The Securities and Exchange Rules, 1971

Updated: Sunday May 26, 2013/AlAhad Rajab 17, 1434/Ravivara Jyaistha 05, 1935, at 04:59:24 PM

The Securities and Exchange Rules, 1971

Rules	CONTENTS
1	Short title and commencement
2	Definitions
3	Qualifications for stock exchange membership etc
4	Manner of transaction of member's business
5	Maintenance a/accounts and audit
6	Form of application for registration
7	Maintenance of books of account of and other documents by stock exchanges
8	Maintenance of books of account, etc. by members
9	Submission of periodical returns by stock exchange
10	Submission of annual report by stock exchange
11	Listing of a security on stock exchange etc.
11-A	Limitation for petitions to Federal Government under section 9.
12 to 15	Omitted
16	Mode of filing or submission of returns, etc.
	FIRST SCHEDULE
	Form I Form of application for registration of a stock exchange under section 5 of the securities and exchange ordinance, 1969
	Form II Periodical return under section 6(2) of the securities and exchange ordinance, 1969, relating to the affairs of a stock exchange for the month of
	Form III Form of application under section 9 of the securities and exchange ordinance, 1969 for listing a security of a stock exchange
	Form IV Statement of beneficial ownership of securities under section 12 of the securities and exchange ordinance, 1969
	SECOND SCHEDULE
	Part I General
	Part II Requirements as to balance-sheet
	Part 111 Requirements as to profit and loss account

The Securities and Exchange Rules, 1971

19^th March, 1971

In exercise of the powers conferred by section 33 of the Securities and Exchange Ordinance, 1969 (XVII of 1969), read with the Ministry of Finance Notification No. S.R.O. 261 (1)/70, dated the 26th October, 1970 the Securities and Exchange Authority of Pakistan is pleased to make the following rules, namely:---

1. Short title and commencement:- (1) These rules may he called the Securities and Exchange Rules, 1971.

(2) They shall come into force at once.

2. Definitions:- In these rules, unless the context otherwise requires:---

(a) 'Authority' means the [Corporate Law Authority] of Pakistan;

(b) 'chartered accountant' means a person who is a chartered accountant within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961);

(d) 'net capital' in relation to a member of. stock exchange, means an amount by which the current assets, namely, cash in hand or in hank, money receivable within a period of twelve months from the date of the balance-sheet and such other assets, not being the value of the membership card of the stock exchange, ;is are so classified under generally accepted accounting principles exceed the current liabilities, namely, money payable within period of twelve months from the date of the balance-sheet and such other liabilities as are so classified under generally accepted accounting principles;

(e) 'officer' in relation to an issuer includes managing agents, manager, secretary or accountant of the issuer and any other person who by virtue of his office may be in possession of any material information with regard to the affairs of the issuer;

(f) 'Ordinance' means the Securities and Exchange Ordinance, 1969 (XVII of 1969);

(g) 'section' means section of the Ordinance.

3. Qualifications for stock exchange membership etc:- --The qualifications for membership of, and admission into stock exchange shall be as follows:---

(a) No person shall be eligible to be a member of a stock exchange if:---

(i) he is less than twenty-one years of age;

(ii) he is not a citizen of Pakistan;

(iii) he is a lunatic or a person of unsound mind,

(iv) he has been convicted of an offence involving fraud or breach of trust;

(v) he has been adjudicated an insolvent or has suspended payment or has compounded with his creditors;

(vi) he has not had experience in the business of securities for a period of not less than two years:---

Provided that the regulations of a stock exchange may authorise the governing body thereof to waive compliance with the foregoing condition relating to experience in the business of securities if such person is, in respect of means, integrity and background, considered by the governing body to be otherwise qualified for membership;

(b) A member shall at all times maintain a net capital balance in the capital account of an amount which is,---

(i) in the case of a stock exchange which in the previous calendar year, had on the cash counter a turnover of securities, other than bonus vouchers, exceeding one crore in number not less than [two hundred fifty thousand]rupees; and

(ii) in any other case not less than [seventy-five thousand] rupees:---

Provided that a member who is also the member of any other stock exchange shall maintain a net capital balance of not less than [two hundred fifty thousand] rupees:---

Provided further that, in the case of a firm, the amount of the net capital balance to be maintained shall he the amount obtained by multiplying [seventy-five thousand] rupees or [two hundred fifty thousand] rupees, as the case may be, by the number of such partners of the firm as are members of the stock exchange;

(i) he ceases to be a citizen of Pakistan:---

Provided the, in the case of a stock exchange functioning immediately before the commencement of these rules, the membership of a member thereof who is not a citizen of Pakistan shall become suspended on such commencement and shall remain so suspended until he becomes a citizen of Pakistan; or

(ii) he is declared a lunatic or a person of unsound mind; or

(iii) he is convicted of an offence involving fraud or breach of trust; or

(iv) he has been adjudicated an insolvent or has suspended payment or has compounded with his creditors;

(d) The membership of a member or members who are partners in a firm and who are in active business shall become suspended as soon as the net capital balance falls short of the amount specified in clause (h) and shall remain so suspended until the net capital balance is increased so as not to fall short of that amount;

(e) Every member shall report to the stock exchange weekly that he or the firm of which he is a partner had, at times during the week to which the report relates, a net capital balance of an amount not less than that specified in clause (b) and shall forthwith inform the stock exchange if, at any time, such balance falls short of that amount.

4. Manner of transaction of member's business - (I) All orders to buy or sell securities which a member may receive shall he entered, in the chronological' order, in a register to he maintained by him in a form which shows the name and address of the person who placed the order, the name and number of the securities to he bought or sold, the nature of the transaction and the limitation, if .my, as to the price of the securities or the period for which the order is to lie valid.

2. (a) A member who has an ' at .best ' order from a customer to buy a security shall not, while such order remains unexecuted, buy the same security on the stock exchange for his own account or for the account of the firm of which he is a partner or for the account of any of the partners therein or for any account in which he, such firm or partner, directly or in directly, has an interest.

(b) A member who has an 'at best' order from a customer to sell a security shall not, while such order remains unexecuted, sell the same security on the stock exchange for his own account or for the account of the firm of which he is a partner or for the account of any of the partners therein or for any account in which he such firm or partner, directly or indirectly. has an interest.

(c) A member who has a limited order from a customer to buy a security shall not while such order remains unexecuted, buy the same security at or below the limit price on the stock exchange for his own account or for the account of the firm of which he is a partner or for the account of any the partners therein or for any account in which he, such firm or partner, directly or indirectly, has an interest.

(d) A member who has a limit order from a customer to sell a security shall not, while such order remains unexecuted, sell the same security at or above the limit price on the stock exchange for his own account or for the account of the firm of which he is a partner or for the account of any of the partners therein or for any account in which he, such firm or partner, directly or indirectly has an interest.

(3) A member executing an order to buy or to sell .1 security shall not fill such order by selling or buying for his own accountor for the account of the firm of which he is a partner or for the account of any of the partners therein or for any account in which he, such firm or partner, directly or indirectly, has an interest, except when,---

(a) the order is a limit order; or

(b) (i)he sells the security at a price not exceeding the price at which the transaction immediately preceding the receipt of the order by him actually took place; or

(ii) he buys the security at a price which is not less than the price at which the transaction immediately preceding the receipt of the order by him actually took place.

(4) A member executing an order of a customer shall, within twenty-four hours of the execution of the order, transmit to the customer a confirmation, which .shall include the following information, namely:---

(a) date on which the order is executed;

(b) name and number of the securities;

(d) price;

(e) commission, if the member is acting as a broker;

(f) whether the order is executed for the member's own account or from the market.

5. Maintenance a/accounts and audit - (1) Every member shall prepare once every year a balance-sheet and a statement of income and expenditure.

(2) A member shall have his accounts audited by an auditor who is a chartered accountant to be appointed by the Authority whenever such audit is required by the Authority in the public interest.

(3) The auditor shall furnish his report to the Authority within such time as the Authority may specify.

6. Form of application for registration - An application for the registration of a stock exchange under section 5 shall be made to the Authority in Form I.

7. Maintenance of books of account of and other documents by stock exchanges - (l) Every stock exchange shall prepare and maintain, as required by subsection (1) of section 6, such books of account and other documents as will accurately disclose a true and fair picture of the state of affairs of the exchange any point of time.

(2) The books of account and other documents referred to in sub-rule (1) shall include:---

(a) journals (or other comparable record), cash books and any other records of original entry forming the basis of entries into any ledger;

(b) ledgers (or other comparable record), showing the position in respect of each member as on the settlement day of the securities which the member had bought or sold since the last preceding' settlement day and which had Been transferred through a Clearing House maintained by the stock exchange;

(c) Ledgers (or other comparable record) showing the position in respect of each member as on the settlement day of the securities which the member had bought or sold since the last preceding settlement day and which had been transferred though a Clearing House maintained by the stock exchange;

(d) daily record of quotations and transactions on the stock exchange showing the time at which each transaction took place;

(e) record of transactions with banks;

(f) record of security deposits;

(g) register of members;

(h) register of authorised clerks; and

(i) minute books of the meetings of,---

(i) members;

(ii) governing body;

(iii) any committee of the general body of members or of the governing body.

(3) The books of accounts and documents referred, to in sub-rule (1) shall be preserved for a period of not less than five years.

8. Maintenance of books of account, etc. by members:- (1) Every member shall prepare and maintain as required by subsection (1) of section 6, the following books of account and other documents in a manner that will disclose a true, accurate and up-to-date position of his business, namely,---

(a) journal (or other comparable record), cash books and any other books of original entry forming the basis of entries into any ledger, the books of original entry being such as contain a daily record of all orders for purchase or sale of securities, all purchases and sales of securities, all receipts and deliveries of securities and all other debts and credits;

(b) ledgers (or other comparable records) reflecting asset, liability, reserve, capital, income and expense accounts;

(c) ledgers (or other comparable records) reflecting securities in transfer, securities borrowed and securities loaned and securities bought or sold of which the delivery is delayed;

(d) record of all balance of all ledger accounts in the form of trial balances to be prepared at least once at the end of the six months of every year of account;

(e) record of transactions with the banks:---

(f) contract books showing details of all contracts entered into by a member with other members of the exchange or counterfoils or duplicates of memos, of confirmation issued to such other members; and

(g) duplicates or counterfoils of memos. of confirmation issued to customers.
(2) The books of accounts and other documents referred to in sub-rule (1) shall be preserved for a period of not less than five years.

9. Submission of periodical returns by stock exchange - The periodical return relating to the affairs of a stock exchange, as required by subsection (2) of section 6, shall be submitted to the Authority monthly in Form II within fifteen days of the close of the month to which it relates.

10. Submission of annual report by stock exchange - (1) The annual report relating to the affairs of a stock exchange, as required by subsection (2) of section f). shall he submitted to the Authority not less than fourteen days before the meeting of the shareholders of the stock exchange before which it is to he laid.

(2) Every such report shall he accompanied by a copy of the balance-sheet and profit and less account of such year audited by an auditor who is a chartered accountant.

11. Listing of a security on stock exchange etc.-- An application under subsection (I) of section 9 for listing of a security on a stock exchange shall he made in Form III.

11-A. Limitation for petitions to Federal Government under section 9. A petition to the Federal Government under subsection (3) or subsection {(1} of section 9 shall be made within thirty days of the stock exchange refusing to list or, as the case may he, delist (he security].

12 to 15.......(Omitted by S.R.O. 1234(1)/85. dated 12-12-1985.

16. Mode of filing or submission of returns, etc.-- Any person required by the Ordinance or any of these rules to furnish any document, statement, return or report to the Authority shall furnish it, either in person or through an agent, to the Authority at its headquarters at Islamabad or send it to the Authority by registered post.

THE

FIRST SCHEDULE
See rule 2 (c)

FORM I
(Sec rule 6)
FORM OF APPLICATION FOR REGISTRATION OF A STOCK EXCHANGE UNDER SECTION 5 OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

To
The Corporate Law Authority, Government of Pakistan, Islamabad

Dear Sir,

1. We/I hereby apply for registration of ....................................... (Name of the Stock Exchange) under section 5 of the Securities and Exchange Ordinance 1969.

2. Four spare copies of the Memorandum and Articles of Association of ........................................................... and tour copies of (Name of the Stock Exchange) the rules and/or bye-laws relating to listing of securities and transactions on the Exchange are enclosed

3. Necessary information required in the annex to this form is furnished.

Yours faithfully,

Signature of the applicant

ANNEX TO FORM 1
PART I GENERAL

1. Name of the applicant Stock Exchange _____________

2. Address _____________

3. Date of establishment. _____________

4. As your Exchange a joint stock company registered under the Companies Act. 1913? If so, state whether public or private. If not, the basis of organization may he stated. _____________

5. Give details of your capital structure _____________

PART II MEMBERSHIP

6. What is the proposed member of numbers ? _____________

7. Is there a ceiling to the maximum number of members that you would take? _____________

8. Give details of the minimum qualification and/ or experience for membership _____________

9. If you have different classes of members, give details _____________

10. State the security deposit required from each member, admission fee and the rate of annual subscription _____________

11. Do you insist on your members or partners of firms who are members or partners of firms who are members to divest themselves of other activities either as principals or as employees ? _____________

12. Do your rules permit firms to become members ? State the conditions under which new partners can be admitted? _____________

13. If your rules do not permit firms becoming members, do you permit individual members to form a partnership ? _____________

14. Do your rules permit members to work in partnership with non-members ? If so, give necessary details. _____________

PART III
GOVERNING BODY

15. What will be the strength of your governing body ? Give details of the constitution, powers of management, elections and tenure of office of the members .of the governing body and the manner in which its business is transacted _____________

16. Are trade or commercial interests represented on the governing body? If so, give details. _____________

17. Do you propose to associate shareholders or investors' associations with the management of your Exchange? If so, give details. _____________

18. Give details of any other committee or sub-committee that can be constituted under the bye-laws of your stock exchange alongwith the functions of each. _____________

19. Give the designations, powers and duties of principal office-beares of your Exchange. _____________

PART IV

TRADING

20. Give details of the manner in which trading will be carried on _____________

21. State the different kinds of contracts on your Exchange, e.g. spot, ready and toward. Also state the period of delivery and payment in each case. _____________

22. Give details of the scale of brokers commission and other charges, if any, prescribed by your Exchange _____________

23. Do your rules prescribe a standard form of contract for the use of your members? _____________

24. Do you classify your members into brokers and jobbers ? _____________

25. Do you have any regulations. regarding dealings by members on their own account _____________

26. Do you have regulations regarding extension by members of credit to any person for the purpose of purchasing any security? _____________

27. Do you prescribe the circumstances in which members can borrow on any security or lend on any security carried for the account of a customer ? _____________

28. Do you prescribe the circumstances under which a member can hypothecate any security carried for the account of any customer?
_____________

29. Do you have a Clearing House for the settlement of contracts ? If so, give details of its organization' and management _____________

30. Will you have any arrangements for recording of bargains ? _____________

31. Will you have any arrangements for recording and publishing market rates ? _____________

32. What are the disciplinary powers available with the governing body to enforce due compliance by members of the regulations of the Stock Exchange and generally to ensure proper standard of business conduct ? _____________

PART V
MISCELLANEOUS

33. What will be the conditions subject to which securities can be listed on your Exchange ? _____________

34. What are the criteria for admitting any security to forward trading? _____________

35. Under what circumstances do you have right, if any, to circumscribe or suspend dealings in a listed security ? _____________

36. What provisions have you made for the levy and recovery of fees, fines and penalties ? _____________

FORM II
(See rule 9)

PERIODICAL RETURN UNDER SECTION 6(2) OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969, RELATING TO THE AFFAIRS OF A STOCK EXCHANGE FOR THE MONTH OF

TO
The Corporate Law Authority, Government of Pakistan, Islamabad.]

1. Name of the Stock Exchange _____________

2. (a) Particulars of applications for listing received _____________

(b) Particulars of those admitted to quotation _____________

3. Particulars of securities delisted and reasons thereof in each case _____________

4. Particulars of member disciplined and nature of offence/violation committed _____________

5. Particulars of members declared defaulters _____________

6. Particulars of members whose net capital balance fell below the prescribed amount. _____________

7. Particulars of non-compliance of any regulations of the Stock Exchange by any company whose securities are listed on the Stock Exchange
_____________

8. Trading volume during the month _____________

(a) Spot

(b) Ready _____________

9. Particulars of securities which registered a rise/decline of ten per cent, or more in value during the month _____________

10. Particulars of securities in which no transactions took place during the month _____________

11. Brief analysis of the stock market trends during the month _____________

place ------- Signature

Date ------ Designation

FORM III
(See rule 11)
FORM OF APPLICATION UNDER SECTION 9 OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969 FOR LISTING A SECURITY OF A STOCK EXCHANGE

To
Dear Sir,

We hereby apply for the listing of our _____________________ on your stock exchange,
(Name of the Security)

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

yours faithfully,

Signature and address

ANNEX TO FORM III

1. The following particulars and documents shall be annexes to the listing application, namely:---

(1) Memorandum and Articles of Association and, in case of debentures, a copy of the trust deed;

(2) Copies of prospectus issued by the company in respect of any security already listed on a stock exchange;

(3) copies of balance-sheets and audited accounts for the last three completed years or for a shorter number of years if the company has been in existence only for such years;

(4) A brief history of the company since incorporation giving details of its activities including any reorganizations, changes in its capital structure and borrowings;

(5) A statement showing;

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

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

(6) Certified copies of agreements or other documents relating to arrangements with or between,---

(a) vendors and/or promoters.

(b) underwriters,

(c). brokers.

(7) Certified copies of agreements with,---

(a) managing agents,

(b) selling agents,

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

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

(10) Names and addresses of the directors and persons holding ten per cent, or more of any class of equity security as on the date of application together with the number of shares of debentures held by each.

(11) Particulars of security for which listing is sought.

2. The stock exchange may, either generally by its bye-laws or in any particular case, call for such further particulars or documents or undertaking as it deems proper.

FORM IV
(See rule 13)
STATEMENT*OF BENEFICIAL OWNERSHIP OF SECURITIES UNDER SECTION 12 OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

As at ------

1. Name of the director/ officer/ shareholder _____________

2. Whether a director, officer or shareholder or the issuer _____________

3. Particulars of the securities beneficially owned _____________

4. Name of the stock exchange at which such securities are listed _____________

5. Beneficially owned in the name of _____________

(a) Self No-Rs.—

(b) any other person No -- Rs. –

6. Particulars of any purchases or sales during the month _____________

7. Gain made during the month by the purchase and sale, or the sale and purchase, of any such security within the preceding six months showing date of purchase and purchase and sale or sale and purchase and purchase and sale price thereof _____________

8. Whether such gain has been reported to the issuer ? If so, please furnish evidence _____________

9. Whether such gain has been tendered to the issuer ? If so, please furnish evidence. If not, has a demand therefor been received? _____________

10. Particulars of such gain not tendered to or recovered by the issuer within six months of its accrual _____________

I declare that the information given in respect of my own self and of the persons mentioned above is correct and complete to the best of my knowledge and belief.

Place ------

Date ------

Signature and addresses

N.B.- 1. Please furnish separate statements for each class of equity security of an issuer beneficially owned.

2. The statement must be signed by the beneficial owner himself, and in the case of a company, by the Secretary, Manager, or a Director of the company].

SECOND SCHEDULE
[Sec rule 12 (2)1

PART I GENERAL

In this Schedule, unless there is anything repugnant in the subject or context:---

(i) 'accounting policies' includes the principles, basis, conventions, rules and procedures adopted by directors in preparing financial statements of a company;---

(ii) 'associated companies' and 'associated undertakings' mean any two or more companies or, as the case my be, undertakings interconnected with each other in the following manner namely:---

(a) if a person who is the owner or a partner or director of a company or undertaking or who directly or indirectly, holds or controls shares carrying not less than ten per cent of the coting power in such company or undertaking is also the owner or partner or director of another company or undertaking, or directly or indirectly, holds or controls shares carrying not less than ten per cent of the voting power in that company or undertaking; or

(b) if the companies or undertakings are under common management or control or one is the subsidiary or another; or

(c) if the undertaking is a modaraba managed by the company; then the two companies or undertakings or the companies and undertakings or the company and undertaking, as the case may be, shall be deemed to be 'associated companies' or 'associated undertakings' and the person who is the owner of or a partner or director in a company or undertaking or who so holds, or controls shares carrying not less than ten per cent of the voting power in a company or undertaking, shall be deemed to be an 'associated person' of every such other person and of the person who is owner or a partner or director in such other company or undertaking, or who so holds or controls such shares in such other company or undertaking:---

Provided that the shares shall be deemed to be owned, held or controlled by a person if they are owned, held or controlled by that person or by the spouse or minor children of the person:---

Provided further that:---

(i) directorship of a person or persons by virtue of nomination by the Federal Government or any Provincial Government or a financial institution directly or indirectly owned or controlled by such Government; or

(ii) shares owned by the National Investment Trust or the Investment Corporation of Pakistan or a financial institution directly or indirectly owned or controlled by such Government;- shall not be taken into account for determining the status of a company or undertaking as an associated company, associated undertaking or associated person;

(iii) 'controlled firm' means a firm the management of which is controlled by a company or where the company is entitled to more than fifty per cent of its profits or is liable or is liable to bear more than fifty per cent of its losses;

(iv) 'debts' includes loans and advances and other receivables where it relates to amounts written off and provision for doubtful and bad debts;

(v) 'executive' means an employee other than the chief executive and directors whose aggregate basic salary or remuneration [* * *] exceeds one hundred thousand rupees in a financial year;

(vi) 'financial 'statements' includes balance-sheet, profit and loss account and statement of changes in the financial position or statement of sources and application of funds;

(vii) 'funds' in relation to any reserve, shall be used only where such a reserve is represented by specifically earmarked investments or other assets realizable at not less than the amount of the reserves;'

(viii) 'liability' includes all liabilities in respect of expenditure contracted for and' all contingent liabilities;

(ix) 'prior period items' means charge or credits that arise in the current financial year as a result of errors or omissions in the preparation of' financial statements of one or more prior financial years;

(x) 'provision' means any amount written off or retained by way of providing for depreciation, renewals and diminution in value of assets, or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy:---

Provided that any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, not being an amount written off in relation to fixed assets or any amount retained by way of providing for any known liability, is in excess of that which, in the opinion of the directors, is reasonable necessary for the purpose, the excess shall be treated for the purpose of this Schedule as a reserve and not as a provision.

(xi) 'reserve' subject to the proviso to clause (x) does not include any amount written off or retained by way or providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability;

(xii) 'turnover' means the gross income exclusive of trade discount .shown on invoices of bills, derived from sale of goods or from rendering, giving or supplying services or benefits or from sale of goods or from rendering, giving or supplying services or benefits or from execution of contracts;

(xiii) 'unusual items' means gains or losses that derive from events or transactions which are distinct from the ordinary activities of a company and therefore are not expected to recur frequently or regularly; and

(xiv) any term or expression not defined in the rules or this Schedule shall be construed to mean the same as under the generally recognised accounting principles.

2. The following shall be disclosed in the financial statements namely:---

(i) all material information necessary to make the financial statements clear and understandable;

(ii) if a fundamental accounting assumption, namely, going concern, consistency and accrual is not followed. in preparation of financial statements, that fact together with the reasons therefor;

(iii) significant accounting policies preferably in one place;

(iv) change in an accounting policy that has material effect in the current year or may have a material effect in the subsequent years together with reasons for the change and the financial effect of the change, if material;

(v) the basis of conversion or translation into rupees of assets and liabilities in foreign currencies and the accounting policy followed in respect of exchange, gains or losses;

(vi) particulars of any charge on the assets of the company to secure the liabilities of any other person including, where practicable, the amount so secured;

(vii) where determinable, the capacity of an industrial unit, actual production and the reasons for shortfall, if any, except in a case where the Authority upon an application agrees that such information need not be disclosed in the public interest;

(viii) the general nature of any credit facilities available to the company under any contract, other than trade credit available in the ordinary .course of business, and not availed of at the date of the balance-sheet.

3. Where any suppressed, concealed or unaccounted income, duty or gain has been declared, disclosed or admitted before any authority charged with the assessment, or recovery of any tax, duty or gain by or on behalf of any company, the amount, nature and financial impact thereof on the company shall be disclosed alongwith information as to how the directors have or purpose to treat the same in the financial statements of the company.

3-A. Any penalty (in terms of money or otherwise) imposed under any law by any authority shall be disclosed in the first annual report furnished after the imposition of the penalty. If as a result of any appeal, revision, petition, or review application,, such penalty is reduced, enhanced or waived, the original penalty imposed shall nevertheless be disclosed, and the fact of any reduction, enhancement or waiver.

4. Where any material item shown in the Financial statements or included in amounts shown therein cannot be determined with substantial accuracy, an estimated amount described as such shall be included in respect of that item together with the description of the item.

5. Except for the first financial statements shall also give the corresponding figures for the immediately preceding financial year. This requirement shall, in the case of companies required to prepare half-yearly financial statement shall be applicable according to the immediately preceding corresponding period.

6. No provision with respect to the information to be given in the financial statements shall he deemed to require the amount of any item that is of no material significance to be given separately.

7. Any information required to be given in respect of any of the item in the financial statements shall, if it cannot he included in such statements, be furnished in a separate note, schedule or statement to be attached to, and which shall be deemed to form an integral part of the financial statements.

8. The figures in the financial statements may he rounded off to the nearest thousand of rupees.

9. Where any property or asset, acquired with the funds of the company, is not held in the name of the company or is not in the possession and control of the company, this fact shall he stated: and the description and value of the property or asset, the person in whose name and possession or control it is held shall he disclosed.

10. If any loan or advance has been granted or debt allowed on terms softer than those generally prevalent in trade or any relief or concession allowed in matters of interest, repayment, security or documentation, details with reasons thereof shall he stated alongwith the nature of interest of the company or its directors or other officers.

PART II
REQUIREMENTS AS TO BALANCE-SHEET

1. The assets and liabilities shall be classified under the headings appropriate to the company's business distinguishing as regards assets between fixed assets, long-term prepayments and deferred costs, investments, loans and advance and current assets and as regards liabilities between share capital and reserves, long-term loans, participation term certificates, debentures and deferred liabilities and current liabilities and provisions.

FIXED ASSETS

2. (A) Fixed assets (other than investments) shall be distinguished between tangible and intangible and shall he classified under appropriate sub-head, duly itemized such as,---

(i) tangible:---

(a) land (distinguishing between free-hold and leasehold);

(b) building (distinguishing between buildings on freehold land and those on lease-hold land);

(d) furniture and fittings;

(e) vehicles;

(f) capital work in progress indicating significant itemwise details;

(g) others (to he specified).

(ii) intangible:---

(a) good will;

(b) patents, copyright, trade marks and designs; and

(B) Under each sub-head, other than capital work in progress, the original cost or the amount of valuation, as the case may he, and the additions thereto and deduction therefrom since the date of the previous balance-sheet shall be stated and the aggregate amount written off, or provided retained up to the date of the balance-sheet, by way of provision for deprecation or amortization or diminution in value shall be shown as deduction therefrom.

(C) Where sums have been written off on a reduction of capital or revaluation of assets and where sums have been added by writing up the assets, the first balance-sheet subsequent to the reduction or revaluation or writing up shall show the original costs, the reduced or increased figures as the case may be, alongwith the date and amount of the reduction or increase made, basis thereof and name and qualification of the valuer who should he an independent person competent to do so. Every balance-sheet subsequent to the reduction or revaluation or writing up, shall show the year and the total amount of the reduction or revaluation or writing up and the element thereof excluded from or included in the book value of the asset.

(D) Any exchange, gain or loss in any year, as a consequence of fluctuations in rate of exchange, relative to the foreign currency borrowings out of the proceeds of which assets were acquired may be added to or deducted from the value of the respective assets and where such addition or deduction or deduction is made, the amount thereof under each sub-head shall he disclosed together with the depreciation policy thereof.

(E) In the case of a company which has been providing for depreciation or amortization or diminution in value by way of lump sum charge to profit and loss account or as appropriation of profit without allocating the amount so provided to different sub-heads the amount retained in the books of the company as provision or reserve for depreciation or amortization or diminution in value shall be allocated against the respective sub-head.

(F) In 'every case where the original cost cannot be ascertained without unreasonable expenses or delay, the valuation shall be the net amount at which an asset stood in the books of the company as at the end of last accounting period after deduction of the amount provided or written off for depreciation or amortization or diminution in value.

LONEG TERM INVESTMENTS
3. (A) There shall be shown under separate sub-heads the aggregate amount respectively of the company's,---

(i) investments in subsidiary companies, controlled firms, managed modarabas and other associated undertakings;

(ii) investments in listed companies and modarabas other than those included in clause (i) above;

(iii) investments in unlisted companies and modarabas other than those included in clause (i) above;

(iv) investments in immovable properties;

(v) investments in participation term certificates;

(vi) investment in debentures and bonds issued by a Government, Municipal Committee or other local authority;

(vii) other investments (to be specified).

(B) Under each of the sub-heads of paragraphs 3 (A), where applicable there shall be stated,---

(i) the nature and extent of the investment made;

(ii) the name of each company, modaraba, firm, Government, Municipal Committee' and local authority;

(iii) in case of shares, various classes and different paid up values together with the terms of redemption, if ' any, in case of preference shares;

(vi) in case of modaraba and participation term certificates, the number of certificates and nominal value of each certificate;

(v) in case of debentures and bonds, the terms of redemption, if any, and the rate of interest.

(C) There shall be stated under sub-head 3 (A) (iii) the name of the chief executive, managing agent or modaraba company.

(D) Percentage of the equity held by the company in an investee company or modaraba or a controlled firm or other associated undertaking where it exceeds ten per cent of the investee's total equity shall be disclosed.

(E) The mode of valuation of investment, e.g. cost or market value, shall be stated separately and, if investments in listed companies or modarabas are valued other wise than at market value; the aggregate amount of the market value thereof shall be shown. Value of investments in unlisted investees to which paragraph (D) applies, calculated by reference to net assets of the investee on the basis of the last available audited accounts in the case of unlisted companies and modarabas and modarabas and the last available accounts in case of other investees together with the period of such accounts shall be disclosed.

(F) Provisions, if any, made for diminution in the value of investments and in respect of losses of subsidiary companies shall he shown as deduction from the gross amounts of the respective subhead.

(G) Investment made against any specific fund or other item shown on the liabilities side especially those required to be made under any law shall be stated separately for each item.

LONG-TERM LOANS AND ADVANCES

4. (A) There shall be shown under separate sub-heads, distinguishing between considered good and considered had or doubtful, aggregate amounts respectively of the company's,---

(i) loans and advances to subsidiary companies, controlled firms, managed modarabas and other associated undertakings;

(ii) loans and advances to the directors, chief executive, managing agents [.....] and executives of the company and to any of them severally or jointly with any other person;

(iii) other loans and advance.

(B) There .shall he .stated under sub-head 4 (A) (i) the name of the each borrower together with the amount of loans and advances, the terms of loan and advance and the particulars of collateral security held, if any.

(C) There shall he stated under sub-head 4 (A) (ii) separately the aggregate amount of loans and advances to the directors, chief executive, [l***] and executives together with the purposes for which loans and advance were made and the general terms of repayment.

(D) There shall he stated under sub-head 4 (A) (iii) in respect of loans and advances, other than those to the suppliers of goods or services, the name of the borrower and term of repayment if the loan or advance of material together with the particulars of collateral security, if any.

(E) There shall he disclosed separately in respect of sub-head 4 (A) (i) and (ii) the maximum aggregate amount of loans and advances outstanding at any time since the date of incorporation or since the date of the previous balance-sheet, whichever is later, such maximum amounts to he calculated by reference to month end balance.

(F) Provision, if any, made for had or doubtful loans and advances shall be shown as a deduction under each sub-head of paragraph 4 (A).

(G) Loans and advances due for (laymen! after a period of twelve months from the date of balance-sheet shall be shown under this head indicating separately,---

(i) outstanding periods for exceeding three years; and (ii) others.

LONG-TERM DEPOSITS, PREPAYMENTS AND DEFERRED COSTS

5. (A) There shall he stated separately long-term deposits, long-term prepayments and deferred costs. Any material item shall he disclosed separately.

(B) Deterred costs shall include preliminary expenses, discount allowed on the issue of shares, it and expenses incurred on the issue of shares including any sums paid by way of commission or brokerage on the issue of shares, to the extent not written off or adjusted and each of these items shall be stated separately.

(C) In respect of each material item of prepayments and deterred costs, the basis on which each item is being amortized or written oft shall he stated and in respect of each item of deferred costs the reasons for carrying forward such costs shall he stated. Deferred costs shall he written off during a period not exceeding five years commencing from the financial year in which the costs were incurred.

CURRENT ASSETS

6. (A) Current assets shall he classified under sub-heads appropriate to the company's affairs, including, where applicable, the following:---

(i) stores and spare parts distinguishing, where practicable, each from the other:---

(ii) loose tools;

(iii) stock-in-trade, distinguishing, where practicable, between (a) stock of raw materials and components, (h) work in progress, (c) stock of finished products and (d) other stock;

(iv) trade debts which shall include amounts due in respect of goods sold or services rendered or in respect of other contractual obligations hut shall not include the amounts which are in the nature of loans or advances. Debts considered good and debts considered doubtful or had shall he separately stated. Debts considered good shall he distinguished between those which are secured and those for which the company holds no security other than the debtor's personal security;

(v) loans and advances due for repayment within ;i period of twelve months from the date of the balance-sheet, showing separately those considered good and those considered doubtful or bad;

(vi) trade deposits and short-term prepayments and current account balances with statutory authorities;

(vii) bills receivable;

(viii) marketable securities, other than long-term investments;

(ix) interest accrued or interest outstanding;

(x) other receivables specifying separately the material items;

(xi) tax refunds due from Government, showing separately excise duties, customs duties, sales tax, income-tax, etc.; and

(xii) cash and bank balances, distinguishing (a) amount in hand, (h) amounts in transit, and (c) balance indicating the nature thereof, e.g. on current or deposit account.
Amounts required to he kept in special or separate accounts under any law shall be shown separately.

(B) In the case of sub-heads 6 (A) (i), (ii) and (iii) the respective basis of valuation shall be stated. If the basis such as 'cost', 'net realizable value' or 'cost or net realizable value whichever is lower' is given there shall also he given to the extent practicable a general indication of the method of determining the 'cost' of 'net realizable value', e.g. 'average cost', 'first-in, first-out', or 'last-in, first-out'. Where the basis of valuation involves departure from the recognized accounting principles, the reasons thereof alongwith financial impact.

(a) the aggregate amount due by directors, chief executive, managing agents, [* * *] and executives of the company and any of them .severally or jointly with any other person;

(b) aggregate amount due by associated undertakings, controlled firms and managed modarabas;

(c) the maximum amount of debts under each of the preceding items (a) and (b), at any time since the date of incorporation or since the date of the previous balance-sheet, whichever is the later. Such maximum amount to he calculated by reference to month-end balance.

(D) In the case of sub-heads 6 (A) (viii), same information, as far as applicable, shall be disclosed as specified in paragraph 3 in respect of long term investments.

(E) Provision, if any, made for diminution in .the value of or loss in respect of any current asset shall he shown as a deduction from the gross amount of the respective assets.

(F) If in the opinion of the directors any of the current assets have, on realization in the ordinary course of the company's business a value less than the amount at which the are stated in the financial statements, a disclosure of the fact that the directors are of that opinion together with their estimates of the realizable value and the reasons for assigning higher values in the balance-sheet shall he required.

SHARE CAPITAL AND RESERVES

7. (a) Share capital and reserves shall he classified under the following sub-heads;

(i) paid-up capital, distinguishing between different classes of preference and equity shares and the amount paid-up in respect of each class. In the case of forfeited shares, the amount already paid thereon shall he added to the paid up capital. Calls paid in advance shall not he added to the paid up capital hut shown separately; and

(ii) reserves, distinguishing between capital reserves and revenue reserves, capital reserves shall include capital redemption reserve, share premium account, surplus on revaluation of fixed assets to the extent it is included in the hook value of such assets, profit prior to incorporation or on the reissue of forfeited shares or any reserve not regarded free for distribution by way of dividend (to he specified), while revenue reserves shall include general reserve, dividend equalization reserve, deferred depreciation reserve, other reserves created out of profit (to he specified), and un-appropriated profit (i.e. credit balance of profit and loss account after appropriations for the period to the date of balance-sheet). Additions to and deductions from item of reserves shall he shown in the balance-sheet under the respective items unless they are disclosed in the profit and loss-account or a statement or a report annexed thereto. Accumulated loss, adverse balance of profit and loss account-shall be shown as deduction from the capital and reserves.

(B) There shall he shown in the balance-sheet,---

(i) authorised share capital, distinguishing between various clauses of shares and stating the number and value of each class;

(ii) issued share capital, distinguishing between various classes of shares and stating the number and value in respect of each class;

(iii) subscribed share capital, distinguishing between various classes of shares and stating the number, value and value in respect of each class. In the case of preference shares, the rate of dividend shall also be stated;

(iv) called up share capital distinguishing between various classes of shares and stating the number, value and the amount called up in respect of each class;

(v) calls unpaid as a deduction from called up share capital distinguishing calls unpaid by (a) directors (including chief executive), (h) managing agents, [(c) executives and (d) others];

(vi) paid-up share capital, distinguishing in respect of each class between (a) shares allotted for consideration paid in cash, (b) shares allotted for consideration other than cash, and (c) bonus shares stating the number and value of each class;

(vii) particulars of any option on unissued shares, such as amount of option, class of shares, issue price, period during which option is exercisable, etc.;

(viii) in the case of redeemable preference shares, the terms of redemption or conversion, if any, together with the earliest date on which the company has power to redeem or the company or the holder of the shares has power to convert the shares; and

(ix) in the case of subsidiary companies, the number of shares of each class held by the holding company.

(C) Whether circumstances permit, authorised, issued subscribed, called up and paid-up capital or any two or more of them may he shown as one item.

LONG-TERM LOANS

8. (A) long-term loans shall he classified as secured and unsecured, and under each class shall be shown separately,---

(i) loans from banking companies and other financial institutions;

(ii) loans from subsidiary companies, controlled firms, managed modarabas and other associated undertakings;

(iii) loans from directors (including chief executive), managing agents and employees of the company;

(iv) other loans.

(B) There shall he stated in respect of each loan,---

(a) the rate of interest;

(b) instalments or period in which the loan has to he repaid;

(c) where any of the long-term loans are secured otherwise than by the operation of law on any assets of the company, the fact that the loans are so secured, together with a statement of the assets upon which they are secured and where more than one class of liabilities is so secured, their relative priorities with respect to payment of interest or profit and redemption;

(d) any other material terms.

DEBENTURES AND PARTICIPATION TERM CERTIFICATES (PTC)

9. (A) borrowings in respect of debentures and PTC shall be separately shown classified as secured and unsecured together with a statement of the assets upon which they are secured and where more than one class of liabilities is so secured, their relative priorities with respect to payment of interest or profit and redemption shall stated.

(B) They shall he stated in respect of each class of debenture and PTC,---

(a) the rate of interest or profit;

(b) terms of redemption or conversion;

(c) the earliest dates on which the debentures or PTC may he redeemed or the company or holder thereof has power to convert into shares;

(d). particulars of any redeemed debentures or PTC which the company has power to reissue;

(e) if any sinking fund exists.

(C) Where any of the company's debentures or PTC are held by a nominee of, or trustee for, the company, the amount thereof, calculated on the same basis as the total amount standing in the balance-sheet in respect of the debentures of PTC of that class, shall unless and until the debentures to PTC so held are reissued or cancelled, he shown as deduction from the total.

DEFERRED LIABILITIES

10. (A) Liabilities as are under recognised accounting principles appropriately classified is deferred liabilities shall be shown distinguished as,---

(a) for taxation;

(b) for pension, gratuity and other staff benefit schemes;

(B) Where any of the deferred liabilities are secured otherwise than by the operation of law on any assets of the company, the fact that the liabilities are so secured, together with a statement of the assets upon which they are secured, and where more than one class of liabilities is so secured, their relative priorities with respect to payment of interest or profit and redemption.

(C) Where any deferred liability is represented by accumulations which are required by law to he invested in any specific manner or kept in a special deposit or account, the same shall he shown separately indicating the mode in which it is invested, deposited or kept.

(D) Where any liability has not been fully provided for, the extent to which it has not been provided for together with the reasons thereof (showing separately the portion relating to the financial year) shall he disclosed.

LONG-TERM DEPOSITS

11. The aggregate amount of deposits classified according to nature and repayment period shall he shown alongwith rate of interest payable thereon and other material terms, such deposits shall he classified as,---

(a) from customers;

(h) from employees;

CURRENT LIABILITIES

12. (A) Current liabilities shall mean liabilities due and payable (other than liabilities the payment of which may, at the company's option, he postponed) within twelve months from the date of the balance-sheet, together with such other liabilities as are under recognised accounting principles appropriately so classified.

(B) Current liabilities and provisions shall, so far as they are appropriate to the company's business, he classified under the following sub-heads.

(i) short-term loans, distinguishing between secured and unsecured and between loans taken from,---

(a) banking companies and other financial institutions;

(b) subsidiary companies, controlled firms, managed modarabas and other associated undertakings;

(d) others.

(ii) current portion of long term liabilities;

(iii) deposits stating separately those repayable on demand and other alongwith rate of interest payable thereon, if any;

(iv) creditors;

(v) accrued liabilities;

(vi) bills payable;

(vii) advance payments and unexpired discounts (or the portion (or which value is still to be given, e.g. in the case of newspapers, clubs and steamship companies:

(viii) interest accrued on secured loans;

(ix) interest accrued on unsecured loans;

(x) profit accrued on PTC.

(xi) other liabilities, if any (to he specified), e.g. unclaimed dividend, unpaid dividend;

(xii) provisions for taxation, showing separately excise duties, customs duties, sales tax. income-tax, etc.;

(xiii) proposed dividend; and
(xiv) other provisions and .accruals for contingencies (to be specified if material).

(C) Where ;any short-term loans or .my other liabilities of the company are secured otherwise than by the operation of law on any assets of the company, the fact that the liabilities are so secured shall he stated, together with a statement of the assets upon which they are secured, and where more than one class of liabilities is so secured, their relative priorities with respect to payment of interest or profit and redemption.

13. No liability shall he shown in the balance-sheet or the notes thereto at a value less than the amount at which it is which it or repayable (unless the quantum of repayment is at the option of the company) at the date of the balance-sheet or, if it is not them repayable, at the amount at which it will first become so repayable thereafter, less, where appropriate, a reasonable deduction for discount until that date.

CONTINGENCIES AND COMMITMENTS

14. There shall he added a footnote to the balance-sheet, showing separately,---

(i) arrears of fixed cumulative dividends on preference shares together with the period for which the dividends are in arrears. If there is more than one class of preference shares, the gross amount of dividends in arrears on cash such class shall be stated separately;

(ii) aggregate amount of any guarantees given by the company on behalf of the chief executive, directors, managing agents or other employees of the company or any of them (severally or jointly with any other person); subsidiaries, associated undertakings, managed modarabas or any other person shall be stated separately, if material and where practicable, the general nature of the guarantee;

(iii) except where the amount of contingent loss has been accrued in the financial statements or the possibility of a loss is remote, following information regarding the existence of contingent loss:---

(a) the nature of contingency:

(b) the uncertain factors that may affect the future outcome;

(c) an estimate of the amount of loss or the range of amounts of loss or a statement that such an estimate cannot be made;

Similar information regarding the existence of a contingent gain shall he provided if it is probable that the gain will he realized;

(iv) uncalled liability on partly paid shares held an investments;

(v) where practicable with aggregate amount or estimated amount. If it is material of contracts for capital expenditure, so far as not provided for;

(vi) other sums for which the company is contingently liable; and

(vii) any other commitment, if the amount is material, indicating the general nature of the commitment.

PART 111
REQUIREMENTS AS TO PROFIT AND LOSS ACCOUNT

1. The profit and loss account shall he so made out as to disclose clearly the operating results of the company during the financial year covered by the account and shall show. arranged under the most convenient heads, the gross income and the gross. expenditure of the company during the financial year disclosing every material feature and in particular the following:---

(A) (i) the turnover and showing as deduction therefrom,---

(a) commission paid to sole selling agents;

(b) commission paid to other selling agents; and

(ii) income from investments, showing separately income from each associated undertaking and from other investment

(iii) income by way of interest on loans and advances and other interests;

(iv) income arising from participation term certificates;

(v) income from modaraba or modaraba certificates;

(vi) profit on sale of investment;

(vii) profit on sale of fixed assets;

(viii) income arising from unusual items;

(ix) income arising from prior period item; and

(x) other income, showing separately every material item and the nature of each such item;

(B) (i)the value of stock-in-trade, including raw materials and components, work in progress and finished products, as at the commencement and as at the end of the financial year; and

(ii) purchase of raw materials and components and finished products; OR

(iii) instead of the information in (B) (i) and (ii) above, cost of raw materials and components consumed and cost of purchase finished goods sold.

(i) stores and spare parts consumed;

(ii) fuel and power;

(iii) salaries and wages including bonus, contribution to provident and other funds and expenses on staff welfare;

(iv) rent, municipal rates and provincial and local taxes;

(v) insurance;

(vi) repairs and maintenance; and

(vii) patents, copyrights, trade marks, designs, royalties any technical assistance.

(D) The aggregate amount of auditor's remuneration, whether tees, expenses or otherwise, for service rendered as auditors or in any other capacity showing separately the remuneration for services rendered as auditors and the remuneration for services rendered in any other capacity and stating the nature of such other services. In the case of joint auditors, information shall he shown separately for each of the joint auditors.

[(E) Other expenses, showing separately every material item and the nature of each such item. In the case of donations where any director or his spouse has interest in the done fund, the names of such directors and the names and addresses of donees shall he disclosed.]

(F) (i)the amount provided for depreciation, renewals, or diminution in the value of fixed assets:

(ii) if such provision is not made by means of a charge for depreciation, the method adopted for making such provision shall he disclosed :

(iii) where such provision is made by means of a charge for depreciation, the value of the assets and the additions or deletions thereto, the depreciation methods and the depreciation rates used for fixed assets under each sub-head of paragraph 2 (A) of Part II of this Schedule shall he disclosed;

(iv) where no such provision has been made, the reasons for not making it and the amount of depreciation which should have been provided and the quantum of arrears of depreciation, if any. shall he disclosed.

(G) (i)The amount of interest on borrowings showing separately the amount of interest on the company's debentures, on other long-term loans and on short-term loans and showing by way of a note the amount of interest on borrowings from the associated undertakings, directors (including chief executive) and the managing agent, if any;

(ii) loss on sale of investments;

(iii) loss on sale of fixed assets;

(iv) debts written-off as irrecoverable distinguishing between trade and other debts;

(v) provision for doubtful or bail debts distinguishing between trade and other debts;

(vi) provision for diminution in value of investments;

(vii) loss or expenses arising from unusual items and provisions therefor;

(ix) provision for losses of subsidiaries, controlled firms and associated undertakings; where loss is actually incurred, the extent of loss in the case of each subsidiary company, controlled firm and associated undertaking shall be disclosed byway of a note;

(x) (a)provision for taxation on in come, capital gains and other tax or taxes, showing separately the provision for liability in respect of the profit of the financial year and the provision for liability deferred due to timings differences and distinguishing where applicable between the provision for Pakistan taxation and the provision for taxation elsewhere;

(b) provisions for deferred liability for taxation on income for the financial year may exclude the tax effects of certain timing differences when there is reasonable evidence that these timid differences will not reverse for some considerable period (at least three years) ahead. There should also he no indication that after this period these timing differences are likely to reverse;

(c) where provision for taxation in respect of the profits of the period is reduced by the writing hack of a part or the whole of the provision for deferred liability made in previous periods the amount written back shall he shown as deduction from the gross charge for taxation; and

(xi) other provisions for meeting specific liabilities, contingencies or commitments (material items to be shown separately);

(H) (i)the amount set aside or proposed to he set aside as reserves, showing separately the respective amounts in respect of each item of reserve;

(ii) the amount of profit payable to PTC holders; and

(iii) the amount of the dividend proposed.

2. The profit and loss arising from 'hedges' and 'forward' contracts, trading in 'futures' and badla (contango and backwardation)' and other transactions of a similar nature, carried forward or completed by 'meeting the difference' and not resulting in actual purchase or sale of stock-in-trade shall not be deducted from or added to the cost of item (B) (ii) and (iii) in paragraph 1 of this part, and shall he shown separately in the profit and loss account.

3. There shall he stated by way of a note the respective amounts included in item (G) (iv) and (v) of paragraph 1 of this Part for (a) debts due by the directors, chief executive, managing agents and executives of the company and any of them severally or jointly with any other person, (b) debts due by associated undertakings,

4. The following shall he stated by way of a note,---

(i) the aggregate amount charged in the financial statements in respect of the directors, chief executive, managing agents and executives by the company as fees, remuneration, allowances, commission, perquisites or benefits or in any other form or manner and for any services rendered, shall give full particulars of such aggregate amounts, separately for the directors chief executive, managing agents, [* * *] and executives together with the number of such directors and executives, under appropriate heads such as

(a) fees;

(b) managerial remuneration;

(d) reimbursable expenses which are in the nature of a perquisite of benefit;

(e) pensions, gratuities, company's contribution to provident superannuation and other staff funds, compensation for loss of office and in connection with retirement from office;

(f) commission indicating the nature thereof and the basis on which such commission in payable;

(g) other perquisites and benefits in cash or in kind stating their nature and where practicable, their approximate money values; and

(h) the amounts, if material, by which any items shown above are affected by any change in accounting policy;

(ii) in the case of sale of fixed assets otherwise than through a regular auction made to chief executive or a director of managing agent or an executive or a shareholder holding not less than ten per cent of the voting, shares of the company or any associated undertaking, [irrespective of the value of the assets and in the case of any other person], if the hook value of the asset or assets exceeds in the aggregate five thousand rupees, particulars of the asset and in aggregate (a) cost or valuation, as the case may be, (b) the hook value, and (c) the sale price and the mode of disposal (e.g., by tender or negotiation) and the particulars of the purchased.

5. The following information shall he disclosed in respect of transactions with associated undertaking showing separately the aggregate amounts of:---

(i) purchases from and sales to or goods and services;

(ii) brokerage or discount or commission together with the nature and the basis on which such brokerage, discount or commission is payable;

(iii) interest indicating the nature thereof; and

(iv) any other transaction indicating the nature of every material item.

6. A company need not show the amount set aside as provisions other than those relating to depreciation, renewals or diminutor in value of assets, if on application made by it, it has been allowed by the Authority to do so on being satisfied that the disclosure of such information would he prejudicial to the interest of. the company, hut shall so frame or mark the heading covering the amount of such provisions as to indicate that it has been so allowed by the Authority.

7. The profit and loss account shall he so drawn up as to disclose separately the manufacturing, trading and operating results, In the case of manufacturing concern, the cost of goods manufactured shall also he shown. Where an undertaking has more than one [...] line of business the working results of such line of business should he separately given provided the turnover of such unit or line of business exceeds twenty per cent of the total turnover of the company Value of items exported during the financial year shall also he shown provided such value exceeds twenty per cent of (he total turnover of the company.

FORM A
See rule 12(2-A)]

Pattern of holdings of the shares held by the shareholders as on I9

No. of shareholders Shareholders Total share held

From…… 1 to 100 Shares

From…… 101 to 500

From…… 501 to 1000

From…… 1001 to 5000

From…… 5001 to 10000

From…… 10001 to above

………………… …………………….

Categories of shareholders Number Shares held Percentage

Individuals. ………. …………… ……….