The Companies Further Issue of Capital Regulations-2020-amended till September-16-2022

GOVERNMENT OF PAKISTAN
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
-.-.-.-

Islamabad, the 16th March, 2020

NOTIFICATION

S.R.O 231 (I)/2020.- In exercise of the powers conferred under section 512 read with
sections 58, 82, 83 and 83 A 1of the Companies Act 2017 (XIX of 2017), the Securities and
Exchange Commission of Pakistan is pleased to notify the following regulations, the same
having been previously published in the official Gazette vide Notification No. S.R.O.
33(I)/2020 dated January 15, 2020, as required under proviso to sub-section (1) of the said
section 512, namely:-

CHAPTER 1 PRELIMINARY

1. Short Title and Commencement. - (1) These regulations shall be called the Companies
(Further Issue of Shares) Regulations, 2020.

(2) They shall come into force at once except in the case of issues announced on or before
the date of these regulations.

(3) These regulations shall apply to the companies issuing further capital by way of:
(i) right shares;
(ii) other than right shares;
(iii) bonus shares;
(iv) employee stock option schemes; and
(v) shares with different rights including preference shares.

2. Definitions. – (1) In these regulations, unless there is anything repugnant in the subject or
context, –
(i) “Act” means the Companies Act, 2017 (XIX of 2017);
[(ia) “Application Supported by Blocked Amount “(ASBA)” means an
application for subscribing to shares, where money is blocked in the
subscriber’s respective bank account;]2
(ii) “issue of share at discount” means issue of share at a price below face
value of such share;

1
Substituted for ’82 and 83’ vide S.R.O 1754(I)/2022 dated September 16, 2022
2
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

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(iii) “further issue of shares” means issue of shares under section 83 of the
Act and does not include Initial Public Offer or offer for sale of shares
by any person holding shares in listed company or further issue of
shares pursuant to any scheme of arrangement including merger,
demerger, amalgamation etc.;
(iv) "exercise" means making of an application by an employee to a
company for issue of shares against option vested in him in pursuance
of a Scheme;
(v) "exercise period" means the time period after vesting within which an
employee may exercise his right to apply for shares against an option
vested in him in pursuance of the Scheme;
(vi) "exercise price" means the price payable by an employee for exercising
an option granted to him in pursuance of the Scheme;
(vii) “initial public offer or IPO” means first time offer of securities to the
general public;
(viii) “issue” for the purpose of these regulations, means further issue of
shares;
(ix) “issue size” means the total number of shares issued or proposed to
be issued by a company;
(x) “issue price” means the price per share at which shares are offered or
issued;
(xi) “issue of shares by way of other than right” means issue of shares out
of the share capital of a company or body corporate to any person
without right offer, either for cash or for consideration otherwise than
in cash;
(xii) “market price” for the purpose of a scheme means latest available
closing price of the share on a securities exchange on which the shares
of the company are listed and where share price is not traded on a
given date, then the share price on the last trading day shall be
considered;
(xiii) "option" means a right but not an obligation granted to an employee
in pursuance of a Scheme to apply for shares of a company at a pre-
determined price;
(xiv) “preference shares” mean the shares which carry or would carry such
preferential rights or privileges as provided for in the articles of
association of the company including but not limited to the following:

(a) carry preferential right over the rights of ordinary

shareholders to receive dividend; preference dividend may be
cumulative or non-cumulative;

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 (b) carry preferential right over the rights of ordinary
shareholders to participate in profits of company;
(c) carry preferential rights over the rights of
ordinary shareholders to be paid in the event of winding up of
the issuer; and
(d) voting and non-voting rights

(xv) “right issue” means the shares offered by a company to its members
strictly in proportion to the shares already held in respective kinds and
classes;
(xvi) “scheme” means an Employees Stock Option Scheme (ESOS) approved
by the shareholders of the company through special resolution 3 in
accordance with procedure and on conditions specified through these
regulations;
(xvii) “schedule” means the schedule appended with these regulations.
(xviii) "vesting" means to give or earn a right to apply for conversion of the
options, granted under a scheme, into shares of the company; and
(xix) "vesting period" means the period during which the vesting of an
option granted to an employee in pursuance of a scheme takes place.

(2) All terms and expression used but not defined in these regulations shall have the same
meaning as assigned to them in the Act, the Securities Act, 2015 (III of 2015) and the Securities
and Exchange Commission of Pakistan Act, 1997 (XLII of 1997).

CHAPTER II
RIGHT ISSUE

3. Conditions for right issue. –

GENERAL CONDITIONS4
(1) Subject to requirements of section 83 of the Act, a listed company issuing right shares
shall, comply with the following general conditions, namely. –

(i) board shall approve the decision to increase share capital and the said decision
shall be communicated on the same day to the Commission and to the securities
exchange for public dissemination;
(ii) Fractional shares, if any, shall not be offered and all fractions less than a share
shall be consolidated and disposed of by the company and the proceeds from
such disposition shall be paid to such of the entitled shareholders as may have
accepted such offer;

3
Substituted for the word “Commission” vide S.R.O 1754(I)/2022 dated September 16, 2022
4
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

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 (iii) the decision of board shall clearly state the following-
(a) quantum of the issue i.e. as percentage of existing paid up capital;
(b) issue size;
(c) issue price;
(d) purpose of the issue;
(e) utilization of the proceeds of the issue;
(f) benefits of the issue to the company and its shareholders;
(g) risks, if any, associated with the issue to which the company and/or its
members are exposed to;
(h) justification for issue of shares at, premium or at discount to face value
(if applicable);
(i) minimum subscription amount; and
(j) provision of ASBA facility (optional).5
(iv) where announcement of the issue of bonus and right shares is made
simultaneously, the resolution of the board shall specify whether such bonus
shares qualify for right entitlement or not;
(v) the letter of offer under section 83 of the Act and information specified in
Schedule I to these regulations, shall be sent to all members along with copy of
the extract of the resolution of the board’s meeting approving the right issue;
and
(vi) A listed company may issue right shares at face value or at premium to face
value provided the directors and substantial shareholders of the company
undertake in writing that:
a. they will subscribe the right shares to be offered to them as per their right
entitlement or arrange subscription for the same through other persons;
and
b. the balance of the right issue is underwritten through at least two
underwriters, not being associated companies or associated undertakings
of the issuer;

Explanation: An underwriter may enter into sub-underwriting arrangement through

sub-underwriting agreement in writing provided such sub-underwriter is licensed by
the Commission to undertake underwriting of securities.

(vii) [in case of a listed company, the letter of offer of right shall be dispatched or
credited within the time period as specified by the listing’s regulations of the
securities exchange;
(viii) a listed issuer shall not be eligible to make a right issue if the issuer at the time
of right issuance is placed on Pakistan Stock Exchange (PSX) defaulter counter.
Provided that this condition will not be applicable on the companies wherein

5
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

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 the purpose of the right issue is repayment of the respective overdues or
removing defaults;
(ix) a listed issuer shall not be eligible to make right issue if it is not cooperating in
an investigation or inspection ordered by the Commission;
(x) if the whole or any part of the shares offered by the issuer is declined or is not
subscribed, the directors may allot such shares in such manner as they may
deem fit within a period of thirty days from the close of the offer or within such
extended time not exceeding thirty days with the approval of the Commission;
(xi) right shares shall only be offered for consideration only in cash;
(xii) right shares shall not be subscribed for consideration of already injected funds
in the issuing company by the subscriber either in the form of loan or any other
consideration;
(xiii) if the board of directors fail, within extended time, to allot shares or
underwriters fail to take up the unsubscribed portion, the unsubscribed right
issue will be extinguished. In such cases, in addition to any other action specified
under the Act against the board, the underwriter will be barred for three years
from underwriting any issue of any listed issuer;
(xiv) subject to compliance with the requirement of section 82 of the Act, a company
may issue right shares at a discount to face value: provided that-
(a) the issue is underwritten in the form and manner as stated in clause (vi)
of this sub-regulation; and
(b) appropriate disclosures in line with the size of the issue are made;
(xv) the listed Issuer shall not, at any time changes or deviate from the purpose of
utilization of proceeds of right issue earlier disclosed to the members through
Schedule 1;
(xvi) in exceptional circumstances, the issuer may change the purpose of proceeds
utilization subject to passing of special resolution and offering an exit
opportunity to dissenting shareholders who have not agreed to the change in
purpose of proceeds utilization;
(xvii) the mechanism for an exit offer opportunity shall be as under-
(a) EOGM notice in respect of any change in the purpose of proceeds
utilization of the issue as disclosed in the offer document shall be given along
with draft special resolution as required under the provisions of the Act;
(b) subject to approval of special resolution as defined in the Act, the
shareholders who have dissented against the special resolution and conveyed
their dissent to the company secretary under intimation to PSX, shall be
provided an opportunity to exit;
(c) during the exit opportunity, shares shall be purchased by sponsors of
the issuer;
(d) purchase price per share shall be average market price of the period
between last date of payment against right issuance and the date of passing of
special resolution;

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 (e) the exit offer shall be executed by the sponsors with in a period of thirty
(30) days from the date of passing of special resolution]6.

(2) In case the right issue size cumulatively during a financial or a calendar year is less than
or equal to Rs.750 million or 50% of the paid-up capital of the listed company issuing right
shares, whichever is lower, the listed company, in addition to compliance of the general
conditions, provided in sub-regulation (1), shall-

(i) simultaneously place Schedule 1 on the website of Securities Exchange along

with sending it to all the members with copy of the extract of the resolution of
the board’s meeting approving the right issue;
(ii) Offer letter dispatched to all shareholders should include the copy of Schedule 1;
(iii) the book closure for the issue shall be made within thirty (30) days from the date
of board resolution or within such time period as approved by the Commission;

(3) In case the right issue size cumulatively during a financial or a calendar year exceeds
Rs.750 million or 50% of the paid up capital of the listed company issuing right shares,
whichever is higher, the listed company, in addition to compliance of the general conditions,
provided in sub-regulation (1), shall comply with the following conditions, namely:-

(i) no company shall issue right exceeding the above referred threshold if the
issuing company, its sponsor, promoter, substantial shareholder and directors
have overdues or defaults irrespective of the amount appearing in the report
obtained from Credit Information Bureau;
(ii) the company shall prepare and its board shall approve the draft offer
document in easily understandable English and Urdu language;
(iii) the Offer document shall contain all disclosures, as referred to in Schedule I of
these regulations. and such disclosure should be true and adequate and
enable the applicants to take an informed investment decision;
(iv) the draft offer document shall be submitted to PSX and the Commission within
45 days of the date of announcement and it shall simultaneously be placed by
the listed company on the PSX and company’s website. It shall be the
discretion of the company and its board to seek public comments on the
offering document and in such case, the public can submit its comments within
7 days of placement;
(v) PSX and the Commission shall, within 15 days of the filing of draft offer
document, share their observations and changes with the company, if any;
(vi) the board shall ensure that draft offer document is updated in light of the
public comments, (if opted for), PSX and the Commission

6
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

Page 6 of 32
 comments/observations, and shall submit final offer letter to PSX within 20
days from the date of comments/observations, whichever is later.
Simultaneously, the Board shall also disclose in tabular form on PSX and
company website as per the Schedule II, all the comments received along with
the explanations as to how they are addressed;
(vii) the final offer document shall be placed on PSX website along with book
closure dates, and relevant right issuance timelines in accordance with Section
83 of the Act;
(viii) the sponsors shall retain their entire shareholding for one year or project
completion whichever is later;
(ix) the statutory auditor shall monitor the proceed utilization till 95% of the
proceeds are utilized in the manner referred to in the final offer letter, and
shall submit half yearly report to the issuer. The issuer will include the report,
along with its comments, if any, in its half yearly and annual financial
statements.

(4) omitted]7

(5) Right issue once announced by the board of a listed company shall not be varied,
postponed, withdrawn or cancelled [except that it will stand extinguished in case it is not
completed within the timeline line and manner specified with in these regulations.] 8

(6) [The company can opt for announcing minimum subscription amount being less than
the total amount of right announced. In instant scenario, the company in addition to
complying with the requirements (as applicable depending upon the size of the right issue)
as mentioned in Regulation 3, shall comply with the following conditions, -

(i) minimum subscription amount should not be less than 90% of size of right issue;
(ii) directors/substantial shareholders undertake in writing that they will subscribe
the right shares to be offered to them as per their right entitlement to the extent
of their proportion of minimum subscription;
(iii) public portion of minimum subscription shall be underwritten by the
underwriter, not being associated company or associated undertakings of the
issuer;
(iv) right entitlement letter will be traded on PSX, risk and rewards shall be sole
liability of the investors.

7
Substituted for regulation (2), (3) (4) vide S.R.O 1754(I)/2022 dated September 16, 2022
8
Substituted for full stop in the end vide S.R.O 1754(I)/2022 dated September 16, 2022

Page 7 of 32
 (7) The company can opt for ASBA facility for receiving of right proceeds and in case the
company announces the option of ASBA facility it, in addition to complying with the
requirements (as applicable depending upon the size of the right issue) as provided in
regulation 3, shall also comply with the following conditions,-

(i) The company or banker to the issue, upon receipt of instructions from the
subscriber, immediately block the subscription money in respective account of
the subscriber;
(ii) in case of subscribers other than ASBA, if the company fails to refund the
subscription amount within 15 days, it shall be liable to pay penalty of 15% per
annum to the subscriber along with the subscription amount.]9

CHAPTER III
BONUS ISSUE

4. Conditions for bonus issue. - (1) A company, in accordance with the provisions of its
articles of association, may issue bonus shares subject to the following conditions, namely: -
(i) the issue of bonus shares is approved by the board;
(ii) in case of a listed company, the resolution of board approving to issue bonus shares is
communicated to the Commission and the securities exchange on the same day i.e. on
the day of the decision;

(2) The decision of the board to issue bonus shares, once announced, shall not be varied,
postponed, withdrawn or cancelled.

CHAPTER IV
ISSUE OF SHARES BY WAY OF OTHER THAN RIGHT OFFER

5. Conditions for issue of shares by way of other than right offer. - (1) A public company
may issue further shares, by way of other than right, under sub-section (1) of section 83 of
the Act subject to the following general conditions, namely. –

(i) the issue is proposed by the board;

(ii) the aforesaid proposal of the board clearly states the following-
(a) proposal of the board to issue shares without right offer is subject to approval
of the shareholders and the Commission;
(b) quantum of the issue both in terms of the number of shares and percentage of
paid up capital before and after the issue;
(c) issue price per share and justification for the same, ;

9
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

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 (d) consideration against which shares are proposed to be issued i.e. cash or other
than cash;
(e) name of person(s), their brief profile, existing shareholding, if any, in the
company, to whom the shares are proposed to be issued;
(f) purpose of the issue;
(g) justification for issue of the shares by way of other than right;
(h) benefits of the issue to the company, its members and capital markets;
(i) breakup value per share as per the latest available audited and reviewed
accounts;
(j) consent of the person(s) to whom the shares are to be issued is(are) obtained;
(k) the proposed new shares shall rank pari passu in all respects with the existing
ordinary shares of the company. In case the proposed new shares are different
from the issued ordinary shares in any respect, then the board’s decision must
state the differences in detail
(l) average market price of the share, in case of a listed company, during the last
three months preceding the board’s decision as well as the latest available
market price; and
(m) where shares are proposed to be issued for consideration other than in cash,
the value of non-cash assets or services or intangible assets shall be determined
by a valuer:

Provided that the valuation shall not be older than six months from the date
of submission of the application to the Commission [and the valuers must be
registered as per the requirements of regulation 8A & 8B of the Companies
(Further Issue of Shares) Regulations, 2020.]10

(n) [the company shall invite claims, if any, on the non-cash assets through
advertisement in the widely circulated newspaper both English and Urdu
language clearly mentioning the fact that-

(i) after issuance of shares the title of the assets will be transferred in the
name of the issuer; and
(ii) claims must be submitted to the statutory auditors (insert name) within
seven (7) days of the date of advertisement.

(o) the company shall intimate the Commission, at the time of seeking approval,
confirming details of claims received and settled as referred in sub-clause (n)
verified through its statutory auditor along with an affidavit that the

10
Substituted for full stop vide S.R.O 1754(I)/2022 dated September 16, 2022

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 information is correct to the best of their knowledge;

(p) non-cash assets shall be transferred in the name of issuer within sixty (60) days
of the date of approval by the Commission or within such extended time not
exceeding 30 days with the approval of the Commission;

(q) the shares shall be issued only in the book entry form within 60 days from the
date of approval by the Commission;

(r) the issuer shall intimate the Commission and the securities exchange about
issuance of the shares within seven days of the issuance;

(s) the sponsors shall retain their shareholding arising as a result of subject issuance
for at least twelve months; and at least twenty five percent of their shareholding
for the next two years;

(t) the persons other than sponsors, shall retain their shareholding arising as a
result of subject issuance from the date of their issuance as follows-
(i) for a period of one year, in case such shareholding is not more than ten
percent (10%) of the issuer’s respective paid up share capital;
(ii) for a period of two years, in case such shareholding is above ten percent
(10%) but not more than twenty five percent (25%) of the issuer’s
respective paid up share capital; and
(iii) for a period of three years, in case such shareholding is above twenty five
percent (25%) of the issuer’s respective paid up share capital:

Provided that the conditions referred in sub-clauses (s) and (t), shall not be applicable
in case where offer price is at premium to the market price of the share of the
company and free float of the issuing company is less than 10% of its listed capital;

(u) the person(s) to whom shares are being issued shall not have overdues or
defaults irrespective of the amount appearing in the report obtained from
Credit Information Bureau].11

(2) The aforesaid decision of the board, in case of a listed company shall be communicated
to the Commission and the securities exchange on the same day i.e. on the date of the
decision of the board.

11
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

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 CHAPTER V
CLASSES AND KINDS OF SHARE CAPITAL

6. Conditions for issuance of shares with different rights. – (1) A company may issue shares
with differential rights under section 58 of the Act subject to compliance with the following
conditions, namely-

(i) the issue of shares with different rights is recommended by the board through
resolution;
(ii) the decision of the board shall, in addition to particulars required under clauses (a) to
(g) of regulation 3 (iii), state the following-

(a) description of different kind of shares such as ordinary shares and preference
shares;
(b) description of different rights such as different class in each kind, rights and
privileges attached to each class or kind of capital;
(c) whether the shares are being issued as right or other than right;
(d) whether the holders of such shares shall be entitled to participate in profits or
surplus funds of the company;
(e) whether the holders of such shares shall be entitled to participate in surplus
assets and profits of the company on its winding-up which may remain after the
ordinary shareholders has been repaid;
(f) whether payment of dividend on preference shares is on cumulative or
noncumulative basis;
(g) in case the shares being issued are convertible into ordinary shares, then mode,
mechanism and manner of such conversion;
(h) rights of holders of preference shares regarding dividend, participation in
general meetings and voting therein before and after conversion of preference
shares into ordinary shares;
(i) in case the shares are partially or wholly redeemable, then mode and manner
of redemption;
(j) any other feature as deem appropriate by the board.

(iii) the issue of shares is authorized by a special resolution;

(iv) [omitted]12

12
Sub-clause (iv) in Regulation 6 omitted through S.R.O. 1461(I)/2021 dated November 10, 2021

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 [(iva) Irrespective of the size of the issue, the listed company shall comply with all applicable
requirements of Chapter IV of these Regulations and seek approval of the
Commission for issuance of such shares offered by way of other than Right;

(ivb) If such shares are being offered by way of Right, then the issuing company shall
comply with the requirement as specified in Regulation 3.]13

(v) [The company shall not amend, alter, very or reassess the terms and conditions of
such issue without approval of the holders of such shares carrying differential
rights]14;

(vi) in case a company performs an act which is contradictory to the provision to clause
(v) above, the Commission may:

(a) direct such company to redeem the entire issue with immediate effect and
make full compensation along with interest accrued therein, if any; or
(b) direct such company to convert the entire issue into ordinary shares with
immediate effect; or
(c) give direction as deemed appropriate by the Commission through an order after
providing the company an opportunity of hearing.

15 (2)Notwithstanding the requirements of sub-regulation (1), a company may convert its

ordinary shares into preference shares or convert its shares (of a particular kind) from one
class to another, on the basis of a special resolution:

Provided that the rights of holders of such converted shares are provided for in the articles of
association of a company:

Provided further that a share that is not a redeemable preference share when issued cannot
afterwards be converted into redeemable preference share.

[(3) A listed company, in case of issue of preference shares, by way of other than right offer,
in addition to compliance of conditions mentioned at regulation 6 (1) above, is required to
submit the following along with the application to the Commission:-

(i) consent of the person(s) to whom the shares are to be issued; and

13
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022
14
Sub-clause (v) in Regulation 6 amended through S.R.O. 1461(I)/2021 dated November 10, 2021
15
Sub-regulation (2) in Regulation 6 inserted through S.R.O. 1461(I)/2021 dated November 10, 2021

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 (ii) terms and conditions of the agreement(s) executed between the company and
the preference shareholders.]16

CHAPTER VI
EMPLOYEE STOCK OPTION SCHEME

7. Condition for issue of Employee Stock Option Scheme. - (1) A public company, may issue
shares to employees pursuant to a Scheme under section [83 A]17 of the Act, subject to the
following conditions-

(i) the articles of association of the company expressly provides and authorizes the offer
of scheme;
(ii) the board shall form a compensation committee for administration and
superintendence of the scheme provided that the chairman of the compensation
committee of listed company shall be an independent director;
(iii) board shall consider and resolve to offer the scheme;
(iv) the aforesaid decision of the board shall provide information required under
subclause (a) to (f) of clause (ii) of sub-regulation (1) of regulation 5, as applicable;
(v) the offer of scheme is authorized by a special resolution;

Provided that separate special resolution shall be required for the following,
where a scheme provides so, -

(a) grant of option to employees of a subsidiary or holding company; and

(b) grant of option to identified employees, during any one year, equal to or
exceeding one per cent of the issued capital (excluding outstanding
conversions) of the company at the time of grant of option[;
Provided further that agenda of the EOGM should explicitly provide details of
any litigation or legal proceedings in the context of the current or previous ESOS
along with management’s stance;

Provided further that ESOS by the issuer has to be announced within six months
of passing of special resolution, and in case of failure to do so, fresh resolution
will be required.]18
(vi) In case shares are to be issued at discount to the face value, the company shall also
obtain approval of shareholders and the Commission under section 82 of the Act;

16
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022
17
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022
18
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

Page 13 of 32
(vii) the company and compensation committee shall ensure that its executive directors
and employees in senior management shall not participate in the deliberation or
discussion of their own allocation of options under the scheme;

(viii) a company shall not vary the terms of a scheme in any manner which may be
detrimental to the interests of its employees:

Provided that a company may by special resolution in a general meeting vary the terms
of a scheme offered pursuant to an earlier resolution but not yet exercised by its
employees provided that such variation is not prejudicial to the interests of the option
holders.

(2) There shall be a minimum period of one year between the grant of option and vesting
of option.

(3) Where options are granted by a company under its scheme in lieu of options held by
the same person under a scheme in another company, which has merged or amalgamated
with the first mentioned company, the period during which the options granted by the
merging or amalgamating company were held by him shall be adjusted against the minimum
vesting period required under these regulations.

(4) A company shall have the freedom to specify the lock-in period for the shares issued
pursuant to an exercise of option.

(5) An employee shall not have the right to receive any dividend or to vote or be entitled
to rights of members in respect of option granted to him, till shares are issued to such
employee on exercise of option.

(6) In case of failure to exercise the option, the options granted shall lapse and such lapsed
options may be granted to other employees within a period of thirty days from the date of
lapse.

(7) An option granted to an employee shall not be transferable to any other person except
to an entitled employee of the company:

Provided that:

(i) in the event of death of an employee while in employment of a company, all

options granted to him till the date of his death shall vest in his legal heirs or
nominees;
(ii) in case an employee suffers a permanent incapacity while in employment of a
company, all options granted to him, as on the date of permanent

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 incapacitation, shall vest in him on that day;
(iii) in the event of resignation or termination of service of an employee, all
options not vested as on that day shall expire. Provided, the employee shall,
subject to the terms and conditions of the scheme, may be entitled to retain
all the vested options.

(8) An option granted to an employee shall not be pledged, hypothecated, mortgaged or

otherwise alienated in any other manner.

[(9) In case of a listed company, entitlement pool is capped at 10% of the enhanced paid
capital of the company in a year; and 25% of the enhanced paid up capital of the company at
any point in time.

Explanation:- For the purpose of this regulation, “Entitlement Pool” means number of shares
that can be issued under an employee stock option scheme determined by the compensation
committee and approved by the shareholders through special resolution.

(10) A listed company may raise its capital through issuance of employee stock option
scheme with the approval of the shareholders through special resolution passed in the general
meeting.

(11) The listed company shall comply with the requirements envisaged in the Act and file
the notice of increase in share capital with the registrar in line with the requirements of the
Act.]19

8. Scheme offered at the time of public offering. - If any options granted to employees in
pursuance of a scheme are outstanding at the time of IPO, the offering document shall
disclose number of such outstanding options, exercise price, exercise period and impact on
shareholding of the members in case all the outstanding options are exercised.

20CHAPTER
VIA
REGISTRATION AND VALUATION

8A. Registered Valuers. (1) Where valuation is required in respect of any property, stocks,
shares, debentures, securities or goodwill or any other assets or net worth of a company or
its liabilities under the provisions of this Act, the following persons shall be eligible to conduct
the requisite valuation:

19
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022
20
Chapter VIA ‘Registration and Valuation’ inserted through S.R.O. 1461(I)/2021 dated November 10, 2021

Page 15 of 32
 (a) Consulting Engineers registered with Pakistan Engineering Council;
(b) Practicing chartered accountants having satisfactory Quality Control Review
awarded by the Institute of Chartered Accountants of Pakistan; and (c) Any
other person as notified by the Commission.

(2) The valuers eligible under sub-regulation (1) shall also be deemed to be registered with
the Commission and shall be entitled to conduct valuation as required under the Act, subject
to fulfillment of the requirements of regulation 8A and 8B.

(3) All such valuers shall continue to be regulated, administered and monitored by the
entities in which they are originally registered, and shall comply with all relevant rules,
regulations, instructions etc. of such entities in addition to requirements of the Act.

Explanation: This Chapter VI-A shall not be applicable on valuers engaged in valuation
of banking transactions, and such valuers shall continue to be regulated under the
applicable laws.

8B. Qualification and Experience for Valuation. - (1) Following valuers who are independent
shall be eligible to conduct valuation: -

(a) in respect of movable property i.e. plant and machinery, immovable property
i.e. land, building etc., and natural resources & exploration thereof, by a valuer
registered with the Pakistan Engineering Council as a Consulting Engineer;
(b) in respect of stocks, shares, debentures, securities, net worth of a company or
an undertaking, goodwill and other intangible assets, services, and liabilities, by
a valuer who is a practicing chartered accountant having satisfactory Quality
Control Review awarded by the Institute of Chartered Accountants of Pakistan;
and
(c) in respect of value of all other assets, not covered in clauses (a) and (b), by a
valuer registered with the Pakistan Engineering Council as a consulting engineer
having experience as a valuer of at least five years in the relevant field:

Explanation: To maintain independence and impartiality and to ensure true and fair
valuation, the valuer shall not undertake valuation of any assets in which he has a direct
or indirect interest or becomes so interested at any time before submission of the report.

(2) The valuation shall not be older than six months, or such other time period as may be
notified by the Commission, from the date of submission to the registrar pursuant to section
70 of the Act in case of a right issue, and from the date of submission of application to the
Commission in case of an issue otherwise than right pursuant to section 83(1)(b) of the Act.

(3) The relevant entity or agency, on its own motion or on the reference by the
Commission, may initiate necessary action against the abovementioned eligible valuers for

Page 16 of 32
any misconduct or failure to perform professional duties in accordance with its rules and
regulations, and may cancel the registration of such a valuer.

(4) Upon cancellation under sub-regulation (3), such valuer shall be deemed as
deregistered and shall not be eligible to conduct any valuation for the purposes of the Act.

[8C. Contents of valuation report.- (1) In case the shares of a listed company are being
issued against properties, building, Plant, equipment, machinery etc. separate
valuation of each asset is required and such valuation report shall include,-

(i) affidavit/undertaking from the valuer about title verification and physical
existence of the asset;
(ii) in case of Land and building, purchase date, chronological transfer of property
along with the value for which transferred, fresh Fard, comparison of at least 3
comparable properties, if any, justification/reasons why they are considered
comparable; reasons in case no comparable property is available; NOCs from the
Bank to ensure that they are free from encumbrance;
(iii) in case of building, plant, equipment, machinery, purchase date, chronological
transfer of the building, plant, equipment, machinery; initial useful life;
remaining useful life; in case initial useful lime estimate has been revised (detail
and reason of such revision), repair/maintenance cost incurred; in case plant is
bought from a foreign supplier, the date when the payment for purchase of plant
etc. was made, the date when it reached in the country, reasons of time lag in
the purchase payment and arrival date; requisite formal approvals from other
regulatory bodies and reference to the record of funding for the purchase in
relevant books of accounts; and
(iv) in case shares are being issued against intangible assets and services, the
valuation should include affidavit/undertaking from the valuer about title
verification of the asset; the methodology used and justification for the same.]21

CHAPTER VII
GENERAL CONDITIONS, REPORTING AND DISCLOSURE REQUIREMENTS

9. General conditions. - (1) The board shall not decide or recommend increase in capital by
way of further issue of shares, beyond the authorized capital as stipulated in the
memorandum and articles of association of the company or where resolution to give effect to
such increase is passed by the members or to be passed by the members before any such
increase.

(2) In case share capital of a company has different classes or kinds having different rights and
privileges, this fact shall be distinctly mentioned in the letter of offer in case of right issue and

21
Inserted vide S.R.O 1754(I)/2022 dated September 16, 2022

Page 17 of 32
the difference in the rights and privileges of each class of share capital shall be clearly stated
in directors’ report to members.

10. Reporting. - (1) The company shall, within 30 days from the date of issue of shares, submit
a report to the Commission clearly indicating the shares issued to:
(i) directors;
(ii) associated companies;
(iii) other shareholders; and
(iv) persons to whom unsubscribed shares are issued under sub-clause (iv) of clause
(a) of sub-section (1) of section 83 of the Act.

(2) After issuance of right shares, the listed entity shall submit to the Commission progress
report on utilization of the proceeds of the right issue on quarterly basis containing the
following -

(i) item-wise breakup of the proceeds utilized both in terms of amount and
percentage of the total allocation made to the relevant item. The breakup
must be provided in comparative form with the utilization plan earlier
disclosed to the members;

(ii) deviation, if any, from the purpose or use of proceeds earlier disclosed to the
members along-with justification for such deviation;

(iii) the progress report shall be continuously submitted till such time the
proceeds from the right issue have been fully utilized or the purpose for which
the proceeds were raised is achieved.

CHAPTER VIII
MISCELLANEOUS

11. Penalty for contravention of Regulations: Whoever fails or refused to comply with,
or contravenes any requirements of the regulations shall be punishable with penalty as
provided under sub-section (2) of section 512 of the Act.

12. Repeal and Savings. - (1) The Companies (Further Issue of Shares) Regulations, 2018,
hereinafter referred to as the repealed regulations shall, upon coming into force of these
regulations, stand repealed:

Provided that repeal of the repealed regulations shall not-

(i) revive anything not in force at the time at which the repeal take effect; or

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 (ii) affect the previous operation of the repealed instruments or anything duly
done or suffered thereunder; or
(iii) affect any right, privilege, obligation or liability acquired, accrued or incurred
under or in respect of the said repealed regulations; or
(iv) affect any penalty imposed, forfeiture made or punishment incurred in
respect of any offence committed against or in violation of the repealed
regulations; or
(v) affect any inspection, investigation, prosecution, legal proceeding or remedy
in respect of any obligation, liability, penalty, forfeiture or punishment as
aforesaid, and any such inspection, investigation, prosecution, legal
proceedings or remedy may be made, continued or enforced and any such
penalty, forfeiture or punishment may be imposed, as if these regulations
has not been notified.

(2) Save as otherwise specifically provided, nothing in these regulations shall affect or deemed
to affect any action taken, orders issued, relaxation granted unless withdrawn, fee paid or
accrued, resolution passed, direction given under the repealed regulations shall, if in force at
the effective date of these regulations and not inconsistent with provision of these
regulations, shall continue to be in force and have effect as if it were respectively taken, made,
directed, passed, given, executed or issued under these regulations.

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 [“Schedule I

The Companies (Further Issue of Shares) Regulations, 2020

Right Share - Offer Document
General Instruction for filling the form:
• All information should be relevant and updated. The source and basis of all statements
and claims should be disclosed.
• All blank spaces in the draft offer document shall be filled up with appropriate data
before filing the offer document.
• Wherever it is mentioned that details are given elsewhere in the document, the same
shall be adequately cross referred by indicating the paragraph, heading and page
number.
• There should be no forward-looking statement or estimation that cannot be
substantiated.

1. Cover Page:
(i) The following statement should appear on the upper most top in bold capital letters:
“ADVICE FOR INVESTORS
INVESTMENT IN EQUITY SECURITIES AND EQUITY RELATED SECURITIES INVOLVES A CERTAIN
DEGREE OF RISKS. THE INVESTORS ARE REQUIRED TO READ THE RIGHTS SHARE OFFER
DOCUMENT (HEREIN REFERRED TO AS ‘OFFER DOCUMENT’) AND RISK FACTORS CAREFULLY,
ASSESS THEIR OWN FINANCIAL CONDITIONS AND RISK-TAKING ABILITY BEFORE MAKING
THEIR INVESTMENT DECISIONS IN THIS OFFERING.

RIGHT ENTITLEMENT LETTER IS TRADABLE ON PSX, RISKS AND REWARDS ARISING OUT OF IT
SHALL BE SOLE LIABILITY OF THE INVESTORS

(ii) Following additional information should also appear on the front page:

This document is issued for the purpose of providing information to shareholders of the
Company and to the public in general in relation to the rights issue (size of the issue in Rs.)
consisting of new ordinary shares (Number of share) by (name of the issuer). A copy of this
document has been registered with the Securities Exchange.

This offer document is valid till……. (60 days from the last day of payment of subscription
amount).
(iii) Full name of the Issuer (including previous name, if any) along with logo/monogram, if
any, date and place of its incorporation, incorporation number, address of its registered
and corporate offices, telephone number, contact person, website address and e-mail
address.
(iv) Total issue size (number of shares), offer price, premium/discount if any, total amount to

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 be raised through right issue, proportion of right offer.
(v) Date of placing offer document on PSX for public comments.
(vi) Date of Final Offer Letter, Date of Book Closure, Subscription amount payment dates,
Trading dates for Letter of Rights
(vii) Details of the relevant contact persons
Name of Designation Contact Office Email
the Person Number Address Id
Authorized Officer of the
Issuer
Underwriter
Banker to the Issue
(viii) Website addresses from where the offer document can be downloaded.

2. Inside Cover Page:

The following undertaking by the Issuer:

“WE …….THE CHIEF EXECUTIVE OFFICER AND…CHIEF FINANCIAL OFFICER …CERTIFY THAT;

(i) THE OFFER DOCUMENT CONTAINS ALL INFORMATION WITH REGARD TO THE ISSUER
AND THE ISSUE, WHICH IS MATERIAL IN THE CONTEXT OF THE ISSUE AND NOTHING
HAS BEEN CONCEALED IN THIS RESPECT;
(ii) THE INFORMATION CONTAINED IN THE OFFER DOCUMENT IS TRUE AND CORRECT TO
THE BEST OF THEIR KNOWLEDGE AND BELIEF;
(iii) THE OPINIONS AND INTENTIONS EXPRESSED THEREIN ARE HONESTLY HELD;
(iv) THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THE OFFER
DOCUMENT AS A WHOLE OR ANY PART THEREOF MISLEADING; AND
(v) ALL REQUIREMENTS OF THE COMPANIES ACT, 2017, THE COMPANIES (FURTHER ISSUE
OF SHARES) REGULATIONS, 2020, THE CENTRAL DEPOSITORY COMPANY AND THAT OF
PSX PERTAINING TO THE RIGHT ISSUE HAVE BEEN FULFILLED.”

For and on behalf of (… Name of the Issuer…)

……..Sd-………… ……….Sd-………

Name of the Chief Executive Officer Name of the Chief Financial Officer”

3. Undertaking by the Board of Directors (Board)

In case of right issue above threshold as specified in Regulations….

WE, THE BOARD ___________________HEREBY CONFIRM THAT:

(i) ALL MATERIAL INFORMATION AS REQUIRED UNDER THE COMPANIES ACT, 2017, THE

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 SECURITIES ACT, 2015, COMPANIES (FURTHER ISSUE OF SHARES) REGULATIONS, 2020,
THE LISTING OF COMPANIES AND SECURITIES REGULATIONS OF THE PAKISTAN STOCK
EXCHANGE LIMITED HAS BEEN DISCLOSED IN THIS OFFER DOCUMENT AND THAT
WHATEVER IS STATED IN OFFER DOCUMENT AND IN THE SUPPORTING DOCUMENTS IS
TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF AND THAT
NOTHING HAS BEEN CONCEALED.
(ii) WE UNDERTAKE THAT ALL MATERIAL INFORMATION, INCLUDING RISKS THAT WOULD
ENABLE THE INVESTOR TO MAKE AN INFORMED DECISION, HAS BEEN DISCLOSED IN
THE OFFER DOCUMENT.
(iii) RIGHT ISSUE IS THE DISCRETION OF BOARD OF THE ISSUER AND IT NEITHER REQUIRE
APPROVAL OF THE COMMISSION NOR THE SECURITIES EXCHANGE.
(iv) THE DRAFT OFFER DOCUMENT WAS PLACED ON THE WEBSITE OF THE SECURITIES
EXCHANGE AND THE ISSUER ON ________ (I.E. WITHIN 45 DAYS OF THE DATE OF
ANNOUNCEMENT BY THE BOARD.
(v) PUBLIC COMMENTS WERE SOUGHT FOR A PERIOD OF 7 (SEVEN) WORKING DAYS I.E
__________TO ________. (OPTIONAL AND IS THE DISCRETION OF THE COMPANY AND
ITS BOARD)
(vi) COMMENTS FROM SECURITIES EXCHANGE AND THE SECP WERE RECEIVED ON …………..
(vii) THE BOARD HAS ENSURED THAT DRAFT OFFER DOCUMENT IS UPDATED IN LIGHT OF
THE PUBLIC COMMENTS, SECURITIES EXCHANGE AND SECP COMMENTS.
(viii) THE BOARD HAS DISCLOSED ON PSX’S AND COMPANY’S WEBSITE, ALL THE COMMENTS
RECEIVED ALONG WITH THE EXPLANATIONS AS TO HOW THEY ARE ADDRESSED.
(ix) THE FINAL OFFER DOCUMENT WAS PLACED ON SECURITIES EXCHANGE WEBSITE ON
____________ ALONG WITH THE BOOK CLOSURE DATES AND RELEVANT RIGHT
ISSUANCE TIMELINES. (I.E. WITHIN 20 WORKING DAYS FROM THE DATE OF RECEIPT OF
COMMENTS OF PSX & SECP).
(x) THE STATUATORY AUDITOR M/s _____________WILL MONITOR THE PROCEED
UTILIZATION IF THE ISSUANCE PROCEEDS EXCEED RS.750 MILLION OR 50% OF THE PAID
UP CAPITAL OF THE LISTED COMPANY ISSUING RIGHT SHARES, WHICHEVER IS HIGHER
.
(xi) THE ISSUER HAS COMPLIED WITH THE REQUIREMENTS OF SECTION 82 OF THE
COMPANIES ACT, 2017 IN CASE OF ISSUANCE OF RIGHT SHARES AT DISCOUNT TO FACE
VALUE.

4. DISCLAIMER:

(i) Following disclaimer be included:

• In line with Companies Act, 2017 and Companies (Further Issue of Shares)
Regulations, 2020, this document does not require approval of the Securities
Exchange and the Securities Exchange Commission of Pakistan (SECP).
• The Securities Exchange and the SECP disclaims
a. any liability whatsoever for any loss however arising from or in reliance upon

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 this document to any one, arising from any reason, including, but not limited to,
inaccuracies, incompleteness and/or mistakes, for decisions and/or actions
taken, based on this document.
b. any responsibility for the financial soundness of the Company and any of its
schemes/projects stated herein or for the correctness of any of the statements
made or opinions expressed with regards to them by the Company in this Offer
document.
c. any responsibility w.r.t quality of the issue
• It is clarified that information in this Offer document should not be construed as
advice on any particular matter by the SECP and the Securities Exchange and must
not be treated as a substitute for specific advice.
5. Glossary of Technical Terms & Definitions:
All the technical terms and abbreviations used in offer document must be defined in the
glossary.

6. Table of Content

7. Salient features of the right issue:

(i) Brief Terms of the Rights Issue:

a) Description of issue:

b) Size of the proposed issue Rs. ______ divided into __________ of

Rs. __________ each
c) Face value of the share
d) Basis of determination of price of
the right issue
e) Proportion of new issue to existing
issued shares with condition, if any
f) Date of meeting of board of
directors (BoD) wherein the right
issue was approved
g) Names of directors attending the
BoD meeting
h) Brief purpose of utilization of right
issue proceeds
i) Purpose of the Right Issue - Details • Total funds required for the project:
of the main objects for raising • percentage of funds financed through
funds through present right issue. the right issue:
• percentage of funds financed from
other sources, if any;

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 • time of completion of project.
• Impact on production capacity

j) ‘Minimum level of subscription’ -------%

(MLS) The Board shall clearly pronounce the
options in case MLS is not achieved.
k) “Application Supported by Blocked amount” (ASBA) facility, if any, will be
provided for subscription of right shares

(ii) Principal Purpose of the Issue and funding arrangements:

A. Details of the principal purpose of the issue.

a. Summary item-wise breakup of the proceeds to be utilized both in terms of
amount & %age of total allocation made to the relevant item, along with
percentage completion status of the relevant item. Additional information may
also be included, as needed, to make the table give complete, concise and clear
picture.
B. Additional disclosures relating to purpose of the issue shall be made in case of the
following:

a) If purpose of the issue is to finance a project:

Details of:
• Total Cost required for the project;
• Sources of Funding;
• Status of Debt Financing if any;
• Project completion status
• location of the project;
• Working capital requirement of the project: - all details, along with following,
as specified in 8(ii)(b) of this schedule be included here.
✓ Basis of estimation of working capital requirement, along with relevant
assumptions.
✓ If no working capital is shown as a part of the project for which the issue is
being made, the reasons for the same.
• plant and machinery, technology, process, etc. – all details as specified in 8(ii)(c)
of this Schedule be included here;
• land, building – all details as specified in 8(ii)(d) of this Schedule be included
here;
• Following information regarding persons or entities with whom any agreement
is entered into:

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 ✓ Place of registration and year of incorporation.
✓ Nature of business
✓ paid up share capital.
✓ Net worth
✓ Revenue
✓ general information relevant to the issuer.
• Pre and post expansion production capacity of the Issuer, if applicable.

b) If purpose of the issue is to finance working capital:

• Specify activities that are classified as working capital.
• Basis of estimation of working capital requirement, along with relevant
assumptions.
• Reasons for raising additional working capital, substantiating the same with
relevant facts and figures.
• Total envisaged working capital requirement in a tabular form, the margin
money thereof and the portion to be financed by any bank(s) or otherwise.
• Cash Conversion Cycle in Number of days for last three years (days inventory
outstanding + days sales outstanding - days payables outstanding)

years years years

Cash Conversion Cycle (in days)

c) If purposes of the issue is to purchase Plant/ Equipment/ Technology:

• Details shall be given in a tabular form, which shall include the details of the
machines required to be bought by the issuer, cost of the machines, name of
the suppliers, date of placement of order and the date or expected date of
supply, etc.
• The percentage and value terms of plant and machinery delivered
• The percentage and value terms of the plant and machinery for which orders
are yet to be placed.
• If second-hand machinery is bought or proposed to be bought, if any, the issuer
shall include valuation report (as envisaged in the Regulations) as part of the
disclosure. Information contained herein should include useful life of machines,
balance estimated life, performance guarantee etc., impact on production
capacity, impact on market share.
✓ purchase date, chronological transfer of the building, plant, equipment,
machinery; initial useful life; remaining useful life; in case initial useful lime
estimate has been revised (detail and reason of such revision),
repair/maintenance cost incurred;
✓ expected working capital expenditure during next 3 years.
• In case plant is bought from a foreign supplier, for both new and second-hand

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 plant & machinery/equipment, the date when the payment for purchase of
plant etc. was made, the date when it reached in the country, reasons of time
lag in the purchase payment and arrival date; requisite formal approvals from
other regulatory bodies; reference to the purchase payment in relevant books
of accounts.

d) If the purpose of the issue is to acquire Land:

• location of the land
• area of the land
• estimated cost of the land
• details of whether the land has been acquired by the Issuer
• Title of the land
• Property agent hired for the execution of purchase
• Comparable value of the property in the vicinity.
• If the party from whom land is being acquired is a related party, status be
disclosed.
• For related party transaction, rationale as to how the transaction is an arm’s
length transaction.

e) If the purpose of the issue is to acquire intangible assets:

• Nature of the asset
• Title of the asset
• Estimated cost of the asset
• If the party from whom intangible asset is being acquired is a related party,
status be disclosed.

f) If purpose of the issue is loan/debt repayment:

• details of loan proposed to be repaid such as name of the lender, brief terms
and conditions and amount outstanding;
• dates of receipt of loan from directors;
• details whether the loan is pledged against any financing facility
• in case the loan is given by the directors, table containing date of deposit of
loan in bank account of the company and subsequent utilization of the same.
• Reasons of issuing right for payment of loan
• Impact of loan repayment on financial position of the company.

g) If purposes of the issue is BMR/investment in greenfield project:

• Details of source of funding.
• Status of debt financing, if any.
• Details regarding financial close of the project.
• Details of letter of credit, if applicable.

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 • Utilization of the proceeds:
• Breakup of the funds required and funds already deployed
• Working capital requirement of the project:
✓ Basis of estimation of working capital requirement, along with relevant
assumptions.
✓ If no working capital is shown as a part of the project for which the issue is being
made, the reasons for the same.
• Implementation schedule of the project like land acquisition, execution of civil
works, installation of plant and machinery, date of trial production, date of
commercial production.
• Details regarding implementation of the project.
• Pre and post expansion production capacity of the Issuer, if applicable.

(iii) General Requirements:

a) Where the issuer proposes to undertake more than one activity or project, such as
diversification, modernization, expansion, etc., the total project cost activity-wise
or project wise, as the case may be.
b) Where the issuer is implementing the project in a phased manner, the cost of each
phase including the phase, if any, which has already been implemented.
c) Details of all material existing or anticipated transactions in relation to the
utilization of the issue proceeds or project cost with promoters, directors, key
managerial personnel, associate companies.

(iv) Financial effects arising from right issue

Measurement Pre – Post Increase in
Unit Issue Issue Percentage
(%)
Authorized Capital
Paid-up-Capital
Net Asset/Breakup value per
share
Gearing Ratio
Production Capacity
Market Share

(v) Total expenses to the issue: (i) bankers’ commission (ii) others, if any.

(vi) Details of underwriters:

Name of the Underwriter Amount Underwritten Associated
Company/Associated
Undertaking of the Issuer

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 (YES/NO)

(vii) Commitments from substantial shareholders/directors:

Name of the Status Number of Amount Shareholding Shareholding
person (Substantial Shares Committed % - pre- % - post
Shareholder/Dire Committed to be to be issuance issuance
ctor) Subscribed Subscribed

(viii) Fractional shares: Fractional shares, if any, shall not be offered and all fractions less
than a share shall be consolidated and disposed of by the company and the proceeds
from such disposition shall be paid to such of the entitled shareholders as may have
accepted such offer;

(ix) Important Dates:

(Name of the Issuer)
Tentative Schedule for Issuance of Letter of Rights
Book Closure: From dd/mm/yy to dd/mm/yy (both days inclusive)
S.No Procedure Day Date
1 Date of credit of unpaid Rights into CDC in Book Entry Form
2 Dispatch of Letter of Right (LOR) to physical shareholders
3 Intimation to Stock Exchange for dispatch of physical Letter of Rights
4 Commencement of trading of unpaid Rights on the Securities Exchange
5 Last date of trading of letter of Rights
6 Payment of subscription amount start date
7 Last date for acceptance of payment
8 Allotment of shares and credit of Shares into CDS
9 Date of dispatch of physical shares certificates

8. Subscription Amount Payment procedure:

(i) Payment as indicated above should be made by cash or crossed cheque or demand
draft or pay order made out to the credit of “<Issuer Name> Right Shares Subscription
Account” through any of the authorized branches of above mentioned bank(s) on or
before dd/mm/yy along with this Right Subscription Request* duly filled in and signed
by the subscriber(s).
(ii) Right Subscription Request can be downloaded from …………………………………….

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 (iii) In case of Non-Resident Pakistani / Foreign shareholder, the demand draft of
equivalent amount in Pak Rupees should be sent to the Company Secretary, (Issuer
Name) at the registered office of the issuer along with Right Subscription Request (both
copies) duly filed and signed by the subscriber(s) with certified copy of NICOP /
Passport well before the last date of payment.
(iv) All cheques and drafts must be drawn on a bank situated in the same city where Right
Subscription Request is deposited. Cheque is subject to realization.
(v) The Bank will not accept Right Subscription Request delivered by post which may reach
after the closure of business on dd/mm/yyyy, unless evidence is available that these
have been posted before the last date of payment.
(vi) Payment of the amount indicated above to the issuer’s Banker(s) to the issue on or
before dd/mm/yyyy shall be treated as acceptance of the Right offer.
(vii) After payment has been received by the Company’s banker(s), the Right Securities will
be credited into respective CDS Accounts within 14 business days from the last
payment date. Paid Right Subscription Request will not be traded or transferred.

9. Profile of management and sponsors

(i) Profile of directors (names, executive/ nonexecutive/independent/nominee director

and tenure of directorship held)
(ii) other directorships held (provide names of the company(ies))
(iii) Profile of sponsors
(iv) If sponsor is company registered in Pakistan, date of incorporation, names of directors
% age of shareholding.
(v) If sponsor is foreign registered company, % age of shareholding, Form 43, form 45 be
provided.

10. Financial Details of the Issuer

(i) financial highlights of issuer for last three years
Audited Audited Audited
Account Year Accounts Year Accounts
Year…
Name of the Statutory Auditor
Gross Revenue/Sale
Gross Profit
Profit before interest & Tax
Profit after tax
Net Profit/Loss
Accumulated Profit/Loss
Total Assets

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 Total Liabilities
Net Equity
Break-up value Per Share
Earnings/Loss per share
Dividend Announced
Bonus Issue
(ii) financial highlights for preceding one year of consolidated financial statements same
as (B) above,
(iii) Detail of issue of capital in previous five years
Right Issue FY____ FY____ FY____ FY____ FY____
Percentage
Number of Shares
Amount Raised
Unsubscribed portion
Unsubscribed portion
allotted by BoD
Unsubscribed portion taken
up by the Underwriter
Proceed utilization break
up….
(iv) Average market price of the share of the issuer during the last six months
(v) Share Capital and Related Matters
a) Pattern of shareholding of the issuer in both relative and absolute terms.
b) Number of shares held by the directors, sponsors & substantial shareholders of
the Issuer (both existing and post right issue).
c) Details and shareholding of holding company, if any.

11. Risk Factors:

(i) Each risk factor shall appear in the following manner
a) Risk as envisaged by the issue;
b) Proposals, if any, to address the risk.
(ii) Risk factors shall be classified as internal and external risk factor.
(iii) Risk factors shall be disclosed in the descending order of materiality.
(iv) All possible risk factors relating to business of the company, the project, technology,
competition, suppliers, consumers, industry, liquidity, regulatory, changes in Govt.
policies, law and order situation, capital market, pending litigations, defaults etc. shall
be disclosed.
(v) Additional risk factors relating to the following areas shall necessarily be disclosed in
the offer document, wherever applicable:
a) Approvals that are yet to be received by the issuer;
b) Seasonality of the business;

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 c) Risk associated with orders not having been placed for plant and machinery in
relation to the principal purpose of the issue;
d) Lack of experience of the Management to run the business;
e) If the issuer has incurred losses in the last three financial years;
f) Dependence of the issuer or any of its business segments upon a single customer
or a few customers
g) Loans, if any, taken by the issuer and its subsidiaries that can be recalled at any
time.
h) In case of outstanding debt instruments, any default in compliance with the
material covenants;
i) Default in repayment of loan by the issuer and associated group companies, if any.
j) Potential conflict of interest of the Sponsors, substantial shareholders or directors
of the issuer if involved with one or more ventures which are in the same line of
activity or business as that of the issuer.
k) Excessive dependence on any key managerial personnel for the project for which
the issue is being made.
l) Any material investment in debt instruments by the issuer which are unsecured.
m) Pending legal Proceeding against the issuer and associated group companies,
which could have material adverse comments.
n) Negative cashflow from operating activities in the last three preceding financial
years.
o) Any restrictive covenant that could hamper the interest of the equity shareholders
p) Low credit rating of the Issuer.
q) Dependence of the issuer or any of its business upon a single customer or few
customers, loss of any one or more may have material adverse effect on the issuer.
r) Any portion of the issue proceed that is proposed to be paid by the issuer to the
sponsors, directors or key management personnel of the issuer.
(vi) A statement that ‘to the best of our knowledge and belief all risk factors have been
disclosed’ shall be given immediately after the risk factor by the authorized
officer/Management.

12. Legal proceedings

(i) Any outstanding legal proceeding other than the normal course of business involving
the issuer, its sponsors, substantial shareholders, directors and associated companies,
over which the Issuer has control, that could have material impact on the issuer.
(ii) Action taken by the securities exchange against the issuer or associated listed
companies of the issuer during the last three years due to noncompliance of the its
regulations.
(iii) Legal proceedings be summarized in the following format:

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 Legal Order Issuing Tax Period, Order Amount/ Current Management's
dated Authority if any Financial Impact status Stance
(PKR Mn)

13. Signatories to the Offer document:

(i) List of the signatories to the offer document and their signatures in original duly dated
and witnessed.

Schedule II]22

The Companies ( Further Issue of Shares) Regulations, 2020

Sr. Name of Comment Whether the Proposed Rationale

No the received Company agree/ change, if
Person disagree to the agreed.
comment

[No. CSD/CI-Reg/14/2018]

(Bilal Rasul)
(Secretary to the Commission)

22
Substituted vide S.R.O 1754(I)/2022 dated September 16, 2022

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