listing of securities for csc students - bursa malaysia guidelines

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CORPORATE SECRETARY CERTIFICATE

LISTING OF SECURITIES

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AGENDA Board StructureBoard Structure Regulatory Framework IPO Rules Sponsorship Regime Of ACE Market Post Listing Obligations (LR)

Continuing Listing Criteria Financial Reporting Transactions Corporate Governance Takeovers Corporate Disclosure Policy Dealing In Securities By Directors

Issue Of Securities Sub-Division & Consolidation Share Buy-Back Enforcement Withdrawal Of Listing 2

BOARD STRUCTURE

844 companies

116 companies

Market Capitalisation

Main Market

ACE Market

Source : Bursa Malaysia WebsiteAs At 31/12/2009

RM999 billion

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AGENDA Board Structure Regulatory FrameworkRegulatory Framework IPO Rules Sponsorship Regime Of ACE Market Post Listing Obligations (LR)



REGULATORY FRAMEWORK

Ministry of FinanceMinistry of Domestic Trade, Cooperatives & Consumerism

Securities CommissionCompanies Commission of Malaysia

Bursa Malaysia

• Capital Markets & Services Act 2007• SC Guidelines• Code On Takeovers & Mergers

• Listing Requirements (LR)• Other Rules

Listed CorporationsListed Corporations

• Companies Act 1965

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Equity Guidelines

Prospectus Guidelines

Principal Adviser Guidelines

Asset Valuation Guidelines

Structured Warrants Guidelines

Main Market LR

ACE Market LR

Trading Rules

Clearing Rules

Depository Rules

Code Of Takeovers & Merger

Securities Commission Bursa Malaysia

Refer To Appendix 1

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REGULATORY FRAMEWORKSecurities Commission Bursa Malaysia

IPO for Main Market

Transfer from ACE to Main Market

Significant change in business direction or policy of a Main Market Company (Appendix 2)

IPO for ACE Market (ILA)

Post IPO issues for Main and ACE Markets (ALA) (e.g. right issue/ bonus issue)

Approving Authority Approving Authority

Commonly referred to as RTO/BDL

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REGULATORY FRAMEWORKSecurities Commission Bursa Malaysia

Approving Authority Approving Authority

Regularisation plan of PN17 Company (Main Market) resulting in RTO/ BDL

Regularisation plan of PN17 Company (Main Market) notresulting in RTO/ BDL

Regularisation plan of GN3 & GN2 Company (ACE Market)

Regularisation plan of PN16 Company (Main Market)

Notes :1) PN16/ GN2 Companies = Cash Companies for Main & ACE

Markets respectively

2) PN17/ GN3 Companies = Financial Condition Companies for Main & ACE Markets respectively

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Securities Commission Bursa Malaysia

Custodian of the Code Of Takeovers & Merger

Powers from LR & Rules -reprimand & fine

Post listing obligations under LR

Statutory power for criminal prosecution

Other Matters Other Matters

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ABC Bhd XYZ

AssetsAssetsExisting businesses

Issue shares

>33%

RTO / BDL RTO / BDL

BDL

RTO

REGULATORY FRAMEWORKControlling Shareholder

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AGENDA Board Structure Regulatory Framework IPO Rules IPO Rules Sponsorship Regime Of ACE Market Post Listing Obligations (LR)



IPO RULES

What’s an IPO? Initial Public Offering

Pre-IPO Exercise

Issue considerationshares for acquisition

Rights Issue

Bonus Issue

IPO

Public Issue

Offer For Sale

Restricted Offer ForSale

Private Placements 12

3

IPO RULES

Main Market

Profit Test

Market Capitalisation (Market Cap)Test

Infrastructure Project Company (IPC)Test

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IPO RULES

Main Market

Aggregate profit aftertax (“PAT”) RM20mover 3-5 years

Uninterrupted PAT

Latest PAT > RM6m

Profit TestProfit Test

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Market Cap TestMarket Cap Test

Minimum Market Capof RM500 million

No minimum profittrack record required

> 1 financial year of operating revenue

Main Market

IPO RULES

No. Of Shares x IPO Price

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IPO RULES

Main MarketIPC TestIPC Test

Remaining concession> 15 years

Minimum project costRM500 million

Shorter remainingconcession period, ifProfit Test fulfilled

Aggregate profit after tax(“PAT”) RM20m over 3-5 years

Uninterrupted PAT

Latest PAT > RM6m

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IPO RULES

Main Market

No minimum paid-up capital

25% in hands of 1,000 public shareholders

Minimum issue price RM0.50

No mandatory underwriting

Minimum offering to public (Appendix 3)

Public Spread

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IPO RULES

Main Market

No restriction on Offer For Sale (OFS), except for IPC

IPC may undertake OFS, provided IPC has 2 consecutive FYs of operating revenue

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4

IPO RULES

Main MarketMoratoriumMoratorium

Listing via Profit Test or Market Cap Test:-

100% in 1st 6 months after listing

Thereafter, no restriction

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IPO RULES

Main Market

Listing via IPC Test:-

100% in 1st 6 months after listing Thereafter, at least 45% under moratorium,

until 1 FY operating revenue achieved

MoratoriumMoratorium

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Bumiputra Equity Interest Bumiputra Equity Interest

50% of public offering to be allocated upon listing

Effective minimum = 12.5%

Deemed complied if no take up at IPO stage

IPO RulesIPO RULES

Main Market

50% x Minimum Public Spread of 25%

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IPO RULES

Main Market

Applicable to companies with Malaysian-basedoperations only

i.e. > 50% PAT from operations based inMalaysia

Not applicable to companies with MSC status,BioNexus status (biotechnology business) orcompanies with > 50% PAT from foreign-basedoperations

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IPO RULES

ACE Market

No minimum track record required

All business sectors allowed

Sponsor to determine suitability

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IPO RULES

ACE MarketSponsor to determine suitability

Prospects

Corporate Governance

Conflict of Interest

Public Interest

Suitability, Efficacy, Past Conduct of Directors & Key Management

Internal Controls & Risk Management

Systems, Procedures, Policies, Controls, Resources To Comply With ACE LR 24

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IPO RULES

ACE Market

No minimum paid-up capital

25% in hands of 200 public shareholders

No minimum issue price

No mandatory underwriting

No minimum offering to public

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IPO RULES

ACE Market

Offer For Sale (OFS) allowed with 1 financial year of operating profit

OFS subject to promoter retain at least 45% ofpaid up capital upon listing

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IPO RULES

ACE Market

100% in 1st 6 months after listing

Next 6 months, at least 45% under moratorium

Thereafter, may dispose 1/3rd, provided 1 FY operating revenue achieved

MoratoriumMoratorium

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IPO RULES

ACE Market

Allocate 12.5% of paid-up capital to approved bumiputra shareholders

Within 1 year after achieve Main Market Profit Test; Or

5 years after listing, whichever is earlier

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IPO RULES

ACE Market

Applicable to companies with Malaysian-basedoperations only

i.e. > 50% PAT from operations based inMalaysia

Not applicable to companies with MSC status,BioNexus status (biotechnology business) orcompanies with > 50% PAT from foreign-basedoperations

Same as Main Market

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AGENDA Board Structure Regulatory Framework IPO Rules Sponsorship Regime Of ACE MarketSponsorship Regime Of ACE Market Post Listing Obligations (LR)



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SPONSORSHIP – ACE MARKET

Sponsorship period :-

• 3 FY after listing

• If no operating revenue after 3 FY, sponsorship period extended for at least 1 FY after operating revenue is generated

• 1st FY = IPO Sponsor

SC’s approval for IPO – Not Required/ Sponsor determined suitability for listing

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Change of Sponsor

Within 1 full financial year after admission

• Sponsor cannot resign or be terminated

After 1 full financial year after admission

• Resignation/ termination subject to Bursa’s approval

• Bursa will not approve unless there is a replacement Sponsor or in exceptional circumstances

• After approval from Bursa, Sponsor or plc must give 3 months notice period for resignation/ termination 32


Change of Sponsor

If fail to find replacement Sponsor under exceptional circumstances (where Bursa has approved)

• Suspension after expiry of the aforesaid 3 months notice period

• Automatic de-listing after 2 months following expiry of the 3 months notice period

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During the sponsorship period, Sponsor must review andapproved all documents (including announcements/ circularsto shareholders) issued by the Sponsored Corporation(“Public Documents”), except the followings:-

Annual audited financial statements;

Certain non-material announcements (e.g. change ofaddress or telephone number); or

Public Documents prepared or submitted to Bursa by anAdviser, who is an entity other than the Sponsor

SC’s approval for IPO – Not Required/ Sponsor determined suitability for listing

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Outside sponsorship period, Adviser to prepare,review & approve certain Public Documents(Appendix 4)

All additional listing application during & outsidesponsorship period – through Sponsor or Adviser

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AGENDA Board Structure Regulatory Framework IPO Rules Sponsorship Regime Of ACE Market Post Listing Obligations (LR)Post Listing Obligations (LR)

Continuing Listing CriteriaContinuing Listing Criteria Financial Reporting Transactions Corporate Governance Takeovers Corporate Disclosure Policy Dealing In Securities By Directors


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CONTINUING LISTING CRITERIA

Public Spread

Financial Condition (PN17/ GN3)

Cash Company (PN16/ GN2)

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CONTINUING LISTING CRITERIAPublic Spread

25% public spread(excluding treasury shares)

Substantial shareholders (>5%) of Listed Issuer Associates of directors &

substantial shareholders of Listed Issuer

Need not maintain minimum number of public shareholders

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Public excludes Directors of Listed Issuer & its

subsidiaries

PUBLIC SPREAD

Associates Of Directors/ SubstantialShareholders

Family members (spouse/parent/child etc.) Person or body corporate, accustomed or

obliged to take instructions

(Appendix 5)


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PUBLIC SPREAD

Substantial shareholders holding up to 15%can be considered “public” provided….

Such shareholder is not a promoter of the Listed Issuer

Such shareholder is either…

A statutory institution managing funds of contributors who are member of the public

Collective Investment Schemes


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CONTINUING LISTING CRITERIAFinancial Condition Shareholders’ Equity (SE) < 25% Of Paid-Up Capital &

SE< RM40 million

R&M On Assets Of Listed Issuer Or On Subsidiary/ Associated Company > 50% Total Assets

Revenue < 5% Of Paid-Up Capital

Adverse/ Disclaimer Opinion By Auditors

Modified Opinion On Going Concern & SE < 50% Of Paid-Up Capital

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CONTINUING LISTING CRITERIAFinancial Condition

Default In Payment & Without Solvency Declaration

Suspended/ Ceased All/ Major Business/ Operations

Winding-up Order On Subsidiary/ Associated Company > 50% Total Assets

AnyTriggered

PN 17

8

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CONTINUING LISTING CRITERIAFinancial Condition – Oilcorp

“..failed to make interest paymentof RM1.6 million…”

“..directors are unable to form anopinion that the company willbe able to meet its debts as theyfall due…company is not solvent”

Default In Payment & Without Solvency Declaration

Immediate Announcement

As PN17Company

AnnounceWhether

RegularisationPlan =RTO

3 Months

Submit Plan To

SC

If NotRTO

12 mthsFrom 1st

Ann.

If RTO

ImplementAs Per SC’s

Timeframe

12 mthsfrom 1st

ann.

Submit Plan To Bursa +Approval

ImplementWithin 6 – 12 Months


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Suspension/Delisting

Failure To Regularise


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> 70% Assets = Cash Or Short Term Investment

Triggered

PN 16


Cash Company

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Cash Company

Trigger CashCompany Criteria

NotifyBursaIn Writing

Bursa ToDetermine

PN 16Company

ImmediateAnnouncementAs PN16Company

12 months

Submit Plan To SC

ImplementAs Per SC’s Timeframe

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Continuing Listing Criteria Financial ReportingFinancial Reporting Transactions Corporate Governance Takeovers Corporate Disclosure Policy Dealing In Securities By Directors


FINANCIAL REPORTING

Quarterly Results

Annual Audited Accounts

< 2 months after quarter end

< 6 months after financial year end

< 4 months after financial year end

Annual Report

Or immediately after Board approval

FINANCIAL REPORTING

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Late Submission Of Financial Statements

30/9/09

Close of 1Q

Due date for 1Q Results

30/11/09

Announce unable to release 1Q Results

7/12/09

5 MD

Suspension Deadline

Next MDSuspension Effected

31/5/10Commence delisting

6 months

3 MD

24/11/09

FINANCIAL REPORTING

In addition to enforcement action

FINANCIAL REPORTING

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Continuing Listing Criteria Financial Reporting TransactionsTransactions Corporate Governance Takeovers Corporate Disclosure Policy Dealing In Securities By Directors


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TRANSACTIONS

Non-related party transaction (Non-RPT)

Related Party Transactions (RPT)

Recurrent related party transactions (RRPT)

Percentage ratios (% Ratios)

Obligations

“Entered Into By Listed Issuer Or ItsSubsidiaries”

Non-RPT/ RPT RULESTRANSACTIONS

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“Acquisitions or disposals of assets by alisted issuer or its subsidiaries butexcludes transactions of revenue naturein the ordinary course of business”

Non-RPT


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RPTRPTRPTRPT

Transaction - RPT

“Transaction entered into by the listedissuer or its subsidiaries which involvesthe interest, direct or indirect, of arelated party”

TRANSACTIONS

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RPT transactions include

Acquisition, disposals or leasing of assets Establishment of joint ventures Provision of financial assistance Provision or receipt of services Any business transaction or arrangement

….entered into by company or subsidiaries.


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TRANSACTIONS

RPT transactions……

Does not exclude transaction of revenue nature in ordinary course of business

RRPT

Related Parties

Listed Company

SubsidiariesMajor

Shareholders

RelatedParties

Directors

PersonsConnected

HoldingCompany

Preceding6 monthsprior to

transaction


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Directors includes chief executive

Major Shareholder> 10% voting shares> 5% voting shares, if largest shareholder

Persons Connected Family members (spouse/parent/child etc.) Partners Person or body corporate, accustomed or

obliged to take instructions

Non-RPT/ RPT RULESRelated Parties

TRANSACTIONS

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RPTRPTRPTRPT

Transaction - RPT

“Transaction entered into by the listedissuer or its subsidiaries which involvesthe interest, direct or indirect, of arelated party”

TRANSACTIONS

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RPT (Basic Example 1)

Listed Listed CompanyCompany

MajorShareholder

>10%

Land

Land


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ABCSdn Bhd

XYZSdn Bhd

ABCSdn Bhd

MajorShareholder >10%

>10%


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Land

Mr. ABC

Land

Director Family Members


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Listed Company

Land

ABCSdn Bhd

Land

Directors/Shareholder

Directors/ShareholdersUnrelated

Commission


65

Non-RPT

% Ratio ≥ 5% And Consideration

≥ RM250kAnnouncement


Materiality Test To Determine ObligationsUnder The LR

8 Ratios

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Non-RPT

Announcement +

Shareholders’ Approval

+Valuation of Real Estate



≥ RM250k

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RPT

Announcement


% Ratio ≥ 0.25% And Consideration

≥ RM250k

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RPTAnnouncement

+Shareholders’

Approval+

Valuation of Real Estate

+Independent

Adviser



≥ RM250k

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RPT Announcement+

Shareholders’ Approval

+Valuation of Real Estate

+Independent

Adviser+

Main Adviser



≥ RM250k

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Acquisition or disposal of real estate10.04

Valuation report is required for:-

i. RPT & % ratio > 5%ii. non-RPT & % ratio > 25%

ii. corporation with real estate to beacquired/ disposed

i. real estate to be acquired/disposed; or

Key Amendments 1TRANSACTIONS

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Property developer/ propertyinvestment corporations – valuationon all material real estates.

10.04

Other corporation that owns realestate and where real estate hasbeen revalued & revaluation formedbasis for arriving at consideration

Key Amendments 1

Corporation With Real Estate:-

TRANSACTIONS

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Acquisition or disposal of real estate10.04

Valuation date < 6 months from Circular date

Valuation Report must comply with SC’s AssetValuation Guidelines

Bursa has discretion to require a 2nd valuation

Key Amendments 1TRANSACTIONS

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TRANSACTIONS

RPT transactions……

Does not exclude transaction of revenue nature in ordinary course of business

RRPT

Necessary For Day-To-Day Operations

Contribute Directly/ Indirectly To Generation Of Revenue

Reasonably Expected Given Type Of Business

RRPTTransaction : RRPT

RecurrentRevenue Nature/Ordinary Course Of Business

Once Every 3 Years

TRANSACTIONS

Necessary For Day-To-Day Operations

Contribute Directly/ Indirectly To Generation Of Revenue

Reasonably Expected Given Type Of Business 75

RRPT

Transaction : RRPT

e.g.

TRANSACTIONS

Purchase of raw materials for manufacturing business

Purchase of machinery for manufacturing business

Purchase of fertilizers for plantation business

Sale of completed houses by property developer

Purchase of office equipment

Rental of office premises

Receipt of management & support services 76

RRPT

Transaction : RRPT Higher threshold for announcement

(% ratio = 1% or RM1m, whichever the higher)

Shareholders’ mandate allowed

Independent Adviser not required (% ratio > 5%)

Main Adviser not required (% ratio > 25%)

Annual renewal required

Disclosure in Annual Report required

Immediate announcement where actual exceeds estimated by > 10%

TRANSACTIONS

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Consideration/Net Assets

Equity Issued/Equity Capital

Value/ Net Assets

Net Profits/Net Profits

Consideration/Market

Capitalisation

Total Asset/Total Assets

Cost/Net Assets

JV Ratio

8 RATIOS

% Ratios% Ratios

TRANSACTIONSAttributable to ordinary equity holders i.e. shareholders’ fund

After all charges, tax & extraordinary items

No. of shares x market price

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8 RATIOS

% Ratios

TRANSACTIONS

Materiality Test To Determine Obligations Under LR:-

Announcement

Shareholders Approval

Independent Adviser

Main Adviser

Valuation Report (real estate transactions)

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Continuing Listing Criteria Financial Reporting Transactions Corporate GovernanceCorporate Governance Takeovers Corporate Disclosure Policy Dealing In Securities By Directors


Bursa’s CorporateGovernanceGuide 2009

2007 Malaysian Code Of Corporate

Governance

Listing Requirements

Broad Principles &Best Practices

Suggestions &Practical Examples

MandatoryMandatory

CORPORATE GOVERNANCE

A narrative statement on how the listed issuer hasapplied the Principles of CG Code; and

A statement on the extent of compliance with the BestPractices of CG Code - specifically identify with reasonsfor non-compliance and the alternatives adopted, if any.

+Disclosure in

Annual ReportVoluntary/ Hybrid

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CGCORPORATE GOVERNANCE

At least 2 or 1/3rd independent directors

No conviction in court of law within last 5 years

Maximum 25 directorships (10 in PLCs/ 15 in non-PLCs)

Must attend MAP by Bursatra Sdn Bhd

Must attend continuous training

Must vacate office, if unsound mind, bankrupt, convicted or absent > 50% of board meeting

Board of Directors

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At least 3 members

All must be non-executive directors

Majority must be independent directors

Chairman must be an independent director

At least 1 must be MIA member, or

If not MIA, 3 years experience plus qualifications as per 1st Schedule of Accountants Act 1967 (Appendix 6)

Audit Committee

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Independent Director

Independent of management and free from any businessor other relationship that could interfere with exercise ofindependent judgement or ability to act in the bestinterest of a listed issuer e.g.

Is not an executive director of the listed issuer or itsrelated corporation (“said Corporation”)

Has not been within the last 2 years and is not anofficer (except non-executive director) of the saidCorporation

Is not a major shareholder of the said Corporation

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85


Independent Director

Independent of management and free from any businessor other relationship that could interfere with exercise ofindependent judgement or ability to act in the bestinterest of a listed issuer e.g.

Is not a family member of an executive director, officeror major shareholder of the said Corporation

Is not acting as a nominee or representative of anyexecutive director or major shareholder of the saidCorporation


At least 3 members

All must be non-executive directors

Majority must be independent directors

Chairman must be an independent director

At least 1 must be MIA member, or

If not MIA, 3 years experience plus qualifications as per 1st Schedule of Accountants Act 1967 (Appendix 6)

Audit Committee

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External Auditors – audit plans, audit report & evaluation of internal controls

Internal Auditor – scope, function, competency, resources, processes, program & results thereof

Financial results – accounting policies, compliance with accounting standards, significant & unusual events

Related party transactions

Audit Committee Review & report Board of Directors

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Continuing Listing Criteria Financial Reporting Transactions Corporate Governance TakeoversTakeovers Corporate Disclosure Policy Dealing In Securities By Directors


Code On Take-Overs &Mergers

CustodianSecuritiesCommission

TAKEOVERS

89

Mandatory General Offer

Listed Company

ControllingShareholder

MGO On BalanceOf Up To 67% #

Mr X

Listed Company

>33%; <50%

OtherShareholders

>33%

Balance67%

# Conditional Upon Acceptance Resulting In Offeror Holding > 50% in Listed Company

TAKEOVERS

90

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Listed Company

Mr X

MGO On Balance Of Up To 65% #

OtherShareholders

>33%; <50% Balance65%

Shareholder A

2%+ 2%/6 months

# Conditional Upon Acceptance Resulting In Offeror Holding > 50% in Listed Company

TAKEOVERS

Mandatory General Offer

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Continuing Listing Criteria Financial Reporting Transactions Corporate Governance Takeovers Corporate Disclosure PolicyCorporate Disclosure Policy Dealing In Securities By Directors


93

Disclosure Of Material Information

Thorough Public Dissemination

Clarification Of Rumours

Response To Unusual Market Activity

Unwarranted Promotional Disclosure

Insider Trading

DISCLOSURE

LR’s Corporate Disclosure Policy




95

Directors buy/ sell securities of own listedcompany

Closed period

Procedures in dealings

Disclosure requirements

DISCLOSURE

Dealing In Securities By Directors

AGENDA Board Structure Regulatory Framework IPO Rules Sponsorship Regime Of ACE Market Post Listing Obligations (LR)


Issue Of SecuritiesIssue Of Securities Sub-Division & Consolidation Share Buy-Back Enforcement Withdrawal Of Listing 96

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97

GeneralGeneral mandatemandate toto issueissue sharesshares ororconvertibleconvertible securitiessecurities

Allotment to directors etc.

Rights Issue

Bonus Issue

Employee Share Option Scheme

ISSUE OF SECURITIES

98

Resolution pursuant to Section 132D, CA 1965 Renewed at every AGM Allotment to directors etc. prohibited Nominal value, when aggregated with issuance in

preceding 12 months, must not exceed 10% ofnominal value of issued & paid-up capital(excluding treasury shares)

Pricing not more than 10% discount to weightedaverage market price for 5 market days beforeprice-fixing date

ISSUE OF SECURITIES

General MandatePowers for directors to issue shares without specific approval at EGM

99

Flexibility & cost savings; need not convene EGM

Normally for raising funds to repay bankborrowings/ other creditors or general workingcapital

Via private placement or special issue

ISSUE OF SECURITIES

General Mandate

100

General mandate to issue shares or convertiblesecurities

AllotmentAllotment toto directorsdirectors etcetc..

Rights Issue

Bonus Issue


ISSUE OF SECURITIES

101

Includes chief executive & major shareholders ofthe listed issuer; and

Persons connected to them.

ISSUE OF SECURITIES

Allotment to Directors etc.

Similar to “Associates”; see Appendix 5

102

Except on pro-rata basis, a listed issuer & itssubsidiary must not issue shares or convertiblesecurities to “Directors etc.” without shareholdersapproving the specific allotment to them ingeneral meeting.

The “interested Directors etc.” must not vote onthe resolution approving the specific allotment tohim/ her.

Precise terms & conditions of allotment must bedisclosed to shareholders

ISSUE OF SECURITIES


Separate resolutions required

Entitlement basis e.g. rights issue, bonus issue

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103

ISSUE OF SECURITIES


Listed Listed IssuerIssuer

Subsidiary

Major Shareholder

Directors ChiefExecutive

Issue shares/ convertible securities

Issue shares/ convertible securities

Shareholders’ approval on specific allotment is required with precise terms & conditions

Abstain from voting of respective resolutions

104

Resolution pursuant to Section 132D, CA 1965 Renewed at every AGM Allotment to directors etc. prohibited Nominal value, when aggregated with issuance in

preceding 12 months, must not exceed 10% ofnominal value of issued & paid-up capital(excluding treasury shares)

Pricing not more than 10% discount to weightedaverage market price for 5 market days beforeprice-fixing date

ISSUE OF SECURITIES

General Mandate Can You See Why ??

105



RightsRights IssueIssue

Bonus Issue


ISSUE OF SECURITIES

106

ISSUE OF SECURITIES

Rights Issue


Major Shareholder

Directors (also sh/holder)

Other Shareholders

Issue shares/ convertible securities for cash on pro-rata entitlement basis

Issue shares/ convertible securities for

cash on pro-rata entitlement basis

e.g. 1 new ordinary share for every 2 existing ordinary shares held 1 new ordinary share with 1 free warrant for every 2 existing

ordinary shares held

107

Must be renounceable

Underwriting at listed issuer’s discretion

Subject to minimum level of acceptance, failingwhich RI terminated & all proceeds returned tosubscribers

Shareholders’ irrevocable undertaking tosubscribe must be supported by sufficientfinancial resources as verified by independentparty

ISSUE OF SECURITIES

Rights Issue (RI)

108



Rights Issue

BonusBonus IssueIssue


ISSUE OF SECURITIES

19

109

ISSUE OF SECURITIES

Bonus Issue


Major Shareholder

Directors (also Sh/holder)

Other Shareholders

Issue shares/ convertible securities on pro-rata entitlement basis

Issue shares/ convertible securities on

pro-rata entitlement basis

e.g. 1 new ordinary share for every 1 existing ordinary shares held 1 new ordinary share for every 10 existing ordinary shares held

Proceeds $$$$ ???

110



Rights Issue

Bonus Issue

EmployeeEmployee ShareShare OptionOption SchemeScheme

ISSUE OF SECURITIES

111

A right but not an obligation to subscribe forshares in the listed issuer

Not more than 15% of issued & paid up sharecapital at any one time

Participation restricted to directors & employeesof listed issuer’s group of companies

Maximum duration of scheme is 10 years Pricing not more than 10% discount to 5 day

weighted average market price when option isoffered

ISSUE OF SECURITIES

ESOS



Issue Of Securities SubSub--Division & ConsolidationDivision & Consolidation Share Buy-Back Enforcement Withdrawal Of Listing 112

113

Also know as “Share Split” E.g.

Issued & paid-up capital of RM100m comprising100m ordinary share of RM1.00 each

SUB-DIVISION & CONSOLIDATION

Sub-division of Shares


114

Adjusted market share price after sub-divisionmust not be less than RM0.50 based on dailyclosing price during 3-month period prior toapplication date (application to Bursa)

Listed issuer must not be Cash Company (PN16/GN2) or PN17/ GN3 Company


Sub-division of Shares

20

115

Opposite of Sub-Division E.g.



Consolidation of Shares




Issue Of Securities Sub-Division & Consolidation Share BuyShare Buy--BackBack Enforcement Withdrawal Of Listing 116

117

SHARE BUY-BACK

Listed Issuer

Issued/ pd-up Shares

Directors

Major Shareholders

Other Shareholders

Investing Public

Listed Issuer (itself)

118

SHARE BUY-BACK

Treasury Shares

No voting rights

No entitlement rights

Disregarded for computation ofEPS, NTA etc

Subsequently cancelled or re-sold “in the market” or distributeas “share dividend”

119

SHARE BUY-BACK

Why Share Buy-Back?

Utilisation of excess funds to purchaseown shares which are deemedundervalued by the market

Potential gain from resale of treasuryshares when market recovers

Reduce unwarranted volatility in shareprice by stabilising supply, demand andmarket price

Flexibility to declare share dividend,instead of cash dividend

Enhance EPS & positive impact ofshare price

Authorisation ~ shareholders’ mandate required

Validity of mandate (AGM to AGM) ~

the conclusion of the first AGM after mandate isobtained

the expiration of the period within which thenext AGM must be held; or

revoked or varied by ordinary resolution passedby the shareholders in general meeting

whichever occurs first.

SHARE BUY-BACK

120

21

“On the market” transactions ~ buy-backthrough Automated Trading System

Maximum limit ~ shares purchased or held astreasury share must not to exceed 10% of itsissued and paid-up capital

Source of funds ~ wholly out of retained profits(“RP”) or share premium (“SP”) account of thelisted issuer or both (RP & SP at Company level)

SHARE BUY-BACK

121

Types of funds ~ No restriction on the types offunds which can be utilised so long as the buyback is backed by an equivalent amount ofretained profits or share premium

i.e. use of bank borrowings permitted

Declaration of solvency ~ in accordance withsection 67A of the Companies Act 1965 and PartIIIA of the Companies Regulations 1966

Execution of solvency declaration ~ signed anddated by the majority of the directors prior toactual buy-back & valid for 6 months

SHARE BUY-BACK

122

SHARE BUY-BACK

Public shareholding spread ~ must bemaintained

Appointment of stockbroker ~ to purchaseand/or resell treasury shares.

Purchase price ~ not more than 15% above theweighted average market price for the shares forthe 5 market days immediately prior to purchase

123

SHARE BUY-BACK

Resale price ~ not less than the weightedaverage market price for the shares for the 5market days immediately prior to the resale; or

A discounted price of not more than 5% to theweighted average market price for the shares forthe 5 market days immediately prior to the resaleprovided that

The resale takes place not earlier than 30days from date of purchase; and

The resale price is not less than the cost ofpurchase

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Issue Of Securities Sub-Division & Consolidation Share Buy-Back EnforcementEnforcement Withdrawal Of Listing 125

ENFORCEMENT

Undertaking By Listed Company “To Bursa Malaysia Securities Berhad

Compliance with Main Market Listing Requirements and Rules of BursaMalaysia Securities Berhad

In consideration of Bursa Securities approving the application for admissionof ..................

WE FURTHER UNDERTAKE AND AGREE to comply with Bursa SecuritiesMain Market Listing Requirements ……insofar as the same shall apply tothe Corporation.

The above Undertaking has been signed by me as..............................Date:Signature:”

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22

ENFORCEMENT

Undertaking By Directors

“To Bursa Malaysia Securities Berhad

Compliance with Main Market Listing Requirements

I, ......................................[name of director], am a director of ........................to be admitted to the Official List of Bursa Securities …

In consideration …….., I UNDERTAKE AND AGREE to comply with BursaSecurities Main Market Listing Requirements including any amendment asmay be made from time to time, insofar as the same shall apply to me as adirector of the Corporation(s).

Yours faithfully”

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Paragraph 16.18

“In the event of any breach of theseRequirements by any applicant, listedissuer, management company, trustee orits directors, officers or advisers….theExchange may take or impose suchactions or penalties as it considerappropriate.”

ENFORCEMENT

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Types of Actions/ Penalties

Caution Letter Private Reprimand Public Reprimand Fine not exceeding RM1.0 million Public Reprimand & Fine Mandatory training program for directors Suspension Delisting

ENFORCEMENT

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Paragraph 16.13

“A director of a listed issuer must not….

“…cause, aid or abet a breach of theseRequirements by such listed issuer or..”

“…permit, either knowingly or where he hadreasonable means of obtaining suchknowledge, such listed issuer to commit abreach of these Requirements”

ENFORCEMENT

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Late Submission Of Financial Statements

Material Deviations Between AuditedResults And Unaudited Results

Late Announcement Of Material Information

Related Party Transactions

ENFORCEMENT

Common Breaches

Source : Bursa Malaysia Website131

Recent Trend

Paragraph 16.13 - A director of a listed issuer…mustnot cause, aid or abet a breach of theseRequirements by such listed issuer…or permit, eitherknowingly or where he had reasonable means ofobtaining such knowledge, such listed issuer…,tocommit a breach of these Requirements

Public Reprimand & Fine On Directors

Directors’ Enforcement

ENFORCEMENT

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Fine On DirectorsFine On Directors

Enforceable ?Enforceable ?

ENFORCEMENT

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Issue Of Securities Sub-Division & Consolidation Share Buy-Back Enforcement Withdrawal Of ListingWithdrawal Of Listing 134

A listed issuer may request for withdrawal of listing subject toapproval of Bursa & shareholders

Resolution must be approved by a majority in number representingthree fourths in value of the shareholders, present and voting; and

Shareholders who object is not more than 10% of the value of theshareholders, present and voting

Shareholders are offered a reasonable cash alternative or otherreasonable alternative (“Exit Offer”)

Independent adviser is required to advise and makerecommendations to shareholders, as well as the fairness andreasonableness of the Exit Offer.

WITHDRAWAL OF LISTING

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Voluntary Withdrawal

A listed issuer may withdraw its listing as follows:

In a take-over offer, upon 90% or more of its listed shares (excludingtreasury shares) being held by a shareholder either individually orjointly with associates of the said shareholder; or

In relation to a corporate proposal undertaken by or in relation to thelisted issuer, upon 100% of the listed shares of the listed issuer beingheld by a shareholder either individually or jointly with the associatesof the said shareholder, and

The offeror’s intention is not to maintain listing status of the listedissuer

WITHDRAWAL OF LISTING

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GO & Other Corporate Proposals

ENDTHANK YOU

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