By
Rahat Aziz
SA Associates
Corporate Consultants & Trainers
 Background
 Concepts
 Links
Companies Ordinance
1984
Security Exchange Ordinance
1969
 Criteria Appendix 2
 Procedure Reg. 1-15
 Documents Appendix 1
 The Companies (Issue of Capital) Rules 1996
Appendix 3.
 Book Building Appendix 4.
 CCG Reg. 35
 De-Listing Reg. 30-31
 IN CASE OF COMPANIES
 A Company should be a Public Company.
 Minimum paid up Capital is 200 (m).
 Not less than 500 Applications.
PUBLIC ALLOCATION
 Minimum Paid-up Capital
250 m can be offered
Rs.500 Million (50%)
250m or 25% of Capital
More than Rs.500 Million
(whichever is higher)
Example:
Capital is 700M, then:
Rs.250M
or
Capital is 1200M, then:
Rs.250M
or
250 is higher
25%=300M
300 is higher
25%=175M
Rahat Aziz
KTBA Workshop – 23 Jan 2014
SA Associates
 IN CASE OF MODARBA:
 30% to sponsors, associates, friends and associated undertaking
 70% to General public.
 Where 25% shares allocated sponsor etc, shares shall not be salable for a
period of 6 months from the date of public subscription.
 Running company:
Shares do not qualify, if its equity is eroded by 40% or more.
APPENDIX -1
Copy of the certificate of incorporation.
Copy of the conversion certificate of commencement of business.
Copy of Feasibility Report, in case of a new project.
Auditor’s Certificates under section 53 read with clause 28(1) of section 2 of
Part-1 of the second schedule to the Companies Ordinance, 1984. The
certificate shall also state Earning Per Share of the company for the last 5
years or for a shorter period if 5 years of the commencement of business
are not completed.
 No Objection Certificates from the Underwriter(s) to the Issue/Offer, if
any, on Form 4.
 Copies of all material contracts and agreements relating to the public
issue/offer of shares and project, if any.
 Copy of consent letters from bankers to the issue/offer.




APPENDIX 4
BRIEF ABOUT BOOK-BUILDING
Book-Building is a process used by companies raising capital
through Public Offerings. It is the practical mechanism for the
quick and efficient management of public offerings.
In general, it is an innovative method of marketing securities
involving price determination and quantum of securities on the
basis of the demand from the prospective shareholders.
Rahat Aziz
KTBA Workshop – 23 Jan 2014
SA Associates
SECP guidelines defines Book-Building as
“a mechanism of price determination through
which indication of interest for investment in
the shares offered by an issuer/offeror is
collected from Institutional Investors and
HNWI and a book is built which gives a picture
of demand for the shares at different price
levels. The strike price is determined based on
the price at which demand for the share at the
end of book building period is sufficient to
raise the minimum capital required”.
TOTAL PUBLIC ISSUE
(i.e., net offer to the public)
BOOK BUILDING
METHOD
FIXED PRICE
METHOD
not more than 75%
of the total offer
shall be allocated to
institutional investors
and HNWI
not less than 25%
of the total offer
shall be allocated
to the general public
A public limited company or a body corporate which
intends to issue shares to the general public under
Section 57 of the Companies Ordinance, 1984 and makes
an application to a stock exchange for listing of its shares
or an Offeror who intends to offer shares under Section
62 of the Companies Ordinance, 1984 and makes an
application to a stock exchange for listing of such shares,
where applicable, and is in compliance with Listing
Regulations of the stock exchange, is eligible to
issue/offer its shares through Book Building process
subject to the following conditions

not more than 75% of the total offer shall be allocated
for offer through book building process to
institutional investors and HNWI; and

not less than 25% of the total offer shall be allocated
for offer to the general public.
Features
Fixed Price Process
Book-Building Process
Pricing
Price at which the securities are Price at which the securities are offered is not
offered is known in advance to known in advance to the investors. Investors
the investors.
decide the price through tender method.
Demand
Demand for the securities is not
Demand for the securities offered can be
known until the close of the issue. known every day as the book is built.
Payment
100% advance payment is
required to be made by the
investors at the time of
application.
Margin for bidding placed by :
HNWIs ---------- Up to 100% of application
money
Institutions ------ not less than 25% of
application money
Successful bidders shall deposit the balance
amount within seven working days of the
close of bidding period.
Appoint Lead Manager & Book Runner

Submit Preliminary Prospectus to KSE & SECP for approval

Circulate approved Preliminary Prospectus to Institutional Investors & HNWIs

Publish advertisements & Conduct Awareness Campaign
Open Escrow Account for the collection of Bid’s amount

Ask for Bids on Price & Quantity of Securities

Maintain an Order Book

Determine the Strike Price in Consultation with the Issuer

Firm up Underwriting Commitments
Cont…

Intimate Successful Bidders & make Provisional Allotment

Collect the balance amount form successful Institutional Bidders

Make Final Allotment of Securities

Publish Final Prospectus containing the Offer Price

Offer to General Public for subscription of securities

Completion of Formalities

Securities Issued & Listed on the Exchange

Commencement of Trading
 Regulation 16-19
 Regulation 20 & 21
 Regulation 32 & 34
 Regulation 36
Dividends.
Meetings.
Fee.
Compliance with
these regulations.
 Regulation:
22-24
 Regulation:
25-29
 30A
 30B
 30C
 30D
Buy Backing Price
Conditions
Procedure
Time Frame
2003
1998
1995
1992
1990
Report of
The
the
Greenbury
Committee Hampel
Committe
Code of Best
e
Practice of
the Cadbury
Committee
The Financial
Reporting
Council (FRC)
200
8
The
Combined
Code on
Corporate
Governance
2002
1996
Sarbanes–Oxley
Act
Report of the
NACD blue ribbon
commission on
director
professionalism
2012
2002
Code of Corporate
Governance-SECP
Code
of Corporate
Governance-SECP
BOD
STRUCTURE
I, II, III
3 : 7%
BOD
COMMITTEE
S
XXIV, XXV,
XXVII, XXVIII,
XXIX, XXX
6 : 14%
BOD
RESPONSIBILI
TIES, POWER,
FUNCTION
IV, V, IX, XI, XIV,
XV, XVII (a), XL,
XLI, XLII
10 : 24%
REPORTING
FRAMEWOR
K
OTHER
ROLES
X, XVI, XVII(b),
XVIII, XIX, XX,
XXI, XXII, XIXII
VI, VII, VIII,
XII, XIII, XIV,
XXXI, XXXII,
XXXIII,
XXXIV, XXXV,
XXXVI,
XXXVII,
XXXVIII,
XXXIX
9 : 19%
15 : 36%
CODE STRUCTURE:
• Board Composition
•
•
•
•
•
(Br.Cp.)
Board Responsibilities, Powers & function (Br.R.P.F)
Board Meeting
(Br. M)
Board Related Management
(Br.R.M)
Board Committees
(Br.Cm)
Corporate Compliance & financial
reporting frame work
(Cr.Com &
Fin.Rep.FW)
At-least One
Independent
Preferably 1/3 of BOD
Br. Cp.
Executive
not more than 1/3 of
elected Dr.
Non-Executive-Remaining
Br. R.P.F
Fiduciary Duty
Professional standard & Corporate value.
Vision/Mission Statement
Significant Policies
Sound Internal Control System
Decision on Material Transaction
Br. M
Seven Days Notice
Dissenting note
Decision on Significant issues
Related party transactions
Br. R.M
Chairman
Chief Executive Officer
Chief Financial Officer
Company Secretary
Head of Internal Audit
Br. Cm.
Audit Committee – its composition
H.R. & Remuneration Committee – its
composition
Term of Reference
Cr. Com & Fin.
Rep. F.W
Director Report
Directors Remuneration
Frequency of Fin. Rep.
External Auditor
Compliance with CG
30
CHAIRMAN OF
BOARD
HUMAN RESOURCE
AND REMUNERATION
COMMITTEE (HR&R)
BOARD OF
DIRECTORS
AUDIT COMMITTEE
CHIEF EXECUTIVE
OFFICER (CEO)
31
COMPANY
INFORMATION
Annual Report
2011
32
08 – Directors
01 – Executive Director(CEO)
02 – Independent Directors
05 – Non-Executive Directors
BOARD OF
DIRECTORS
(including
Chairman
of Board)
Mazhar Karim
Chairman
Non-Executive Director
Ahsan M. Saleem
Chief Executive & Managing Director
Mohammad Anwar
Non-Executive Director
Muhammad Abdul Aleem
Non-Executive Director (Independent)
Nasir Shafi
Non-Executive Director
S.M. Ehtishamullah
Non-Executive Director
Syed Zahid Hussain
Non-Executive Director (Independent)
03 – Members.
Zahid Bashir
Non-Executive Director
01 – Independent Directors (as
Chairman)
AUDIT COMMITTEE
02 – Non-Executive Directors
Muhammad Abdul Aleem Chairman
Nasir Shafi
Member
S.M. Ehtishamullah
Member
Non-Executive Director (Independent)
Non-Executive Director
Non-Executive Director
33
02 – Members.
01 – Executive Directors (as
Chairman)
01 – Non-Executive Directors
HUMAN RESOURCE COMMITTEE
Ahsan M. Saleem Chairman
Chief Executive & Managing Director
Nasir Shafi
Member
Non-Executive Director
Must have 3 members at least and
the Chairman should be a nonexecutive or independent director
34
COMPANY
INFORMATION
Annual Report
2011
35
08 – Directors
01 – Executive Director(CEO)
02 – Non-Executive
05 – Non-Executive(Independent)
BOARD (including
OF DIRECTORS
Directors
Chairman)
Mr. Adil Matcheswala
Chairman
Non-Executive Director (Independent)
Mr. Shahid Hameed
Vice Chairman Non-Executive Director
Mr. Kashif Shafi Khan
Non-Executive Director (Independent)
Mr. Naief Abdullatif S A Mohammad
Non-Executive Director
Mr. Aslam Khaliq
Non-Executive Director (Independent)
Syed Nadir Shah
Non-Executive Director (Independent)
Mr. Ahsen Ahmed
Non-Executive Director (Independent)
03 – Members.
Mr. Muhammad Kamran Nasir
Chief Executive Officer
03 – Non-Executive
(Independent) Directors
AUDIT COMMITTEE
(including Chairman)
Mr. Adil Matcheswala
Mr. Shahid Hameed
Mr. Ahsen Ahmed
Chairman
Member
Member
Non-Executive Director (Independent)
Non-Executive Director (Independent)
Non-Executive Director (Independent)
36
03 – Members.
01 – Executive Directors
02 – Non-Executive
(independent) Directors
(including Chairman)
COMPENSATION COMMITTEE
Mr. Aslam Khaliq
Mr. Mohd Kamran Nasir
Mr. Shahid Hameed
Chairman
Member
Member
Non-Executive Director (Independent)
Chief Executive Officer
Non-Executive Director (Independent)
37
THANK YOU