By

Rahat AzizS A A s s o c i a t e s

Corporate Consultants & Trainers

LISTING REGULATIONS OF KSE (GUARANTEE)

LTD

Background

Concepts

Links

BACK GROUND AND CONCEPT/LINK:

Companies Ordinance 1984

Security Exchange Ordinance 1969

Criteria Appendix 2Procedure Reg. 1-15Documents Appendix 1The Companies (Issue of Capital) Rules 1996 Appendix 3.Book Building Appendix 4.CCG Reg. 35De-Listing Reg. 30-31

REGULATION’S STRUCTURE:

IN CASE OF COMPANIES

A Company should be a Public Company.

Minimum paid up Capital is 200 (m).

Not less than 500 Applications.

INITIAL PUBLIC OFFERING – (IPO)

PUBLIC ALLOCATIONMinimum Paid-up Capital Rs.500 Million (50%) More than Rs.500 Million

Example:

Capital is 700M, then:

Rs.250M

or

25%=175M

CRITERIA APPENDIX 2

250 m can be offered

250m or 25% of Capital (whichever is higher)

250 is higher

Capital is 1200M, then:Rs.250M or25%=300M

300 is higher

Rahat Aziz KTBA Workshop – 23 Jan 2014 SA Associates

IN CASE OF MODARBA:

30% to sponsors, associates, friends and associated undertaking

70% to General public.

Where 25% shares allocated sponsor etc, shares shall not be salable for a period of 6 months from the date of public subscription.

Running company:

Shares do not qualify, if its equity is eroded by 40% or more.

APPENDIX -1

Copy of the certificate of incorporation. Copy of the conversion certificate of commencement of business. Copy of Feasibility Report, in case of a new project. Auditor’s Certificates under section 53 read with clause 28(1) of

section 2 of Part-1 of the second schedule to the Companies Ordinance, 1984. The certificate shall also state Earning Per Share of the company for the last 5 years or for a shorter period if 5 years of the commencement of business are not completed.

No Objection Certificates from the Underwriter(s) to the Issue/Offer, if any, on Form 4.

Copies of all material contracts and agreements relating to the public issue/offer of shares and project, if any.

Copy of consent letters from bankers to the issue/offer.

SOME IMPORTANT DOCUMENTS:

APPENDIX 4

BRIEF ABOUT BOOK-BUILDING

Book-Building is a process used by companies raising capital through Public Offerings. It is the practical mechanism for the quick and efficient management of public offerings.

In general, it is an innovative method of marketing securities involving price determination and quantum of securities on the basis of the demand from the prospective shareholders.

IPO THROUGH BOOK BUILDING

Rahat Aziz KTBA Workshop – 23 Jan 2014 SA Associates

SECP guidelines defines Book-Building as “a mechanism of price determination through which indication of interest for investment in the shares offered by an issuer/offeror is collected from Institutional Investors and HNWI and a book is built which gives a picture of demand for the shares at different price levels. The strike price is determined based on the price at which demand for the share at the end of book building period is sufficient to raise the minimum capital required”.

DEFINITION:

BOOK-BUILDING PROCESS

TOTAL PUBLIC ISSUE

(i.e., net offer to the public)

BOOK BUILDING METHOD

not more than 75% of the total offer

shall be allocated to institutional investors

and HNWI

FIXED PRICE METHOD

not less than 25% of the total offer shall be allocated

to the general public

A public limited company or a body corporate which intends to issue shares to the general public under Section 57 of the Companies Ordinance, 1984 and makes an application to a stock exchange for listing of its shares or an Offeror who intends to offer shares under Section 62 of the Companies Ordinance, 1984 and makes an application to a stock exchange for listing of such shares, where applicable, and is in compliance with Listing Regulations of the stock exchange, is eligible to issue/offer its shares through Book Building process subject to the following conditions

not more than 75% of the total offer shall be allocated for offer through book building process to institutional investors and HNWI; and

not less than 25% of the total offer shall be allocated for offer to the general public.

ELIGIBILITY

DIFFERENCE BETWEEN FIXED PRICE PROCESS AND BOOK-BUILDING PROCESS

Features

Fixed Price Process

Book-Building Process

Pricing Price at which the securities are offered is known in advance to the investors.

Price at which the securities are offered is not known in advance to the investors. Investors decide the price through tender method.

Demand

Demand for the securities is not known until the close of the issue.

Demand for the securities offered can be known every day as the book is built.

Payment

100% advance payment is required to be made by the investors at the time of application.

Margin for bidding placed by :HNWIs ---------- Up to 100% of application moneyInstitutions ------ not less than 25% of application money Successful bidders shall deposit the balance amount within seven working days of the close of bidding period.

PROCESS FLOW Appoint Lead Manager & Book Runner

Submit Preliminary Prospectus to KSE & SECP for approval

Circulate approved Preliminary Prospectus to Institutional Investors & HNWIs

Publish advertisements & Conduct Awareness Campaign

Open Escrow Account for the collection of Bid’s amount

Ask for Bids on Price & Quantity of Securities

Maintain an Order Book

Determine the Strike Price in Consultation with the Issuer

Firm up Underwriting CommitmentsCont…

PROCESS FLOW

Intimate Successful Bidders & make Provisional Allotment

Collect the balance amount form successful Institutional Bidders

Make Final Allotment of Securities

Publish Final Prospectus containing the Offer Price

Offer to General Public for subscription of securities

Completion of Formalities

Securities Issued & Listed on the Exchange

Commencement of Trading

Regulation 16-19 Dividends.Regulation 20 & 21 Meetings.Regulation 32 & 34 Fee.Regulation 36 Compliance with

these regulations.

COMPLIANCE:

Regulation: 22-24

Regulation: 25-29

LISTING OF FURTHER CAPITAL & SUBSIDIARIES

30A Buy Backing Price30B Conditions30C Procedure30D Time Frame

VOLUNTARY DE-LISTING

Chapter XI

The Formation Timeline

The Financial Reporting Council (FRC)

1990

The Greenbury Committee

The Combined Code on Corporate Governance

Code of Best Practice of the Cadbury Committee

1992

1995

Report of the Hampel Committee

1998

2003

2008

The Formation Timeline

1996Sarbanes–Oxley Act

2002

Report of the NACD blue ribbon commission on director professionalism

The Formation Timeline

2002Code of Corporate Governance-SECP

2012

Code of Corporate Governance-SECP

Code at a Glance (Clause Reference)

BOD STRUCTURE

BOD COMMITTE

ES

BOD RESPONSIBIL

ITIES, POWER,

FUNCTION

REPORTING FRAMEWOR

K

OTHER ROLES

I, II, III XXIV, XXV, XXVII, XXVIII, XXIX, XXX

IV, V, IX, XI, XIV, XV, XVII (a), XL, XLI, XLII

X, XVI, XVII(b), XVIII, XIX, XX, XXI, XXII, XIXII

VI, VII, VIII, XII, XIII, XIV, XXXI, XXXII, XXXIII, XXXIV, XXXV, XXXVI, XXXVII, XXXVIII, XXXIX

3 : 7% 6 : 14% 10 : 24% 9 : 19% 15 : 36%

CODE STRUCTURE:

• Board Composition (Br.Cp.)• Board Responsibilities, Powers & function (Br.R.P.F)• Board Meeting (Br. M)• Board Related Management (Br.R.M)• Board Committees (Br.Cm)• Corporate Compliance & financial reporting frame work (Cr.Com &

Fin.Rep.FW)

At-least OneIndependentPreferably 1/3 of BOD

Executive not more than 1/3 of elected Dr.

Non-Executive-Remaining

Br. Cp.

Fiduciary DutyProfessional standard & Corporate

value.Vision/Mission StatementSignificant PoliciesSound Internal Control SystemDecision on Material Transaction

Br. R.P.F

Seven Days NoticeDissenting noteDecision on Significant issuesRelated party transactions

Br. M

ChairmanChief Executive OfficerChief Financial OfficerCompany SecretaryHead of Internal Audit

Br. R.M

Audit Committee – its composition

H.R. & Remuneration Committee – its composition

Term of Reference

Br. Cm.

Director ReportDirectors

RemunerationFrequency of Fin. Rep.External AuditorCompliance with CG

Cr. Com & Fin. Rep. F.W

CASESTUDY

30

31

STRUCTURE OF BOARD

CHAIRMAN OF BOARD

AUDIT COMMITTEE

HUMAN RESOURCE AND REMUNERATION

COMMITTEE (HR&R)

CHIEF EXECUTIVE

OFFICER (CEO)

BOARD OF DIRECTORS

COMPANY INFORMATION

Annual Report 2011

32

33

STRUCTURE OF BOARD OF CRESCENT STEEL (Annual Report 2011)

BOARD OF DIRECTORS

Mazhar Karim Chairman Non-Executive DirectorAhsan M. Saleem Chief Executive & Managing DirectorMohammad Anwar Non-Executive DirectorMuhammad Abdul Aleem Non-Executive Director (Independent)Nasir Shafi Non-Executive DirectorS.M. Ehtishamullah Non-Executive DirectorSyed Zahid Hussain Non-Executive Director (Independent)Zahid Bashir Non-Executive Director

AUDIT COMMITTEE Muhammad Abdul Aleem Chairman Non-Executive Director (Independent)Nasir Shafi Member Non-Executive DirectorS.M. Ehtishamullah Member Non-Executive Director 

08 – Directors 01 – Executive Director(CEO)02 – Independent Directors 05 – Non-Executive Directors (including Chairman of Board)

08 – Directors 01 – Executive Director(CEO)02 – Independent Directors 05 – Non-Executive Directors (including Chairman of Board)

03 – Members.01 – Independent Directors (as Chairman)02 – Non-Executive Directors

03 – Members.01 – Independent Directors (as Chairman)02 – Non-Executive Directors

34

CRESCENT STEEL (Annual Report 2011)….contd

HUMAN RESOURCE COMMITTEE

Ahsan M. Saleem Chairman Chief Executive & Managing DirectorNasir Shafi Member Non-Executive Director

02 – Members.01 – Executive Directors (as Chairman)01 – Non-Executive Directors

02 – Members.01 – Executive Directors (as Chairman)01 – Non-Executive Directors

Must have 3 members at least and the Chairman

should be a non-executive or independent director

Must have 3 members at least and the Chairman

should be a non-executive or independent director

COMPANY INFORMATION

Annual Report 2011

35

36

STRUCTURE OF BOARD OF JS GLOBAL CAPITAL LTD (Annual Report 2011)

BOARD OF DIRECTORS

Mr. Adil Matcheswala Chairman Non-Executive Director (Independent)Mr. Shahid Hameed Vice Chairman Non-Executive Director Mr. Kashif Shafi Khan Non-Executive Director (Independent)Mr. Naief Abdullatif S A Mohammad Non-Executive Director Mr. Aslam Khaliq Non-Executive Director (Independent)Syed Nadir Shah Non-Executive Director (Independent)Mr. Ahsen Ahmed Non-Executive Director (Independent)Mr. Muhammad Kamran Nasir Chief Executive Officer

AUDIT COMMITTEE Mr. Adil Matcheswala Chairman Non-Executive Director (Independent)Mr. Shahid Hameed Member Non-Executive Director (Independent)Mr. Ahsen Ahmed Member Non-Executive Director (Independent) 

08 – Directors 01 – Executive Director(CEO)02 – Non-Executive 05 – Non-Executive(Independent) Directors (including Chairman)

08 – Directors 01 – Executive Director(CEO)02 – Non-Executive 05 – Non-Executive(Independent) Directors (including Chairman)

03 – Members.03 – Non-Executive (Independent) Directors (including Chairman)

03 – Members.03 – Non-Executive (Independent) Directors (including Chairman)

37

JS GLOBAL CAPITAL LTD (Annual Report 2011)……cont

COMPENSATION COMMITTEE

Mr. Aslam Khaliq Chairman Non-Executive Director (Independent)Mr. Mohd Kamran Nasir Member Chief Executive Officer Mr. Shahid Hameed Member Non-Executive Director (Independent)

03 – Members.01 – Executive Directors02 – Non-Executive (independent) Directors (including Chairman)

03 – Members.01 – Executive Directors02 – Non-Executive (independent) Directors (including Chairman)

THANK YOU