#1Listing on Pakistan Stock Exchange Small and Medium Enterprises Board Dream Big and Make it Happen! PSX#2Contents of the Presentation: Section 1: Introduction Section 2: PSX Listing Requirements Section 3: SME Board Listing Requirements Section 4: Post Listing Section 5 :Listing Fee Section 6: Benefits And Relaxations Section 7: SME Listing Procedure Section 8: De-Listing Section 9: FAQs Psx 2#3PSX Section 1 Introduction 3#4Importance of SMEs to the Pakistani economy Psx SMEs have the potential to drive/stimulate growth provided they are given an enabling platform to flourish. KHYBER PAKHTUNKHWA FEDERALLY ADMINISTERED TRIBAL AREAS There are Approximately 3 Million SMEs in Pakistan ISLAMABAD GILGIT-BALTISTAN AZAD KASHMIR SME output contributes 40% to the annual GDP SME Output contributes 25% to the total exports. BALOCHISTAN SINDH PUNJAB SMEs employ 80% of the non-agricultural labor force Economic Survey of Pakistan 2017 4#5PSX Section 2 PSX Listing Requirements 5#6What is the Eligibility Criteria? Psx Main Board SME Board • Minimum post issue paid up capital of Rs.200 million • Minimum post issue paid up capital of Rs.25 million 6#7PSX Section 3 SME Board Listing Requirements 7#8What are the SME Board Requirements? PSX SME Board - a platform for SMEs to raise capital to fund growth and expansion SHOP ✓ At least 20% of post issue paid up capital to be offered ONLY to QIBS and HNWIS through private placement. QIBS: Financial Institutions; Insurance Companies; Mutual/Pension Funds HNWIS: Investor bidding at least Rs.1 Million ✓ Minimum five initial subscribers SME: A public company having a post issue Paid Up Capital PKR 25-200 Million ✓ Minimum Bid size of each initial subscriber: PKR 1 Million 80#9What are the mandatory requirements? Psx Financial Statements • Must prepare periodic Financial statements • Must audit statements by QCR rated chartered accountants • Must publish on the website SME Website • Must contain basic business information • Must contain Information Memorandum • Must post annual, half-year quarterly accounts Operational Requirements • Must be in business for at least three years • Must be profitable for at least 2 years before getting listed 600 JL 6#10What is the Listing Requirement? Psx Information Memorandum ⚫IM shall be circulated to QIBS and HNWIS. ⚫IM shall be placed on the website of the SME, the Exchange and the Advisor/Consultant to the Issue. • Minimum information / disclosures required in the IM: Schedule-l of Chapter 5A of PSX Rule Book. Compliance (Post Listing) • SME required to disclose and disseminate Price Sensitive Information. • CEO of the SME responsible for regulatory compliance: Must submit compliance report at the end of each half year. • If SME violates any provision of SME Regulations, Exchange may take any disciplinary action such as: Imposing a fine, Placing SME in the Defaulters' Segment, Suspend trading, etc.#11PSX Section 4 Post Listing 11#12What happens Post Listing? ✓ Sponsor Shareholding Lock-in 100% (Entire) holding blocked for 1 year. 25% holding blocked for 3 years. Psx ✓ Clearing, settlement and risk management through NCCPL. 20% 16% 34% 50% 30% 250- 200- 150 100- 50- 0- 5 6 7 8 9 10 ✓ Trading shall take place through KATS. ✓ In the secondary market, the minimum order size for trading shall be PKR 100,000. ✓ SME to maintain a minimum free float of 20% of post issue paid up capital. 12 12#13PSX Section 5 Listing Fee 13#14What is the Listing Fees? Psx S Initial Listing Fees ⚫0.05% of Post Paid Up Capital • Capped at PKR 50,000 • PKR 20,000 on Paid Up Capital up-to PKR 50 Million Annual Listing Fees • PKR 30,000 on Paid Up Capital between PKR 50-100 Million PKR 40,000 on Paid Up Capital exceeding PKR 100 Million 14#15PSX Section 6 Benefits And Relaxations 15#16What are the Benefits and Relaxations? Psx Tax Benefits Relaxations 20% on tax payable in the first tax year of listing 20% on tax payable in the subsequent tax year 10% on tax payable in the following two tax years respectively SME need not comply with the Provisions of Chapter 5, "Listing of Companies and Securities Regulations" of PSX Rule Book. Code of Corporate Governance TAX 16#17PSX Section 7 SME Listing Procedure 17#18How can you get your company listed on the Exchange? Psx ⚫SME appoints "Advisor and Consultant". • Consultant submits listing application to the Listing Department at PSX • The listing department reviews documents and performs due diligence . Your listing application is submitted to the PSX Listing Committee. PSX Listing Committee approves the listing application. SME offers its shares to eligible investors and gets listed after they subscribe to its shares. Procedure 18#19PSX Section 8 De-Listing 19#20What will be your Exit Strategy? Voluntary De-listing You can delist your company through buy-back of shares by the sponsors at a price approved by the Exchange Involuntary De-listing Your company can be removed from the listed companies list due to violation of PSX's Listing of Companies & Securities Regulations Migration to Main Board When paid up capital exceeds PKR 200 Million And SME has been listed on the SME Board for at least Three years Psx 20 20#21Contact Information PSX Raeda Latif General Manager - Marketing and Business Development Email: [email protected] Telephone: +92-2135274580 Ext: 4580 Haris Saeed Business Development Manager Email: [email protected] Telephone: +92-2135274574 Ext: 4582 Help Desk (92-21) 111-011-122 Karachi Office Ext: 4580, 4582 Lahore Office Ext: 4653 Islamabad Office Ext: 4666 Web: psx.com.pk Email: [email protected] Mariam Mehtab Marketing and Business Executive Email: [email protected] Telephone: +92-2135274572 Ext: 4572 21#22Contact Information Serving Investors & Industry Stock Exchange Building, Stock Exchange Road, Karachi-74000, Pakistan. Tel: (+92)111-001-122, Website: www.psx.com.pk PSX