June 29,
1999
Companies (Asset
Backed Securitization) Rules.
S.R.O. 781 (I)/99.- The
following draft of the Companies (Rehabilitation of Sick Industrial Units) Rules, 1999,
which are proposed to be made in exercise of the powers conferred by sections 296 and 506
of the Companies Ordinance, 1984 (XLVII of 1984), read with section 43 of the Securities
and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) is hereby published as
required by sub-section (2) of section 506 of the Companies Ordinance, 1984 (XLVII of
1984) for the information of all persons likely to be affected thereby and notice is
hereby given that the draft will be taken into consideration after fourteen days of its
publication in the official Gazette.
Any objection or suggestion
which may be received from any person in respect of the said draft before the expiry of
the said period will be considered by the Securities and Exchange Policy Board.
THE COMPANIES
(REHABILITATION OF SICK INDUSTRIAL UNITS) RULES, 1999
S.R.O.782 (I)/99.- In
exercise of the powers conferred by section 296, read with section 506, of the Companies
Ordinance, 1984 (XLVII of 1984), and clause (b) of section 43 of the Securities and
Exchange Commission of Pakistan Act, 1997 (XLII of 1997), the Securities and Exchange
Policy Board hereby makes the following rules, the same having been published previously
as required under the said section 506, namely:-
THE COMPANIES
(REHABILITATION OF SICK INDUSTRIAL UNITS) RULES, 1999
PART I - PRELIMINARY
1. Short title and
commencement.- (1) These rules may be called the Companies (Rehabilitation of Sick
Industrial Units) Rules, 1999.
(2) They shall come into
force at once.
(3) They shall apply to all
industrial companies.
2. Definition.- (1)
In these rules, unless there is anything repugnant in the subject or context,-
(a) "Bankers'
Committee" means the Committee constituted by the State Bank of Pakistan comprising
Heads of banks and financial institutions to implement the recommendations of the State
Bank of Pakistan Coordination Committee relating to the revival of sick units;
(b) "Chairman"
means the Chairman of the Task Force;
(c) "Commission"
means the Securities and Exchange Commission of Pakistan;
(d) "Industrial
Company" means a company which owns one or more industrial units;
(e) "Member"
means a Member of the Task Force;
(f) "Ordinance"
means the Companies Ordinance, 1984 (XLVII of 1984);
(g) "Sick Industrial
Company" means an industrial company (being a company registered for not less than
five years) which has at the end of any financial year accumulated losses equal to or
exceeding its entire net worth and has also suffered cash losses in such financial year
and the financial year immediately preceding such financial year.
Explanation.- For the
purposes of this clause-
(i) "cash loss"
means loss as computed without providing for depreciation;
(ii) "net worth"
is the sum total of the paid up capital and free reserves;
(iii) "free
reserves" means all reserves credited out of the profits and share premium account
but does not include reserves credited out of re-evaluation of assets, write back of
depreciation provisions and amalgamation.
(h) "Task Force"
means a Task Force constituted and set up in terms of sub-section (2) of section 296 of
the Ordinance for revival of sick industrial units.
(i) "Vice
Chairman" means the Vice Chairman of the Task Force.
PART II - ESTABLISHMENT
OF TASK FORCE FOR REVIVAL OF SICK INDUSTRIAL UNITS
3. Constitution of Task
Force.- (1) There shall be constituted and established a Task Force to be known as the
"Task Force for Revival of Sick Industrial Units" to exercise the jurisdiction
and powers and to discharge the functions and duties conferred or imposed on it by section
296 of the Ordinance or under these rules.
(2) The Task Force shall
consist of a Chairman, a Vice Chairman and not less than five and not more than twelve
other Members to be appointed by the Federal Government.
(3) The Chairman, Vice
Chairman and other Members of the Task Force shall be persons of ability, integrity and
standing who have special knowledge and experience in banking, industry, law, finance and
accountancy.
4. Secretariat of the
Task Force.- The Task Force shall have a permanent secretariat at the head office of
the Habib Bank Limited, Karachi.
5. Powers and functions
of the Task Force.- Without prejudice to the generality of the provisions of section
296, the Task Force shall, for the purposes of the role assigned to it under the said
section or under these rules, have the same power as are vested in a court under the Code
of Civil Procedure, 1908 (Act V of 1908), while drawing up a rehabilitation plan, in
respect of the following matters, namely,-
(a) enforcing the
attendance of persons and having them on oath or affirmation;
(b) compelling the
discovery and production of books and papers and any material objects;
(c) issuing commissions for
examination of witness.
6. Finances.- (1)
All finances for the working of the Task Force shall be borne by the banks and financial
institutions jointly who are represented on the Bankers' Committee.
(2) The requirements of
finances for the Task Force shall be determined by it in its meetings from time to time
and shall be apportioned to the financiers through consensus.
7. Procedure and conduct
of the business.- (1) The following procedure shall be followed for the conduct of the
business of Task Force, namely:-
It shall -
(i) prepare and furnish
recommendations for a company to be declared as a sick industrial company in terms of
sub-section (1) of section 296 of the Ordinance;
(ii) after a company has
been declared 'sick' by the Commission, prepare rehabilitation plan for the sick
industrial company and submit the same to the Commission for publication in accordance
with sub-section (4) of section 296 of the Ordinance;
(iii) examine the
objections received in respect of the rehabilitation plan and submit its recommendations
to the Commission in this regard;
(iv) prepare and submit for
approval of the Commission, final rehabilitation plan for a sick industrial company;
(v) monitor the
implementation of the rehabilitation plan; and
(vi) report any
non-compliance with the rehabilitation plan to the Commission.
(2) In the performance of
its functions, the Task Force shall act on the advice of the Commission and in accordance
with the recommendations of the Bankers' Committee.
(3) While submitting the
rehabilitation plan to the Commission, a copy of the same shall be sent to the Bankers'
Committee and also to the sick industrial company.
8. Reference to the Task
Force.- The Task Force shall not undertake to make its recommendations for declaration
of a company as a sick industrial company or to prepare a rehabilitation plan for a sick
industrial company unless a recommendation has been received from the Bankers' Committee.
9. Decisions by the Task
Force.- All decisions of the Task Force shall be taken by a majority vote in a meeting
of the Members and shall be expressed in the form of recommendations.
PART III - MEETINGS AND
OTHER MATTERS
10. Meetings of the Task
Force.- (1) The quorum of a meeting of the Task Force shall be five Members.
(2) Every meeting shall be
presided over by the Chairman or in the case of his absence by Vice Chairman.
(3) The Task Force may hold
its meetings on such dates and at such places as it may deem fit.
(4) The Task force shall
meet at least twice every month.
(5) The Chairman shall have
the authority to convene or adjourn the meeting.
(6) In the case of the
difference of opinion among the Members, the opinion of the majority present at the
meeting shall prevail and decision of the Task Force shall be expressed in terms of the
views of the majority. Any Member dissenting from the majority view, may record his views
separately. If the members are evenly divided in their opinions, the Chairman shall have a
second or a casting vote.
11. Appointment of
advisers and consultants.- The Task Force may, on such terms and conditions as it may
deem fit, employ and pay consultants and agents and technical, professional and other
advisers including without limitation, bankers, stock-brokers, surveyors, valuers,
actuaries, accountants, lawyers, and other persons to transact any business or to do any
act required to be transacted or done in the exercise of its powers, the performance of
its functions or for the better implementation of the purposes of these rules.
12. Protection of action
taken in good faith.- No suit or other legal proceedings shall lie against the Task
Force or its Chairman or Vice Chairman or any of its other Members to discharge any
function under these rules for any loss or damage caused or likely to be caused by any
action which is in good faith done or intended to be done in pursuance of these rules.
13. Removal of
difficulties.- If any difficulty arises in giving effect to any provision of these
rules, the Policy Board may, by notification in the official Gazette, make such provisions
as may appear to it to be necessary for the purposes of removing the difficulty.
--------------------------------------------------------------------------------------
No.296/Com.(CL)/99
( MUHAMMAD SIDDIQUE )
Joint Registrar of Companies
(H.q.)
Back
June
14, 1999
Amendment of the
Ordinance XLVII of 1984, Ordinance XXXI of 1980, and Act XLII of 1997.
1. Amendment of the
Ordinance XLVII of 1984.- The following further amendments shall be made in the
Companies Ordinance, 1984 (XLVII of 1984), namely:-
(1) In section 86, in
sub-section (1), in the proviso for the full stop, at the end, a colon shall be
substituted and thereafter the following new proviso shall be added, namely:-
"Provided further that
a public company may reserve a certain percentage of further issue for its employees under
"Employees Stock Option Scheme" to be approved by the Commission in accordance
with the rules made under this Ordinance."
(2) For section 90, the
following shall be substituted, namely:-
" 90. Classes and
kinds of share capital.- A company limited by shares may have different kinds of share
capital and classes therein as provided by its memorandum and articles:
Provided that different
rights and privileges in relation to the different classes of shares may only be conferred
in such manner as may be prescribed.".
(3) In section 95, for
sub-section (4), the following shall be substituted, namely:-
"(4) Nothing in this
section shall prevent --
(a) a company from
redeeming any shares or any other redeemable security issued in accordance with the
provisions of this Ordinance; and
(b) a listed company from
purchasing its own shares in accordance with the provisions of this Ordinance.".
(4) After section 95
amended as aforesaid, the following new section shall be inserted, namely:-
"95A. Power of
company to purchase its own shares.- (1) Notwithstanding anything contained in this
Ordinance or any other law for the time being in force or the memorandum and articles, a
listed company may, subject to the provisions of this section and the rules framed by the
Commission in this behalf, purchase its own shares (hereinafter in this section referred
to as "purchase").
(2) The purchase shall be
authorized by a special resolution which shall indicate the maximum number of shares to be
purchased; the maximum price at which the shares may be purchased; and the period within
which the purchase is to be made.
(3) The notice of the
meeting in which the special resolution authorizing the purchase of shares is proposed to
be moved, shall be accompanied by an explanatory statement containing all material facts
including the following:-
a) justification for the
purchase;
b) source of funding;
c) effect on the financial
position of the company; and
d) nature and extent of the
interest, if any, of every director, whether directly or indirectly.
(4) The purchase shall
always be in cash and shall be out of the distributable profits.
(5) Where shares are
purchased by a company on premium, the amount of premium shall be charged to Share Premium
Account of the company or in the absence of any balance therein, to the distributable
profits of the company.
(6) Where purchase is made
at a price lower than the nominal value of shares, the difference shall be credited to the
reserve created under sub-section (10).
(7) The company shall have
such debt equity and current ratios as may be prescribed.
(8) The majority of the
directors including the chief executive, shall at a meeting make a declaration of solvency
verified by an affidavit to the effect that they have made a full inquiry into the affairs
of the company, and that after having done so, they have formed the opinion that the
company shall continue to operate as a going concern and that it is capable of meeting its
liabilities on time during the period upto the end of the immediately succeeding financial
year.
(9) The purchase shall be
made through a tender system and the mode of tender shall be decided by the company in
general meeting through a special resolution.
(10) The shares purchased
under this section shall not be resold and shall be cancelled forthwith. The amount of the
company's paid up share capital shall be diminished by the nominal value of such shares
accordingly. The amount by which the company's paid up share capital is thereby diminished
on cancellation of the shares purchased shall, after accounting for the credit, if any,
pursuant to sub-section (6) of this section, be transferred from the distributable profits
to an account to be called "Capital Re-purchase Reserve Account".
(11) The provisions of this
Ordinance relating to the reduction of a company's share capital apply as if the Capital
Re-purchase Reserve Account were paid-up share capital of the company, except that the
reserve account may be applied by the company in paying up its unissued shares to be
allotted to members of the company as fully paid bonus shares.
(12) Where a company has
purchased its own shares under this section, it shall maintain a register of shares so
purchased and enter therein the following particulars, namely:-
(i) numbers of shares
purchased;
(ii) consideration paid for
the shares purchased;
(iii) mode of purchase; and
(iv) the date of
cancellation of such shares.
(13) A return about the
purchase of shares under this section containing such particulars relating to purchase as
may be prescribed, along with the declaration of solvency made under sub-section (8),
shall be filed with the Commission and the registrar within thirty days of the purchase.
(14) If a company makes
default in compliance with the provisions of this section, the company shall be liable to
a fine which may extend to one million rupees and any officer of the company who is
knowingly and willfully in default shall also be punishable with imprisonment for a term
which may extend to six months, or with fine which may extend to one million rupees, or
with both.".
(5) After section 197, the
following new section shall be inserted, namely:-
"197A. Prohibition
regarding distribution of gifts.- (1) Notwithstanding anything contained in this
Ordinance, a company shall not distribute gifts in any form to its members in its
meetings.
(2) If default is made in
complying with this section, the company and every officer of the company who is a party
to the default shall be liable to a fine not exceeding five hundred thousand
rupees.".
2. Amendment of the
Ordinance XXXI of 1980.- The following amendments shall be made in the Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980), namely:-
(1) In section 2, in
sub-section (1), clause (a) shall be re-lettered as clause (ab) and before that clause the
following clause shall be inserted, namely:-
(a) "Commission"
means the Commission as defined in the Securities and Exchange Commission of Pakistan Act,
1997 (XLII of 1997);".
(2) In sections 19, 20 and
22, for the words "Federal Government", wherever occurring, the word
"Commission" shall be substituted.
(3) In section 32, -
(a) the existing section
shall be re-numbered as sub-section (1) of that section; and
(b) after sub-section (1),
re-numbered as aforesaid, the following new sub-section shall be added, namely:-
"(2) Any person
aggrieved by an order passed under sub-section (1) may, within sixty days of such order,
prefer an appeal to the Commission.".
3. Amendment of the Act
XLII of 1997.- The following amendments shall be made in the Securities and Exchange
Commission of Pakistan Act, 1997 (XLII of 1997), namely:-
(1) In section 20, in
sub-section (4), in clause (o), after the comma, occurring after the word
"Ordinance", the words, commas, figures and brackets "the Securities and
Exchange Ordinance, 1969 (XVII of 1969), the Modaraba Companies and Modaraba (Floatation
and Control) Ordinance, 1980 (XXXI of 1980)." shall be inserted.
(2) In section 20, after
sub-section (6), the following new sub-section shall be added, namely:-
"(7) The Commission,
and the Commissioner or officer to whom any of the functions or powers have been delegated
under section 10 may, for the purposes of a proceeding or enquiry, require anyone-
(a) to produce before, and
to allow to be examined and kept by, an officer of the Commission specified in this
behalf, any books, accounts or other documents in the custody or under the control of the
person so required, being documents relating to any matter the examination of which may be
considered necessary by the Commission or such Commissioner or officer; and
(b) to furnish to an
officer of the Commission specified in this behalf such information and documents in his
possession relating to any matter as may be necessary for the purposes of the proceeding
or enquiry.".
(3) In section 23, in
sub-section (2), for clause (c), the following shall be substituted, namely:-
"(c) taxes, fees,
penalties or other charges levied under this Act, the Ordinance, the Securities and
Exchange Ordinance, 1969 (XVII of 1969), the Modaraba Companies and Modaraba (Floatation
and Control) Ordinance, 1980 (XXXI of 1980), and under any other law for the time being
administered by the Commission; and"
Back
January 14, 1999
Amendment in the
investment companies and investment advisers rules, 1971.
S.R.O. (I)/99.- In exercise of the powers
conferred by section 32 of the Securities and Exchange Ordinance, 1969 (XLVII of 1969),
the Federal Government is pleased to direct that the following further amendments shall be
made in the Investment Companies and Investment Advisers Rules, 1971, namely:-
In the aforesaid Rules,-
(I) In rule 2,-
(a) in clause (d), for the word "Schedule" the words "First Schedule"
shall be substituted; and
(b) in clause (g) for the
full stop, at the end, the semicolon and word ";and" shall be added and
thereafter the following new clause shall be added, namely:-
"(h) "Schedule" means a schedule to these rules.";
(II) in rule 4,-
(i) in clause (a), for the words, comma, figures and brackets "Companies Act, 1913
(VII of 1913)" the words, comma, figures and brackets "Companies Ordinance, 1984
(XLVII of 1984)" shall be substituted; and
(ii) in clause (b),-
(a) for the word
"twenty", the words "one hundred" shall be substituted; and
(b) for the semicolon a colon shall be substituted and thereafter the following proviso
shall be inserted, namely-
"Provided that an existing investment company shall raise its capital to one hundred
million rupees within a period of three years;";
(III) in rule 5, in
sub-rule (2) for the full stop at the end a colon shall be substituted and thereafter the
following proviso shall be added, namely:-
"Provided that in case an investment adviser is an adviser to more than one
investment company, the application shall be accompanied by an undertaking that the
investment adviser shall invest or arrange the investment for a minimum period of two
years.";
(IV) in rule 6, in sub-rule (2), for the full stop, at the end, a colon shall be
substituted and thereafter the following proviso shall be added, namely:-
"Provided that an investment company may invest in the unlisted securities up to ten
per cent and in the government securities and rated fixed income securities having minimum
investment grade rating up to twenty per cent of its total investment portfolio subject to
such conditions as the Authority may notify in the official Gazette.";
(V) in rule 7, in sub-rule (1), in clause (a), after the word "made", the commas
and words ",or has arranged to make," shall be inserted;
(VI) in rule 17,-
(i) in sub-rule (1),-
(a) in clause (a), for the
word "fourteen", the word "twenty-one" shall be substituted; and
(b) in clause (b), for the words "two months", the words "sixty days"
shall be substituted;
(ii) in sub-rule (2), for
the words, commas and figure "provisions of the Securities and Exchange Rules,
1971," the words "requirements set out in the Second Schedule to these
rules" shall be substituted.
(VII) in rule 19,-
(i) for clause (a) the
following shall be substituted, namely:-
"(a) that such person is registered as a company under the Companies Ordinance, 1984
(XLVII of 1984), and has capital of not less than twenty million rupees:
Provided that an existing
investment adviser shall raise its capital to a minimum level of twenty million rupees
within a period of three years.";
(ii) in clause (d) for the
full stop, at the end, semicolon and the word "; and" shall be substituted; and
(iii) after clause (d), amended as aforesaid, the following new clause shall be added,
namely:-
"(e) that such a
person furnishes an undertaking, within ninety days of the grant of a certificate of
registration, that the investment adviser shall furnish evidence to the satisfaction of
the Authority that the personnel employed by it for executive, research or other related
functions possess sufficient educational qualifications and professional experience to
manage funds for the investment companies and rendering advisory services.";
(VIII) in rule 20, for
sub-rule (2) the following shall be substituted, namely:-
"(2) An application under sub-rule (1) shall, besides other documents referred to in
Form III, be accompanied by;-
(a) an undertaking that the
company will at all times maintain a net capital balance in the capital account of an
amount which is not less than one and a half per cent of the paid-up capital; and
(b) receipt evidencing a fee of twenty-five thousand rupees as application process
fee."
(IX) for the words
"THE SCHEDULE" the words "THE FIRST SCHEDULE" shall be substituted;
and
(X) after the first Schedule the following shall be added, namely:-
"THE SECOND SCHEDULE
[See rule 17(2)]
DISCLOSURE REQUIREMENTS FOR INVESTMENT COMPANIES
1. General
(l) Annual report must contain all the information required in this Schedule. Interim
reports must at least contain the statement of assets and liabilities and the investment
portfolio. Where the investment company has paid or proposes to pay an interim dividend,
the amount of dividend should be disclosed.
(2) All reports must contain comparative figures for the previous period except for the
investment portfolio.
(3) The items listed under the statement of assets and liabilities, income statement,
distribution statement, statement of movements in reserves and the notes to the accounts,
where applicable, must be disclosed. It is, however, not mandatory to adopt the format as
shown or to disclose the items in the same order.
2. Statement of assets
and liabilities.
The following must be separately disclosed, namely:-
(i) total value of
investments;
(ii) bank balances;
(iii) preliminary and floatation costs;
(iv) dividends and other receivable;
(v) bank loan and overdrafts or other forms of borrowings;
(vi) dividend payable;
(vii) total value of all assets;
(viii) total value of all liabilities; and
(ix) net asset value.
3. Income statement.
(l) Total investment income
net of withholding tax, broken down by category.
(2) Total other income, broken down by category.
(3) Element of income and capital gains.
(4) An itemized list of various costs which have been debited to the scheme including,--
(a) fees paid to the
investment adviser;
(b) remuneration of the custodian;
(c) amortization of formation costs; director's fee and remuneration;
(d) safe custody and bank charges; auditor's remuneration;
(e) borrowing expenses; legal and other professional fees; and
(f) any other expense borne by the company.
(5) Taxes.
(6) Amounts transferred to and from reserves.
(7) Net income to be carried forward for distribution.
4. Distribution
statement.
(l) Amount brought forward at the beginning of the period.
(2) Net income for the period.
(3) Interim dividend and date of distribution.
(4) Final dividend per share.
(5) Undistributed income carried forward.
5. Statement of
movements in reserves.
(l) Net asset value per share as at the beginning of the period.
(2) Net asset value per share as at the end of the period.
(3) Any item resulting in an increase or decrease in net asset value of the share
including, -
(i) surplus or loss on sale
of investments;
(ii) exchange gain or loss;
(iii) unrealized appreciation or diminution in value of investments; and
(iv) net income for the period less distribution.
(4) Amounts transferred to
and from the revenue account.
6. Notes to the
accounts.
The following matters shall
be set out in the notes to the accounts.
(1) Principal accounting policies:
(a) The basis of valuation
of the assets of the company including the basis of valuation of unquoted and unlisted
securities;
(b) the revenue recognition policy regarding dividend income and other income;
(c) foreign currency translation, if any;
(d) the basis of amortization of formation costs;
(e) taxation; and
(f) any other accounting policy adopted to deal with items which are judged material or
critical in determining the transactions and in stating the disposition of the investment
company.
Note.- Any changes to the above accounting policies and their financial effects upon
the accounts should also be disclosed.
(2) Transactions with
connected persons:
The following transactions
should be disclosed, namely:-
(l) Details of all
transactions entered into during the period between the company and the investment
adviser, or any entity in which these parties or their connected persons have a material
interest; and
(2) name of any director of the investment adviser or any connected person if such a
person becomes entitled to profits from transactions in shares or from management of the
company and the amount of profits to which such person becomes entitled.
(3) Borrowings:
(l) State whether the
borrowings are secured or unsecured and the duration of the borrowings.
(2) Contingent liabilities and commitments of the company.
(3) If the free negotiability of any asset is restricted by statutory or contractual
requirements, this must be stated.
7. Contents of the
auditors' report.
The report of the auditor
should state --
(l) whether in the
auditor's opinion, the accounts prepared for that period have been properly prepared in
accordance with the relevant provisions of the rules;
(2) without prejudice to the foregoing, whether in the auditor's opinion, a true and fair
view is given of the disposition of the company at the end of the period and of the
transactions of the scheme of the period then ended;
(3) if the auditor is of the opinion that proper books and records have not been kept by
the company or the accounts prepared are not in agreement with the company's books and
records, that fact; and
(4) if the auditor has failed to obtain all the information and explanations which, to the
best of his knowledge and belief, are necessary for the purpose of the audit, that fact.
8. Investment portfolio.
(l) Number or quantity of
each holding together with the description and market value.
(2) The total investment stated at cost.
(3) The value of each holding as a percentage of the total investments.
(4) Statement of movements in portfolio holdings since the end of the preceding accounting
period.
9. Performance table.
(l) A comparative table covering the last three financial years and including, for each
financial year, at the end of the financial year.--
(a) total net asset value;
and
(b) net asset value per share.
(2) A performance record
over the last ten financial years; or if the company has not been in existence during the
whole of that period in which it has been in existence, showing the earnings per share and
dividend distribution during each of those years.
(Syed Samsamul Haq)
Joint Secretary
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