27th September, 1977
S.R.O 903 (1) / 77 – In pursuance of subsection (2) of section 12 of the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970 (V of 1970) and in exercise of the powers conferred on it under section 24 of the said Ordinance that Monopoly Control Authority thereby makes the following rules:-
1. (1) These Rules may he called the Monopoly Control Authority (Net Worth of Stocks and Shares) Rules, 1977.
(2) They shall come into force at once.
2. Definitions – In these Rules unless there is anything repugnant in the subject or context,
(a) ‘countable capital’ means the paid up capital of a company as reduced by the aggregate of the paid up value of preference shares and of such other stocks and shares to which no voting power is attached.
(b) ‘free reserves’ means all reserves plus unappreciated profit of a company excluding the following reserves, namely:
(i) Reserve created on revaluation of fixed assets.
(ii) Goodwill Reserve.
(in) Depreciation Reserve.
(iv) Gratuity Reserve.
(v) Workers Participation and Welfare Funds.
(vi) Reserve for Taxation to the extent of the actual tax liability of the company.
(vii) Any other reserve to meet any specific liability existing on the date of the balance-sheet.
3. Formula for determining net worth – (1) For the purposes of sub-section (2) of section 12 of the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970, (V of 1970), the net worth of an ordinary stock or shares shall be determined by multiplying the face value of such stock or share by the aggregate of countable capital and the free reserves of the company as reduced by its losses, it any, and dividing the product by the countable capital,
(2) Free reserves and losses referred to in sub-rule (I) shall he determined from the latest audited balance sheet of the company.