Doing Business in Kenya - RSM International

More documents

Recommendations

Info

• At the date of application, the company must not be in breach of any of its loancovenants particularly in regard to the maximum debt capacity.• Company shall not be eligible to list unless:• It has a minimum of 25 investors;• At least 20% of the paid up capital after listing, excluding any holding bythe employees or family members, is held by not less than the prescribedminimum number of investors; and• No investor shall hold more than 3% of the shares above.• Company must have been in existence in the same line of business for a minimumof 2 years with good growth potential in order to provide a comparative andreliable track record.• A subsidiary whose parent company has a 5 year track record may list, providedthat the subsidiary has an operating track record of at least 1 year.• The financial statements of the company must not be older than 4 monthsbefore the listing and must be audited.• Company must be solvent and the auditor’s report must be unqualified.• Company may not use the proceeds of a public issue to redeem any loans by thedirectors or the shareholders prior to the listing.• Company must ensure that the existing shareholders, related persons or suchother group of controlling shareholders who have influence over management,undertake not to sell their shareholding, before the expiry of a period of 24months following listing.• Company must have at least 2 non-executive and independent directors on itsboard of directors.• Company must disclose a clear policy on dividends.• Company listed on AIMS may only change from this segment after a minimumof 1 year and on satisfying, the requirements for MIMS.8.2.3 Fixed Income Securities Market SegmentCompanies intending to list their commercial papers or corporate bonds in the FIMSmust satisfy the following eligibility requirements:• Company to be listed must be a company limited by shares and registered underthe Companies Act (Cap 486).• The company must have a minimum authorised, issued and fully paid up sharecapital of Shs 50,000,000 and net assets of Shs 100,000,000 before the publicoffering of the securities. In the event that the issuer does not have net assetsof Shs 100,000,000, the issuer must obtain from a bank or any other approvedinstitution a financial guarantee to support the issue.• The securities to be listed must be freely transferable and not subject to anyrestrictions on marketability or pre-emption rights.78DOING BUSINESS IN KENYA
• The company must have published audited financial statements complying withIFRS for an accounting period ending on a date not more than 4 months priorto the proposed date of the offer.• If more than 4 months will have elapsed since the end of the company’s lastaccounting period for which audited financial statements have been preparedand the proposed offer date, the company must prepare a set of un-auditedinterim financial statements for the period following the end of the financialperiod.• The un-audited interim financial statements should not however exceed 6months, unless the issuer is already listed in any market segment. In this regard,unlisted issuers with published accounts exceeding a period of 6 months willhave to carry out an interim audit for the period, or plan the date of offer toimmediately follow completion of the next annual audit.• The company must have prepared financial statements for the latest accountingperiod on a going concern basis and the audit report must not contain anyemphasis of matter or qualification/modification in this regard.• At the date of the application, the company must not be in breach of any of itsloan covenants particularly in regard to the maximum debt capacity.• The company should have made profits in at least 2 of the last 3 years precedingthe issue of the commercial paper or the corporate bond.• Companies wishing to issue or list debt securities should not be insolvent.• Total indebtedness of the issuer, including the new issue of the commercialpaper or the corporate bond shall not exceed 400% of the company’s net worth(or a gearing ratio of 4:1) as at the date of the latest balance sheet.• The ratio of funds generated from operations to total debt for the 3 tradingperiods preceding the issue shall be maintained at a weighted average of 40%or more. These requirements of solvency and adequacy of working capital willapply both to the issuer on its own and to the group.• The above two conditions must be maintained as long as the commercial paperor corporate bond remains outstanding.• The directors and senior management of an applicant must have collectivelyappropriate expertise and experience for the management of the group’sbusiness. Details of such expertise must be disclosed in the issue informationmemorandum.DOING BUSINESS IN KENYA79
Page 7:
2.0 General2.1 IntroductionKenya li
Page 13 and 14:
Kenya Tanzania Uganda Rwanda Burund
Page 15 and 16:
A huge chunk of the Act regulates m
Page 17 and 18:
• Stamping of the Memorandum of A
Page 19 and 20:
the Registrar within a statutory pe
Page 21:
3.2.3 Thin CapitalisationThin capit
Page 24 and 25:
Where a business is carried on or e
Page 26 and 27:
territory or domestic market. Motor
Page 28 and 29: • Unrealised foreign exchange los
Page 30 and 31: 4.2.6 Business with Non-Resident Pe
Page 32 and 33: Installments Due Date RateNon-Agric
Page 34 and 35: The current Personal Income Tax rat
Page 36 and 37: c) Housing• The higher of market
Page 38 and 39: partnership in which the husband or
Page 40 and 41: (1) East African Community partner
Page 42 and 43: Where the taxpayer still disputes w
Page 44 and 45: The VAT rates applicable in Kenya a
Page 46 and 47: 4.8.4 De-registration and Disposal
Page 48 and 49: • Payment is received for all or
Page 50 and 51: 4.8.7 Records, Invoices, Credit and
Page 52 and 53: A credit note should be serially nu
Page 54 and 55: However, where a motor vehicle or o
Page 56 and 57: Where there is no tax payable a ‘
Page 58 and 59: granted or is partly granted, the b
Page 60 and 61: • Airtime on cellular mobile phon
Page 62 and 63: Transit VisasThese are visas requir
Page 64 and 65: Class K is for persons who have an
Page 66 and 67: 5.3.2 WagesAlthough the Employment
Page 68 and 69: NSSF provides the employee with a l
Page 70 and 71: 6.0 ACCOUNTING6.1 Statutory Framewo
Page 72 and 73: 7.0 INTELLECTUAL PROPERTYRIGHTSKeny
Page 74 and 75: Years 1 Shs 1,000Year 2 Shs 1,500Ye
Page 76 and 77: 8.0 Listing Rules8.1 The Capital Ma
Page 80 and 81: 8.3 Payable FeesCompanies pay an in
Page 82 and 83: 9.0 Investing in Kenya9.1 General I
Page 84 and 85: 9.3 Foreign Ownership of Shares and
Page 86 and 87: Contact Details - RSM AshvirRSM Ash
Page 88 and 89: Appendix of Acronyms used in the Bo
Page 90: Notes90DOING BUSINESS IN KENYA
show all

Doing Business in Kenya - RSM International

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?