CODE OF

CORPORATE GOVERNANCE 2012

TABLE OF CONTENTS
CONTENTS PAGE
Definitions 3-6
Composition of Board 7-9
Role of Chairman and Chief Executive and separation of the two positions 10
Responsibilities, Powers and Functions of the Board 11-16
Meetings of the Board 17-18
Key information to be placed for decision by the Board 19-22
Performance Evaluation 23
Related Party Transactions 24-26
Quarterly and Monthly Financial Statements and Annual Report 27
Board Orientation and Learning 28-29
Formation of Board Committees
Chief Financial Officer, Company Secretary and Chief Internal Auditor - appointment and 30-31
removal
Role and qualification of Chief Financial Officer and Company Secretary 32
Requirement to attend Board Meetings 33
Financial Reporting Framework 34
Directors' Report to the Shareholders 35-39
Disclosure of Interests by Directors and Officers 40
Directors' Remuneration 41
Responsibility for Financial Reporting and Corporate Compliance 42-43
Audit Committee 44-50
Internal Audit 51-53
External Auditors 54-55
Compliance with the Rules 56
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

Independent Director
Independent
Independent Director
Director means
means aa director
director who
who is is not
not connected
connected
or
or does
does notnot have
have any
any other
other relationship,
relationship, whether
whether pecuniary
pecuniary
or
or otherwise,
otherwise, with
with the
the listed
listed company,
company, its its associated
associated
companies,
companies, subsidiaries,
subsidiaries, holding
holding company
company or or directors.
directors. The
The
test
test of
of independence
independence principally
principally emanates
emanates from from the
the fact
fact
whether
whether such
such person
person can
can be
be reasonably
reasonably perceived
perceived as as being
being
able
able toto exercise
exercise independent
independent business
business judgment
judgment without
without
being
being subservient
subservient to
to any
any form
form ofof conflict
conflict of
of interest.
interest.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
A
A DIRECTOR
DIRECTOR SHALL
SHALL NOT
NOT BE
BE CONSIDERED
CONSIDERED INDEPENDENT
INDEPENDENT IF
IF
ONE
ONE OR
OR MORE
MORE OF
OF FOLLOWING
FOLLOWING CONDITIONS
CONDITIONS EXIST
EXIST :
(i)
(i) He/she
He/she has
has been
been anan employee
employee of
of the
the company,
company, any any of
of its
its
subsidiaries
subsidiaries or
or holding
holding company
company within
within the
the last
last three
three years;
years;
(ii)
(ii) (ii)
(ii) He/she
He/she is
is or
or has
has been
been the
the CEO
CEO ofof subsidiaries,
subsidiaries, associated
associated
company,
company, associated
associated undertaking
undertaking or
or holding
holding company
company inin the
the
last
last three
three years;
years;
(iii)
(iii) iii)
iii) He/she
He/she has,
has, or
or has
has had
had within
within the
the last
last three
three years,
years, aa
material
material business
business relationship
relationship with
with the
the company
company either
either directly,
directly,
or
or indirectly
indirectly as
as aa partner,
partner, major
major shareholder
shareholder or or director
director of
of aa
body
body that
that has
has such
such aa relationship
relationship with
with the
the company:
company:
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

A
A DIRECTOR
DIRECTOR SHALL
SHALL NOT
NOT BE
BE CONSIDERED
CONSIDERED INDEPENDENT
INDEPENDENT IF
IF
ONE
ONE OR
OR MORE
MORE OF
OF FOLLOWING
FOLLOWING CONDITIONS
CONDITIONS EXIST
EXIST :
(iv)
(iv) He/she
He/she has
has received
received remuneration
remuneration in in the
the three
three years
years
preceding
preceding his/her
his/her appointment
appointment as as aa director
director or
or receives
receives
additional
additional remuneration,
remuneration, excluding
excluding retirement
retirement benefits
benefits from
from
the
the company
company apart
apart from
from aa director’s
director’s fee
fee or
or has
has participated
participated in
in
the
the company’s
company’s share
share option
option or
or aa performance-related
performance-related pay pay
scheme;
scheme;
(v)
(v) He/she
He/she isis aa close
close relative
relative of
of the
the company’s
company’s promoters,
promoters,
directors
directors or
or major
major shareholders:
shareholders:
Explanation:
Explanation: close
close relative
relative means
means spouse(s),
spouse(s), lineal
lineal
ascendants
ascendants and
and descendants
descendants and
and siblings;
siblings;
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012

A
A DIRECTOR
DIRECTOR SHALL
SHALL NOT
NOT BE
BE CONSIDERED
CONSIDERED INDEPENDENT
INDEPENDENT IF
IF
ONE
ONE OR
OR MORE
MORE OF
OF FOLLOWING
FOLLOWING CONDITIONS
CONDITIONS EXIST
EXIST :
(vi)
(vi) He/she
He/she holds
holds cross-directorships
cross-directorships or
or has
has significant
significant links
links
with
with other
other directors
directors through
through involvement
involvement in
in other
other companies
companies
or
or bodies;
bodies;
(vii)
(vii) He/she
He/she has
has served
served on
on the
the Board
Board for
for more
more than
than three
three
consecutive
consecutive terms
terms from
from the
the date
date of
of his
his first
first appointment
appointment
provided
provided that
that such
such person
person shall
shall be
be deemed
deemed “independent
“independent
director”
director” after
after aa lapse
lapse of
of one
one term.
term.
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012

COMPOSITION
COMPOSITION OF
OF BOARD
BOARD

(1)
(1) The
The Board
Board shall
shall consists
consists ofof executive
executive and
and non-executive
non-executive
directors,
directors, including
including independent
independent directors
directors and
and those
those
representing
representing minority
minority interests
interests with
with the
the requisite
requisite range
range of
of
skills,
skills, competence,
competence, knowledge,
knowledge, experience
experience and
and approach
approach so
so
that
that the
the Board
Board asas aa group
group includes
includes core
core competencies
competencies and
and
diversity
diversity considered
considered relevant
relevant inin the
the context
context of
of the
the Public
Public
Sector
Sector Company's
Company's operations.
operations.
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012

COMPOSITION
COMPOSITION OF
OF BOARD
BOARD

i.i. The
The Board
Board ofof Directors
Directors is
is encouraged
encouraged to to have
have aa balance
balance of
of
executive
executive andand non-executive
non-executive directors,
directors, including
including independent
independent
directors
directors andand those
those representing
representing minority
minority interests
interests with
with the
the
requisite
requisite skills,
skills, competence,
competence, knowledge
knowledge and and experience
experience so so
that
that the
the Board
Board as as aa group
group includes
includes core
core competencies
competencies and and
diversity,
diversity, including
including gender,
gender, considered
considered relevant
relevant in in the
the context
context
of
of the
the company’s
company’s operations.
operations.
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012

COMPOSITION
COMPOSITION OF
OF BOARD
BOARD
b)
b) The
The Board
Board of
of Directors
Directors of
of each
each listed
listed company
company shall
shall have
have at
at
least
least one
one and
and preferably
preferably one
one third
third of
of the
the total
total members
members of of the
the
Board
Board as
as independent
independent directors.
directors. The
The Board
Board shall
shall state
state in
in the
the
annual
annual report
report the
the names
names of of the
the non-executive,
non-executive, executive
executive andand
independent
independent director(s).
director(s).
iii.
iii. Any
Any casual
casual vacancy
vacancy on on the
the Board
Board of
of Directors
Directors of
of aa listed
listed
company
company shall
shall be
be filled
filled up
up by
by the
the directors
directors at
at the
the earliest
earliest but
but not
not
later
later than
than 90
90 days
days thereof.
thereof.
ii.
ii. No
No person
person shall
shall be
be elected
elected or
or nominated
nominated as
as aa director
director of
of more
more
than
than seven
seven listed
listed companies
companies simultaneously:
simultaneously:
Provided
Provided that
that this
this limit
limit shall
shall not
not include
include the
the directorships
directorships in
in the
the
listed
listed subsidiaries
subsidiaries of
of aa listed
listed holding
holding company.
company.
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012
Role
Role of
of the
the chairman
chairman and
and chief
chief executive
executive and
and
separation
separation of
of the
the two
two positions
positions

vi.
vi. The
The Chairman
Chairman and and the
the Chief
Chief Executive
Executive Officer
Officer (CEO),
(CEO), by by whatever
whatever
name
name called,
called, shall
shall not
not be
be the
the same
same person
person except
except where
where provided
provided for for
under
under any
any other
other law.
law. The
The Chairman
Chairman shall shall be
be elected
elected from
from among
among the the
non-executive
non-executive directors
directors of of the
the listed
listed company.
company. The The Chairman
Chairman shallshall be
be
responsible
responsible for
for leadership
leadership of of the
the Board
Board andand shall
shall ensure
ensure that
that the
the Board
Board
plays
plays an
an effective
effective role
role in
in fulfilling
fulfilling all
all its
its responsibilities.
responsibilities. The
The Board
Board of of
Directors
Directors shall
shall clearly
clearly define
define the
the respective
respective roles
roles and
and responsibilities
responsibilities of of
the
the Chairman
Chairman and
and CEO.
CEO.
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012
RESPONSIBILITIES,
RESPONSIBILITIES, POWERS
POWERS AND
AND FUNCTIONS
FUNCTIONS OF
OF
THE
THE BOARD
BOARD
iv.
iv. The
The Board
Board ofof Directors
Directors ofof aa listed
listed company
company shallshall exercise
exercise its
its powers
powers
and
and carry
carry out
out its
its fiduciary
fiduciary duties
duties with
with aa sense
sense of of objective
objective judgment
judgment and
and
independence
independence in in the
the best
best interests
interests of of the
the listed
listed company.
company.
v.
v. The
The Board
Board of
of Directors
Directors of
of aa listed
listed company
company shall
shall ensure
ensure that:
that:
(a)
(a) professional
professional standards
standards and
and corporate
corporate values
values are
are put
put in
in place
place that
that
promote
promote integrity
integrity for
for the
the Board,
Board, senior
senior management
management and and other
other
employees
employees in in the
the form
form of
of aa Code
Code of of Conduct,
Conduct, defining
defining therein
therein
acceptable
acceptable and and unacceptable
unacceptable behaviors.
behaviors. TheThe Board
Board shall
shall take
take
appropriate
appropriate steps
steps toto disseminate
disseminate Code
Code ofof Conduct
Conduct throughout
throughout the the
company
company along
along with
with supporting
supporting policies
policies and
and procedures
procedures and
and these
these shall
shall
be
be put
put on
on the
the company’s
company’s website;
website;
(b)
(b) adequate
adequate systems
systems and
and controls
controls are
are in
in place
place for
for identification
identification and
and
redress
redress of
of grievances
grievances arising
arising from
from unethical
unethical practices.
practices.
 Code
Code of
of Corporate
Corporate Govrnance
Govrnance 2012
2012
RESPONSIBILITIES,
RESPONSIBILITIES, POWERS
POWERS AND
AND FUNCTIONS
FUNCTIONS OF
OF
THE
THE BOARD
BOARD
The
The Board
Board shall
shall exercise
exercise its its powers
powers and and carry
carry out
out its
its fiduciary
fiduciary dutiesduties
with
with aa sense
sense of of objective
objective judgment
judgment and and independence
independence in in thethe best
best
interest
interest ofof the
the company.
company. This This provision
provision shall
shall apply
apply to to allall directors,
directors,
including
including ex-officio
ex-officio directors.
directors. A A director,
director, once
once appointed
appointed or or elected,
elected, shallshall
hold
hold office
office for
for aa period
period ofof three
three years,
years, unless
unless he
he resigns
resigns or or is is removed
removed
in
in accordance
accordance with with the
the provisions
provisions of of the
the Ordinance.
Ordinance. The The removal
removal of of aa
director
director shall
shall only
only take
take place
place in in the
the event
event ofof misconduct
misconduct or or ifif the
the director
director
has
has notnot performed
performed upto upto the the standard,
standard, determined
determined through through aa
performance
performance evaluation.
evaluation.

(3)
(3) The
The Board
Board shall
shall ensure
ensure that
that obligations
obligations to to all
all shareholders
shareholders are
are
fulfilled
fulfilled and
and they
they are
are duly
duly informed
informed inin aa timely
timely manner
manner of
of all
all material
material
events
events through
through shareholder
shareholder meetings
meetings and
and other
other communications
communications asas are
are
considered
considered necessary.
necessary.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RESPONSIBILITIES,
RESPONSIBILITIES, POWERS
POWERS AND
AND FUNCTIONS
FUNCTIONS OF
OF
THE
THE BOARD
BOARD
(d)
(d) aa system
system of
of sound
sound internal
internal control
control isis established,
established, which
which is
is effectively
effectively
implemented
implemented andand maintained
maintained at
at all
all levels
levels within
within the
the company;
company;
(c)
(c) The
The Board
Board ofof Directors
Directors of
of aa listed
listed company
company shall
shall ensure
ensure that
that aa vision
vision
and/or
and/or mission
mission statement
statement andand overall
overall corporate
corporate strategy
strategy for
for the
the listed
listed
company
company isis prepared
prepared and
and adopted.
adopted.
Board
Board shall
shall further
further ensure
ensure that
that significant
significant policies
policies have
have been
been
formulated;
formulated; Explanation:
Explanation: The
The significant
significant policies
policies for
for this
this purpose
purpose may
may
include:
include:
•• governance,
governance, risk
risk management
management and
and compliance
compliance issues;
issues;
•• human
human resource
resource management
management including
including preparation
preparation of
of aa succession
succession
plan;
plan;
'•'• procurement
procurement of
of goods
goods and
and services;
services;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RESPONSIBILITIES,
RESPONSIBILITIES, POWERS
POWERS AND
AND FUNCTIONS
FUNCTIONS OF
OF
THE
THE BOARD
BOARD
'•'• procurement
procurement of
of goods
goods and
and services;
services;
•• investors’
investors’ relations
relations including
including but
but not
not limited
limited to
to general
general investor
investor
awareness,
awareness, complaints
complaints and
and communication,
communication, etc.;
etc.;
'•'• marketing;
marketing;
•• determination
determination of
of terms
terms of
of credit
credit and
and discount
discount to
to customers;
customers;
•• write-off
write-off of
of bad/doubtful
bad/doubtful debts,
debts, advances
advances and
and receivables;
receivables;
•• capital
capital expenditure,
expenditure, planning
planning and
and control;
control;
•• investments
investments and
and disinvestment
disinvestment of
of funds;
funds;
•• borrowing
borrowing of
of moneys;
moneys;
'•'• determination
determination and
and delegation
delegation of
of financial
financial powers;
powers;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RESPONSIBILITIES,
RESPONSIBILITIES, POWERS
POWERS AND
AND FUNCTIONS
FUNCTIONS OF
OF
THE
THE BOARD
BOARD
'•'• transactions
transactions or
or contracts
contracts with
with associated
associated companies
companies and
and related
related
parties;
parties;
•• the
the corporate
corporate social
social responsibility
responsibility (CSR)
(CSR) initiatives
initiatives and
and other
other
philanthropic
philanthropic activities
activities including
including donations,
donations, charities,
charities, contributions
contributions and
and
other
other payments
payments ofof aa similar
similar nature;
nature;
•• health,
health, safety
safety and
and environment;
environment;
'•'• the
the whistleblower
whistleblower policy
policy
'A
'A complete
complete record
record ofof particulars
particulars of
of the
the significant
significant policies
policies along
along with
with the
the
dates
dates on
on which
which they
they were
were approved
approved or or amended
amended by by the
the Board
Board of of
Directors
Directors shall
shall be
be maintained.
maintained.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RESPONSIBILITIES,
RESPONSIBILITIES, POWERS
POWERS AND
AND FUNCTIONS
FUNCTIONS OF
OF
THE
THE BOARD
BOARD
'(g)
'(g) the
the Board
Board of
of Directors
Directors shall
shall define
define the
the level
level of
of materiality,
materiality, keeping
keeping inin
view
view the the specific
specific circumstances
circumstances of of thethe company
company and and thethe
recommendations
recommendations of of any
any technical
technical oror executive
executive subcommittee
subcommittee of of the
the
Board
Board that
that may
may bebe set
set up
up for
for the
the purpose.
purpose.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
MEETINGS
MEETINGS OF
OF THE
THE BOARD
BOARD
'vii.
'vii. All
All written
written notices,
notices, including
including the
the agenda,
agenda, of
of meetings
meetings shall
shall be
be
circulated
circulated at at least
least seven
seven days
days prior
prior to
to the
the meetings,
meetings, except
except in
in the
the
case
case of of emergency
emergency meetings,
meetings, where
where thethe notice
notice period
period may
may be be
reduced
reduced or or waived.
waived.
'viii.
'viii. The
The Chairman
Chairman shall
shall ensure
ensure that
that the
the minutes
minutes of
of meetings
meetings of
of
the
the Board
Board of
of Directors
Directors are
are appropriately
appropriately recorded.
recorded. The
The Company
Company
Secretary
Secretary shall
shall be
be secretary
secretary to
to the
the Board.
Board.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
MEETINGS
MEETINGS OF
OF THE
THE BOARD
BOARD
'In
'In the
the event
event that
that aa director
director of of aa listed
listed company
company is is of
of the
the
view
view that
that his
his dissenting
dissenting note note has
has notnot been
been satisfactorily
satisfactorily
recorded
recorded in in the
the minutes
minutes of of aa meeting
meeting of of the
the Board
Board of of
Directors,
Directors, he he may
may refer
refer thethe matter
matter to to the
the Company
Company
Secretary.
Secretary. TheThe director
director may may require
require the the note
note toto bebe
appended
appended to to the
the minutes,
minutes, failing
failing which
which he he may
may file
file an
an
objection
objection with
with the
the Securities
Securities andand Exchange
Exchange Commission
Commission of of
Pakistan
Pakistan (SECP)
(SECP) in in the
the form
form ofof aa statement
statement to to that
that effect.
effect.
The
The objection
objection may
may bebe filed
filed with
with the
the SECP
SECP within
within 30
30 days
days ofof
the
the date
date of
of confirmation
confirmation of of the
the minutes
minutes of of the
the meeting.
meeting.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
KEY
KEY INFORMATION
INFORMATION TO
TO BE
BE PLACED
PLACED FOR
FOR DECISION
DECISION
BY
BY THE
THE BOARD
BOARD
ix.
ix. In
In order
order toto strengthen
strengthen and
and formalize
formalize corporate
corporate decision-making
decision-making
process,
process, significant
significant issues
issues shall
shall be
be placed
placed for
for the
the information,
information,
consideration
consideration andand decision
decision of
of the
the Board
Board of
of Directors
Directors of
of listed
listed companies
companies
and/or
and/or its
its committees.
committees.

The
The significant
significant issues
issues for
for this
this purpose
purpose may
may include:
include:
•• the
the CEO
CEO shall
shall immediately
immediately bring
bring before
before the
the Board,
Board, as as soon
soon as as itit is
is
foreseen
foreseen that
that the
the company
company willwill not
not bebe in
in aa position
position of
of meeting
meeting its its
obligations
obligations on on any
any loans
loans (including
(including penalties
penalties onon late
late payments
payments and and
other
other dues,
dues, toto aa creditor,
creditor, bank
bank oror financial
financial institution
institution or
or default
default in in
payment
payment ofof public
public deposit),
deposit), TFCs,
TFCs, Sukuks
Sukuks or or any
any other
other debt
debt instrument.
instrument.
Full
Full details
details ofof the
the company’s
company’s failure
failure to
to meet
meet obligations
obligations shall
shall be be
provided
provided in
in the
the company’s
company’s quarterly
quarterly and
and annual
annual financial
financial statements.
statements.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
KEY
KEY INFORMATION
INFORMATION TO
TO BE
BE PLACED
PLACED FOR
FOR DECISION
DECISION
BY
BY THE
THE BOARD
BOARD
•• annual
annual business
business plan,
plan, cash
cash flow
flow projections,
projections, forecasts
forecasts and
and strategic
strategic
plan;
plan;
•• budgets
budgets including
including capital,
capital, manpower
manpower and
and overhead
overhead budgets,
budgets, along
along
with
with variance
variance analyses;
analyses;
•• matters
matters recommended
recommended and/or
and/or reported
reported by
by the
the committees
committees of
of the
the
Board;
Board;
•• quarterly
quarterly operating
operating results
results of
of the
the listed
listed company
company as
as aa whole
whole and
and in
in
terms
terms of
of its
its operating
operating divisions
divisions or
or business
business segments;
segments;
•• internal
internal audit
audit reports,
reports, including
including cases
cases of
of fraud,
fraud, bribery,
bribery, corruption,
corruption, or
or
irregularities
irregularities of
of aa material
material nature;
nature;
'•'• management
management letter
letter issued
issued by
by the
the external
external auditors;
auditors;
 Code
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of Corporate
Corporate Governance
Governance 2012
2012
KEY
KEY INFORMATION
INFORMATION TO
TO BE
BE PLACED
PLACED FOR
FOR DECISION
DECISION
BY
BY THE
THE BOARD
BOARD
•• details
details of
of joint
joint venture
venture or
or collaboration
collaboration agreements
agreements or
or agreements
agreements with
with
distributors,
distributors, agents,
agents, etc.;
etc.;
•• promulgation
promulgation or
or amendment
amendment toto aa law,
law, rule
rule or
or regulation,
regulation, enforcement
enforcement
of
of an
an accounting
accounting standard
standard and
and such
such other
other matters
matters as
as may
may affect
affect the
the
listed
listed company;
company;
•• status
status andand implications
implications of
of any
any law
law suit
suit or
or proceedings
proceedings of
of material
material
nature,
nature, filed
filed by
by or
or against
against the
the listed
listed company;
company;
•• any
any show
show cause,
cause, demand
demand or
or prosecution
prosecution notice
notice received
received from
from revenue
revenue
or
or regulatory
regulatory authorities;
authorities;
•• failure
failure to
to recover
recover material
material amounts
amounts of
of loans,
loans, advances,
advances, and
and deposits
deposits
made
made by by the
the listed
listed company,
company, including
including trade
trade debts
debts and
and inter-corporate
inter-corporate
finances;
finances;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
KEY
KEY INFORMATION
INFORMATION TO
TO BE
BE PLACED
PLACED FOR
FOR DECISION
DECISION
BY
BY THE
THE BOARD
BOARD
•• any
any significant
significant accidents,
accidents, dangerous
dangerous occurrences
occurrences and
and instances
instances of
of pollution
pollution
and
and environmental
environmental problems
problems involving
involving the
the listed
listed company;
company;
•• significant
significant public
public oror product
product liability
liability claims
claims made
made or
or likely
likely to
to be
be made
made against
against
the
the listed
listed company,
company, including
including anyany adverse
adverse judgment
judgment or or order
order made
made onon the
the
conduct
conduct of of the
the listed
listed company
company or or of
of another
another company
company that
that may
may bear
bear negatively
negatively
on
on the
the listed
listed company;
company;
•• report
report on
on governance,
governance, riskrisk management
management and and compliance
compliance issues.
issues. Risks
Risks
considered
considered shall
shall include
include reputational
reputational risk
risk and
and shall
shall address
address risk
risk analysis,
analysis, risk
risk
management
management and and risk
risk communication;
communication;
•• disputes
disputes with
with labor
labor and
and their
their proposed
proposed solutions,
solutions, any
any agreement
agreement with
with the
the labor
labor
union
union or
or collective
collective bargaining
bargaining agent
agent and
and any
any charter
charter of
of demands
demands on
on the
the listed
listed
company;
company;
'•'• whistleblower
whistleblower protection
protection mechanism;
mechanism;
•• report
report on
on CSR
CSR activities;
activities;
'•'• payment
payment for
for goodwill,
goodwill, brand
brand equity
equity or
or intellectual
intellectual property.
property.
 Code
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2012
PERFORMANCE
PERFORMANCE EVALUATION
EVALUATION
Clause
Clause (v)(e):
(v)(e): within
within two
two years
years ofof coming
coming into
into force
force of
of this
this
Code,
Code, aa mechanism
mechanism is is put
put in
in place
place for
for an
an annual
annual evaluation
evaluation
of
of the
the Board’s
Board’s own
own performance;
performance;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RELATED
RELATED PARTY
PARTY TRANSACTIONS
TRANSACTIONS
a)
a) The
The details
details of
of all
all related
related party
party transactions
transactions shall
shall be
be
placed
placed before
before the
the Audit
Audit Committee
Committee of of the
the company
company andand
upon
upon recommendations
recommendations of of the
the Audit
Audit Committee
Committee the the
same
same shall
shall be
be placed
placed before
before the
the Board
Board for
for review
review and
and
approval.
approval.
b)
b) The
The related
related party
party transactions
transactions which
which are
are not
not executed
executed
at
at arm's
arm's length
length price
price shall
shall also
also be
be placed
placed separately
separately at at
each
each Board
Board meeting
meeting along
along with
with necessary
necessary justification
justification
for
for consideration
consideration andand approval
approval of of the
the Board
Board on on
recommendation
recommendation of of the
the Audit
Audit Committee
Committee of of the
the listed
listed
company.
company.
 Code
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of Corporate
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Governance 2012
2012
RELATED
RELATED PARTY
PARTY TRANSACTIONS
TRANSACTIONS
c)
c) The
The board
board of
of directors
directors of
of aa company
company shall
shall approve
approve the
the pricing
pricing
methods
methods for for related
related party
party transactions
transactions thatthat were
were made
made on on the
the
terms
terms equivalent
equivalent to
to those
those that
that prevail
prevail in
in arm’s
arm’s length
length transaction,
transaction,
only
only ifif such
such terms
terms can
can be
be substantiated.
substantiated.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RELATED
RELATED PARTY
PARTY TRANSACTIONS
TRANSACTIONS
d)
d) Every
Every company
company shall
shall maintain
maintain aa partyparty wise
wise record
record ofof
transactions,
transactions, inin each
each financial
financial year,
year, entered
entered into
into with
with related
related
parties
parties in
in that
that year
year along
along with
with allall relevant
relevant documents
documents and and
explanations.
explanations. TheThe record
record ofof related
related party
party transactions
transactions shall
shall
include
include the
the following
following particulars
particulars in
in respect
respect ofof each
each transaction:
transaction:
i)i) Name
Name of
of related
related party;
party;
ii)
ii) Nature
Nature of
of relationship
relationship with
with related
related party;
party;
iii)
iii) Nature
Nature of
of transaction;
transaction;
iv)
iv) Amount
Amount of
of transaction;
transaction; and
and
v)
v) Terms
Terms and
and conditions
conditions of
of transaction,
transaction, including
including the
the amount
amount of
of
consideration
consideration received
received or
or given.
given.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
Quarterly
Quarterly and
and Monthly
Monthly Financial
Financial Statements
Statements and
and
Annual
Annual Report
Report
(xviii)The
(xviii)The quarterly
quarterly unaudited
unaudited financial
financial statements
statements of
of listed
listed
companies
companies shall
shall be
be published
published and and circulated
circulated along
along with
with
directors’
directors’ review
review on
on the
the affairs
affairs of
of the
the listed
listed company.
company.
(xix)
(xix) All
All listed
listed companies
companies shall
shall ensure
ensure that
that second
second quarterly
quarterly
financial
financial statements
statements are
are subjected
subjected to
to aa limited
limited scope
scope review
review
by
by the
the statutory
statutory auditors
auditors in
in such
such manner
manner and and according
according to
to
such
such terms
terms and and conditions
conditions as
as may
may be
be determined
determined byby the
the
Institute
Institute of of Chartered
Chartered Accountants
Accountants of of Pakistan
Pakistan (ICAP)
(ICAP) and
and
approved
approved by by the
the SECP.
SECP.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

BOARD
BOARD ORIENTATION
ORIENTATION AND
AND LEARNING
LEARNING
(xi)
(xi) All
All listed
listed companies
companies shall shall make
make appropriate
appropriate
arrangements
arrangements to to carry
carry out
out orientation
orientation courses
courses forfor their
their
directors
directors to
to acquaint
acquaint them
them with
with this
this code,
code, applicable
applicable laws,
laws,
their
their duties
duties and
and responsibilities
responsibilities toto enable
enable them
them toto effectively
effectively
manage
manage thethe affairs
affairs of
of the
the listed
listed companies
companies for
for and
and on
on behalf
behalf
of
of shareholders.
shareholders.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

BOARD
BOARD ORIENTATION
ORIENTATION AND
AND LEARNING
LEARNING
(It
(It shall
shall bebe mandatory
mandatory for
for all
all the
the directors
directors ofof the
the listed
listed companies
companies
to
to have
have certification
certification under
under any
any directors’
directors’ training
training program
program offered
offered
by
by institutions—local
institutions—local oror foreign—that
foreign—that meetmeet thethe criteria
criteria specified
specified
by
by the
the SECP:
SECP:
Provided
Provided that
that from
from June
June 30,
30, 2012
2012 to
to June
June 30,
30, 2016
2016 every
every year,
year, aa
minimum
minimum of of one
one director
director on
on the
the board
board shall
shall acquire
acquire the
the said
said
certification
certification under
under this
this program
program each
each year
year and
and thereafter
thereafter all
all
directors
directors shall
shall obtain
obtain it:
it:
Provided
Provided further
further that
that individuals
individuals with
with aa minimum
minimum of
of 14
14 years
years of of
education
education andand 15
15 years
years ofof experience
experience onon the
the board
board of
of aa listed
listed
company—local
company—local and/or and/or foreign—shall
foreign—shall bebe exempted
exempted from
from thethe
directors’
directors’ training
training program.
program.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

FORMATION
FORMATION OF
OF BOARD
BOARD COMMITTEES
COMMITTEES
(xxiv)
(xxiv) The
The board
board of
of directors
directors of
of every
every listed
listed company
company shallshall
establish
establish an
an Audit
Audit Committee,
Committee, at at least
least ofof three
three members
members
comprising
comprising of of non-executive
non-executive directors.
directors. The
The chairman
chairman of of the
the
committee
committee shall
shall be
be an
an independent
independent director,
director, who
who shall
shall not
not be
be the
the
chairman
chairman ofof the
the board.
board. The
The board
board shall
shall satisfy
satisfy itself
itself such
such that
that at
at
least
least one
one member
member of of the
the audit
audit committee
committee has
has relevant
relevant financial
financial
skills/expertise
skills/expertise and
and experience.
experience.
xxv)
xxv) There
There shall
shall also
also be
be aa Human
Human Resource
Resource and and Remuneration
Remuneration (HR&R)
(HR&R)
Committee
Committee at at least
least of
of three
three members
members comprising
comprising aa majority
majority of
of non-
non-
executive
executive directors,
directors, including
including preferably
preferably an an independent
independent director.
director. The
The
CEO
CEO maymay bebe included
included as as aa member
member of of the
the committee
committee but
but not
not as
as the
the
chairman
chairman of of committee.
committee. The The CEO
CEO ifif member
member of of HR&R
HR&R Committee
Committee shall
shall
not
not participate
participate in in the
the proceedings
proceedings of of the
the committee
committee onon matters
matters that
that
directly
directly relate
relate to
to his
his performance
performance and
and compensation.
compensation.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

FORMATION
FORMATION OF
OF BOARD
BOARD COMMITTEES
COMMITTEES
The
The committee
committee shall
shall be
be responsible
responsible for:
for:
i)i) recommending
recommending human
human resource
resource management
management policies
policies to
to the
the board;
board;
ii)
ii) recommending
recommending to to the
the board
board the
the selection,
selection, evaluation,
evaluation, compensation
compensation
(including
(including retirement
retirement benefits)
benefits) and
and succession
succession planning
planning of
of the
the CEO;
CEO;
iii)
iii) recommending
recommending to to the
the board
board the
the selection,
selection, evaluation,
evaluation, compensation
compensation
(including
(including retirement
retirement benefits)
benefits) of
of COO,
COO, CFO,
CFO, Company
Company Secretary
Secretary and
and Head
Head of
of
Internal
Internal Audit;
Audit; and
and
iv)
iv) consideration
consideration and
and approval
approval on
on recommendations
recommendations of of CEO
CEO on
on such
such matters
matters for
for
key
key management
management positions
positions who
who report
report directly
directly to
to CEO
CEO or
or COO.
COO.
 Code
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Governance 2012
2012
Chief
Chief Financial
Financial Officer,
Officer, Company
Company Secretary
Secretary and
and Chief
Chief Internal
Internal
Auditor
Auditor -- appointment
appointment and
and removal
removal

(xii)
(xii) The
The appointment,
appointment, remuneration
remuneration and and terms
terms andand conditions
conditions of
of
employment
employment of of the
the Chief
Chief Financial
Financial Officer
Officer (CFO),
(CFO), the
the Company
Company
Secretary
Secretary and
and the
the Head
Head of
of Internal
Internal Audit
Audit of
of listed
listed companies
companies shall
shall
be
be determined
determined by
by the
the board
board ofof directors.
directors.
The
The removal
removal ofof the
the CFO
CFO and and Company
Company Secretary
Secretary of of listed
listed
companies
companies shall
shall be
be made
made with
with the
the approval
approval ofof the
the board
board of of
directors.
directors. The
The removal
removal of of Head
Head ofof Internal
Internal Audit
Audit shall
shall be
be made
made
with
with the
the approval
approval ofof the
the board
board only
only upon
upon recommendation
recommendation of of the
the
Chairman
Chairman of of the
the Audit
Audit Committee:
Committee: Explanation:
Explanation: ForFor this
this purpose
purpose
the
the term
term removal
removal shall
shall include
include non
non renewal
renewal ofof contracts
contracts of of the
the
CFO,
CFO, Company
Company Secretary
Secretary and
and Head
Head of of Internal
Internal Audit.
Audit.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
Role
Role and
and qualification
qualification of
of Chief
Chief Financial
Financial Officer
Officer and
and Company
Company
Secretary
Secretary

(xiii)
(xiii) No
No person
person shall
shall bebe appointed
appointed as as the
the CFO
CFO ofof aa listed
listed company
company
unless
unless he/she
he/she has
has atat least
least five
five years
years of
of experience
experience of
of handling
handling financial
financial
or
or corporate
corporate affairs
affairs of of aa listed
listed company
company or or aa bank
bank or or aa financial
financial
institution
institution and
and is:
is:
(a)
(a) aa member
member of
of aa recognized
recognized body
body of
of professional
professional accountants;
accountants; or
or
(b)
(b) has
has aa postgraduate
postgraduate degree
degree in
in finance
finance from
from aa recognized
recognized university
university
or
or equivalent.
equivalent.
Provided
Provided that
that individuals
individuals serving
serving as
as CFO
CFO of of aa listed
listed company
company for
for the
the
last
last five
five years
years atat the
the time
time of
of coming
coming intointo effect
effect ofof this
this Code
Code shall
shall be
be
exempted
exempted fromfrom the
the above
above qualification
qualification requirement.
requirement.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

REQUIREMENT
REQUIREMENT TO
TO ATTEND
ATTEND BOARD
BOARD MEETINGS
MEETINGS
(xv)
(xv) The
The CFO
CFO and
and Company
Company Secretary
Secretary of
of aa listed
listed company
company or or in
in their
their
absence,
absence, thethe nominee,
nominee, appointed
appointed byby the
the board,
board, shall
shall attend
attend allall
meetings
meetings ofof the
the Board
Board of of Directors.
Directors. Provided
Provided that that the
the CFO
CFO and and
Company
Company Secretary
Secretary shall
shall not
not attend
attend such
such part
part of of aa meeting
meeting of
of the
the Board
Board
of
of Directors,
Directors, which
which involves
involves consideration
consideration of
of an
an agenda
agenda item
item relating
relating toto
the
the CFO
CFO and
and Company
Company Secretary
Secretary respectively.
respectively.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

FINANCIAL
FINANCIAL REPORTING
REPORTING FRAMEWORK
FRAMEWORK
(d)
(d) International
International Financial
Financial Reporting
Reporting Standards,
Standards, as as applicable
applicable in
in
Pakistan,
Pakistan, have
have been
been followed
followed in
in preparation
preparation of
of financial
financial statements
statements and
and
any
any departures
departures therefrom
therefrom hashas been
been adequately
adequately disclosed
disclosed and
and
explained;
explained;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

DIRECTORS'
DIRECTORS' REPORT
REPORT TO
TO THE
THE SHAREHOLDERS
SHAREHOLDERS

(xvi)The
(xvi)The directors
directors of
of listed
listed companies
companies shall
shall annex
annex statements
statements to
to the
the
following
following effect
effect with
with the
the Directors’
Directors’ Report,
Report, prepared
prepared under
under Section
Section 236
236
of
of the
the Ordinance:
Ordinance:
(a)
(a) The
The financial
financial statements,
statements, prepared
prepared by
by the
the management
management of of the
the listed
listed
company,
company, present
present itsits state
state of
of affairs
affairs fairly,
fairly, the
the result
result ofof itsits
operations,
operations, cash
cash flows
flows and
and changes
changes in
in equity;
equity;
(b)
(b) Proper
Proper books
books of
of account
account of
of the
the listed
listed company
company have
have been
been
maintained;
maintained;
(c)
(c) Appropriate
Appropriate accounting
accounting policies
policies have
have been
been consistently
consistently applied
applied in
in
preparation
preparation of
of financial
financial statements
statements andand accounting
accounting estimates
estimates are
are
based
based on
on reasonable
reasonable and
and prudent
prudent judgment;
judgment;
(d)
(d) (The
(The system
system ofof internal
internal control
control is
is sound
sound in
in design
design and
and has
has been
been
effectively
effectively implemented
implemented andand monitored;
monitored; and
and
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

DIRECTORS'
DIRECTORS' REPORT
REPORT TO
TO THE
THE SHAREHOLDERS
SHAREHOLDERS
(f)
(f) There
There are
are nono significant
significant doubts
doubts upon
upon the
the listed
listed company’s
company’s ability
ability to
to
continue
continue as
as aa going
going concern.
concern.
Provided
Provided that
that where
where necessary
necessary the
the following
following information
information shall
shall also
also be
be
annexed
annexed to
to the
the Directors’
Directors’ Reports
Reports of
of listed
listed companies:
companies:
a)
a) IfIf the
the listed
listed company
company is
is not
not considered
considered to
to be
be aa going
going concern,
concern, the
the fact
fact
along
along withwith the
the reasons
reasons shall
shall be
be disclosed;
disclosed;
b)
b) Significant
Significant deviations
deviations from
from last
last year
year in
in operating
operating results
results of
of the
the listed
listed
company
company shall
shall be
be highlighted
highlighted and
and reasons
reasons thereof
thereof shall
shall be
be explained;
explained;
c)
c) Key
Key operating
operating and
and financial
financial data
data of
of last
last six
six years
years shall
shall be
be summarized;
summarized;
d)
d) IfIf the
the listed
listed company
company hashas neither
neither declared
declared dividend
dividend nor
nor issued
issued bonus
bonus
shares
shares for for any
any year,
year, the
the reasons
reasons thereof
thereof shall
shall be
be given;
given;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

DIRECTORS'
DIRECTORS' REPORT
REPORT TO
TO THE
THE SHAREHOLDERS
SHAREHOLDERS
e)
e) Where
Where any
any statutory
statutory payment
payment on
on account
account of
of taxes,
taxes, duties,
duties, levies
levies and
and charges
charges
is
is outstanding,
outstanding, the
the amount
amount together
together with
with aa brief
brief description
description and
and reasons
reasons for
for the
the
same
same shall
shall be
be disclosed;
disclosed;
f)f) Significant
Significant plans
plans and
and decisions,
decisions, such
such asas corporate
corporate restructuring,
restructuring, business
business
expansion
expansion andand discontinuance
discontinuance ofof operations,
operations, shall
shall bebe outlined
outlined along
along with
with future
future
prospects,
prospects, risks
risks and
and uncertainties
uncertainties surrounding
surrounding the
the listed
listed company;
company;
g)
g) AA statement
statement as
as to
to the
the value
value of
of investments
investments of
of provident,
provident, gratuity
gratuity and
and pension
pension
funds,
funds, based
based on
on their
their respective
respective audited
audited accounts,
accounts, shall
shall be
be included;
included;
h)
h) The
The number
number of
of board
board and
and committees’
committees’ meetings
meetings held
held during
during the
the year
year and
and
attendance
attendance by
by each
each director
director shall
shall be
be disclosed;
disclosed;
i)i) The
The details
details of
of training
training programs
programs attended
attended by
by directors;
directors;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

DIRECTORS'
DIRECTORS' REPORT
REPORT TO
TO THE
THE SHAREHOLDERS
SHAREHOLDERS
j)j) The
The pattern
pattern of
of shareholding
shareholding shall
shall be
be reported
reported to
to disclose
disclose the
the aggregate
aggregate
number
number ofof shares
shares (along
(along with
with name
name wise
wise details
details where
where stated
stated below)
below) held
held by:
by:
I.I. associated
associated companies,
companies, undertakings
undertakings and
and related
related parties
parties (name
(name wise
wise details);
details);
II.
II. mutual
mutual funds
funds (name
(name wise
wise details);
details);
III.
III. directors
directors and
and their
their spouse(s)
spouse(s) and
and minor
minor children
children (name
(name wise
wise details);
details);
IV.
IV. executives;
executives;
V.
V. public
public sector
sector companies
companies and
and corporations;
corporations;
VI.
VI. banks,
banks, development
development finance
finance institutions,
institutions, non-banking
non-banking finance
finance companies,
companies,
insurance
insurance companies,
companies, takaful,
takaful, modarabas
modarabas andand pension
pension funds;
funds; and
and
VII.
VII. shareholders
shareholders holding
holding five
five percent
percent or
or more
more voting
voting rights
rights in
in the
the listed
listed
company
company (name
(name wise
wise details).
details).
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
DISCLOSURE
DISCLOSURE OF
OF INTERESTS
INTERESTS BY
BY DIRECTORS
DIRECTORS AND
AND
OFFICERS
OFFICERS
((xxiii)
xxiii) Where
Where any
any director,
director, CEO
CEO or
or executive
executive of
of aa listed
listed company
company or
or their
their spouses
spouses sell,
sell, buy
buy or
or
transact,
transact, whether
whether directly
directly oror indirectly,
indirectly, inin shares
shares of of the
the listed
listed company
company of of which
which he he isis aa director,
director,
CEO
CEO or or executive,
executive, as as the
the case
case maymay be,
be, hehe shall
shall immediately
immediately notify notify in in writing
writing to to the
the Company
Company
Secretary
Secretary of such transaction. Such director, CEO or executive, as the case may be, shall also
of such transaction. Such director, CEO or executive, as the case may be, shall also
deliver
deliver aa written
written record
record of of the
the price,
price, number
number of of shares,
shares, form form of of share
share certificates,
certificates, i.e.,
i.e., whether
whether
physical
physical or electronic within the Central Depository System, and nature of transaction to
or electronic within the Central Depository System, and nature of transaction to the
the
Company
Company Secretary
Secretary withinwithin four
four days
days of
of effecting
effecting the
the transaction.
transaction. The The notice
notice of of the
the director,
director, CEO CEO
or executive, as the case may be, shall be presented by the Company
or executive, as the case may be, shall be presented by the Company Secretary at the meeting Secretary at the meeting
of
of the
the board
board ofof directors
directors immediately
immediately subsequent
subsequent to to such
such transaction.
transaction. In In the
the event
event of of default
default by by
aa director, CEO or executive to give a written notice or deliver a written
director, CEO or executive to give a written notice or deliver a written record, the Company record, the Company
Secretary
Secretary shall
shall place
place thethe matter
matter before
before the
the board
board of of directors
directors in in its
its immediate
immediate next next meeting:
meeting:
Provided that each listed company shall determine a closed period
Provided that each listed company shall determine a closed period prior to the announcement prior to the announcement
of
of interim/
interim/ final
final results
results andand anyany business
business decision,
decision, which
which may may materially
materially affect
affect thethe market
market price price
of
of its shares. No director, CEO or executive shall, directly or indirectly, deal in the shares of the
its shares. No director, CEO or executive shall, directly or indirectly, deal in the shares of the
listed
listed company
company in in any
any manner
manner duringduring the
the closed
closed period.
period. TheThe closed
closed period
period shallshall start
start from
from thethe
day when any document/statement, which forms the basis of price
day when any document/statement, which forms the basis of price sensitive information, is sentsensitive information, is sent
to
to the
the board
board of of directors
directors and and terminate
terminate after
after the
the information
information is is made
made public.
public. Every
Every listed
listed
company
company shall advise its directors about the closed period at the time of circulating agenda and
shall advise its directors about the closed period at the time of circulating agenda and
working
working papers
papers for for the
the board
board meetings,
meetings, along
along with
with sending
sending intimation
intimation of of the
the same
same to to the
the stock
stock
exchanges.
exchanges.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

DIRECTORS'
DIRECTORS' REMUNERATION
REMUNERATION
(xvii)
(xvii) There
There shall
shall be
be aa formal
formal and
and transparent
transparent procedure
procedure for
for fixing
fixing the
the
remuneration
remuneration packages
packages of
of individual
individual directors.
directors. No
No director
director shall
shall be
be involved
involved inin
deciding
deciding his/her
his/her own
own remuneration.
remuneration.
a)
a) Directors’
Directors’ remuneration
remuneration packages
packages shall
shall encourage
encourage value
value creation
creation within
within the
the
company.
company. These
These shall
shall be
be subject
subject toto prior
prior approval
approval of
of shareholders/board
shareholders/board as as
required
required by
by company’s
company’s Articles
Articles of
of Association.
Association. Levels
Levels of
of remuneration
remuneration shall
shall bebe
appropriate
appropriate toto attract
attract and
and retain
retain the
the directors
directors needed
needed toto govern
govern the
the company
company
successfully.
successfully.
Subject
Subject to
to the
the provisions
provisions ofof the
the Ordinance
Ordinance and and the
the company’s
company’s Articles
Articles of
of
Association,
Association, the
the shareholders/board
shareholders/board shallshall determine
determine the the remuneration
remuneration forfor non-
non-
executive
executive directors.
directors. However,
However, itit shall
shall not
not be
be at
at aa level
level that
that could
could be
be perceived
perceived toto
compromise
compromise their
their independence.
independence. (b)(b) The
The company's
company's Annual
Annual Report
Report shall
shall contain
contain
details
details of
of the
the aggregate
aggregate remuneration
remuneration separately
separately of of executive
executive and
and non-
non-
executive
executive directors,
directors, including
including salary/fee,
salary/fee, benefits
benefits and and performance-linked
performance-linked
incentives
incentives etc.
etc.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

RESPONSIBILITY
RESPONSIBILITY FOR
FOR FINANCIAL
FINANCIAL REPORTING
REPORTING AND
AND
CORPORATE
CORPORATE COMPLIANCE
COMPLIANCE

(xxi)
(xxi) No
No listed
listed company
company shall
shall circulate
circulate its
its financial
financial
statements
statements unless
unless the
the CEO
CEO and
and the
the CFO
CFO present
present the
the
financial
financial statements,
statements, duly
duly endorsed
endorsed under
under their
their respective
respective
signatures,
signatures, for
for consideration
consideration and
and approval
approval of
of the
the Board
Board of
of
Directors.
Directors.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012
RESPONSIBILITY
RESPONSIBILITY FOR
FOR FINANCIAL
FINANCIAL REPORTING
REPORTING AND
AND
CORPORATE
CORPORATE COMPLIANCE
COMPLIANCE

ItIt shall
shall be
be mandatory
mandatory for for the
the CEO
CEO andand CFO
CFO toto have
have the
the
second
second quarterly
quarterly and
and annual
annual accounts
accounts (both
(both separate
separate and
and
consolidated
consolidated wherewhere applicable)
applicable) initialed
initialed by
by the
the external
external
auditors
auditors before
before presenting
presenting itit to
to the
the audit
audit committee
committee and
and the
the
Board
Board of of Directors
Directors for
for approval.
approval.
(xxii)
(xxii) The
The Company
Company Secretary
Secretary of
of aa listed
listed company
company shall
shall
furnish
furnish aa Secretarial
Secretarial Compliance
Compliance Certificate,
Certificate, on
on thethe
prescribed
prescribed form
form (Appendix
(Appendix A),
A), along
along with
with annual
annual return
return filed
filed
with
with the
the registrar
registrar concerned
concerned certifying
certifying that
that the
the secretarial
secretarial
and
and corporate
corporate requirements
requirements ofof the
the Ordinance
Ordinance have have been
been
complied
complied with.
with.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE

The
The board
board of of directors
directors ofof every
every listed
listed company
company shall
shall
establish
establish anan Audit
Audit Committee,
Committee, at at least
least of
of three
three members
members
comprising
comprising of of non-executive
non-executive directors.
directors. The
The chairman
chairman ofof the
the
committee
committee shall
shall be
be anan independent
independent director,
director, who
who shall
shall not
not
be
be the
the chairman
chairman of of the
the board.
board. The
The board
board shall
shall satisfy
satisfy itself
itself
such
such that
that at
at least
least one
one member
member of of the
the audit
audit committee
committee has has
relevant
relevant financial
financial skills/expertise
skills/expertise and
and experience.
experience.
(xxvi)
(xxvi) The
The names
names ofof members
members of of the
the committees
committees ofof the
the
board
board shall
shall be
be disclosed
disclosed in
in each
each Annual
Annual Report
Report of
of the
the listed
listed
company.
company.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE
(xxviii)The
(xxviii)The CFO,
CFO, the the Head
Head of of Internal
Internal Audit
Audit andand external
external auditors
auditors
represented
represented by by engagement
engagement partnerpartner or or in
in his
his absence
absence any any other
other
partner
partner designated
designated by by the
the audit
audit firm
firm shall
shall attend
attend meetings
meetings of of the
the
Audit
Audit Committee
Committee at at which
which issues
issues relating
relating toto accounts
accounts and and audit
audit are
are
discussed:
discussed: Provided
Provided thatthat at
at least
least once
once aa year,
year, the
the Audit
Audit Committee
Committee
shall
shall meet
meet the
the external
external auditors
auditors without
without the
the CFO
CFO and and the
the Head
Head of of
Internal
Internal Audit
Audit being
being present:
present: Provided
Provided further
further that
that at at least
least once
once aa
year,
year, the
the Audit
Audit Committee
Committee shallshall meet
meet the
the head
head of of internal
internal audit
audit andand
other
other members
members of of the
the internal
internal audit
audit function
function without
without the the CFO
CFO and and the
the
external
external auditors
auditors being
being present:
present: Provided
Provided further
further that
that the
the chairman
chairman
of
of the
the Audit
Audit Committee
Committee and and engagement
engagement partner
partner of of external
external auditor
auditor
or
or in
in his
his absence
absence anyany other
other partner
partner designated
designated by by the
the audit
audit firm
firm shall
shall
be
be present
present at
at the
the AGM
AGM for for necessary
necessary feedback
feedback to to the
the shareholders.
shareholders.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE
(xxix)
(xxix) The
The Board
Board ofof Directors
Directors of of every
every listed
listed company
company shall
shall determine
determine the the terms
terms
of
of reference
reference of of the
the Audit
Audit Committee.
Committee. The The Board
Board shall
shall provide
provide adequate
adequate
resources
resources and and authority
authority to to enable
enable the the Audit
Audit Committee
Committee carry carry out
out itsits
responsibilities
responsibilities effectively.
effectively. The The Audit
Audit Committee
Committee shall,
shall, inter
inter alia,
alia, recommend
recommend to to
the
the Board
Board of
of Directors
Directors the the appointment
appointment of of external
external auditors,
auditors, their
their removal,
removal, audit
audit
fees,
fees, the
the provision
provision byby the
the external
external auditors
auditors ofof any
any service
service toto the
the listed
listed company
company
in
in addition
addition to
to audit
audit of
of its
its financial
financial statements.
statements. The The Board
Board ofof Directors
Directors shall
shall give
give
due
due consideration
consideration toto the
the recommendations
recommendations of of the
the Audit
Audit Committee
Committee in in all
all these
these
matters
matters and
and where
where itit acts
acts otherwise,
otherwise, itit shall
shall record
record the
the reasons
reasons thereof.
thereof.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE
The
The terms
terms of
of reference
reference of
of the
the Audit
Audit Committee
Committee shall
shall also
also include
include the
the following:
following:
(a)
(a) determination
determination of
of appropriate
appropriate measures
measures to
to safeguard
safeguard the
the listed
listed company’s
company’s
assets;
assets;
(b)
(b) review
review of
of quarterly,
quarterly, half-yearly
half-yearly and
and annual
annual financial
financial statements
statements of of the
the listed
listed
company,
company, prior
prior to
to their
their approval
approval by
by the
the Board
Board of
of Directors,
Directors, focusing
focusing on:
on:
•• major
major judgmental
judgmental areas;
areas;
•• significant
significant adjustments
adjustments resulting
resulting from
from the
the audit;
audit;
•• the
the going
going concern
concern assumption;
assumption;
•• any
any changes
changes in
in accounting
accounting policies
policies and
and practices;
practices;
•• compliance
compliance with
with applicable
applicable accounting
accounting standards;
standards;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE
(c)
(c) review
review of
of preliminary
preliminary announcements
announcements of
of results
results prior
prior to
to publication;
publication;
(d)
(d) facilitating
facilitating the
the external
external audit
audit and
and discussion
discussion with
with external
external auditors
auditors of
of major
major
observations
observations arising
arising from
from interim
interim and
and final
final audits
audits and
and any
any matter
matter that
that the
the
auditors
auditors may may wish
wish toto highlight
highlight (in
(in the
the absence
absence ofof management,
management, where
where
necessary);
necessary);
(e)
(e) review
review of
of management
management letter
letter issued
issued by
by external
external auditors
auditors and
and management’s
management’s
response
response thereto;
thereto;
(f)
(f) ensuring
ensuring coordination
coordination between
between the
the internal
internal and
and external
external auditors
auditors of
of the
the listed
listed
company;
company;
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE
g)
g) review
review ofof the
the scope
scope andand extent
extent ofof internal
internal audit
audit and
and ensuring
ensuring thatthat the
the internal
internal
audit
audit function
function hashas adequate
adequate resources
resources and and is is appropriately
appropriately placed
placed within
within the
the
listed
listed company;
company; (h) (h) consideration
consideration of of major
major findings
findings of of internal
internal investigations
investigations of of
activities
activities characterized
characterized by by fraud,
fraud, corruption
corruption and and abuseabuse of of power
power and and
management's
management's response response thereto;
thereto; (i) (i) ascertaining
ascertaining that that thethe internal
internal control
control
systems
systems including
including financial
financial and and operational
operational controls,
controls, accounting
accounting systems
systems for for
timely
timely andand appropriate
appropriate recording
recording of of purchases
purchases and and sales,
sales, receipts
receipts andand
payments,
payments, assets
assets andand liabilities
liabilities and
and thethe reporting
reporting structure
structure areare adequate
adequate and and
effective;
effective; (j)(j) review
review of of the
the listed
listed company’s
company’s statement
statement on on internal
internal control
control
systems
systems prior
prior to to endorsement
endorsement by by the
the Board
Board of of Directors
Directors and and internal
internal audit
audit
reports;
reports; (k)(k) instituting
instituting special
special projects,
projects, value
value forfor money
money studies
studies or or other
other
investigations
investigations on on any
any matter
matter specified
specified by by the
the Board
Board of of Directors,
Directors, in in consultation
consultation
with
with the
the CEO
CEO and and to
to consider
consider remittance
remittance of of any
any matter
matter to to the
the external
external auditors
auditors
or
or toto any
any other
other external
external body;
body; (l)(l) determination
determination of of compliance
compliance with with relevant
relevant
statutory
statutory requirements;
requirements; (m) (m) monitoring
monitoring compliance
compliance with with the
the best
best practices
practices of of
corporate
corporate governance
governance and and identification
identification ofof significant
significant violations
violations thereof;
thereof; andand (n)
(n)
consideration
consideration of of any
any other
other issue
issue oror matter
matter as as may
may bebe assigned
assigned by by the
the Board
Board of of
Directors.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

AUDIT
AUDIT COMMITTEE
COMMITTEE
(xxx)
(xxx) The
The Audit
Audit Committee
Committee of of aa listed
listed company
company shall shall appoint
appoint aa
secretary
secretary of of the
the committee
committee who who shall
shall either
either be be the
the Company
Company
Secretary
Secretary or or Head
Head of of Internal
Internal Audit.
Audit. However,
However, CFO CFO shall
shall not
not be
be
appointed
appointed as as the
the secretary
secretary toto the
the Audit
Audit Committee.
Committee. The The secretary
secretary
shall
shall circulate
circulate minutes
minutes of of meetings
meetings of of the
the Audit
Audit Committee
Committee to to all
all
members,
members, directors,
directors, Head
Head ofof internal
internal Audit
Audit and
and thethe CFO
CFO prior
prior to
to
the
the next
next meeting
meeting of of the
the board
board and
and where
where this
this is
is not
not practicable,
practicable,
the
the Chairman
Chairman of of the
the Audit
Audit Committee
Committee shall shall communicate
communicate aa
synopsis
synopsis of of the
the proceedings
proceedings to to the
the board
board and
and thethe minutes
minutes shall
shall
be
be circulated
circulated immediately
immediately after
after the
the meeting
meeting of of the
the board.
board.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

INTERNAL
INTERNAL AUDIT
AUDIT
(xxxi)
(xxxi) There
There shall
shall bebe an
an internal
internal audit
audit function
function in
in every
every listed
listed company.
company. The
The
Head
Head ofof internal
internal Audit
Audit shall
shall functionally
functionally report
report to
to the
the Audit
Audit Committee
Committee and
and
administratively
administratively to
to the
the CEO.
CEO.
AA director
director cannot
cannot be
be appointed,
appointed, in in any
any capacity,
capacity, in
in the
the internal
internal audit
audit function,
function, to
to
ensure
ensure independence
independence of
of the
the internal
internal audit
audit function.
function.
The
The internal
internal audit
audit function
function may
may be be outsourced
outsourced by by aa listed
listed company
company to to aa
professional
professional services
services firm
firm or
or be
be performed
performed by by the
the internal
internal audit
audit staff
staff of
of holding
holding
company.
company. However,
However, due
due care
care shall
shall be
be exercised
exercised to to ensure
ensure that
that suitably
suitably qualified
qualified
and
and experienced
experienced persons,
persons, who
who are
are conversant
conversant withwith the
the company's
company's policies
policies and
and
procedures,
procedures, areare engaged
engaged in in the
the internal
internal audit.
audit. In In the
the event
event of
of outsourcing
outsourcing the the
internal
internal audit
audit function,
function, company
company shall
shall appoint
appoint oror designate
designate aa fulltime
fulltime employee
employee
other
other than
than CFO,
CFO, asas Head
Head ofof Internal
Internal Audit,
Audit, to
to act
act asas coordinator
coordinator between
between firmfirm
providing
providing internal
internal audit
audit services
services and
and the
the board:
board:
Provided
Provided that
that while
while outsourcing
outsourcing the
the function,
function, the
the company
company must
must not
not appoint
appoint its
its
existing
existing external
external auditors
auditors as
as internal
internal auditors.
auditors.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

INTERNAL
INTERNAL AUDIT
AUDIT
'(xiv)
'(xiv) No
No person
person shall
shall be
be appointed
appointed as
as the
the Head
Head ofof Internal
Internal Audit
Audit of
of aa
listed
listed company
company unless
unless he/she
he/she has
has 55 years
years of
of relevant
relevant audit
audit experience
experience
and
and is:
is:
(a)
(a) aa member
member of
of aa recognized
recognized body
body of
of professional
professional accountants;
accountants; or
or
(b)
(b) aa Certified
Certified Internal
Internal Auditor;
Auditor; or
or
(c)
(c) aa Certified
Certified Fraud
Fraud Examiner;
Examiner; or
or
(d)
(d) aa Certified
Certified Internal
Internal Control
Control Auditor
Auditor
Provided
Provided that
that individuals
individuals serving
serving as
as Head
Head ofof Internal
Internal Audit
Audit of
of aa listed
listed
company
company for
for the
the last
last five
five years
years at
at the
the time
time of
of coming
coming into
into effect
effect of
of this
this
Code
Code shall
shall be
be exempted
exempted from from the
the above
above qualification
qualification requirement.
requirement.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

INTERNAL
INTERNAL AUDIT
AUDIT
((xxxii)
xxxii) All
All listed
listed companies
companies shall
shall ensure
ensure that
that internal
internal audit
audit reports
reports
are
are provided
provided for
for the
the review
review of of external
external auditors.
auditors. The
The auditors
auditors
shall
shall discuss
discuss any
any major
major findings
findings inin relation
relation to
to the
the reports
reports with
with the
the
Audit
Audit Committee,
Committee, which
which shall
shall report
report matters
matters of
of significance
significance to
to the
the
Board
Board ofof Directors.
Directors.
(xxxiv)
(xxxiv) NoNo listed
listed company
company shall
shall appoint
appoint as
as external
external auditors
auditors aa
firm
firm of
of auditors
auditors which
which or
or aa partner
partner of
of which
which is
is non-compliant
non-compliant with
with
the
the International
International Federation
Federation ofof Accountants'
Accountants' (IFAC)
(IFAC) Guidelines
Guidelines on
on
Code
Code of of Ethics,
Ethics, asas adopted
adopted by by the
the Institute
Institute of
of Chartered
Chartered
Accountants
Accountants of of Pakistan.
Pakistan.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

EXTERNAL
EXTERNAL AUDITORS
AUDITORS
(xxxvi)
(xxxvi) No
No listed
listed company
company shallshall appoint
appoint its
its auditors
auditors to to provide
provide services
services in in
addition
addition to
to audit
audit except
except inin accordance
accordance with
with the
the regulations
regulations andand shall
shall require
require the
the
auditors
auditors to
to observe
observe applicable
applicable IFAC
IFAC guidelines
guidelines inin this
this regard
regard and
and shall
shall ensure
ensure
that
that the
the auditors
auditors do do not
not perform
perform management
management functions
functions or or make
make management
management
decisions,
decisions, responsibility
responsibility for for which
which remains
remains with
with the
the Board
Board of of Directors
Directors and
and
management
management of of the
the listed
listed company.
company.
(xxxvii)
(xxxvii) (a)
(a) All
All listed
listed companies
companies in in the
the financial
financial sector
sector shall
shall change
change their
their external
external
auditors
auditors every
every fivefive years.
years. Financial
Financial sector,
sector, for
for this
this purpose,
purpose, means
means banks,
banks, non-
non-
banking
banking financial
financial companies
companies (NBFC’s),
(NBFC’s), modarabas
modarabas and and insurance/takaful
insurance/takaful
companies;
companies; provided
provided thatthat all
all inter
inter related
related companies/
companies/ institutions,
institutions, engaged
engaged in in
business
business of of providing
providing financial
financial services
services shall
shall appoint
appoint thethe same
same firm
firm of
of auditors
auditors
to
to conduct
conduct thethe audit
audit of
of their
their accounts
accounts and and
(b)
(b) All
All listed
listed companies
companies other
other than
than those
those in
in the
the financial
financial sector
sector shall,
shall, at
at aa
minimum,
minimum, rotate
rotate the
the engagement
engagement partner
partner after
after every
every five
five years.
years.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

EXTERNAL
EXTERNAL AUDITORS
AUDITORS
(xxxviii)
(xxxviii) No
No listed
listed company
company shall
shall appoint
appoint aa person
person as as an
an external
external
auditor
auditor or
or aa person
person involved
involved inin the
the audit
audit of
of aa listed
listed company
company whowho
is
is aa close
close relative,
relative, i.e.,
i.e., spouse,
spouse, parents,
parents, dependents
dependents and and non-
non-
dependent
dependent children,
children, of of the
the CEO,
CEO, the
the CFO,
CFO, anan internal
internal auditor
auditor or
or aa
director
director of
of the
the listed
listed company.
company.
(xxxix)
(xxxix) Every
Every listed
listed company
company shall
shall require
require external
external auditors
auditors to
to
furnish
furnish aa Management
Management LetterLetter to
to its
its board
board of
of directors
directors within
within 45
45
days
days of
of the
the date
date of
of audit
audit report:
report:
Provided
Provided that
that any
any matter
matter deemed
deemed significant
significant by
by the
the external
external
auditor
auditor shall
shall be
be communicated
communicated in
in writing
writing to
to the
the board
board prior
prior to
to the
the
approval
approval of
of the
the audited
audited accounts
accounts by
by the
the board.
board.
 Code
Code of
of Corporate
Corporate Governance
Governance 2012
2012

COMPLIANCE
COMPLIANCE WITH
WITH THE
THE RULES
RULES
(xl)
(xl) All
All listed
listed companies
companies shall
shall publish
publish and
and circulate
circulate aa statement
statement (in
(in the
the form
form
as
as specified
specified inin Appendix
Appendix “B”)
“B”) along
along with
with their
their annual
annual reports
reports to
to set
set out
out the
the
status
status of of their
their compliance
compliance with
with the
the requirements
requirements set set out
out above.
above. The The
statement
statement shallshall be
be specific
specific and
and deemed
deemed to to be
be supported
supported byby the
the necessary
necessary
evidence
evidence held held by
by the
the company
company making
making the
the said
said statement.
statement.
(xli)
(xli) All
All listed
listed companies
companies shall
shall ensure
ensure that
that the
the statement
statement of
of compliance
compliance with
with
the
the best
best practices
practices of
of corporate
corporate governance
governance is is reviewed
reviewed and
and certified
certified by
by
statutory
statutory auditors,
auditors, where
where such
such compliance
compliance can can be
be objectively
objectively verified,
verified,
before
before itsits publication.
publication. Statutory
Statutory auditors
auditors of
of listed
listed company
company shall
shall ensure
ensure that
that
any
any non-compliance
non-compliance with with the
the CCG
CCG requirements
requirements is is highlighted
highlighted in
in their
their
review
review report.
report.
(xlii)
(xlii) Where
Where the the SECP
SECP is is satisfied
satisfied that
that itit is
is not
not practicable
practicable toto comply
comply with
with
any
any of of the
the best
best practices
practices ofof corporate
corporate governance
governance in in aa particular
particular case,
case, itit
may,
may, for for reasons
reasons toto be
be recorded,
recorded, relax
relax the
the same
same subject
subject to
to such
such conditions
conditions
as
as itit may
may deem
deem fit.
fit.
THANK YOU!