ADVANCED CORPORATE LAWS AND PRACTICES

Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

A.1 (a) CL’s board has resolved to get shares of CL de-listed from PSX. It means that the board
has resolved for voluntary delisting of CL’s shares.

The minimum purchase price which should be notified to PSX for purchase of CL’s shares
is Rs. 64.22 per share, which is the highest of the following prices per share, as required
under the PSX Rule Book:

Rupees
(i) Market price as of date of notification i.e. 6 December 2022 61.50
(ii) Average market price (annualized) for last three years 62.00
(iii) Intrinsic value per share (W-1) 63.33
(iv) Earnings multiplier approach (W-2) 64.22
(v) Maximum price at which RL had purchased the shares in the
preceding one year from the open market 63.00

W-1:
Rs. 63.33 per share (Rs. 1,900 million ÷ 30 million shares) is the intrinsic value calculated on the
basis of the revalued amount of the CL’s assets as on 30 November 2022, determined by
the professional valuers, duly certified by a firm of chartered accountants, which is issued
within a period of three months.

W-2:
Rs. 64.22 per share [4.94(2.13+1.58+1.23)(W-3) (being higher than 4.73) × 13(W-4)] calculated
on the basis of earnings multiplier approach based on adjusted EPS of CL’s after tax profit
of last three years preceding the date of the notice given to PSX i.e. 6 December 2022 as
reported in its annual audited financial statements multiplied by current P/E ratio.

W-3: 2022 2021 2020

Profit after tax for the year (Rs. in million) 142 135 185
No. of shares issued (in million) 30 30 30
Earnings per share (Rs.) 4.73 4.50 6.17
Weightage (%) 45% 35% 20%
Earnings per share - adjusted (Rs.) 2.13 1.58 1.23

W-4: P/E ratio = current price ÷ actual EPS of the year 2022 = 61.5 ÷ 4.73 = 13

(b) The process of determining the final purchase price to acquire CL’s shares is as follows:

(i) CL shall notify PSX, immediately when board resolved to get shares of CL de-listed
from PSX along with the reasons thereof and minimum price at which the shares
are proposed to be purchased i.e. Rs. 64.22 per share [as determined in (a) above].
(ii) A formal application to PSX shall be made by CL for de-listing supported by
reasons thereof and the proposed purchase price i.e. Rs. 64.22 per share [as
determined in (a) above] along with non-refundable application fee of Rs. 500,000
to be paid by RL.
(iii) Final purchase price of shares to be de-listed shall be fixed with the approval of PSX
and will be determined/approved by the PSX’s board on its own or on the basis of
recommendations of PSX’s Voluntary Delisting Committee.
(iv) The decision of the PSX’s board will be communicated to RL, CL and shall also be
notified and announced immediately.
(v) RL will be required to convey acceptance/refusal to the purchase price approved
by the PSX’s board within 7 days of conveying of the relevant decision to them.
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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

(vi) If RL prefers to appeal to the Commission on PSX decision, it must do so within

10 days of the decision.
(vii) Once the purchase price has been finalized either by the determination of the
Commission in appeal; or by RL accepting the price stipulated by PSX, CL shall
call a general meeting of its shareholders and pass a special resolution approved by
not less than ¾ of their number present at such meeting resolving that shares be de-
listed on terms stipulated by PSX.
(viii) The purchase agent will maintain a live bid in the System during initial period of
60 days of trades, at the minimum purchase price approved by PSX. The actual
purchase price shall be based on market forces, subject to minimum purchase price
determined by PSX.

A.2 (a) Course of action available to SIL in respect of its proposal:

SIL and FBL are qualifying creditors since their outstanding debt cumulatively amounts
to Rs. 1,650 million (900 + 750) which is more than two-third of the value of HRL’s assets
i.e. Rs. 1,600 million (2,400 × 2 ÷ 3).

SIL together with FBL shall have to file a petition in the Court for an order of mediation
against HRL, if they could make a prima facie case in this respect.

SIL’s responsibilities:
SIL together with FBL shall have to submit a plan of rehabilitation of HRL in the Court,
within thirty days after submission of the statement of affairs by HRL, upon the Court’s
directions.

SIL must ensure that rehabilitation plan submitted by it specifies following matters in
relation to HRL:
 Claims and classes of claims against HRL;
 Interests and classes of interests in HRL;
 Claims and interests belonging to HRL;
 Claims or interests that will or will not be impaired under the plan of rehabilitation;
 Places of business of HRL, details of its assets and any security interests created over
such assets;
 Particulars of HRL’s shareholders, directors and key management;
 Scheme of implementation of the plan of rehabilitation of HRL.

On receiving the order from the Court, SIL and FBL shall provide the notice of the order
of mediation to all interested parties within three days through:
 registered post, acknowledgement due or courier service; and
 publication in one English language and one Urdu language daily newspaper of
wide circulation in the country.

SIL and FBL shall ensure that the notice of the order of mediation specifies the
appointment of mediator and mentions that any claims against, and interests in HRL,
must be filed with mediator within a period of fourteen days of publication of notice of
the order of mediation.

SIL shall provide necessary funds to allow the mediator to perform the functions under
the Corporate Rehabilitation Act, 2018.

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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

(b) The Court has the power to appoint an insolvency expert to act as sole or joint mediator(s).
The Court may consider appointing Zain Ali as mediator if he fulfills all of the following
conditions:
 He is an insolvency expert having sound knowledge of insolvency practices of
Pakistan;
 He is a professional having minimum experience of fifteen years in the field of
accountancy, banking, finance, law, management;
 His name appears on the panel of insolvency experts maintained by the Commission
in consultation with the State Bank of Pakistan.

Determination of remuneration:
In the given scenario as the petition for an order of mediation is to be filed by SIL and
FBL being the qualifying creditors as discussed in (a) above, hence the remuneration of
mediator would be determined by HRL, SIL and FBL with mutual consent.

However, in case of disagreement between HRL, SIL and FBL remuneration of mediator
shall be determined by the Court.

A.3 The outward remittance of foreign exchange by LPL using the sources not permitted by the SBP,
raises the doubt that LPL may indulge in transfer of its property (i.e. its funds) out of proceeds
of crime that will lead to the offence of money laundering under the Anti-Money Laundering
Act, 2010 (AML).

Accordingly, if the prosecuting agency will appoint an officer for the investigation of LPL’s
affairs who would also make sure that LPL does not transfer any of its properties, whether
located within or outside Pakistan, till further notice, then under the AML, following would be
the risks related to LPL’s properties:

(i) Risk of attachment of local properties:

LPL’s properties may provisionally be attached for a maximum period of 180 days by an
order in writing, and with prior permission of the Court.

(ii) Risk of losing possession on confirmation of attachment of local properties:

LPL shall lose possession of the attached property after the aforesaid provisional
attachment is confirmed by the Court, based on the determination that LPL’s property is
involved in money laundering, which shall continue during the pendency of the
proceedings before a Court, relating to money laundering, unless LPL is acquitted.

However, where the property seized is perishable in nature or subject to speedy and
natural decay, or when the expense of keeping it in custody is likely to exceed its value,
the Court may, on the application of the investigating officer, order immediate sale of the
property in any manner deemed appropriate in the circumstances.

(iii) Risk of forfeiture of local properties:

If it is proved to the Court that LPL’s property is involved in money laundering, then by
the Court’s order it shall be forfeited and all the rights and title in such property shall vest
absolutely in the Federal Government free from all encumbrances.

(iv) Risk on properties located outside Pakistan:

LPL’s properties located outside Pakistan may have the same impact as that of properties
located within Pakistan as discussed above, if those other countries are contracting state.

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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

A.4 VPL holds 70.83% (850 ÷ 1,200) shares in SFL; therefore, VPL is holding company of SFL.
Further, VPL and SFL together holds 51.33% shares [30% (450 ÷ 1,500) + 21.33% (320 ÷ 1,500)] in
WFL which make WFL a subsidiary of VPL.

As per the decisions taken in the board meetings of VPL and its subsidiary SFL, it is established
that VPL wants to dispose of its subsidiary company i.e. WFL which is listed on PSX.

Steps required to be taken by VPL:

 In order to dispose of the subsidiary, VPL shall have to obtain consent of the general
meeting under an ordinary resolution either specifically or by way of an authorization.
 Notice of general meeting should be sent 21 days before the date of general meeting along
with proxy form and a statement setting out all material facts concerning such business.
 VPL being a private company may pass the resolution through circulation that need to be
signed by all the members for the time being entitled to receive notice of meeting.

Steps required to be taken by SFL:

Since SFL holds 21.33% shares of WFL, there are no additional steps required under any
corporate laws that need to be taken for executing its board’s decision. Nevertheless, since VPL
has to obtain the consent of general meeting, being a subsidiary, SFL may wait for the outcome
of VPL general meeting’s decision.

Steps required to be taken by TPL:

 Board of TPL shall recommend to the members purchase of the shares. The decision of the
board shall clearly specify the number of shares proposed to be purchased, the purchase
price, period within which the purchase shall be made, source of funds, justification for the
purchase and effect on TPL’s financial position.
 Purchase of shares shall be made under authority of a special resolution for which a general
meeting shall be held; and after purchase of shares it shall be cancelled.
 TPL being a private company may pass the resolution through circulation that need to be
signed by all the members for the time being entitled to receive notice of meeting.
 TPL shall make the purchase within such period and have to comply with such
requirements as may be specified in the regulations.
 TPL shall purchase the shares against cash consideration and out of the distributable profits
or reserves specifically maintained for the purpose.

A.5 (a) Continuity of existing board committees:

At present, DL falls under the definition of “public sector company” under the provisions
of the Public Sector Companies (Corporate Governance) Rules, 2013 (PSCCG) as its
77.33% (58 ÷ 75 × 100) shares are held by the Federal Government (FG), accordingly it
would be complying with the requirements of PSCCG.

However, after sale of DL’s 21 million shares by the FG to the general public, FG’s
shareholding will be reduced to 49.33% (37 [= 58 – 21] ÷ 75 × 100), accordingly, after
listing, instead of PSCCG, it shall have to follow the requirements of the Listed
Companies (Code of Corporate Governance) Regulations, 2019 (CCG).

At present, DL has five board committees that are mandatory under the PSCCG.

Under CCG, it would be mandatory for DL to have the following committees:

 Audit Committee;
 Human Resource and Remuneration Committee.
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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

Further, following committees are recommended under CCG:

 Nomination Committee;
 Risk Management Committee.

However, CCG does not require or recommend the formation of a procurement

committee.

Hence, after getting listed, DL may or may not continue to have the committees except
the Audit Committee and Human Resource Committee. Moreover, the Human Resource
Committee shall be captioned as Human Resource and Remuneration Committee as
required under CCG.

(b) Key changes to be made in the composition of the audit committee

Under CCG, at least one member of audit committee shall be financially literate, who
must fulfill the following criteria i.e. a person who:
 is a member of a recognized body of professional accountants; or
 has a post graduate degree in finance from a university or equivalent institution,
either in Pakistan or abroad, recognized by the Higher Education Commission of
Pakistan; or
 has at least ten years of experience as audit committee member; or
 has at least twenty years of senior management experience in overseeing of financial,
audit related matters.

PSCCG requires that all members should be financially literate, however, no criteria of
literacy is prescribed. Hence, if any one out of four existing audit committee members
meets the above requirement, DL can continue with them, otherwise, DL shall have to
appoint at least one person fulfilling the above criteria.

Key changes to be made in the conduct of the audit committee

(i) Under CCG, the Secretary to the audit committee shall either be a company
secretary or head of internal audit (HIA) while no such restriction exists under
PSCCG.
(ii) Under CCG, a meeting of the audit committee shall also be held, if requested by
the external auditors, head of internal audit or by chairman of the audit committee;
while no such requirement exists under PSCCG.
(iii) Under CCG, the minutes of audit committee shall be circulated to HIA and where
required to the CFO. Whereas PSCCG requires its circulation to CFO instead of
HIA.
Moreover, under CCG, minutes shall be circulated prior to the next meeting of the
board, whereas, under PSCCG, the minutes shall be circulated within 14 days of
the meeting.
However, under CCG where it is not practicable to circulate the audit committee’s
minutes prior to the next meeting of the board, the chairman of the audit committee
shall communicate a synopsis of the proceedings to the board and the audit
committee’s minutes shall be circulated along with the minutes of the meeting of
the board.

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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

(c) Changes in qualification criteria of CFO

As per PSCCG, if total assets of DL are less than Rs. 5 billion, a person holding a master
degree in finance from a university recognized by the HEC with at least ten years relevant
experience, can be appointed as CFO; otherwise should be a member of a recognized
body of professional accountants with at least five years relevant experience.
However, relevant experience has not been defined by PSCCG.

After the applicability of CCG, DL shall appoint a person as CFO who meets any of the
following criteria:

(i) He/she has at least three years of managerial experience in the fields of audit or
accounting or in managing financial or corporate affairs functions of a company
and is a member of ICAP or ICMAP;
(ii) He/she has at least five years of managerial experience in the fields of audit or
accounting or in managing financial or corporate affairs functions of a company
and is either a member of professional body of accountants whose qualification is
recognized as equivalent to post graduate degree by HEC of Pakistan or has a
postgraduate degree in finance from a university in Pakistan or equivalent
recognized and approved by the HEC of Pakistan;
(iii) He/she has at least seven years of managerial experience in the fields of audit or
accounting or in managing financial or corporate affairs functions of a company
and has a suitable degree from a university in Pakistan or abroad equivalent to
graduate degree, recognized and approved by the HEC of Pakistan.

A.6 (a) Under the provisions of the Banking Companies Ordinance, 1962 OBL’s liquid assets are
not sufficient to support borrowing from KBL on the proposed terms since its available
liquid assets are less than required 19% of demand liabilities. The position of OBL’s liquid
assets after proposed borrowing from KBL would be as follows:

Rs. in million
Total liquid assets as at 30 November 2022 (W-1) 2,635
Liquid assets required to be maintained @ 19% of demand liabilities
(19,400 (W-2) × 19%) 3,686
Liquid assets - shortfall (1,051)

W-1: Liquid assets of OBL as at 30 Nov 2022 Market Liquid

Cost
value assets
Investments: ----------- Rs. in million -----------
45 million securities of BL - held-for-trading 2,000 2,800 *-
45 million securities of DL - available-for-sale 1,500 1,250 1,250
(3,000/2) (2,500/2) (2,500/2)
Balances in current accounts with:
State Bank of Pakistan 445
Other banks 400
Cash in hand:
Local currency 300
Foreign currencies 240
2,635
*Not considered as OBL intends to pledge these shares with KBL

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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

W-2: Demand liabilities of OBL as at 30 November 2022 Rs. in million

(i) Deposits placed by customers in:
Pak rupees - current deposits 9,400
Foreign currency - current deposits 4,500

(ii) Deposits placed by financial institutions in:

Pak rupees - current deposits 5,500
19,400

(b) Under the provisions of the Banking Companies Ordinance, 1962 a person who holds five
percent or more shares of a banking company, should obtain prior approval of the State
Bank of Pakistan (SBP) and should meet and continue to meet the fit and proper test of
the SBP.

Considering the above, the requirement to be fulfilled by Ali Saeed in respect of further
purchase of shares of BBL and OBL are as follows:

Requirement before purchasing BBL’s shares:

No requirement is to be fulfilled by Ali Saeed with respect to proposed purchase of further
0.5% shares of BBL, as even after the said purchase his percentage of shareholding will
still be less than five percent (4.1 + 0.5 = 4.6%) i.e. the threshold specified under the
Banking Companies Ordinance, 1962.

Requirements before purchasing OBL’s shares:

As regards proposed purchase of further 1.2% shares of OBL, Ali Saeed shall have to take
prior approval of SBP as after the proposed purchase his shareholdings in OBL will be
5.6% (= 4.4 + 1.2) i.e. it will exceed the threshold of five percent shares. Moreover, he
will also have to meet fit and proper test as may be required by SBP.

Consequences of failure to meet the relevant requirements:

If Ali Saeed fails to meet the aforesaid requirements then he may have to face following
consequences, as SBP may give order due to such failure:
(i) To reduce, divest or transfer to a fit and proper person his shareholding within such
reasonable period, if Ali Saeed subsequently fails to meet the fit and proper test even
though he had purchased the shares with SBP’s prior approval.
(ii) To divest his shareholding to a fit and proper person, if in the opinion of SBP, he is
or is likely to be detrimental to the interest of OBL or its depositors.
(iii) To prohibit Ali Saeed (through an interim order):
 to transfer of, or carry out of the agreement or arrangement to transfer OBL’s
shares;
 to exercise voting rights.

In case of noncompliance of (i) or (ii), SBP may dispose of Ali Saeed’s shares of OBL
either through PSX or public auction.

SBP’s aforesaid interim order may also deprive Ali Saeed during continuance of aforesaid
interim order from his following entitlements, if during that period OBL announce:
 cash or stock dividends;
 issue of further shares.

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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

A.7 (a) The name proposed for the new company i.e. “Pakistan Indonesia Development
Chamber” (PIDC) is not suitable, as consideration has not been given to the following
provisions of the Companies Act, 2017 and the Companies (Incorporation) Regulations,
2017:
(i) PIDC’s principal line of business i.e. marketing functions of various electronic
equipment, does not commensurate with its name, whereas it is mandatory that it
shall always commensurate with the name.
(ii) The word Chamber is allowed for those companies that is to be established as a
Trade Organization under the Trade Organizations Act, 2013. Since it is not the
intention to form a trade organization, the word ‘Chamber’ cannot be used in the
name.
(iii) New company’s name cannot contain name of two countries i.e. Pakistan and
Indonesia, since there is no indication that it is a Joint Venture of two governments
or companies or individuals of two relevant countries. Permission for registration
with such words may only be extended subject to submission of documentary
evidence to the satisfaction of the registrar to support the fact.
(iv) Since SL intends to issue new company’s 40% shares to the general public, it means
it will be incorporated as a public limited company. Hence, the name must contain
the word “Limited” as the last word of the name of the company.

(b) GL intends to issue shares to PL at Rs. 8 per share i.e. at a discount of Rs. 2 per share, in
that case it has to meet the following statutory compliances before issuance of shares:
 Call board of directors meeting to get the approval for further issue of shares to PL
at a discount.
 Send notice of general meeting along with proxy form and draft of special
resolution, 21 days before the date of general meeting.
 Get the approval of members under special resolution to be passed in GL’s general
meeting for issue of shares at discount to PL, by specifying number of shares to be
issued (i.e. 12.5 million [= 100 million ÷ 8]), rate of discount (i.e. 20%), and
proposed price per share (i.e. Rs. 8 per share).
 GL may get the special resolution passed by circulation signed by all the members
for the time being entitled to receive notice of a meeting, if its number of members
are not more than fifty.
 After GL has passed a special resolution authorising the issue of shares to PL at 20%
discount, apply to the Commission for an order sanctioning the issue.
 File the duly authenticated special resolution with the registrar within fifteen days
from passing thereof. The resolution shall be embodied in or annexed to every copy
of the articles issued after that date, if articles have been registered and shall keep
the record of copy of the resolution.
 Obtain certification of statutory auditors confirming breakup value per share based
on assets (revalued not later than 3 years) or per share value based on discounted
cash flow is not more than Rs. 8 per share.
 Issue shares within sixty days after the date on which issue is sanctioned by the
Commission or within such extended time as the Commission may allow.
 Issue share certificates in physical form within thirty days after the allotment of
shares under the signature of GL’s authorized officer, in such manner and form as
may be specified.

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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

 The share certificates shall be issued in the following manner, namely:

– in pursuance of a resolution passed by GL’s board; and
– on surrender of letter of allotment to GL.
 Make compliance of other terms and conditions deemed fit by the Commission.
 GL being an unlisted company, if proposes to offer its shares to PL by way of private
placement, then it shall have to ensure that:
– During the current financial year, it has not made two private placements;
– Shares are offered through information memorandum which contain minimum
information as specified in Schedule-I of the Private Placement of Securities
Rules, 2017;
– It should receive the amount from PL through cheque or demand draft or other
banking channels but not in cash.

Following are statutory compliances to be met by GL after issuance of shares:

 File with the registrar a return of the allotment within 45 days after the date of
allotment stating the following:
– number of the shares (12.5 million shares);
– nominal amount (Rs. 125 million) of the shares comprised in the allotment;
– such particulars as may be specified of PL; and
– amount paid on each share (Rs. 8 per share).
 Accompany the following with the said return of allotments:
– report from its auditor to the effect that the amount of consideration Rs. 100
million has been received in full by GL and shares have been issued to PL;
– copy of the resolution passed by the company authorising such issue; and
– copy of the order of the Commission permitting the issue at higher than 10%
discount.
 If GL had passed the resolution by circulation then it shall have to be noted at
subsequent meeting of the members and made part of the minutes of such meeting.
 Contain particulars of the discount allowed on the issue of the shares to PL in every
prospectus relating to the issue of shares, and every statement of financial position
issued by GL subsequent to the issue of shares.
 Ensure that proceeds of the issue are utilized in the form and manner as disclosed
in the information memorandum, if the shares are issued by way of private
placement.

A.8 (a) Under the Foreign Exchange Manual (FEM), SEL’s banker would only be able to allow
the proposed remittances, once the banker gets the assurance that SEL complies with all
the terms and conditions specified in the FEM which are as follows:

(i) It is an export oriented Pakistani company.

(ii) It has designated it (i.e. one branch of the banker) to exclusively handle the
transaction.
(iii) Profits, dividends and capital of London branch would be repatriated.
(iv) Proposed funds for investment is legitimate and taxes have been paid.
(v) It has a clean record of loan repayments.
(vi) No money laundering and terrorism financing related investigation is pending
against SEL or its beneficial owner / key management personnel under Anti Money
Laundering Act, 2010 or Anti-Terrorism Act, 1997.
(vii) It has made an application to banker.
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 ADVANCED CORPORATE LAWS AND PRACTICES
Suggested Answer
Certified Finance and Accounting Professional Examination – Winter 2022

(viii) The application should be accompanied by the following relevant information:

 The proposed branch office shall be involved in selling the hosiery products
i.e. the business in which SEL is already engaged in Pakistan.
 Copies of SEL’s last three years audited financial statements.
 Such documents through which it could be established that:
– SEL is a bona fide entity; and
– the transactions to be entered into by SEL is genuine.
 The performance of previous investments abroad, if any, in terms of profit
repatriation, increase in exports etc.

Even after getting affirmative reply on all the above matters, SEL’s banker would still not
be able to approve the proposed remittances as the proposed remittances are beyond its
permitted limits that should have to be in line with the terms and conditions of “general
permission” specified under FEM which are as follows:

(i) Limit on investment required for the establishment of branch:

SEL’s proposed investment exceeds the permitted limit of 80% of SEL’s equity i.e.
Rs. 69,600,000 [= 87,000,000 (W-1) × 80%].

(ii) Limit on remittance to the branch for meeting the operational expenses:
SEL would be able to remit maximum USD 500,000 i.e. higher of USD 100,000 or
10% of its average annual export earnings of last three years i.e. USD 500,000
(=*USD 5,000,000 × 10%).

*USD 5,000,000 (=3,000,000 + 5,500,000 + 6,500,000 = 15,000,000 ÷ 3)

(iii) Limit on export overdue:

Provision for doubtful debts in respect of export sales as at 30 November 2022 was
Rs. 10,000,000 which is 1.52 % (= 10,000,000 ÷ 660,000,000 × 100) of SEL’s
previous year’s export sales. If the export overdue at the time of application is more
than Rs. 6,600,000 (660,000,000 × 1%) i.e. beyond the permitted limit then the
banker will not be able to allow the remittance.

W-1: Rs. in '000

Paid-up share capital 100,000
Reserves 15,000
Unappropriated profit 10,000
125,000
Less:
Due from related parties 25,000
Investment in unlisted shares of subsidiaries 7,000
Investment in listed shares of associated company 6,000
38,000
Adjusted Equity 87,000

(b) Alternative(s) available to SEL:

If SEL’s banker has shown its inability to remit the amount, then alternative available to
SEL is to get permission from State Bank of Pakistan for remitting the proposed amount
to its London branch.

(The End)

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