All
Authorized Dealers
In Foreign Exchange,
Dear
Sirs,
ISSUE
AND EXPORT OF BONUS SHARES IN FAVOUR OF NON-RESIDENTS
Attention
of the Authorized Dealers is invited to the Circular Letter
No.INT: 129/7(455)-93 dated the 13th January,
1993 wherein it was clarified that exemption form the provisions
of Section 13(1) of the Foreign Exchange Regulation Act,
194 granted vide para-6,
Chapter
XX of Foreign Exchange Manual does not cover issue and
export of Bonus Shares and that the companies concerned
should ensure to obtain specific approval of the State Bank
for all bonus issues in favour of non-residents.
2.
It has now been decided to grant general permission to such
companies as are covered under para-6
(a)
I & (a)
II ibid i.e. companies listed on Stock Exchanges in
Pakistan and manufacturing concerns which are either unlisted
Public Limited or Private Limited Companies, for issue and
export of bonus shares to their non-resident shareholders.
However, before issuing bonus shares to non-residents the
companies concerned must ensure:-
-
That
the shares against which bonus shares are to be issued
are held by the non-residents under the specific and/or
general permission of the State Bank and registered
at their foreign address.
-
That
in case the shares are held under the general permission,
the requirements as contained in para-7
(a),
(b)
& (c),
Chapter
XX ibid has been fully compiled with.
-
That
the company fulfils statutory requirement of 25% free
reserves for issue of bonus shares or necessary waiver
from Corporate Law Authority has been obtained in
this respect.
-
That
the application on the prescribed form (Annexure
'B') is duly certified by the Company’s Auditors
as well as their designated banker.
3.
Within 30 days from the date of export of bonus shares issued
in terms of para – 2 above,
the companies concerned will submit the following documents
to their designated banker:-
-
Application
in duplicate in the prescribed form (Annexure
'B') duly certified by the company’s Auditors,
which will also be counter-signed by the designated
banker. There will be one consolidated application
in respect of all the non-resident shareholders.
-
Tow
certified copies of the audited annual Profit &
Loss Account and Balance Sheet of the Company for
the year to which the bonus issue pertains.
-
Two
certified true copies of the shareholders/Directors’
resolution declaring the bonus.
-
Two
certified true copies of Auditor’s Certificate
regarding free reserves in terms of SRO.710(1)/80
dated the 26th June, 1980.
The
Authorized Dealer concerned will retain the duplicate
copy of the application together with one copy of each
document for its record and pass on the other to Foreign
Exchange Department (Investment Division), State Bank
of Pakistan, Central Directorate, and Karachi.
4.
It has further been decided that from now-onward the documents
required in terms of sub-paras (a),
(b)
& (c)
of para-7
ibid will not be passed on to the State Bank by the designated
banks in piece-meal in respect of each issue/transfer but
in the consolidated form for all the shares issued/transferred
to non-residents alongwith the application for remittance
of dividend and/or application for issue and export of bonus
shares as above. The designated Authorized Dealer, before
passing on the documents to the State Bank, will ensure
that the following particulars of the inward remittance
have been further certified by the concerned Authorized
Dealer (issuing bank) under his signature and seal on the
back of each Proceeds Realization Certificate:-
-
Amount
of foreign currency.
-
Date
of receipt.
-
Rate
of exchange applied.
-
Rupee
equivalent.
-
Page
No; Item No.; reference of Schedules and period of
monthly exchange returns under which the transaction
has been reported to the State Bank.