Home

About ISE

Regulation

Companies

Members

Notice/Circular

Investor Education

Investor Complaints

FAQs

Local Market

International Market

News

Technology

Downloads

Contact

I. PRELIMINARY

1. Short title and extent of applicability:

(1) These regulations may be called "Listing Regulations of the Islamabad Stock Exchange (Guarantee) Limited"

(2) The Regulations shall apply to all companies, and securities applying for listing and those listed on the Exchange.

2. (1) In the Regulations, unless there is anything repugnant in the subject or context;

i) "Authority" means the Corporate Law Authority:

ii) "Board" means the Board of Directors of the Exchange;

ii-a) �CDC� means the Central Depository Company of Pakistan Limited;

ii-b) �CDS� means the Central Depository System established and operated by the Central Depository Company of Pakistan Limited;

 ii-c) �Eligible� means a security which CDC has declared to be eligible for deposit with the CDC;

iii) "Exchange" means the Islamabad Stock Exchange (Guarantee) Limited;

iv) "Listed Company" means a company or a body corporate or other body which has been listed in accordance with the Regulations and whose securities are listed and include a provisionally listed company under these Regulations for trading in provisionally listed companies of the Exchange:

v) "Listed Security" shall include any share, scrip, debentures, participation term certificate, modaraba certificate, mushariqa certificate, term finance certificate, bond, pre‑organization certificate or such other instruments as the Federal Government may, by notification in the Official Gazette, specify for the purpose and which is accepted for listing on the Stock Exchange in accordance with the Regulations;

vi) "Ordinance" means the Companies Ordinance, 1984 (XLVII of 1984);

vii) "Prescribed" means prescribed by these Regulations or under authority hereof;

viii) "Regulations" means these Listing Regulations of the Exchange for the time being in force;

ix) "Secretary" means the Secretary of the Exchange;

x) "Securities & Exchange Ordinance" means the Securities & Exchange Ordinance, 1969 (XVII of 1969).

(2) Words or expressions defined in the Ordinance and the Securities & Exchange Ordinance shall, except those defined herein or where the subject or the context forbids, bear the same meanings as in those Ordinances or either of them and in the case of word or expression bears different meanings under both the Ordinances, that meaning which is carried or included in the Companies Ordinance, 1984 shall prevail and have preferred application.

II.  LISTING OF COMPANIES & SECURITIES

3. (1) No dealings in securities of a company shall be allowed on the Exchange, either on the Ready Quotation Board or Cleared List, unless the company or the securities have been listed and permission for such dealing has been granted in accordance with the Regulations.

(2) The permission under Sub‑Regulation (I) may be granted upon an application being made by the company or in respect of the securities in the manner prescribed. The Exchange, in granting such permission will consider among other things, sufficiency of public interest in the company or the securities.

(3) The Exchange shall decide the question of granting permission within a maximum period of three months from the date of receipt of listing application. In case the permission is refused, the reasons thereof will be communicated to the applicant and the Authority within two weeks of the decision.

(4) The Board will be the sole authority to grant, defer or refuse such permission and may for that purpose, relax any of these regulations subject only to two‑third majority of the directors present at such meeting of the Board and so resolving.

4. (1) The application for listing shall be made by the applicant company or on behalf of the security in the prescribed form and will be accompanied by the fees, specified in the Regulation.

    (2) The Board may require additional evidence, declarations, affirmations and information as also other forms to be filled up and all such requisitions shall be deemed to be prescribed requisitions for the purpose of a proper application for consideration by the Board for Listing.

    (3) If an application together with the additional information referred to in Sub‑Regulation (2) is not submitted, the Board may defer consideration or decline to consider it in which case such application will stand disposed off as refused. However, the applicant may move a fresh application after six months from the date of refusal unless the Board other‑wise decides.

    (4) An applicant company or security applying for listing shall furnish full and authentic information in respect thereof and such other particulars as the Board of the Exchange may require from time to time. All routine particulars may be called for by the Secretary.

III.  UNDERTAKING

5, (1) No listing of a company, securities shall be permitted unless the company or the authorized representative on behalf of the securities has provided an undertaking under a common seal and authorized signature to abide by these regulations.

(2) The Company and/or the authorized representative in respect of securities, as the case may be, shall further undertake:‑

i) that the securities shall be quoted on the Ready Quotation Board and/or the Cleared List at the discretion of the Exchange;

ii) that the Exchange shall not be bound by the request of the company to remove its securities from the Ready Quotation Board and/or the Cleared List;

iii) that the Exchange shall be authorized and have the right, at any time and without serving notice if it be deemed proper, to suspend or to remove any shares or securities from the Ready Quotation Board and/or the Cleared List for any reason, which the Exchange considers sufficient in public interest subject, however, to the procedure laid down in Section 9 of the Securities and Exchange Ordinance;

iv) that such provisions in the Articles of Association of a company or in any declaration or basis relating to any other security as are or otherwise not deemed by the Exchange to be in conformity with the Regulations shall, upon being called upon by the Board, be amended forthwith and until such time as these amendments are made, the provisions of these Regulations shall be deemed to supersede the Articles of Association of the Company or the nominee relating to the other securities to the extent indicated by the Board for purposes of amendment.

v) that the company or the security may be de‑listed by the Board in the event of non‑compliance and breach of undertaking given hereunder.

6. The following documents and particulars duly certified by the company or the company presenting the security shall be submitted to the Exchange at the time of application for listing or any time on demand by the Exchange:

        i) Application for listing as per Form I ;

        ii) Memorandum & Articles of Association;

        iii) Copy of the Certificate of Incorporation;

        iv) Copy of the Certificate of Commencement of Business;

        v) Copy of the Feasibility‑ Report, in case of new project;

        vi) Copy of the Permission for setting up the Industrial Unit;

        vii) Copies of the title deeds of the land;

        viii) Copies of all material contracts and agreements entered into or exchanged with foreign participants, machinery,             suppliers and any other financial institutions;

        ix) Copies of Letter(s) of Credit established in favour of Machinery Suppliers, if linked with the public issue;

        x) Copy of authorization for floatation of Modaraba by the Registrar of Modaraba Companies;

        xi) Names of Directors alongwith directorship of other companies listed on the Exchange;

        xii) Draft Prospectus/Offer for Sale;

        xiii) Auditor's Certificate for the amount subscribed by the Promoters/Directors/Associates;

        xiv) Copies of the Agreements relating to issue of securities for consideration other than cash, if any;

        xv) Copies of underwriting agreement (if any ) and No Objection Certificate from the underwriters to publish the prospectus     (Underwriting public issue is not compulsory for listing on the Exchange);

        xvi) Statement of audited accounts for the last Five (05) years or for a shorter number of years if the company is in operation only for such period;

        xvii) Statement showing the cost of project and means of finance;

        xviii) Copies of the approval application under Sec 41(1)(f) & (106) of the Income Tax Ordinance 1979;

        xix) Copies of the consent letters from Bankers to the Issues;

        xx) Application for submission of undertaking and payment of fees as per Form II;

        xxi) Copy of approval of prospectus/offer for sale from Corporate Law Authority; and

        xxii) Any other documents/material contract and such other particulars as may be required by the Exchange.

III‑A .  OFFER OF CAPITAL BY COMPANIES / MODARABAS TO THE PUBLIC

6 A. (1) In case capital of company is up to two hundred million rupees, at least fifty percent of such capital shall be offered to the public.

        (2) In case capital of the company is beyond two hundred million rupees, public offer shall be at-least one hundred million rupees or twenty five percent of the capital, whichever is higher.

        (3) Allocation of share capital to overseas Pakistanis shall not exceed twenty percent of the public offer.

        (4) Allocation of share capital to employees of the company shall not exceed five percent of the public offer.

        (5) In the case of a Modaraba applying for listing on the Exchange, 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 70% shall be offered to the General Public.

        (6) The Stock Exchange, if it is satisfied that it is not practicable to comply with the requirements of any of the above regulations in a particular case or class of cases, the Exchange may, for the reasons to be recorded, relax the Regulations subject to approval of the Authority.

IV.  PROSPECTUS, ALLOTMENT, ISSUE & TRANSFER OF SHARES

7. (1) No Company will apply for listing or be listed unless it is registered under the Ordinance as a public limited company or has been setup under a statute and its minimum paid-up capital is Rs. 20 million.

    (2) Companies registered in Northern areas and Azad Jammu & Kashmir will be eligible for listing and will be treated at par with companies registered in Pakistan.

    (3) Despite receiving the application for 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 250 applications.

    (4) The requirements of Sub section (1) or (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 power under the Securities & Exchange Ordinance so directs.

    (5) Company may make a public offer of securities to be eligible securities in the CDS.

8. (1) The Prospectus or the offer for sale shall be submitted to and cleared by the Exchange before an application for its approval is made to the Authority. The Exchange may require additional information, data, certification or requirement to be included in the prospectus or the offer for sale, If any applicant fails to comply with such requirements, the Exchange may refuse to issue clearance under these Regulations.

    (2) The Prospectus or the offer for sale shall conform to and in accordance with the requirements and provisions of the Ordinance and/or the Securities and Exchange Ordinance and any other law or legal requirements for the time being applicable. The application made to the Authority shall, amongst other things, be accompanied by the clearance given by the Exchange under Sub-regulation (1).

    (3) Without prejudice to the foregoing, the prospectus or the offer for sale shall fulfill all requirements of the law and instructions of the Authority as well as the criteria for listing and the guidelines laid down by the Exchange from time to time, not being inconsistent with law or instructions of the Authority.

        (a) The share certificates shall be issued in such marketable lots or in any other manner as may be determined or approved by the Exchange.

        (b) The application money shall be refunded, within such time as is prescribed in regulation 9(4), if the company is not listed on the Exchange for any reason whatsoever or the listing is refused.

    (4) The prospectus or offer for sale with the proforma application form shall be published by the company in one Newspaper each at Karachi, Lahore and Rawalpindi/Islamabad, or as the Exchange may in addition require, at least 7(seven) days in advance but not more than 30(thirty) days before the due date of the opening of the subscription list.

    (5) The issue shall be made available to the Exchange and to the bankers to the issue for distribution of printed copies of prospectus or offer for sale and application forms in the quantity to be determined by the Exchange and the Bankers. The company shall also accept application on identical forms.

    (6) 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.

    (7) The directors or the offerers, as the case may be, shall not participate in subscription of shares offered to the general public.

9. (1) The company shall inform the Exchange of the subscription received, which information shall be communicated in writing under the hand of an authorized person with certificate(s) from Bankers to the issue, within three working days of the closing of subscription.

    (2) The company shall take a decision within 10 days of the closure of subscription list as to what applications have been accepted and are successful.

    (3) The company shall refund the application money in case of un-accepted or unsuccessful applications within 10 days of the date of such decision.

    (4) In case the application for listing is refused by the Exchange, for any or whatsoever reasons, the company shall forthwith pay without surcharge all money received from applicants in pursuance of the prospectus or the offer for sale, and if any such money is not repaid within 10 days after the company becomes liable to repay it, the directors of the company shall be, jointly & severally, liable to repay that money with surcharge at the rate of one and half percent for every month or part thereof from the expiration of the fifteenth day.

    (5) In case of over‑subscription, the company, or the offerers, as the case may be, shall immediately submit to the Exchange, copies of the ballot register of successful applications.

    (6) The company shall dispatch all shares certificates, in marketable lots, within 30 days of the closing of subscription list to all the successful applicants under intimation to the Exchange.

                �Provided that where the security has been declared to be an eligible security, Share certificates shall be issued by the company or deposited directly into the CDS in such manner as may be prescribed by the CDC.�

    (7) Any company which makes a default in complying with the requirements of these Regulations, or any of its sub‑regulation, shall pay to the Exchange a penalty of Rs. 500 (Rupees five hundred 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 the notice and also by publication in the Ready Board Quotations of the Exchange.

    (8) Any action under these Regulations shall be without prejudice to the action or steps taken by any other person or authority.

10. The company or the offerers shall, within 30 days of closing of subscription list, pay brokerage to the members of the Exchange at the minimum rate of one percent of the value of the shares actually sold through them.

11. (1) The Company shall split allotment letters and letters of right into marketable lots within seven days of receipt of such application.

    (2) The company shall consolidate or split, as may be required by a holder in writing, share certificates into marketable lots within 45 days of receipt of such application. The company may charge an amount, which shall not exceed Rs.10/‑(ten) for each share certificate, except in the case of those issued or to be issued in market lots.

        � Provided that requirement of sub-regulation (1) & (2) shall not apply where the security has been declared an eligible security and held in the name of CDC. In such cases, the procedure as prescribed by the CDC shall be complied with.�

12. (1) The company shall verify the signature of shareholders within 48 hours of such request.

    (2) The company shall complete shares transfer and have ready for delivery the share certificates lodged for registration of transfer within 45 days of the application for such transfer and its registration.

        � Provided that this regulation shall not apply in case of eligible securities deposited into the CDS. In such cases, the procedure as prescribed by the CDC shall be complied with.�

13. (1) The company shall give a minimum of 21 days notice to the Exchange prior to closure of Share Transfer Books for any purpose.

        �Provided that companies quoted on Cleared List shall give two months notice for closure of Share Transfer Register subject to prior approval of dates by the Exchange.�

    (2) 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) The company shall issue transfer receipts immediately on receiving the shares for transfer.

    (4) The company shall not charge any transfer fee for transfer of shares.

    (5) The company shall provide a minimum period of 07 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.

14. No listed company shall exercise any lien whatsoever on fully paid shares and nor shall there be any restriction on transfer of fully paid shares. The same shall apply to all listed securities.

V.  DIVIDENDS AND ENTITLEMENTS

15.                    (1)        Every listed company shall advise and keep advised by appropriate writings the Exchange of all dividends and entitlement in respect of its listed securities immediately upon recommendations by its directors through a letter to be delivered under a sealed cover during trading hours of the Exchange.

                        (2)        Listing companies, holding their board meetings outside Islamabad, shall advise the Exchange and convey full particulars as in sub‑regulation (I) including the place, address and time, during its time, during its trading hours by fax followed by a letter of confirmation.

                        (3)        Intimation of dividend and of all other entitlements shall be sent to the Exchange not later than 15 days prior to commencement of the book closure.

16.        Every listed company shall send to the Exchange its financial results, both in the case of half yearly and annual accounts, in such form as may be prescribed by the Exchange as soon as these approved by the directors of the company.

17.                    (1)        The company shall send to the Exchange 300 copies each of statutory reports, annual reports and audited accounts not later than 21 days before a meeting of the shareholders is held to consider the same.

                        (2)        The company shall send to the Exchange copies of all notices as well as resolutions prior to their publications 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.

                        (3)        The company shall send to the Exchange 300 copies of half yearly accounts as soon as the same are printed and/or published.

17-A Quality of Audit

1.i)      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) and, therefore, shall authorized their auditor to make available all the relevant information including the audit working papers to the QCR Committee of ICAP.

ii)                  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 three years unless a lesser period is determined by the Commission. In case of a Firm which has been appointed as a auditor, and any of its partners has 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 all the stock exchanges of the country, the Commission with a copy to the Institute of Chartered Accountants of Pakistan (ICAP) to the effect that such a partner shall not be engaged in the audit of any listed company for the specified period.

A person appointed as an auditor shall be guilty of �professional misconduct� if he: -

a.       fails to report a material misstatement or fact known to  him, non-disclosure of which may render the financial statement misleading or disclosure of which is necessary in his professional capacity;

b.      fails to obtain sufficient information to warrant the expression of an opinion or his expectation are sufficiently material to negate the expression of an opinion;

c.       makes a statement which is misleading, or deceptive;

d.      incites any one to commit a criminal offence, or helps or encourages anyone in planning or execution of a criminal offence which is committed;

e.       agree 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;

f.       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;

g.       expresses his opinion on financial statement of any business or enterprise in which he, his firm or a partner in his firm has a substantial interest, unless he discloses his interest in his report;

h.       is penalized under any of the provisions of the Companies Ordinance, 1984;

i.        is guilty of any other act, which is determined as professional misconduct by the Commission.

iii)                No listed company shall appoint or continue to retain any person as an auditor who has been engaged by the company as a consultant or advisor or to provide any service, including services related to the designing of accounting systems or compilation of accounts.

iv)                A listed company shall also not appoint or continue to retain any person as an auditor, if a person associated with the auditor is, or has been, at the time during the preceding six months engaged as a consultant or advisor or to provide any service, including service related to the designing of accounting systems or compilation of accounts.

Explanation:

For the purpose 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 per cent 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 per cent of the voting power on that company or has other interest to that extent.

v)                 All contracts/arrangements entered into upto 31 May 2002, for non-audit services as are proposed to be not permissible shall be allowed to be performed until the expiry of such contracts/arrangements or 30 June 2003, whichever is earlier.

vi)                In connection with shares registration services,(transfer agents) an auditor or a person associated with him of a listed company rendering such services to its audit clients may continue to do so under existing or renewed contracts/arrangements until 30 June 2003.

2.      The Commission may, in its sole discretion and to the extent deemed fit and proper, exempt one or more services from the restriction aforesaid. ICAP also may, with  the prior written approval of the Commission, and to the extent deemed fit and proper, exempt one or more services from this restriction.

3.      Any regulations made in pursuance of the previous directives of the Commission issued vide No.13/SEC/CSM/2001 dated 7 February, 2002 and even No.dated 5 March 2002,shall be superseded by the revised regulations to be made by the Exchange in accordance with this directive, from the date such revised regulations are notified in the official Gazzette.

18.        (1)        Every listed company shall;

                                                i)          dispatch the interim divided warrants to the shareholders concerned within 45 days from the date of commencement of closing of share transfer register for purpose of determination of entitlement of dividend;

                                                ii)         dispatch the final dividend warrants to the shareholders concerned within 45 days from the date of General Meeting in which the same has been approved;

                                                iii)         intimate the Exchange immediately as soon as all the dividend warrants are posted to the shareholders;

                                                iv)        dispatch interim and final dividend warrants to the shareholders by registered post unless those entitled to receive the dividend require otherwise in writing.

                        (2)        All dividend warrants, in additions to the place of the Registered Office of the issuing companies, shall be encashable at Karachi, Hyderabad, Sukkur, Quetta, Multan, Lahore, Faisalabad, Islamabad/Rawalpindi and Peshawar for a period of three months from the date of issue.

                        (3)        A listed company, which makes a default in complying with the requirements of these Regulations, shall pay to the Exchange penalty of Rs. 500/‑ (Rupees five hundred 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 publication in the official quotation list of the Exchange.

                        (4)        The Board may suspend or if so decides, delist any company which makes a default in complying with the requirements of this Regulation.

                        (5)        Any action under these Regulations shall be without prejudice to the action or steps taken by any other person or authority.

VI.  ANNUAL GENERAL MEETINGS, ETC.

19.                    (1)        A listed company shall hold its Annual General meeting and lay before the said meetings Balance Sheet & Profit & Loss Account within six months following the closure of its financial year.

                        (2)        A company may apply to the Exchange for extension in time under Sub‑Regulation (1) and shall pay the following extension fee with such applications:

                        i)          Extension for 1st month or part thereof Rs. 1,000/‑

                        ii)         Extension for the 2nd month or part thereof Rs. 1,000/‑

                        iii)         Extension for the 3rd month or part thereof Rs. 2,500/‑

                                    Provided that the above extension shall be allowed subject to production of a letter of approval from the Corporate Law Authority allowing a similar extension.

                        (3)        Upon receipt of the application, with the fee corresponding to the extension applied for, the, Board may, in its sole discretion, grant or refuse the extension. In the event of refusal the fee paid with the application shall be refunded.

                        (4)        Failure to obtain extension from the Exchange or if the annual General Meeting is not held within time of the extension is refused, it shall make the company liable to penalty at double the rate of extension fees provided above.

                        (5)        No further extension beyond maximum period under sub‑regulation (2) shall be granted. In the event of default continuing after the final extension provided herein above, the company shall be liable to an additional penalty at the rate of Rs. 500/‑ (five hundred) per day for every day of the default and to action of suspension or delisting as may be decided by the Exchange. The Exchange may also notify the fact of such default and the name of the defaulting company by notice and also by publication of the same in the official quotation list of the Exchange.

                        (6)        The Board may suspend/delist any company which makes a default in complying with the requirements of this Regulation and/or fails to pay the penalty payable hereunder or imposed by the Exchange.

20.                    (1)        The company shall furnish copies of minutes of its Annual General Meeting and of every Extra‑Ordinary General Meeting to the Exchange within 30 days of such meeting.

                        (2)        The company shall furnish a complete list of all its shareholders as at the 31st of December in each calendar year, duly affirmed to be correct as and upto that date, within 30 days thereof. Failure to comply in the said behalf shall be deemed to be violation of these Regulations and, in addition, such company shall be liable to pay a sum of Rs. 500 (five hundred) per day for each day of default until it continues.

VII.  INCREASE OF CAPITAL & ALLIED ISSUES

21.        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 refund of capital.

22.                    (1)        A listed company shall issue entitlement letters or right offers to all the shareholders within a period of 45 days from the date of re‑opening of share transfer register of the company closed for this purpose.

                                    � Provided that this regulation shall not apply in case of eligible securities deposited into CDS. In such cases, the procedure as prescribed by the CDC shall be complied with.�

                        (2)        The company shall pay the following fees for extension granted by the Exchange with regard to issuance of entitlement letters, etc.

                        i)          For the first 15 days .............. Rs. 100 per day

                        ii)         For the next 15 days .............. Rs. 200 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.

                        (3)        No extension shall be granted beyond the period in sub‑regulation (2). In the event of the default continuing after the final extension, the company shall be liable to an additional penalty at the rate of Rs. 500 (five hundred) per day for each day of default and also to action of suspension or otherwise delisting by the Exchange.

                        (4)        No company which has been suspended or de‑listed, as the case may be, shall be restored and its shares 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 Board for the restoration.

23.                    (1)        A listed company shall issue bonus shares certificates within a period of forty five days from the date of re‑opening of the share transfer register closed for this purpose according to the following time table:‑

                                                i)          The bonus shares certificates shall be dispatched to the shareholders concerned by registered post 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 share certificates are posted to the shareholders;

                                                iii)         The company shall pay the extension fee for extension granted by the Exchange with regard to issuance of bonus shares;

                                                iv)        No extension beyond that provided in the preceding clause shall be granted;

                                                v)         In the event of the default continuing after the final extension the company shall be liable to a penalty at the rate of Rs. 500/‑ (five hundred) per day if the default continues and also to action of suspension or de‑listing by the Exchange;

                                    � Provided that this regulation shall not apply in case of eligible securities deposited into the CDS. In such cases, the procedure as prescribed by the CDC shall be complied with.�

                        (2)        No listed company, which has been suspended or de‑listed, shall be restored and its shares re‑quoted on the Exchange until it pays penalty for the days of the default and receives the assent of the Board for restoration.

VIII.  LISTING OF SUBSIDIARY COMPANY & OTHER MATTERS

24.                    (1)        A listed company distributing shares of its unlisted subsidiary company in the form of special dividend, right shares or any similar distribution shall get such subsidiary company listed on the Exchange within a period of 120 days from the date of approval of such distribution by the shareholders at a meeting of such company.

                        (2)        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 special dividend shall encash 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 30 days from the expiry of 120 days 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 shall be suspended by the Board or the company de‑listed.

25.        Every listed company shall notify the Exchange immediately regarding changes in its Board of Directors by addition or removal by death, resignation, or disqualification, etc.

26.        A listed company shall obtain prior clearance of the Exchange for any amendment proposed to be made in its memorandum and articles of association before the same are placed for the approval of the shareholders.

27.        A listed company shall immediately notify the Exchange in respect of any material change in the nature of its business including sale or purchase of major operating assets, franchise, brand name, goodwill, royalty, financial plan, etc and all relevant information such as consideration, terms of payments, period of use of such facilities and projected gains to accrue to the company.

28.        Every listed company shall advise the Exchange of:-

                        (a)        The decision to issue Participation Term Certificates and the purpose thereof not withstanding that application is to be made to the authorities later;

                        (b)        Submit copy of the application made to authorities with relevant details and certified copy of the consent order;

                        (c)        All materials particulars of the Participation Term Certificates including conditions governing the issue, details of guarantee/securities, trustees and name of the subscribing institution(s).

29.        All listed companies shall obtain prior approval of the Exchange in respect of the date & time of holding of its Annual General Meetings.

30.        All listed companies shall notify the Exchange in advance the date & time of its board meeting specially called for consideration of its accounts and for declaration of any entitlements for the shareholders.

IX.   DE‑LISTING AND SUSPENSION

31.                    (1)        A listed company may be de-listed, suspended or placed on the Defaulters� Counter for any of the following reasons:-

                                                (a)        if its securities are quoted below 50% of face value for a continuous period of three years.

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

                                                (b)        if it has failed to declare dividend or bonus:-

                                                                        i)          for five years from the date of declaration of last dividend or bonus; or

                                                                        ii)         in the case of manufacturing companies, for 5 years from the date of commencement of production; and

                                                                        iii)         for five years from the date of commencement of business in all other cases.

                                                (c)        if it has failed to hold its Annual General Meeting for a continuous period of 3 years;

                                                (d)        if it has gone into liquidation either voluntarily or under court order;

                                                (e)        if it has failed to pay the annual listing fees as prescribed in these regulations payable to the Exchange for a period of 2 years or penalty imposed under these regulations or any other dues payable to the Exchange;

(f)                if it has failed to comply with the requirements of any of these regulations;

(ff)       if the company for any reason whatsoever refuses to join CDS after its securities have been declared eligible securities by the CDC;

                                                (g)        no company which has been de‑listed or suspended shall be restored and its shares re-quoted until it removes the causes of de‑listing/suspension and receives the assent of the Board for the restoration.

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

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

31-A Voluntary de-listing: -

(i)                 Any company intending to seek voluntary de-listing from the Exchange shall intimate to the Exchange immediately, of the intention of the majority shares/security holders to purchase all shares/securities, without exception, from all the other shares/security holders with the purpose to de-list the shares/security alongwith the reasons thereof. Such intimation shall also include the price at which the shares/securities are to be purchased by the majority shares/securities holders.

(ii)               The price of the shares/securities is to be fixed with the approval of the Exchange.

31-B Voluntary de-listing of a shares/security shall subject to the following conditions: -

(i)                 Approval of the proposal in general meeting of the company by not less than � of the shares/security holders present at such general meeting.

(ii)               Company�s compliance with the prescribed procedure for the purpose laid down by the Exchange and other terms and conditions as may be laid down by the Exchange.

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

31-C Procedure for voluntary de-listing

(i)                 A formal request shall be made by the company for de-listing supported by reasons thereof and the proposed purchase price.

(ii)               If the proposed purchase price is considered inadequate, a price determined by the Exchange will be followed by the company.

(iii)              On acceptance by the Exchange of the proposal of the company shall call a general meeting of the shares/security holders and pass a special resolution approved by not less than � shares/securities holder present at such meeting.

(iv)             A copy of special resolution referred to above shall be sent to the Exchange immediately along with a complete list of shares/security holders, containing information with regard to shares/securities held by the majority holders and other, their name category, the number of shares/securities, percentage and addresses.

(v)               An undertaking from a Purchase Agent (who may be a commercial bank, or an investment bank or a member of the Exchange) on behalf of the majority holders to purchase the shares/securities at least for a period of 60 working days or as may be fixed by the Exchange from the date of commencement of purchase. The purchasing agent will provide a bank guarantee acceptable to the Exchange.

(vi)             Consent of the purchase agent on behalf of majority holders.

(vii)            The company shall also convey the decision of the majority to purchase the shares/securities to all the holders on their addresses available to the records of the company through registered post with a copy of special resolution and also publish a notice in this behalf duly approved by the Exchange through two widely circulated newspapers including one of Karachi.

(viii)          The company shall also submit the following information on completion of the period for the purchase of shares/securities.

(a)               Total number of outstanding shares/securities (with percentage).

(b)               Shares/securities owned by majority holders before the offer (with percentage).

(c)               Shares/securities bought under the offer (with percentage).

(d)               Total shares/securities currently owned by majority holders (with percentage).

(e)               Shares/securities outstanding with minority holders (with percentage).

(f)                Guarantee money required @ Rs. _______ per shares/security.

(ix)             With regard to all outstanding shares/securities, an undertaking from the sponsors to purchase remaining shares/securities along with a twelve months bank guarantee acceptable to the Exchange.

32.              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 price 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 Authority, quote such companies at par from the one hundred and eighty first day, irrespective of the price earlier prevalent.

X.  LISTING AND ANNUAL FEES

33                     (1)        A company applying for listing on the Exchange, shall pay an initial listing fee equivalent to 0.1% of the PAID‑UP‑CAPITAL subject to a maximum of rupees five hundred thousands.

                        (2)        Whenever a listed company increases the paid‑up‑capital of any class or class of its shares, or securities listed on the Exchange, it shall pay to the Exchange a fee equivalent to 0.1% of such increase.

                        (3)        Every listed company shall pay, in respect of each financial year of the Exchange, commencing from 1st July and ending on the 30th June next, an annual listing fee, which shall be payable by or before 30th September in each calendar year, as per following Schedule:‑

COMPANIES HAVING PAID UP CAPITAL RATE OF FEE (Rs. per annum)   Upto Rs. 10 Million 1,250.00   Above Rs. 10 Million & upto Rs. 20 Million 2,500.00   Above Rs. 20 Million &upto Rs. 30 Million 3,750.00   Above Rs. 30 Million &upto Rs. 40 Million 5,000.00   Above Rs. 40 Million &upto Rs. 50 Million 6,250.00   Above Rs. 50 Million   7,500.00

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

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

                        (4)        The above listing fee or any other sum fixed by the Board shall be payable by 30th September in advance for every financial year.

                        (5)        Failure to pay the annual fee by 30th September shall make the company liable to pay a surcharge at the rate of 1.5% (one and a half percent) per month or part thereof, until payment. However, if reasonable grounds are adduced for non or delayed payment of annual fee, the Exchange may, reduce or, waive the surcharge liability.

                        (6)        A company, applying for enlistment on the Exchange shall, in addition to other fees, pay a sum of Rs. 2,500/‑ as service charges.

34.                    (1)        All Exchange dues shall be paid by, cheques, pay orders or bank drafts payable to the Exchange at any bank branch located in Islamabad.

                        (2)        Without prejudice to the action with the Exchange may take under these Regulations in the event of default in payment of its dues, nothing shall prevent the Exchange from recovering such dues through posting defaulters names on the notice board of the Exchange or by invoking the process of law and obtaining order of a competent court.

35.                    (1)        Without prejudice to various specific or other penalties provided or available under these Regulations the Exchange shall have powers to suspend, or de-list a company or place it on the �Defaulters� Counter� which in the opinion of the Exchange, such company has defaulted or contravened any Listing Regulations;

                        (2)        The suspension of delisting under the preceding sub‑regulation shall be communicated to the company and simultaneously notified to the trade, inter alia, by posting it on the notice board of the Exchange and publishing it, if deemed necessary, in the official Quotation List or a Circular or intimation issued by the Exchange.

(3)               Trading in the shares and securities of the suspended or delisted company shall forthwith cease and shall not be recommenced until the suspension is withdrawn or the listing restored by order of the Board.

XI. CODE OF CORPORATE GOVERNANCE

BOARD OF DIRECTORS

1. All listed companies shall encourage effective representation of independent non-executive directors, including those representing minority interests, on their Boards of Directors so that the Board as a group includes core competencies considered relevant in the context of each listed company. For the purpose, listed companies may take necessary steps such that:

1. Minority shareholders as a class are facilitated to contest election of directors by proxy solicitation, for which purpose the listed companies may:

�       annex to the notice of general meeting at which directors are to be elected, a statement by a candidate(s) from among the minority shareholders who seeks to contest election to the Board of Directors, which statement may include a profile of the candidate(s);

�       provide information regarding shareholding structure and copies of register of members to the candidate(s) representing minority shareholders; and

�       ? on a request by the candidate(s) representing minority shareholders and at the cost of the company, annex to the notice of general meeting at which directors are to be elected an additional copy of proxy form duly filled in by such candidate(s) and transmit the same to all shareholders in terms of section 178 (4) of the Companies Ordinance, 1984;

(b)the Board of Directors of each listed company includes at least one independent director representing institutional equity interest of a banking company, Development Financial Institution, Non-Banking Financial Institution (including a modaraba, leasing company or investment bank), mutual fund or insurance company; and

[Explanation:For the purpose of this clause, the expression "independent director" means a director who is not connected with the listed company or its promoters or directors on the basis of family relationship and who does not have any other relationship, whether pecuniary or otherwise, with the listed company, its associated companies, directors, executives or related parties. The test of independence principally emanates from the fact whether such person can be reasonably perceived as being able to exercise independent business judgment without being subservient to any apparent form of interference.

Any person nominated as a director under sections 182 and 183 of the Companies Ordinance, 1984 shall not be taken to be an "independent director" for the above-said purposes.

The independent director representing an institutional investor shall be selected by such investor through a resolution of its Board of Directors and the policy with regard to selection of such person for election on the Board of Directors of the investee company shall be disclosed in the Directors' Report of the investor company.]

(c) executive directors, i.e. working or whole time directors, are not more than 75% of the elected directors including the Chief Executive:

Provided that in special circumstances, this condition may be relaxed by the Securities and Exchange Commission of Pakistan.

Provided further that nothing contained in this clause shall apply to banking companies, which are required by Prudential Regulation No.9 for Banks to have not more than 25% of the directors as paid executives of the banks.

1. The directors of listed companies shall, at the time of filing their consent to act as such, give a declaration in such consent that they are aware of their duties and powers under the relevant law(s) and the listed companies� Memorandum and Articles of Association and the listing regulations of stock exchanges in Pakistan.

QUALIFICATION AND ELIGIBILITY TO ACT AS A DIRECTOR

1. No listed company shall haveas a director, a person who is serving as a director of ten other listed companies.

2. No person shall be elected or nominated as a director of a listed company if:

1. his name is not borne on the register of National Tax Payers except where such person is a non-resident; and

2. he has been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a banking company, a Development Financial Institution or a Non-Banking Financial Institution or he, being a member of a stock exchange, has been declared as a defaulter by such the stock exchange; and

1. A listed company shall endeavour that no person is elected or nominated as a director if he or his spouse is engaged in the business of stock brokerage (unless specifically exempted by the Securities and Exchange Commission of Pakistan).

TENURE OF OFFICE OF DIRECTORS

1. The tenure of office of Directors shall be three years. Any casual vacancy in the Board of Directors of a listed company shall be filled up by the directors within 30 days thereof.

RESPONSIBILITIES, POWERS AND FUNCTIONS OF BOARD OF DIRECTORS

1. The directors of listed companies shall exercise their powers and carry out their fiduciary duties with a sense of objective judgement and independence in the best interests of the listed company.

2. Every listed company shall ensure that:

a.       a �Statement of Ethics and Business Practices� is prepared and circulated annually by its Board of Directors to establish a standard of conduct for directors and employees, which Statement shall be signed by each director and employee in acknowledgement of his understanding and acceptance of the standard of conduct;

b.      the Board of Directors adopt a vision/ mission statement and overall corporate strategy for the listed company and also formulate significant policies, having regard to the level of materiality, as may be determined it;

Explanation:

Significant policies for this purpose may include:

�       risk management;

�       human resource management including preparation of a succession plan;

�       procurement of goods and services;

�       marketing;

�       determination of terms of credit and discount to customers;

�       write-off of bad/ doubtful debts, advances and receivables;

�       acquisition/ disposal of fixed assets;

�       investments;

�       borrowing of moneys and the amount in excess of which borrowings shall be sanctioned/ ratified by a general meeting of shareholders;

�       donations, charities, contributions and other payments of a similar nature;

�       determination and delegation of financial powers;

�       transactions or contracts with associated companies and related parties; and

�       health, safety and environment

A complete record of particulars of the above-mentioned policies along with the dates on which they were approved or amended by the Board of Directors shall be maintained.

The Board of Directors shall define the level of materiality, keeping in view the specific circumstances of the company and the recommendations of any technical or executive sub-committee of the Board that may be set up for the purpose;

(c) the Board of Directors establish a system of sound internal control, which is effectively implemented at all levels within the company;

(d) the following powers are exercised by the Board of Directors on behalf of the company and decisions on material transactions or significant matters are documented by a resolution passed at a meeting of the Board:

�       investment and disinvestment of funds where the maturity period of such investments is six months or more, except in the case of banking companies, trusts, mutual funds and insurance companies;

�       determination of the nature of loans and advances made by the company and fixing a monetary limit thereof;

�       write-off of bad debts, advances and receivables and determination of a reasonable provision for doubtful debts;

�       write-off of inventories and other assets; and

�       determination of the terms of and the circumstances in which a law suit may be compromised and a claim/ right in favour of the company may be waived, released, extinguished or relinquished;

(e) appointment, remuneration and terms and conditions of employment of the Chief Executive Officer (CEO) and other executive directors of the listed company are determined and approved by the Board of Directors; and

(f) in the case of a modaraba or a Non-Banking Financial Institution, whose main business is investment in listed securities, the Board of Directors approve and adopt an investment policy, which is stated in each annual report of the modaraba/ Non-Banking Financial Institution.

Explanation:

The investment policy shall inter alia state:

�       that the modaraba/ Non-Banking Financial Institution shall not invest in a connected person, as defined in the Asset Management Companies Rules, 1995, and shall provide a list of all such connected persons;

�       that the modaraba/ Non-Banking Financial Institution shall not invest in shares of unlisted companies; and

�       the criteria for investment in listed securities.

The Net Asset Value of each modaraba/ Non-Banking Financial Institution shall be provided for publication on a monthly basis to the stock exchange on which its shares/ certificates are listed.

ix.     The Chairman of a listed company shall preferably be elected from among the non-executive directors of the listed company. The Board of Directors shall clearly define the respective roles and responsibilities of the Chairman and Chief Executive, whether or not these offices are held by separate individuals or the same individual.

MEETINGS OF THE BOARD

x.       The Chairman of a listed company, if present, shall preside over meetings of the Board of Directors.

xi.     The Board of Directors of a listed company shall meet at least once in every quarter of the financial year. Written notices (including agenda) of meetings shall be circulated not less than seven days before the meetings, except in the case of emergency meetings, where the notice period may be reduced or waived.

xii.    (xii) The Chairman of a listed company shall ensure that minutes of meetings of the Board of Directors are appropriately recorded. The minutes of meetings shall be circulated to directors and officers entitled to attend Board meetings not later than 30 days thereof, unless a shorter period is provided in the listed company�s Articles of Association.

In the event that a director of a listed company is of the view that his dissenting note has not been satisfactorily recorded in the minutes of a meeting of the Board of Directors, he may refer the matter to the Company Secretary. The director may require the note to be appended to the minutes, failing which he may file an objection with the Securities and Exchange Commission of Pakistan in the form of a statement to that effect.

KEY INFORMATION TO BE PLACED FOR DECISION BY BOARD OF DIRECTORS

xiii.  In order to strengthen and formalize corporate decision-making process, significant issues shall be placed for the information, consideration and decision of the Boards of Directors of listed companies.

Significant issues for this purpose may include:

n     annual business plans, cash flow projections, forecasts and long term plans;

n     budgets including capital, manpower and overhead budgets, along with variance analyses;

n     quarterly operating results of the listed company as a whole and in terms of its operating divisions or business segments;

n     internal audit reports, including cases of fraud or irregularities of a material nature;

n     management letter issued by the external auditors;

n     details of joint venture or collaboration agreements or agreements with distributors, agents, etc;

n     promulgation or amendment of a law, rule or regulation, enforcement of an accounting standard and such other matters as may affect the listed company;

n     status and implications of any law suit or proceedings of material nature, filed by or against the listed company;

n     any show cause, demand or prosecution notice received from revenue or regulatory authorities, which may be material;

n     default in payment of principal and/or interest, including penalties on late payments and other dues, to a creditor, bank or financial institution or default in payment of public deposit;

n     failure to recover material amounts of loans, advances, and deposits made by the listed company, including trade debts and inter-corporate finances;

n     any significant accidents, dangerous occurrences and instances of pollution and environmental problems involving the listed company;

n     significant public or product liability claims likely to be made against the listed company, including any adverse judgement or order made on the conduct of the listed company or of another company that may bear negatively on the listed company;

n     disputes with labour and their proposed solutions, any agreement with the labour union or Collective Bargaining Agent and any charter of demands on the listed company; and

n     payment for goodwill, brand equity or intellectual property.

ORIENTATION COURSES

xiv.  All listed companies shall make appropriate arrangements to carry out orientation courses for their directors to acquaint them with their duties and responsibilities and enable them to manage the affairs of the listed companies on behalf of shareholders.

CHIEF FINANCIAL OFFICER (CFO) AND COMPANY SECRETARY

APPOINTMENT AND APPROVAL

xv.   The appointment, remuneration and terms and conditions of employment of the Chief Financial Officer (CFO), the Company Secretary and the head of internal audit of listed companies shall be determined by the CEO with the approval of the Board of Directors

The CFO or the Company Secretary of listed companies shall not be removed except by the CEO with the approval of the Board of Directors.

QUALIFICATION OF CFO AND COMPANY SECRETARY

xvi.  No person shall be appointed as the CFO of a listed company unless:

a.       he is a member of a recognized body of professional accountants; or

b.      he is a graduate from a recognized university or equivalent, having at least five years experience in handling financial or corporate affairs of a listed public company or a bank or a financial institution.

xvii.                       No person shall be appointed as the Company Secretary of a listed company unless he is:

a.       a member of a recognized body of professional accountants; or

b.      a member of a recognized body of corporate/ chartered secretaries; or

c.       a lawyer; or

d.      a graduate from a recognized university or equivalent, having at least five years experience of handling corporate affairs of a listed public company or corporation.

REQUIREMENT TO ATTEND BOARD MEETINGS

xviii.                      The CFO and the Company Secretary of a listed company shall attend meetings of the Board of Directors.

Provided that unless elected as a director, the CFO or the Company Secretary shall not be deemed to be a director or entitled to cast a vote at meetings of the Board of Directors for the purpose of this clause. Provided further that the CFO and/ or the Company Secretary shall not attend such part of a meeting of the Board of Directors, which involves consideration of an agenda item relating to the CFO, Company Secretary, CEO or any director.

CORPORATE AND FINANCIAL REPORTING FRAMEWORK

THE DIRECTORS� REPORT TO SHAREHOLDERS

xix.  The directors of listed companies shall include statements to the following effect in the Directors� Report, prepared under section 236 of the Companies Ordinance, 1984:

a.       The financial statements, prepared by the management of the listed company, present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

b.      Proper books of account of the listed company have been maintained.

c.       Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.

d.      International Accounting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure therefrom has been adequately disclosed.

e.       The system of internal control is sound in design and has been effectively implemented and monitored.

f.       There are no significant doubts upon the listed company�s ability to continue as a going concern.

g.       There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations.

The Directors� Reports of listed companies shall also include the following, where necessary:

a.       If the listed company is not considered to be a going concern, the fact along with reasons shall be disclosed.

b.      Significant deviations from last year in operating results of the listed company shall be highlighted and reasons thereof shall be explained.

c.       Key operating and financial data of last six years shall be summarised.

d.      If the listed company has not declared dividend or issued bonus shares for any year, the reasons thereof shall be given.

e.       Where any statutory payment on account of taxes, duties, levies and charges is outstanding, the amount together with a brief description and reasons for the same shall be disclosed.

f.       Significant plans and decisions, such as corporate restructuring, business expansion and discontinuance of operations, shall be outlined along with future prospects, risks and uncertainties surrounding the listed company.

g.       A statement as to the value of investments of provident, gratuity and pension funds, based on their respective audited accounts, shall be included.

h.       The number of Board meetings held during the year and attendance by each director shall be disclosed.

i.        The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by:

�       associated companies, undertakings and related parties (name wise details);

�       NIT and ICP (name wise details);

�       directors, CEO and their spouse and minor children (name wise details);

�       executives;

�       public sector companies and corporations;

�       banks, Development Finance Institutions, Non-Banking Finance Institutions, insurance companies, modarabas and mutual funds; and

�       shareholders holding ten percent or more voting interest in the listed company (name wise details).

Explanation:For the purpose of this clause, clause (b) of direction (i) and direction (xxiii), the expression �executive� means an employee of a listed company other than the CEO and directors whose basic salary exceeds five hundred thousand rupees in a financial year.

(j) All trades in the shares of the listed company, carried out by its directors, CEO, CFO, Company Secretary and their spouses and minor children shall also be disclosed.

FREQUENCY OF FINANCIAL REPORTING

xx.   The quarterly unaudited financial statements of listed companies shall be published and circulated along with directors� review on the affairs of the listed company for the quarter.

xxi.  All listed companies shall ensure that half-yearly financial statements are subjected to a limited scope review by the statutory auditors in such manner and according to such terms and conditions as may be determined by the Institute of Chartered Accountants of Pakistan and approved by the Securities and Exchange Commission of Pakistan.

xxii.                       All listed companies shall ensure that the annual audited financial statements are circulated not later than four months from the close of the financial year.

xxiii.                      Every listed company shall immediately disseminate to the Securities and Exchange Commission of Pakistan and the stock exchange on which its shares are listed all material information relating to the business and other affairs of the listed company that will affect the market price of its shares. Mode of dissemination of information shall be prescribed by the stock exchange on which shares of the company are listed.

This information may include but shall not be restricted to information regarding a joint venture, merger or acquisition or loss of any material contract; purchase or sale of significant assets; any unforeseen or undisclosed impairment of assets due to technological obsolescence, etc.; delay/ loss of production due to strike, fire, natural calamities, major breakdown, etc.; issue or redemption of any securities; a major change in borrowings including any default in repayment or rescheduling of loans; and change in directors, Chairman or CEO of the listed company.

RESPONSIBILITY FOR FINANCIAL REPORTING AND CORPORATE COMPLIANCE

xxiv.                     No listed company shall circulate its financial statements unless the CEO and the CFO present the financial statements, duly endorsed under their respective signatures, for consideration and approval of the Board of Directors and the Board, after consideration and approval, authorize the signing of financial statements for issuance and circulation.

xxv.                       The Company Secretary of a listed company shall furnish a Secretarial Compliance Certificate, in the prescribed form, as part of the annual return filed with the Reg-istrar of Companies to certify that the secretarial and corporate requirements of the Companies Ordinance, 1984 have been duly complied with.

DISCLOSURE OF INTEREST BY A DIRECTOR HOLDING COMPANY�S SHARES

xxvi.                     Where any director, CEO or executive of a listed company or their spouses sell, buy or take any position, whether directly or indirectly, in shares of the listed company of which he is a director, CEO or executive, as the case may be, he shall immediately notify in writing the Company Secretary of his intentions. Such director, CEO or executive, as the case may be, shall also deliver a written record of the price, number of shares, form of share certificates (i.e. whether physical or electronic within the Central Depository System) and nature of transaction to the Company Secretary within four days of effecting the transaction. The notice of the director, CEO or executive, as the case may be, shall be presented by the Company Secretary at the meeting of the Board of Directors immediately subsequent to such transaction. In the event of default by a director, CEO or executive to give a written notice or deliver a written record, the Company Secretary shall place the matter before the Board of Directors in its immediate next meeting:

Provided that each listed company shall determine a closed period prior to the announcement of interim/ final results and any business decision, which may materially affect the market price of its shares. No director, CEO or executive shall, directly or indirectly, deal in the shares of the listed company in any manner during the closed period.

AUDITORS NOT TO HOLD SHARES

xxvii.                    All listed companies shall ensure that the firm of external auditors or any partner in the firm of external auditors and his spouse and minor children do not at any time hold, purchase, sell or take any position in shares of the listed company or any of its associated companies or undertakings:

Provided that where a firm or a partner or his spouse or minor child owns shares in a listed company, being the audit client, prior to the appointment as auditors, such listed company shall take measures to ensure that the auditors disclose the interest to the listed company within 14 days of appointment and divest themselves of such interest not later than 90 days thereof.

CORPORATE OWNERSHIP STRUCTURE

xxviii.                  Every company which is proposed to be listed shall, at the time of public offering, offer not less than Rs. 100 million or 20% of the share capital of the company, whichever is higher, to the general public unless the limit is relaxed by the stock exchange with the approval of the Securities and Exchange Commission of Pakistan.

DIVESTURE OF SHARES BY SPONSORS/CONTROLLING INTEREST

xxix.                     In the event of divestiture of not less than 75% of the total shareholding of a listed company, other than a divestiture by non-resident shareholder(s) in favour of other non-resident shareholder(s) or a disinvestment through the process of privatization by the Federal or Provincial Government, at a price higher than the market value ruling at the time of divestiture, it shall be desirable and expected of the directors of the listed company to allow the transfer of shares after it has been ascertained that an offer in writing has been made to the minority shareholders for acquisition of their shares at the same price at which the divestiture of majority shares was contemplated. Where the offer price to minority shareholders is lower than the price offered for acquisition of controlling interest, such offer price shall be subject to the approval of the Securities and Exchange Commission of Pakistan.

AUDIT COMMITTEE

COMPOSITION

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

FREQUENCY OF MEETINGS

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

ATTENDANCE AT MEETINGS

xxxii.                    The CFO, the head of internal audit and a representative of the external auditors shall attend meetings of the Audit Committee at which issues relating to accounts and audit are discussed.

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

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

TERMS OF REFERENCE

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

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

a.       determination of appropriate measures to safeguard the listed company�s assets;

b.      review of preliminary announcements of results prior to publication;

c.       review of quarterly, half-yearly and annual financial statements of the listed company, prior to their approval by the Board of Directors, focusing on:

n     major judgmental areas;

n     significant adjustments resulting from the audit;

n     the going-concern assumption;

n     any changes in accounting policies and practices;

n     compliance with applicable accounting standards; and

n     compliance with listing regulations and other statutory and regulatory requirements.

d.      facilitating the external audit and discussion with external auditors of major observations arising from interim and final audits and any matter that the auditors may wish to highlight (in the absence of management, where necessary);

e.       review of management letter issued by external auditors and management�s response thereto;

f.       ensuring coordination between the internal and external auditors of the listed company;

g.       review of the scope and extent of internal audit and ensuring that the internal audit function has adequate resources and is appropriately placed within the listed company;

h.       consideration of major findings of internal investigations and management's response thereto;

i.        ascertaining that the internal control system including financial and operational controls, accounting system and reporting structure are adequate and effective;

j.       review of the listed company�s statement on internal control systems prior to endorsement by the Board of Directors;

k.      instituting special projects, value for money studies or other investigations on any matter specified by the Board of Directors, in consultation with the Chief Executive and to consider remittance of any matter to the external auditors or to any other external body;

l.        determination of compliance with relevant statutory requirements;

m.     monitoring compliance with the best practices of corporate governance and identification of significant violations thereof; and

n.       consideration of any other issue or matter as may be assigned by the Board of Directors.

REPORTING PROCEDURE

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

INTERNAL AUDIT

xxxv.                   There shall be an internal audit function in every listed company. The head of internal audit shall have access to the chair of the Audit Committee.

xxxvi.                  All listed companies shall ensure that internal audit reports are provided for the review of external auditors. The auditors shall discuss any major findings in relation to the reports with the Audit Committee, which shall report matters of significance to the Board of Directors.

EXTERNAL AUDITORS

xxxvii.                No listed company shall appoint as external auditors a firm of auditors which has not been given a satisfactory rating under the Quality Control Review programme of the Institute of Chartered Accountants of Pakistan.

xxxviii.               No listed company shall appoint as external auditors a firm of auditors which firm or a partner of which firm is non-compliant with the International Federation of Accountants' (IFAC) Guidelines on Code of Ethics, as adopted by the Institute of Chartered Accountants of Pakistan.

xxxix.                  The Board of Directors of a listed company shall recommend appointment of external auditors for a year, as suggested by the Audit Committee. The recommendations of the Audit Committee for appointment of retiring auditors or otherwise shall be included in the Directors� Report. In case of a recommendation for change of external auditors before the elapse of three consecutive financial years, the reasons for the same shall be included in the Directors� Report.

xl.     No listed company shall appoint its auditors to provide services in addition to audit except in accordance with the regulations and shall require the auditors to observe applicable IFAC guidelines in this regard and shall ensure that the auditors do not perform management functions or make management decisions, responsibility for which remains with the Board of Directors and management of the listed company.

xli.    All listed companies are required to change their external auditors every five years. If for any reason this is impractical, a listed company may at a minimum, rotate the partner in charge of its audit engagement after obtaining the consent of the Securities and Exchange Commission of Pakistan.

xlii.  No listed company shall appoint a person as the CEO, the CFO, an internal auditor or a director of the listed company who was a partner of the firm of its external auditors (or an employee involved in the audit of the listed company) at any time during the two years preceding such appointment or is a close relative, i.e. spouse, parents, dependents and non-dependent children, of such partner (or employee).

xliii.Every listed company shall require external auditors to furnish a Management Letter to its Board of Directors not later than 30 days from the date of audit report.

xliv.                       Every listed company shall require a partner of the firm of its external auditors to attend the Annual General Meeting at which audited accounts are placed for consideration and approval of shareholders.

COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

xlv.  All listed companies shall publish and circulate a statement along with their annual reports to set out the status of their compliance with the best practices of corporate governance set out above.

xlvi.                       All listed companies shall ensure that the statement of compliance with the best practices of corporate governance is reviewed and certified by statutory auditors, where such compliance can be objectively verified, before publication by listed companies.

xlvii.                      Where the Securities and Exchange Commission of Pakistan is satisfied that it is not practicable to comply with any of the best practices of corporate governance in a particular case, the Commission may, for reasons to be recorded, relax the same subject to such conditions as it may deem fit.

PRIVATEAppendix
Clause Reference	Brief Description	Manner of Enforcement	Effective Date
(i)	Representation of independent non-executive directors, including those representing minority interests, on the Board of Directors of listed companies	Voluntary	When next election is due
(ii)	Filing of consent by directors	Mandatory	When next election is due
(iii) and (iv)	Qualification and eligibility to act as a director	Mandatory	When next election is due
(v)	Election/ nomination of a broker on the Board of Directors	Voluntary	When next election is due
(vi)	Tenure of office of directors	Mandatory	Immediate
(vii), (viii)and (ix)	Responsibilities, powers and functions of the Board of Directors	Mandatory	July 1, 2024
(x), (xi)and (xii)	Meetings of the Board of Directors	Mandatory	Immediate
(xiii)	Significant issues to be placed for decision by the Board of Directors	Mandatory	July 1, 2024
(xiv)	Orientation courses	Mandatory	July 1, 2024
(xv)	Appointment and removal of CFO and Company Secretary	Mandatory	July 1, 2024
(xvi) and(xvii)	Qualification of CFO and Company Secretary	Mandatory	Immediately for new appointments
(xviii)	Requirement for CFO and Company Secretary to attend Board meetings	Mandatory	Immediate
(xix)	The directors' report to shareholders	Mandatory	For accounting periods ending on or after June 30, 2024
(xx), (xxi),(xxii) and (xxiii)	Frequency of financial reporting	Mandatory	For accounting periods ending on or after June 30, 2024
(xxiv) and(xxv)	Responsibility for financial reporting and corporate compliance	Mandatory	For accounting periods ending on or after June 30, 2024
(xxvi)	Disclosure of interest by a director holding company's shares	Mandatory	Immediate
(xxvii)	Auditors not to hold shares	Mandatory	Immediate
(xxviii)	Corporate ownership structure	Mandatory	July 1, 2024
(xxix)	Divestiture of shares by sponsors/ controlling interest	Mandatory	July 1, 2024
(xxx),(xxxi),(xxxii),	Audit Committee	Mandatory	July 1, 2024
(xxxiii) and(xxxiv)
(xxxv) and (xxxvi)	Internal Audit	Mandatory	July 1, 2024
(xxxvii), (xxxviii),	Appointment of external auditors	Mandatory	When next appointment of auditors is due
(xxxix) and (xl)
(xli)	Rotation of external auditors	Mandatory	When next appointment of auditors is due
(xlii)	Appointment of a partner or employee of the external auditors in a key position within the listed company	Mandatory	Immediately for new appointments
(xliii)	Management letter issued by external auditors	Mandatory	For accounting periods ending on or after June 30, 2024
(xliv)	Attendance of external auditors at Annual General Meeting	Mandatory	For accounting periods ending on or after June 30, 2024
(xlv) and (xlvi)	Compliance with the Code of Corporate Governance	Mandatory	For accounting periods ending on or after June 30, 2024

F O R M - I

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

                                                                                                            Dated:______________

The Secretary

Islamabad Stock Exchange (Guarantee) Limited

Islamabad.

Dear Sir,

We hereby apply for the listing of our  ________________________________________

on your Stock Exchange.                                                           (Name of Company)

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

Yours faithfully,

                                                                                                                    ____________________

                                                                                                                 SIGNATURE & ADDRESS

C. C. to:

The Corporate Law Authority

ISLAMABAD.

                               ANNEXURE TO FORM - I

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

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

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

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

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

**5.      A statement showing:-

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

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

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

            (a)        vendors and/or promoters

            (b)        underwriters

            (c)        brokers

**7.      Certified copies of agreements with:-

            (a)        managing agents

            (b)        selling agents

            (c)        managing director and technical directors

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

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

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

*11.      Particulars of security for which listing is sought.

*12.      Additional information/documents that may be called by the Exchange.

Note:

*          To be submitted alongwith the application.

**         May be submitted at your convenience.

                                          F O R M - II

             FORM FOR SUBMISSION OF UNDERTAKING AND PAYMENT OF FEES

                                                                                                                  Dated:________________

The Secretary

Islamabad Stock Exchange (Guarantee) Limited

Islamabad.

                                         Re: LISTING ON THE STOCK EXCHANGE

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

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

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

                                                                                                                                     Yours faithfully

                                                                                                                                    ____________

                                                                                                                                       SIGNATURE  

ANNEXURE TO FORM - II

FORM OF UNCONDITIONAL UNDERTAKING UNDER LISTING REGULATION NO. 5

ON NON-JUDICIAL STAMP PAPER

                                                                                                                   Dated: _______________

The Governing Board of Directors

Islamabad Stock Exchange (Guarantee) Limited

Islamabad.

                                                          U N D E R T A K I N G

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

We further undertake:-

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

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

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

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

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

                                                                                                                                     Yours faithfully,

                                                                                                             (Signature of authorized person)

Common seal of the company

                                                          COMPANY PROFILE

                                    (For Companies Already Listed at other Exchanges)

Name of Company:______________________________

Address (Registered Office): ______________________

Telephone Numbers:_____________________________

Mills - Other Addresses:__________________________

Telephone Numbers:_____________________________

Board of Directors:_____________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

Auditors:_________________________________________________________________

________________________________________________________________________

Legal Advisors:_________________________________________________________________

________________________________________________________________________

Bankers:_________________________________________________________________

________________________________________________________________________

________________________________________________________________________

Registrar of Shares:_______________________________________________________________

Market Summary

Daily Quotation