Listing of Securities For CSC Students - Bursa Malaysia Guidelines

AGENDA
 Board Structure
CORPORATE SECRETARY CERTIFICATE  Regulatory Framework
 IPO Rules
 Sponsorship Regime Of ACE Market
 Post Listing Obligations (LR)
 Continuing Listing Criteria
LISTING OF SECURITIES  Financial Reporting
 Transactions
 Corporate Governance
 Takeovers
 Corporate Disclosure Policy
 Dealing In Securities By Directors
 Issue Of Securities
 Sub-Division & Consolidation
 Share Buy-Back
 Enforcement
1  Withdrawal Of Listing 4
AGENDA REGULATORY FRAMEWORK

 Board Structure
 Regulatory Framework Ministry of Domestic Trade, Ministry of Finance
Cooperatives & Consumerism
 IPO Rules
 Continuing Listing Criteria Companies Commission of Securities Commission
 Financial Reporting Malaysia
• Capital Markets & Services Act 2007
 Transactions • Companies Act 1965 • SC Guidelines
 Corporate Governance • Code On Takeovers & Mergers
 Takeovers
 Dealing In Securities By Directors Bursa Malaysia
• Listing Requirements (LR)
• Other Rules
 Share Buy-Back
 Enforcement
 Withdrawal Of Listing 2 Listed Corporations 5
BOARD STRUCTURE REGULATORY FRAMEWORK
Securities Commission Bursa Malaysia

Main Market 844 companies
 Equity Guidelines  Main Market LR
 Prospectus Guidelines  ACE Market LR

ACE Market 116 companies
 Principal Adviser Guidelines  Trading Rules
 Asset Valuation Guidelines  Clearing Rules
Market Capitalisation RM999 billion  Structured Warrants Guidelines  Depository Rules

 Code Of Takeovers & Merger
Source : Bursa Malaysia Website Refer To Appendix 1

As At 31/12/2009
3 6
1
REGULATORY FRAMEWORK REGULATORY FRAMEWORK
Securities Commission Bursa Malaysia Controlling Shareholder
 RTO / BDL Issue shares
Approving Authority Approving Authority RTO
 IPO for Main Market  IPO for ACE Market (ILA) >33%
 Transfer from ACE to Main  Post IPO issues for Main and
Market ACE Markets (ALA) (e.g. right ABC Bhd XYZ
issue/ bonus issue)
 Significant change in business
direction or policy
of a Main Market Company
Commonly referred to as RTO/BDL Assets
(Appendix 2) Existing Assets
BDL
businesses
7 10
REGULATORY FRAMEWORK AGENDA

Securities Commission Bursa Malaysia  Board Structure
 Regulatory Framework
 IPO Rules
Approving Authority Approving Authority  Post Listing Obligations (LR)
 Regularisation plan of PN17  Regularisation plan of PN17  Financial Reporting
Company (Main Market) Company (Main Market) not  Transactions
resulting in RTO/ BDL resulting in RTO/ BDL  Corporate Governance
 Regularisation plan of PN16  Regularisation plan of GN3 &  Takeovers
Company (Main Market) GN2 Company (ACE Market)  Corporate Disclosure Policy
Notes :  Issue Of Securities
1) PN16/ GN2 Companies = Cash Companies for Main & ACE  Sub-Division & Consolidation
Markets respectively
 Share Buy-Back
2) PN17/ GN3 Companies = Financial Condition Companies for  Enforcement
Main & ACE Markets respectively
REGULATORY FRAMEWORK IPO RULES
What’s an IPO? Initial Public Offering

Securities Commission Bursa Malaysia
Pre-IPO Exercise IPO
Other Matters Other Matters

 Issue consideration  Public Issue
 Statutory power for criminal  Powers from LR & Rules -
prosecution reprimand & fine shares for acquisition
 Offer For Sale
 Custodian of the Code Of  Post listing obligations under
Takeovers & Merger LR
 Rights Issue
 Restricted Offer For
 Bonus Issue Sale
9
 Private Placements 12
2
IPO RULES IPO RULES
Main Market
Profit Test
IPC Test
Market Capitalisation (Market Cap)

 Remaining concession
Main Market Test > 15 years
 Aggregate profit after tax
 Minimum project cost (“PAT”) RM20m over 3-5 years
RM500 million  Uninterrupted PAT

Infrastructure Project Company (IPC)
Test  Latest PAT > RM6m
 Shorter remaining
concession period, if
Profit Test fulfilled
13 16
IPO RULES IPO RULES
Main Market
Main Market
 No minimum paid-up capital Public Spread
Profit Test
 Aggregate profit after  25% in hands of 1,000 public shareholders

tax (“PAT”) RM20m
over 3-5 years  Minimum issue price RM0.50
 Uninterrupted PAT  No mandatory underwriting
 Latest PAT > RM6m  Minimum offering to public (Appendix 3)
14 17
IPO RULES IPO RULES
Main Market Main Market

Market Cap Test
No. Of Shares x IPO Price  No restriction on Offer For Sale (OFS), except
 Minimum Market Cap for IPC
of RM500 million
 IPC may undertake OFS, provided IPC has 2
 No minimum profit consecutive FYs of operating revenue
track record required
 > 1 financial year of

operating revenue
15 18
3
IPO RULES IPO RULES
Main Market
Main Market
Bumiputra Equity Interest
Moratorium
Listing via Profit Test or Market Cap Test:-  Applicable to companies with Malaysian-based
 100% in 1st 6 months after listing operations only
 i.e. > 50% PAT from operations based in
 Thereafter, no restriction Malaysia
 Not applicable to companies with MSC status,
BioNexus status (biotechnology business) or
companies with > 50% PAT from foreign-based
operations
19 22
IPO RULES IPO RULES
Main Market ACE Market

Moratorium
 No minimum track record required
Listing via IPC Test:-
 100% in 1st 6 months after listing  All business sectors allowed
 Thereafter, at least 45% under moratorium,  Sponsor to determine suitability

until 1 FY operating revenue achieved
20 23
IPO
IPO RULES
Rules IPO RULES
Main Market ACE Market

Bumiputra Equity Interest Sponsor to determine suitability
50% x Minimum Public Spread of 25%
 50% of public offering to  Prospects
be allocated upon listing  Corporate Governance
 Effective minimum =  Conflict of Interest
12.5%  Public Interest
 Deemed complied if no  Suitability, Efficacy, Past Conduct of Directors & Key

Management
take up at IPO stage
 Internal Controls & Risk Management
 Systems, Procedures, Policies, Controls, Resources To
21 Comply With ACE LR 24
4
IPO RULES IPO RULES
ACE Market ACE Market

 No minimum paid-up capital Bumiputra Equity Interest
 25% in hands of 200 public shareholders  Allocate 12.5% of paid-up capital to approved
bumiputra shareholders
 No minimum issue price
 Within 1 year after achieve Main Market Profit
 No mandatory underwriting Test; Or
 5 years after listing, whichever is earlier

 No minimum offering to public
25 28
IPO RULES IPO RULES
ACE Market ACE Market Same as Main Market
Bumiputra Equity Interest

 Offer For Sale (OFS) allowed with 1 financial
year of operating profit  Applicable to companies with Malaysian-based
operations only
 OFS subject to promoter retain at least 45% of
 i.e. > 50% PAT from operations based in
paid up capital upon listing
Malaysia
 Not applicable to companies with MSC status,
BioNexus status (biotechnology business) or
companies with > 50% PAT from foreign-based
operations
26 29
IPO RULES AGENDA

 Board Structure
ACE Market  Regulatory Framework
 IPO Rules
Moratorium  Sponsorship Regime Of ACE Market
 100% in 1st 6 months after listing  Financial Reporting
 Transactions
 Next 6 months, at least 45% under moratorium  Corporate Governance
 Takeovers
 Thereafter, may dispose 1/3rd, provided 1 FY  Dealing In Securities By Directors
operating revenue achieved  Issue Of Securities
 Share Buy-Back
 Enforcement
5
SPONSORSHIP – ACE MARKET SPONSORSHIP – ACE MARKET
SC’s approval for IPO – Not Required/
Sponsor determined suitability for listing
 SC’s approval for IPO – Not Required/
Sponsor determined suitability for listing During the sponsorship period, Sponsor must review and
approved all documents (including announcements/ circulars
 Sponsorship period :- to shareholders) issued by the Sponsored Corporation
• 3 FY after listing (“Public Documents”), except the followings:-
• 1st FY = IPO Sponsor  Annual audited financial statements;

• If no operating revenue after 3 FY, sponsorship  Certain non-material announcements (e.g. change of
period extended for at least 1 FY after operating address or telephone number); or
revenue is generated
 Public Documents prepared or submitted to Bursa by an
Adviser, who is an entity other than the Sponsor
31 34
SPONSORSHIP – ACE MARKET SPONSORSHIP – ACE MARKET
Change of Sponsor
 Within 1 full financial year after admission

 Outside sponsorship period, Adviser to prepare,
review & approve certain Public Documents
• Sponsor cannot resign or be terminated (Appendix 4)
 After 1 full financial year after admission  All additional listing application during & outside
sponsorship period – through Sponsor or Adviser
• 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 35
SPONSORSHIP – ACE MARKET AGENDA

 Board Structure
Change of Sponsor
 IPO Rules
 If fail to find replacement Sponsor under exceptional  Sponsorship Regime Of ACE Market
circumstances (where Bursa has approved)  Post Listing Obligations (LR)
• Suspension after expiry of the aforesaid 3 months notice  Financial Reporting
period  Transactions
• Automatic de-listing after 2 months following expiry of the 3  Takeovers
months notice period  Corporate Disclosure Policy
 Share Buy-Back
 Enforcement
6
CONTINUING LISTING CRITERIA CONTINUING LISTING CRITERIA
PUBLIC SPREAD
Public Spread
 Public Spread Substantial shareholders holding up to 15%
can be considered “public” provided….
 Financial Condition (PN17/ GN3)
 Such shareholder is not a
 Cash Company (PN16/ GN2) 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
37 40

Public Spread Financial Condition
25% public spread Need not maintain  Shareholders’ Equity (SE) < 25% Of Paid-Up Capital &
minimum number of SE< RM40 million
(excluding treasury shares)
public shareholders
 R&M On Assets Of Listed Issuer Or On Subsidiary/
Public excludes
Associated Company > 50% Total Assets
 Directors of Listed Issuer & its
subsidiaries  Revenue < 5% Of Paid-Up Capital
 Substantial shareholders  Adverse/ Disclaimer Opinion By Auditors
(>5%) of Listed Issuer
 Associates of directors &  Modified Opinion On Going Concern & SE < 50% Of Paid-
Up Capital
substantial shareholders of
Listed Issuer 38 41
41
CONTINUING LISTING CRITERIA

PUBLIC SPREAD CONTINUING LISTING CRITERIA
Public Spread Financial Condition
Associates Of Directors/ Substantial  Default In Payment & Without Solvency Declaration
Shareholders
 Suspended/ Ceased All/ Major Business/ Operations
 Family members (spouse/parent/child etc.)  Winding-up Order On Subsidiary/ Associated Company >
 Person or body corporate, accustomed or 50% Total Assets
obliged to take instructions
Any
Triggered
(Appendix 5)
PN 17
39 42
7
Financial Condition Financial Condition
Failure To Suspension/
Regularise Delisting
43 46

Financial Condition – Oilcorp
Cash Company
Default In Payment & Without
> 70% Assets = Cash Or Short Term Investment
Solvency Declaration
“..failed to make interest payment Triggered
of RM1.6 million…”
“..directors are unable to form an PN 16

opinion that the company will
be able to meet its debts as they
fall due…company is not solvent”
44 47

Financial Condition
Cash Company
Immediate Trigger
Implement Notify
Announcement Submit Cash Bursa To
12 mths As Per Bursa
As PN17 If RTO Plan To Company Determine
from 1st SC’s In Writing
Company SC Criteria
ann. Timeframe
3 Months
Implement Immediate
Submit
As Per 12 Announcement PN 16
Announce Implement Plan To
Submit SC’s months As PN16 Company
Whether 12 mths Within SC
If Not Plan To Timeframe Company
Regularisation From 1st 6 – 12
RTO Bursa +
Plan = Ann. Months
Approval
RTO
45 48
8
AGENDA AGENDA
 Board Structure  Board Structure
 Regulatory Framework  Regulatory Framework
 IPO Rules  IPO Rules
 Sponsorship Regime Of ACE Market  Sponsorship Regime Of ACE Market
 Post Listing Obligations (LR)  Post Listing Obligations (LR)
 Continuing Listing Criteria  Continuing Listing Criteria
 Financial Reporting  Financial Reporting
 Transactions  Transactions
 Corporate Governance  Corporate Governance
 Takeovers  Takeovers
 Corporate Disclosure Policy  Corporate Disclosure Policy
 Dealing In Securities By Directors  Dealing In Securities By Directors
 Issue Of Securities  Issue Of Securities
 Sub-Division & Consolidation  Sub-Division & Consolidation
 Share Buy-Back  Share Buy-Back
 Enforcement  Enforcement
 Withdrawal Of Listing 49  Withdrawal Of Listing 52
FINANCIAL
FINANCIAL REPORTING
REPORTING TRANSACTIONS
 Quarterly Results < 2 months after

 Non-related party transaction (Non-RPT)
quarter end
 Related Party Transactions (RPT)
Or immediately after
Board approval
 Recurrent related party transactions (RRPT)
 Annual Audited < 4 months after
Accounts financial year end  Percentage ratios (% Ratios)
 Annual Report < 6 months after
financial year end  Obligations
50 53
FINANCIAL
FINANCIAL REPORTING
REPORTING TRANSACTIONS
Non-RPT/ RPT RULES
Late Submission Of Financial Statements
In addition to
enforcement
Close Due date for Suspension action
“Entered Into By Listed Issuer Or Its
of 1Q 1Q Results Deadline Subsidiaries”
3 MD 5 MD
30/9/09 30/11/09 7/12/09 Next MD 31/5/10
Suspension Commence
24/11/09
Effected delisting
Announce unable
to release 1Q 6 months
Results
51 54
9
TRANSACTIONS
Non-RPT/ RPT RULES TRANSACTIONS
Non-RPT RPT transactions……

Does not exclude transaction of revenue nature in
“Acquisitions or disposals of assets by a ordinary course of business
listed issuer or its subsidiaries but
excludes transactions of revenue nature
in the ordinary course of business” RRPT
55 58
TRANSACTIONS
Transaction - RPT TRANSACTIONS
Non-RPT/ RPT RULES
RPT Related Parties
Persons
Connected
“Transaction entered into by the listed
Holding
issuer or its subsidiaries which involves Company Directors Preceding
the interest, direct or indirect, of a 6 months
Listed prior to
related party” Company transaction
Major
Subsidiaries Shareholders
Related
56
Parties 59
TRANSACTIONS
Non-RPT/ RPT RULES
Related Parties
RPT transactions include
 Directors includes chief executive
 Acquisition, disposals or leasing of assets
 Establishment of joint ventures  Major Shareholder
 Provision of financial assistance > 10% voting shares
 Provision or receipt of services > 5% voting shares, if largest shareholder
 Any business transaction or arrangement
 Persons Connected
 Family members (spouse/parent/child etc.)
….entered into by company or subsidiaries.
 Partners
 Person or body corporate, accustomed or
obliged to take instructions
57 60
10
TRANSACTIONS
Transaction - RPT TRANSACTIONS
Non-RPT/ RPT RULES
RPT RPT (Basic Example 3)
Family Members
Director
“Transaction entered into by the listed
issuer or its subsidiaries which involves
the interest, direct or indirect, of a Listed Mr. ABC
related party” Company
Land Land
61 64
TRANSACTIONS
Non-RPT/ RPT RULES
RPT (Basic Example 1) RPT (Basic Example 4)
Commission
Major
Shareholder Directors/ Directors/
Shareholder Unrelated
>10%
Shareholders
Land Listed Listed ABC

Company Company Sdn Bhd
Land Land Land

62 65
TRANSACTIONS
Non-RPT/ RPT RULES
RPT (Basic Example 2) Non-RPT Materiality Test To
Determine Obligations
Major Under The LR
Shareholder >10%
8 Ratios
>10%
% Ratio ≥ 5% And
Listed XYZ
Consideration Announcement
Company Sdn Bhd
≥ RM250k
ABC ABC
Sdn Bhd Sdn Bhd
63 66
11
TRANSACTIONS
Non-RPT/ RPT RULES
Non-RPT RPT Announcement
+
Announcement Shareholders’
+ Approval
% Ratio ≥ 25% And Shareholders’ % Ratio ≥ 25% And
+
Consideration Approval Consideration
Valuation of
≥ RM250k + ≥ RM250k
Real Estate
Valuation of +
Real Estate Independent
Adviser
+
67
Main Adviser
70
TRANSACTIONS
Key Amendments 1
RPT 10.04 Acquisition or disposal of real estate
i. RPT & % ratio > 5%

% Ratio ≥ 0.25% And ii. non-RPT & % ratio > 25%
Consideration  Valuation report is required for:-
Announcement
≥ RM250k
i. real estate to be acquired/
disposed; or
ii. corporation with real estate to be

acquired/ disposed
68 71
TRANSACTIONS
Key Amendments 1
RPT 10.04 Corporation With Real Estate:-

Announcement
+  Property developer/ property
Shareholders’ investment corporations – valuation
% Ratio ≥ 5% And Approval on all material real estates.
Consideration +
≥ RM250k  Other corporation that owns real
Valuation of
estate and where real estate has
Real Estate
been revalued & revaluation formed
+
basis for arriving at consideration
Independent
Adviser
69 72
12
TRANSACTIONS
Key Amendments 1 TRANSACTIONS
Transaction : RRPT
RRPT  Purchase of raw materials for manufacturing
10.04 Acquisition or disposal of real estate business
 Purchase of machinery for manufacturing

 Valuation date < 6 months from Circular date
business
e.g.
 Valuation Report must comply with SC’s Asset  Purchase of fertilizers for plantation business
Valuation Guidelines
 Sale of completed houses by property developer
 Bursa has discretion to require a 2nd valuation
 Purchase of office equipment
 Rental of office premises
73  Receipt of management & support services 76
TRANSACTIONS TRANSACTIONS
Transaction : RRPT
RPT transactions…… RRPT  Higher threshold for announcement
(% ratio = 1% or RM1m, whichever the higher)
Does not exclude transaction of revenue nature in
ordinary course of business  Shareholders’ mandate allowed
 Independent Adviser not required (% ratio > 5%)

 Necessary For Day-To-Day
Operations  Main Adviser not required (% ratio > 25%)
RRPT
 Contribute Directly/ Indirectly To  Annual renewal required
Generation Of Revenue
 Disclosure in Annual Report required
 Reasonably Expected Given
 Immediate announcement where actual exceeds
Type Of Business 74 estimated by > 10% 77
TRANSACTIONS
Transaction : RRPT TRANSACTIONS
8 RATIOS Attributable to ordinary equity holders
i.e. shareholders’ fund
RRPT
Revenue Nature/ Recurrent Value/ Equity Issued/
JV Ratio
Net Assets Equity Capital
Ordinary Course Of Business
 Necessary For Day-To-Day Once Every Net Profits/

Consideration/
Cost/
Market
Operations 3 Years Net Profits
Capitalisation
Net Assets
 Contribute Directly/ Indirectly To % Ratios

Generation Of Revenue No. of shares x
Consideration/ Total Asset/ market price
After all charges, tax & Net Assets Total Assets
 Reasonably Expected Given extraordinary items
Type Of Business 75 78
13
TRANSACTIONS CORPORATE GOVERNANCE
CG
8 RATIOS
Materiality Test To Determine Board of Directors
Obligations Under LR:-
 At least 2 or 1/3rd independent directors
 Announcement  No conviction in court of law within last 5 years

 Shareholders Approval  Maximum 25 directorships (10 in PLCs/ 15 in non-PLCs)
 Independent Adviser
 Must attend MAP by Bursatra Sdn Bhd
 Main Adviser
% Ratios  Must attend continuous training
 Valuation Report (real estate
transactions)  Must vacate office, if unsound mind, bankrupt, convicted
or absent > 50% of board meeting
79 82
AGENDA CORPORATE
CG GOVERNANCE
 Board Structure Audit Committee
 IPO Rules
 Sponsorship Regime Of ACE Market  At least 3 members
 Continuing Listing Criteria  All must be non-executive directors
 Financial Reporting
 Transactions  Majority must be independent directors
 Takeovers  Chairman must be an independent director
 At least 1 must be MIA member, or
 Share Buy-Back  If not MIA, 3 years experience plus qualifications as per
 Enforcement 1st Schedule of Accountants Act 1967 (Appendix 6)
 Withdrawal Of Listing 80 83
CORPORATE GOVERNANCE CORPORATE GOVERNANCE

Independent Director
2007 Malaysian Bursa’s Corporate Listing
Code Of Corporate Governance Requirements
 Independent of management and free from any business
Governance Guide 2009 or other relationship that could interfere with exercise of
independent judgement or ability to act in the best
interest of a listed issuer e.g.
Broad Principles & Suggestions &
Mandatory
Best Practices Practical Examples
 Is not an executive director of the listed issuer or its
+ related corporation (“said Corporation”)
Voluntary/ Hybrid Disclosure in
Annual Report
 Has not been within the last 2 years and is not an
 A narrative statement on how the listed issuer has officer (except non-executive director) of the said
applied the Principles of CG Code; and Corporation
 A statement on the extent of compliance with the Best
Practices of CG Code - specifically identify with reasons
for non-compliance and the alternatives adopted, if any.  Is not a major shareholder of the said Corporation
81 84
14
CORPORATE GOVERNANCE AGENDA
Independent Director  Board Structure
 IPO Rules
 Independent of management and free from any business  Sponsorship Regime Of ACE Market
or other relationship that could interfere with exercise of  Post Listing Obligations (LR)
independent judgement or ability to act in the best  Continuing Listing Criteria
interest of a listed issuer e.g.  Financial Reporting
 Transactions
 Is not a family member of an executive director, officer  Corporate Governance
or major shareholder of the said Corporation  Takeovers
 Is not acting as a nominee or representative of any
executive director or major shareholder of the said  Sub-Division & Consolidation
Corporation  Share Buy-Back
 Enforcement
CORPORATE
CG GOVERNANCE TAKEOVERS
Audit Committee
 At least 3 members
 All must be non-executive directors
Securities Custodian Code On Take-Overs &

 Majority must be independent directors Mergers
Commission
 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)
86 89
CORPORATE
CG GOVERNANCE TAKEOVERS
Audit Committee Review & report Board of Directors Mandatory General Offer
 External Auditors – audit plans, audit report & evaluation

of internal controls MGO On Balance
Of Up To 67% #
 Internal Auditor – scope, function, competency, Mr X Controlling Other

Shareholder Shareholders
resources, processes, program & results thereof
>33%; <50% >33%
 Financial results – accounting policies, compliance with
accounting standards, significant & unusual events Listed Company Listed Company Balance
67%
 Related party transactions
# Conditional Upon Acceptance Resulting In Offeror
Holding > 50% in Listed Company
87 90
15
TAKEOVERS AGENDA
Mandatory General Offer  Board Structure
 IPO Rules
MGO On Balance Of Up To  Post Listing Obligations (LR)
65% #  Continuing Listing Criteria
Mr X Shareholder Other
 Transactions
A Shareholders
 Takeovers
+ 2%/  Corporate Disclosure Policy
6 months >33%; <50% 2% Balance  Dealing In Securities By Directors
65%  Issue Of Securities
Listed Company
 Share Buy-Back
# Conditional Upon Acceptance Resulting In Offeror  Enforcement
Holding > 50% in Listed Company  Withdrawal Of Listing 94
91
AGENDA DISCLOSURE
 Board Structure Dealing In Securities By Directors
 IPO Rules
 Sponsorship Regime Of ACE Market  Directors buy/ sell securities of own listed
 Post Listing Obligations (LR) company
 Financial Reporting  Closed period
 Transactions
 Takeovers  Procedures in dealings
 Dealing In Securities By Directors  Disclosure requirements
 Share Buy-Back
 Enforcement
DISCLOSURE AGENDA
LR’s Corporate Disclosure Policy  Board Structure
 IPO Rules
 Disclosure Of Material Information  Sponsorship Regime Of ACE Market
 Thorough Public Dissemination  Continuing Listing Criteria
 Clarification Of Rumours  Transactions
 Response To Unusual Market Activity  Takeovers
 Unwarranted Promotional Disclosure
 Insider Trading  Share Buy-Back
 Enforcement
16
ISSUE OF SECURITIES ISSUE OF SECURITIES
 General mandate to issue shares or  General mandate to issue shares or convertible

convertible securities securities
 Allotment to directors etc.  Allotment to directors etc

etc..
 Rights Issue  Rights Issue
 Bonus Issue  Bonus Issue
 Employee Share Option Scheme  Employee Share Option Scheme
97 100

Powers for directors to issue shares
without specific approval at EGM
General Mandate Allotment to Directors etc.
 Resolution pursuant to Section 132D, CA 1965
 Renewed at every AGM  Includes chief executive & major shareholders of
 Allotment to directors etc. prohibited the listed issuer; and
 Nominal value, when aggregated with issuance in  Persons connected to them.
preceding 12 months, must not exceed 10% of
nominal value of issued & paid-up capital
(excluding treasury shares) Similar to “Associates”; see Appendix 5
 Pricing not more than 10% discount to weighted

average market price for 5 market days before
price-fixing date 98 101

Entitlement basis e.g. rights
issue, bonus issue
General Mandate Allotment to Directors etc.
 Flexibility & cost savings; need not convene EGM  Except on pro-rata basis, a listed issuer & its
subsidiary must not issue shares or convertible
 Normally for raising funds to repay bank securities to “Directors etc.” without shareholders
borrowings/ other creditors or general working approving the specific allotment to them in
capital general meeting. Separate resolutions
required
 Via private placement or special issue  The “interested Directors etc.” must not vote on
the resolution approving the specific allotment to
him/ her.
 Precise terms & conditions of allotment must be

99 disclosed to shareholders 102
17
Allotment to Directors etc. Abstain from voting of
respective resolutions
Rights Issue
Directors Major Other

Directors Major Chief
(also sh/holder) Shareholder Shareholders
Shareholder Executive
Issue shares/ Issue shares/

Issue shares/ Issue shares/ convertible securities for
Listed convertible securities for
Listed
convertible securities convertible securities cash on pro-rata Issuer cash on pro-rata
Issuer entitlement basis entitlement basis
Shareholders’ approval on
specific allotment is required e.g.
with precise terms &  1 new ordinary share for every 2 existing ordinary shares held
conditions  1 new ordinary share with 1 free warrant for every 2 existing
Subsidiary
ordinary shares held
103
106

General Mandate Can You See Why ?? Rights Issue (RI)
 Resolution pursuant to Section 132D, CA 1965  Must be renounceable
 Renewed at every AGM
 Underwriting at listed issuer’s discretion
 Allotment to directors etc. prohibited
 Subject to minimum level of acceptance, failing
 Nominal value, when aggregated with issuance in
which RI terminated & all proceeds returned to
preceding 12 months, must not exceed 10% of
subscribers
nominal value of issued & paid-up capital
(excluding treasury shares)  Shareholders’ irrevocable undertaking to
 Pricing not more than 10% discount to weighted subscribe must be supported by sufficient
average market price for 5 market days before financial resources as verified by independent
price-fixing date 104
party 107
 General mandate to issue shares or convertible  General mandate to issue shares or convertible
securities securities
 Allotment to directors etc.  Allotment to directors etc.
 Rights Issue  Rights Issue
 Bonus Issue  Bonus Issue
 Employee Share Option Scheme  Employee Share Option Scheme
105 108
18
ISSUE OF SECURITIES AGENDA
Bonus Issue  Board Structure
 IPO Rules
Directors Major Other  Sponsorship Regime Of ACE Market
(also Sh/holder) Shareholder Shareholders  Continuing Listing Criteria
 Transactions
Issue shares/ Issue shares/  Corporate Governance
convertible securities on
Listed convertible securities on  Takeovers
pro-rata entitlement Issuer pro-rata entitlement  Corporate Disclosure Policy
basis basis  Dealing In Securities By Directors
e.g.
 Sub--Division & Consolidation
Sub
 1 new ordinary share for every 1 existing ordinary shares held
 Share Buy-Back
 1 new ordinary share for every 10 existing ordinary shares held
 Enforcement
Proceeds $$$$ ???  Withdrawal Of Listing 112
109
ISSUE OF SECURITIES SUB-DIVISION & CONSOLIDATION

Sub-division of Shares
 General mandate to issue shares or convertible
securities  Also know as “Share Split”
 Allotment to directors etc.  E.g.
Issued & paid-up capital of RM100m comprising
 Rights Issue 100m ordinary share of RM1.00 each
 Bonus Issue
Issued & paid-up capital of RM100m comprising
 Employee Share Option Scheme 200m ordinary share of RM0.50 each
110 113
ISSUE OF SECURITIES SUB-DIVISION & CONSOLIDATION

ESOS Sub-division of Shares
 A right but not an obligation to subscribe for
 Adjusted market share price after sub-division
shares in the listed issuer
must not be less than RM0.50 based on daily
 Not more than 15% of issued & paid up share closing price during 3-month period prior to
capital at any one time application date (application to Bursa)
 Participation restricted to directors & employees
of listed issuer’s group of companies  Listed issuer must not be Cash Company (PN16/
GN2) or PN17/ GN3 Company
 Maximum duration of scheme is 10 years
 Pricing not more than 10% discount to 5 day
weighted average market price when option is
offered 111 114
19
SUB-DIVISION & CONSOLIDATION SHARE BUY-BACK
Consolidation of Shares
Treasury  No voting rights
 Opposite of Sub-Division Shares
 No entitlement rights
 E.g.
 Disregarded for computation of
Issued & paid-up capital of RM10m comprising EPS, NTA etc
100m ordinary share of RM0.10 each
 Subsequently cancelled or re-
sold “in the market” or distribute
Issued & paid-up capital of RM10m comprising as “share dividend”
10m ordinary share of RM1.00 each
115 118
AGENDA SHARE BUY-BACK

 Board Structure  Utilisation of excess funds to purchase
Why Share
 Regulatory Framework own shares which are deemed
 IPO Rules Buy-Back?
undervalued by the market
 Post Listing Obligations (LR)  Potential gain from resale of treasury
 Continuing Listing Criteria shares when market recovers
 Transactions  Reduce unwarranted volatility in share
 Corporate Governance price by stabilising supply, demand and
 Takeovers market price
 Dealing In Securities By Directors  Flexibility to declare share dividend,
 Issue Of Securities instead of cash dividend
 Share Buy-
Buy-Back  Enhance EPS & positive impact of
 Enforcement share price
SHARE BUY-BACK SHARE BUY-BACK

 Authorisation ~ shareholders’ mandate required
Listed
Issuer Directors
 Validity of mandate (AGM to AGM) ~
Major Shareholders
 the conclusion of the first AGM after mandate is
Issued/ pd- Other Shareholders obtained
up Shares
Investing Public  the expiration of the period within which the
next AGM must be held; or
Listed Issuer (itself)
 revoked or varied by ordinary resolution passed
by the shareholders in general meeting
whichever occurs first.
117 120
20
SHARE BUY-BACK SHARE BUY-BACK
 “On the market” transactions ~ buy-back  Resale price ~ not less than the weighted
through Automated Trading System average market price for the shares for the 5
market days immediately prior to the resale; or
 Maximum limit ~ shares purchased or held as
treasury share must not to exceed 10% of its A discounted price of not more than 5% to the
issued and paid-up capital weighted average market price for the shares for
the 5 market days immediately prior to the resale
 Source of funds ~ wholly out of retained profits provided that
(“RP”) or share premium (“SP”) account of the
listed issuer or both (RP & SP at Company level)  The resale takes place not earlier than 30
days from date of purchase; and
 The resale price is not less than the cost of

purchase
121 124
SHARE BUY-BACK AGENDA

 Types of funds ~ No restriction on the types of  Board Structure
funds which can be utilised so long as the buy  Regulatory Framework
back is backed by an equivalent amount of  IPO Rules
retained profits or share premium  Sponsorship Regime Of ACE Market
i.e. use of bank borrowings permitted  Financial Reporting
 Transactions
 Declaration of solvency ~ in accordance with  Corporate Governance
section 67A of the Companies Act 1965 and Part  Takeovers
IIIA of the Companies Regulations 1966  Corporate Disclosure Policy
 Execution of solvency declaration ~ signed and  Sub-Division & Consolidation
dated by the majority of the directors prior to  Share Buy-Back
actual buy-back & valid for 6 months  Enforcement
SHARE BUY-BACK ENFORCEMENT
 Public shareholding spread ~ must be Undertaking By Listed Company

maintained
“To Bursa Malaysia Securities Berhad
 Appointment of stockbroker ~ to purchase Compliance with Main Market Listing Requirements and Rules of Bursa
and/or resell treasury shares. Malaysia Securities Berhad
In consideration of Bursa Securities approving the application for admission

 Purchase price ~ not more than 15% above the of ..................
weighted average market price for the shares for
the 5 market days immediately prior to purchase WE FURTHER UNDERTAKE AND AGREE to comply with Bursa Securities
Main Market Listing Requirements ……insofar as the same shall apply to
the Corporation.
The above Undertaking has been signed by me as..............................

Date:
Signature:”
123 126
21
ENFORCEMENT ENFORCEMENT
Undertaking By Directors Paragraph 16.13

“To Bursa Malaysia Securities Berhad “A director of a listed issuer must not….
Compliance with Main Market Listing Requirements
I, ......................................[name of director], am a director of ........................

“…cause, aid or abet a breach of these
to be admitted to the Official List of Bursa Securities … Requirements by such listed issuer or..”
In consideration …….., I UNDERTAKE AND AGREE to comply with Bursa
Securities Main Market Listing Requirements including any amendment as “…permit, either knowingly or where he had
may be made from time to time, insofar as the same shall apply to me as a
director of the Corporation(s). reasonable means of obtaining such
knowledge, such listed issuer to commit a
Yours faithfully”
breach of these Requirements”
127 130
Paragraph 16.18 Common Breaches

 Late Submission Of Financial Statements
“In the event of any breach of these
Requirements by any applicant, listed  Material Deviations Between Audited
issuer, management company, trustee or Results And Unaudited Results
its directors, officers or advisers….the
Exchange may take or impose such  Late Announcement Of Material Information
actions or penalties as it consider
 Related Party Transactions
appropriate.”
Source : Bursa Malaysia Website
128 131
Types of Actions/ Penalties Recent Trend

 Caution Letter Paragraph 16.13 - A director of a listed issuer…must
 Private Reprimand not cause, aid or abet a breach of these
Requirements by such listed issuer…or permit, either
 Public Reprimand
knowingly or where he had reasonable means of
 Fine not exceeding RM1.0 million obtaining such knowledge, such listed issuer…,to
 Public Reprimand & Fine commit a breach of these Requirements
 Mandatory training program for directors Directors’ Enforcement
 Suspension
Public Reprimand & Fine On Directors
 Delisting
129 132
22
ENFORCEMENT WITHDRAWAL OF LISTING
GO & Other Corporate Proposals
A listed issuer may withdraw its listing as follows:
Fine On Directors
 In a take-over offer, upon 90% or more of its listed shares (excluding
treasury shares) being held by a shareholder either individually or
jointly with associates of the said shareholder; or
 In relation to a corporate proposal undertaken by or in relation to the

Enforceable ? listed issuer, upon 100% of the listed shares of the listed issuer being
held by a shareholder either individually or jointly with the associates
of the said shareholder, and
 The offeror’s intention is not to maintain listing status of the listed

issuer
133
136
AGENDA
 Board Structure
 IPO Rules
 Transactions
 Takeovers
END
 Corporate Disclosure Policy THANK YOU
 Share Buy-Back
 Enforcement
WITHDRAWAL OF LISTING
Voluntary Withdrawal
 A listed issuer may request for withdrawal of listing subject to
approval of Bursa & shareholders
 Resolution must be approved by a majority in number representing

three fourths in value of the shareholders, present and voting; and
 Shareholders who object is not more than 10% of the value of the
shareholders, present and voting
 Shareholders are offered a reasonable cash alternative or other

reasonable alternative (“Exit Offer”)
 Independent adviser is required to advise and make

recommendations to shareholders, as well as the fairness and
reasonableness of the Exit Offer.
135
23

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AGENDA

AGENDA REGULATORY FRAMEWORK

BOARD STRUCTURE REGULATORY FRAMEWORK

Securities Commission Bursa Malaysia

 Prospectus Guidelines  ACE Market LR

 Asset Valuation Guidelines  Clearing Rules

Market Capitalisation RM999 billion  Structured Warrants Guidelines  Depository Rules

Source : Bursa Malaysia Website Refer To Appendix 1

Approving Authority Approving Authority RTO

REGULATORY FRAMEWORK AGENDA

REGULATORY FRAMEWORK IPO RULES

What’s an IPO? Initial Public Offering

Other Matters Other Matters

Market Capitalisation (Market Cap)

RM500 million  Uninterrupted PAT

IPO RULES IPO RULES

 Aggregate profit after  25% in hands of 1,000 public shareholders

 Uninterrupted PAT  No mandatory underwriting

 Latest PAT > RM6m  Minimum offering to public (Appendix 3)

IPO RULES IPO RULES

Main Market Main Market

 > 1 financial year of

IPO RULES IPO RULES

Main Market ACE Market

 Thereafter, at least 45% under moratorium,  Sponsor to determine suitability

Main Market ACE Market

 Deemed complied if no  Suitability, Efficacy, Past Conduct of Directors & Key

ACE Market ACE Market

 5 years after listing, whichever is earlier

IPO RULES IPO RULES

ACE Market ACE Market Same as Main Market

Bumiputra Equity Interest

IPO RULES AGENDA

• 1st FY = IPO Sponsor  Annual audited financial statements;

SPONSORSHIP – ACE MARKET SPONSORSHIP – ACE MARKET

 Within 1 full financial year after admission

• Bursa will not approve unless there is a replacement

• After approval from Bursa, Sponsor or plc must give 3

SPONSORSHIP – ACE MARKET AGENDA

CONTINUING LISTING CRITERIA CONTINUING LISTING CRITERIA

CONTINUING LISTING CRITERIA

CONTINUING LISTING CRITERIA CONTINUING LISTING CRITERIA

“..failed to make interest payment Triggered

“..directors are unable to form an PN 16

CONTINUING LISTING CRITERIA CONTINUING LISTING CRITERIA

 Quarterly Results < 2 months after

Non-RPT RPT transactions……

Land Listed Listed ABC

Land Land Land

RPT 10.04 Acquisition or disposal of real estate

i. RPT & % ratio > 5%

ii. corporation with real estate to be

RPT 10.04 Corporation With Real Estate:-

 Purchase of machinery for manufacturing

 Rental of office premises

73  Receipt of management & support services 76

 Independent Adviser not required (% ratio > 5%)

 Necessary For Day-To-Day Once Every Net Profits/

 Contribute Directly/ Indirectly To % Ratios

 Announcement  No conviction in court of law within last 5 years

CORPORATE GOVERNANCE CORPORATE GOVERNANCE

 All must be non-executive directors

Securities Custodian Code On Take-Overs &