuant to clauses (a) to (c) of sub-
section (1), the means it uses for (3)disseminating information are such that it equally, timely and
effectively provides access to such information by the holders of the securities of the company and
investors.
(3) A listed company meets the requirements of sub-section (1) when information that affects the market or
a sector of the market generally is made public in a manner that would be likely to bring it to the
attention of persons who commonly invest in securities of a kind whose price or value might be
affected by the information.
(4) A listed company may, under its own responsibility, delay the public disclosure of price sensitive
information such as not to prejudice its legitimate interests, provided that—
(a) such delay would not be likely to mislead public investors;
(b) any person receiving the information owes the listed company a duty of confidentiality,
regardless of whether such duty is based on law, regulations, articles of association or contract;
and
(c) the listed company is able to ensure the confidentiality of that information.
(4)
(5) In the event that a listed company is also traded or listed on a foreign market or exchange, the listed
company shall ensure that where information is released to those markets the same information is
released in Pakistan simultaneously.
(5)
(6) Without limiting the generality of this section the listed company shall also comply with such further
obligations and requirements as may be prescribed.

(1) "Disclosure to public immediately regarding price sensitive information of COMPANY & ITS SUBSIDIARIES which are material to
an investor's investment decision.”
(2) Evaluate
(3) < Disseminating meaning = to spread >
(4) < In case of depository receipts >
(5) < Referring Rule Book of Pakistan Stock Exchange Chapter 5 >

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Price Sensitive Information Chapter-11

5.6.1. DISCLOSURE OF PRICE-SENSITIVE INFORMATION

(a) Every Listed Company shall immediately disseminate to the (6)Commission and the (7)Exchange
all price-sensitive information relating to the business and other affairs of the listed company
that may affect the market price of its shares in the manner prescribed by the Exchange from
time to time. The said information shall be communicated to the Exchange prior to its release to
any other person or print / electronic media.
The price-sensitive information may include but shall not be limited to:
(i) any material change in the nature of business of the company due to technical, strategic,
manufacturing, or marketing related changes, opening of new line of business or closure
of any existing line of business, either partly or fully;
(ii) information regarding any joint ventures, merger, demerger, restructuring, acquisition or
any material contract entered into or lost;
(iii) all decisions of the Board of Directors of the company relating to cash dividend, bonus
issue, right issue or any other entitlement or corporate action, buy back of securities or
voluntary delisting;
(iv) purchase or sale of significant assets, franchise, brand name, goodwill, royalty, financial
plan, etc.;
(v) any undisclosed revaluation of assets including impairment of assets due to any reason;
(vi) delay or loss of production due to strike, fire, natural calamities, major breakdown, etc.;
(vii) a major change in borrowings including projected gains to accrue to the company;
(viii) issue or redemption of securities or any change in the terms of issued securities;
(ix) material change in ownership of the company;
(x) any default in repayment, rescheduling or restructuring of loans or breach of loan
agreement by the company;
(xi) default, delay, rescheduling or restructuring in payment of markup, profit, interest or rent
etc., as the case may be and in redemption of principal amount in respect of Debt
Securities issued by a Listed Company along with reasons thereof;
(xii) change in directors, Chairman, CEO or auditors of the company;
(xiii) fraud/default by the company or fraud/default/arrest of its directors, CEO or executives;
(xiv) initiation of winding up proceedings against the company or any of its
associated/subsidiary company;
(xv) non-renewal of license by the (8)Commission or any other relevant licensing authority
along with reason(s) of the non-renewal; and
(xvi) any other information that is deemed price sensitive information.
Explanation: Such information shall be disseminated to the Commission and the Exchange as
soon as any decision about above referred matters or any other significant issue is taken by the
board or a significant matter requiring disclosure has come into the knowledge of the
company’s management.

(6) SECP
(7) PSX
(8) < Example: Section 42 Company >

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Some Practical Examples

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 Price Sensitive Information Chapter-11

5.6.2. DISCLOSURE IN RESPONSE TO A RUMOR OR A REPORT CONTAINING SENSITIVE

INFORMATION:
Whenever a Listed Company becomes aware or is made aware of any rumor or report containing
sensitive information, likely to affect market price of its listed Securities or trading volume in any form
whatsoever and howsoever including but not limited to the following:
(i) broadcasted/ presented through the electronic media; and not limited to an
(ii) article/news or otherwise; and
(iii) published in a newspaper, newswire, magazine, or any other publication.
The Company should confirm or deny information and set forth the facts sufficient to clarify the same
in writing to the Exchange, within one (1) day of such publication / broadcast.

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Price Sensitive Information Chapter-11

Some Practical Examples

UNITY FOODS LIMITED

UNITY TOWER,
Plot # 8C, Block 6, P.E.C.H.S,
Karachi 75400, Pakistan
Phone: + 92 21 34373608
Email: info@urityfoods.pk
Website: www.unityfoods.pk

Dated: November 18, 2022

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Material Information

Dear Sir,

In accordance with Clause 5.6.2 of PSX Regulations, we hereby convey the following information:

We would like to take this opportunity to clarify certain matters that are being discussed with regards to the
company and to quash the rumors that are being spread in the market. In this regard, please note the following:
1. The company has appointed new auditors to conclude annual audit of accounts for the year ended June 30,
2022 after receiving the previous auditors' resignation. This resignation was due to the fact that the auditor
had indicated its inability to complete the audit within the stipulated time as per SECP's extension to hold
the AGM which was granted to the company. The company installed latest ERP software SAP4hana and the
data transfer into the new system was initiated in July which caused the delay in provision of the requested
information. The-e is absolutely no other reason for this resignation. The new auditors have initiated the
audit and the process is moving smoothly;
2. The company received a Show Cause Notice from the SECP on October 17, 2022 in which the respected
regulator had inter alia questioned some "business decisions" made by the company in the past. We feel
that the business decisions made by the company do not fall under the purview of the regulator and
therefore the Show Cause Notice is unlawful and hence the company sought the honorable Islamabad High
Court's assistance in this matter whereby the Honorable Court has granted interim relief to the Company.
As this matter is in court now, we wish not to comment on it further;
We remain committed to our responsibility to our shareholders and will continue to fight such attempts being
made to damage the company.

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 Price Sensitive Information Chapter-11

5.6.3. DISCLOSURE IN CASE OF UNUSUAL MOVEMENTS IN PRICE AND/OR VOLUME OF A

SECURITY:
(a) In case the (9)Exchange observes unusual, significant or sudden movement in price and/or
volume of a security of a Listed Company, the Exchange may seek explanation from the
Company and the Company shall respond promptly to the Exchange by giving sufficient
information as is available to it in order to clarify its position for onward dissemination to the
public including but not limited to the following:
(i) details of any matter or development of which it is aware that is or may be relevant to the
unusual movements, or
(ii) a statement of the fact if it is not aware of any such matter or development.
(b) It shall be the responsibility of the Listed Company to respond promptly, in the same manner, to
any news in the print and electronic media regarding that company which may have caused
such unusual movement(s).

(9) < Exchange itself observed >

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Price Sensitive Information Chapter-11

Practical Example of Notice By Exchange to the Company

PSX/N-68 January 20, 2021

Reproduced hereunder letter No.PSX/Gen-117 dated January 20, 2021 sent to First Prudential Modaraba
under Section 97 of the Securities Act, 2015 and Clause 5.6.3, of PSX Regulations, seeking clarification
regarding substantial increase in price or volume of its shares during last few days, for information of all
market participates.

< Will be explained below in this handout >

Stock Exchange Building, Stock Exchange Road, Karachi - 74000, Pakistan

UAN: 111-001-122 Fax:3 2410825
Website: www.psx.com.pk Email: info@psx.com.pk

Ref. No. PSX/ Gen-117 January 20, 2020

The Company Secretary

First Prudential Modaraba
3rd Floor, Horizon Vista,
Plot No. Commercial 10,
Block No. 4, Clifton Karachi.

Subject: Unusual Movement in Price or Volume of M/s. First Prudential Modaraba (PMI)

Dear Sir,

Your attention is invited to Section 97 of the Securities Act, 2015 and Clause 5.6.3, of the PSX Regulations whereby the
Listed Companies are required to respond promptly by disclosing the following to the public if there are unusual
movements in the price or volume of its traded securities is observed:
(a) Details of any matter or development of which it is aware that is or may be relevant to the unusual movements, or
(b) A statement of the fact that it is not aware of any such matter or development.
It may be noted that while reviewing the trading data of the Modaraba, it has been observed that the price and volume of
PMI has experienced substantial increase during last two months.
Please note that in case of any material / price-sensitive information that is likely to affect the market price / volume, you
are required to share the same to the Exchange for its onward dissemination to all market participant as prescribed under
clause 5.6.1, of the PSX Regulations.
In view of the above and in the absence of any material announcement of the Modaraba, you are advised to furnish the
reason and / or any material information in Modaraba's knowledge which may have resulted in substantial increase in
price and volume in terms of clause 5.6.3, of PSX Regulations and Section 97 of the Securities Act, 2015 immediately,
through PUCARS for information of all market participants.
The above may be noted for strict compliance.
Yours sincerely,

Hafiz Maqsood Munshi

Manager
Companies & Securities Compliance – RAD
Copy to:
The Joint Director (SMD)-SECP
The Acting Chief Regulatory Officer – PSX
PSX Website

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 Price Sensitive Information Chapter-11

Reply by the Company

First Prudential Modaraba

PSX/147/2021

January 22, 2021

The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Karachi.

Subject: Unusual Movement in Price or Volume of First Prudential Modaraba (PMI)

Dear Sir,

This is with reference to your notice No. PSX/ N-68 dated January 20, 2021 regarding the captioned subject.

We would like to submit that the SECP vide order no. SC/M/PRDD/KASB/20129/36 dated January 31, 2020
has transferred the management rights of First Prudential Modaraba (PMI) to Awwal Modaraba Management
Limited (AMML) through competitive bidding.

One of the conditions for transfer of management rights of PMI to AMML is that AMML shall hold and/or
acquire minimum statutory holding often percent (10%) of the issued certificate capital of PMI. Therefore, in
compliance of the said SECP directions, Pak Brunei Investment Company Limited, being the holding company
of the AMML, has commenced the acquisition of PMI's modaraba certificates.

We hope that above stated facts will suffice the purpose. We assure you of strict compliance with all
necessary regulations.

Regards,

Misbah Wahid
Company Secretary

Managed by Awwal Modaraba Management Limited

(A wholly owned subsidiary of Pak Brunei Investment Company Limited)

3rd Floor, Horizon Vista, Plot No. Commercial-10, Block No. 4, Scheme No. 5, Clifton, Karachl-75600, Pakistan.
Telephone: (+92-21) 35374273-74, 38771685, 35361215-9. Fax: 021-35374275
Web: www.firstprudentialmodaraba.com

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Price Sensitive Information Chapter-11

5.6.4. DISCLOSURE OF INTEREST BY RELEVANT PERSONS HOLDING COMPANY’S SHARES:

Where any director, CEO, (10)substantial shareholder or executive of a Listed Company or their
spouses sell, buy or take any beneficial position, whether directly or indirectly, in shares of the Listed
Company of which he/she is a director, CEO, substantial shareholder or executive, as the case may
be, he/she shall immediately notify in writing to the Company Secretary. Such director, CEO,
substantial shareholder 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 into Central
Depository System), and nature of transaction to the Company Secretary within seven days of
effecting the transaction. The Company Secretary shall immediately forward the same to the
Exchange for its dissemination to all concerned. The notice of the director, CEO, substantial
shareholder or executive, as the case may be, shall also 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.
(11)
Provided that each listed company, excluding open-end mutual funds, 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 closed period. The closed
period shall start from the day when any document/statement, which forms the basis of price
sensitive information, is sent to the board of directors and terminate after the information is made
public. Every listed company shall advise its directors about the closed period at the time of
circulating agenda and working papers for the board meetings, along with sending intimation of the
same to the Exchange.
Explanation: For the purpose of clause 5.6.1 and 5.6.4, the expression “executive” means the CEO,
Chief Operating Officer, Chief Financial Officer, Head of Internal Audit and Company Secretary by
whatever name called, and other employees of the company for whom the board of directors will set
the threshold to be reviewed on an annual basis and disclosed in the annual report.(12)

(10) As defined in securities act 2015

(Ixii) "substantial shareholder", in relation to a company, means a person who has an interest in shares of a company —
(a) the nominal value of which is equal to or more than ten per cent of the issued share capital of the company; or
(b) which enables the person to exercise or control the exercise of ten per cent or more of the voting power at a
general meeting of the company;
(11) Closed period will be discussed later
(12) < Usually senior management level employees >

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Practical Example

ICI PAKISTAN LTD.

ICI House, 5, West Wharf
Karachi 74000
T +92 21 3231 3717-22
F +92 21 3231 1739
UAN 111 100 200
www.ici.com pk
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building,
Stock Exchange Road,
Karachi.

April 18, 2022

ICI/ComSec/25/2022
Dear Sir,
DISCLOSURE OF INTEREST BY A DIRECTOR, CEO, OR EXECUTIVE OF A LISTED COMPANY AND
THEIR SPOUSE AND THE SUBSTANTIAL SHAREHOLDERS U/C 5.6.4 OF PSX REGULATIONS
This is to inform you that the following transaction(s) have been executed by our Director and CEO in the shares of ICI
Pakistan Limited, details of which are hereunder:
Details of Transactions
S. Name of Person with
No. of Form of Share
No. Description Date Nature Rate Market
Shares Certificates
Mr. Asif Jooma
1 15-04-2022 Sell 500 811.00 CDC Ready
(Director and CEO)
Mr. Asif Jooma
2 15-04-2022 Sell 1,700 815.00 CDC Ready
(Director and CEO)
Mr. Asif Jooma
3 15-04-2022 Sell 200 816.10 CDC Ready
(Director and CEO)
Mr. Asif Jooma
4 15-04-2022 Sell 100 817.00 CDC Ready
(Director and CEO)
Mr. Asif Jooma
5 15-04-2022 Sell 1,500 825.00 CDC Ready
(Director and CEO)
We confirm that the said transaction(s) will be presented in the subsequent board meeting. While presenting the details of
the said transactions to the Board, non-compliances, if any, would also be presented to the Board for their consideration
as required under clause No. 5.6.4 of PSX Regulations and we will confirm the same to the Exchange after the said board
meeting.
We further confirm that the holding period for the transaction(s) is over six (06) months and in case it is within six (06)
months, the cheque equivalent to the profit shall be deposited with SECP as required under Section 105 of the Securities
Act, 2015 under intimation to PSX.
You may please inform the members of the Exchange accordingly.
To be discussed later

CC: The Director (Enforcement)

Securities & Exchange Commission of Pakistan
NIC Building, Jinnah Avenue
Islamabad.

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Price Sensitive Information Chapter-11

5.6.5. DISCLOSURE OF INFORMATION RELATING TO ACQUISITION OF MORE THAN TEN PER CENT
VOTING SHARES OF A COMPANY:
Where Exchange receives any information from an acquirer under section 110 of the Securities Act
2015, the Exchange, upon receipt of such information, shall immediately disseminate the same to all
concerned.
5.6.6. DISCLOSURE OF SIGNIFICANT RELATED PARTY TRANSACTIONS:
(a) Every Listed Company shall disseminate to the Exchange information about Related Party
Transaction(s) which, (13)individually or taken together with previous transactions with a Related
Party during a financial year, is of a value equal to or more than 10% of total assets or annual
total turnover as per last year’s audited financial statements of the Listed Company,
immediately upon entering into such transaction.
Provided that nothing in this clause shall apply to any transactions entered into by the Listed
Company in its ordinary course of business on an arm’s length basis as specified in terms of
section 208 of the Companies Act, 2017 and (14)regulation made thereunder.
(b) The information to be disseminated under sub-clause (a) shall include but not be limited to the
following:
(i) Name of Related Party;
(ii) Nature of transaction;
(iii) Amount of transaction;
(iv) Names of the interested person(s) and their nature of interest in the transaction/ related
party;
(v) The interested persons’ direct and indirect shareholding in the Listed Company;
(vi) Details, description, terms and conditions of transaction; and
(vii) The rationale for and benefit to the Listed Company of such transaction.

(13) < Either 1 transaction or cumulative transactions in entire year >

(14) Companies (Related Party Transactions & Maintenance of Related Records) Regulations, 2018

5.6.6A. DISCLOSURE OF INFORMATION RELATING TO STAY OBTAINED FROM THE COURT

AGAINST THE INSPECTION OR INVESTIGATION PROCEEDINGS OF THE COMMISSION:
The Listed Company shall immediately disclose to the Exchange the information relating to an order
of the Court staying any inspection or investigation proceedings initiated by the Commission against
such Listed Company.(15)

(15) Inspection / Investigations As per provisions of Companies Act, 2017

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Some Practical Examples

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Price Sensitive Information Chapter-11

5.6.7. NON COMPLIANCE WITH DISCLOSURE OF PRICE SENSITIVE INFORMATION TO THE

EXCHANGE:
(a) In case a Listed Company or Issuer of a Listed Security fails to communicate the complete
(16)
financial results timely, or any other price sensitive information immediately, such company or
issuer will be liable to pay penalty at a minimum of Rs.100,000/- (Rupees one hundred
thousand only) and maximum up to Rs.1,000,000/- (Rupees One million only) to be determined
by the Exchange.
(b) In case a Listed Company or Issuer of a Listed Security fails to communicate accurate and
complete financial results, or any other price sensitive information in a timely manner, the Chief
Executive Officer (CEO) as well as Chief Financial Officer (CFO) of such Listed Company or
Issuer will be liable to pay a penalty of a minimum Rs. 100,000/- (Rupees one hundred
thousand only) and a maximum penalty of upto Rs. 1,000,000/- (Rupees one million only) to be
determined by the Exchange.

(16) < Linked with accounts section of Companies Act, 2017 >

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“Now Continuing with Securities Act, 2015”

(17)
97. Notification of required disclosure by the Commission or a securities exchange.—
(1) A listed company shall respond promptly upon being informed by the Commission or a securities
exchange that there are unusual movements in the price or volume of its traded securities by
promptly disclosing to the public—
(a) details of any matter or development of which it is aware that is or may be relevant to the
unusual movements, or
(b) a statement of the fact if it is not aware of any such matter or development.
(2) It shall be the responsibility of the listed company to respond promptly, in the same manner, to
any news in the print and electronic media regarding that company which may prima facie affect
the opinion of investor or public at large.
(3) Without limiting the general effect or provisions of this Part, listed companies shall also comply
with such further reporting obligations and requirements as may be prescribed.

(17) < Same as 5.6.3 >

98. Power of the Commission to require production of records and documents concerning listed
companies.—
(1) Where—
(a) it appears to the Commission that there are circumstances suggesting that the business of
a listed company has been or is being conducted –
(i) with intent to defraud its creditors or the creditors of another person;
(ii) for a fraudulent or unlawful purpose; or
(iii) in a manner that adversely effects any of its members;
(b) it appears to the Commission that there are circumstances suggesting that a company
was listed for a fraudulent or unlawful purpose;
(c) it appears to the Commission that there are circumstances suggesting that the persons
concerned with the listing of a company or the management of its affairs have in relation to
the listing or management been guilty of fraud, misfeasance or other misconduct towards it
or its members; or
(d) it appears to the Commission that there are circumstances suggesting that the members
of a listed company have not been given all the information with respect to its affairs that
they might reasonably expect,
the Commission may give directions—
(i) to the directors or management of the listed company;
(ii) to a subsidiary or an associated company of the listed company; or
(iii) to a listed company or listed companies that own or control either individually or
collectively a majority shareholding of the listed company or have the power to place a
majority of directors on the board of the listed company or
(iv) where it appears to the Commission that it is in the interest of the investor or public
interest, requiring it, at the time and place specified in the directions, to produce the
records and documents specified in the directions.
(2) The Commission may, when acting under sub-section (1), authorize a person, on producing, if
required to do so, evidence of his authority to require a listed company referred to in sub-section
(1) to produce to him records and documents specified by him.
(3) The Commission or authorized person may require production of records and documents from a
listed company under this section. The Commission or authorized person may also require
production of those records and documents from a person who appears to the Commission or
authorized person to be in possession of them.(18)

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(4) The power under this section to require a listed company or other person to produce records and
documents includes the power—
(a) if the records and documents are produced—
(i) to take copies of them or extracts from them; and
(19)
(ii) to require that person or any other person who is a present or past officer of the
listed company or is or was at any time employed by the listed company, to provide
an explanation of any of them; or
(b) if the records and documents are not produced, to require the person who was required to
produce them to state, to the best of his knowledge and belief, where they are.

(18) < From any employee of the listed company >

(19) Power to make inquiry from present as welt as past officer.

99. Remedy in cases of unfair prejudice by listed companies.—

(1) If it appears to the Commission from any information, record or other document obtained under
this Act or the roles or regulations made under the Act or any other legislative power, that the
affairs of a listed company is being or has been conducted in a manner unfairly prejudicial to the
interests of some or all of its shareholders, the Commission may make an application to the
Court for an order under this section.
(2) If on an application under this section the Court is of the opinion that the company's affairs are
being or have been conducted in a manner unfairly prejudicial to the interests of its members
generally or of some part of the members, whether or not the conduct consists of an isolated act
or a series of acts, the Court may, with a view to bringing to an end the matters complained of—
(a) make an order restraining the carrying out of the act or conduct;
(b) order that the company shall bring in its name the proceedings the Court considers fit
against the persons, on the terms, the Court orders;
(c) appoint a receiver of the whole or a part of the company's property or business and may
specify the powers and duties of the receiver or manager and fix his remuneration; and
(d) make any other order it considers fit, whether for regulating the conduct of the company's
affairs in future or for the purchase of the shares of any members of the company .by other
members of the company or by the company and, in the case of a purchase by the
company, for the reduction accordingly of the company's capital or otherwise.
(3) Where an order under this section makes an alteration in or an addition to the constitution of a
company, the company shall not have power without the leave of the Court to make any further
alteration in or addition to the constitution inconsistent with the order. (20)

(20) < Constitution = Memorandum of Association and Articles of Association >

100. Power of the Commission to issue directives to listed companies.—

Where it appears to the Commission that —
(a) it is desirable for the protection of members or other holders of securities or in the public interest;
(b) the listed company is in breach of listing regulations; or
(c) the listed company is contravening, has contravened or is about to contravene or has failed to
comply with any provision of, or requirement under, this Act, any rules or any regulations made,
under this Act or in purported compliance with any such provision or requirement, has furnished
the Commission with information that is false, inaccurate or misleading,
the Commission may issue directive to the listed company —
(i) to cease and desist from the breach of this Act or rules or regulations made there under;
(ii) to do or not to do any matter as specified under this Act or rules or regulations made there under;
or
(iii) with regard to or for any other matter that the Commission considers necessary in exercise of its
powers under this Act or rules or regulations made there under,

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and the listed company shall comply with the directive(21).

(21) < Mandatory Compliance >

101. Duty of directors and others to disclose shareholding in listed company.—

(1) Every person who becomes a director, executive officer, or substantial shareholder of a listed
company shall give notice in writing to the company-
(a) of his beneficial ownership in the listed equity securities of the company or any other
nature of securities as may be prescribed by the Commission; and
(b) of the amount and description of the securities of the company and date of acquisition of
beneficial ownership.
(2) A director, executive officer or substantial shareholder of a listed company shall give notice in
writing to the company of any of the following events, namely: -
(a) any change in beneficial ownership mentioned in sub-section (1) and the notification shall
state the number, amount and description of securities involved.
(b) any gain referred to in section 104.
(3) The reporting requirement imposed by sub-sections (1) and (2) shall be fulfilled before the
expiration of a period of seven days beginning with the day on which the requirement (22)first
arises.
(4) For the purposes of sections 101 to 107, the term "executive officer" - includes but not limited to
the chief executive, chairman, chief financial officer, secretary, (23)auditor or any other officer of
the company as may be prescribed by the Commission.
(24)
(5) For the purposes of sections 101 to 107 beneficial ownership of securities of any director,
executive officer or substantial shareholder, in case of natural person, shall be deemed to
include the securities beneficially owned, held or controlled by—
(25)
(a) him or her;
(26)
(b) the wife or husband of a director of a company, not being herself or himself a director of
the company;
(c) the minor son or daughter of a director where "son" includes stepson and "daughter"
includes step-daughter; and "minor" means a person under the age of eighteen years;
(27)
(d) a private company, where such director, executive officer or substantial shareholder is a
shareholder, but to the extent of his (28)proportionate shareholding in the private company:
Provided that "control" in relation to securities means the power to exercise a controlling
influence over the voting power attached thereto.
Provide further that in case the substantial shareholder is a non-natural person, only those
securities will be treated beneficially owned by it, which are held in its name.

(22) < Inclusive of day of event >

(23) Internal Auditor not external as how external auditors will acquire shares in the company.
(24) What constitutes a beneficial ownership is defined here
(25) Director, executive officer or substantial shareholder itself.
(26) It only includes a Director.
(27) It includes all 3:
(1) Director;
(2) Executive Officer
(3) Substantial Shareholder
(28) Notice to the extent of his/her ownership means:
Mr. A  Holding 30% in ABC Pvt Ltd
Mr. A  Director of a listed company (XYZ Ltd)
ABC (Pvt) Ltd acquired 500 shares in XYZ Limited.
Mr. A shall disclose (500  30%) = 150 shares accordingly

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102. Register of directors’ interests notified under section 101.—

(1) Every listed company shall keep a register for the purposes of section 101 in the form approved
by the Commission.
(2) Whenever a company receives notification from a director, executive officer or substantial
shareholder pursuant to section 101, the company shall enter in the register, against name of the
respective director, executive officer or substantial shareholder, the information received and the
date of the entry.
(3) Whenever a listed company is notified of any matter in consequence of requirement imposed by
sub-section (29)(1) of section 101, the company shall notify it to the Commission, within seven
days of the (30)receipt of the information, showing therein name of director, executive officer or
shareholder, date of appointment or acquisition of beneficial ownership and number of shares
held by him.

(29) Case where the person is becoming director, executive officer or substantial shareholder.
(30) Receipt from concerned person.

103. Notification to the Commission of directors and others' interest.—

(1) Every director, executive officer or substantial shareholder of a listed company shall submit to
the Commission in the prescribed form -
(a) a statement of beneficial ownership in the listed equity securities of the company or any
other nature of securities as may be prescribed by the Commission;
(b) the particulars of any change in the interest aforesaid; and
(c) any change in his position.
(2) The reporting requirement imposed by sub-sections < 1) shall be fulfilled before the expiration of
a period of seven days beginning with the day on which the requirement first arises.
(3) For the purposes of sections 101 to 107, "equity security" means any stock or transferable share
(preferred or common) or similar security representing ownership, any security convertible, with
or without consideration, into such a security, or carrying any warrant or right to subscribe to or
purchase such a security, any such (31)warrant or right itself, and such other security as may be
prescribed by the Commission.

(31) Example: Letter of right

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Nishatabad, Faisalabad – Pakistan,

CCML
CRESCENT COTTON MILLS LIMITED
Tel: 041-8752111-14
Fax: 041-8750366
E-mail: info@crescentcotton.com
(Formerly Crescent Sugar Mills & Distillery Ltd.)

CCML/CS/PSE/167
November 01, 2022

The General Manager,

Pakistan Stock Exchange Ltd.,
Stock Exchange Building,
Off: I.I. Chundrigar Road,
Karachi,

Dear Sir,

Re: Intimation Regarding Shares Transaction by Director

In pursuant to the requirements of Securities Act 2015 read with applicable provisions of the Rule Book of
Pakistan Stock Exchange Limited, it is hereby notified that Mr. Adnan Amjad, Director of the Company has
informed regarding change in shareholding under clause 5.6.1.(d) of PSX regulations the detail is given
below:
5.6.4

1. Name of Company : Crescent Cotton Mills Limited

2. No. of Shares : 19,500
3. Rate per Share : Rs. 34.5/-
4. Form of Share Certificate : in CDC form
5. Nature Transaction : Purchase
6. Date of Transaction : October 31, 2022

Please disseminate the above information amongst the TRE Certificate Holders of the Exchange accordingly.

Thanking you.
Yours faithfully,
for Crescent Cotton Mills Limited

Company Secretary

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Nishatabad, Faisalabad – Pakistan,

CCML
CRESCENT COTTON MILLS LIMITED
Tel: 041-8752111-14
Fax: 041-8750366
E-mail: info@crescentcotton.com
(Formerly Crescent Sugar Mills & Distillery Ltd.)

DISCLOSURE FORM
Securities Act, 2015

Faisalabad, November 01, 2022

Name of the Company: Crescent Cotton Mills Limited

Date of report (date of earliest event reported if applicable): October 31, 2022
Address: New Lahore Road, Nishatabad, Faisalabad.
Notification under PSX Rule Book regarding acquisition/disposal of shares by CEO Directors, Executive and
substantial shareholders.

Name of Shareholder : Mr. Adnan Amjad

Designation : Director
Nature of Transaction : Purchase
Form of Shares : Electronic in CDC Form
Transaction/settlement Date : October 31, 2022
Quantity : 19,500/-
Gross Rate : Rs. 34.50

SIGNATURE
In case of person pursuant to the requirements of applicable laws, the Company has duly caused this
form/statement to be signed/on its behalf by the undersigned hereunto duly authorised.

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104. Trading by directors and others.—

Where any director, executive officer or substantial shareholder of a listed company irrespective of any
intention makes any gain computed in the prescribed manner, by the purchase and sale, or the sale
and purchase of any beneficially owned listed equity securities of same class, or any other nature of
securities as my be prescribed by the Commission, within period of less than six months, such director,
executive officer or substantial shareholder shall make a report to the Commission in the prescribed
form before the expiration of a period of seven days beginning with the day on which the gain accrues:
Provided that nothing in this section shall apply to any nature of acquisition as may be prescribed by the
Commission.
105. Tender of gain to be credited to Federal Consolidated Fund.—
Where director, executive officer or substantial shareholder makes (32)any gain mentioned in section
104, such director, executive officer or substantial shareholder shall tender the amount of such gain to
the Commission within the period of six months of the accrual of gain and the Commission shall credit
the amount of such gain to the Federal Consolidated Fund.

(32) < Within a period of less than six months >

106. Directive by the Commission.—

(1) Where within the period provided in section 105, a director, executive officer or substantial
shareholder fails or neglects to tender the gain, the Commission may by order in writing direct
such director, executive officer or substantial shareholder to tender the gain to the Commission
for onward credit to the Federal Consolidated Fund.
(2) where any person who contravenes or fails to comply with any provision of sections 101,
102,103,104,105 and 107, the Commission may by order in writing direct,—
(a) in the case of an individual, to pay by way of penalty to the Commission such sum which
may extend to five hundred thousand rupees and to a further sum which may extend to
one thousand rupees per day for every day during which the default continues; and
(b) in the case of a company, the company and its every director or officer who is knowingly
and willfully in default, to pay by way of penalty to the Commission such amount which
may extend to five hundred thousand rupees and to a further amount which may extend to
one thousand rupees per day for every day during which the default continues.
(3) Any person, who obstructs or contravenes or does not comply with any order or direction given
under this section commits an (33)offence and shall be liable to pay by way of penalty such
amount which may extend to five million rupees or three times the tenderable gain made
whichever is higher.(34)

(33) Crime
(34) Higher of;
A = 5,000,000
B = 3 x Grain

107. Notification to the Commission of prescribed information.—

(1) Every listed company, once in each year, prepare in the prescribed manner and file with the
Commission a return containing the prescribed information.
(2) The return referred to in sub-section (1) shall be filed with the Commission within forty-five days
from the date of the annual general meeting held in the year or, where no such meeting is held
or if held is not concluded, from the last day of the calendar year to which it relates.

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Practical Example

ICI PAKISTAN LTD.

ICI House, 5, West Wharf
Karachi 74000
T +92 21 3231 3717-22
F +92 21 3231 1739
UAN 111 100 200
www.ici.com pk
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building,
Stock Exchange Road,
Karachi.

April 18, 2022

ICI/ComSec/25/2022
Dear Sir,
DISCLOSURE OF INTEREST BY A DIRECTOR, CEO, OR EXECUTIVE OF A LISTED COMPANY AND
THEIR SPOUSE AND THE SUBSTANTIAL SHAREHOLDERS U/C 5.6.4 OF PSX REGULATIONS
This is to inform you that the following transaction(s) have been executed by our Director and CEO in the shares of ICI
Pakistan Limited, details of which are hereunder:
Details of Transactions
S. Name of Person with
No. of Form of Share
No. Description Date Nature Rate Market
Shares Certificates
Mr. Asif Jooma
1 15-04-2022 Sell 500 811.00 CDC Ready
(Director and CEO)
Mr. Asif Jooma
2 15-04-2022 Sell 1,700 815.00 CDC Ready
(Director and CEO)
Mr. Asif Jooma
3 15-04-2022 Sell 200 816.10 CDC Ready
(Director and CEO)
Mr. Asif Jooma
4 15-04-2022 Sell 100 817.00 CDC Ready
(Director and CEO)
Mr. Asif Jooma
5 15-04-2022 Sell 1,500 825.00 CDC Ready
(Director and CEO)
We confirm that the said transaction(s) will be presented in the subsequent board meeting. While presenting the details of
the said transactions to the Board, non-compliances, if any, would also be presented to the Board for their consideration
as required under clause No. 5.6.4 of PSX Regulations and we will confirm the same to the Exchange after the said board
meeting.
We further confirm that the holding period for the transaction(s) is over six (06) months and in case it is within six (06)
months, the cheque equivalent to the profit shall be deposited with SECP as required under Section 105 of the Securities
Act, 2015 under intimation to PSX.
You may please inform the members of the Exchange accordingly.

CC: The Director (Enforcement)

Securities & Exchange Commission of Pakistan
NIC Building, Jinnah Avenue
Islamabad.

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 Price Sensitive Information Chapter-11

Another Example

July 01, 2022

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Disclosure of Interest by a Director CEO, or Executive

of a Listed Company and their Spouses and the Substantial
Shareholders u/c 5.6.1.(d) of PSX Regulations

Dear Sir, 5.6.4

We have to inform you that the following transaction have been executed by our Substantial shareholder in
shares of the Company, details of which are hereunder:

Details of Transaction
S. Name of Person with Form of
No. Description No. of
Date Nature Rate Share Market
Shares
Certificates
1 EFU General Insurance Ltd. 30-06-2022 BUY 125,000 205.85 CDC Ready

We confirm that the said transaction will be presented in the subsequent board meeting including duly
highlighted the non-compliance(s), if any, for their consideration as required under clause No. 5.6.1(d) of PSX
Regulations and confirm the same to the Exchange.

We further confirm that holding period for the transaction is over six (06) months and in case it is within six
(06) months, the cheque equivalent to the profit shall be deposited with SECP as required under Section 105
of the Securities Act, 2015 under intimation to PSX.

Thanking you,

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Price Sensitive Information Chapter-11

Another Example

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Price Sensitive Information Chapter-11

We further confirm that holding period for the transaction(s) is over six (06) months and in case it is within
six (06) months, the cheque equivalent to the profit shall be deposited with SECP as required under section
105 of the Securities Act, 2015 under intimation to PSX.

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Price Sensitive Information Chapter-11

August 10, 2020

The Manager Director

Pakistan Stock Exchange Limited

Securities Markets Division

Securities and Exchange Commission of Pakistan

Subject: Disclosure under Takeover Regulations

(i) This is to inform that Hum Network Limited ("Target Company") is the subject of rumour and
speculation, details of which are as follows:

1. A magazine namely Profit Pakistan, in its issue of July 27, 2020, has published an article titled
"Is Sultana Siddiqui about to lose control over Hum TV" speculating that Kingsway Capital and
Mr. Jahangir Siddiqui and JS Group companies may be increasing their shareholding in the
Target Company to takeover control of the Target Company at the forthcoming elections of the
Target Company, implying that the aforesaid parties are acting in concert. There are, however, a
number of inaccuracies in the said article. (Copy attached as Annex 1)

2. Another magazine namely Treasure in its issue of July 29, 2020, “SECP urged to disclose names
behind Hum Network's share price hike" has also speculated regarding the change of control of
the Target Company. (Copy attached as Annex 2)

(ii) Furthermore, there is undue movement in the share price of the Target Company. The price of the share
has increased from Rs. 2.31 per share to Rs. 17.05 per share during the period starting from April 03,
2020 to June 18, 2020. It may be clarified that the face value of the shares of the Target Company is Re.
1 per share. Further, there are reasonable grounds which are mentioned below for concluding that it is
the potential acquirers actions which has led to the situation:

In view of the speculation regarding the change of control of the Target Company and very unusual and
unwarranted steps taken by Kingsway Capital, the record of the share transfers in the last few months
was scrutinized, which has shoved the following transactions by Kingsway Capital and JS Group and their
associated persons:

HUM NETWORK LIMITED

Karachi Office Lahore Office Islamabad Office

Building No. 10/11, Hassan All Street, 24-A, Plot # 2A, Sector G-6/1-1
Off II. Chundngar Road Karachi-74000 Masson Road, Khayabane-Suhrwardy Road
UAN: 111-486-111 Lahore. Aabpara, Islamabad
Fax : +92 21-3262 8840 Ph: +92-42-36312501-3 Ph: +92-51-8777000 www.humnetwork.tv

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Price Sensitive Information Chapter-11

(a) During commencing second half of April 2020 to first week of May 2020, a private limited
company namely, Aitkenstuart Pakistan (Private) Limited (“APPL”) started acquiring and
accumulating shares of the Target Company. APPL acquired at least 83,462,000 shares of the
Target Company, which constitutes 8.83% of the total issued capital of the Target Company. The
aforesaid number of shares is based on the NDM transaction and it is possible that APPL may
have purchased or sold more shares in the open market, information for which is not available to
the Target Company.

(b) APPL during the period commencing from May 20, 2020 to June 8, 2020 sold shares of the
Target Company to JS Bank Limited (79,030,303 shares), Jahangir Siddiqui & Sons Limited
(3,375,197 shares) and Mr. Munaf Ibrahim (1,056,500 shares).

(c) Munaf Ibrahim/Cedar Capital transferred 16,500,000 shares of the Target Company to Kingsway
Capital on June 3, 2020.

(d) In accordance with the list of beneficial owners as of June 30, 2020, the collective shareholding
of the aforesaid persons is more than 33% of tin total issued capital of the Target Company:

Name Shareholding
Kingsway Capital 195.709,500
JS Group (including the existing shareholding of Jahangir 94.035,500
Siddiqui & Co. Limited)
Munaf Ibrahim 24.633,000
Total 314.348,000
(e) Taken together the shares of the Target Company purchased by and transacted among the
aforesaid parties may exceed the threshold of 10% of the issued capital of the Target Company,
and consequently may have been subject to mandatory reporting under Section 103 and 110 of
the Securities Act, 2015, and upon further sale of such shares any gain may also need to be
reported under Section 104 and would need to be tendered under Section 105 of the Securities
Act, 2015.
(f) APPL is 100% owned subsidiary of OBS Healthcare (Pvt) Limited and is the holding company
of AGP Limited, which is a listed company. These companies are part of the OBS Group, which
is headed by Mr. Tariq M. Khan. JS Group and OBS Group have along business association. JS
Bank's annual report for the year 2015 claimed as follows:
“OBS Group, result of a management buyout of Organon Pakistan in 2006, is a leading
health care group with a strong presence in Pakistan, Sri Lanka, and Afghanistan.
Focused on bringing long-term value to the Pakistani Pharma market, OBS Group he s
been aggressive in fostering strategic alliances and acquisitions. Similarly, by
understanding OBS's and its sponsors' needs, JS Bank facilitated them by providing
structured products and services for all five acquisitions since 2007 thus helping them to
grow from a marginal player to a top 10 pharmaceutical company in Pakistan.”
Mr. Tariq M. Khan also acknowledged the said relationship in the following testimonial:
"OBS has been associated with JS Bank since its inception and it is their approach
towards attention to details and personalized services among many reasons that OBS
group proudly valves JS Bank as its trusted partner.”

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(g) AGP's IPO in 2018 was also managed by JS Global Capital Limited in their capacity as the
Consultant to the Issue. According to the beneficial owners list made available to the Target
Company, the person managing the acquisition of shares on behalf of APPL is Mr. Kamran
Mirza, who was also formerly employed with JS Bank as Executive Vice President and Head of
Investment Banking Group.

(h) All sale and purchase transaction for APPL and Kingsway Capital have been routed through JS
Global Capital Limited as the broker. In case of transactions of Mr. Munaf Ibrahim, his broker
was Cedar Capital.

(i) Mr. Munaf Ibrahim has been a longtime employee of JS Group and has served in various
capacities.

(j) The significant increase in price per share as well as volume, as discussed above, was not
prompted or accompanied by any significant change in fundamentals underlying the valuation of
price of a share of the Target Company or any market dynamics.

(k) Pursuant to the notice for election of directors, the Target Company has received intention to
contest election of directors from various persons out of which at least 6 persons are either
employees of JS Group companies or hold directorships in JS Group companies or their investee
companies. All of such persons hold only nominal number of shares in the Target Company. JS
Group companies only hold 9.94% shares in the capital of the Target Company. This strengthens
the likelihood of JS Group companies acting in concert with the shareholders mentioned in
Paragraph (d) above and possibly other foreign shareholders of the Target Company.

It may, however, be clarified that eligibility of all persons who have shown interest in contesting the
election of directors is subject to compliance with the applicable Laws and Regulations (including
Rules and Regulations issued by Securities & Exchange Commission of Pakistan, Pakistan Stock
Exchange Limited and Pakistan Electronic Media Regulatory Authority), and obtaining all requisite
regulatory approvals.

The Securities Exchange is requested to make the above information immediately available to the
shareholders of the target company under Regulation 5(1) of Listed Companies (Substantial Acquisition of
Voting Shares and Takeover) Regulations, 2017, by placing it on the notice board and through notification on
automated information system and make an announcement on the house of the exchange.

Mohsin Naeem
Company Secretary
HUM Network Limited

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 Price Sensitive Information Chapter-11

Stock Exchange Building, Stock Exchange Road, Karachi - 74000, Pakistan

UAN: 111-001-122 Fax:3 2410825
Website: www.psx.com.pk Email: info@psx.com.pk

Ref No. PSX/ Gen-659 April 20, 2023

The Company Secretary,

Tandlianwala Sugar Mills Limited,
66-L, Gulberg-II,
Lahore.

Subject: UNUSUAL MOVEMENT IN PRICE OR VOLUME IN THE SHARES OF M/S, TANDLIANWALA

SUGAR MILLS LIMITED (TSMAL)

Dear Sir,

This is with reference to the requirement of section 97 of the Securities Act, 2015 and PSX Regulation 5.6.3,
whereby the Listed Companies are required to respond promptly by disclosing the following to the public if
there are unusual movements in the price or volume of its traded securities is observed:
(a) Details of any matter or development of which it is aware that is or may be relevant to the unusual
movements, or
(b) A statement of the fact that it is not aware of any such matter or development.
It may be noted that PSX has observed that the price in the shares of TSML has increased substantially
during the period form March 16, 2023 to April 13, 2023.
Please note that in case of any material/price-sensitive information that is likely to market price/volume you
required to share the some to the Exchange for its onward dissemination to all market participants as
prescribed under the PSX Regulation 5.6.1
In view of the above, you are advised to furnish the reason and / or any material information in Company’s
knowledge which may have resulted in substantial increase in price in terms of the PSX Regulation 5.6.3, and
Section 97 of the Securities Act, 2015 at the earliest, through PUCARS for information of all market
participants.

Yours truly,

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Reverse Merger Chapter-12

CHAPTER
12

REVERSE MERGER

Page 315 CORPORATE LAW BY SIR IBRAHIM

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 Reverse Merger Chapter-12

Reverse Merger

Reason and Purpose:

A reverse merger is a merger in which a unlisted company becomes a public listed company by acquiring it.
"The process saves a private company from the complex, time-consuming process, and expensive regulatory
compliance of becoming a public company through acquisition of a public company as an investment,"

(d) "Listed Shell Company", shall mean any Listed Company, classified by the Exchange with reasons to
be recorded in writing, as a Listed Shell Company for the purposes of Reverse Merger on the basis of
erosion of its equity, no or nominal business operations in its principal line of business as per
Memorandum of Association or no or nominal assets;
"Operating Unlisted Company", shall mean an unlisted company currently in operation which is
intending to merge with a Listed Shell Company;
(I) "Surviving Company", shall mean the Listed Company survived pursuant to scheme of arrangement of
an Operating Unlisted Company with a Listed Shell Company approved by the relevant competent
authority.
For the time being, there is no requirement of minimum free float for listed companies under the law.
Here it is exclusively mentioned for reverse merger.
Example:
Paid-up Capital  500 Million of Rupees 10/each
5 Million Shares  Provided by law; or
Higher of 12.5
(500  10)  25%  12.5 Million Shares

5.22 REVERSE MERGER REGULATIONS:

5.22.1. The following clauses shall be applicable on the Listed Company in relation to Reverse Merger
transactions, for ensuring timely disclosure of information and compliance with all applicable
requirements of this Chapter.
5.22.2 Every Listed Company, in order to enable the Exchange to determine its status as Listed Shell
Company and assess applicability of the provisions prescribed in relation to Reverse Merger, shall
intimate the Exchange immediately upon approval by its board of directors to consider the proposal
received from Operating Unlisted Company for merger. The Listed Company shall also obtain from
the Operating Unlisted Company and submit to the Exchange, confirmation that the Operating
Unlisted Company has received the approval by the board of directors of the Listed Company to
initiate merger negotiations with the Operating Unlisted Company.
5.22.3 The Exchange may require the Listed Company to provide any additional information as deemed
appropriate, for determining the proposed transaction as a Reverse Merger. The Exchange shall
communicate in writing, within a maximum period of 15 days from the date of receipt of such
intimation, if the proposed transaction is a Reverse Merger or otherwise.
In case the Exchange confirms that the proposed transaction is a Reverse Merger, the Listed Shell
Company shall ensure compliance with all applicable requirements as provided for herein below.
5.22.4 The Listed Shell Company shall submit to the Exchange the information / documents as mentioned in
Appendix-II to this Chapter and give an undertaking on non-judicial stamp paper confirming that the
proposed Surviving Company shall fulfill the following conditions:
(a) The minimum paid-up capital shall not be less than Rs. 200 million;
(b) The minimum Free Float shall not be less than 25% of the issued share capital and 5 million
Free Float shares within one year from the date of (1)approval of the scheme of arrangement by
the competent authority;

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(c) The Promoters/ Sponsors/ Controlling Directors / Majority Shareholders are / were not also the
Promoters/ Sponsors/ Controlling Directors / Majority Shareholders in a:
i. Listed Company, which is in the Defaulters’ Segment; or
ii. Listed Company, which was delisted due to noncompliance of any applicable provision of
PSX Regulations within the past five years; or
iii. Corporate Brokerage House whose (2)TRE Certificate has been cancelled/forfeited by the
(3)
Exchange or any other stock exchange of Pakistan that existed prior to integration of
stock exchanges pursuant to Integration Order number 01/2016 dated January 11, 2016
issued by the Commission; or declared defaulter by the Exchange or any other stock
exchange of Pakistan that existed prior to January 11, 2016 or the NCCPL, due to
noncompliance Pakistan Stock Exchange Regulations Page 45 of 190 of any applicable
rules, regulations, notices, procedures, guidelines etc. but shall not include any TRE
Certificate surrendered voluntarily to the Exchange, if such TRE Certificate Holder does
not have any pending investor claims.
(d) It is not an associated company or a wholly owned company of any other Listed Company,
which is in the Defaulters’ Segment or trading in its shares is suspended due to violation/non-
compliance of laws.
(e) There are no overdue loan/payments to any financial institution against the CEO/Promoters/
Sponsors/ Directors/ Major Shareholders of the Surviving Company either in their individual
capacity or as CEO, Director, Partner or Owner in any Company / Firm / Sole Proprietorship;
(f) There are no overdue loan or payments to any financial institution against the Operating
Unlisted Company, its associated or group companies and undertakings;
(g) None of its Sponsors, Major Shareholders, Directors and Management, Associated Company or
undertaking has been declared to have been involved in any fraudulent activity by the
Commission, SBP or any other investigation agency or court
(h) None of the Sponsors, Major Shareholders, Directors and Management, Associated Company
or undertaking Entity of the Listed Shell Company has been declared involved in any fraudulent
activity by the Commission, SBP or any other investigation agency or court
(i) The shares of sponsors shall be inducted into CDS in freeze status for a period of not less than
three years and the sponsors shall not be allowed to sell their shares during this period;
(4)
(j) It shall ensure compliance with all requirements of these Regulations.
Provided that the condition (d), shall not apply to directors nominated by the Government or by
Financial Institutions as creditors.
5.22.5 The Listed Shell Company shall obtain confirmation from the Exchange that it has complied with the
requirements of this Clause and any other condition specified by the Exchange before seeking the
shareholders' approval for a scheme of Reverse Merger.
5.22.6 If a Listed Shell Company enters into a scheme of Reverse Merger without complying with any
requirement(s) of this Clause and any other specified condition, the Exchange shall place such
Company or the Surviving Company, as the case may be, in the Defaulters’ Segment and/or initiate
any other actions including suspension of trading in its shares or delisting as determined by the
Exchange.
5.22.7 Where the Exchange is satisfied that it is not practicable to comply with any requirement pertaining to
Reverse Merger as provided in the PSX Regulations, in a particular case or class of cases, the
Exchange may, for reasons to be recorded, relax such requirement subject to such condition(s) as it
may deem fit.

(1) < Scheme of arrangement for merger under section 279 to 292 of Companies Act, 2017 >
(2) < Trading Right Entitlement >
(3) (i.e. Karachi Stock Exchange / Lahore Stock Exchange)
(4) Associated Company, by way of cross directorship of a director which was nominated by the government or by financial
institution, is excluded here...

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15 December 2021

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road, Karachi

Board Meeting – Samin Textiles Limited ("SMTM or "the Company")

Dear Sir,

This is to inform you that a meeting of the Board of Directors of SMTM will be held on 23 December 2021 at
11:00 a.m. at 8.7-KM, Multan Road, Lahore, to consider, review, finalize and approve the scheme of
arrangement along with other ancillary matters, pertaining to the potential acquisition of certain assets,
liabilities, obligations, contracts and undertaking from Waves Singer Pakistan Limited ("WSPL") and merger /
amalgamation of the same with and into SMTM, against proposed consideration which may be in the form of
SMTM's shares to be issued to WSPL and/or shareholders of WSPL alongwith amount payble in cash, subject
to completion of necessary corporate, legal and regulatory formalities.
The Company has declared the "Closed Period" from 16 December 2021 to 23 December 2021 as required
under Clause 5.6.1 (d) of the Rule Book of Pakistan Stock Exchange Limited. Accordingly, no Director, CEO,
or Executive shall, directly / indirectly, deal in the shares of the Company in any manner during the Closed
Period.
You may please inform the TRE Certificate Holders of the Exchange accordingly.
Yours sincerely,

For and on behalf of

Samin Textiles Limited

Muhammad Tayyab
Company Secretary

Cc: The Securities and Exchange Commission of Pakistan, Islamabad

Lahore Head Office: 8.7-Km Multan Road, Opposite Mansoorah Lahore - 54790, Pakistan
PH: 042-35415421-5,042-35421502-4 UAN: +92 (42)111-31-32-33

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23 December 2021

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Disclosure of Material Information- Samin Textiles Limited (the "Company" or "SMTM")

Dear Sirs,

Under Section 96 and 131 of the Securities Act, 2015 (the "Act") and Clause 5.6.1(a) of the Rule Book of
Pakistan Stock Exchange Limited ("PSX"), it is informed that the Board of Directors held a meeting on 23
December, 2021 and following was discussed and approved:

The Directors approved the draft Scheme of Arrangement under the provisions of Sections 279 to 283 and
285 of the Companies Act, 2017 by and between the Company and Waves Singer Pakistan Limited
("WSPL"), laid before the Board of Directors of the Company ("Scheme") (subject to finalization of the
Scheme, obtaining all necessary shareholders', creditors' and regulatory approvals and the sanction of the
Scheme by the Honourable Lahore High Court, Lahore along with fulfilment of related legal formalities), in
terms of which inter alia;
(i) SMTM is to acquire home appliances business / undertaking of WSPL by way of separation / demerger
of the same from WSPL and its amalgamation with and into SMTM against proposed consideration as
below:
(a) 256,006,196 (Two Hundred Fifty-Six Million Six Thousand One Hundred Ninety-Six) new shares
of SMTM to be issued and allotted after proposed capital reduction of SMTM as explained in the
note 1 below:
i. 199,724,956 (One Hundred Ninety-Nine Million Seven Hundred Twenty-Four Thousand
Nine Hundred Fifty-Six) shares of SMTM to be issued and allotted to WSPL.
ii. 56,281,240 (Fifty-Six Million Two Hundred Eighty-One Thousand Two Hundred Forty)
shares of SMTM to be issued and allotted directly to the WSPL shareholders @ 20 shares
in SMTM for every 100 shares of WSPL upon implementation of the Scheme of
Arrangement. Refer to note 2 below:
(b) PKR 2,000,000,000 (Pak Rupees Two Billion Only) in cash shall be payable to WSPL; no
additional compensation shall be applicable against this amount if the said amount is settled by
SMTM within two years of the sanction of the Scheme. However, if the said amount is still wholly
or partially outstanding at the end of two years of the sanction of the Scheme then a profit / mark-
up shall be payable on the outstanding amount by SMTM to the Company on a quarterly basis in
arrears at such profit / mark-up rate as determined by the Board(s) of Directors of each of the
Company and SMTM at the relevant time, provided that such profit/mark-up rate shall not be less
than the rate prescribed under applicable laws.
Note 1: The issuance of new shares of SMTM under paragraphs (a) and (b) above will take place after
reduction of SMTM's outstanding share capital from every 225 shares to 100 shares i.e. Total paid up
26,728,000 (Twenty-Six Million Seven Hundred Twenty-Eight) SMTM Shares to 11,879,111 (Eleven
Million Eight Hundred Seventy-Nine Thousand One Hundred Eleven) SMTM shares.
Note 2: 20 SMTM shares directly issued to WSPL shareholders as above are equivalent to presently
traded 45 shares of SMTM prior to the proposed capital reduction.

Lahore Head Office: 8.7-Km Multan Road, Opposite Mansoorah Lahore - 54790, Pakistan
PH: 042 35415421 5,042 35421502 4 UAN: +92 (42)111 31 32 33

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(ii) The principle line of business of the SMTM is to be changed / altered to include manufacturing,
assembly and wholesale of home appliances and other light engineering products.
(iii) The name of SMTM will be changed from Samin Textiles Limited to Waves Home Appliances
Limited, subject to finalization and approval of the Scheme.
(iv) The Company's year-end will be changed to 31 December to be aligned with the year-end of
WSPL.
The Board of Directors approved the Scheme subject to finalization of the Scheme and any changes and
modifications as may be required by the shareholders of the merger parties and / or the Honourable Lahore
High Court, Lahore and such amendments as may be considered necessary without affecting the substance
thereof.
The Scheme will be circulated to the PSX and the shareholders in due course subject to directions / order of
the Honourable Lahore High Court, Lahore, and in accordance with applicable laws.
You may please inform the TREC holders accordingly.
Yours faithfully,

Company Secretary
Muhammad Tayyab

Cc:
Director / HOD
Surveillance, Supervision and Enforcement Department
Securities and Exchange Commission of Pakistan
NIC Building, 63 Jinnah Avenue
Blue Area, Islamabad.

Lahore Head Office: 8.7-Km Multan Road, Opposite Mansoorah Lahore - 54790, Pakistan
PH: 042-35415421-5,042-35421502-4 UAN: +92 (42)111-31-32-33

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22 June 2022

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road,
Karachi

Emergent Board Meeting (Other than Financial Results) - Samin Textiles Limited

Dear Sir,

This is to inform that an emergent meeting of Board of Directors of Samin Textiles Limited (SMTM or the
Company) will be held on Monday, 27 June 2022 at 10:30 AM, at 8.7 Km Multan Road, Opposite Mansoorah,
Lahore to consider and adopt the Order of the Lahore High Court, Lahore (LHC) on the sanction of Scheme of
Arrangement between Waves Singer Pakistan Limited (WSPL) and Samin Textiles Limited (SMTM) and to
discuss and formulate a plan to complete all actions on part of the Company in accordance with the Order of
LHC.
The Company has declared the "Closed Period" from Thursday, 23 June 2022 to Monday, 27 June 2022 (both
days inclusive) as required under relevant Clause of the Rule Book of PSX. Accordingly, no director, CEO, or
Executive shall directly/indirectly deal in the shares of the Company in any manner during the "Closed Period".
You may kindly inform the members of the exchange and TRE certificate holders accordingly.
Yours Sincerely,
For Samin Textiles Limited

Company Secretary
Muhammad Tayyab

Copy to:
Executive Director (Enforcement) SECP and all concerned.

Lahore Head Office: 8.7-Km Multan Road, Opposite Mansoorah Lahore - 54790, Pakistan
PH: 042-35415421-5,042-35421502-4 UAN: +92 (42)111-31-32-33

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 Reverse Merger Chapter-12

LANDMARK SPINNING INDUSTRIES LIMITED

28/10/2021
To,

The General Manager,

Pakistan Stock Exchange Limited,
Stock Exchange Building,
Stock Exchange Road,
Karachi

SUBJECT: DISCLOSURE OF MATERIAL INFORMATION

Dear Sir,

In accordance with Sections 96 and 131 of the Securities Act, 2015 and the relevant provisions of the Rule
Book of the Pakistan Stock Exchange Limited, we hereby convey the following:
At a meeting of the Board of Directors of Landmark Spinning Industries Limited (hereinafter referred to as the
"Company") held at Karachi at 1st Floor, Cotton Exchange Building, I.I. Chundriger Road, Karachi on
28/10/2021 at the registered office of the Company, the Board of Directors authorized the Company and its
management to explore the feasibility of a potential merge of the Company with and into M/s. Liven
Pharmaceuticals (Pvt) Ltd,. ("OC") ("Proposed Arrangement"), including but not limited to, entering into
discussions with OC and its management, formulating and proposing the structure and terms with respect to
the same, along with carrying out and finalizing the structure and terms with respect to the same, along with
carrying out and finalizing the feasibility/valuations in respect thereof (if required), and the draft documents
pertaining to the Proposed Arrangement, to be presented to the Board for their consideration. Furthermore, the
Chief Executive Officer has been authorized to appoint legal, financial and such other advisors and
consultants as may be required for the purposes of the above.

You may please inform the TREC holders accordingly.

Yours Faithfully,

Cc: M/s. Liven Pharmaceuticals (Pvt) Ltd,

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PAKISTAN STOCK EXCHANGE LIMITED

Stock Exchange Building, Exchange Road, Karachi – 74000, Pakistan.
UAN: 111-001-122 Fax: 32410825
Website: www.psx.com.pk Email: info@psx.com.pk

Ref: No. PSX/ C-857-2210 November 09, 2021

The Company Secretary

Landmark Spinning Industries Limited
1st Floor, Cotton Exchange Building
I.I. Chundrigar Road
Karachi

Subject: Intimation in respect of entering into discussion for Reverse Merger

Dear Sir,

Reference to your letter dated October 29, 2021 conveying the decision of the Board of Directors of your
Company to explore the feasibility of a potential merger of Liven Pharmaceuticals (Pvt.) Limited, an Operating
Unlisted Company with and into Landmark Spinning Industries Limited.
On review of the Audited Accounts of Landmark Spinning Industries Limited for the year ended June 30,
2021, it has been observed that the Landmark Spinning Industries Limited is a Listed Shell Company. The
proposed merger of Liven Pharmaceuticals (Pvt.) Limited, an Operating Unlisted Company, with and into
Landmark Spinning Industries Limited shall constitute a "Reverse Merger Transaction" as per PSX
Regulations.
In view of above, the Company will be required to comply with the requirements of PSX Regulation No. 5.22
pertaining to Reverse Merger and will also be required to submit documents as stated in Appendex-2 of these
Regulations.
Sincerely,

Regulatory Affairs Division | UAN:+9221 111-00-11-22 | E-mail: info@psx.com.pk | Web: psx.com.pk

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LANDMARK SPINNING INDUSTRIES LIMITED

13.04.2022
The General Manager,
Pakistan Stock Exchange Limited,
Stock Exchange Building,
Stock Exchange Building,
Karachi - 74000,
Pakistan.

Subject: DISCLOSURE OF MATERIAL INFORMATION

Dear Sir,

In accordance with Section 96 and 131 of the Securities Act, 2015 read with Clause 5.6.1(a) of the Rule Book
of the Pakistan Stock Exchange Limited ("PSX"), we hereby convey the following: At a meeting of the Board
of Directors of M/s. Landmark Spinning Industries Limited. ("Company") held at he registered office of the
Company - 1st Floor, Cotton Exchange Building, I.I. Chundrigar Road, Karachi on 13th April, 2022 in which
the Board of Directors approved the draft Scheme of Arrangement under Section 279 to 282 and Section 285
of the Companies Act, 2017 laid before the Board of Directors of the Company ("Scheme"), subject to
obtaining all necessary shareholders', creditors' and regulatory approvals, and the sanction of the Scheme by
the High Court of Sindh along with fulfilment of related legal formalities.

In terms of the Scheme, inter alia:

I. M/s. LIVEN PHARMACEUTICALS (PRIVATE) LIMITED ("LPL") shall be merged with and into the
Company, against which 66,666,667 (Sixty Six Million, Sixty Six Thousand and Six Hundred and Sixty
Seven) ordinary shares of the Company, having a face value of PKR 10/- (Pak Rupees Ten) each, shall
be allotted and issued by the Company to the shareholders of LPL, as fully paid up, on the basis of a
swap ratio of approximately 1666.666675 shares of the Company for every 1 (one) share of LPL held
by each of the shareholders of LPL, in accordance with the provisions of the Scheme.

II. The authorized capital of the Company, upon sanction of the Scheme, shall stand automatically
increased from PKR 150,000,000/- (Pak Rupees One Hundred and Fifty Million) to PKR
1,000,000,000/- (Pak Rupees One Billion), divided into 100,000,000 (One Hundred Million) shares of
PKR 10/- (Pak Rupees Ten) each by merger of the existing authorized share capital of LPL and the
Company.

III. Upon sanction of the Scheme, the name of the surviving entity i.e. the Company shall be changed to
"Liven Pharma Limited".

IV. The "Loan from directors" appearing in the books of LPL shall be converted at a par value of Rs.10/-
resulting in further issuance of shares to such shareholders of LPL in the Company.

V. The Object Clause of the Memorandum of Association of the Company shall be replaced with an object
clause which caters to the principal line of business of the merged entity i.e. carrying on the business of
manufacturing of pharmaceuticals and other allied products.

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LANDMARK SPINNING INDUSTRIES LIMITED

VI. That the registered office of the surviving entity i.e. Company shall upon sanction of the Scheme be
changed from 1st Floor, Cotton Exchange Building, I.I Chundrigar Road, Karachi to 138 E, Sukh
Chyan Garden, Canal Road, Lahore, Punjab and accordingly Clause II of the Memorandum of
Association of the Company shall upon sanction of the Scheme shall be amended to replace the words
"Province of Sindh" with the words "Province of Punjab".

VII. Subsequent to the issuance of shares to the existing shareholders of LPL as per Swap Ratio and
conversion of "Directors Loan" as mentioned in Clause 1 & IV above, the majority shareholders of the
LMSM shall sell their entire shareholding to the existing shareholders of LPL against mutually agreed
sale consideration.

The Board of Directors approved the draft of the Scheme, subject to any changes and modifications as may be
required by the shareholders of the Company or the Honourable High Court of Sindh and such amendments as
may be considered necessary without affecting the substance thereof.

Furthermore, the Board approved the mechanism for share swap as proposed by the Board of Directors of the
LPL, who are also the majority shareholders of the LPL considering the one proposed by the M/s. HLB Ijaz
Tabussum & Company, Chartered Accountants, which, inter alia, contains the valuations/calculations of the
swap ratios and other related and ancillary valuation reports so issued and made part of the Scheme.

All of the above, as applicable, along with extracts of the Resolution passed by the Board of Directors in the
aforesaid meeting shall be shared with the PSX in due course, after fulfillment of all legal formalities.

The Scheme will be circulated to the PSX and the shareholders in due course subject to directions/order of the
Honourable High Court of Sindh.

Yours Truly,
By order of the Board
Landmark Spinning Industries Limited

The Commissioner, Enforcement & Monitoring Division, Securities & Exchange Commission of Pakistan,
NIC Building, 63-Jinnah Avenue, Islamabad.

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LANDMARK SPINNING INDUSTRIES LIMITED

NOTICE OF EXTRA ORDINARY GENERAL MEETING

In the matter of: JCM. No. 11/2022

M/s Landmark Spinning Industries Limited

AND

M/S. Liven Pharmaceuticals (Private) Limited

Notice is hereby given that pursuant to the Order dated 20th May 2022 of the High Court of Sindh at
Karachi passed in Judicial Companies Miscellaneous No 11 or 2022 a meeting of the members of
M/s. Landmark Spinning Industries Limited, will be held on Monday 27th June 2022 at 03:00 p.m. at
registered office 1st Floor Cotton Exchange Building. I.I. Chundriger Road, Karachi to consider and if
thought fit approve, adopt and agree to the Scheme of Arrangement proposed by the Board of
Directors.

One copy of the statement as required under S.134 (3) of the Companies Act, 2017 setting out in
detail the special business to be conducted in the Extra Ordinary General Meeting and the
statement under S. 281 of the Companies Act, 2017 explaining the effects of the Scheme are being
provided with the notice of the meeting sent to the members. Further copies of such documents may
be obtained upon application from the registered office of the Company at 1st Floor Cotton
Exchange Building. I.I. Chundriger Road, Karachi during working hours on a day prior to the
meeting.

Mr. Amin Hashwani has been appointed as the chairman of the meeting and will be subject to the
subsequent approval of the Honourable Court.

Please note that the Scheme will be subject to the subsequent approval of the Honourable Court

Dated: 31/05/2022 BY ORDER OF THE BOARD

Place; Karachi Muhammad Aslam Ali

Company Secretary,

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Invitation of Deposit Chapter-13

CHAPTER
13

INVITATION OF DEPOSIT

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 Invitation of Deposit Chapter-13

Invitation of Deposits
84. Prohibition on acceptance of deposits from public.—
(1) On and after the commencement of this Act, no company shall invite, accept or renew deposits from the
public:

Prohibition:
It is not allowed because accepting deposits from public and onward investment and lending is the ordinary course
of business of the bank. If this will be allowed to the company, then how the interest of the bank will be secured.

Provided that nothing in this sub-section shall apply to a banking company and such other company or
class of companies or such deposits as the Commission may, notify in this behalf.
Explanation.— For the purposes of this section, “deposit” means any deposit of money with, and
includes any amount borrowed by, a company, but shall not include a loan raised by issue of
debentures or a loan obtained from a banking company or financial institution or an advance against
sale of goods or provision of services in the ordinary course of business.

These are exceptions.

(2) Where a company accepts or invites, or allows or causes any other person to accept or invite on its
behalf, any deposit, the company shall be punishable—
(a) where such contravention relates to the acceptance of any deposit, with penalty which shall not
be less than the amount of the deposit so accepted; and
(b) where such contravention relates to the invitation for any deposit, shall be liable to a penalty of
level 3 on the standard scale.
(3) In addition to the fine on the company under sub-section (2), every officer of the company which is in
default shall be punishable with imprisonment for a term which may extend to two years and shall also
be liable to fine which may extend to five million rupees.

Severe Penalty
Reason is only to protect the interest of those that has normal course of business doing this.

1) Amount raised by way of issue of debentures

2) Loan obtained from banking company
3) Loan obtained from Financial Institutions
4) Advance against sale of goods or provision of services in the ordinary course of business.

Question

What about amount received from employee in connection with employment contract??

It will also fall under exception as this was exclusively covered while covering Section 218 and Employees
Provident Fund Regulations.

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Invitation of Deposit Chapter-13

Practical Example

DAWN
To days Paper September 10, 2023

Anatomy of a Ponzi Scheme

Published August 17, 2023

KARACHI: Located at a stone’s throw from the public beach in Clifton, the offices of For U Real
Traders Ltd appeared swarmed with prospective clients looking to double their savings in a short
time.
Beyond the reception area adorned with a portrait of the Quaid-i-Azam and many works of Islamic calligraphy
was a bullpen where a large team of 20-something women worked the phone lines non-stop. Next to it was
the meeting room where a “sale manager” would pitch the get-rich-quick scheme to the clients who showed
serious interest in the first few phone calls.
“If you deposit Rs100,000 today, you’ll get eight to 10 per cent profit every month. You can withdraw the initial
Rs100,000 a year later or reinvest it,” I was told.
In simpler words, the “investment scheme” promises a nominal rate of profit that ranges from 96pc to 120pc a
year. For context, the annual profit rate on a typical savings account offered by conventional banks is hovering
around 22pc these days. The apparently Ponzi scheme is elaborate in the sense that there’s a ready answer
to every obvious question.
Are you registered with the Securities and Exchange Commission of Pakistan (SECP)? “Of course, we are.
Here’s the proof of company registration. Feel free to look up our name and registration number on the
SECP’s website.”
Are you registered with the Federal Board of Revenue? “Yes, here’s our national tax number.” How do you
make so much money to pay up to 10pc profit every month? “We run a large cattle farm and supply milk to
Nestle. Here’s the copy of our formal agreement with Nestle.”
Where’s your cattle farm? “We’ve got hundreds of cows in our farm located in Dunyapur tehsil of Lodhran.
Look it up on Google.”
The company runs offices in Karachi and Lahore. The number of clients is north of 3,000, according to the
sales representative. There’s no readily available accounting of total deposits, she said. But her estimate is
that the company has collected more than Rs250 million since March 2022, which is when For U Real Traders
Ltd registered with the SECP and FBR, according to the documents provided by the company. So why are the
company’s dealings suspicious if it’s registered with the regulator, pays taxes, runs a legit farm business and
maintains a valid supplier’s agreement with probably the largest seller of milk in the country?
The simple answer is that no entity, whether registered or unregistered, can accept investments and deposits
from the general public and promise profits until and unless it receives a separate, stand-alone license from
the SECP or the State Bank of Pakistan (SBP). In other words, registering a company with the SECP or the
FBR doesn’t allow anyone to collect funds from people.
The spokesperson for the SECP told Dawn that For U Real Traders — a sole proprietorship owned by one
Muhammad Sajid Hussain — is not allowed to offer such schemes. “Therefore, people should refrain from
making investments with them,” he said.
Following a query by Dawn on the status of For U Real Traders, the apex regulator of the corporate sector
tried taking up the matter with the company and its sponsors. “However, no response was received as the
company and (its) sponsors were not traceable,” the spokesperson said, adding that the regulator has initiated
proceedings for striking the name of the company from its register of companies.
The company’s name has also been added to the “List of Companies Suspected to be Engaged in
Unauthorised Activities” on the SECP website to caution the general public.
On its part, Nestle Pakistan Ltd said the food company has “hundreds of suppliers” in its value chain but none
of them is authorised to use the Nestle name, logo or any of its brands in its communication. “We are looking
into the matter and will initiate action if anyone is found to be in violation of our contractual terms,” he said.

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 Invitation of Deposit Chapter-13

Duck Test
Experts say people should be suspicious of every financial proposition that sounds too good to be true. In
figurative expression, if something looks like a duck, swims like a duck and quacks like a duck, then it
probably is a duck.
“No legitimate and sustainable investment scheme can offer an annual rate of profit that’s 15-20pc higher than
the risk-free interest rate,” said independent economist Ammar H. Khan while speaking to Dawn.
In other words, if the key interest rate is 22pc, the maximum rate of profit offered by a genuine business on a
viable basis can’t possibly exceed 42pc as a rule of thumb. “Be suspicious if someone promises you
otherwise,” he said.
Published in Dawn, August 17th, 2023
Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and
tech from Pakistan and across the world.

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Shares Basic Concept Chapter-14

CHAPTER
14

SHARES CONCEPT

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 Shares Basic Concept Chapter-14

Shares Basic Concept

Some Basic concepts of Shares:
60. Numbering of shares.—
Every share in a company having a share capital shall be (1)distinguished by its (2)distinctive number:
Provided that nothing in this section shall apply to a share held by a person whose name is entered as
(3)
holder of beneficial interest in such share in the records of a (4)central depository system.

(1) Each share certificate shall be unique from another one in respect of unique number.

(2) Reason = where any share certificate is lost, it is addressed by its distinctive number If no distinctive number, then how to
address a specific share certificate which is lost.

(3) Holder = Central Depository Company

But Beneficial Interest (Owner) = Shareholder

(4) Section is talking about physical shares.

60A. Prohibition on issuance of bearer shares or bearer share warrants, etc.-

(1) Notwithstanding anything contained in the National Investment (Unit) Trust Ordinance, 1965 (VII of
1965) or any other law for the time being in force, no company shall allot, issue, sell, transfer or assign
any bearer shares, bearer share warrants or any other equity or debt security of a bearer nature,(5) by
whatever name called, and any allotment, issue, sale, transfer, assignment or other disposition of any
such bearer shares or bearer share warrants or any other equity or debt security of a bearer nature,
shall be void.
Explanation.- For the purpose of this section, the term "bearer shares or bearer share warrants"
means a negotiable instrument that accords ownership or control in a company to the person who
(6)
possess such instrument and includes any other equity or (7)debt security of a bearer nature.
(2) All existing bearer shares or bearer share warrants, if any, shall either be registered or cancelled, in
such (8)manner and within such period, as may be (8)specified.
(3) Any contravention or default in complying with the requirements of this section shall be liable in case of-
(a) a director or officer of the company or any other person, to a penalty which may extend to one
million rupees; and
(b) the company, to a penalty which may extend to ten million rupees.

Bearer shares = Such share certificates which is open to every one means whichever is holding it shall be
considered as the owner of it.
Example: Prize Bonds

(5) Equity Instrument as well as debt instrument (both are covered here)

(6) Holder

(7) e.g. Sukuks

(8) Companies General Provision and Forms Regulations, 2018

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[This section has been inserted by the Companies (Amendment) Act, 2020 dated 26th August, 2020]

16A. (9)Procedure for registration or cancellation of 10securities of bearer nature

(1) Where a company has issued any equity or debt security of a bearer nature, by whatever name called,
it shall, within three months of (11)coming into force of section 60A of the Act, publish a notice as per
Form 40, in at least one daily English and Urdu language national newspaper having wide circulation in
the province in which the registered office of the company is situated, requiring the holder(s) to
surrender such securities to the company for their registration in the name of the holder(s).
(2) In reply to the notice, every person who is the holder of any security of a bearer nature mentioned in
sub-regulation (1) shall, within three months of the publication of such notice, surrender the same to the
company for its registration.
(3) Where any security of a bearer nature is surrendered for registration, the company after making such
enquiry as deemed appropriate, shall enter the name of the holder in the register of members or the
register of debenture holders, as the case may be, in respect of the securities represented by the
instrument in accordance with the terms of issue thereof.
(4) Where the holder of any security of a bearer nature (12)fails to surrender the same to the company within
the period specified hereinabove, the company shall, not later than three months from the deadline for
surrender of such securities, apply to the court for an order for cancellation of the security with effect
from the date of the order, pursuant to the provisions of (13)section 89 of the Act, and shall also publish a
notice in at least one daily English and Urdu language national newspaper having wide circulation in the
province in which the registered office of the company is situated, within fourteen days of such
application, of the fact that an application has been made to the court under this provision.
(5) Any security of a bearer nature, which has been surrendered pursuant to sub-regulation (3) and
registered or cancelled by the company, shall be duly accounted for in the (14)next annual return to be
filed by the company.
(6) A company which has issued securities of a bearer nature prior to the coming into force of this provision
shall prepare and maintain a register of the number of such securities, as per Form 41, containing
particulars of holders of such securities, the date of their issue, surrender and cancellation, if any, under
sub-regulation (2) or sub-regulation (4).

(9) Companies General Provision and Forms Regulations, 2018 "Regulation 16A"

(10) Both are included as mentioned in section above

(11) Date = 26th August, 2020

(12) Within a period of 3 months

(13) Reduction of share capital

(14) < It must be reflected in Form A >

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 Shares Basic Concept Chapter-14

Practical Example

FORM 40
THE COMPANIES ACT, 2017
THE COMPANIES (GENERAL PROVISIONS AND FORMS) REGULATIONS, 2018
[Section 60A and Regulation 16A(1)]

PUBLIC NOTICE TO HOLDERS OF SECURITIES OF BEARER NATURE ISSUED BY A COMPANY

(Otsuka Pakistan Limited)

December 30, 2020

Take Notice that by virtue of section 60A of the Companies Act 2017, no company shall allot, issue, sell,
transfer or assign any bearer share, bearer share warrant or any other equity or debt security of a bearer
nature, by whatever name called.

Sub-section 2 of section 60A of the Act requires that all existing bearer shares or bearer share warrants if any,
shall either be registered or cancelled.

Sub-regulation (2) of regulation 16A of the Regulations requires every holder of any securities of a bearer
nature issued by Otsuka Pakistan Limited to surrender it to the company for registration.

Accordingly, every person who is a holder of such securities is advised to surrender the securities of a bearer
nature issued by Otsuka Pakistan Limited at its' registered office located at 30-B, SMCHS, Karachi-74400,
Pakistan, for registration, before the expiration of three months of this notice i.e. March 31, 2021.

It is, therefore, in the interest of every bearer of such securities to present the securities for registration within
the stipulated time period.

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61. Nature of shares or other securities.—

The shares or other securities of any member in a company shall be movable property transferable(15) in the
manner provided by the articles of the company.

(15) We have already covered transfer section in our earlier studies.

62. Shares certificate to be evidence.—

(1) A certificate, if issued in (16)physical form under signature of (17)authorized officer of the company as my
be specified or issued in book-entry form, specifying the shares held by any person or shares held in
central depository system shall be prima facie evidence of the title of the person to such shares.
(2) Notwithstanding anything contained in the articles of a company, (18)the manner of issue of a certificate
of shares, the form of such certificate and other matters shall be such as may be specified.

(16) Other than listed companies

(17) CDC
(18) < Articles of the company is overruled here >

TITLE

If Physical Shares If Shares in Book Entry Form

<Share Certificate> (CDC Statement)

1

70. Return as to allotments.—

(1) Whenever a company having a share capital makes any allotment of(19) its shares, the company shall,
within forty-five days thereafter-
(a) file with the registrar a return of the allotment, stating the number and nominal amount of the
shares comprised in the allotment and (20)such particulars as may be specified, of each allottee,
and the amount paid on each share; and
(b) in the case of shares allotted as paid up in cash, submit along with the return of allotment, a
report from its auditor to the effect that the amount of consideration has been received in full by
the company and shares have been issued to each allottee:
Provided that in case, the appointment of auditor is not mandatory by a company, the report for
the purpose shall be obtained from a practicing chartered accountant or a cost and management
accountant;
(c) in the case of shares allotted as paid up otherwise than in cash, submit along with the return of
allotment, a copy of the document evidencing the transfer of non-cash asset to the company, or
a copy of the contract for technical and other services, intellectual property or other
consideration, along with copy of the valuation report (verified in the specified manner) for
registration in respect of which that allotment was made;
(d) file with the registrar—
(i) in the case of bonus shares, a return stating the number and nominal amount of such
shares comprised in the allotment and the particulars of allottees together with a copy of
the resolution authorising the issue of such shares;
(ii) in the case of issue of shares at a discount, a copy of the resolution passed by the
company authorising such issue and where the maximum rate of discount exceeds ten per
cent, a copy of the order of the Commission permitting the issue at the higher percentage.

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Explanation.— Shares shall not be deemed to have been paid for in cash except to the extent
that the company (21)shall actually have received cash therefor at the time of, or subsequent to,
the agreement to issue the shares, and where shares are issued to a person who has sold or
agreed to sell property or rendered or agreed to render services to the company, or to persons
nominated by him, the amount of any payment made for the property or services shall be
deducted from the amount of any cash payment made for the shares and only the balance, if
any, shall be treated as having been paid in cash for such shares, notwithstanding any bill of
exchange or cheques or other securities for money.
(2) If the registrar is satisfied that in the circumstances of any particular case the period of forty five days
specified in sub-sections (1) for compliance with the requirements of this section is inadequate, he may
extend that period as he thinks fit, and, if he does so, the provisions of sub-sections (1) shall have effect
in that particular case as if for the said period of forty five days the extended period allowed by the
registrar were substituted.
(3) No return of allotment shall be required to be filed for the shares taken by the subscribers to the
memorandum on the formation of the company.(22)
(4) Any violation of this section shall be an offence liable to a penalty of level 1 on the standard scale.
(5) This section shall apply (23)mutatis mutandis to shares which are allotted or issued or deemed to have
been issued to a scheduled bank or a financial institution in pursuance of any obligation of a company
to issue shares to such scheduled bank or financial institution:(24)
Provided that where default is made by a company in filing a return of allotment in respect of the shares
referred to in this sub-section, the scheduled bank or the financial institution to whom shares have been
allotted or issued or deemed to have been issued may file a return of allotment in respect of such
shares with the registrar together with such documents as may be specified by the Commission in this
behalf, and such return of allotment shall be deemed to have been filed by the company itself and the
scheduled bank the financial institution shall be entitled to recover from the company the amount of any
(25)
fee properly paid by it to the registrar in respect of the return.

(19) Allotment:
(a) There will be change in company's issued and paid-up capital.
(b) There will be change in the financial statements as equity will be changed.
(20) Specified in Regulation 12 of Companies general provision and forms regulation, 2018
(21) “Cash shall be received”
(22) This section shall not be applied on 1st allotment (i.e. when promoters were subscribed to shares for formation of the company)
(23) With necessary changes
(24) If company has defaulted in repayment of a loan or interest to a lender and there constitutes a clause in loan agreement that in
case of default this loan shall be converted into shares of the company.
(25) Very Important here it is written fee paid to registrar. This means that only fee that is paid to registrar shall be claimed from the
company. However, if lender has engaged any legal advisor for this matter, then fee paid to such legal advisor shall not be
entitled to be claimable.

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(26)
12. Return of allotments of shares.—
(1) Subject to the provisions of section (27)70 and (28)83 of the Act, a company having a share capital shall
file a return of allotment of shares, with the registrar as per Form 3 within forty-five days after the date
of allotment.
(2) Where shares are allotted against consideration otherwise than in cash as per requirements of clause
(c) of sub-section (1) of section 70 of the Act, the documents which are to be filed with the registrar
along with the return of allotment, shall be verified in the following manner, namely—
(i) by an affidavit of an authorized officer that these are true copies;
(ii) by certification of the public officer having custody of the original document, where applicable:
Provided that the company shall comply with the requirements of the Companies (Issue of
Capital) Rules, 1996 and any other relevant rules or regulations issued by the Federal
Government or the Commission, as the case may be.

(26) This section will be further explained after further issue of shares and public offering.
(27) Companies (General Provisions and forms) Regulations, 2018.
(28) Further issue of shares

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Practical Example of Form 3

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 Shares Basic Concept Chapter-14

Enclosures:
1. In case shares are allotted against cash consideration, a report from Auditor of the Company in terms of
section 70(1)(b) of the Act as per Appendix attached herewith, to the effect that the amount of
consideration has been received in full.
2. In case shares are allotted against consideration otherwise than in cash, a copy of the contract in writing
constituting the title of the allottee to the allotment together with a contract of sale, or for services or
other consideration in respect of which that allotment was made, such contract being duly stamped.
3. In case bonus shares are issued, copies of the resolution of Board of Directors /members authorizing the
issue of such shares.
4. In case the shares are issued at discount, a copy of the special resolution passed by the members
authorizing such issue and where the maximum rate of discount exceeds limits specified in the Act, a
copy of the order of the Commission permitting the issue at the higher percentage.
5. In case of allotment of shares in consequence of the exercise of the option for conversion in terms of an
agreement for participation term certificates, term finance certificates, redeemable capital, musharika or
hire-purchase shall be reported in Section-B and copies of the relevant documents submitted with the
return.
6. Any other document, certificate, report etc required under any regulation pertaining to issuance of
shares.

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Public Offering - Securities Act, 2015 Chapter-15

CHAPTER
15

PUBLIC OFFERING -
SECURITIES ACT, 2015

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 Public Offering - Securities Act, 2015 Chapter-15

< Companies Act, 2017 Section Governing Prospectus >

Public Offering – Securities Act, 2015 Portion

57. Prospectus.—
(1) No prospectus shall be issued by or on (1)behalf of a company unless on or before the date of its
publication, a copy thereof signed by every person who is named therein as a director or (2)proposed
director of the company has been filed with the registrar.
(2) In case of any contravention of this section, the company and every person who is a party to the issue,
publication or circulation of the prospectus shall be liable to a penalty not exceeding of level 2 on the
standard scale.

< Now moving towards Securities Act, 2015 >

87. Offer of (3)securities.—

(1) This Part applies to offer of securities other than Government debt securities.(4)
(2) Subject to the provisions of this Part, no person shall make a public offer of securities unless the
(5)
issuer or (5)offeror of the securities has submitted for approval to the Commission, and the
Commission has approved prospectus.
(3) No person shall make a public offer of securities if such person or its directors, sponsors or substantial
shareholders have been holding the office of the directors, or have been sponsors or substantial
shareholders in any company, which—
(a) had been declared defaulter by the securities exchange; or
(b) whose TRE certificate has been cancelled or forfeited by the securities exchange; or
(c) which has been de-listed by a securities exchange due to non-compliance of its regulations:
Provided that the Commission may grant relaxation upon reasons to be recorded, and
rectification of cause leading to such de-listing.

(1) It is talking about offeror - Substantial Shareholder which is selling its shares to public through Pakistan Stock Exchange (PSX).
(2) As per law, there are minimum 3 directors requirement for unlisted company and there are minimum 7 directors requirement for
listed company. In this case, Unlisted will specify the name of proposed director in prospectus and it is also signed by that
proposed director.

(3) Equity Securities (Shares) or Debt Securities (Sukuks etc.)

(4) Federal Government Debt Securities: Pakistan Investment Bonds, Market Treasury Bills

(5) Issuer – Company

Offeror – Substantial Shareholder selling his/her share to public via PSX

Definition

(lxii) “substantial shareholder”, in relation to a company, means a person who has an interest in shares of a company

(a) the nominal value of which is equal to or more than ten per cent of the issued share capital of the company; or

(b) which enables the person to exercise or control the exercise of ten per cent or more of the voting power at a
general meeting of the company;

(xxxvi) “offeror” means any person or entity holding, directly or indirectly, such number of securities as may be prescribed and
offers such securities for sale to the public or invites any other person to make subscription for such an offer and includes
an issuer;

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Example:

Issuer Company A Eligibility Requirement for

Public Offer by Company A

Its directors

Company A Sponsors

Substantial Shareholders

These 3 persons are sponsors

Holding the office of director or substantial shareholders in
OR OR
in any other company any other company

Company B Company C

Note:
Company A, B and C all three companies are considered for below tests:
• These companies (A, B and C) shall not be declared defaulter by securities exchange.
• If any of these companies are brokerage house, these trading right entitlement shall not be cancelled or
forfeited by securities exchange.
• Which these companies shall not be delisted by securities exchange due to non compliance of PSX rule
book.
Provided that, SECP may grant relaxation upon reason to be recorded and rectification of cause
leading to such delisting.
(4) Sub-section (2) shall not apply—
(a) to securities offered by the State Bank of Pakistan;
(b) where the securities are offered in connection with a private offering or private placement; and
(c) issue of shares of a subsidiary to the members of a listed holding company by way of specie
dividend or any other distribution in the prescribed manner.
(d) where the securities are offered by the issuer to—
(i) members or employees of the issuer; or
(ii) members of the families of any such members or employees; and
(e) where the securities are shares and are offered as bonus shares to any or all of the members of
the issuer;(6)
(5) A prospectus approved by the Commission shall be valid for a period of sixty days from the date of
such approval or for a longer period approved by the Commission in case of shelf registration, provided
that the supplement to the prospectus for each offering shall contain updated disclosures:
Provided that the time period of sixty days provided for approval of prospectus may be extended by the
Commission by reasons to be recorded in writing.

(6) (To be discussed when covering PSX Rule Book)

(Right Issue or Employee Share Scheme – To be covered with section 83 and further issue)

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<Difference Between Prospectus and Shelf Prospectus>

"Prospectus" means any document described or issued as a prospectus and includes any document, notice,
circular, material, advertisement, offer for sale document, publication or other invitation offering to the public
(or any section of the public) or Inviting offers from the public for the subscription or purchase of any
securities of a company body corporate or entity, [other than deposits invited by a bank and certificate
of investments and certificate of deposits issued by nonbanking finance companies.]
"Shelf Registration" means an arrangement that allows a single offering document allowing companies to
make multiple offerings as disclosed in the offering document within a prescribed time and subject to
prescribed conditions.

Time Period
Prospectus Shelf Registration

Single offering document but

One time multiple offering
single offering Prospectus Shelf Registration
document
Example

One Time Company want to invest in building

and the project is for 2 years. Valid for a Valid for
Period of 60 Longer a
Offering Total Cost = 200 million Days Period
Rs. 200 million

Break-up is as follows:- = Total Issue Size

Q1 of Year1 = 25
Q2 of year1 = 20 Extended by Supplement
Q3 of year1 = 30 Shelf registration commission by to
Q4 of year1 = 25 issue & disclosed reasons to be prospectus
Q1 of year2 = 25 in it regarding this recorded in writing
Q2 of year2 = 15 offering
Issued in
Q3 of year2 = 10 each
Q4 of year2 = 50 trenches
200

When offering amount from public at each

These are known as trenches quarter as disclosed in shelf registration

(6) The Commission shall not be liable to any action in damages suffered as a result of any prospectus
approved by the Commission.(7)
(8)
(7) A person who, in connection with a public offer of securities, makes a false or fictitious application,
commits an offence.
(8) The Commission may, where it (9)considers it appropriate, forfeit any or all of the money paid or payable
in respect of an offering application under sub-section (7) after providing the applicant a reasonable
opportunity of being heard.

(7) Crime
(8) Surrender
(9) Company

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88. Approval, issue, circulation and publication of prospectus.—

(1) No person shall issue, circulate and publish prospectus (10)including a shelf-prospectus or supplement
to the prospectus until it has been approved by the Commission which approval may be subject to
such conditions or restrictions as the Commission considers necessary.
(2) The issuer or the offeror, as the case may be, shall, not less than twenty one days before the proposed
date of publication of the prospectus, submit a copy to the Commission for approval.(11)
(3) Where a public offer of securities is to be made in Pakistan the issuer or offeror, as the case may be,
shall publish the prospectus in full text or in (12)such abridged form as may be prescribe, at least in one
Urdu and one English daily newspaper.
(4) The prospectus shall not be published in the newspapers less than seven days or more than thirty days
before the commencement of the public subscription.

Commencement of Public Subscription

30 Days Before 7 Days Before

Time period of Publication of the Newspaper

(5) The issuer or the offerer, as the case may be, shall make available (13)sufficient number of copies of the
prospectus approved by the Commission under subsection (1), free of charge, from the date of its
publication in the newspapers till the closing of the subscription at the registered office of the issuer,
with all the securities exchanges of the country, with all the bankers to the issue, the concerned share
registrar, the concerned ballotter and the concerned credit rating agency, if any.
(6) The prospectus in full text and the shares subscription form shall be uploaded on the website of the
issuer and shall remain there from the date of its publication in the newspapers till the closing of the
subscription.
(7) No person shall issue, circulate, publish, telecast or broadcast without the prior written approval of the
Commission, an advertisement, other than a prospectus, announcing a public offer of securities for
which a prospectus is required under this Part unless a prospectus has been published and the
advertisement gives an address in Pakistan from which it can be obtained.

Advertisement

Announcing a public offer of securities

for which prospectus is required

Not allowed

Unles
s

Prospectus has bee issued and advertisement

Prior written approved and gives an address in Pakistan from which it can
of commission
be abstained

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Example:
Company A has entered into an agreement with PIA that in each of its boarding pass, an advertisement
in relation to public offering shall be printed, this is legal in eyes of law provided that:
• Written approved of commission
• Prospectus in already published
• Addressed full from prospectus from which it can be obtained
(8) The issuer or offeror, as the case may be, shall not, at any time, vary the terms of the clauses stipulated
in its prospectus except subject to the approval of the Commission.
(9) Where an issuer or the offerer, as the case may be, can issue, circulate and publish supplement to the
prospectus inviting the general public for subscription of the security(ies) earlier offered to the public
through shelf-prospectus, provided that—
(a) it has obtained prior written approval of the Commission for its issue, circulation and publication;
(b) the last supplement should be published within such time period to be prescribed by the
Commission; and
(c) the aggregate amount of the offer or issue floated in tranches should not exceed the total issue
size as mentioned in the shelf-prospectus.
(10) A copy of each supplement to the prospectus shall be filed with the registrar on or before the date of its
issue, circulation or publication.
(11) A supplement to the prospectus shall contain such information as may be prescribed by the
Commission and it shall be published in atleast all those newspapers in which the shelf-prospectus has
been published.
(12) In case of any misstatement or omission of material information from the supplement to the prospectus,
sections 92 and 93 shall apply mutatis mutandis.

(10) 1. Prospectus
2. Shelf Prospectus
3. Supplement to Prospectus
These all 3 are approved by the commission
(11) Publication in Newspaper
(12) Abridged = Short Form
(13) Number of copies not given by law.
Availability of copies of prospectus:
1. Registered Office of company
2. Securities Exchange
3. Bankers to Issue
4. Share Registrar
5. Ballotter
6. Credit Rating Agency (If Any)

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<Practical Example of prospectus is attached in folder named “Prospectus”>

89. Contents of prospectus.—

The Commission may approve a prospectus if it contains such information and reports as may be
(14)
prescribed.

(14) It is prescribed in Public Offering Regulations

90. Expert to be independent.—

A prospectus shall not contain a statement purporting to be made by an expert unless the expert is a person
who is not, and has not been, engaged or interested in the formation or promotion or in the management of
the company.

(15) Expert Example:

Company’s Legal Advisor Property Valuer

91. Expert’s consent to issue of prospectus containing statement made by him.—

(16)

A prospectus that contains a statement purporting to be made by an expert or to be based on a statement

made by an expert shall not be issued, circulated or published unless—
(a) the expert has given, his written consent to the issue of the prospectus with the statement in the form
and context in which it is included; and
(b) there appears in the prospectus a statement that the expert has given and has not withdrawn his
consent.

(16) Statement allowed by these person provided that these persons shall not be promoter / sponsor of the company. Further, these
persons shall not be in the management of the company (i.e. these shall not be director, officer of the company) + Written
consent of the expert is required via section 91 as explained below.

92. Criminal liability for defective prospectus.—

A person commits an (17)offence, who—
(a) makes a misleading, incorrect, untrue or deceptive statement in a prospectus; or
(b) omits information or a statement from a prospectus that this Act or any rule or regulation made under
this Act, requires to be included in the prospectus.

(17) Crime.

93. Compensation for false or misleading prospectus.—

Every offeror, issuer, director of an offeror or issuer or any person who has signed the prospectus shall be
liable to pay compensation to any person who acquires any of the securities, in reliance upon the prospectus,
to which the prospectus relates and suffers loss in respect of them as a result of any incorrect, untrue or
misleading statement in the prospectus or the omission from it of any matter required to be included by or
under section 89.
94. Abridged prospectus.—
Notwithstanding the provisions of this Part, a public offer of securities may be made by publication of an
abridged version of a prospectus (an abridged prospectus), instead of a prospectus, if—
(a) a prospectus is prepared in accordance with section 89 and the abridged prospectus is prepared in
accordance with such requirements as may be prescribed;
(b) a copy each of the prospectus and the abridged prospectus is submitted to the Commission at the
same time for approval and both the prospectus and the abridged prospectus are approved by the
Commission;
(c) sufficient copies of the prospectus are made available for collection at the times and places specified in
section 88 and the abridged prospectus; and (ALL CONDITIONS SHALL BE FULFILLED)
(d) the public offer complies with such other requirements as may be prescribed.

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 Public Offering - Securities Act, 2015 Chapter-15

95. Issue of securities outside Pakistan.—

(18)
No company shall, except with the prior approval of the Commission, issue or list any securities outside
Pakistan.
Illustration
Question
Public subscription commencement date  5 October 2018
What will be the date of publication of prospectus in newspapers??
What will be the timeframe for approval of prospectus by the commission??
Related Material
(2) The issuer or the offeror, as the case may be, shall, not less than twenty one days before the proposed
date of publication of the prospectus, submit a copy to the Commission for approval.
(3) Where a public offer of securities is to be made in Pakistan the issuer or offeror, as the case may be,
shall publish the prospectus in full text or in such abridged form as may be prescribe, at least in one
Urdu and one English daily newspaper.
(4) The prospectus shall not be published in the newspapers less than seven days or more than thirty days
before the commencement of the public subscription.

(18) Recap:
< It is talking about Global Depository Receipts >

Time Frame

Assuming 5th September 2018 as a publication date Public Subscription

Commencement Date

Time frame for

publication of prospectus
in news paper
Submission Date to
SECP for Approval 5th October 2018

15th August 2018 5th September 2018 28th September 2018

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Public Offering - Securities Act, 2015 Chapter-15

Hint: First decide the Public Subscription Commencement Date,

Prospectus Timeline then work back and find out respective dates.

AIR LINK COMMUNICATION LIMITED PROSPECTUS

NEW ISSUE AND OFFER FOR SALE
Date and Place of Incorporation: January 2, 2014 in Lahore. | Registration Number: 0086378 | Registered Address: LG-2, Al – Qadeer Heights, Babar Block, New Garden Town, Lahore. |
Contact Person: Mr. Amer Latif – Company Secretary | Website: www.airlinkcommunication.net | Email: amer.latif@airlinkcommunication.net | Telephone: (+42) 35844063-4 Ext. 118
Issue Size: The Issue consists of 90,000,000 Ordinary Shares, of face value of PKR 10.00/- each, which constitutes 25.0% of the total post-IPO paid-up capital of Air Link Communication Limited
excluding mandatory conversion of TFCs amounting to PKR 400 million as mentioned under Section 11.1.1. Out of total issue size, 60, 000,000 ordinary shares are being issued by Airlink
Communication Limited and remaining 30,000,000 ordinary shares are being offered by sponsor of Air link Communication Limited i.e Mr. Muzzaffar Hayat Piracha from his current share holding.
Method of Offering: 100% Book Building Method.
Book Building Method and Floor Price: The entire issue will be offered through 100% Book Building at a Floor Price of PKR 65.00/- per share (including a premium of PKR 55.00/- per share) with a
price band of 40% above the floor price i.e. Rs. 91/- per share (Justification of premium is given under “Valuation Section” in Section 4A. The bidders shall be allowed to place b ids for hundred percent
(100%) of the Issue size and the Strike Price shall be the price at which the hundred percent (100%) of the Issue is subscribed. However, the successful bidders shall be provisionally allotted only
seventy-five percent (75%) of the issue size i.e. 67,500,000 shares and the remaining twenty five percent (25%) i.e. 22,500,000 shares shall be offered to the retail investors. In case retail portion of the
issue remains unsubscribed, the unsubscribed portion will be allotted to the successful bidders on pro-rata basis.
General Public/Retail portion: General Public portion of the Issue comprises of 22,500,000 ordinary shares (25% of the total issue) at the Strike Price. In case retail portion of the Issue remains
unsubscribed, the unsubscribed shares will be allotted to the successful bidders of book building on a pro rata basis.
Public Comments: The Draft Prospectus was placed on PSX’s website for seeking public comments for seven (7) working days starting from December 02, 2020 to December 10, 2020. The
comments received have been duly incorporated / responded by the Consultant to the Issue.
REGISTRATION OF ELIGIBLE INVESTORS: The registration of eligible investors will commence at 9:00 am on 25/08/2021 and will close at 3:00 pm on 31/08/2021
BIDDING PERIOD DATES: From 30/08/2021 to 31/08/2021 (From: 9:00 am to 5:00 pm)
DATE OF PUBLIC SUBSCRIPTION: From 06/09/2021 to 07/09/2021 (both days inclusive) From: 9:00 am to 5:00 pm

Example 1: Airlink Communications Limited

Approval Date 16 Jul-21
Add: 60 Days 60
Valid Till 14-Sep-21

PANTHER TYRES LIMITED (Formerly Mian Tyre And Rubber Company Limited)
PROSPECTUS/OFFER FOR SALE DOCUMENT NEW ISSUE AND OFFER FOR SALE
Date and place of incorporation: Lahore, October 24, 1983, Incorporation number: 0010858, Registered and Corporate Office: Panther House, 97-B Aziz Avenue, Jail Road, Lahore, Pakistan,
Website: www.panthertyres.com,
Issue Size: The Issue consists of 40,000,000 Ordinary Shares (i.e. 28.57% of the total post-IPO paid up capital of Panther Tyres Limited) of face value of PKR 10/- each,. Out of total issue size ,
30,000,000 (21.42% of the total post-IPO paid up capital of Panther Tyres Limited) ordinary shares are being issued by Panther Tyres Limited and 10,000,000 (7.14% of the total post – IPO paid up
capital of Panther Tyres Limited) ordinary shares are being offered by sponsor of panther tyres i.e. Mian Iftikhar Ahmed from his current shareholding.
Method of Offering: 100% Book Building Method
Book Building method and Floor Price: The entire Issue will be offered through book building method at a Floor Price of PKR 47/- per share (including premium of PKR 37/- per share) with a price
band of upto 40%. Justification of premium is given under “Valuation Section”, i.e. Section 4A). The bidders shall be allowed to place bids for hundred percent (100%) of the Issue size and the Strike
Price shall be the price at which the hundred percent (100%) of the Issue is subscribed. However, the successful bidders shall be provisionally allotted only seventy-five percent (75%) of the Issue size
i.e. 30,000,000 shares and the remaining twenty five percent (25%) i.e. 10,000,000 shares shall be offered to the retail investors.
Retail/general public portion: General Public portion of the Issue comprises of 10,000,000 ordinary shares (25% of the total issue) at the Strike Price. In case retail portion of the Issue remains
unsubscribed, the unsubscribed shares will be allotted to the successful bidders of book building on a pro rata basis.
Public Comments: Draft Prospectus was placed on PSX’s website for seeking public comments starting from November 18, 2020 to November 26, 2020. The comments received have been duly
responded by the Lead Manager.
REGISTERATION OF ELIGIBLE INVESTORS: The registration of eligible investors will commence at 9:00 am on January 22, 2021 and will close at 3:00 pm on January 28, 2021
BIDDING PERIOD DATES: From January 27, 2021 to January 28, 2021 (From: 9:00 am to 5:00 pm)
DATE OF PUBLIC SUBSCRIPTION: From February 03, 2021 to February 04, 2021 (both days inclusive) From: 9:00 am to 5:00 pm

Example 2: Panther Tyres Limited

Approval Date 13 Jan-21
Add: 60 Days 60
Valid Till 14-Mar-21

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PSX Rule Book – Listing Regulations Portion Chapter-16

CHAPTER
16

PSX RULE BOOK – LISTING

REGULATIONS PORTION

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 PSX Rule Book – Listing Regulations Portion Chapter-16

PSX Rule Book – Listing Regulations Portion

Listing Rules: 5.2.2 to 5.5.9

5.2.2. THE EXCHANGE SHALL NOT ENTERTAIN LISTING APPLICATION OF A COMPANY:

(a) Where the Issuer, its sponsors, promoters, substantial shareholders and directors have over-dues or
defaults, irrespective of the amount, appearing in the report obtained from the credit information bureau.
(E-CIB Report)

Sponsors

ISSUER

Promoters

Company which is Considering Listing

Substantial Shareholder

Directors

Order-dues Default

Should be appearing in ECIB Report

Irrespective of the Amount

(1)
(b) The Issuer, or its directors, sponsors, or substantial shareholders have been holding the office of
directors, or have been sponsors or substantial shareholders in any company:
(i) Which has been declared defaulter by the securities exchange; or
(ii) Whose TRE Certificate has been cancelled or forfeited by the securities exchange; or
(iii) Which has been delisted by a securities exchange due to non-compliance of its regulations.
Provided that Commission may grant relaxation upon reasons to be recorded, and rectification of cause
leading to such delisting.

(1) Same concept as discussed in Securities Act, 2015

(2)
5.2.3. The loan amounting to Rs. 500,000 or more written-off by a financial institution during last five years
be disclosed in the prospectus.

(2) In rule 5.2.2, existing overdue or default is considered, but here (5.2.3, it is talking regarding any past overdue or default which is
written off by a financial institutions.

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5.3. UNDERTAKING:
5.3.1. No listing of a company or security shall be approved unless the applicant company provides an
undertaking on Form-II.
5.4. PUBLIC OFFER BY COMPANIES/MODARABAS:
5.4.1. In case of issue of equity securities by the applicant company except for the (3)SPAC way of IPO or offer
for sale, the allocation to General Public shall be as under:
(a) FOR COMPANIES SEEKING LISTING: (First Time Listing)

(4)POST ALLOCATION OF CAPITAL TO THE GENERAL PUBLIC, (5)EXCLUDING

ISSUE PAID UP CAPITAL
PREMIUM AMOUNT AND PRE-IPO PLACEMENT

Up to PKR 2.5 billion At-least 10% of PIPC

Provided that the Company shall be required to subsequently enhance the
quantum of public shareholding to 25% within next 3 years of its listing.

Above PKR 2.5 billion and upto PKR 5 billion At-least 10% of PIPC
Provided that the Company shall be required to subsequently enhance the
quantum of public shareholding to 15% within next 3 years of its listing.

Above PKR 5 billion and upto PKR 10 billion At-least 10% of PIPC

Above PKR 10 billion At-least 5% of PIPC

(b) FOR COMPANIES ALREADY LISTED: (Talking about Further Issue of Shares – To be discussed later)
In case of an already listed company at the Exchange, the size of offer of capital shall not be less than
Rs.100 million.
Explanation: For the purpose of this clause, the term “size of the offer” means the product of the offer
price and the number of shares being offered.

(3) To be discussed in Public Offering Regulations

(4) After Listing, Issued and Paid-up Capital
(5) Offer Size Calculation shall be based on face Value, irrespective of the fact that offer prize is higher.

5.4.2. The Issuer or the Offeror, as the case may be, may allocate share capital up to twenty percent (20%) of
the public offer to overseas Pakistanis. The amount should be subscribed through proper banking
channel.
Provided that in case of under subscription in either of the categories i.e., the quota allocated to
resident or non-resident Pakistanis, the unsubscribed portion will be allocated to the applicants of other
category.
5.4.3. The Issuer or Offeror, as the case may be, may allocate share capital up to five percent (5%) of the
public offer to its employees of the company whose shares are offered.
5.4.4. In the case of a Modaraba applying for listing on the Exchange, thirty percent (30%) of the total Paid-up
capital shall be subscribed by the sponsors or their associates or friends, relatives and associated
undertakings and the balance of seventy percent (70%) shall be offered to the General Public.
(Mandatory Requirement for both 30% and 70%)
Provided that the Exchange, if it is satisfied that it is not practicable to comply with the requirements of
clause 5.4, in a particular case or class of cases may, for reasons to be recorded, relax the
requirements contained therein subject to approval of the Commission.

(6) To be discussed in Public Offering Regulations

5.4.5. THE ALLOCATION OF SHARE CAPITAL:

The shares shall be allotted or allocated to any persons including sponsors or employees in the manner
and with such terms and conditions as prescribed under the Public Offering Regulations.

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5.4.6. OFFER/ISSUE THROUGH BOOK BUILDING:

In case where the shares of the company are issued/offered through Book Building, it shall comply with
the requirements as prescribed in the Public Offering Regulations.
5.5. PROSPECTUS, ALLOTMENT, ISSUE AND TRANSFER OF SHARES:
5.5.1. No Company will be listed unless it is registered under the (7)Companies Act as a public limited
company and its minimum paid-up capital is (8)Rs. 200 million.

(7) Not Applicable to Body Corporate

But Body Corporate can list their securities in securities exchange.
(8) This shall be calculated using Rs. 10 as it is the face value.
Meaning thereby there shall be at least 20 Million Shares. (20m  10) = 200 Million

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(9)
Illustration of 5.4.1(a)

(9) Now the question arises what is mean by Pre-IPO Investor??

When a company successfully raises capital through a pre-lPO placement, it can signal to other investors that the company is
financially sound and has strong growth potential. This can lead to increased demand for the company's shares once it goes
public, which can benefit both the company and its shareholders.

5.5.2. The companies registered in (10)Gilgit Baltistan and Azad Jammu and Kashmir will be eligible for listing
and will be (11)treated at par with Companies registered in Pakistan.

(10) As Companies Act, 2017 is not applied in Gilgit Baltistan and Azad Jammu Kashmir
(11) Same Level

5.5.3. Despite receiving the application for approval of listing and any preliminary actions thereon, no
company shall be listed unless it has made a public issue which is subscribed by not less than 500
applications. (VERY IMPORTANT)
5.5.4. The requirements of Regulation 5.5.1 or 5.5.3 shall not apply to listing of Securities other than shares of
Companies, unless any law so requires or the Federal Government in the exercise of its powers under
the Securities Act, 2015 so directs.
(12)
5.5.5. The Companies shall ensure that the securities offered to the general public are declared as eligible
securities in the CDS.

(12) Eligible Securities in Central Depository System

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 PSX Rule Book – Listing Regulations Portion Chapter-16

5.5.6. The audited accounts to be incorporated in the Prospectus / Offer for sale document shall not be older
than 8 months from the date of publication of the Prospectus / Offer for sale document. The Prospectus
shall contain all disclosures mentioned in the Public Offering Regulations. Moreover, it shall also
disclose any loan amounting to Rs. 500,000 or more written-off by a financial institution during last five
years.
Provided that is case of secondary public offering and initial public offering of other class of shares,
Listed Companies are allowed to publish the Prospectus/Offer for sale document based on audited
accounts older than eight months, subject to the condition that they are compliant with the requirements
related to annual and quarterly accounts as specified under the Companies Act.(13)
Provided further that the conditions referred to in Regulation 5.5.6 shall not apply (14)SPAC.
Furthermore, SPAC shall ensure that prospectus submitted contains all the disclosures as specified for
SPAC in Public Offering Regulations.

(13) Secondary Public Offering Initial Public Offering of other class of shares
< in this case the company is already listed on securities exchange >
(14) SPAC is “Special Purpose Acquisition Company”→ To be discussed in Public Offering Regulations

5.5.7. APPROVAL OF PROSPECTUS:

(a) The prospectus shall be submitted to and approved by the Exchange before an application for its
approval is made to the Commission. The Exchange may require additional information, data,
certification or requirement to be included in the prospectus. If any applicant fails to comply with such
requirements, the Exchange may refuse to issue approval under these Regulations.(15)
(b) The prospectus shall conform to and be in accordance with the requirements and provisions of the
Public Offering Regulations, Securities Act, 2015, any other law or legal requirement for the time being
applicable, instructions of the Commission, Exchange’s Criteria for Listing and the Exchange’s Listing
Guidelines laid down from time to time. The application made to the Commission shall, amongst other
things, be accompanied by the approval given by the Exchange under sub-regulation 5.5.7(a) above.
(c) The issuer shall make available to the Exchange and to bankers to the issue for distribution printed
copies of prospectus or offer for sale and application forms for shares in the quantity to be determined
by the Exchange and the bankers. The company shall also accept applications on identical forms.(16)
(d) The applications for shares shall be accepted only through bankers to the issue, whose names shall be
included in the prospectus or the offer for sale.
(e) The directors or the offerors, as the case may be, shall not participate in subscription of shares offered
to the general public. (VERY IMPORTANT)

(15) Meaning thereby that the prospectus shall also be approved by the exchange in addition to SECP.
(16) It is not mandatory to use the same form as disclosed in prospectus, identical Form shall also be accepted by the company for
the purpose of share subscription.

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Free Float Definition Chapter-17

CHAPTER
17

FREE FLOAT DEFINITION

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 Free Float Definition Chapter-17

Free Float Definition

Although this definition is not explicitly covered in syllabus, but it is important definition (i.e. this concept was
used while covering reverse merger)

Means the number of ordinary shares readily available for trading through the exchange which comprises of
total outstanding ordinary shares excluding the shares held by the following categories/persons:
(i) Government holdings

(ii) Directors, (1)Sponsors and (1)Senior Management Officers and their Associates;
(iii) Shares in physical form;
(iv) Associate Companies or undertakings and Group Companies (cross holdings);(2)
(3)
(v) Shares issued under Employees Stock Option Schemes that cannot be sold in the open market in
normal course:
(vi) Treasury Shares; and (Recap : Buy Back of Shares)
(4)
(vii) Any other category that are barred from selling at the review date.
Explanation: For the purpose of this definition:
I. "Sponsor" has the same meaning as defined in The Companies (Issue of Capital) Rules, 1996: and
ii. "Senior Management Officer" and "Associate" have the same meaning as defined in the Securities Act.

(1) Definition is copied below:

(2) Refer Associated Companies and Undertakings Definition of Companies Act, 2017
(3) Remember FAFR Concept of Lock-In-Period (A period in which employees / are not able to sell their shares)-IFRS-02 Share
Based Payment
(4) <Remember concept of Reverse Merger where shares of sponsors shall be inducted into CDC in freeze status>

“Sponsors” Definition As Per “The Companies (Issue of Capital) Rules, 1996”.

Sponsor means:
(a) a person who has contributed initial capital in the issuing company and has the right to appoint majority
of the directors on the hoard of the issuing company directly or indirectly by virtue of shareholding held
in its own name and in the names of his relatives, associated companies and associated undertakings;
(b) a person who replaces the person referred to in clause (a); and(5)
(c) a person or group of persons having management control of the issuing company whether directly or
indirectly.
Explanation: For the purpose of this sub-rule the term "relative" includes a spouse, father, mother, brother,
sister and son or daughter, including a step or adopted child.

(5) Example includes: If sponsor is selling shares to another person or transfer of shares by operation of law.

“Senior management officer” includes, chief executive officer/ managing director, deputy managing
(6)

director/chief operating officer and chief regulatory officer or (7)holder of such positions by whatever name
called;

(6) And their Associates. As these are natural person so clause (a) of definition will be followed
(7) Example includes: Company Secretary, Chief Financial Officer.

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Free Float Definition Chapter-17

"associate", in relation to –
(a) an (9)individual, means –
(8)

(I) that individual's spouse, son, adopted son, stepson, daughter, adopted daughter, stepdaughter,
father, stepfather, mother, stepmother, brother, stepbrother, sister or stepsister;
(II) any company of which that individual is a director;
(III) any company in which that individual or any of the persons mentioned in sub clause (i) has
control of twenty per cent or more of the voting power in the company, whether such control is
exercised individually or jointly; or
(IV) any employee of that individual; or
(10)
(b) a company, means another company in which the first mentioned company has control of not less than
twenty per cent of the voting power in that company, and a reference in this Act to an associated
person or associated company shall be construed accordingly;

(8) Natural Person

(9) Individual = Senior Management Officer
(10) In case of artificial person

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Public Offering Regulations, 2017 Chapter-18

CHAPTER
18

PUBLIC OFFERING
REGULATIONS, 2017

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 Public Offering Regulations, 2017 Chapter-18

In this topic
These regulations shall apply to:
(i) a public limited company or body corporate proposing to issue securities to the general public;
(ii) an Offeror who intends to offer securities to the general public; and
(iii) sponsors of the public limited company or body corporate, the Consultants to the Issue, the
Underwriter, the Book Runner, the reason for all Designated Institution, the Banker to an Issue,
Investment Agent and Issuing and Paying Agent.(1)
These Regulations shall not apply to an Issue by Special Purpose Vehicle or body corporate specifically setup
by the Federal Government or any provincial Government for the purpose of issue of any debt security, under
any other law or (2)offer of securities as mentioned under sub-section (4) of section 87 of the Act.
Special Purpose Vehicle (SPV) Definition
Special Purpose Vehicle (SPV) for the purpose of these regulations means a public limited company or a
body corporate registered with the Commission under the Companies (Asset Backed Securitization) Rules,
1999.
Illustration of SPV:
Company Name: Paktel Limited
Name of SPV: Securetel SPV Limited
Paktel Limited is considering to issue secured TFC (Debt Security) to repay existing loan.
Assets Securitized: Present and Future receivables of Paktel Limited
Purpose: Retiring existing loans of United Bank Limited and Pakistan Kuwait Investment Company (Pvt.)
Limited
Bills Collection Agent: United Bank Limited
Security: Primary Security-Hypothecation Charge on Purchased Receivables, rights and benefits of SPV
under Sale and Purchase agreement, service agreement and under the guarantee executed by Millicom in
favor of SPV.
Millicom: Holding Company of Paktel Limited

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Public Offering Regulations, 2017 Chapter-18

Regulation 3: General Conditions for Public Offer of Securities

(3)
(1) An Issuer shall make a public offer of securities, subject to the following general conditions, namely.
(i) the Issuer has obtained (4)approval form its Board of Directors relating to Public Offering
(ii) the Issuer has (5)profitable track record for at least 2 preceding financial years from its (6)
core
business activities;
(7)
Provided that in case of non-compliance with profitability criteria, the sponsors of the Issuer
shall retain at least 51% of the post issue paid-up capital till the company reports net profit after
tax for two consecutive financial years including profit from its core business activities;
Provided further that the issuer shall:
(a) submit a business plan to turnaround the company into a profitable venture; and
(b) disclose the following on the cover page of the Prospectus in bold language:
“This is a loss-making company. The risks associated with loss making companies are
(8)

comparatively much higher than profitable companies. The prospective investor should,
therefore, be aware of the risk of investing in such companies and should make the decision to
invest only after careful due diligence. It is advisable to consult any independent investment
advisor before making any investment.”
(9)
(iii) not less than 51% of the shares of the issuer are held by same persons for at least 2 preceding
financial years;
Provided that this clause shall not apply in case of new issuance of shares by the issuer.
Provided further that the above (10)clauses (ii) and (iii) shall not apply in case of:
(i) Green Field Project;
(ii) public offering of debt security whose debt servicing is guaranteed from the Government.
(iii) public offering of debt security by multilateral agencies.
(iv) public offering of debt security by state owned enterprises having entity rating of BBB+
and above.
Provided further that Commission may consider relaxing any of the (11)above clauses (ii) to (iii) in
case of privatization of government owned entities by Privatisation Commission through capital
markets.

(1) Meaning and reason for all these persons will be discussed below.

(2) Refer Lectures of Securities Act, 2015

(3) Eligibility Conditions

[First we have covered eligibility conditions in Securities Act, 2015. Then, we have covered eligibility conditions in Listing Rules
(Chapter 5 of Pakistan Stock Exchange Rule Book). Now, we are going to cover it finally through Public Offering Regulations,
2017]

(4) (Board of Directors Resolution)

(5) This is inserted in order to protect the interest of general public.

(6) We can say that “Principal Line of Business”

(7) < Sponsors shall be debarred from selling >

(8) Again this is inserted to protect the interest of general public. In order to save general public from any kind of loss in relation to
public offering.

(9) Consistency of Some Management

(10) (ii) is about profitable record as mentioned above and (iii) is about Consistency of same management.

(11) (ii) is about profitable record as mentioned above and (iii) is about Consistency of same management.

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 Public Offering Regulations, 2017 Chapter-18

(Case (a)

IQ Company Limited

Sponsor
s
Mr A, Mr. B and Mr. C

Sold Controls K
Sponsors Mr D, E, F, G, H, I, J

Sold = 01 January 2020

Purchase – 01 January 2020

Now IQ Company Limited Within 2 years

Issuer wants to make public
offering of its shares on
31 December 2020

Valid in the eyes of law

although 2 years of consistency
of same management is not
satisfied as (it is the case of
new issuance of shares by IQ
company limited)

Case (b)
If Sponsors Mr. D, E, F, G, H, I, J want to make public offer on 16 August 2021 as disposal of shareholding as
an Offeror.

This does not constitutes legality as 2 years of

consistency of same management is not satisfies.

Case (c)
In February 2004, Habib Bank Limited was privatized and the government of Pakistan divested its
shareholding through privatization commission of Pakistan.
(12)
Suppose:

HBL was nationalized in January 2003, and it has HBL was nationalized in December 1999 but it has no
Profitable records. profitable records.
Offeror (Privatization Commission) Offeror

Disposing Govt holding (with 2 years of acquisition) Disposing Govt Holding

May apply SECP for relaxation even 2 years of No Profitable Records

consistrat management is not satisfied
May apply to SECP for relaxation of any proviso as
mentioned is clause (ii)

(iv) In case of (13)green field project, following criteria shall be applicable:

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Public Offering Regulations, 2017 Chapter-18

a. Sponsors’ contribution, in the form of equity in a green field project at the time of IPO, shall
not be less than 51% of the entire equity and shall be retained till the commencement of
commercial production.
b. In case the project requires debt financing, in addition to equity funding, financial close
shall be mandatory.(14)
c. Successful business (15)track record of sponsors preferably running a listed
company/ies, manufacturing/industrial units etc. considering various parameters such as
operational profitability, operating cash flows, EPS and dividend payout etc.
d. Experience and skills of the Management to run the proposed project.
e. If required, Engineering, Procurement and Construction (EPC) contract shall be in place.
(16)
f. Land for the project, if required is acquired by the Issuer and the same is in the name of
the issuer.
g. the sponsors of the Issuer shall retain at least 51% of the post issue paid-up capital till the
company reports net profit after tax for two consecutive financial years including profit from
its core business activities.
h. The Issuer shall disclose the following on the cover page of the Prospectus in bold
language:
“It is a green field project. The risks associated with the green field project are
much higher than a project that has commenced commercial production/operations.
The prospective investor should, therefore, be aware of the risk of investing in such
projects and should make the decision to invest only after careful due diligence. It
is advisable to consult any independent investment advisor before making any
investment.”
(v) The securities shall be issued in book-entry form only.(17)
(2) No (18)Issuer shall make a public offer if
(i) the Issuer, its sponsors, promoters, substantial shareholders and directors have over dues or
defaults, irrespective of the amount, appearing in the report obtained from the credit information
bureau; and(19)
Provided that the clause (i) above shall not apply to the nominee director of the government and
financial institution/ creditor.(20)
Provided further that the clause (i) shall not apply to independent director.
[(ii) the Issuer or its directors, sponsors or substantial shareholders have been holding the office of
the directors, or have been sponsors or substantial shareholders in any company,
(a) which had been declared defaulter by the securities exchange or futures exchange; or
(b) whose TRE certificate has been cancelled or forfeited by the securities exchange; or
(c) which has been de-listed by the securities exchange due to non-compliance of its
regulations.
Provided that Commission may grant relaxation upon reasons to be recorded, and rectification of
cause leading to such delisting.](21)
(3) The Issuer shall appoint (22)Consultant to the Issue, Book Runner, Underwriter, Balloter and Share
Registrar and Banker to an Issue, where required, through separate agreements in writing.
(23)
Provided that appointment of consultant to the Issue shall not be mandatory in case of initial public
offering of other class of shares by listed companies.
(24)
Provided further that the Commission may consider relaxing the appointment of Consultant to the
Issue in case of privatization of government owned entities by Privatization Commission through capital
markets.
(25)
Provided further, that in case the Consultant to the Issue is not appointed by the Issuer than a
specific disclosure in this context shall be made on the Cover page of the Prospectus.
(26)
Provided further, that scheduled bank, investment finance service license holder and development
financial institution can only act as Consultant to the Issue in case of public offering of debt securities.
Provided further, that sub-regulation (3) shall not apply to the extent if the issue or offer of securities is
made simultaneously both in domestic and international markets.

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(12) All these considerations are just for example purpose.

(13) “Green Field Project" includes a project that is being newly built by the Issuer and has not commenced commercial
production/operation;

(14) Borrowing arrangement’s must be finalized.

(15) Law is talking regarding successful business track record of SPONSORS.

(16) < Acquired not on lease >

(17) In Central Depository Company

(18) Company

(19) < Same concept as discussed in Listing Rules >

(20) Additional information provided by Public Offering Regulations here.

(21) This is third time, this restriction is stated. First it is stated in Securities Act, 2015 second, it is stated in listing rules Third, it is
stated here.

(22) < Described Below >

(23) In case where the issuer is already listed.

(24) In case of privatization of government owned entities (Example may be of HBL as mentioned above)

(25) Already Listed Company

Relaxation by commission in case of privatization
(26) It means that any person holding a license to act as consultant to issue other than these may act as Consultant to the Issue in
case of public offering of shares.

Consultant To The Issue:

Definition: “Consultants to the Issue” means any person licensed by the Commission to act as a Consultant
to the Issue, which may also be called Lead Manager or Advisor.
Regulation 18: Functions of the Consultant to the Issue. –
The Consultant to the Issue shall perform the following functions, namely:-
(1) preparation of prospectus, and related documents and ensuring that the same are prepared in
accordance with the requirements of the applicable laws including section 89 of the Act, these
Regulations, regulations of the securities exchange and other applicable regulatory framework;
(2) before submitting the application to the securities exchange under section 19 of the Act, the Consultant
to the Issue shall examine the proposed issue from various aspects including eligibility requirements
and suitability of the Issuer or security for listing considering the interest of general public and its
benefits to the capital market.
(3) give justifications in support of the (27)offer/ Floor Price set by the Issuer under a separate section titled
as “Valuation section ” in the prospectus.
(4) assist in the execution of agreements of the issuer with underwriters, bankers to an issue, book runner,
Designated Institution, debt security trustee, issuing and paying agent, balloter and transfer agent and
investment agent;(28)
(5) on behalf of the Issuer, seeking the (29)approval of the securities exchange under section 19 of the Act
and Commission under section 87 and 88 of the Act;
(6) preparation and publication of prospectus and advertisements with regard to public issue;
(7) ensure that the public offering including book building is carried out in accordance with the prospectus
and requirement of these Regulations and the Act;
(8) preparation and submission of final report on the issue to the Commission;
(9) comply with all the applicable directives and orders issued by the Commission; and
(10) any other related function as may be specified by the Commission from time to time.

(27) < Will be discussed later >

(28) (These will be discussed later)

(29) < Approval of Prospectus >

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19. Responsibilities of the Consultants to the Issue.__

(1) The Consultants to the Issue shall.-
(i) ensure that, after having made due and careful enquiry, they have reasonable grounds to believe
that-
(a) the application submitted to the securities exchange under section 19 of the Act and the
prospectus submitted to the Commission under section 87 and 88 of the Act meets the
relevant requirements of the Act, these Regulations, regulations of the securities exchange
and other applicable regulatory framework; and
(b) the documents, reports, statements and information submitted along with the aforesaid
application and prospectus are not false or misleading and do not contain any material
omission;
(ii) ensure that adequate disclosures are made to the investors in a timely manner so as to enable
them to make a balanced and informed decision.
(iii) endeavor to ensure that the investors are provided with true and adequate information without
making any misleading or exaggerated claims or any misrepresentation and are made aware of
the associated risks before taking any investment decision.
(iv) obtain from their employees an undertaking stating therein that they will not misuse their position
of having access to non-public information, if any, relating to the issue for their personal benefit
or for the benefit of any other person who does not have or is not authorized to have access to
such information;
(v) actively participate in preparation of the prospectus and ensure that all material facts, including
all potential risks, as required under the law are disclosed therein and that the Issuer is compliant
with all the laws applicable to the issue of securities;
(vi) remain associated with the issue till its completion i.e. credit of securities, submission of final
report to the securities exchange and Commission, resolution of the issue related complaints, if
any, and implementation of final decision of the Commission on application rejected, if any.
(vii) ensure that they understand the nature of business of their customer.
(viii) ensure that their customer is fully briefed on its obligations and potential liabilities pertaining to its
application and supporting documents including the prospectus, in relation to the requirements
stipulated by the Commission.
(ix) ensure that their customer has been made aware of the need for it to extend its full cooperation
in the provision and verification of information for the purposes of the assignment;
(x) withdraw from the assignment in case their customer fails or refuses to address its concerns
about the issue or any related information provided to it.
(2) The Consultants to the Issue shall not-
(i) make any false statement, whether oral or written, either about their qualifications or capability to
render services or their achievements with regard to services rendered to their potential
customers;
(ii) make unsubstantiated claims or statements, in order to acquire business from the customer,
about qualifications of their professional staff or their capability to render certain services or their
achievements concerning the consultancy services rendered by them;
(iii) submit any document or report to the Commission that contains any untrue or false statement, or
any material fact omitted therefrom;
(iv) agree to manage or be associated with any issue as consultant unless its responsibilities relating
to the issue are clearly determined through an agreement in writing; and
(v) be a party to or instrumental for -
(a) creation of false market;
(b) price rigging or manipulation or;
(c) Conveying of non-public price sensitive information in respect of securities proposed to be
listed in securities exchange to any person.
This regulations will also be covered at the and of this handout. The purpose of covering here is to
elaborate their purpose.

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STATEMENT BY CONSULTANT TO THE ISSUE / LEAD MANAGER

16th July, 2021
The Chief Executive
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi
<BMA Capital Management Limited = Consultant to the Issue / Lead Manager>

Being mandated as the Consultant to the Issue/ lead Manager to this Initial Public Offering of Octopus Digital Limited
through the Book Building process, we hereby confirm that:
I) all material information as required under the Companies Act, 2017, the Securities Act, 2015, the
Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited and the
Public Offering Regulations, 2017 has been disclosed in this Prospectus and that whatever is stated
in Prospectus and in the supporting documents is true and correct to the best of our knowledge and
belief and that nothing has been concealed.
II) We have examined the business model and audited financial statements of the Issuer and based on
the same, material information, including risks that would enable the investor to make an Informed
decision, has been disclosed In the Prospectus.
For and behalf of BMA Capital Management Limited

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Book Runner:
Definition:
“Book Runner” means a securities broker or a scheduled bank who holds a valid license from the Commission
to act as an
(The basic concept of underwriter is that in case of under subscription of public offering, an
underwriter will subscribe all unsubscribed shares)
20. Responsibilities of the book runner.–
The Book Runner shall be responsible to:
(1) ensure that necessary infrastructure and electronic system is available to accept bids and to conduct
the whole Book Building process in a fair, efficient and transparent manner;
(2) ensure blocking of bid and margin money of the Bidders in their respective accounts;
(3) the Book Runner must be financially capable for honoring its commitments arising out of defaults by
their investors, if any;
(4) use the software provided by the Designated Institution for the Book Building on such terms and
conditions as may be agreed through an agreement in writing
(5) ensure that the software used for Book Building is based on Dutch Auction Method for display of the
order book and determination of the strike price;
(6) ensure that the bidders can access to the System and can revise their bids electronically using the user
ID and the password;
(7) underwrite the Book Building Portion;
(8) ensure that it has obtained list and Unique Identification Numbers of the associates of the Issuer and
the consultant to the issue;
(9) ensure that names and Unique Identification Numbers of all the persons mentioned above are entered
and capped in a manner as prescribed in these Regulations before commencement of the Bidding
Period;
(10) ensure that it blocked all Unique Identification Numbers and names of all related employees for
participation in the bidding.
This regulations will also be covered at the and of this handout. The purpose of covering here is to
elaborate their purpose.
Underwriter - If any of the shares are unsubscribed in IPO, an underwriter will subscribe all remaining shares.
Balloter: If the shares applied for by the general public are in excess of the shares allocated to them, the
distribution shall be made by computer balloting. This is done by balloter.
Share Registrar
Share registrars and balloters are the regulated securities activities under the Securities Act. 2015. The role of
Share Registrars and Ballotters is very important, as they are involved in the issuance and transfer of shares,
maintenance of share registers, issuance of dividend warrants and bonus shares on behalf of the issuer.
Ballotters role is also of important as they have to conduct fair and transparent balloting for the investors in
Initial Public Offering (IPO).
Bankers To The Issue: "Banker to an Issue" means a scheduled bank licensed by the Commission as a
Banker to an Issue Generally these will receive company's share subscription application along with amount.
(4) The Consultant to the Issue, Book Runner and Underwriter and their (30)associates shall not publish any
research report by whatever name called in respect of the Issuer or Issue from the date of their
appointment as Consultant to the Issue, Book Runner and Underwriter till the date of allotment of
securities to the general public:
Provided that information memorandum and other marketing material may be prepared and
shared with the prospective investors through private arrangement. (31)
(5) Subsequent to the underwriting agreement with the issuer, the underwriter to the issue may enter into
separate agreements with other underwriters duly licensed by the Commission, with the consent of the
issuer and any such arrangement shall be disclosed in the Prospectus in case of fixed price method
and in supplement to the Prospectus in case of book building method.

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(32)
UNDERWRITER

Other Other Other

Underwriter 1 Underwriter 2 Underwriter 3

(33)
There will be no burden only on underwriter in case of under subscription of public offering. Other
underwriters will also be there to support it.
(34)
(6) The Consultant to the Issue may enter into separate agreements with any expert for performance of its
duties;
Provided that the said agreement(s) shall not absolve the Consultant to the Issue from its obligations as
specified in these Regulations and the agreement entered with the Issuer.
(7) Issuer shall ensure that Centralized E-PO System (35)(CES) is available for the general public
(36)
(8) The Issuer itself or through its Consultant to the Issue, if any shall submit an application along with draft
prospectus for listing of its securities to the securities exchange under section 19 of the Act read with
the relevant regulations of the securities exchange. The copy of the said application along with draft
prospectus shall also be sent to the Commission for its record;
[(9) The Issuer while submitting draft prospectus to the securities exchange shall comply with the following
requirements with respect to the contents of the draft prospectus and advertisement;
(i) Prepare the draft prospectus as per the format and disclosures prescribed in First Schedule and
should be translated into Urdu in addition to English version.
(ii) Prepare the draft abridge prospectus, if any, as per the disclosures prescribed in Third Schedule.
(iii) Prepare the draft advertisement, if any, as per the disclosures prescribed in Third Schedule.
(iv) Prepare the draft supplement to the prospectus, in case of shelf registration, as per the discloses
prescribed in Fourth Schedule.](37)
(9a) The issuer and Consultant to the Issue, if any shall ensure that all applicable disclosures as prescribed
under First Schedule are made in the draft prospectus.
(9b) In case, some disclosures are not applicable to a particular issue, the Issuer and Consultant to the
Issue, if any shall report the same to the Commission along with rationale.
(10) The language of the draft prospectus should be simple, plain, clear, precise and easily understandable.
(11) The draft prospectus as submitted by the Issuer shall be placed by the securities exchange on its
website for a period of seven working days and the same shall be notified by the securities exchange to
its members, for seeking public comments. The draft prospectus shall also be placed on the website of
the Issuer and Consultant to the Issue, if any;
(12) The securities exchange shall ensure that all comments received on the draft prospectus have been
incorporated and suitably addressed by the Consultant to the Issue and the (38)Issuer to the satisfaction
of the securities exchange.
(38)
Provided that in case where Consultant to the Issue is not appointed, the Issuer, itself shall address
the comments received on the draft prospectus.
(13) While processing any application submitted by the Issuer itself or through its Consultant to the Issue, if
any under section 19 of the Act for its approval, the securities exchange, in addition to any other
requirements, shall examine the proposed issue from various aspects including eligibility requirements
and suitability of the Issuer or security for listing considering the interest of general public and its
benefits to the capital market. In order to assess the suitability aspect, the securities exchange shall
ensure that the Issuer has made all such disclosures as are necessary to comply with the requirements
of sub-section 4(a) of Section 20 read with Section 22 of the SECP Act, 1997. The securities exchange
may ask for any additional information as required. (39)
(14) The securities exchange shall communicate its approval or reasons for rejection of the application to
the Consultant to the Issue, if any, the Issuer and the Commission. (40)

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(15) After obtaining the approval of the securities exchange, the Issuer itself or through its Consultant to the
Issue, if any, shall submit an application along with the documents prescribed in Eight Schedule to the
Commission for its (41)approval under section 87 and 88 of the Act. The application shall be
accompanied by the processing fee as prescribed in Fifth Schedule.
(15a) Any change in the Prospectus subsequent to its approval by the Commission and prior to its
publication, may be made only with prior written approval of the securities exchange and the
Commission; and(42)
(15b) Any change in the Prospectus subsequent to its publication, may be made only with the prior written
approval of the securities exchange and the Commission and such change shall be disseminated to the
public through publication of addendum to the Prospectus in at least all those newspapers, websites in
which the Prospectus has been published earlier.(43)
(16) In case application for listing is refused by the securities exchange, the Issuer itself or through its
Consultant to the Issue, if any, may file a petition before the Commission within thirty days of such
refusal.
(17) A company may issue securities outside Pakistan subject to prior approval of the Commission under
section 95 of the Act and payment of non-refundable fee of one million rupees and submission of such
documents as prescribed in Sixth Schedule.
[(18) Securities of any company established outside Pakistan can be offered for sale to the public under
sections 87 and 88 of the Act read with section 446 and 447 of the Companies Act.
Provided such foreign company is compliant with the provision of Part 2[XII of the Companies
Act], these Regulations and meets requirements of regulations of the securities exchange for
listing of companies and securities.](44)
(19) The securities subscription form on the format provided in Seventh Schedule shall be made part of the
Prospectus.
(20) the Issuer, the Consultant to the Issue, the Underwriter, the Book Runner and the Designated institution
shall maintain record of the issue for a period of at least ten years from the closing of the public
subscription.(45)
(21) The offer size and allocation of capital to the general public shall be as per the requirements of the
relevant regulations of the (46)securities exchange.

Method of Public Offer of Shares

(47)
Fixed Price Method: Book Building Method:
Under the fixed price method, the offer Book building is a mechanism of price
price is set by the issuer in consultation discovery of shares through Bidders who
with the consultant to the issue. make Bids at Floor Price or within the Price
Band. Bids received are listed in descending
order of price evidencing demand at different
price levels at Floor Price or within the Price
Band. A Strike Price is arrived at through
Dutch Auction Method.

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(30) Definition of associates as defined in Securities Act, 2015 in t Free Float handout will be followed here.

(31) It means that this is not to be done publicly but can be done with their dents.

(32) 1. These other underwriters shall also be licensed by the commission.

2. Consent of the issuer shall also be required in respect of this arrangement.

3. Disclosure in prospectus or supplement of prospectus, as the case may be, shall also be required.

(33) If this condition will be fulfilled, then underwriter may enter into separate agreement with other underwriters.

(34) Perhaps an expert will help but the ultimate responsibility lies with a Consultant to the issue.

(35) Reading Material (Extracted From Prospectus of Octopus Digital Limited)

CES can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be made through 1UNK's
member banks available for CES.

For making application though CES, investors must be registered with CES. Registration can be done under a self-registration
process by filling the CES registration form, which is available 24/7 all throughout the year.

in addition to the above, investors/sub-account holder(s) can request their respective TREC Holders who are Participants in
Central Depository System (CDS) to make electronic subscription on their behalf for subscription of securities of a specific
company by authorizing (adding the details of) their respective Participant(s) in CES. Consequently, authorized Participants will
electronically subscribe on behalf of their sub-account holder(s) in securities offered through Initial Public Offerings and will also
be able to make payment against such electronic subscriptions through all the available channels mentioned on CES only after
receiving the subscription amount from the sub-account holder(s). To enable this feature, the CDS Participant may request CDC
to activate his ID on the CES portal.

“Centralized EPO System (CES)” means a centralized system through which applications for subscription of securities through
Public Offering can be made electronically through internet, Automated Teller Machines (ATM) and mobile phones.

This is the system of CDC.

(36) First Prospectus will be approved by exchange and then it will be approved by SECP.

(37) < Contents of Prospectus >

(38) There are 2 cases of this:

1 When company is already listed
2 Public Offer by Privatization Commission

(39) The purpose of this is to protect the interest of general public.

(40) Communication in both cases (i.e. Approval and Rejection)

(41) After approval of prospectus by the securities exchange then it will be submitted to SECP for it’s approval.

(42) Change in case where the prospectus is not published.

(43) Change in case where the prospectus is not published.

(44) Case of listing of foreign company.

(45) Maintenance of Records

(46) Chapter 5: Listing Rules

Recap handout of Public Offering – Listing Regulations Portion

(47) Will be discussed in detail after covering Fixed Price Method.

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Regulation 5: Conditions for public offer of Shares

An Issuer shall comply with the following conditions, namely,-
(1) The sponsors of the Issuer shall retain their entire shareholding in the company for a period of not less
than twelve months from the last date for public subscription or in case of green field projects from the
date of commencement of commercial operations or production by the company, whichever is later;
(2) The sponsors of the Issuer shall retain not less than twenty five percent of the paid up capital of the
company for not less than three financial years from the last date for the public subscription or, in case
of green field projects, from the date of commencement of commercial operations or production by the
company, whichever is later;
Provided that sub regulation (1) and (2) shall not apply in case of: (i) secondary public offering; and (ii)
initial public offering of other class of shares by listed companies.
(48)
(3) The shares of the sponsors mentioned at (1) and (2) above shall be kept unencumbered in a blocked
account with central depository;
(4) Subject to compliance with sub-regulation (1) and (2) above, and with the approval of the securities
exchange, the sponsors of the Issuer may sell their shareholding through block-sale to any other
person who shall be deemed sponsor for the purposes of these Regulations. Any such person and its
directors, sponsors and substantial shareholders shall comply with conditions as stipulated in sub
regulation (1) of regulation 3 above;

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Conclusion in Case of Profit Making

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GREEN FIELD PROJECT Conclusion in case of green field project

Sponsor minimum capital = 51% By virtue of Regulation 3 (i) (iv) (a) & 3(i)(iv) (g)

PAT for 2 consecutive years Reg 3(1)(iv) (g) Satisfied No PAT for 2 consecutive years

Commencement of Retain 51% till Time of PAT for

Commercial Production 2 Consecutive Years

Yes Reg. 3(1)(iv) (g) No Wait for Commercial Reg. Follows

Satisfied Production

12 months from date of

commercial production passed?

Reg. 5(1) Shall Retain Entire

Yes No
Satisfied Holding 5(1)

May Sell Shall retain at least 25% at least for 3 year

25% Holding period from date of commercial production Reg 5(2)

Company Sponsor Minimum Capital

Loss Making 51%
Profit Making 25% Derived From Above 3 Conclusions
Green Filed Project 51%
In regulation 3 at least 51% word has been written in case of loss making and green field project. If
sponsor has 90% shareholding, then he/she shall follow Regulation 5 (1) and may sell excess
shareholding subject to compliance of Regulation 5 (1) (49)
(5) The issuer may allot shares on account of preferential allocation to its employees at the same price at
which shares are offered to the general public;(50)
(6) In case of public offer of shares for a green field project, balancing, modernization and replacement or
expansion,-
(i) The public offer of shares shall be in accordance with the financial plan approved by the board of
directors of the Issuer. The financial plan shall be disclosed in the prospectus along with
rationale for variations, if any;

(48) Unencumbered meaning not saleable, moreover pledge / charge shall not be made on these shares.

(49) After 12 months period

(50) Remember Listing Rules, where offer size may be allocated separately to employees.

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6. Conditions for public offer of shares through fixed price method.-

In addition to the conditions as mentioned at regulation 5 above, an Issuer shall comply with the following
conditions, namely,-
(1) The Issuer shall decide the offer price in consultation with the Consultant to the Issue, (51)if any. The
Consultant to the Issue, if any or the Issuer shall provide explanations in support of the offer price under
a separate section titled as “Valuation Section” of the prospectus.
(52)
(2) The public offer under the fixed price method shall be fully underwritten.
(53)
(3) An issuer shall issue shares to the general public at the price not higher than the price at which the
shares were issued to investor during the period of six months prior to the date of public subscription.
(54)
(4) After approval of the prospectus by the Commission, the Issuer itself or through its Consultant to the
Issue, if any shall seek from the securities exchange the dates for the publication of prospectus and the
subscription period.
(5) Non-compliance with any of the condition imposed by the securities exchange and the Commission
while granting approval for issuance, circulation and publication of the prospectus shall be considered
as violation of the prospectus and the Act.
(6) After inserting the dates(55) of the subscription period, the copy of the approved Prospectus shall be
placed on the website of the Issuer, the securities exchange and the Consultant to the Issue, if any.
(56)
(7) The prospectus shall be issued, circulated and published not less than seven days and not more than
thirty days before the commencement of the subscription period for the retail portion of the Issue.
(8) The prospectus (57)or abridged prospectus, as approved by the Commission shall be published in at
least one English and one Urdu Newspaper.
(9) The general public shall submit application for the subscription of shares to the (58)Banker to an Issue
either in physical form or electronically. The application shall be duly accompanied by a crossed cheque
or demand draft or pay order in the name of the Issuer or evidence of direct debit of subscription money
from the applicant’s bank account or blocking of the subscription money in the applicant’s bank
account.
(10) Within 10 working days of the close of public subscription period or such shorter period of time as may
be specified by the Commission from time to time, the shares shall be allotted and issued against the
accepted and successful applications and (59)the subscription money of the unsuccessful applicants
shall be unblocked/refunded.
(11) The company whose shares are offered through fixed price method shall not be provisionally listed.

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(51) There are 2 cases of this:

1 When company is already listed
2 Public Offer by Privatization Commission

(52) Fully Underwritten:

In case of under subscription, an Underwriter shall subscribe all remaining shares.

(53) Price shall be decided by consultant to issue or issuer as the case may be subject to this condition.

(54) 1. Approval of prospectus by PSX

2. Approval of prospectus by SECP
3. Dates for publication of prospectus and subscription period from PSX

(55) As given by PSX

(56) This was also covered while covering Securities Act, 2015.

(57) Normally, prospectus is usually quite large in respect of number of pages and it will be very costly and impossible to publish in
news paper, therefore, as a commercial substance, issuer may publish abridged prospectus, (this is the reason behind "OR"
word.

(58) Banker to issue responsible for receiving of subscription application along with amount.
Blocking of subscription money means blocking of amount from customer's account.
(59) Subscription Money of unsuccessful applicants shall be unblocked (in case of blocking of money) or refunded (in case of deposit
of money/cheque)

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Public Offer of shares through Book Building Method

Book Building Method:

Book building is a mechanism of price discovery of shares through Bidders who make Bids at Floor Price or
within the Price Band. Bids received are listed in descending order of price evidencing demand at different
price levels at Floor Price or within the Price Band. A Strike Price is arrived at through Dutch Auction Method.
Book building is a mechanism of price discovery of shares through Bidders who make Bids at Floor Price or
within the Price Band. Bids received are listed in descending order of price evidencing_demand at different
price levels at Floor Price or within the Price Band. A Strike Price is arrived at through Dutch Auction Method.
Important Definitions:
Book Building is a mechanism of price discovery.
Floor Price: "Floor Price" in case of book building means the minimum price per share set by the Issuer in
consultation with Consultant to an Issue.
Price Band: "Price Band" in case of Book Building means Floor Price with an upper limit of 40% above the
Floor
Price, allowing Bidder to make Bid at Floor Price or within the Price Band.
Bid: "Bid" in case of shares means an intention to buy a specified number of shares at a specified price.
Strike Price: "Strike Price" means the price per share determined on the basis of Book Building process.
Dutch Auction Method: "Dutch Auction Method" means the method through which Strike Price is determined
by arranging all the Bids in descending order based on the Bids Prices along with the number of shares and
the cumulative number of shares bid for. The Strike Price is determined by lowering the Bid Price to the extent
that the total number of securities offered under the Book Building Portion are subscribed.
Practical Example: (Octopus Digital Limited)
Floor Price:
4. A VALUATION SECTION
The Ordinary Shares of Octopus are being issued at Floor Price of PKR 29/- per share which is at a
premium of PKR 19/- per share Ordinary Share to the face value of PKR 10.00/- per Ordinary Share.
The Lead Manager has reviewed the business performance of the Company and in their opinion, the
floor Price of PKR 29/- per share is justified based on the following:
Price Band:
Range
(60)
In this case range = From Rupees 29.00/= to Rupees 40.60/=
The Floor Price of PKR 29/- has a maximum Price Band of 40% above which no bid shall be accepted. At
maximum Price Band, the highest strike price that can be bid shall be PKR 40.6/- per share.

(60) = 29(1 + 40%)

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[THINK WHY THERE ARISES A CONCEPT OF PRICE BAND OF 40%]

If there will be no limit, then bidder will go to more and more amount and
ultimately share price will go from floor price to more and more high amount.

(61)
Floor Price = 20 and book building, strike price = 500
ROSHAN PACKAGES LIMITED
(62)
KARACHI: Roshan Packages Limited (RPL) fetched Rs. 86.25 apiece in its initial public offering (IPO) at
Pakistan Stock Exchange (PSX), higher than the market's expected intrinsic value range of Rs. 45-55 per
share and significantly above the (63)Rs. 35-per-share floor price, which comprises premium worth Rs. 25 per
share.

(61) No control and ultimately there will be loss of interest of general public.
(62) < IPO Before the concept of price band >
(63) Floor Price = 35/Share
Strike Price = 86.25/Share

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This is a Practical Example of Bid Screen

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(64)
7. Conditions for offer of shares through Book Building:
In addition to the conditions as mentioned at regulation 5 above, the Issuer shall comply with the following
conditions, namely:
(1) The (65)offer Size is not less than twenty five million shares and two hundred fifty million rupees or such
higher number of shares and amount as may be specified by the Commission from time to time;
(2) The company whose shares are issued through Book Building shall not be provisionally listed.
(3) Maximum seventy-five percent of the offer size is allocated to book building portion and the remaining
minimum twenty-five percent to the retail investors. The retail portion of the public offer shall be (66)fully
underwritten.
Provided further that the Commission may allow undertaking of book building process and
subscription by retail investors simultaneously, subject to the condition that the Consultant to
the Issue, the Book Builder and the Issuer shall satisfy the Commission that the necessary
arrangements in terms of IT infrastructure, underwriting for the retail portion, distribution
network, etc are in place for simultaneously undertaking book building and retail subscription;
(67)
(4) The bidders may be allowed to place bids for hundred percent of the offer size and the strike price shall
be the price at which the hundred percent of the offer size is subscribed. However, the successful
bidders would be allotted and issued only seventy-five percent of the offer size and the remaining
twenty five percent would be offered to the retail investors. The bidders shall give an undertaking along
with the application that they would subscribe to the unsubscribed shares, if any, by the retail investors
and their remaining bid money would remain deposited/ blocked till allotment of unsubscribed shares by
the retail investors, if any, to them on pro-rata basis. In case the retail portion is fully subscribed, the bid
money shall be immediately refunded or unblocked. In this case, the retail portion may not be
underwritten.
(6) Book building portion shall be credit (68)underwritten by one or more book runners.
(7) The Issuer and the Consultant to the Issue, if any shall provide names and Unique Identification
Numbers of all their associates, if any, to the Book Runner; at least three working days before the
commencement of the Bidding Period. The book runner shall enter the names and UIN number of
associates of the Issuer, the associates of the Consultant to the Issue and its associates, if any in the
book building system in order to ensure compliance with these regulations.
(8) The associates of the Issuer as disclosed in the Prospectus (69)shall not in (70)
aggregate make bids in
excess of ten percent of the shares offered though Book Building.
(9) The associates of the Consultant to the Issue and Book Runner shall not in aggregate make bids in
excess of ten percent of the shares offered through Book Building:
(71)
Provided that sub-regulation (9) shall not apply to such associates of the Consultant to the Issue and
the Book Runner that are Financial Institutions, Mutual Funds 5[and Insurance Companies.
(10) The consultant to the issue shall ensure that the issuer has entered into a tripartite agreement in writing
with the Designated Institution and the Book Runner. The said agreement shall specify inter-alia, the
rights, privileges, duties, responsibilities and obligations of each party to the agreement and shall
provide a clause on dispute resolution mechanism among the parties to the agreement.
Provided that in case where there is no consultant to the Issue, the Issuer itself shall ensure that
tripartite agreements contain the required content as prescribed above.
(11) The Issuer, the Consultant to the Issue, the Book Runner, the Underwriter and the Designated
Institution shall maintain record of the issue for a period of at least ten years from the closing of the
public subscription.

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(64) (Additional Conditions in Case of Book Building)

(65) Offer Size = 25 Million Shares  Rupees 10 = 250 Million
Book Building Portion: Maximum 75% of Offer Size as determined above
Retail Portion: Minimum 25% of Offer Size as determined above
(66) When Book Runner (Will be discussed later) will be appointed for book building, it will underwrite only book building portion. So,
in case of retail portion (i.e. 25%), Issuer, shall appoint another underwriter or engage the same underwriter to underwrite retail
portion.
(67) VERY IMPORTANT
< Will be discussed in illustration 3 >
(68) DUAL PERSON
Book Runner will develop a stage for Book Building and also a underwriter
“Book Runner” means a securities broker or a scheduled bank who holds a valid license from the Commission to act as an
Underwriter.
(69) < Not Allowed >
(70) < Aggregate word is very important here >
Please Refer: Associates Definition in Securities Act, 2015 as elaborated in Free Float Definition.
ABC = 2% of book building
DEF = 4% of book building
GHI = 8% of book building
Total = 14% of book building
(71) Please note that this relaxation is given for associates of Consultant to the issue and Book runner. This is not provided for
associates of Issuer.
Even if associate of the issuer is financial institutions, then this restriction will still apply (Regulation 7(8)

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Illustration No. 1
Understanding of Bidding Chart and Determination of Strike Price (72)

Company Name = Issuer = IQ Limited

(73)
Offer Size = 25 Million Shares of Rs. 10/ each (In Compliant with Regulation 7(1))
Book Building Portion = Maximum 75% of Offer Size (25 Million Shares  75%) = 18.75 Million (Reg. 7(3))
Retail Portion = Minimum 25% of Offer Size (25 Million Shares  25%) - 6.25 Million (Regulation 7(3))
Floor Price = 15/Share (In consultation with consultant to the issuer)
Price Band = 15(1+ 40%) = 21/Share

(74)
Book Building Portion 18,750,000 Shares
Cumulative Remaining Offer
Bidder Quantity Bid Price(75) Bid Amount
Quantity Size
1 633,686 633,686 21 13,307,406 18,116,314
2 585,249 1,218,935 21 12,290,229 17,531,065
3 757,067 1,976,002 21 15,898,407 16,773,998
4 456,243 2,432,245 21 9,581,103 16,317,755
5 572,759 3,005,004 21 12,027,939 15,744,996
6 56,256 3,061,260 21 1,181,376 15,688,740
7 712,444 3,773,704 21 14,961,324 14,976,296
8 240,660 4,014,364 21 5,053,860 14,735,636
9 254,294 4,268,658 21 5,340,174 14,481,342
10 423,729 4,692,387 21 8,898,309 14,057,613
11 521,520 5,213,907 21 10,951,920 13,536,093
12 56,256 5,270,163 20 1,125,120 13,479,837
13 407,996 5,678,159 20 8,159,920 13,071,841
14 203,188 5,881,347 20 4,063,760 12,868,653
15 541,389 6,422,736 20 10,827,780 12,327,264
16 210,434 6,633,170 20 4,208,680 12,116,830
17 429,068 7,062,238 20 8,581,360 11,687,762
18 842,213 7,904,451 20 16,844,260 10,845,549
19 56,256 7,960,707 19 1,068,864 10,789,293
20 582,865 8,543,572 19 11,074,435 10,206,428
21 670,014 9,213,586 19 12,730,266 9,536,414
22 291,957 9,505,543 18 5,255,226 9,244,457
23 217,299 9,722,842 18 3,911,382 9,027,158
24 881,688 10,604,530 17 14,988,696 8,145,470
25 534,047 11,138,577 17 9,078,799 7,611,423
26 673,637 11,812,214 17 11,451,829 6,937,786
27 67,255 11,879,470 17 1,143,352 6,870,530
28 667,440 12,546,910 16 10,679,040 6,203,090
29 217,395 12,764,305 16 3,478,320 5,985,695
30 136,634 12,900,939 16 2,186,144 5,849,061
31 721,884 13,622,823 16 11,550,144 5,127,177
32 680,789 14,303,612 16 10,892,624 4,446,388
33 914,774 15,218,386 16 14,636,384 3,531,614
34 238,085 15,456,471 16 3,809,360 3,293,529
35 359,559 15,816,030 16 5,752,944 2,933,970
36 931,555 16,747,585 16 14,904,880 2,002,415
37 819,330 17,566,915 16 13,109,280 1,183,085
38 219,016 17,785,931 16 3,504,256 964,069
39 964,069 18,750,000 16 (76) 15,425,104 -

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40 148,222 18,898,000 15 2,223,330

41 488,711 19,386,933 15 7,330,665
42 83,054 19,469,987 15 1,245,810
43 68,626 19,538,613 15 1,029,390
44 333,501 19,872,114 15 5,002,515
45 330,641 20,202,755 15 4,959,615
46 94,952 20,297,707 15 1,424,280
47 199,781 20,497,488 15 2,996,715
48 487,711 20,985,199 15 7,315,665
49 417,761 21,402,960 15 6,266,415
50 79,901 21,482,861 15 1,198,515
51 205,271 21,688,132 15 3,079,065
52 73,919 21,762,051 15 1,108,785
53 99,315 21,861,366 15 1,489,725
54 76,979 21,938,345 15 1,154,685
55 459,171 22,397,516 15 6,887,565

(72) This Illustration is just for understanding of basic bidding chart; Complex Illustrations will be covered later in this handout.
(73) This shall be fully underwritten by one or more book runners
(74) Book Building Portion Minus Cumulative Quantity
(75) Descending Order
(76) 1. This is the price where quantity available for book building portion will be zero.
2. This is the price which at which shares will be allotted to ALL bidders
3. It shall be determined at the close of bidding period.

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Procedure for public offer of shares through Book Building.-

The following procedure shall be adopted for book building process:
(1) The Issuer shall decide the Floor Price and the Price Band in consultation with the Consultant to the
Issue, if any.
Provided that the upper limit of the Price Band should not be more than 40% of the Floor Price.
The Floor Price and its determination shall be disclosed under a separate section titled as
“Valuation Section” in the prospectus. The Consultant to the Issue, if any or the Issuer shall
Justify the Floor price.
(2) After approval of the prospectus by the Commission, the Issuer itself or through its Consultant to the
Issue, if any shall seek from the securities exchange (77)the dates for the publication of prospectus and
the Bidding Period.
[(3) Non-compliance with any of the condition imposed by the securities exchange and the Commission
while granting approval for issue, circulation and publication of the prospectus shall be considered as
violation of the prospectus and the Act.
(4) The prospectus and abridged prospectus as approved by the Commission shall be published in at least
one English and one Urdu Newspaper.
(5) The prospectus shall be issued, circulated and published not less than seven days and not more than
thirty days before the commencement of the subscription period for the retail portion of the Issue.](78)
(6) After inserting the dates of the Bidding period, the copy of the approved Prospectus shall be placed on
the website of the Issuer, the Book Runner, the Designated Institution, the securities exchange and the
Consultant to the Issue, if any.
6(a) The Issuer shall publish the Prospectus at least one day before the commencement of registration of
bidders by the Book Runner.
(7) The bidding shall be conducted electronically through the System in a fair, efficient and transparent
manner.
(8) Save as provided in regulation 3(15)(a) and (b), Floor price shall not be revised once the Prospectus
has been approved by the Commission.
(9) The registration of bidders by the Book Runner shall commence at least three working days before the
start of the bidding period and shall remain open till 03:00 pm on the last date of the bidding period.
(10) The Book Runner shall at least establish bid collection centers in Islamabad, all the (79)provincial
capitals, Azad Kashmir and Gilgit/Baltistan. The Book Runner may also designate any of the Bankers to
an Issue as its collection agent.
(11) The Book Runner shall provide a mechanism for registration of the bidders at the bid collection centers
and collection agents.
(12) The Book Runner shall make all necessary arrangements for receiving bids and the instruments
evidencing payment of the bid money
(13) The Book Runner shall put in place a mechanism to enter details including the maximum Bid amount of
the Bidders into the System
(14) Once details of the bidders are entered into the System, the Designated Institution shall assign and
communicate password and user ID to the bidders enabling them to directly place the bid and revise
the bid, if required.
(15) The bidding shall remain open (80)for at least one working day.
(16) The Book Building process shall be considered as cancelled if the Issuer does not receive bids for the
number of shares allocated under the Book Building Portion and the same shall be immediately
intimated by the Book Runner and Consultant to the Issue to the Commission, the securities exchange,
the Designated Institution and the bankers to an issue. (81)All the Bankers to an Issue shall be advised
by the book runner for refund/ unblocking of the Bid Money of the bidders. The margin money shall be
unblocked/ refunded to the bidders, where required, immediately but not later than three working days
of the closing of the Bidding Period;

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(17) The Book Building process shall be considered as cancelled if the total number of bids received is
less than forty; and
(18) The Book-Runner shall ensure that subscription money received against the bids accepted shall not be
released to the Issuer by the Banker to the Book Building Portion until:
(i) credit of all shares allocated under the retail portion of the issue; and
(ii) issuance of NOC by the securities exchange in case the company is already listed or formal
trading of the company in case of new listing.

(77) Same as above as discussed in fixed price method.

(78) Same as above as discussed in fixed price method.
(79) Sindh – Karachi
Baluchistan – Quetta
KPK – Peshawar
Punjab – Lahore
(80) Practically, it is open for 2 working days
(81) Margin Money Concept will be discussed later in this handout.

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Procedure for Bidding

Regulation 9: Procedure for bidding: The following procedure shall be followed for bidding:
(1) Bids can be placed as (82)
‘Limit Bid’ or a ‘Step Bid’ either electronically or with the bid collection centers
and collection agent.
(83)
Provided that the minimum size of a limit bid and that of any step, in case of a Step Bid, shall
not be less than one million rupees;
(2) The book runner (84)shall vet the bid applications and accept only such bid applications that are duly
filled in and supported by a crossed cheque or demand draft or pay order or confirmation from the
Banker to an Issue that Bid Money has been electronically debited from the bidder account or is
blocked in the bidder account;
(3) In case of (85)institutional investors, the book runner may accept bid applications with minimum 25%
margin money.
Provided that the book runner may waive this margin requirement for institutional investors at its own
discretion.
(4) On receipt of bid application, the Book Runner shall enter the Bid into the System and issue to the
bidder an electronic receipt bearing name of the book runner, name of the bidding center, date and
time;
(5) The bidding shall commence from 09:00 a.m. and close at 05:00 p.m. on all days of the Bidding Period.
The bids shall be collected and entered into the system by the Book-Runner till 05:00 p.m. on the last
day of the bidding period;
(6) The bidders can revise the bids upward till 05:00 p.m. on the last day of the Bidding Period;
(7) The Book Runner may reject any bid application for reasons to be recorded in writing provided the
reason of rejection is disclosed to such bidder. Decision of the Book Runner shall not be challengeable
by the bidder.
(8) The Designated Institution shall through the System display live throughout the bidding period an order
book in descending order showing demand for shares at various prices and the accumulated number of
shares bid for along with percentage of the total shares offered. The order book should also show the
revised bids. The order book shall be accessible through websites of the Designated Institution, Book
Runner, the Consultant to the Issue, securities exchange, clearing house and the central depository;
(9) At the close of the bidding period, Strike Price shall be determined on the basis of Dutch Auction
Method by the Designated Institution;
(86)
(10) The bidders who have made bids at prices above the Strike Price shall be allotted shares at the
Strike Price;
(11) In case the bids received are sufficient to allot the total number of shares offered for sale under the
Book Building Portion, the allotment shall be made on the basis of highest bid priority that is the bid
made at the highest price shall be considered first for allotment of shares.
(12) In case all the bids made above the Strike Price are accommodated and shares are still available for
allotment, such available shares shall be allotted against the bids made at the Strike Price on
proportionate basis.
(13) The bidders who have made bids below the Strike Price shall not qualify for allotment of securities and
the book runner shall intimate their respective banks for unblocking their Bid Money within one working
day of the close of the bidding period;
(14) Within one day of the closing of the bidding period, successful bidders shall be intimated the Strike
Price and the number of shares provisionally allotted to each of them;

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(87)
(15) The bid money of bidders who have undertaken to subscribe the unsubscribed retail portion shall
remain deposited or blocked till allotment of unsubscribed retail portion, if any, to them on pro-rata
basis; and
(16) The successful bidders shall be issued securities only after the end of the public subscription, in the
form of book-entry to be credited in their respective accounts. All the bidders shall, therefore, provide
number of their accounts in the bid application; and
(17) The Designated Institution shall continue to display on its website, the data pertaining to the Book
Building and determination of the Strike Price for a period of at least three working days after closure of
the bidding period.

Limit Bid Step Bid

(88) (89)
"Limit Bid" in case of shares mean a bid "Step Bid" in case of shares means a series of
placed by the bidder at a maximum price that he Limit Bids at increasing prices provided that Bid
is willing to pay for shares under the Book Amount of any step is not less than one million
Building method; rupees under the Book Building method.

(82) < Defined Below >

(83) Bidding Quantity *Bid Price Shall be greater than or equal to Rupees 1,000,000/=
(84) (Confirms and Verifies)
(85) Refer Definition of Institutional Investor
"Institutional Investors" means any of the following entities:
(a) A financial institution;
(b) A company as defined in the Companies Act;
(c) An insurance company established under the Insurance Ordinance, 2000;
(d) A securities broker;
(e) A fund established as Collective Investment Scheme under the Non-Banking Finance Companies and Notified Entities
Regulations, 2008;
(f) A fund established as Voluntary Pension Scheme under the Voluntary Pension System Rules, 2005;
(g) A private fund established under Private Fund Regulations, 2015;
(h) Any employee's fund established for beneficial of employees;
(i) Any other fund established under any special enactment;
(ia) A foreign company or any other foreign legal person; and
(j) Any other entity as specified by the Commission.
(86) Even bid price is greater than strike price, shares shall be allotted to bidders @ Strike Price.
(87) Refer Regulation 7(4)
Will be discussed in illustration 3
(88) Maximum Price that bidder is willing to pay. It means that if strike price is determined to be greater than limit bid, then this shall be
cancelled.
(89) Step 1 = Rs. 20/share  Number of shares = XXXX
Step 2 = Rs. 25/share  Number of shares = XXXX
Step 3 = Rs. 30/share  Number of shares = XXXX
This shall not be less than 1 Million rupees

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Restrictions

10. Restrictions:
(1) The biding period shall not be extended except in extra ordinary circumstances like closure of banks,
failure of System, etc. In such case, Book Runner shall apply to the Commission for extension in the
Bidding Period after obtaining NOC from securities exchange. In case extension is granted, the same
shall be disseminated through publication in all those newspapers where the prospectus was published
and the website of the issuer, consultant to the issue, book runner, the designated institution and the
securities exchange.
(2) The bidder shall not –
(i) make bid below the Floor Price and above the upper limit of the Price Band;
(ii) make bid for more than 10% of the shares allocated under the Book Building Portion;
(iii) subject to the provision of clause (i) above, make bid with price variation of more than 10% of the
prevailing indicative strike price or such other percentage as may be specified by the
Commission;
(iv) make consolidated bid;(90)
(v) make more than one bid either severally or jointly;
(vi) make downward revision both in terms of Bid Price and Bid Volume;
(91)
Provided that in case of upward revision of the Bid Price, the number of shares Bid for
i.e. Bid Volume may be adjusted ensuring that the bid amount or bid money remains the
same; or
(vii) withdraw the Bid.
(3) No person shall take part in the book building process, directly or indirectly severally or jointly in any
manner or engage in any act or practice which create a false and misleading appearance of active
bidding for raising or depressing strike price in the book building process.

(90) “Consolidated Bid” mean a bid which is fully or partially beneficially owned by persons other than the one named therein
Mr. A 100,000
Mr. B 200,000
Mr. C 700,000
Total 1,000,000
Not Allowed
(91) In case of step bid
Step 1 = 10,000 Shares  12 = 120,000
Step 2 = 8,000 Shares  15 = 120,000

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Illustration No. 2
Understanding of Bidding Chart and Determination of Strike Price
Company Name = Issuer = IQ Limited
*Offer Size = 25 Million Shares of Rs. 10/ each (In Compliant with Regulation 7(1))
**Book Building Portion = Maximum 75% of Offer Size (25 Million Shares  75%) = 18.75 Million (Reg. 7(3))
Retail Portion = Minimum 25% of Offer Size (25 Million Shares  25%) - 6.25 Million (Regulation 7(3))
Floor Price = 15/Share (In consultation with consultant to the issuer)
Price Band = 15(1+ 40%) = 21/Share
Bank Building Portion 18,750,000 Shares
Cumulative Remaining Proportional Revised
Bidder Quantity Bid Price Bid Amount
Quantity Offer Size Allocation Results
1 633,686 633,686 21 13,307,406 18,116,314 - 633,686
2 585,249 1,218,935 21 12,290.229 17,531,065 - 585.249
3 757,067 1,976,002 21 15,898,407 16,773,998 - 757,367
4 456.243 2,432,245 21 9,581,103 16,317,755 - 456,243
5 572,759 3,005,004 21 12,027.939 15,744,996 - 572,759
6 56,256 3,061,260 21 1,181,376 15,688,740 - 56,256
7 712,444 3,773,704 21 14,961,324 14,976,296 - 712,444
8 240,660 4,014,364 21 5,053,860 14,735,636 - 240,660
9 254,294 4,268,658 21 5,340,174 14,431,342 - 254,294
10 423,729 4,692,387 21 8,898,309 14,057,613 - 423,729
11 521,520 5,213,907 21 10,951,920 13,536,093 - 521,520
12 56,256 5,270,163 20 1,125,120 13,479,837 - 56,256
13 407,996 5,678,159 20 8,159,920 13,071,841 - 407,996
14 203,138 5,881,347 20 4,063,760 12,868,653 - 203,188
15 541,389 6,422,736 20 10,827,780 12,327,264 - 541,339
16 210,434 6,633,170 20 4,203,630 12,116,330 - 210,434
17 429,068 7,062,238 20 8,581,360 11,687,762 - 429,068
18 842,213 7,904,451 20 16,844,260 10,845,549 - 842,213
19 56,256 7,960,707 19 1,068,864 10,789,293 - 56,256
20 532,365 8,543,572 19 11,074,435 10,206,428 - 582,365
21 670,014 9,213,586 19 12,730,266 9,536,414 - 670,014
22 291,957 9,505,543 18 5,255,226 9,244,457 - 291,957
23 217,299 9,722,842 18 3,911,382 9,027,158 - 217,299
24 881,688 10,604,530 17 14,988,696 8,145,470 - 881,688
25 534,047 11,138,577 17 9,078,799 7,611,423 - 534,047
26 673,637 11,812,214 17 11,451,829 6,937,786 - 673,637
27 67,256 11,879,470 17 1,143,352 6,870,530 - 67,256
28 667,440 12,546,910 16 10,679,040 6,203,090 - 667,440
29 217,395 12,764,305 16 3,478,320 5,985,695 - 217,395
30 136,634 12,900,939 16 2,186,144 5,849,061 721,834 -
32 680,789 14,303,612 16 10,392,624 4,446,388 680,789
33 914,774 15,218,386 16 14,636,384 3,531,614 - 914,774
34 238,085 15,456,471 16 3,809,360 3,293,529 - 238,085
35 359,559 15,816,030 16 5,752,944 2,933,970 - 359,559
36 931,555 16,747,585 16 14,904,880 2,002,415 - 931,555
37 819,330 17,566,915 16 13,109,280 1,183,085 - 819,330
38 219,016 17,785,931 16 3,504,256 964,069 - 219,016
39 564,069 18,350,000 16 9,025,104 ***400,000 - 564,069
40 148,222 18,498,222 15 2,223,330 251,778 16,255 16,255
41 488,711 18,986,933 15 7,330,665 (236,933) 53,594 53,594
42 83,054 19,069,987 15 1,245,810 9,108 9,108
43 68,626 19,138,613 15 1,029,390 This is the case of 7,526 7,526
44 333,501 19,472,114 15 5,002,515 implication of 36,573 36,573
45 330,641 19,802,755 15 4,959,615 Regulation 9(12) 36,259 36,259
46 94,952 19,897,755 15 1,424,280 10,413 10,413
74 199,781 20,097,488 15 2,996,715 21,909 21,909
48 4S7,711 20,585,199 15 7,315,665 53,484 53,484
49 417,761 21,002,960 15 6,266,415 45,813 45,813
50 79,901 21,082,861 15 1,198,515 3,762 8,762
51 205,271 21,233,132 15 3,079,065 22,511 22,511
52 73,919 21,362.051 15 1,108,785 8,106 3,106
53 99,315 21,461,366 15 1,489,725 10,891 10,891
54 76,979 21,538,345 15 1,154,685 3.442 3,442
55 459,171 21,997,516 15 6,887,565 50,354 50,354
18,750,000

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Cumulative Proportional
Bidder Quantity Bid Price Bid Amount
Quantity Allocation
40 148,222 148,222 15 2,223,330 16,255
41 488,711 636,933 15 9,553,995 53,594
42 83,054 719,987 15 10,799,805 9,108
43 68,626 788,613 15 11,829,195 7,526
44 333,501 1,122,114 15 16,831,710 36,573
45 330,641 1,452,755 15 21,791,325 36,259
46 94,952 1,547,707 15 23,215,605 10,413
47 199,781 1,747,488 15 26,212,320 21,909
48 487,711 2,235,199 15 33,527,985 53.484
49 417,761 2,652,960 15 39,794,400 45,813
50 79,901 2,732,861 15 40,992,915 8,762
51 205,271 2,938,132 15 44,071,980 22,511
52 73,919 3,012,051 15 45,180,765 8,106
53 99,315 3,111,366 15 46,670,490 10,891
54 76,979 3,188,345 15 47,825,175 8,442
55 459,171 3,647,516 15 54,712,740 ****50,354
*This shall be fully underwritten by one or more book runners
**Regulation 10(2)(ii) is ignored here (10% of offer size)
***400,000 Quantity is remaining which is proportionately distributed.
**** 148,222  400,000
3,647,516

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“Minimum Bid Size” mans the Bid Amount equal to one million rupees under the Book Building method.
Bids can be placed as ‘Limit Bid’ or a ‘Step Bid’ either electronically or with the bid collection centers and
collection.
Provided that the minimum size of a limit bid and that of any step, in case of a Step Bid, shall not be less than
one million rupees.

All Bidders are compliant, otherwise their bids shall be cancelled and shall not be a part of bidding chart. If no
of bidders are less than 40, then book building shall be cancelled.

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Illustration No. 3 (Regulation 7 (4))

Understanding of Bidding Chart and Determination of Strike Price

Company Name = Issuer = IQ Limited

Offer Size = 25 Million Shares of Rs. 10/ each (In Compliant with Regulation 7(1))
Book Building Portion = Maximum 75% of Offer Size (25 Million Shares  75%) = 18.75 Million (Reg. 7(3))
Retail Portion = Minimum 25% of Offer Size (25 Million Shares  25%) - 6.25 Million (Regulation 7(3))
Floor Price = 15/Share (In consultation with consultant to the issuer)
Price Band = 15(1+ 40%) = 21/Share

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Illustration No. 4
Understanding of Bidding Chart and Determination of Strike Price
Company Name = Issuer = IQ Limited
Offer Size = 25 Million Shares of Rs. 10/ each (In Compliant with Regulation 7(1))
Book Building Portion = Maximum 75% of Offer Size (25 Million Shares  75%) = 18.75 Million (Regulation 7(3))
Retail Portion = Minimum 25% of Offer Size (25 Million Shares  25%) - 6.25 Million (Regulation 7(3))
Floor Price = 15/Share (In consultation with consultant to the issuer)
Price Band = 15(1+ 40%) = 21/Share
Bidder Quantity Cumulative Quantity Bid Price Bid Amount
1 900,735 900,735 21.00 18,915,435
2 2,080,191 2,980,926 21.00 43,684,011
3 1,402,357 4,383,283 21.00 29,449,497
4 2,115,508 6,498,791 21.00 44,425,668
5 286,738 6,785,529 21.00 6,021,498
6 75,896 6,861,425 21.00 1,593,816
7 571,185 7,432,610 21.00 11,994,885
8 2,150,373 9,582,983 21.00 45,157,833 Indicative Strike Price
9 511,899 10,094,882 20.00 10,237,980 is the provisional Strike
10 88,118 10,183,000 20.00 1,762,360 price in a bidding chart
11 367,534 10,550,534 20.00 7,350,680 till the time of ending of
12 1,339,748 11,890,282 19.00 25,455,212 bidding period.
13 619,405 12.509,687 19.00 11,768,695
14 1,784,391 14,294,078 19.00 33,903,429 Rupees 18 is indicative strike price
15 1,388,904 15,682,982 19.00 26,389,176
16 402,257 16,085,239 18.00 7,240,626
17 350,415 16,435,654 18.00 6,307,470
18 2,314,346 18,750,000 18.00 41,658,228
19 2,314,346 16.36 37,862,701
20 350,415 16.20 5,676,723 (92)
21 123,304 16.10 1,985,194
22 135,435 16.00 2,166,960
21,673,500

• In this case, 40 Limit of bidders is ignored.

Bidder Previous Price Revised Price
(93)
19 16.360 19.80
20 16.200 19.70
Suppose Bidders revise their bid price
21 16.100 19.60
22 16.000 19.50
• Regulation 10(2)(ii) is also ignored here

Revised Bidding Chart

Bidder Quantity Cumulative Quantity Bid Price Bid Amount
1 900,735 900,735 21.00 18,915,435
2 2,080,191 2,980,926 21.00 43,684,011
3 1,402,357 4,383,283 21.00 29,449,497
4 2,115,508 6,498,791 21.00 44,425,668
5 256,738 6,785,529 21.00 6,021,498
6 75,596 6,861,425 21.00 1,593,816
7 571,155 7,432,610 21.00 11,994,885
8 2,150,373 9,582,983 21.00 45,157,833
9 511,599 10,094,882 20.00 10,237,980
10 88,118 10,183,000 20.00 1,762,360
11 367,534 10,550,534 20.00 7,350,680
19 2,314,346 12,864,880 19.80 45,824,051
20 350,415 13,215,295 19.70 6,903,176 (94)
21 123,304 13,338,599 19.60 2,416,758
22 135,435 13,474,034 19.50 2,640,983
12 1,339,748 14,813,782 19.00 25,455,212
13 619,405 15,433,187 19.00 11,768,695
14 1,784,391 17,217,578 19.00 33,903,429
15 1,388,904 18,606.482 19.00 26,389,176
16 402,257 19,008,739 18.00 (95) 7,240,626
17 350,415 19,359,154 18.00 6,307,470
18 2,314,346 21,673,500 18.00 41,658,228

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11. Procedure for allocation of shares to retail investors.–

The following procedure shall be followed for allocation of shares to (96)retail investors:
(1) Within three working days of the closing of the Bidding Period, the Issuer itself or through its Consultant
to the Issue, if any shall publish supplement to the prospectus in those newspapers in which the
prospectus was earlier published and also disseminate the same to the securities exchange, banker to
an issue and underwriter. For this clause the term supplement to the prospectus means
information relating to results of the Book Building or any other information prescribed below
that is important for the retail investors.
(1a) The supplement to the prospectus shall contain the information relating to the Strike Price, the Offer
Price, names of the underwriters of the retail portion of the Issue (97)if any, underwriting commission
bifurcating as take up commission or any other, commitment by the successful bidders for subscribing
the undersubscribed retail portion in case of hundred percent book building, category wise breakup of
the successful bidders along with number of shares allocated to them, dates of public subscription and
such other information as specified by the Commission.
(2) The issuer may offer the shares to the retail investors at a certain discount to the strike price.
(3) The general public shall submit application for the subscription of shares to the Banker to an Issue
either in physical form or electronically. The application shall be duly accompanied by a crossed cheque
or demand draft or pay order in the name of the Issuer or evidence of direct debit of subscription money
from the applicant’s bank account or blocking of the subscription money in the applicant’s bank
account.
(4) Within 10 working days of the close of public subscription period or such shorter period of time as may
be specified by the Commission from time to time, the shares shall be allotted and issued against the
accepted and successful applications and the subscription money of the unsuccessful applicants shall
be unblocked/ refunded.
(98)
(5) In case retail portion of the issue, if any, remains unsubscribed, the unsubscribed shares shall either be
taken up by the underwriters or allotted to successful bidders at the strike price determined in the book
building process on pro-rata basis.

(92) He decided to increase the bid amount in order to win bidding

(93) What law say us regarding this?
Regulation 10(2)(iii)
Bidder shall not make bid with price variation of more than 10% of the prevailing indicative strike price or such other percentage
as may be specified by the Commission.
Maximum revision of bid price = 18(1 + 10%) = 19.8/Share
(94) Through Revision these bidders now have won the portion.
(95) Prorate method will be used as described in illustration 2 above.
(96) < After Book Building >
(97) If any because in case of 100% book building, underwriter will not be allowed for retail portion as it will automatically subscribed
by bidders.
(98) In case of 75% Book Building
Underwriter
In case of 100% Book Building
Bidders in proportion as defined in illustration 3

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Offer for Sale of Shares by an Offeror

12. Offer for sale of shares by the Offeror.(99)

(1) A person or group of persons, holding more than ten per cent shares of a listed company or listed body
corporate, may offer such shares for sale to the public subject to the conditions that the offer size
(product of the offer price or floor price and number of shares being offered) of capital to the public shall
not be less than one hundred million rupees.(100)
(2) In case of offer for sale of shares of an unlisted company or unlisted body corporate, the size of the
offer of capital to be offered to the public shall be in accordance with these Regulations and regulations
of the securities exchange;
Provided that offer for sale of shares by the existing shareholders of a company is not allowed in case
of green field project.(101)

(99) < individually or aggregate >

(100) In case of listed Company
(101) Refer 5.4.1. of Chapter 5 of Listing Rules,

16. Post Issue Reporting and Disclosures.

The issuer upon completion of public offering of securities shall,
(i) report detailed break-up of the utilization of the proceeds of the issue in its post issue quarterly/half-
yearly and annual accounts 1till the fulfillment of the commitments mentioned in the prospectus; and
(ii) submit a: (a) Half yearly progress report; and (b) annual progress report reviewed by the auditor, to the
securities exchange till the fulfillment of the commitments mentioned in the prospectus stating the
following:
a. Implementation status of the project/commitment made in the Prospectus as per format given
below:

Commitment Start date Completion date

Current Rationale for
made in the (disclosed in (disclosed in the
status delay, if any.
Prospectus the prospectus) Prospectus)

b. Detailed break-up utilization of the proceeds raised from the issue.

(iia) Submit a final report reviewed by the auditor after the fulfillment of the commitments mentioned in the
Prospectus.
(iii) in case of Sukuk and other Shariah compliant securities, ensure that while preparing their financial
reports, all the relevant standards, notified by the Accounting and Auditing Organization of the Islamic
Financial Institutions and the Islamic Financial Accounting Standard as notified by the Commission for
adoption, from time to time relating to the financial reporting and accounting treatment of Sukuk are
complied with.(102)

(102) To be discussed with public offering of debt securities

16a. Offering an Exit Opportunity in case of change in principal purpose of Issue as disclosed in
prospectus:(103)
(1) The Issuer shall not, at any time change the principal purpose of the issue as disclosed in the
Prospectus.
(2) In exceptional circumstances, the issuer may change the principal purpose of the issue subject to
passing of special resolution and offering an exit opportunity to dissenting shareholders who have not
agreed to the change in principal purpose of the issue as disclosed in the Prospectus.
(3) Offering an exit opportunity shall also be mandatory where the principal purpose of issue was
undertaken and thereafter funds were diverted to other purposes, which resulted in non-completion of
principal purpose of issue in a timely manner as disclosed in the prospectus.

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(4) The mechanism for an exit offer opportunity shall be as under:

(i) EOGM notice in respect of any change in the principal purpose of the issue as disclosed in the
prospectus shall be given along with draft special resolution as required under the provisions of
Companies Act, 2017.(104)
(ii) Subject to approval of special resolution as defined in the Companies Act, 2017, the
shareholders who have dissented against the special resolution and conveyed their dissent to
the company secretary under intimation to PSX, shall be provided an opportunity to exit by
offering a price per share, by the sponsors of the issuer that shall be highest of the following:
(a) Intrinsic value based on the latest available audited accounts;
(b) Weighted average closing price for last six preceding months
(105)
(c) offer price at which the shares were subscribed through IPO.
(iii) The exit offer shall be executed by the sponsors with in a period of thirty days from the date of passing
of special resolution.

(103) Very Important

(104) As Required under section 134(3) of Companies Act, 2017
(105) Strike Price

16(b) Relaxation: The Commission may relax any of the requirements of the Public Offering Regulations,
2017 for privatization of government owned entities by Privatization Commission through capital market.

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Function and Responsibilities

17. General responsibilities of the Consultant to the Issue, Book Runner, Underwriter, Banker to an
Issue and Issuing and Paying Agent:
The Consultant to the Issue, Book Runner, Underwriter, Banker to an Issue and Issuing and Paying Agent
shall –
(1) make all efforts to protect the interests of investors.
(2) maintain high standards of integrity, dignity and fairness in the conduct of its business.
(3) fulfill its obligations in a prompt, ethical, and professional manner.
(4) at all times exercise due diligence, ensure proper care and exercise independent professional
judgment.
(5) endeavor to ensure that inquiries and complaints from investors are dealt with in a timely and
appropriate manner;
(6) avoid conflict of interest and make appropriate disclosure to the customers of their possible source or
potential areas of conflict of duties and interest which would impair their ability to render fair, objective
and unbiased services;
(7) ensure that they have made the reporting lines and compensation arrangements for their employees in
a way to eliminate or effectively manage actual and potential conflicts of interest;
(8) ensure that their directors and employees shall not directly or indirectly indulge in any insider trading or
other market abuses;
(9) have internal control procedures and financial and operational capabilities which can be reasonably
expected to protect its operations, its customers, investors and other regulated persons from financial
loss arising from theft, fraud, and other dishonest acts, professional misconduct or omissions;
(10) be responsible for the acts or omissions of its employees in respect of the conduct of its business;
(11) frame policies and procedures to ensure compliance with the requirements of these Regulations by its
employees;
(12) ensure that communications with the securities exchange and the Commission are kept confidential,
except as required to be disclosed to the customers;
(13) render only such services as agreed in writing with their customer and are not prohibited under these
Regulations and any other applicable law;
(14) Maintain a functional website containing all public information about the issue and mechanism for
handling of complaints;
(15) inculcate a culture of compliance of the regulatory requirements through ongoing education and training
of their employees.
(16) ensure that internal control policy is widely disseminated for compliance by all employees and is
reviewed for appropriateness and sufficiency by the competent authority at least once every year;
(17) promptly investigate, in the event of a breach of policies, procedures, controls or misconduct, and take
appropriate steps to rectify the weaknesses, if any, to prevent recurrence of such breach;
(18) Employ sufficient human resource which is adequately trained to efficiently perform its functions;
(19) Submit any document, report or information as and when required by the Commission;
(20) ensure that annual review, for appropriateness and sufficiency, of the internal control system is carried
out by the internal audit department, which reports directly to the board of directors or its audit
committee.
(21) ensure that any change in license status, any penal action against it or any material change in its
financial and operating position which may have adverse effect on the interest of the Issuer, or
investors is promptly notified to the Issuer, the offeror, the Commission and the securities exchange;
(22) ensure that all information provided to the securities exchange and Commission is true, accurate and
no material fact is omitted or suppressed; and
(23) in case of consultant to the issue give, directly or indirectly, any investment advice about any security in
the media unless a disclosure of its interest in the said security is made, while giving such advice.

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18. Functions of the Consultant to the Issue.

The Consultant to the Issue shall perform the following functions, namely:-
(1) preparation of prospectus, and related documents and ensuring that the same are prepared in
accordance with the requirements of the applicable laws including section 89 of the Act, these
Regulations, regulations of the securities exchange and other applicable regulatory framework;
(2) before submitting the application to the securities exchange under section 19 of the Act, the Consultant
to the Issue shall examine the proposed issue from various aspects including eligibility requirements
and suitability of the Issuer or security for listing considering the interest of general public and its
benefits to the capital market.
(3) give justifications in support of the offer/ Floor Price set by the Issuer under a separate section titled as
“Valuation section” in the prospectus.
(106)
(4) assist in the execution of agreements of the issuer with underwriters, bankers to an issue, book
runner, Designated Institution, debt security trustee, issuing and paying agent, balloter and transfer
agent and investment agent;
(5) on behalf of the Issuer, seeking the approval of the securities exchange under section 19 of the Act and
Commission under section 87 and 88 of the Act;
(6) preparation and publication of prospectus and advertisements with regard to public issue;
(7) ensure that the public offering including book building is carried out in accordance with the prospectus
and requirement of these Regulations and the Act;
(8) preparation and submission of final report on the issue to the Commission;
(9) comply with all the applicable directives and orders issued by the Commission; and
(10) any other related function as may be specified by the Commission from time to time.

(106) Help

19. Responsibilities of the Consultants to the Issue.

(1) The Consultants to the Issue shall.-
(i) ensure that, after having made due and careful enquiry, they have reasonable grounds to believe
that-
(a) the application submitted to the securities exchange under section 19 of the Act and the
prospectus submitted to the Commission under section 87 and 88 of the Act meets the
relevant requirements of the Act, these Regulations, regulations of the securities exchange
and other applicable regulatory framework; and
(b) the documents, reports, statements and information submitted along with the aforesaid
application and prospectus are not false or misleading and do not contain any material
omission;
(ii) ensure that adequate disclosures are made to the investors in a timely manner so as to enable
them to make a balanced and informed decision.
(iii) endeavor to ensure that the investors are provided with true and adequate information without
making any misleading or exaggerated claims or any misrepresentation and are made aware of
the associated risks before taking any investment decision.
(iv) obtain from their employees an undertaking stating therein that they will not misuse their position
of having access to non-public information, if any, relating to the issue for their personal benefit
or for the benefit of any other person who does not have or is not authorized to have access to
such information;
(v) actively participate in preparation of the prospectus and ensure that all material facts, including
all potential risks, as required under the law are disclosed therein and that the Issuer is compliant
with all the laws applicable to the issue of securities;
(vi) remain associated with the issue till its completion i.e. credit of securities, submission of final
report to the securities exchange and Commission, resolution of the issue related complaints, if
any, and implementation of final decision of the Commission on application rejected, if any.

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(vii) ensure that they understand the nature of business of their customer.
(viii) ensure that their customer is fully briefed on its obligations and potential liabilities pertaining to its
application and supporting documents including the prospectus, in relation to the requirements
stipulated by the Commission.
(ix) ensure that their customer has been made aware of the need for it to extend its full cooperation
in the provision and verification of information for the purposes of the assignment;
(x) withdraw from the assignment in case their customer fails or refuses to address its concerns
about the issue or any related information provided to it.
(2) The Consultants to the Issue shall not-
(i) make any false statement, whether oral or written, either about their qualifications or capability to
render services or their achievements with regard to services rendered to their potential
customers;
(ii) make unsubstantiated claims or statements, in order to acquire business from the customer,
about qualifications of their professional staff or their capability to render certain services or their
achievements concerning the consultancy services rendered by them;
(iii) submit any document or report to the Commission that contains any untrue or false statement, or
any material fact omitted therefrom;
(iv) agree to manage or be associated with any issue as consultant unless its responsibilities relating
to the issue are clearly determined through an agreement in writing; and
(v) be a party to or instrumental for -
(a) creation of false market;
(b) price rigging or manipulation or;
(c) Conveying of non-public price sensitive information in respect of securities proposed to be
listed in securities exchange to any person.
20. Responsibilities of the book runner.
The Book Runner shall be responsible to:
(1) ensure that necessary infrastructure and electronic system is available to accept bids and to conduct
the whole Book Building process in a fair, efficient and transparent manner;
(2) ensure blocking of (107)bid and margin money of the Bidders in their respective accounts;
(3) the Book Runner must be financially capable for honoring its commitments arising out of defaults by
their investors, if any;
(4) use the software provided by the Designated Institution for the Book Building on such terms and
conditions as may be agreed through an agreement in writing
(5) ensure that the software used for Book Building is based on Dutch Auction Method for display of the
order book and determination of the strike price;
(6) ensure that the bidders can access to the System and can revise their bids electronically using the user
ID and the password;
(7) underwrite the Book Building Portion;
(8) ensure that it has obtained list and Unique Identification Numbers of the associates of the Issuer and
the consultant to the issue;(108)
(9) ensure that names and Unique Identification Numbers of all the persons mentioned above are entered
and (109)capped in a manner as prescribed in these Regulations before commencement of the Bidding
Period;
(10) ensure that (110)it blocked all Unique Identification Numbers and names of all (111)
related employees for
participation in the bidding.

(107) Margin Money in case of institutional investor.

(108) 10% limit

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(109) 10% limit

(110) Not allowed to participate in bidding.
(111) (xli) “Related Employees” mean such employees of the Issuer, the Offeror, the Book Runner, the Underwriters, and the
Consultants to the Issue, who arc involved in the Issue or the Offer for Sale;
Important word here is related, other than related employee is allowed. This is he reason for separate allocation of employees of
issuer in listing rules.

21. Responsibilities of Banker to an Issue:

The Banker to an Issue shall.-
(1) ensure that information related to the subscription of the issue is provided to the Issuer, within the time
period and in the form and manner as disclosed in the prospectus or as required under the agreement
executed with the them;
(2) in case of Application Supported by Blocked Amount, on receipt of the application, immediately block
the bid money or subscription money in respective account of the bidder or the subscriber;
(3) Upon receipt of information from the book runner and balloter and share registrar, immediately unblock
the bid money or subscription money of the unsuccessful bidders or subscribers;
(4) Immediately inform the Commission regarding any penal action, legal proceedings initiated against it by
the State Bank of Pakistan;
(5) not accept applications for subscription of securities and subscription money thereof after closing of the
subscription period.
22. Responsibilities of underwriter.
(1) An underwriter shall, -
(i) obtain from its relevant employees, an undertaking stating therein that they will not misuse their
position of having access to the non-public information, if any, relating to the Issue being
underwritten for their personal benefit or for the benefits of any other person who does not have
or is not authorized to have access to such information;
(ii) ascertain before entering into an underwriting agreement that the regulatory requirement, if any,
relating to the exposure limits on investment in securities are not breached in case it is called
upon to fulfill its commitment of subscribing the unsubscribed portion of an Issue pursuant to the
underwriting agreement;
(iii) in the event of being called upon to subscribe to the securities underwritten pursuant to an
agreement, subscribe such securities within such time as specified in the agreement but it shall
not exceed fifteen days starting from the date of Issue of such intimation, notice, invitation by the
Issuer;
(iv) sell the securities subscribed pursuant to the underwriting agreement in the secondary market or
to persons other than the directors, sponsors and associates of the Issuer;
(v) Publish its entity credit rating in its periodic financial reports, and each advertisement and
brochure, if any, in relation to promotion of its business;
(2) The underwriter shall not,-
(i) enter into any buy-back or repurchase arrangement with the Issuer or any other person with
respect to the securities underwritten by it;
(ii) derive any undue benefits directly or indirectly, from any underwriting transaction other than the
commission payable to it under the underwriting agreement;
(iii) make any oral or written statement, which would misrepresent its underwriting commitment;
(iv) give, directly or indirectly, any investment advice about any security in the media unless a
disclosure of its interest in the said security is made, while giving such advice;
(v) willfully make false statement or conceal any material fact in any document, report or paper
furnished to the Commission;
(vi) participate itself or through its associates for the subscription of shares out of retail portion of an
issue which is underwritten by it;

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(vii) be party to or instrumental for creation of false market;

(viii) be party to or instrumental for price rigging or manipulation;
(ix) be party to or instrumental for passing of unpublished price sensitive information in respect of
securities which are listed or proposed to be listed on the securities exchange to any person or
intermediary;
(x) undertake underwritings commitments exceeding four times of its equity (excluding unrealized
gains and revaluation surplus) as per its latest audited financial statements at any time.
Provided that any subsequent agreement by the underwriter to the issue with other underwriters duly
licensed by the Commission may be excluded while arriving at exposure limit of an underwriter in
respect of its commitment.
24. Responsibilities of Designated Institution in case of book building.(112)
(1) The Designated Institution in case of book building system shall perform following functions namely;
(i) record name, Unique Identification Number (UIN), National Tax Number (NTN), postal and email
addresses, land line and cell numbers, bank account Number and branch address and Investor
Account Number or Sub-Account Number of the bidder with participant account number;
(ii) provide a mechanism for registration of the bidders before commencement of the bidding period
till 03:00 p.m. on the last day of the Bidding Period and require the investors to provide at least
such information as mentioned in para (i) above;
(iii) generate bidders’ Internet Protocol (IPs) address and keep record of all IP addresses from where
the bids are placed;
(iv) record the number of shares bid for, the Bid Price, type of the bid i.e. Limit Bid or Step Bid, date
and time of the entry of the bid;
(v) display the bids revised, and date and time of upward revision;
(vi) neither allow withdrawal of bid, nor accept the bids placed at a Bid Price that is below the Floor
Price or above the upper limit of the Price Band;
(vii) display live the total number of shares offered for sale, the Floor Price, Price Band, total number
of bids received, total number of shares bid for and indicative Strike Price;
(viii) build an order book showing demand for the shares at various price levels in a descending order
along with the accumulated number of shares bid for and percentage of total shares offered
under the Book Building Portion;
(ix) discover the strike price at the close of the Bidding Period;
(x) generate alerts for the Bidders via Short Message Service through cell phones and emails upon
entry of the bid, at the time of upward revision of the bid, and upon discovery of the strike price;
and
(xi) ensure that system must provide the bidders the option to upward revise their bids online or
through the Book Runner during the period permitted under these Regulations;
(113)
(2) The Designated Institution shall ensure that:
(i) identity of the bidder is not displayed; and
(ii) no bid is entered into the System after closing of the Bidding Period;

(112) Regulation 23 will be discussed with public offering of debt securities.

(113) “Designated Institution” includes the securities exchange, central depository and clearing company to provide Book Building
System;

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< 5.5.8 and 5.5.9 are remaining > Listing Rules

5.5.8. SUBSCRIPTION PROCESS:

(a) The company shall inform the Exchange of the subscription received and such information shall be
communicated in writing under the hand of an authorized person with certificate(s) from bankers to the
issue, within three (3) working days of the closing of subscription.
(b) Within ten (10) working days of the close of public subscription period, the company shall allot and
issue shares against the accepted and successful applications and the subscription money of the
unsuccessful applicants shall be refunded.
(c) In case the application for listing is refused by the Exchange, for any or whatsoever reasons, the
company shall forthwith repay without surcharge all moneys received from applicants in pursuance of
the prospectus or the offer for sale, and if any such money is not repaid within eight days after the
Company becomes liable to repay it, the (114)directors of the company shall be, jointly and severally,
liable to repay that money from the expiration of eight day together with surcharge at the rate of two
percent (2%) for every month or part thereof from the expiration of the eight day.
(d) In case of over-subscription, the company, or the Offerors, as the case may be, shall immediately
submit to the Exchange copies of the (115)ballot register of successful applications.
(e) The company shall credit all shares in the respective CDS Account of the successful applicants within
ten (10) working days of the closing of subscription list under intimation to the Exchange.

(114) Directors personally liable.

(115) Computer Balloters

5.5.9. BROKERAGE TO TRE CERTIFICATE HOLDERS:

The Listed Company or the Offeror, as the case may be, shall, within ten (10) working days of closing of
subscription list, pay brokerage to the Securities Broker at a rate not more than one percent (1%) of the value
of the shares actually sold through them.

Follow Section 70 of Companies Act, 2017 (Return of Allotments)

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Some Practical Examples from Prospectus of Octopus Digital Limited

Prospectus | Octopus Digital Limited

12.1.3 Mechanism for Determination of Strike Price

1. At the close of the bidding period, the Strike Price shall be determined on the basis of Dutch Auction
Method by the Designated Institution. Under this methodology, the Strike Price is determined by
lowering the price to the extent that the total shares offered under the Book Building Portion are
subscribed.
2. The Order Book shall display the bid prices in a tabular form in descending order along with the number
of shares bid for and the cumulative number of shares at each price level.
3. As per the regulation 9(12) of the PO Regulation, in case all the bids made above the Strike Price are
accommodated and shares are still available for allotment, such available shares will be allotted on
proportionate basis against the bids made at the Strike Price.
The mechanism for determination of the Strike Price can be understood by the following illustration:
1. Number of shares being Issued through the Book Building: 27,350,000 Ordinary Shares
2. Floor Price: PKR 29/- per Ordinary Share with maximum price band of 40% i.e. PKR 40.6/- per share
3. Bidding Period: From September 9th, 2021 to September 10th, 2021
4. Bidding Time: 9:00am – 5:00pm
5. Bidding Revision Time (Upward Revision only): 9:00am – 5:00pm on all days

On the basis of the figures provided in the above illustration, according to the Dutch Auction Method, the
Strike Price would be set at PKR 30.00 per share to sell the required quantity of 27,350,000 ordinary shares.
The bidders who have placed bids at prices above the Strike Price (which in this illustration is PKR 30.00 per
share, will become entitled for allotment of shares at the Strike Price and the differential would be refunded.
In case all the bids made above the Strike Price are accommodated and shares are still available for
allotment, such available shares shall be allotted against the bids made at the Strike Price on proportionate
basis as per regulation 9(12) of the PO Regulations.

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Material Taken From Prospectus of Octopus Digital Limited

HOW ALLOCATED
TO RETAIL PORTION
HAS BEEN MADE
13.1.19 MINIMUM AMOUNT OF APPLICATION
The minimum value of application will be calculated as Issue Price x 500 shares.
13.1.13 MINIMUM AMOUNT OF APPLICATION & BASIS FOR ALLOTMENT OF SHARES OF THE ISSUE
The basis and conditions for allotment of shares out of the Issue shall be as follows:
1. Application for shares must be made for 500 shares or in multiples of (116)500 shares only. Applications
which are neither for 500 shares nor for multiples of 500 shares shall be rejected.
2. The minimum amount of application for subscription of 500 shares is the Issue Price x 500 shares.
3. Application for shares (117)below the minimum amount shall not be entertained.
4. SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS IS PROHIBITED AND SUCH
APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT,
2015.
5. If the shares offered to the general public are sufficient to accommodate all applications, all applications
shall be accommodated.
6. If the shares applied for by the general public (118)are in excess of the shares allocated to them, the
distribution shall be made by computer balloting, in the presence of the representative(s) of PSX in the
following manner:
─ If all applications for 500 shares can be accommodated, then all such applications shall be
accommodated first. If all applications for 500 shares cannot be accommodated, then balloting
will be conducted among applications for 500 shares only.
─ If all applications for 500 shares have been accommodated and shares are still available for
allotment, then all applications for 1,000 shares shall be accommodated. If all applications for
1,000 shares cannot be accommodated, then balloting will be conducted among applications for
1,000 shares only
─ If all applications for 500 shares and 1,000 shares have been accommodated and shares are still
available for allotment, then all applications for 1,500 shares shall be accommodated. If all
applications for 1,500 shares cannot be accommodated, then balloting will be conducted among
applications for 1,500 shares only.

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─ If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated and
shares are still available for allotment, then all applications for 2,000 shares shall be
accommodated. If all applications for 2,000 shares cannot be accommodated, then balloting will
be conducted among applications for 2,000 shares only.
─ After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted
in the following manner:
o If the remaining shares are sufficient to accommodate each application for over 2,000
shares, then 2,000 shares shall be allotted to each applicant and remaining shares shall
be allotted on pro-rata basis.
o If the remaining shares are not sufficient to accommodate all the remaining applications for
over 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares to each
successful applicant.
[7. If the Issue is over-subscribed in terms of amount only, then allotment of shares shall be made in the
following manner:
─ First preference will be given to the applicants who applied for 500 shares;
─ Next preference will be given to the applicants who applied for 1,000 shares;
─ Next preference will be given to the applicants who applied for 1,500 shares;
─ Next preference will be given to the applicants who applied for 2,000 shares; and then
─ After allotment of the above, the balance shares, if any, shall be allotted on pro rata basis to the
applicants who applied for more than 2,000 shares.](119)
8. Allotment of shares will be subject to scrutiny of applications for subscription of shares.
9. Applications, which do not meet the above requirements, or application which are incomplete, will be
rejected.

(116) 500, 1,000, 1,500, 2,000, 2,500

(117) It means below 500 shares shall not be acceptable.
(118) When Retail Portion is oversubscribed in terms of shares subscription.
(119) "When retail portion is oversubscribed in terms of amount only"

13.1.14 BASIS OF ALLOTMENT

The basis and conditions of transfer of shares to the General Public shall be as follows:
1. The minimum value of application will be calculated as Issue Price x 500 shares. Application for amount
below the minimum value shall not be entertained.
2. Application for shares must be made for 500 shares or in multiple of 500 shares only. Applications
which are neither for 500 shares nor for multiples of 500 shares shall be rejected.
3. Allotment / Transfer of shares to successful applicants shall be made in accordance with the allotment
criteria / instructions disclosed in the Prospectus.
4. Allotment of shares shall be subject to scrutiny of applications in accordance with the criteria disclosed
in the Prospectus and / or the instructions by the Securities & Exchange Commission of Pakistan.
5. Applications, which do not meet the above requirements, or applications which are incomplete will be
rejected. The applicants are, therefore, required to fill in all data fields in the Application Form.
6. The Company will credit shares in the CDS Accounts of the successful applicants.

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Public Offering of Debt Securities Chapter-19

CHAPTER
19

PUBLIC OFFERING OF
DEBT SECURITIES

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 Public Offering of Debt Securities Chapter-19

Public Offering of Debt Securities

Some Important Definition:

“Bid” in case of debt securities means an intention to buy a specified number of debt securities for a particular
profit rate/spread
“Bid Amount or Bid Money” in case of debt securities means the amount equal to the product of the number of
debt securities bid for and the face value of debt security
“Book Building” in case of debt securities means a process undertaken to elicit demand for debt securities
under which bids are collected from the Bidders and a book is built which depicts demand for the debt
securities at different profit rate/spread levels
“Commercial Paper” means an unsecured debt security with a maturity of not less than (1)
30 days and not
more than one year
“Cut off profit rate/spread” mean the profit rate/spread of a debt security determined on the basis of book
building process.(2)
“Custodian” means an investment agent/debt securities trustee, Bank, Investment Finance Service license
holder and Depository Company engaged in regulated activities, not being an associate of the Special
Purpose Acquisition Company, appointed for securing the monies of investors in the escrow account
“Escrow Account” means an account maintained with a scheduled bank (having an investment grade rating)
by a custodian
“Debt Securities Trustee” means a person licensed by the Commission under the Act and appointed as a Debt
Securities Trustee by an Issuer through execution of trust deed
“Investment Agent” means an entity that holds a valid license to act as Consultant to the Issue under the Act
and is appointed by the issuer through execution of issuance agreement (3)
“Issuer” in relation to securities, means any person including a company, a Special Purpose Vehicle and a
body corporate who has issued or proposes to issue a security and includes an Offeror (4)
“Issuing and Paying Agent” means a Financial Institution appointed by an Issuer of Commercial Paper under
these Regulations as an Issuing and Paying Agent
“Limit bid” in case of debt security means a bid placed by the bidder for a particular profit rate/spread under
the book building method
“Reverse Dutch Auction Method” means the method through which the cutoff profit rate/spread is determined
by arranging all the profit rate/spread in an ascending order along with the number of debt securities and the
cumulative number of debt securities bid for at each profit rate/spread. The cut off profit rate/spread is
determined by increasing the profit rate/spread to the extent that the total number of debt securities offered
under the Book Building portion are subscribed(5)
“Shariah Advisor” means an individual, a Limited Liability Partnership (LLP) or a company who/that meets the
fit and proper standards specified by the Commission

“Shariah concepts” for the purpose of these Regulations includes Ijarah, Musharakah, Murabahah, Modaraba,
Salam and any other concept allowed by the Shariah Advisor
“Shariah certificate” for the purpose of these Regulations means a Shariah pronouncement, a fatwa or
Shariah opinion signed by Shariah Advisor in such form and manner as notified by the Commission from time
to time(6)

“Step Bid” in case of debt securities means a series of Limit Bids at different profit rates/spreads provided that
Bid Amount of any step is not less than one million rupees under the Book Building method

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“Special Purpose Vehicle (SPV)” for the purpose of these regulations means a public limited company or a
body corporate registered with the Commission under the Companies (Asset Backed Securitization) Rules,
1999(7)
“Sukuk” means an instrument of equal value representing undivided share in ownership of the identified
tangible assets, usufruct and services or in the ownership of the assets of particular projects or special
investment activity.(8)

(1) Short Term

(2) Here there is no strike price like book building of shares. There is a Cut-off profit rate / spread
(3) Consultant to the issue.
(4) Here, Offeror is not relevant in case of debt securities.
Issuer:
1. Company
2. SPV → Refer Public Offering of Shares Handout
3. Body Corporate
(5) Unlike Dutch Auction Method in case of shares, there is Reverse Dutch Auction Method in case of debt securities.
(6) For Shariah Compliant Securities
(7) Refer diagram as described in Public Offering of Shares handout.
(8) Sukuk shall always be secured against assets of the company.

Other Debt Securities (such as TFC) may or may not be secured against the assets of the company.

Some Provisions of Companies Act, 2017

66. Issue of securities and redeemable capital not based on interest.—

(1) A company may by public offer or, upon terms and conditions contained in an (9)agreement in writing,
issue to one or more scheduled banks, financial institutions or such other persons as are notified for the
purpose by the Commission either severally, jointly or through their syndicate, any instrument in the
nature of redeemable capital in any or several forms in consideration of funds, moneys or
accommodations received or to be received by the company, whether in cash or in specie or against
any promise, guarantee, undertaking or indemnity issued to or in favour of or for the benefit of the
company.

(9) Practically, it is talking about Debt Security Agreement (i.e. TFC Agreement)

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GOVERNMENT OF PAKISTAN SECURITIES AND EXCHANGE

COMMISSION OF PAKISTAN

Islamabad, the 19th April 2021

NOTIFICATION

S.R.O. 492 (I)/2021.- In exercise of the powers conferred under section 510 read with section 66
of the Companies Act, 2017 (XIX of 2017), the Securities and Exchange Commission of Pakistan, in
supersession of previous notification S.R.O. 1208 (I)/2020 dated November 11, 2020 is pleased to notify the
following persons to whom any instrument in the nature of "redeemable capital" may be issued by a
company, subject to the terms and conditions as provided under section 66 of the Act, namely:-
(i) mutual funds, Voluntary Pension Schemes and Private fund being managed by NBFC;
(ii) insurer registered under the Insurance Ordinance, 2000 (XXXIX of 2000);
(iii) a Securities Broker;
(iv) a Fund and Trust as defined in the Employees Contributory Funds (Investment in Listed Securities)
Regulations, 2018;
(v) a company and body corporate as defined in the Companies Act, 2017(XIX of 2017);
(vi) all individual investors including accredited individual investors, in case of Government Debt
Securities, and debt securities whose debt servicing is guaranteed by the Government;
(vii) accredited individual investors, in case of corporate debt instruments:
Provided that the company shall ensure the following:
(a) instrument is not placed to more than fifty (50) accredited individual investors;
(b) information memorandum contains all applicable information/disclosures as prescribed under
the Public Offering regulations, 2017; and
(b) instrument is not sold to non-accredited investors in secondary market.
Explanation: - for the purposes of this notification the expressions, -
(a) “accredited individual investor” means an individual investor registered with National Clearing
Company of Pakistan Limited and having net assets of Rs. 5 million or more; and
(b) “Government Debt Securities” means a debt security such as Treasury Bill (T-Bill), Pakistan
Investment Bond (PIB), Government of Pakistan (GoP) Ijarah Sukuk and any other debt
instrument issued by the Federal Government, Provisional Government, Local
Government/Authority, and any other statutory body.

[File No. SMD/CIW/Misc./09/2015]

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(2) In particular and without prejudice to the generality of the forgoing provisions, the agreement referred to
in sub-section (1) for redeemable capital may provide for, adopt or include, in addition to others, all or
any of the following matters, namely-
(a) mode and basis of repayment by the company of the amount invested in redeemable capital
within a certain period of time;
(b) arrangement for sharing of profit and loss; (In case of Shariah compliant security)
(c) creation of a special reserve called the “participation reserves” by the company in the manner
provided in the agreement for the issue of participatory redeemable capital in which all providers
of such capital shall participate for (10)interim and final adjustment on the maturity date in
accordance with the terms and conditions of such agreements; and
(d) in case of net loss on participatory redeemable capital on the date of maturity, the right of holders
to convert the outstanding, balance of such capital or part thereof as provided in the agreement
into ordinary shares of the company at the break-up price calculated in the specified manner.
(3) The terms and conditions for the issue of instruments or certificates of redeemable capital and the
rights of their holders shall not be challenged or questioned by the company or any of its shareholders
(11)
unless repugnant to any provision of this Act or any other law or the memorandum or articles or any
resolution of the general meeting or directors of the company or any other document.
(12)
(4) The provision of this Act relating to the creation, issue, increase or decrease of the capital shall not
apply to the redeemable capital.

(10) < It is talking abut dividend >

(11) Against
(12) 1. Buy Back of Shares [Section (88)]
2. Reduction of Share Capital [Section (89)]
3. Section 85
<These shall not be applicable in case of redeemable share capital>

(55) “redeemable capital” includes sukuk and other forms of finances obtained on the basis of
(13)

participation term certificate (PTC), musharika certificate, term finance certificate (TFC) or any other
security or obligation not based on interest, representing an instrument or a certificate of specified
denomination, called the face value or nominal value, evidencing investment of the holder in the capital
of the company other than share capital, on terms and conditions of the agreement for the issue of such
instrument or certificate or such other certificate or instrument as the concerned Minister-in-Charge of
the Federal Government may, by notification in the official Gazette, specify for the purpose;
Explanation.− “sukuk” represents redeemable investment in certificates of equal nominal value
representing undivided shares in ownership of tangible assets of a particular project or specific
investment activity, usufruct and services;

(13) Definition

Extracts of Section. 183

Subsection (2) The board shall exercise the following powers on behalf of the company, and shall do so by
means of a resolution passed at their meeting, namely—
• to issue debentures or any instrument in the nature of redeemable capital

It means for issuance of debentures or any instrument in the nature of redeemable capital,
Board of Director's Resolution shall be mandatory.

AND SUCH ISSUE SHALL BE AUTHORISED BY MEMORANDUM OF ASSOCIATION

AND ARTICLES OF ASSOCIATION OF THE COMPANY.

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 Public Offering of Debt Securities Chapter-19

• Requirements of Securities Act, 2015 shall apply (14)

mutatis mutandis.
• There are not any requirements mentioned in PSX Rule Book Chapter no 5 in relation to debt securities
(i.e. Post Issue Capital, Limit, Allocation to general public, employees, foreign investors)

(14) With necessary changes

Now Resuming Public Offering Regulations, 2017

Regulation 13. General Conditions for public offer of Debt Securities.

An issuer may make a public offer of debt security under section 87 and 88 of the Act, if it fulfills the following
conditions, namely.-
(1) It is authorized by its Memorandum and Articles of Association to issue debt securities;
(2) For issuance of debt security, other than the commercial paper, the Issuer shall appoint, as applicable, -
(i) Debt Securities Trustee;(15)
(ii) Investment Agent; (To be discussed later)
(iii) Shariah Advisor. (In case of sharish compliant security)
(3) It has obtained rating of the debt security from a credit rating company licensed by the Commission and
the rating shall not be more than six months old. The minimum rating shall be A2 (short term) in case of
short term debt securities (instruments with tenor of up to one year) and BBB+ (long term)/ A2 (short
term)in case of long term debt securities (instruments with tenor exceeding one year) ;
Provided that in case of short term debt securities (instruments with tenor of up to one year), the
condition of instrument rating may be waived, if the issuer has obtained entity rating and such rating is
not less than “A-” (long term)/ “A2” (short term) and not more than six months old:
Provided further that this clause shall not apply to a (16)Sovereign Sukuk, a Government Guaranteed
Sukuk and any other debt security whose debt servicing is guaranteed from the Government;
(4) The public offer for debt securities shall be fully underwritten, except in case of issuance of Sukuk,
where underwriting may not be required in the following conditions:
i. The issue is made for the repayment of debt;
ii. Utilization of the proceeds of the issue is solely for meeting the working capital requirement; and
iii. The issuer has alternative funding arrangements in place for meeting short fall, if any, in the
event of under subscription of the issue.
(5) The long term debt securities including Sukuk and other Shariah compliant securities shall not be
restructured or rescheduled unless approval of two third of the debt securities holders in value for the
time being outstanding is obtained;
(6) It shall report profit payment and redemption status of the securities on semiannual basis to the
Commission, securities exchange, debt securities trustee, investment agent, and issuing and paying
agent, till complete redemption of the issue.
(7) In case of Shariah compliant debt securities including Sukuk, the following conditions shall also be
complied with:
(i) The issuer has appointed (17)Investment Agent through an investment agency agreement which
contains at least roles and responsibilities of both parties to the agreement, dispute resolution
mechanism and such other clauses as specified by the Commission from time to time;
(ii) The investment agent shall endeavor that assets are transferred to Sukuk holders through an
SPV.
(iii) In case the Sukuk is issued without establishment of SPV then Shariah Advisor should give
reasons referring to Shariah principles for allowing issuance of Sukuk without establishment of
an SPV
(iv) The Investment Agent shall not be associated company or associated undertaking of the Issuer;

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(v) In case of secured Sukuk, the Issuer has arranged appropriate security, in the form acceptable to
the Investment Agent:
Provided that this sub-clause shall not apply to Government Guaranteed Sukuk;
(vi) The Issuer shall, before the issue of Sukuk, engage Shariah Advisor and obtain in writing from
it/him/her Shariah certificate and the Shariah certificate must be signed by (18)Shariah Advisor
ascertaining that the basis on which the Sukuk are structured is Shariah compliant;
(vii) The Shariah Advisor may not remain engaged throughout the tenor of the Issue, if the Shariah
certificate states so and where an Issuer opts to engage Shariah Advisor for a longer period, the
term of engagement shall be at the discretion of the Issuer;
(viii) The Issuer has obtained a Shariah Certificate from the Shariah Advisor which must contain at
least such information and certification and in the form and manner as notified by the
Commission from time to time including the following:
a. how the structure is free from riba;
b. whether and to what extent the return to Sukuk holders is attributable to the underlying
assets;
c. whether and to what extent the ownership of underlying assets, belongs to the Sukuk
holders;
d. whether and to what extent the related agreements and contracts, separately and
collectively, are consistent with the concerned Shariah principles; and
e. exceptions, reservations, and qualifications regarding Shariah compliance, if any, and
details thereof.
Provided that the Issuer shall ensure that all relevant documents, contracts, details, and
information required by the Shariah Advisor for understanding of the transactions, concepts,
structure and framing or review of the Shariah certificate are provided and adequately explained
to the Shariah Advisor;
(x) The Issue shall not embed any swaps, options or other derivatives except in the case of
convertible or exchangeable Shariah compliant securities;
(xi) The Issuer shall ensure that proceeds of the Issue are utilized for Shariah compliant purposes
and in the form and manner as disclosed in the Prospectus.
(xii) Where Shariah compliant debt securities are convertible or exchangeable into ordinary shares of
the Issuer, the option of conversion or exchange, as the case may be, shall be at the discretion
of the investors and the underlying ordinary shares shall be listed at the time of the offer of such
debt securities.(19)
Provided that this clause shall not apply in case of issuance of Tier 1 and Tier 2 instruments by
Scheduled Banks.
(xiia) The Shariah Advisor providing the initial Sharah certificate shall state in their Shariah certificate
whether or not Shariah Audit of the issued Sukuk is required;
(xiib) The compliance of features and Shariah requirements of Sukuk shall be audited on annual basis,
where applicable; and
(xiic) The Issuer shall appoint its own statutory auditors or another firm of Chartered
Accountants to perform Shariah audit;
(xiii) The Shariah audit report where required shall made part of the annual financial report of the
Issuer;
(xiv) The external Shariah audit fee where applicable shall be disclosed in the audited financial
statements of the Issuer;
(xiva) Where a Sukuk is structured using a single Shariah concept, the Sukuk shall preferably be
named according to that concept;
(xivb) In case of rescheduling or restructuring of an Issue, the Issuer shall seek a fresh Shariah
certificate from the Shariah Advisor;
(xivc) The Prospectus must make it unambiguously clear to the investors whether or not the Sukuk are
asset backed, that is, based on true sale, providing investors an unqualified right over the

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concerned assets and where the Sukuk are not asset backed, the Prospectus shall explain the
implications, most notably, if the Sukuk holders are assuming credit risk of the Issuer and their
standing in the hierarchy of creditors;(20)
(xivd) Where Sukuk are issued without transferring concerned assets, where applicable, to an SPV, the
Issuer shall explain in the Prospectus why the SPV structure has not been used and any
potential implications regarding investor protection and Shariah compliance;
(xive) The Prospectus shall specify fees and expenses pertaining to Shariah compliance, including the
fee, if any, paid to the Shariah Advisor;
(xivf) The Issuer shall furnish the Shariah certificate and the transaction documents to all the Sukuk
holders in physical or electronic form or shall make available the same on its website, in
downloadable format, for information of the investors;
(xivg) The engagement letter or agreement executed with the Shariah Advisor among other things
must clearly define the roles and responsibilities of both parties to the agreement, dispute
resolution mechanism and such other clauses as specified by the Commission from time to time;
(xv) Any other condition as may be specified by the Commission from time to time.
(8) Within 10 working days of the close of public subscription period or such shorter period of time as may
be specified by the Commission from time to time, the debt securities shall be allotted and issued
against the accepted and successful applications and the subscription money of the unsuccessful
applicants shall be unblocked/ refunded.

(15) As defined in 65 of Companies Act, 2017. (It is appointed for securing an issue of debentures. To protect the interest of investors
in relation to principal/interest and in case of default, to protect the interest of investors in relation to assets (in case of secured
securities)
(16) Sovereign Sukuk means the Sukuk issued by companies or other legal entities which are fully owned by the state;
(17) Applicable in case of issuance of Shariah Compliant Securities
(18) By law Shariah Advisor is only required before the issue of Shariah compliant securities.
If issuer opt to engage Shariah Advisor for a longer period, there will be a separate engagement and separate fee arrangement.
The purpose of this is to protect the interest of Shariah Advisor.
(19) This is the case where ordinary shares are not already listed.
(20) Asset Backed – raising finance where the principal is covered by the capital value of the asset but the returns and repayments to
Sukuk holders are directly financed by these assets.
Asset Based – raising finance where the principal is covered by the capital value of the asset but the returns and repayments to
Sukuk holders are not directly financed by these assets.

(21)
14. Conditions for Public Offering of short term debt securities._
An issuer may make public offer of short term debt securities in the form of Commercial Paper only subject to
compliance with the following conditions, namely.-
(1) The equity of the Issuer is not less than Rs. 50 million as per its latest audited financial statements.
(2) The commercial paper shall be issued for maturities between thirty days and one year and the date of
maturity shall be calculated from the first day of subscription. Where the maturity date happens to be a
holiday, the payment shall be made on the immediate following working day.
(3) The Commercial Paper shall be issued in denomination of Rs.10,000 or multiples thereof.
(4) The aggregate amount of a Commercial Paper shall be within such limits as may be approved by its
Board of Directors, provided the total liabilities of the issuer after the issue of such Commercial Paper
do not exceed four times of the issuer’s equity.
(5) The commercial paper shall be issued at discount to face value.
(6) The commercial paper shall not be rolled over or restructured or rescheduled.
(7) The Issuer shall appoint an (22)Issuing and Paying Agent through an agreement in writing. The
agreement shall contain all the basic terms and conditions, and role and responsibilities of both the
parties to the agreement.
(8) The Issuing and Paying Agent appointed shall not be associate of the issuer.

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(9) On maturity, the holder shall present the commercial paper for payment to the Issuing and Paying
Agent who, having received funds from the Issuer, shall effect repayment through crossed cheque, pay
order, demand draft or direct credit in the holders respective account.
(10) Commercial Paper may be redeemed before maturity under a call option and an investor may ask the
Issuer for early redemption under a put option subject to the condition that such options are provided in
the offering document.

(21) Nature of commercial paper = Just like T- Bills (Issued at discount and redeemed on face value)
(22) "Issuing and Paying Agent" means a Financial Institution appointed by an Issuer of Commercial Paper under these Regulations
as an Issuing and Paying Agent;

23. Responsibilities of Issuing and Paying Agent.__

The issuing and Paying Agent shall,-
(1) enter into an agreement in writing with the Issuer to act as Issuing and Paying Agent for the issue;
(2) ensure that the conditions laid down for the issuance of debt securities are strictly adhered to;
(3) ensure that the Issuer has the minimum credit rating as specified in these Regulations;
(4) ensure that the Issuer has met all the requirements as prescribed in these Regulations before the
issuance of debt securities;
(5) obtain copies of all the investor agreements i.e. the agreements executed with the initial subscribers
and the said agreements contain salient features and other terms and conditions of the issue including
the following,-
(i) covenants of the issue of debt securities;
(ii) non availability of any recourse to the initial subscribers on the Issuer and Issuing and Paying
Agent and to the subsequent purchasers on the sellers in the secondary market;
(iii) non availability of any guarantee by any bank or other financial institution;
(iv) default history of the Issuer including rescheduling/restructuring of loan for the last 5 years; and
(6) verify all the documents submitted by the Issuer i.e. copy of Board’s resolution etc. and have in custody
certified copies of the original document and issue a certificate that documents are in order;
(7) Place specimen of the investors’ agreement between the Issuer and the subscribers containing
minimum terms and conditions on its website.
(8) on the issue date, deliver debt securities to investors against proof of payment and at maturity, after
receiving funds from the Issuer, effect repayment on receipt of the debt security from the investors;
(9) make it clear to the initial subscribers in the investor agreement and the general public in the
prospectus that their investment is subject to credit and other risks inherent in such instruments and
payment would be made to them after the Issuer has made the funds available to Issuing and Paying
Agent;
(10) inform the initial subscribers that in case of any default by the Issuer, it will not be in a position to seek
recovery from the Issuer or initiate any action against the Issuer either on its own or on behalf of the
investors;
(11) in case of any default by the Issuer, be responsible for the immediate notification of such default to the
holders of the debt security and the Commission
Explanation.__ For the purpose of these Regulations the term “default” shall include partial payment of
redemption amount instead of full amount.
(12) in case of partial payment by the Issuer, distribute the received funds, among all the holders of the debt
securities, on pro-rata basis and while doing so it shall take all necessary measures to safeguard its
position against any adverse consequences including incorporation of this provision in the agreement
executed between the Issuer and the Issuing and Paying Agent;
(13) submit a report on the issue to the Commission within fifteen days from the last date for closing of the
subscription of the debt security and the report shall contain all the material facts and figures relating to
the issue including those as required under these Regulations to be reported to the Commission; and
(14) obtain from the concerned depository company list of debt security holders on monthly basis.

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15. Conditions for issue of convertible debt securities.__

An issuer may make a public offer of a convertible debt security under clause (b) of sub-section (1) of
(23)
section 83 of the Companies Act subject to the following conditions, namely:
(1) the Issuer is authorized by its Memorandum and Articles of Association to issue convertible securities;
(2) the Issuer has obtained approval of the Commission under clause (b) of sub-section (1) of section 83 of
the Companies Act;
(3) The conversion ratio or mechanism is disclosed in the prospectus; and
(4) The mechanism for resolution of dispute if arises at the time of conversion is provided in the
prospectus.

There are 2 Type of Debt Securities

Floating Rate Instruments Fixed Rate Instrument

Fixed Method Book Building Method

(23) Further issue of share capital. Will be discussed later.

15a. Book Building Mechanism for debt securities: (Book Building Method)
An issuer can adopt book building mechanism for discovery of profit rate in case of fixed rate instrument and
spread (+/-) in relation to the Kibor in case of floating rate instrument.
Bid for the purpose of this regulation means intention to buy specified number of debt securities for a
particular spread/profit rate quoted in basis points.
The Book Building shall be conducted as per the conditions and procedure prescribed below:
i. The total issue size of the debt security shall be offered to the General Public including both book
building portion and retail portion.
ii. Maximum Seventy Five percent of the issue size shall be allocated to the Book Building portion and the
remaining twenty five percent to the retail investors. The retail portion of the public offer shall be fully
underwritten.
Provided that the requirement of 25% allocation to the retail portion may be relaxed by the Commission
upon reasons to be recorded in writing.
iii. The Issuer shall enter into a tripartite agreement in writing with the Designated Institution and the Book
Runner. The said agreement shall specify inter-alia, the rights, privileges, duties, responsibilities and
obligations of each party to the agreement and shall provide a clause on dispute resolution mechanism
among the parties to the agreement:
iv. The Issuer shall publish the prospectus at least one day before the commencement of registration of
bidders by the book runner;
v. For Floating rate instruments, Bidder can enter spread on both positive and negative sides in relation to
the KIBOR.
vi. The Book Building shall be considered as cancelled if the Issuer does not receive bids for total number
of debt securities offered under the book building.
vii. Clause (9) to (15) of Regulation 8 and clause (1), (4) and (5) of Regulation 9 relating to procedure for
Book Building and bidding of shares shall also apply in case of debt securities. (24)

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viii. The Book Runner shall collect full amount of the bid money as margin money in respect of bids placed
by the individual investors.
ix. In case of Institutional Investors, the Book Runner shall accept application with minimum 10% margin
money.
Provided that Book runner may waive/reduce the margin requirement for institutional investors at its
own discretion
x. Book Building Portion shall be credit underwritten by one or more book runners:
xi. At the close of the bidding period, cut-off profit rate/ spread shall be determined on the basis of reverse
Dutch Auction Method by arranging all the profit rate/spread in an ascending order along with the
number of debt securities and the cumulative number of debt securities bid for at each profit
rate/spread. The cut off profit rate/spread is determined by increasing the profit rate/ spread to the
extent that the total number of debt securities offered under the Book Building portion are subscribed.
The allotment shall be made on following basis:
a. The allotment shall be made on the basis of highest bid priority, i.e. the bid made at the lowest
profit rate/ spread shall be considered first for allotment;
b. The bidders who have made bids at profit rate/spread less than the Cut-off profit rate/ spread
shall be allotted the debt securities at the Cut-off profit rate/Spread;
c. In case all the bids made at profit rate/spread below the cut off profit rate/spread are
accommodated and debt securities are still available for allotment. Such available debt securities
shall be allotted against the bids made at the Cutoff profit rate/spread on proportionate basis.
d. The bidders who have made bids at profit rate/spread higher than the Cut-off profit rate/spread
shall not qualify for allotment.
xii. Within one day of the close of the bidding period, successful bidders shall be intimated the Cut-off profit
rate/spread and the number of debt securities allotted to each of them;
xiii. Successful bidders shall deposit remaining amount of bid money within three working days of intimation
of successful bid. In case any bidder fails to do so, margin money shall be forfeited without any
recourse.
xiv. The successful bidders shall be issued securities only after the end of the public subscription, in the
form of book-entry to be credited in their respective accounts.

(24) Please Refer these Regulations as already covered in public offering of shares, handout.

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Understanding of Bidding Chart and Determination of Cut-off Spread / Yield

Company Name = Issuer — IQ Limited

Offer Size = 25 Million TFC's of Rs. 100/ each
Book Building Portion = Maximum 75% of Offer Size (25 Million Shares  75%) = 18.75 Million
Retail Portion = Minimum 25% of Offer Size (25 Million Shares  25%) = 6.25 Million
There will be no concept of Floor Price / Price Band
(25)
Bidder Quantity Cumulative Quantity Face Value Cut-Off Yield/ (26)Spread Bid Amount
1 347,997 347,997 100 0.11% 34,799,700
2 317,958 665,955 100 0.32% 31,795,800
3 1,201,557 1,867,512 100 0.32% 120,155,700
4 76,232 1,943,744 100 0.34% 7,623,200
5 303,148 2,246,892 100 0.34% 30,314,800
6 1,159,032 3,405,924 100 0.45% 115,903,200
7 2,002,168 5,408,092 100 0,45% 200,216,800
8 2,002,168 7,410,260 100 0.45% 200,216,800
9 303,148 7,713,408 100 0.45% 30,314,800
10 442,850 8,156,258 100 0.54% 44,285,000
11 1,860,313 10,016,571 100 0.56% 186,031,300
12 494,139 10,510,710 100 0.65% 49,413,900
13 65,659 10,576,369 100 0.66% 6,565,900
14 248,060 10,824,429 100 0.67% 24,806,000
15 535,855 11,360,284 100 0.67% 53,585,500
16 1,830,151 13,190,435 100 0.70% 183,015,100
17 106,672 13,297,107 100 0.78% 10,667,200
18 1,213,196 14,510,303 100 0.80% 121,319,600
19 117,165 14,627,468 100 0.87% 11,716,500
20 1,543,698 16,171,166 100 0.89% 154,369,800
21 2,578,834 18,750,000 100 0.90% (27) 257,883,400
22 779,236 100 1.00% 77,923,600

Kibor + 0.90% is the answer

(25) Ascending Order

(26) In case of floating rate instrument, spread will be determined and in case of fixed rate instrument, interest rate will be determined.
(27) This is cut-off Yield/Spread

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15b. Restrictions:
(1) The bidding period shall not be extended except in extra ordinary circumstances like closure of banks,
failure of System, etc. In such case, Book Runner shall apply to the Commission for extension in the
Bidding Period after obtaining NOC from securities exchange. In case extension is granted, the same
shall be disseminated through publication in all those newspapers where the prospectus was published
and the website of the issuer, consultant to the issue, if any, book runner, the designated institution and
the securities exchange.
(2) The bidder shall not:
(i) make consolidated bid;
(ii) make upward revision in terms of profit rate/spread;
(iii) make downward revision in terms of bid amount; and
(iv) withdraw the Bid:
(3) No person shall take part in the book building process, directly or indirectly severally or jointly in any
manner or engage in any act or practice which create a false and misleading appearance of active
bidding for raising or depressing cutoff profit rate/spread in the book building process.
15c. Procedure for allocation of debt securities to the retail investors:
i. Within three working days of the closing of the Bidding Period, the Issuer itself or through its Consultant
to the Issue, if any shall publish supplement to the prospectus in those newspapers in which the
prospectus was earlier published and also disseminate the same to the securities exchange, banker to
an issue and underwriter. For this clause the term supplement to the prospectus means information
relating to results of the Book Building or any other information prescribed below that is important for
the retail investors.
ii. The supplement to the prospectus shall contain the information relating to the (28)cut off profit
rate/spread, names of the underwriters of the retail portion of the Issue , underwriting commission
bifurcating as take up commission or any other, category wise breakup of the successful bidders along
with number of debt securities allocated to them, dates of public subscription and such other
information as specified by the Commission.
iii. The general public shall submit application for the subscription of debt securities to the Banker to an
Issue either in physical form or electronically. The application shall be duly accompanied by a crossed
cheque or demand draft or pay order in the name of the Issuer or evidence of direct debit of
subscription money from the applicant’s bank account or blocking of the subscription money in the
applicant’s bank account.
iv. Within 10 working days of the close of public subscription period or such shorter period of time as may
be specified by the Commission from time to time, the debt securities shall be allotted and issued
against the accepted and successful applications and the subscription money of the unsuccessful
applicants shall be unblocked/ refunded.

(28) Cut off profit – In case of fixed instrument

Spread – In case of floating instrument

Important Information:

Regulation 16a (Exit Opportunity) is only applicable in case of shares.

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Special Purpose Acquisition Company Chapter-20

CHAPTER
20

SPECIAL PURPOSE
ACQUISITION COMPANY

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 Special Purpose Acquisition Company Chapter-20

Special Purpose Acquisition Company

CHAPTER VIA
Special Purpose Acquisition Company, Functions and other Requirements

The purpose of a Special Purpose Acquisition Company (SPAC) is to provide a vehicle for
investors to pool their capital together and use it to acquire or merge with an existing
company. SPACs are typically formed by experienced investors or sponsors who have a
proven track record.
PURPOSE

Definition:
“Special Purpose Acquisition Company” or “SPAC” means a Company formed and registered under the
Companies Act, 2017, having sole principal line of business to raise money through public offering for entering
into merger or acquisition transactions.

12a. Eligibility to Commence business as SPAC. __

(1) No person shall commence business as a SPAC unless,-
(i) it is registered as a public limited company having principle line of business of SPAC, having a
paid-up capital of not less than ten million rupees, and shall not carry out any commercial
business other than the business of SPAC; and
(ii) its promoters, sponsors, directors and chief executive officer fulfil the Fit and Proper criteria as
specified in the Ninth Schedule.

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1[NINTH SCHEDULE

FIT AND PROPER CRITERIA

[see regulation 12(a)]

Fit and proper criteria for Promoters / Sponsors, directors and chief executive officer of Special
Purpose Acquisition Companies (SPACs).
(A) Application and Scope:
The Fit and Proper Criteria in relation to Special Purpose Acquisition Companies (SPACs) shall be
applicable to the following persons:
(i) Promoters or sponsors;
(ii) Directors; and
(iii) Chief executive officer
(B) Integrity and Track Record:
A person shall not be considered Fit and Proper if he:
(i) has been convicted of an offence involving moral turpitude, fraud or breach of trust;
(ii) has been involved in the mismanagement of investments, financial or business misconduct,
fraud etc.;
(iii) has been suspended or barred from capital market activities;
(iv) has been subject to material adverse findings, after conducting an inquiry, by the Commission or
any other regulatory or professional body or government agency;
(v) has been actively involved in the management of a company or firm whose registration or license
has been revoked or cancelled or which has gone into liquidation or other similar proceedings
due to mismanagement of affairs, financial misconduct or malpractices;
(vi) is ineligible, under the Act, Companies Act or any other legislation or regulation, from acting as
(1)
a director or serving in a managerial capacity of a company;
(vii) found involved in money laundering or terrorist financing, illegal deposit taking/ banking
business/ financial dealings;
(viii) has been adjudged as insolvent or has suspended payment or has compounded with his
creditors;
(ix) The fitness and propriety of any person shall be assessed by taking into account all the relevant
factors including but not limited to the following:
a. Integrity and track record of such person;
b. Competence and capability of the person; and
c. Conflict of interest of such person;
Undertaking from all the sponsors, directors and key management with regard to the above shall be
enclosed along with application for registration as SPAC.
(C) Competence and Capability:
The sponsors shall be required to submit an undertaking w.r.t competence and capability. In
determining a person’s competence and capability the following shall be considered:
(i) A SPAC must demonstrate that promoters/sponsors/directors have the experience, qualification
and competence to–

1
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021

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a) achieve the SPAC’s business objective and strategy as disclosed in the prospectus issued
in relation to the initial public offering; and
b) perform their individual roles, including an understanding of the nature of their obligations
and those of the SPAC under the regulatory requirements relevant to their roles.
(ii) The SPAC promoters/sponsors/directors, as a whole, must possess the appropriate experience
and track record which demonstrate that it will be capable of identifying and evaluating
acquisition targets, completing the qualifying acquisition and managing the company sustainably
based on the business strategy outlined in the prospectus. The SPAC must demonstrate that the
promoters/sponsors/directors/chief executive officer have the requisite collective experience and
track record, which include having–
a) sufficient and relevant technical and commercial experience and expertise;
b) positive track record in corporations within the same industry and business activity
evidenced by promoters/sponsors/directors/chief executive officer’s contribution to the
growth and performance of such corporations, including ability to deal with the relevant
risks relating to the business operations;
c) ability to locate and develop appropriate acquisition opportunities for corporations; and
d) positive corporate governance and regulatory compliance history.
(iii) the chief executive and director must be fully conversant with their duties as prescribed under the
statutes, rules and regulations; and
(iv) in case of promoters or sponsors or directors, should have special knowledge of matters which
the company may have to deal with as a SPAC.
(D) General:
(i) The Fit and Proper Criteria is (2)perpetual in nature and SPAC shall ensure compliance with the
provisions of Fit and Proper Criteria;
(ii) In case of any change in status result in non-compliance with the Fit and Proper Criteria, the
SPAC shall immediately stop the person from performing his assigned functions, informs the
Commission and initiate the process for replacement of the individual with a fit and proper
individual;
(iii) All persons subject to Fit and Proper Criteria shall report any change with reference to their
fitness and propriety to the SPAC within three business days of such change taking effect and
SPAC shall within three business days from the date of receipt, report the same to the
Commission;
(iv) Any violations or circumvention of the Fit and Proper Criteria shall be dealt with under the
provisions of the Act; and
(v) All persons subject to fit and proper criteria shall submit an affidavit to the Commission affirming
under the oath that the person meets the fit and proper criteria and it has no overdue payment of
any financial institution.]

(1) Section 153 of Companies Act, 2017

(2) At All Time

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12b. Functions of SPAC –

(1) A SPAC shall be responsible, -
(i) to raise and utilize funds for the sole purpose of merger or acquisition transaction and complete
the transaction within permitted time frame as per these regulations;
(ii) to open an escrow account and maintain custodial arrangements for escrow account at all times
as required under these regulations;
(iii) to act in the best interests of the investors and to ensure that merger transactions shall be
structured in such a manner to avoid any conflict of interest;
(iv) to be obliged to manage its assets, in the interest of the investors in good faith and to the best of
its ability and without undue advantage for itself or any of its related parties, associates or its
officers;
(v) to ensure that at least 15% shareholding of merged entity (post-merger) are held by the sponsors
for a period of at least one year from the date of merger:
(3)
Provided that SPAC sponsors may increase shareholding percentage in the merged entity, if
merged entity (subsequent to merger) starts generating operating profit within specified time (as
disclosed in prospectus);
(vi) to ensure that sponsor’s shareholding in the target company (4)premerger/acquisition should be
less than 30% of the total shareholding of the target company;
(vii) to prepare the draft prospectus as per format and disclosures prescribed in Schedule Eleven and
shall submit application for approval of the prospectus as per these regulations and the Act,
2015.

Merger = Uniting of two companies

Acquisition = To make a subsidiary

12c. Listing.
A SPAC offering securities to the public (5)shall be listed on the securities exchange.
12d. Modes of fund raising.–
(1) A SPAC can raise funds through issuance of equity securities and/or warrants either by way of;
(i) Initial Public Offer (IPO); or
(6)
(ii) Private placements
12e. Minimum Fund Raised.-
A SPAC shall raise at least (7)Rs. 200 million to undertake a merger or acquisition transaction. The offering
document/prospectus should clearly provide the justification that the funds raised are sufficient enough to
enable the SPAC to have a core business with sufficient size and scale relative to the industry in which the
business operates.
12f. Time frame for completion of qualifying acquisition.-
SPAC must complete the merger or acquisition transaction within the permitted time frame of thirty six (36)
months from the date of listing of SPAC on the exchange:
Provided that the Commission may, upon request by the SPAC, after reasons to be recorded in writing,
extend the permitted time by six months subject to terms and conditions as deem appropriate by Commission.

(3) In order to protect the interest of investors

(4) The purpose of 15% Limit is to protect the interest of general public money.
The purpose of 30% Limit is to avoid the conflict of interest.
(5) Mandatory to List
(6) < To be discussed >
(7) < IPO to rise atleast Rs. 200 Million >

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12g. Shareholders’ Approval.–

(1) Each merger or acquisition transaction shall be approved by the shareholders by way of special
resolution. The SAPC shall provide the disclosures as specified in (8)Schedule Twelve, while presenting
to the shareholder.
(2) SPAC shall ensure mandatory implementation of e-voting.
(3) The notice of general meeting by SPAC shall not be less than 21 days.
12h. Rights of holders of voting securities who vote against a qualifying acquisition /Refund to
Investors Or in case where SPAC fails to complete the merger or acquisition transaction-
(1) A SPAC shall be entitled to make refund to the entitled shareholders from the Escrow account in the
following scenarios, -
(i) where the company is unable to complete the merger or acquisition transaction within the
permitted time period as specified in these regulations (9)or as approved by the Commission; or
(ii) to those entitled shareholders, who do not approve the merger or acquisition transaction.
(2) if the SPAC is unable to complete the merger or acquisition transaction within the permitted time period,
the securities holders, will receive (10)pro rata amount out of the Escrow account including any profit
accrued/credited in the Escrow account, net of any taxes payable.
(3) The SPAC shareholder/(s), other than directors, sponsors and chief executive offer, disapproving the
merger or acquisition transaction shall be –
(i) entitled to receive, in exchange for their securities, a sum equivalent to 90% of their initial
investment, net of any taxes payable and expenses related to the facilitation of the exchange,
provided that such merger or acquisition transaction is approved and completed within the
permitted time frame; and
(ii) paid as soon as practicable upon completion of the merger or acquisition transaction should they
elect to exchange their securities. The securities tendered in exchange for cash must be
cancelled. In complying with this requirement, the SPAC must specify, in the circular to
shareholders in relation to the qualifying acquisition, the timeframe for payment to holders of
securities electing to exchange their securities. The SPAC must also demonstrate that this
timeframe is reasonable, including providing details of all milestones or steps to be taken.
(iii) the basis of computation for refund must be disclosed in the prospectus and notice of the general
meeting.
(iv) SPAC shall notify through its share registrar the list of dissenting shareholders to CDC. Shares of
the dissenting shareholder shall immediately be blocked by CDC.
(v) for the purpose of processing the list of dissenting shareholder/(s) and freezing, SPAC shares
shall not be tradeable on the securities exchange for one day i.e. immediately after the date of
book closure.
(4) SPAC immediately after processing payments from the (11)Escrow account as per the procedure
specified in these regulations shall stand delisted and process of its voluntary winding up shall be
initiated by the SPAC as specified in Companies Act, 2017.
“Escrow Account” means an account maintained with a scheduled bank (having an investment grade
(12)

rating) by a (13)custodian.
“Custodian” means an investment agent/debt securities trustee, Bank, Investment Finance Service
(13)

license holder and Depository Company engaged in regulated activities, not being an associate of the Special
Purpose Acquisition Company, appointed for securing the monies of investors in the escrow account.

(8) Mentioned at the last of this handout

(9) 36 months extension
(10) Original Money + (Subject to any withholding of tax)
(11) Escrow Account
(12) Custodian is for safeguarding of interest of shareholders.
(13) Escrow Account’s beneficial ownership with SPAC but operating rights is with custodian.

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12i. Management of Escrow Account. –

(1) SPAC must place at least ninety percent (90%) of the funds raised in an escrow account immediately
upon receipt of all proceeds. 10% of the total proceeds may be utilized to defray expenses related to
the initial public offering/private placements, operating costs, fund the search for a target business and
complete the qualifying acquisition;
(2) The monies in the escrow account shall only be utilized for the purpose of merger or acquisition
transaction.
(3) The monies in the escrow account can be released by the custodian for such purposes as permitted
under these regulations and upon termination of the escrow account.
(4) The escrow account can be terminated-
(i) following the completion of all merger or acquisition within the permitted time frame; or
(ii) upon failure to complete merger or acquisition transaction by SPAC.
(5) The proceeds in the escrow account can be (14)invested in permitted investments and any income
generated by the funds held in the escrow account, including profit or dividend income derived from the
permitted investments, must accrue to the escrow account and SPAC must ensure that in such
investments initial capital is preserved.
(6) Members of the management team shall not be eligible for any other payments from escrow account
other than in relation to securities purchased by them during and after the public offering.
12j. Fair market value of Acquisition. –
(1) The fair market value of the target company or companies, as the case may be, must equal to at least
eighty percent (80%) of the aggregate amount in the escrow account, net of any taxes payable and the
losses incurred on the investments made out of the escrow account.
(2) The fair market value should be supported by a valuer’s report recognized under the Companies Act,
2017
12k. Additional financing.-
(1) SPAC can raise additional funds by way of rights issue or other than right issue or through secondary
public offering to complete its merger or acquisition transaction within the permitted time period
specified in these regulations or as approved by the Commission. At least ninety percent (90%) of the
proceeds received, as a result, shall also immediately be deposited into escrow account.
(2) Where a SPAC proposes to obtain debt financing, the SPAC must ensure that–
(i) any credit facility obtained prior to the completion of the merger or acquisition transaction, may
only be drawn after the approval of the merger or acquisition through special resolution;
(ii) the funds from the credit facility obtained must be applied towards the financing of the merger or
acquisition, defraying related costs or enhancing the business(es) acquired under the merger or
acquisition; and
(iii) the monies in the escrow account must not be used as collateral for the debt financing.
12l. Majority ownership and management control:-
The merger or acquisition by SPAC should result in majority ownership or management control by the SPAC
of the merged/target entity.
12m. Change in board of directors and management team.-
Any change in the board, if so required, shall only be made in a manner provided in the Companies Act, 2017,
provided that the directors of SPAC shall at all times comply with fit and proper criteria given under Ninth
Schedule.

(14) < Permitted Investments will be written in Custodian Agreement >

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12n. The Custodian - its roles and responsibilities. –

(1) The funds raised by SPAC from issuance of securities shall be kept by the custodian in escrow
account, in accordance with the custodian agreement, these Regulations and applicable laws.
(2) Contents of the custodian agreement must be in accordance and in compliance with these regulations
and at minimum should include such information as specified in Schedule Ten.
(3) SPAC must secure and maintain custodial arrangements at all times over the monies in the escrow
account until the termination of the escrow account.
(4) A custodian must take appropriate measures to ensure the safekeeping of the monies held in the
escrow account.
(5) A custodian must ensure that proper accounting records and other records of escrow account are
maintained.
(6) A custodian may be provided a mandate by the SPACs to invest the amounts held in the escrow
account in permitted investments.
(7) A custodian may only distribute the funds held in the escrow account in accordance with the provisions
of the custodian agreement.
(8) The custodian shall disclose any information to the Commission and PSX upon request;
(9) The custodian agreement will terminate–
(i) on the appointment of a new custodian following the resignation or termination of services of the
existing custodian; or
(ii) following the termination of the escrow account.

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Special Purpose Acquisition Company Chapter-20

1
[SCHEDULE TEN

Minimum Contents of the Custodian Agreement

Custodian Agreement at minimum should include -

(i) provisions relating to the powers of the custodian including any indemnity given by the SPAC to the
custodian;

(ii) general covenants by the SPAC to–

(a) comply with the provisions of the custodian agreement; and

(b) provide the custodian any information which the custodian may require in order to discharge its
duties and obligations as custodian under the custodian agreement;

(iii) reporting covenants by the SPAC to immediately notify the custodian of any–

(a) circumstance that has occurred that would materially prejudice the SPAC;

(b) change in the utilization of proceeds; and

(c) other matter that may materially prejudice the interests of the holders of voting securities;

(iv) Where the custodian is allowed to invest the monies kept in the escrow account, the conditions under
which it is permitted to do so and the types of permitted investment;

(v) provision on release of funds from escrow account, clearly specifying that funds can only be released in
relation to-

(a) Making permitted investments of the monies in escrow account as specified under Regulation
12(h)(4);

(b) For the purpose of merger or acquisition transaction in accordance with Regulation 12(h)(1) and
12(i) of these regulations;

(c) the release of funds to the holders of voting securities, in accordance with 12(g)(3) of these
regulations, who had voted against the qualifying merger or acquisition and the remaining funds
to the SPAC upon completion of the qualifying acquisition within the permitted time frame; and

(d) the release of funds to the holders of voting securities upon failure to complete the merger or
acquisition transaction as referred to in regulation 12(o) of these regulations;

(e) meeting expenses related to the initial public offering/private placements and operating costs,
fund the search for a target business and complete the qualifying acquisition in accordance with
these regulations.

(vi) the conditions for the resignation and termination of the custodian.
---

1
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021

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 Special Purpose Acquisition Company Chapter-20

12o. Failure to complete merger or acquisition transaction-

(1) In case SPAC fails to complete merger or acquisition transaction within the permitted time frame or
within such extended time as approved by the Commission it shall notify the Commission and the
concerned securities exchange of the same fact within seven days.
(2) In case where SPAC fails to complete the merger or acquisition transaction prior to expiry of the
permitted time frame due to any unforeseen circumstances/reasons, it shall immediately notify the
same to the Commission and the concerned securities exchange of the fact.
12p. Power of the Commission to issue directions.
The Commission may issue such directions to the SPAC, including but not limited to filing of reports and
furnishing such documents and information to the Commission or to the investors, as it may deem fit, and
SPAC shall comply with such requirements.
12q. Relaxation:
The Commission may, if deems appropriate based on valid justification provided by the SPAC, upon reasons
to be recorded in writing, relax any of the requirements of Chapter VIA subject to such conditions or limitations
as it deems appropriate.

Important Illustration

1 If SPAC decides to Then after proposed merger, SPAC will Purpose of SPAC is achieved, now it will
merge be merged with the target company. be a normal company. (Here it is
seasonal SPAC)
2 If SPAC decides to Then after proposed acquisition, SPAC Purpose of SPAC is achieved and
acquire target will not be merged rather, acquires a SPAC status is also retained. (Here it is
company target company. not seasonal SPAC)

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Special Purpose Acquisition Company Chapter-20

1[Twelve Schedule

[Format of Information Circular to SPAC holders seeking vote for approval of

merger/acquisition transaction]
[see Regulation 12(g)]

To solicit a shareholder vote on the merger/acquisition, the SPAC will prepare an information circular which
may include the following information:
1) Information about the target company;
(i) Primary business of the target company and the industry in which it operates; Background and
history of the target company including its name, registration number, date of incorporation, date
of commencement of business, date of conversion into public limited company, description of the
business including core and others, if any.
(ii) Group Structure of the target company showing shareholding in relative and absolute term.
(iii) Pattern of shareholding of the target company.
(iv) Names of the Sponsors;
(v) Organizational structure of the target company; group information, if any;
(vi) Major events in the history of the target company such as: a) Significant financial or strategic
partnerships.
b) Time/cost overrun in setting up projects.
c) Capacity enhancement, location of plants.
d) launch of key products or services.
e) entry in new geographies or exit from existing markets.
f) Key awards, accreditations or recognition .
g) Defaults or rescheduling/ waiver / restructuring of borrowings with financial institutions/
banks.
(vii) Nature and location of the target company’s projects, if any; current implementation and
operational status of the projects; nature and type of plant and machinery; total capacity and
capacity utilization; financial plan with detailed breakup, in case the proceeds of the issue are to
be used for financing a project.
(viii) Infrastructure facilities like roads, buildings, housing colonies; utilities like water, electricity; raw
materials.
(ix) Product or services of the target company: Revenue and cost driver of the target company in
detail;
(x) Intellectual property rights;
(xi) Details of material property
(xii) Future prospects, demand outlook.
(xiii) Vendors to the target company.
(xiv) Approvals: All government and other approvals which are material and necessary for carrying on
the business of the target company.
(xv) Details regarding Associated companies of the target company.
(xvi) Related parties’ transactions, if any and their significance on the financial performance of the
target company.
2) The draft scheme for the proposed merger/acquisition transaction

1
Inserted vide SRO 1214 (I)/2021 dated September 15, 2021

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 Special Purpose Acquisition Company Chapter-20

3) Financial Information;
(i) Financial statements of the SPAC and the Target Company;
(ii) Pro forma financial information to reflect the merger transaction;
(iii) Qualified opinion, if any given by the auditor of the target company during the last three financial
years;
(iv) Following details as per the financial statements of the target company for the last 3 years or for
a shorter period if 3 years of commencement of business are not completed in tabular format:
a) Share capital;
b) Net Worth;
c) Revenue;
d) Gross margin
e) Operating margin
f) Profit after tax;
g) Profit after tax margin;
h) Earnings per share;
i) Breakup value per share;
j) Total borrowings as per the balance sheet;
k) Total debt to equity ratio;
l) Cash flow from operations
4) Description of post-transaction company and its management, directors, governance structure, and
material contracts;
5) Management’s discussion and analysis (MD&A) of the SPAC and the target company
6) All material Risk factors related to the target company;
7) The timeframe for payment to holders of securities electing to exchange their securities. The SPAC
must also demonstrate that this timeframe is reasonable, including providing details of all milestones or
steps to be taken.
8) LEGAL PROCEEDINGS AND OVERDUE LOANS OF THE TARGET COMPANY;
Summary table of outstanding legal proceedings other than the normal course of business against the
target company its sponsors, substantial shareholders, directors or its associated group companies,
over which the target company has control, that could have material impact on the target company.
OVERDUE LOANS OF THE TARGET COMPANY
9) MATERIAL CONTRACTS / DOCUMENTS RELATED TO THE ISSUE (list of all agreements related to
the proposed merger or acquisition)
10) MEMORANDUM OF ASSOCIATION OF THE TARGET COMAPNY
11) BOARD AND MANAGEMENT OF THE TARGET COMPANY

Area of Expertise
Name of Professional
S.NO. alongwith years of Major Achievements
Sponsors/Promoters Qualification
experience

12) PRE AND POST ISSUE SHAREHOLDING OF THE SPONSORS OF SPAC

S. No. Name of Shareholding % Shareholding %
Sponsor (Nos. of shares- (Nos. of shares-
Pre-Issue) Post-Issue)

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Special Purpose Acquisition Company Chapter-20

13) OUTSTANDING LEGAL PROCEEDING

14) REFUND TO INVESTORS: A SPAC can make refund to the entitled shareholders from the Escrow
account as follows:
(i) where the company is unable to complete the merger or acquisition transaction within the
stipulated time period of thirty six (36) months;
(ii) to those entitled shareholders, who do not approve the merger or acquisition transaction.
15) RIGHTS OF HOLDERS OF VOTING SECURITIES WHO VOTE AGAINST A QUALIFYING
ACQUISITION
16) TIME FRAME FOR COMPLETION OF ACQUISITION/MERGER
17) Any other information that an investor must know before approving the transaction
18) MISCELLANEOUS INFORMATION

REGISTERED OFFICE / CENTRAL OFFICE OF AUDITOR OF THE TARGET

THE TARGET
Registered Office Address: M/s , Chartered Accountants
Phone: Address: .
Fax: Email: Contact No.:
Website: Email:

REGISTRAR AND TRANSFER AGENT BANKERS

Limited
Office: UAN:
FAX:
Email & Website:

all the necessary information with regard to the issue and constitutes full, true and plain disclosures of
all material facts relating to the shares being offered through this prospectus and that nothing has been
concealed

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 Special Purpose Acquisition Company Chapter-20

Annexure-A
Information and documents to be submitted along with the prospectus]
1. Undertakings by the directors/ investment agent / custodian on non-judicial stamp papers attested by
Oath Commissioner regarding compliance with the requirements of Regulations;
2. Affidavits/undertakings from the promoters, directors of the SPAC that they meet the fit & proper criteria
as required under regulation 12(b) of the Regulations, duly attested by Oath Commissioner;
3. Profiles of the directors and sponsors/ of the SPAC containing the details regarding their professional
experience;
4. Forms 28 and 29 duly certified from the concerned Company Registration Office (CRO);
5. Copies of all other approvals required under any law and/or contract;
6. Undertaking, on Non-Judicial Stamp Paper, from the Chief Executive or any Director/Sponsor of the
SPAC authorized by the Board of Directors to the effect that the SPAC shall comply with the
requirements of the Regulations;
7. Undertaking, on Non-Judicial Stamp Paper, from the Sponsor/Promoters of SPAC to the effect that they
shall not utilize the amount of fund raised from the public for any other purpose except for merger or
acquisition transaction and related expenses as permitted under these regulations.
8. Power of attorney by the SPAC in favor of consultants/advisors, if any;
9. Certificate of Incorporation, Memorandum and Articles of Association/constitutive document of SPAC;
10. Copy of the Information Memorandum, if any;]

[File No. SMD/CIW/Misc./09/2015]

(Bilal Rasul)
Secretary to the Commission

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Special Purpose Acquisition Company Chapter-20

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Remaining Areas of PSX Rule Book Chapter-21

CHAPTER
21

REMAINING AREAS OF
PSX RULE BOOK

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 Remaining Areas of PSX Rule Book Chapter-21

Remaining Areas of PSX Rule Book

5.5.10. SPLIT/CONSOLIDATION OF PHYSICAL INSTRUMENTS:

(a) The Company shall split allotment letters and letters of right into marketable lots within seven (7)
days of receipt of such application.
(b) The Company shall consolidate or split, as may be required by a Security holder in writing
certificates into marketable lots within thirty (30) days of receipt of such application. In case the
split/consolidation results in lots other than marketable lots, the company may charge an amount,
which shall not exceed Rs.100/- for each certificate.
5.6.8. Every Listed Company and Issuer of Listed Security shall send to the Exchange its quarterly and
annual financial results, in the manner prescribed by the Exchange from time to time.
Not Applicable today as listed company shares shall be in book entry form as per Companies Act, 2017 and
Public Offering Regulations, 2017.

PAKISTAN STOCK EXCHANGE LIMITED

Stock Exchange Building, Stock Exchange Road, Karachi-74000
Phones: 111-001-122, Fax (021) 32460923

The Chief Executive/Secretary

of All Listed Companies and Issuers of Listed Securities

Subject: Correspondence Manual

Dear Sir,

In order to facilitate the listed companies to follow time bound requirements of the Listing of Companies &
Securities Regulations under the Rule Book, we are pleased to enclose herewith a copy of the
Correspondence Manual, which will help in exchanging correspondence on various related issues with this
Exchange.

The listed companies and issuers of listed securities are advised to disseminate the information to the
Exchange through the Web portal called Pakistan Unified Corporate Action Reporting System (PUCARS).

The listed companies and issuers of listed securities are further advised to study the Correspondence Manual
and ensure that correspondence is exchanged as per the requisite Forms to avoid violation of the Listing of
Companies & Securities Regulations.

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Remaining Areas of PSX Rule Book Chapter-21

FORM-3
Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Financial Results for the Year Ended

Dear Sir,

We have to inform you that the Board of Directors of our company in their meeting held on ________(date)
________ at ________ (time) ________, at________ (place) _______________recommended the following:

(i) CASH DIVIDEND

A final Cash Dividend for the year ended________at Rs. ________per share i.e. ________%. This is in
addition to Interim Dividend(s) already paid at Rs. ________per share i.e. ________%.

AND/OR

(ii) BONUS SHARES

It has been recommended by the Board of Directors to issue Bonus Shares in the proportion of
________share(s) for every ________share(s) held i.e. ________%. This is in addition to the Interim
Bonus Shares already issued @ ________%.

AND/OR

(iii) RIGHT SHARES

The Board has recommended to issue ___________% Right Shares at par/at a discount/premium of
Rs. _________________per share inproportion of __________share(s) for every share(s). The
entitlement of right shares being declared simultaneously will be/will not be applicable on Bonus Shares
as declared above.

AND/OR

(iv) ANY OTHER ENTITLEMENT/CORPORATE ACTION

AND/OR

(v) ANY OTHER PRICE-SENSITIVE INFORMATION

The financial results of the Company are attached.

(The Company shall give complete Profit & Loss Account along with appropriations, earning per share
and comparative figures of immediately preceding corresponding period. In addition, if the accounts
contain certain qualification / observation by the auditors, the same should also be intimated. In case
the consolidated Profit & Loss Accounts are applicable, it will be required to communicate the
standalone alongwith consolidated Profit & Loss Accounts separately for the same period).

The Annual General Meeting of the Company will be held on ________ (date) ________at (time), at
_________________________________ (place) _______________

*The above entitlement will be paid to the shareholders whose names will appear in the Register of Members on (date).

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 Remaining Areas of PSX Rule Book Chapter-21

The Share Transfer Books of the Company will be closed from (date) to (date) (both days inclusive). Transfers
received at the (complete address of share) at the close of business on (date) will be treated in time for the
purpose of above entitlement to the transferees.
The Annual Report of the Company will be transmitted through PUCARS atleast 21 days before holding of
Annual General Meeting.

Yours Sincerely,

Notes:

1. The above information should be sent during trading hours through PUCARS followed by a hard copy
of letter of confirmation Under Sealed Cover immediately after the Board Meeting. In case the meeting
is not concluded during trading hours, the company shall immediately convey through PUCARS to the
Exchange that the meeting is in progress followed by a hard copy of letter of confirmation. The
information will have to be conveyed on the next working day between 9:15 a.m. to 9:30 a.m. positively.

2. The company shall mention only the applicable portion of declaration i.e., cash dividend/bonus/
right/any other entitlement/corporate action and any other price- sensitive information which is/are
recommended by the Board of Directors of the Company.

3. The above information is required to be sent to the Exchange prior to its release to anyone else.
Appropriate action will be taken against the company violating this requirement.

4. The company shall give a minimum of 14 days notice to the Exchange prior to closure of Share
Transfer Books for any purpose.

Provided that the companies quoted on the Futures Counter shall intimate to the Exchange the dates of
book closure and corporate actions, if any, on or before 20th day of the month with a notice period of at
least 21 days after the said 20th day for commencement of book closure.

5. Intimation of dividend and of all other entitlements shall be sent to the Exchange not later than 14 days
prior to commencement of the book closure.

6. The company shall provide a minimum period of 7 days but not exceeding 15 days at a time for closure
of Shares Transfer Register, for any purpose, not exceeding 45 days in a year in the whole.

7. The company shall treat the date of mailing/dispatching as the date of lodgment for the purpose for
which the share transfer books of the company are closed.

*In case the company decides to announce separate book closure for the entitlement of right shares then it must be clearly mentioned
while announcing the dates of book closure.

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Remaining Areas of PSX Rule Book Chapter-21

Some Practical Examples

INDUS DYEING MANUFACTURING CO. LIMITED

December 08, 2022 FORM-3

IDML/118/C&SD/2022

The General Manager,

Pakistan Stock Exchange Limited,
Stock Exchange Building,
Stock Exchange Road,
Karachi. Fax No. 111-573-329

Subject: Financial Results for The Year Ended June 30, 2022

Dear Sir,

We have to inform you that the Board of Directors of our Company in their meeting held on December
08, 2022 at 12:00 p.m. at its registered office Karachi recommended the following:

Cash DIVIDEND NIL

Financial results of the Company for the year ended June 30, 2022 are attached herewith as Annexure
“A & B”.
The 65th Annual General Meeting of the Company was not held within stipulated time due to unavailability
of audited financial statements for the year ended June 30, 2022 of its wholly owned subsidiary company i.e
"Indus Wind Energy Limited" (IWEL) for consolidation purposes and therefore AGM for year 2022 was
overdue.
The said audited financial statements of IWEL were not finalized and got audited due to its pending
application before the SECP for reinstatement of exemptions pertaining to applicability of TFRS 16 (Leases),
Capitalization of exchange differences (IAS 21) and Recognition of Embedded Derivatives (IFRS 9) granted
through SRO 24(I)/2012, dated 16.01.2012 which had been partially modified/withdrawn through (SRO
986(I)/2019), dated 02.09.2019 (“the Impugned Notification").
The matter is still pending at the end of the SECP however on the writ petitions of Wind companies including
IWEL the Honorable Lahore High Court, Lahore has now suspended the Impugned Notification till the further
orders. Resultantly; financial statements of IWEL has now been finalized and got audited. On availability of
said consolidated financial statements, the Board of Directors of the Company has now approved the
financial statements (standalone and consolidated) for the year ended June 30, 2022.

5th Floor, Office No.505, Beaumont Plaza, Beaumont Road, Civil Lines Quarters, Karachi-75530, Pakistan.
Tel # (92-21) 111-404-104 & 35693641 to 35693660 (20 Lines). Fax # (92-21) 35693593 & 35693594
E-mail:info@indus-group.com & indus@khi.comsats.nel,pk
Web Site: www.indus-group.com

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 Remaining Areas of PSX Rule Book Chapter-21

INDUS DYEING MANUFACTURING CO. LIMITED

An application for seeking direction of overdue AGM for the year 2022 under section 147 of the Companies
Act, 2017 is now being filed with SECP. The Board has therefore recommended that 65 th Annual General
Meeting of the Company will be held in accordance with the direction of the SECP.

The Annual Report of the Company will he transmitted through PUCARS atleast 21 days before holding of
Annual General Meeting.

Thanking You,

Yours Faithfully,

Securities and Exchange Commission of Pakistan,

NIC Building, 63 Jinnah Avenue,
Islamabad.

5th Floor, Office No.505, Beaumont Plaza, Beaumont Road, Civil Lines Quarters, Karachi-75530, Pakistan.
Tel # (92-21) 111-404-104 & 35693641 to 35693660 (20 Lines). Fax # (92-21) 35693593 & 35693594
E-mail:info@indus-group.com & indus@khi.comsats.nel,pk
Web Site: www.indus-group.com

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Remaining Areas of PSX Rule Book Chapter-21

INDUS DYEING MANUFACTURING CO. LIMITED

April 29, 2023

IDML/57/2023/(KHI)

The General Manager,

Pakistan Stock Exchange Limited,
Stock Exchange Building,
Stock Exchange Road,
Karachi.

Subject: Financial Results for The Year Ended March 31, 2023

Dear Sir,

We have to inform you that the Board of Directors of Indus Dyeing & Manufacturing Company Limited, in
their meeting held at 12:00 p.m. on April 29, 2023 (Saturday) recommended the following:

CASH DIVIDEND NIL

The Third Quarterly results are approved by the Board of Directors of the Company is appended as
Annexure - A & B.
You may please inform the members of the Exchange accordingly.
Thanking You

Ends.: As stated above

Copy: Executive Director/HOD
Offsite-ll Department,
Supervision Division,
Securities & Exchange Commission of Pakistan,
NIC Building, 63 Jinnah Avenue,
Islamabad.

5th Floor, Office No.505, Beaumont Plaza, Beaumont Road, Civil Lines Quarters, Karachi-75530, Pakistan.
Tel # (92-21) 111-404-104 & 35693641 to 35693660 (20 Lines). Fax # (92-21) 35693593 & 35693594
E-mail:info@indus-group.com & indus@khi.comsats.nel,pk
Web Site: www.indus

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 Remaining Areas of PSX Rule Book Chapter-21

FORM-7

Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Financial Results for the Quarter Ended_____________________

Dear Sir,

We have to inform you that the Board of Directors of our company in their meeting held on (date) at (time)
_________ at (place), recommended the following:

(i) CASH DIVIDEND

An interim Cash Dividend for the quarter ended _______________at Rs. _______________ per share
i.e. ______________%. This is in addition to Interim Dividend(s) already paid at Rs. _______________
per share i.e. _______________%.

AND/OR

(ii) BONUS SHARES

It has been recommended by the Board of Directors to issue Interim Bonus Shares in proportion of
____________ share(s) for every ____________ share(s) held i.e. ____________%. This is in addition
to the Interim Bonus Shares already issued @ ____________%.

AND/OR

(iii) RIGHT SHARES

The Board has recommended to issue % Right Shares at par/at a discount/premium of Rs.
____________ per share in proportion of ____________ share(s) for every ____________ share(s).
The entitlement of right shares being declared simultaneously will be / will not be applicable on Bonus
Shares as declared above.

AND/OR

(iv) ANY OTHER ENTITLEMENT/CORPORATE ACTION

AND/OR

(v) ANY OTHER PRICE-SENSITIVE INFORMATION

The financial results of the Company are attached.

The Company shall give complete income statements including earning per share for the current interim
period and cumulatively for the current financial year to date, with comparative income statements for
the comparable interim periods (current and year-to-date of the immediately preceding financial year).
In addition, if there is any observation / qualification of the auditors while reviewing the second quarterly
accounts, the same should also be intimated. In case the consolidated Profit & Loss Accounts are
applicable, it will be required to communicate the standalone along with consolidated Profit & Loss
Accounts separately for the same period.

*The above entitlement will be paid to the shareholders whose names will appear in the Register of Members on (date).

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Remaining Areas of PSX Rule Book Chapter-21

The Share Transfer Books of the Company will be closed from (date) to (date) (both days inclusive). Transfers
received at the (complete address of share department) at the close of business on (date) will be treated in
time for the purpose of above entitlement to the transferees.
The Quarterly Report of the Company for the period ended will be transmitted through PUCARS separately,
within the specified time.

Yours Sincerely,

Notes:

1. The above information should be sent during trading hours through PUCARS followed by a hard copy
of letter of confirmation Under Sealed Cover immediately after the Board Meeting. In case the meeting
is not concluded during trading hours, the company shall immediately convey through PUCARS to the
Exchange that the meeting is in progress followed by a hard copy of letter of confirmation. The
information will have to be conveyed on the next working day between 9:15 a.m. to 9:30 a.m. positively.

2. The company shall mention only the applicable portion of declaration i.e., cash dividend/
bonus/right/any other entitlement/corporate action and any other price-sensitive information which is/are
recommended by the Board of Directors of the Company.

3. The above information is required to be sent to the Exchange prior to its release to anyone else.
Appropriate action will be taken against the company violating this requirement.

4. The company shall give a minimum of 14 days notice to the Exchange prior to closure of Share
Transfer Books for any purpose.

Provided that the companies quoted on the Futures Counter shall intimate to the Exchange the dates of
book closure and corporate actions, if any, on or before 20th day of the month with a notice period of at
least 21 days after the said 20th day for commencement of book closure.

5. Intimation of dividend and of all other entitlements shall be sent to the Exchange not later than 14 days
prior to commencement of the book closure.

6. The company shall provide a minimum period of 7 days but not exceeding 15 days at a time for closure
of Shares Transfer Register, for any purpose, not exceeding 45 days in a year in the whole.

7. The company shall treat the date of mailing/dispatching as the date of lodgment for the purpose for
which the share transfer books of the company are closed.

*In case the company decides to announce separate book closure for the entitlement of right shares then it must be clearly mentioned
while announcing the dates of book closure.

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 Remaining Areas of PSX Rule Book Chapter-21

5.6.9. PROVISION OF STATUTORY REPORTS, AUDITED ACCOUNTS, NOTICE, RESOLUTION AND

QUARTERLY REPORTS TO THE EXCHANGE:
(a) The Company shall send/transmit to the Exchange its statutory report, annual report containing
therein the audited financial statements, auditors’ report, directors’ report and the chairman’s
review report, in the manner prescribed by the Exchange not later than twenty one (21) days
before a meeting of the shareholders is held to consider the same.
(b) The Company shall transmit to the Exchange all notices as well as resolutions prior to their
publication and dispatch to the shareholders and also file with the Exchange certified copies of
all such resolutions as soon as these have been adopted and become effective.
(c) The Company shall send/transmit to the Exchange its quarterly accounts in the manner
prescribed by the Exchange from time to time and within the time stipulated under the
Companies Act, 2017.

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Remaining Areas of PSX Rule Book Chapter-21

Prescribed in Correspondence Manual of PSX

FORM-5

Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Transmission of Annual Report for the Year Ended_____________________

Dear Sir,

We have to inform you that the Annual Report of the Company for the year ended __________________have
been transmitted through PUCARS and is also available on Company’s website.

You may please inform the TRE Certificate Holders of the Exchange accordingly.

Yours Sincerely,

Encl: As above.

Notes:

1. The Annual Report must be transmitted through PUCARS at least 21 days before the holding of Annual
General Meeting.
2. Failure to transmit the Annual Report through PUCARS within the specified time, shall make the
company liable to pay a penalty of Rs. 5,000/- (Rupees five thousand only) for every day during which
the default continues.

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 Remaining Areas of PSX Rule Book Chapter-21

Relevant Extracts From The Companies Act, 2017

237. Quarterly financial statements of listed companies.—
(1) Every listed company shall prepare the quarterly financial statements within the period of—
(a) thirty days of the close of first and third quarters of its year of accounts; and
(b) sixty days of the close of its second quarter of its year of accounts

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Remaining Areas of PSX Rule Book Chapter-21

Manner Prescribed in by PSX in Correspondence Manual

FORM-8

Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Transmission of Quarterly Report for the Year Ended_____________________

Dear Sir,

We have to inform you that the Quarterly Report of the Company for the period ended _______________have
been transmitted through PUCARS and is also available on Company’s website.

You may please inform the TRE Certificate Holders of the Exchange accordingly.

Yours Sincerely,

Encl: As above.

Notes:
1. The 1st and 3rd Quarterly Report must be transmitted to the Exchange within 30 days of the close of
the Quarter and whereas the 2nd Quarterly Report with Limited Scope Review of the Auditor must be
transmitted within 60 days of the close of the Quarter.
2. Failure to transmit the Quarterly Report through PUCARS within the specified time, shall make the
company liable to pay a penalty of Rs. 5,000/- (Rupees five thousand only) for every day during which
the default continues.

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 Remaining Areas of PSX Rule Book Chapter-21

Some Practical Example

INDUS MOTOR COMPANY LIMITED

Plot No. NWZ/I/P-1 Port Qasim Authority, Bin Qasim Karachi
INDUS MOTOR Tel:021-3470041-48-34721100, 021-11-869-682 Fax: 021-34720056-347720054
Email:anam.khan@toyota-indus.com Website:www.toyota-indus.com

Post-ID: 20272
February 24, 2023, 16:15:05

The General Manager

Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi

Subject: Transmission of Quarterly Report for the Period Ended 2022-12-31

Dear Sir,

We have to inform you the quarterly Report of the Company for the period ended 2022-12-31
have been transmitted through PUCARS and is also available on Company’s website

You may please inform the TRE Certificate Holders of the Exchange accordingly.

Yours Sincerely,

Encl: As Above.

Email:anam.khan@toyota-indus.com Website:www.toyota-indus.com

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Remaining Areas of PSX Rule Book Chapter-21

5.6.10. PAYMENT OF DIVIDEND:

Every Listed Company shall:
(i) credit interim and final dividend into the designated bank accounts of the shareholders concerned within
the time lines specified by the Commission pursuant to section 242 of the Companies Act;
Please Recap Section 242 of Companies Act, 2017 and Distribution of Dividend Regulations lecture.
(ii) intimate the Exchange immediately as soon as all the dividends have been credited in the respective
bank accounts of the shareholders

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 Remaining Areas of PSX Rule Book Chapter-21

Interim Dividend

FORM-9

Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Credit of Interim Cash Divided

Dear Sir,

We are pleased to inform you that the interim cash dividend @ Rs. ________________per share, i.e. % for
the year ending ___________________ has been credited electronically into the designated bank accounts of
the shareholders of the Company on _________________.

Yours Sincerely,

Notes: Every listed company shall:-

1. Credit the interim cash dividend to the shareholders concerned within 15 working days from the date of
commencement of closing of share transfer register for purpose of determination of entitlement of
dividend as required under Rule 3 of the Companies (Distribution of Dividends) Regulations, 2017 read
with Sections 242 & 243 of the Companies Act, 2017.
2. Intimate the Exchange immediately as soon as the dividend has been credited to the designated bank
accounts of the shareholders.
3. A listed company, which makes a default in complying with the requirements of Clause 5.6.5 of Rule
Book of the Exchange, shall pay to the Exchange penalty of Rs.5,000/= (Rupees five thousand only) for
every day during which the default continues. The Exchange may also notify the fact of such default
and the name of defaulting company by notice and also by publication in the Official Quotation List of
the Exchange.
4. The Exchange may suspend or if it so decides, delist any Company which makes a default in complying
with the requirements of this Regulation.
5. Any action under the PSX Regulation shall be without prejudice to the action or steps taken by any
other person or Authority.
6. The Companies are advised to send the above information through PUCARS immediately.

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Remaining Areas of PSX Rule Book Chapter-21

Final Dividend

FORM-10

Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Credit of Final Cash Divided

Dear Sir,

We are pleased to inform you that the final cash dividend @ Rs. _________________ per share, i.e.
_____________% for the year ended has been credited electronically into the designated bank accounts of
the shareholders of the Company on ______________________.

Yours Sincerely,

Notes: Every listed company shall:-

1. Credit the final cash dividend to the shareholders concerned within 15 working days from the date of
General Meeting in which the same has been approved as required under Rule 3 of the Companies
(Distribution of Dividends) Regulations, 2017 read with Sections 242 & 243 of the Companies Act,
2017.
2. Intimate the Exchange immediately as soon as the dividend has been credited to the designated bank
accounts of the shareholders.
3. A listed company, which makes a default in complying with the requirements of Clause 5.6.5 of Rule
Book of the Exchange, shall pay to the Exchange penalty of Rs.5,000/= (Rupees five thousand only) for
every day during which the default continues. The Exchange may also notify the fact of such default
and the name of defaulting company by notice and also by publication in the Official Quotation List of
the Exchange.
4. The Exchange may suspend or if it so decides delist any Company which makes a default in complying
with the requirements of this Regulation.
5. Any action under the PSX Regulation shall be without prejudice to the action or steps taken by any
other person or Authority.
6. The Companies are advised to send the above information through PUCARS immediately.

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 Remaining Areas of PSX Rule Book Chapter-21

Practical Examples

NISHAT POWER LIMITED

NPL-PSX/10 March 07, 2023

The General Manager

Pakistan Stock Exchange Ltd
Stock Exchange Building,
Stock Exchange Road, PUCARS/TCS
Karachi.

Subject: Credit of 20% 2nd Interim Cash Dividend

Dear Sir,

We have to inform you that 20% 2nd Interim Cash Dividend of Nishat Power Limited i.e. Rs.2/- (Rupees Two
Only) per share for the Half Year ended December 31, 2022 approved in the Board of Directors Meeting held on
February 13, 2023 has been credited on March 07, 2023 through electronic mode directly into the designated bank
accounts of the Shareholders who have submitted their valid Computerized National Identity Card (CNIC) and
International Bank Account Number (IBAN) with complete bank details.
A copy of notice in this respect is enclosed for circulation.

Thanking you,

Copy to:

The Share Registrar The Director/HOD

Nishat Power Limited Surveillance, Supervision and Enforcement Department
Hameed Majeed Associates (Pvt) Ltd. Securities and Exchange Commission of Pakistan,
H.M. House, 7-Bank Square, Lahore. NIC Building, 63-Jinnah Avenue, Blue Area,
Phone (042) 37235081-82 Islamabad.
Email: shares@hmaconsultants.com Fax No. (051) 9100428

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Remaining Areas of PSX Rule Book Chapter-21

NISHAT POWER LIMITED

NISHAT POWER LIMITED

CREDIT OF 20% 2ND INTERIM CASH DIVIDEND
FOR THE HALF YEAR ENDED DECEMBER 31, 2022
We are pleased to inform the shareholders of Nishat Power Limited (“the Company”) that the 20% 2nd Interim Cash
Dividend of the Company i.e. Rs. 2/- (Rupees Two Only) per share for the Half Year ended December 31, 2022
approved in the Board of Directors Meeting held on February 13, 2023 has been credited on March 07, 2023
through electronic mode directly into the designated bank accounts of the Shareholders who have submitted their
valid Computerized National Identity Card (CNIC) and International Bank Account Number (IBAN) with complete
bank details.
The dividend of the shareholders who have not so far provided their valid CNIC and/or Bank account details
including IBAN or whose Bank account details are incorrect/incomplete has been withheld in accordance with the
requirements of Section 242 of the Companies Act, 2017 and Companies (Distribution of Dividends) Regulations,
2017.
The Shareholders whose dividends have been withheld are requested to contact the Company’s Share Registrar at
the below given address alongwith legible copy of their valid CNIC and complete bank account details including
valid IBAN, and also update their CDC accounts/ sub accounts with Central Depository Company or with their
Participants as the case may be.
Share Registrar – Nishat Power Limited
Hameed Majeed Associates (Pvt) Ltd,
H. M. House, 7-Bank Square,
Lahore.
Phone No. (042) 37235081-82. Email: shares@hmaconsultants.com
Central Depository Company of Pakistan Limited (CDC) has developed Centralized Cash Dividend Register
(CCDR) and e-Services web portal, which would contain details pertaining to cash dividends either paid, unpaid or
withheld by listed companies. The CCDR will help to maintain history of dividends paid to shareholders by listed
companies and access of all such information will be provided to the respective shareholders including detail of
Income Tax / Zakat deduction etc. (if any) and the net amount credited into their bank accounts.
To register yourself for e-Dividend services, please visit CDC e-Services Portal by accessing
https://eservices.cdcaccess.com.pk/public/indes.xtml

Lahore
March 07, 2023

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 Remaining Areas of PSX Rule Book Chapter-21

5.6.11.SUSPENSION OF TRADING IN THE SHARES/WARRANTS OF A LISTED COMPANY PURUANT TO

SCHEME OF MERGER/AMALGAMATION/RECONSTRUCTION: (Recap Section 279 to 285 of
Companies Act, 2017)
Where a Listed Company enters into a scheme of reconstruction of the company/ companies or
amalgamation of any two or more Listed Companies or division/ splitting of a Listed Company into one
or more companies, pursuant to the order of the Court, Commission or State Bank of Pakistan as per
the Scheme of Merger/ Amalgamation/ Reconstruction already notified by the Exchange, the Exchange
on announcement of final dates of closure of share transfer registers by the Listed Company for
determining the entitlement, shall suspend trading in the shares of the Listed Company being merged
as per the Exchange’s trading schedule already notified. The Exchange, as the case may be, shall also
issue a separate notice for delisting of the merged Listed Company upon fulfilment of the applicable
requirements.
5.7. ANNUAL GENERAL MEETINGS/ANNUAL REVIEW MEETINGS, ETC
5.7.1. HOLDING OF MEETING:
(a) Listed Companies shall intimate to the Exchange the date and time of holding of their annual
general meetings. Listed Companies are encouraged to avoid overlap with other Listed
Companies in holding their annual general meetings and provide video-link facility to
shareholders to enable them to participate in the annual general meetings.
(b) Every Listed Company including Modaraba shall hold its annual general meetings or annual
review meetings, as the case may be, and lay before the said meetings its financial statements
within one hundred and twenty (120) days following the close of financial year.
Provided that it shall be mandatory for a Company to notify the Exchange of any extension in
time of holding the Annual General Meeting by furnishing to the Exchange a copy of the letter of
approval from the Commission allowing such extension, within 48 hours of receipt of the same.
These are the requirements in addition to requirements imposed by Companies Act, 2017 in relation to
extension of annual general meetings.

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Remaining Areas of PSX Rule Book Chapter-21

Notification to PSX w.r.t extension in AGM

Date: January 18, 2021

Ref: PSX-1522/01-21
The General Manager,
Pakistan Stock Exchange Limited,
Stock Exchange Building,
Stock Exchange Road,
Karachi.

Subject: Extension in time and Approval for holding of Annual General Meeting U/s 132 of the
Companies Act 2017, for the accounting year ended September 30, 2020

Sir,

This is to inform you that we had applied to Securities and Exchange Commission of Pakistan (SECP) for
extension in the period for holding Annual General Meeting for the year ended September 30, 2020 for upto
February 27, 2021, i.e. thirty (30) days, copy of the application filed with the SECP is enclosed for your
information.

We are pleased to inform you that SECP vide there letter no. EMD/233/340/2002-177 dated January 11,
2021, received by us on January 13, 2021 has approved the extension of time in holding of Annual General
Meeting for upto February 27, 2021, i.e. thirty (30) days under provision of section 132 and section 223 of the
Companies Act 2017, copy of the letter received to us from SECP for your information and record.

We in this respect request you to please inform TRE Certificate holders of the Exchange accordingly.

Thanking you

Yours faithfully

Muhammad Ayub
Company Secretary

Enclosed:
A) Application to SECP for extension in time for holding of AGM
B) Letter received from SECP of approval of extension in time for holding of AGM

Phone: (+92-21) 111-BAWANY (22 92 69) Fax: +92-21-34322864 WEB: WWW.FARAN.COM.PK

43-1-E(B), P.E.C.H.S, Block-6, Off Razi Road, Shahrah-e-Faisal, Karachim
ISO 9001:2015 Certified

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 Remaining Areas of PSX Rule Book Chapter-21

Approval of SECP Allowing such extension

Say No To Corruption

EMD/233/340/2002/-177 January 11, 2021

The Company Secretary,

Faran sugar Mills Limited
43 – 1 – E(B), P.E.C.H.S.,
Block-6, Off Razi Road,
Shahrah-e-Faisal
Karachi.

Subject: EXTENSION IN THE TIME FOR HOLDING OF ANNUAL GENERAL MEETING UNDER
SECTION 132 OF THE COMPANIES ACT, 2017 FOR ACCOUNTING YEAR ENDED
SEPTEMBER 30, 2020

Dear Sir,

Please refer to the application of Faran Sugar Mills Limited (the “Company”) vide letter No. SECP-1518/01-21
dated December 29, 2020 regarding the captioned subject.

2. In this connection, I am directed to inform you that the competent authority has granted 30 days extension i.e.
upto February 27, 2021 to hold the annual general Meeting and lay therein the Annual Audited Accounts of the Company
for the year ended September 30, 2020 under the provision for Section 132 and Section 223 of the Companies Act, 2017
(the “Act”).

3. Kindly note that the said approval is without prejudice to any action that Commission can initiate for non-
compliance with the provisions of the Act.

Additional Joint Director (CSD)

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Remaining Areas of PSX Rule Book Chapter-21

Important Circular Governing Annual Financial Statements and Notices of General Meetings

Corporate Supervision Department

Company Law Division

No.EMD/Misc./D-III/2010-154 July 3, 2019

CIRCULAR NO. 10/2019

ANNUAL FINANCIAL STATEMENTS AND NOTICES OF GENERAL MEETINGS
In order to consolidate applicable requirements for filing of annual financial statements and notices of general meetings
with the Securities and Exchange Commission of Pakistan (SECP) and dissemination of notices to general public
pursuant to the provisions of the Companies Act, 2017 (XIX of 2017) (“the Act”), the SECP in exercise of powers
conferred under section 510 of the Act hereby directs listed companies that:
(i) All notices of general meetings shall be sent to the members and every person who is entitled to receive notice of
general meetings at least twenty-one days before the date fixed for the meeting and shall be published in English
and Urdu morning newspapers, having nationwide circulation, which are generally known and read, in English
and Urdu languages respectively;
(ii) A copy of newspaper in each language, in which notice of general meeting was published, along with statement
under section 134 of the Act, where applicable, shall be filed with the SECP within three days of publication;
(iii) Notice of general meeting, along with statement under section 134 of the Act, where applicable, shall also be
transmitted to the SECP through fax or email at the email address general.meetings@secp.gov.pk; and
(iv) One of the copies of financial statements and reports attached therewith, filed with the SECP in pursuance of
section 223(7) of the Act, shall be duly signed by the auditor, the Chief Executive, a director and the Chief
Financial Officer as the case may be.
(v) Following circulars of the SECP are hereby repealed:
i. Circular No. 2 dated January 13, 1999
ii. Circular No. 4 dated March 12, 1999
iii. Circular No. Nil dated February 22, 2001
iv. Circular No. 5 dated March 14, 2002
v. Circular No. 1 dated January 7, 2008; and
vi. Circular No. 10 dated February 15, 2012

Corporate Supervision Department

Distribution:
1. Chief Executives of all listed companies
2. Pakistan Stock Exchange
3. Institute of Chartered Accountants of Pakistan
4. Institute of Cost & Management Accountants of Pakistan
5. All officers of SECP

Page 470 CORPORATE LAW BY SIR IBRAHIM

 Remaining Areas of PSX Rule Book Chapter-21

Please note that these are the minutes of general meeting of members and are not the minutes of BoD
Meeting. Please refer to definition that was covered earlier
5.7.2. FURNISHING OF MINUTES OF MEETING AND FREE FLOAT RELATED INFORMATION:
(a) The Listed Company shall furnish certified true copies of minutes of its Annual General Meeting
and of every extraordinary general meeting to the Exchange within sixty (60) days of such
meeting.
(b) Every Listed Company or issuer of a Listed Security shall:
(i) ensure that requisite input into the CDC free-float functionality is entered in a timely
manner to enable the Exchange to access the number and break-up of Free-Float shares
of the company on quarterly basis i.e. as on March 31, June 30, September 30 and
December 31 each year, within fifteen (15) days of close of each quarter.
(ii) submit directly to the Exchange along with the annual audited accounts as prescribed in
clause 5.6.9. (a) of these Regulations, an annual Free-Float certificate duly verified by the
auditor, in the format specified by the Exchange. The CDC shall notify to the Exchange
late/non-submission of quarterly Free-Float information by any listed company within the
timeframe specified in clause (i) above, for initiating necessary action as provided in the
PSX Regulations.
(c) A Listed Company or an issuer of a Listed Security which fails to communicate the correct details
of Free-Float of shares shall be liable to pay a penalty of Rs. 5,000/- per day from the date of first
communication of such details till the correct details are communicated.

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Remaining Areas of PSX Rule Book Chapter-21

Related Material

PSX/N-533 June 06, 2022

FOR ALL LISTED COMPANIES

TIMELY SUBMISSION OF ANNUAL FREE-FLOAT CERTIFICATE
VERIFIED BY THE AUDITOR THROUGH PUCARS

Attention of all Listed Companies is invited to PSX Regulation 5.7.2(b)(ii), which is reproduced below
for ready reference:

5.7.2. (b) Every Listed Company or issuer of a Listed Company shall:

(ii) submit directly to the Exchange along with the annual audited accounts as prescribed in clause
5.6.9. (a) of these Regulations, an annual Free-Float certificate duly verified by the auditor, in the
format specified by the Exchange.

In light of the aforesaid regulation, all Listed Companies are required to submit the Annual Free-Float
Certificate, duly verified by the Auditor, through Form 31 of the Correspondence Manual. Further, it
is emphasized that the said certificate must be submitted along with the annual audited accounts
within the timeframe stipulated under PSX Regulation 5.6.9(a) through PUCARS.
The Listed Companies must note the above for compliance accordingly, failing which would attract
penal action as provided in PSX Regulation 5.21.1.
It is reiterated that the regulatory filings and disclosures must be made through PUCARS using the
dedicated forms specified in the Correspondence Manual.

AJEET KUMAR
Chief Regulatory Officer
Cc:
1. The Director/HOD (PRDD), SMD, SECP
2. The Executive Director (CSD), SECP
3. The Chief Executive Officer, PSX
4. The Chief Executive Officer, CDC
5. The Chief Executive Officer, NCCPL
6. The Chief Executive Officer, PMEX
7. The Chief Executive Officer, 1FMP
8. All Department Heads, PSX
9. All Listed Companies through PUCARS
10. PSX Website

Regulatory Affairs Division | UAN:+9221 111-00-11-22 | E-mail: info@psx.com.pk | Web: psx.com.pk

Page 472 CORPORATE LAW BY SIR IBRAHIM

 Remaining Areas of PSX Rule Book Chapter-21

FORM – 31

INDEPENDENT REASONABLE ASSURANCE REPORT ON

STATEMENT OF FREE FLOAT OF SHARES

To the Chief Executive of the (name of Company)

1. Introduction

We have been engaged to perform a reasonable assurance engagement on the annexed Statement of
Free Float of Shares (the 'Statement') of __________________ (the Company) as of ____________,
____________, and ____________ (mention relevant quarter end).

2. Applicable Criteria

The criteria against which the Statement is assessed is Regulation No. 5.7.2(c)(ii) of Pakistan Stock
Exchange Limited Regulations (PSX Regulations) which requires every listed
company/modaraba/mutual fund to submit directly to Pakistan Stock Exchange (PSX) an annual Free-
Float Certificate duly verified by the auditor along with the annual audited accounts as prescribed under
regulation 5.6.4(a) of the PSX Regulations.

3. Management's Responsibility for the Statement/s

Management is responsible for the preparation of the Statement as of ____________,____________

and____________ (mention relevant quarter end) in accordance with the applicable criteria. This
responsibility includes maintaining adequate records and internal controls as determined necessary to
enable the preparation of the Statement/s such that it is free from material misstatement, whether due
to fraud or error.

4. Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for
Chartered Accountants issued by the Institute of Chartered Accountants of Pakistan, which is founded
on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality
and professional behavior.

The firm applies International Standard on Quality Control 1 "Quality Control for firms that perform
Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services
Engagements" and accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.

5. Our responsibility and summary of the work performed

Our responsibility is to carry out an independent reasonable assurance engagement and to express an
opinion as to whether the Statement is prepared in accordance with the applicable criteria, based on
the procedures we have performed and the evidence we have obtained.

We conducted our reasonable assurance engagement in accordance with International Standard on

Assurance Engagements 3000 (Revised), 'Assurance Engagements other than audits or reviews of
historical financial statements' (ISAE 3000) (Revised) issued by the International Auditing and
Assurance Standards Board. That standard requires that we plan and perform this engagement to
obtain reasonable level of assurance about whether the Statement is free from material misstatement.

A reasonable assurance engagement in accordance with ISAE 3000 (Revised) involves performing
procedures to obtain evidence about the free float of shares and related information in the Statement.
The nature, timing and extent of procedures selected depend on the practitioner's judgment, including
the assessment of the risks of material misstatement, whether due to fraud or error, in the Statement. In
making those risk assessments, we considered internal control relevant to _______________(name of
company)'s preparation of the Statement. A reasonable assurance engagement also includes
assessing the applicable criteria used and significant estimates made by management, as well as,
evaluating the overall presentation of the Statement.

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Remaining Areas of PSX Rule Book Chapter-21

We have carried out the procedures considered necessary for the purpose of providing reasonable
assurance on the Statement. Our assurance procedures performed included verification of information
in the Statement with the underlying data and record comprising of Central Depository Company
statements, forms submitted by the Company with Securities 6 Exchange Commission of Pakistan
relating to its pattern of shareholding and other related information. Verification that the computation of
free float of shares is in accordance with the PSX regulation also forms part of our assurance
procedures.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

6. Opinion*

In our opinion, the Statement as of____________, ____________ and ____________ (mention

relevant quarter end) is prepared, in all material respects, in accordance with the PSX Regulations.

7. Restriction on use and distribution

This report is issued in relation to the requirements as stipulated under Regulation No 5.7.2(c)(ii) of the
PSX Regulations and is not to be used or distributed for any other purpose. This report is restricted to
the facts stated herein and the attachments.

Date: Signature
Chartered Accountants
*Modification/Qualification of opinion, if applicable, shall be in accordance with ISAE 3000 (Revised).

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 Remaining Areas of PSX Rule Book Chapter-21

FORMAT OF STATEMENT OF FREE FLOAT OF SHARES

Quarter-1 Quarter-2 Quarter-3 Quarter-4

Total Outstanding Shares xxx xxx xxx xxx

Less: Government Holdings (xxx) (xxx) (xxx) (xxx)

Less: Shares held by Directors/Sponsors/Senior (xxx) (xxx) (xxx) (xxx)

Management Officers and their associates

Less: Shares in Physical Form (xxx) (xxx) (xxx) (xxx)

Less: Shares held by Associate companies/Group (xxx) (xxx) (xxx) (xxx)

Companies (Cross holdings)

Less: Shares issued under Employees Stock Option (xxx) (xxx) (xxx) (xxx)
Schemes that cannot be sold in the open market in
normal course

Less: Treasury shares (xxx) (xxx) (xxx) (xxx)

Less: Any other category that are barred from selling at (xxx) (xxx) (xxx) (xxx)
the review date

Free Float xxx xxx xxx xxx

Basis of Preparation: This Statement is prepared in accordance with the requirements of Regulation No.
5.7.2(c)(ii) of Pakistan Stock Exchange Limited Regulations (PSX Regulations)

Company Secretary Chief Executive

Note:
"Sponsors" has the same meaning as defined in The Companies (Issue of Capital) Rules, 1996. "Senior
Management Officers" and "Associates" have the same meaning as defined in the Securities Act, 2015.

Page 475 CORPORATE LAW BY SIR IBRAHIM

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5.8. INCREASE OF CAPITAL AND ALLIED ISSUES:

Every listed Company shall immediately advise the Exchange of all decisions taken by its board of
directors regarding any change in authorized, issued or paid-up capital, by issue of bonus shares, right
shares or reduction of capital, etc.

Section 85 of CA, 2017 Section 83 of CA, 2017 Section 89 of CA, 2017

5.8.1. INCREASE OF SHARE CAPITAL THROUGH ISSUING OF ENTITLEMENT LETTERS OR RIGHT
OFFERS:
(a) A listed Company shall issue entitlement letters or right offers in marketable lots to all the
Security holders within a period of thirty (30) days from the date of re-opening of security transfer
register of the company closed for this purpose.
Provided that this regulation shall not apply on the Security which is eligible to be deposited into
CDS. In such cases, the procedure as prescribed by the CDC shall be complied with.
(b) The Exchange may, at the request of the Listed Company, extend time for issuance of the
entitlement letter for a period not exceeding thirty (30) days. The company shall pay the following
fees to the Exchange for extension granted by the Exchange with regard to issuance of
entitlement letters, etc.
(i) for the first fifteen (15) days Rs. 250/- per day
(ii) for the next fifteen (15) days Rs. 500/- per day
Failure to seek extension from the Exchange shall make the company liable to a penalty at double the
rate of extension fee provided above. Provided that extension shall not be granted beyond 30 days.
5.8.2. INCREASE OF SHARE CAPITAL THROUGH ISSUING OF BONUS SHARES:
(a) A listed Company shall issue bonus shares certificates within a period of thirty (30) days from the
date of re-opening of the share transfer register closed for this purpose:
(i) Bonus shares shall be credited into the respective CDS Accounts of shareholders
maintained with the CDC or dispatched to the shareholders concerned by registered post
or through courier services unless those entitled to receive the bonus share certificates
require otherwise in writing;
(ii) The Exchange shall be immediately intimated as soon as the bonus shares are credited /
dispatched to the shareholders;
Provided that in case of Book-Entry Securities deposited into the CDS, in addition to the above,
procedure as prescribed by the CDC shall also be complied with.

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 Remaining Areas of PSX Rule Book Chapter-21

Bonus Shares and Right Issue will be covered in detail in Further Issue of Shares Regulation, 2020 Handout

FORM-11

Date: dd/mm/yyyy
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Building
Stock Exchange Road
Karachi.

Subject: Credit/Dispatch of Bonus Share Certificates

Dear Sir,

We are pleased to inform you that the share certificates in respect of Bonus Shares i.e. (%) for the period
ended____________, announced on (date) have been dispatched to the shareholders through the registered
post or through courier service/credited to their respective accounts in the Central Depository System (CDS)
of Central Depository Company of Pakistan Limited (CDC) on (date).

Yours Sincerely,

Notes:
1. A listed company shall issue bonus shares certificates within a period of thirty days from the date of re-
opening of the share transfer register closed.
2. The bonus shares shall be credited into the respective CDS Accounts of shareholders maintained with
the CDC or dispatched to the shareholders concerned by registered post or through courier service
unless those entitled to receive the bonus share certificates require otherwise in writing.
Provided that in case of Book-Entry Securities deposited into the CDS, the procedure as prescribed by
the CDC shall be complied with.
3. The Exchange shall be immediately intimated as soon as the bonus share are credited / dispatched to
the shareholders.
4. No extension beyond that provided in the preceding Clause shall be granted.
5. In the event of the default continuing after the final extension the company shall be liable to a penalty at
the rate of Rs.5,000/= per day the default continues and also to action of suspension or de-listing by the
Exchange.
6. The companies having their office outside Karachi are advised to pay the extension fee through
demand draft.
7. The companies are advised to send the above information through PUCARS followed by a hard copy of
letter of confirmation immediately.

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Remaining Areas of PSX Rule Book Chapter-21

5.9. LISTING OF SUBSIDIARY COMPANY AND OTHER MATTERS:

5.9.1. SPECIE DIVIDEND OF SUBSIDIARY COMPANY:
(a) In case of failure of such subsidiary company to apply for listing or refusal by the Exchange for
such listing on account of insufficient public interest, or for any other reason whatsoever, the
company distributing specie dividend shall purchase the shares of the subsidiary company at the
option of the recipients at a price not less than the current break-up value, or face value,
whichever is higher, within thirty (30) days from the expiry of one hundred twenty (120) days
(referred to in clause (a) above) or from the date of refusal of listing whichever is earlier, failure in
which behalf shall be default in which event the trading in the shares of the listed Company be
suspended by the Board or the company de-listed.
5.9.2. A Listed Company shall submit to the Exchange certified true copy of its updated memorandum and
articles of association immediately after obtaining approval of the Commission for any amendment
made therein.
5.9.3. Every Listed Company and issuer of listed security shall notify to the Exchange at least one week in
advance the date, time and place of its board meeting specially called for consideration of its quarterly
and annual accounts or for declaration of any entitlement for the security holders in the manner
prescribed by the Exchange from time to time.
5.9.4. Where no trading has taken place on the Exchange in the securities of a Listed Company for a
continuous period of 180 days, the Exchange, if it is satisfied that the prices quoted are not in
accordance with the market realities, may except in cases where the earlier quotation is below par
value and, with the prior approval of the Commission, quote such companies at par from the one
hundred and eighty first day irrespective of the price earlier prevalent.
5.10. QUALITY OF AUDIT:
5.10.1. All Listed Companies shall facilitate the Quality Control Review (QCR) of the audit working papers of
practicing chartered accountants, carried out by the Institute of Chartered Accountants of Pakistan
(ICAP). For such purpose, all Listed Companies shall authorize their auditors to make available all the
relevant information including the audit working papers to the QCR Committee of ICAP.
5.10.2. (a) No Listed Company shall appoint or continue to retain any person as an auditor, who has been
found guilty of professional misconduct, by the Commission or by a court of Law, for a period of
five years unless a lesser period is determined by the Commission. In case a firm has been
appointed as an auditor, and if any of its partners have been held guilty of professional
misconduct, the firm shall only be eligible for appointment as an auditor provided a written
confirmation is given by the firm to Exchange and the Commission with a copy to ICAP to the
effect that such partner shall not be engaged in the audit of any Listed Company for the period
specified above.
(b) A person appointed as an auditor shall be guilty of “professional misconduct” if he:
(i) fails to report a material misstatement or fact known to him and non-disclosure of which
may render the financial statements misleading or disclosure of which is necessary in his
professional capacity;
(ii) fails to obtain sufficient information to warrant the expression of an opinion or his
exceptions are sufficiently material to negate the expression of an opinion;
(iii) makes a statement which is misleading, or deceptive;
(iv) incites any one to commit a criminal offence, or helps or encourages anyone in planning or
execution of a criminal offence which is committed;
(v) agrees with anyone to prevent or obstruct the course of justice by concealing, destroying
or fabricating evidence by a misleading statement which he knows to be untrue;
(vi) deceives any person, either by making a statement, which he knows to be false, or by
suppressing matters relevant to a proper appreciation of its significance;
(vii) expresses his opinion on financial statements of any business or enterprise in which he,
his firm or a partner in his firm has substantial interest;

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(viii) is penalized under any of the provisions of the Companies Ordinance, 1984 in relation to
his function as an auditor of a listed company; and

(ix) is guilty of any other act which is determined as professional misconduct by the
Commission in relation to his function as an auditor of a listed company.

5.10.3.The auditor of a listed company shall not provide the following services to such Listed Companies:

(i) preparing financial statements, accounting records and accounting services;

(ii) financial information technology system design and implementation, significant to overall
financial statements;

(iii) appraisal or valuation services for material items of financial statements;

(iv) acting as an Appointed Actuary within the meaning of the term defined by the Insurance
Ordinance, 2000;

(v) actuarial advice and reviews in respect of provisioning and loss assessments for an insurance
entity;

(vi) internal audit services related to internal accounting controls, financial systems or financial
statements;

(vii) human resource services relating to:

(i) executive recruitment;

(ii) work performed (including secondments) where management decision will be made on
behalf of a listed audit client;

(viii) legal services;

(ix) management functions or decisions;

(x) corporate finance services, advice or assistance which may involve independence threats such
as promoting, dealing in or underwriting of shares of audit clients;

(xi) any exercise or assignment for estimation of financial effect of a transaction or event where an
auditor provides litigation support services as identified in paragraph 9.187 of Code of Ethics for
Chartered Accountants;

(xii) share registration services (transfer agents); and

(xiii) any other service(s) which the Council of Institute of Chartered Accountants of Pakistan (“ICAP”)
with the prior approval of the Commission, may determine to be a “prohibited service”.

The Commission may on the recommendation of ICAP or in its sole discretion and to the extent
deemed fit and proper exempt one or more services from the restriction under this Regulation.

5.10.4. A listed company shall not appoint or continue to retain any person as an auditor, who is engaged by
such company to provide services listed in Regulation 5.10.3 or if a person associated with the auditor
is, or has been, at any time during the preceding one year engaged as a consultant or advisor or to
provide any services listed in Regulation 5.10.3.

Explanation:

For the purposes of this regulation, the expression “associated with” shall mean any person associated
with the auditor, if the person:

(a) is a partner in a firm, or is a director in a company, or holds or controls shares carrying more than
twenty percent of the voting power in a company, and the auditor is also partner of that firm, or is
a director in that company or so holds or controls shares in such company; or

(b) is a company or body corporate in which the auditor is a director or holds or controls shares
carrying more than twenty percent of the voting power in that company or has other interest to
that extent.

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5.11. DEFAULTERS’ SEGMENT, SUSPENSION AND DE-LISTING:

5.11.1. A Listed Company may be placed in the Defaulters’ Segment if:
(a) It has not commenced its commercial production in the case of a manufacturing company or
business operations in the case of any other company within ninety (90) days of the date of
commencement of commercial production/ business operations as disclosed in its Prospectus;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only company
or business operations in the case of any other company within ninety (90) days of the date of
commencement of commercial production/ business operations as disclosed in its Prospectus;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate
actions under Regulation 5.11.2(a) and 5.11.2(b).
(b) It has suspended commercial production/ business operations in its principle line of business for
a continuous period of one year;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate
actions under Regulation 5.11.2(a) and 5.11.2(b).
Provided that Regulation 5.11.1(a) and 5.11.1(b) shall not apply on SPAC.
(c) It has failed to hold its one Annual General Meeting as per law;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate
actions under Regulation 5.11.2(a) and 5.11.2(b). However, if such company fails to hold its
Annual General Meeting for two consecutive years, trading in shares of the company shall be
suspended by the Exchange and the company shall be given 90 days to rectify the non-
compliance, failing which, the Exchange shall initiate further actions against the company
commencing from Regulation 5.11.2(e).
(d) It has failed to submit its annual audited accounts for the immediately preceding financial year as
per law;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate
actions under Regulation 5.11.2(a) and 5.11.2(b). However, if such company fails to submit its
annual accounts for two consecutive years, trading in shares of the company shall be suspended
by the Exchange and the company shall be given 90 days to rectify the non-compliance, failing
which, the Exchange shall initiate further actions against the company commencing from
Regulation 5.11.2(e).
(e) It has failed to pay within the time specified by the Exchange:
(i) the annual listing fees for two (2) years; or
(ii) any penalty imposed by the Exchange under these Regulations though final order; or
(iii) any other dues payable to the Exchange under these Regulations;
(f) It for any reason whatsoever has failed to join CDS after its security has been declared eligible
security;
Trading in shares of such company shall be suspended by the Exchange upon its placement on
the Defaulters’ Segment and the company shall be given 90 days to rectify the non-compliance,
following which the Exchange shall initiate further actions against the company commencing from
Regulation 5.11.2(e).
(g) Its CDS eligibility has been suspended by the CDC;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate
actions under Regulation 5.11.2(a) and 5.11.2(b).
(h) Its CDS eligibility has been revoked by the CDC;
Trading in shares of such company shall be suspended immediately by the Exchange upon its
placement on the Defaulters’ Segment and the company shall be given 90 days to rectify the
non-compliance, following which the Exchange shall initiate further actions against the company
commencing from Regulation 5.11.2(e).

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(i) Its statutory auditor has issued a qualified opinion on the going concern assumption or has
issued a disclaimer or an adverse opinion in the audit report;
Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate
actions under Regulation 5.11.2(a) and 5.11.2(b).
(j) License of the listed regulated person or listed company, as the case may be, has been
cancelled or revoked by the Commission or licensing authority;
Trading in shares of such company shall be suspended by the Exchange and the company shall
be given 90 days to rectify the non-compliance, failing which, the Exchange shall initiate further
actions against the company commencing from Regulation 5.11.2(e).
(k) It has failed to comply with any provision of this Chapter or where, in the opinion of the
Exchange, it is necessary to do so in the interest of protecting investors and maintaining a fair,
orderly and transparent market;
(l) A show cause notice for winding up has been issued to the company by the Commission;
Upon placement of such company on the Defaulters’ Segment from the date on which the
Exchange receives information from the Commission regarding issuance of show cause notice
for winding-up of the company, the Exchange shall initiate actions under Regulation 5.11.2(a)
and 5.11.2(b).
Provided that the Exchange upon receiving information that the Commission has passed order
for winding-up of the company, shall immediately disseminate such information to the general
public.
Provided further that upon receipt of information regarding filing of winding-up petition against the
company in Court by the Commission, the Exchange shall suspend trading in against the
company in Court by the Commission, the Exchange shall suspend trading in shares of the
Company.
The Exchange shall proceed to delist such company upon appointment of official liquidator by
Court, without providing the company with opportunity for compulsory buy-back.
(m) Winding-up petition is filed by creditor(s) or shareholder(s) in the Court subject to the following
conditions:
(i) such creditor or creditors, either severally or jointly, have a claim against the company which is
equivalent to at least ten percent of the equity of the company as per the latest accounts
available with the Exchange; or
(ii) such shareholder or shareholders, either severally or jointly, own at least ten percent of the
company’s paid-up capital;
Upon placement of such company on the Defaulters’ Segment from the date on which the
Exchange receives information regarding commencement of its winding-up, the Exchange shall
initiate actions under Regulation 5.11.2(a) and 5.11.2(b) and suspend trading in shares of the
Company.
The Exchange shall proceed to delist such company upon appointment of official liquidator by
Court, without providing the company with opportunity for compulsory buy-back.
(n) Voluntary winding-up proceedings have commenced through passing of special resolution;
Upon placement of such company on the Defaulters’ Segment from the date of receipt of
information from such company regarding passing of special resolution for voluntary winding-up,
the Exchange shall initiate actions under Regulation 5.11.2(a) and 5.11.2(b) and suspend trading
in the shares of such company. The Exchange shall proceed to delist such company upon
appointment of liquidator/official liquidator as the case may be, without providing the company
with opportunity for compulsory buy-back.
5.11.3.Any information/ notices issued in relation to actions taken against any company under Regulation
5.11.1 and 5.11.2 or restoration of such company to the normal Ready Delivery Contracts Market shall
be disseminated by the Exchange to the market participants prior to opening of market on the next
trading day.

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5.11.4. Mechanism to be followed for Suspension of Trading in the Shares:

The Exchange shall suspend trading in the shares of a Company under these Regulations by providing
the company with notice of 14 trading days for submitting reasons as to why trading in its shares may
not be suspended by the Exchange. Upon failure of the company to rectify its default within 7 trading
days from the date of such notice, trading in shares of the company shall be allowed only on T+0
(SPOT) for the next 7 days, and upon continued failure of the company to rectify its default, the
Exchange shall suspend trading in the shares of the company from the 15th trading day.
Provided that the Exchange shall obtain clearance from the Commission prior to providing the company
with notice of 14 trading days as aforesaid under clause 5.11.1(I).
Provided further that the trading in the shares of a company shall be suspended immediately under
clause 5.11.1(h) without following the above mechanism of suspension.
5.11.5.No company which has been de-listed under these Regulations, shall be restored and its shares re-
quoted until it removes the causes of de-listing and receives the assent of the Managing Director of the
Exchange for the restoration.
5.11.6.No company shall be de-listed under these Regulations, unless such company has been provided an
opportunity of being heard. In case of failure of the company to avail the hearing opportunity, the
Exchange shall proceed to delist the company on ex-parte basis.
5.11.7.In case of a company having more than one ground for placement on Defaulters’ Segment, the
Exchange shall follow the steps prescribed for the ground that leads to earlier suspension or delisting of
the company, as the case may be. (Consider those reasons first which lead to earlier suspension or
delisting of the company)
5.11.8.The Exchange may relax the action of suspension of trading in a company’s shares, if it is established
that such action may not be in the best interests of its shareholders/investing public and where the
company has demonstrated improvement from the last reported progress towards the rectification of
cause(s) of its non-compliance(s).
The Exchange shall disseminate its decision to grant any such relaxation for the information of market
participants.
Provided that the relaxation so granted shall not be more than 60 days at once, however, the same may
be extended considering the ground(s) as aforementioned.

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Compulsory Delisting

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5.21. DISCIPLINARY ACTIONS:

5.21.1.Any Listed Company which fails or refuses to comply with, or contravenes any provision of these
Regulations, or knowingly and wilfully authorizes or permits such failure, refusal or contravention, shall,
be liable to disciplinary action(s) by the Exchange as specified below:
(a) Issue an Advice;
(b) Issue a warning in writing to act more carefully and vigilantly.
(c) Reprimand in writing that the conduct warrants censure;
(d) Impose any one or more conditions or restrictions;
(e) Direct to take remedial actions to rectify its non-compliance(s);
(f) Impose a fine as specified below:
5.12. EFFECTS OF SUSPENSION OF TRADING:
EFFECTS OF SUSPENSION OF TRADING IN THE SECURITIES OF A SUSPENDED COMPANY:
5.12.1.Transfer in the physical shares of such company shall be restricted. However, such restriction shall not
be applicable in cases where:
(a) the Share Registrar/ Transfer Agent/ the company has received transfer request from a
shareholder prior to the date of suspension; or
(b) the shares have been purchased prior to the date of suspension of trading and the shareholder
provides proper instrument of transfer, evidencing purchase of such shares prior to the date of
suspension, to the Share Registrar/ Transfer Agent/ the company.
5.12.2.It shall be mandatory upon the company to ensure that no transfers in physical shares, other than as
specified in Regulation 5.12.1.(a) and
5.12.1.(b) above, take place during the period of suspension. Within ten (10) days of suspension, the
company shall provide the Exchange with a copy of its Share Transfer Register, as of the day prior to
the day of suspension, and details of any transfers registered under Regulation 5.12.1 (a) and 5.12.1
(b) subsequent to suspension in trading of its shares shall also be submitted to the Exchange within 48
hours of registration of such transfer.
5.13. RESTORATION OF TRADING IN THE SHARES OF SUSPENDED COMPANY:
The Exchange, upon submission of application for restoration of trading by a company, may restore
trading in the shares of such company, where the cause of suspension of trading has been removed to
the satisfaction of the Exchange. Where trading in the shares of such company is suspended
continuously for 180 days or more, the Exchange may require such company to comply with any one or
more of the following conditions and in such manner/ time as may be specified by the Exchange:
(a) Submit a satisfactory resumption proposal with a view to resuming trading in its securities
including short-term milestones to implement such proposal;
(b) Publish an appropriate announcement to the public detailing the measures adopted for removal
of cause of suspension;
(c) Conduct a corporate briefing session for the shareholders and analysts;
(d) Release latest annual or quarterly financial report or any other relevant report/ documents
deemed acceptable by the Exchange for the purpose; and/ or
(e) Comply with any specific requirements or conditions as may be prescribed by the Exchange.
5.19. LISTING AND ANNUAL FEES:
5.19.1. LISTING FEE SCHEDULE:
(a) A company applying for listing on the Exchange, shall pay an initial listing fee equivalent to one
tenth of one percent of the PAID-UPCAPITAL subject to a maximum of rupees one million and
five hundred thousand.
Provided that in case of Open-Ended Mutual Funds, the initial listing fee shall be charged at the
rate of one twentieth of one percent of the amount of total fund size of Mutual Fund subject to a
maximum of Rupees 0.5 million.

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(b) Whenever, a listed company increases the paid-up capital of any class or classes of its shares,
or securities listed on the Exchange, it shall pay to the Exchange a fee equivalent to 0.2% of
increase in Paid-Up Capital.
(c) Every listed company shall pay, in respect of each financial year of the Exchange, commencing
from 1st July and ending on 30th June next, an annual listing fee calculated on the basis of the
company’s *market capitalization, in accordance with following schedule, subject to a maximum
of Rupees five million:
*Explanation: For the purpose of this sub-clause, the market capitalization shall be calculated by
multiplying the last one year’s volume weighted average price with the company’s outstanding ordinary
shares as on June 30, of the preceding year.
Rate of Fee applicable with effect from July 01, 2020:
COMPANIES HAVING MARKET CAPITALIZATION AS ON JUNE 30 RATE OF FEE PER ANNUM

Up to Rs. 100 million Rs.100,000

Above Rs. 100 million & up to Rs.250 million Rs.100,000 + 0.075% on excess over Rs. 100 million

Above Rs. 250 million & up to Rs.500 million Rs.212,500 + 0.06% on excess over Rs. 250 million

Above Rs. 500 million & up to Rs.1,000 million Rs.362,500 + 0.025% on excess over Rs. 500 million

Above Rs. 1,000 million & up to Rs.2,000 million Rs.487,500 + 0.015% on excess over Rs. 1,000 million

Above Rs. 2,000 million & up to Rs.10,000 million Rs.637,500 + 0.013% on excess over Rs. 2,000 million

Above Rs. 10,000 million & up to Rs.20,000 million Rs.1,677,500 + 0.005% on excess over Rs. 10,000 million

Above Rs. 20,000 million & up to Rs.50,000 million Rs.2,177,500 + 0.0015% on excess over Rs. 20,000 million

Above Rs.50,000 million Rs.2,627,500+0.001% on excess over Rs.50,000 million

Provided that in case of Open-Ended Mutual Funds, the annual listing fee of PKR 25, 000 shall be
payable in respect of each financial year of the Exchange, commencing from 1st July and ending on
30th June next, before the 30th September in each calendar year.
Provided further that the Board may revise the above fees or any of the slabs or add new slabs with the
approval of the Commission.
Provided further that every company applying for listing shall not be charged annual listing fee for
twelve (12) months from the date of its listing.
(b) Issue a warning in writing to act more carefully and vigilantly.
(c) Reprimand in writing that the conduct warrants censure;
(d) Impose any one or more conditions or restrictions;
(e) Direct to take remedial actions to rectify its non-compliance(s);
(f) Impose a fine as specified below:
(d) The above Listing fee or any other sum fixed by the Board shall be payable by 30th September
in advance for every financial year.
(e) Failure to pay the annual fee by 30th September shall make the company liable to pay a
surcharge at the rate of 1.5 per cent (one and a half per cent) per month or part thereof, until
payment. However, if reasonable grounds are adduced for nonpayment or delayed payment of
annual fee, the Exchange may, reduce or waive the surcharge liability.
(f) A company applying for enlistment on the Exchange shall, in addition to other fees, pay a sum of
Rs. 50,000/- (Rupees fifty thousand only) as non-refundable service charges. An open-end
mutual fund applying for listing on the Exchange shall pay a sum of Rs. 25,000/- (Rupees twenty
five thousand only) as non-refundable service charges.
(g) A company applying for revalidation of approval earlier granted by the Exchange for issue,
circulation and publication of prospectus upon lapse of its validity shall pay to the Exchange a
revalidation fee at the rate of one twentieth of one percent of paid up capital subject to a
maximum of Rs.1 million.

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Provided that such fee shall be charged only in cases where validity of approval of the Commission for
issue, circulation and publication has also lapsed.
5.19.2. LISTING FEE PAYMENT PROCESS:
(a) All Exchange dues shall be paid by cheques, pay orders or bank drafts payable to the Exchange
at any Bank Branch located in Karachi.
(b) Without prejudice to the action which 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.
5.19.3. DISCIPLINARY ACTIONS AGAINST NON-PAYMENT OF PENALTIES:
(a) Without prejudice to various specific or other Penalties provided or available under these
Regulations, the Exchange shall have powers to place the company in the Defaulters Segment,
suspend or delist it, if in the opinion of the Exchange, such company has defaulted or
contravened any of these Regulations.
(b) The placement of a company in the Defaulters Segment, its suspension or de-listing under
Regulations 5.11. or the preceding sub-regulation shall be communicated to the Commission,
such company and simultaneously notified to the market participants, inter-alia by posting it on
the notice board and website of the Exchange and publishing it, if deemed necessary, in the
Daily Quotations of the Exchange.
(c) Trading in the securities of a suspended or de-listed company shall forthwith cease and shall not
commence until the suspension is withdrawn or the de-listing is restored by the order of the
Managing Director of the Exchange.
(d) Trading in the securities of a company placed in Defaulters' Segment, if allowed, shall be
affected separately and the prices shall also be quoted separately in the Daily Quotations until
such company is removed from the Defaulters' Segment and restored to the ready market of the
Exchange.
(e) No listed company shall appoint a person as an external auditor or a person involved in the audit
of a listed company who is a close relative, i.e., spouse, parents, dependents and non-
dependent children, of the CEO, the CFO, an internal auditor or a director of the listed company.
(f) Every listed company shall require external auditors to furnish a Management Letter to its board
of directors within 45 days of the date of audit report:
Provided that any matter deemed significant by the external auditor shall be communicated in
writing to the Board of Directors prior to the approval of the audited accounts by the Board.
Talking about cover letter, board letter Please follow the requirement of 30 days for public sector
company as per public sector corporate governance rules.
5.20. COMPLIANCE WITH ACCESS TO INSIDE INFORMATION REGULATIONS, 2016:
(a) All Listed Companies shall maintain and regularly update a register to enlist persons employed
under contract or otherwise, who have access to inside information, in the manner as provided in
Access to Inside Information Regulations, 2016 as may be amended from time to time.
(b) For the purpose of sub-clause (a), a Listed Company shall designate a senior management
officer who shall be responsible for entering or removing names of persons in the said register in
a timely manner. The said designated officer shall be obliged to keep proper record including
basis for inclusion or exclusion of names of persons in the said list and make the same available
as and when required by the Commission.
AMOUNT OF AMOUNT OF PENALTY FOR EVERY DAY
REGULATION NO.
PENALTY DURING WHICH THE DEFAULT CONTINUE
5.7.2(b) - Rs. 1,000
5.5.10., 5.6.9., 5.6.10(i)., 5.7.1., 5.8.2.(a)(i) - Rs. 5.000
5.3.1.(a) - Rs. 10,000
5.7.1. Rs. 10.000 -
5.14., 5.15., 5.15., 5.17. Rs. 200.000 Rs. 10.000

Provided where reasonable grounds are adduced by a company and after taking into account the
factors including but not limited to the severity and frequency of non-compliance of such company, the

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Exchange may waive or reduce the applicable fine under this Chapter and/or initiate any one or more
disciplinary actions laid down under sub-clause (a) to (e) of this clause.
5.21.2. In cases where specific Penalty provisions have not been provided in these Regulations then whoever
fails or refuses to comply with, or contravenes any provision of these Regulations, or fails to comply with directions,
decisions, notices, guidelines, clarifications and circulars of the Exchange or fails to provide any required information or
provides incomplete, false, forged or misleading information to the Exchange as may be required from time to time, or
knowingly and willfully authorizes or permits such failure, refusal or contravention shall, be liable to fine not exceeding five
hundred thousand rupees for each default, and, in case of continuing failure, refusal or contravention, to a further fine not
exceeding Rs.10,000/- (Rupees ten thousand only) for every day after the first day during which such contravention
continues.
No such penalty shall be imposed unless an opportunity of being heard has been granted.
5.21.3. The amount of penalty shall be paid to the Exchange.
5.21.4. The Managing Director of the Exchange may suspend or if it so decides, delist any company which
makes a default in complying with the requirements of Regulation 5.6.10, 5.7.1, 5.8.2 and 5.9.1.
5.21.5. Any action under this Regulation shall be without prejudice to the action or steps taken by the
Commission, any other authority or person.
No company which has been suspended or de-listed, as the case may be, shall be restored and its
shares shall be re-quoted on Exchange until it has paid the full amount of penalty for the days of the
default and receives the assent of the Managing Director of the Exchange for the restoration.
This is in addition to any regulatory action. Meaning thereby that any other actions of any regulatory
shall be in place.

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Practical Example

PSX/N-696 Dated: July 22, 2022

SUSPENSION OF TRADING THE SHARES OF THE COMPANIES

This is further to PSX Notice No. PSX/N-499 dated May 25, 2022 on the subject matter.
It is informed that the following Companies have not so far removed the cause(s) of suspension of trading in their
shares:

Default(s) of PSX
S. No. Name of Companies Reason(s) of Suspension
Regulations
1 M/s. Standard Insurance 5.1 1.1.(b)(c)(d)(f)(i)(l) Suspended commercial production / business
Company Limited operations in its principle line of business, failed to
hold the Annual General Meetings, failed to submit its
annual audited accounts, non-induction of its ordinary
shares into CDS, adverse opinion in the audit report
and Winding-up proceedings have been initiated.
2 M/s. Mohib Exports Limited 5.1 1.1.(c)(d)(e)(f)(l) Failed to hold the Annual General Meetings, failed to
submit its annual audited accounts, Non-payment of
dues of the Exchange, Non-induction of its ordinary
shares into CDS and winding-up proceedings have
been initiated.

In view of above, the Pakistan Stock Exchange Limited has decided that trading in the shares of the Companies
shall remain suspended until such time the cause(s) of suspension have been rectified or another period of 60 days
effective from July 26, 2022.
The decision has been taken in exercise of the powers vested in the Exchange under Sub-Section (7) of Section 19
of the Securities Act, 2015 and clause 5.11 of the PSX Regulations.
The above may be noted for record purposes.

HAFIZ MAQSOOD MUNSHI

Head, Listed Companies Compliance
Cc:
1. The Director (CSD)-SECP
2. The Director (CI)-SECP
3. The Chief Executive Officer-PSX
4. The Chief Regulatory Officer-PSX
5. All Departmental Heads-PSX
6. The Central Depository Company of Pakistan Limited
7. The National Clearing Company of Pakistan Limited
8. Companies concerned / Registrar / Share Transfer Agent
9. PSX Website & Notice Board

Regulatory Affairs Division | UAN:+9221 111-00-11-22 | E-mail: info@psx.com.pk | Web: psx.com.pk

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 Remaining Areas of PSX Rule Book Chapter-21

PSX/N-217 Dated: March 04, 2022

SUSPENSION OF TRADING THE SHARES OF THE COMPANIES

This is further to PSX Notice No. PSX/N-04 dated January 042, 2022 on the subject matter.
It is informed that the following Companies have not so far removed the cause(s) of suspension of trading in their
shares:

Default(s) of PSX
S. No. Name of Companies Reason(s) of Suspension
Regulations
1. M/s. Mandviwala Mauser Plastic 5.11.1. (i) Adverse opinion in the audit report
Industries Ltd
2. M/s. Nirala MSR Foods Limited 5.11.1.(c)(d)(e)(l) Failed to hold the Annual General Meetings,
failed to submit the Annual Audited
Accounts, non-payment of dues of the
Exchange and winding-up petition has been
filled by SECP against the Company.

In view of above, the Pakistan Stock Exchange Limited has decided that trading in the shares of the Companies
shall remain suspended until such time the cause(s) of suspension have been rectified or another period of 60 days
effective from Mach 06, 2022.
The decision has been taken in exercise of the powers vested in the Exchange under Sub-Section (7) of Section 19
of the Securities Act, 2015 and clause 5.11 of the PSX Regulations.
The above may be noted for record purposes.

Hafiz Maqsood Munshi

Senior Manager – RAD
Cc:
1. The Director (CSD)-SECP
2. The Director (CI)-SECP
3. The Chief Executive Officer-PSX
4. The Chief Regulatory Officer-PSX
5. All Departmental Heads-PSX
6. The Central Depository Company of Pakistan Limited
7. The National Clearing Company of Pakistan Limited
8. Companies concerned / Registrar / Share Transfer Agent
9. PSX Website & Notice Board

Regulatory Affairs Division | UAN:+9221 111-00-11-22 | E-mail: info@psx.com.pk | Web: psx.com.pk

Page 489 CORPORATE LAW BY SIR IBRAHIM

Remaining Areas of PSX Rule Book Chapter-21

5.2. LISTING OF COMPANIES AND SECURITIES:

5.2.1. DEALING IN THE SECURITIES OF A COMPANY AT THE EXCHANGE:
(a) No dealings in securities of a company shall be allowed on the Exchange, either on the Ready
Delivery Contract Market or Futures Market, unless the company or the securities have been
listed and approval for such dealing has been granted by the Exchange.
(b) The Issuer shall file an application for listing on Form-I along with the documents as mentioned in
Appendix-I to this chapter to the Exchange for approval. A copy of the complete application shall
be submitted to the Commission for its record.
(c) The Exchange may require such additional evidence, declarations, affirmations, information or
other forms to be filled up as it may consider necessary.
(d) The Exchange shall accept a listing application of an Issuer when the Issuer has completed all
necessary requirements of the Exchange.
(e) The Exchange shall place the draft prospectus on its website for a period of seven working days
and shall notify the same, for seeking public comments. The Exchange shall ensure that all
comments received on the draft prospectus are incorporated and suitably addressed by the
Consultant to the Issue and the Issuer to its satisfaction.
(f) The Exchange shall complete the approval process for listing of an equity security within 15
working days from the date of complete submission of all required documentation including any
other additional documentation as required by the Exchange. In case the approval is refused,
after providing an opportunity of being heard to the applicant, the reasons thereof will be
communicated to the applicant and the Commission within two weeks of the decision.
(g) An applicant company or security applying for listing shall furnish full and authentic information in
respect thereof and such other particulars as the Exchange may require from time to time.
(h) The issuer whose ordinary shares are already listed at Exchange may apply for listing of other
class of shares without making public offer of respective class of shares.

Page 490 CORPORATE LAW BY SIR IBRAHIM