1. IPOs & Exchange Listing Regulatory Requirements & Compliance Presented by: Mr. Salman Ali Bokhari Head of Corporate Finance Presented at: Pakistan IPO Summit April 29, 2013

2. Regulatory Framework » Ordinances/Acts » SECP-Securities and Exchange Ordinance » SECP-Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Ordinance » SECP Rules » SECP-Code of Corporate Governance » SECP-Companies (Buy-Back of Shares) Rules » SECP-Companies (Issue of Capital) Rules » SECP Guidelines » Issue of Commercial Paper » Issue of TFCs » Prohibition of Insider Trading » Exchange » Provisionally Trading Company » Listing Regulations 2

3. PRE-LISTING MATTERS & REQUIREMENTS 3

4. Listing Eligibility LSE’s Listing Regulations » Public Limited Company » Minimum Paid-up Capital: Rs. 200 Million » Company’s Equity has NOT been eroded by more than 40%  Issue offered to public must be subscribed by a minimum of 500 Applicants

5. Listing Eligibility LSE’s Listing Regulations » NOT Associate of a Listed Company in default of Listing Regulations » NOT Subsidiary of a Listed Company in default of Listing Regulations » Promoters/Sponsors/Controlling directors are NOT Promoters/Sponsors/Controlling directors of a company in default of Listing Regulations » CEO had not,been a CEO of a company in default of Listing Regulations 

6. Offer Allocation » For Initial Public Offers: Rs. 100 million or 25% of the total Paid- up Capital whichever is higher » For Offer by Existing Shareholders: Rs. 100 million or 25% of the total Paid-up Capital whichever is lower » Allocation of Offered Shares » Upto 20% may be allocated to overseas Pakistanis » Upto 5% may be allocated to employees of the Company » The allocation of shares to: » Sponsors in excess of 25%; and » Allocation of shares, under Pre-IPO placement including employees of the companies/group companies etc., shall not be saleable for a period of 6 months from the date of public subscription.

7. COSTS OF OFFER & LISTING Expense CalculationEstimated Range Underwriting Commission – B. Building = 0.5% x Strike Price x Shares offered through Book Building0.50% Underwriting Commission – G. Public = 1.0% x Offer Price x Shares offered to General Public0.50-1.0% Take up Commission* = 1.5% x Offer Price x Shares subscribed by underwriters0.50-1.5% Bankers to the Offer Commission = 0.2% x Offer Price x Shares offered to General Public0.20% Brokerage to Members of the Exchange = 1.0% x Offer Price x Shares sold through members1.0% LM & BR Fees = 1.0% x Offer Price x Total Offer (Book Building + Public Issue) Fix or %age based 1% Printing, Publication and notice Costs = 1,000,000Estimate Exchange Fees and Listing Charges = 0.1% x Total Paid-up-Capital Max. Rs. 2,500,000 per Exchange CDC Fees and Deposits = 67,500Max. Rs. 67,500 CDC Fresh Issue Fees = 0.01 x Total shares outstanding0.01 per share SECP Application and Processing Fee = 50,00050,000-60,000 Legal & Professional Fees = 1,000,000Estimate Balloting Agent = 750,000750,000 Miscellaneous Cost = 1,000,000Estimate

8. Listing Process Application for Listing Complete Documents Received by Exchange along with Prospectus Checked by Exchange Approval by Company Affairs Committee Application for Approval of Prospectus from SECP Application for Trading Symbol to NCCPL Application for Prospectus Publication + Subscription Date 8

9. Listing Process(Cont ’ d) 9 Application for Prospectus Publication + Subscription Date Checked by Exchange Approval Publication of Prospectus Provisional Listing in case of Public Offer of Rs. 150 Million or above IPO

10. Listing Process(Cont ’ d) 10 IPO Dispatch of Physical and CDC Shares Balloting in case of Over Subscription Underwritten by Underwriters if Under-subscribed Approval Application for NOC and release of funds along with Auditors’ Certificate in case of under-Subscription Advertisement in Newspapers Live in CDC Results Notification to Exchange FORMAL LISTING ON EXCHANGE

11. On-Going Compliance » Dividends: Information to be sent to exchange prior to release » Communication of price sensitive information » Sending copies of annual reports 21 days before meeting of shareholders » Sending copies of quarterly accounts » Annual meeting within 4 months of closing of annual financial year » Furnish certified copies of minutes of AGM and EOGM in 60 days » Compliance of Code of Corporate Governance » Quality of Audit & Appointment of Auditors 11

12. Suspension and Defaulters’ Counter » A listed company may be placed in Defaulters Segment, suspended or delisted for any of the following reasons:- » (a) if its securities are quoted below 50 percent of face value for a continuous period of three years. » (b) if from three years of the date of formal listing, it has not started commercial production in the case of a manufacturing company or has not commenced business in the case of any other company. » (c) if it has failed to hold its annual general meeting for a continuous period of two 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 the listing regulations; » (g) if the company for any reason whatsoever refuses to join the CDS after its securities have been declared eligible securities by the CDC. 12

13. Delisting » Voluntary Delisting: Any company intending to seek voluntary de-listing from the Exchange shall intimate to the Exchange, immediately, of the intention. Minimum purchase price proposed by the sponsors will be the highest of the benchmark price based on any of the following: a.Market Price b.Average Market Price (Annualized) c.Intrinsic value per share (estimated net realizable value of assets of the company) d.Earnings Multiplier approach (for profitable companies) e.The maximum price at which the Sponsors had purchased these shares from the open market in the preceding one year. 13

14. Requirements of Appointment » A person as appointed as an auditor shall be guilty of “professional misconduct” if he:- » Fails to report a material misstatement or fact known to him, » Fails to obtain sufficient information to warrant the expression of an opinion » Makes a statement which is misleading, or deceptive; » Incites any one to commit a criminal offence, » Agrees with anyone to prevent or obstruct the course of justice by concealing, destroying or fabricating evidence » Is guilty of any other act, which is determined as professional misconduct by the Commission 14

15. Listing Fee Structure » Initial Fee: 0.1% of PUC maximum of 2.5 Million » Additional Fee: 0.1% of PUC or 0.4% of actual capital » Annual Fee: 15

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