Section 56 lays down that the matters and reports stated in
Schedule II to the Act must be included in a prospectus. The format of prospectus
is divided into three parts.
In the first part brief particulars are to be given about
matters mentioned below:
1. General information. Under this head information is given about (i)
Name and address of registered office of the company. (ii) Name/(s) of stock
exchange/(s)
where application for listing is made. (iii) Declaration
about refund of the issue if minimum subscription of 90 per cent is not
received within 90 days from closure of the issue. (iv) Declaration about the
issue of allotment letters/refunds within a' period of 10 weeks and interest in
case of any delay in refund at the prescribed rate under s.73. (v) Date of
opening of the issue. (vi) Date of closing of the issue.(vii) Name and address
of auditors and lead managers. (viii) Whether rating from CRISIL or any rating
agency has been obtained for the proposed debentures/preference shares issue. If
no rating has been obtained, this should be answered as 'No'. (ix) Names and address
of the underwriters and the amount underwritten by them.
2. Capital structure of the company. (i) Authorised, issued,
subscribed and paid-up capital. (ii) Size of the present issue, giving
separately reservation for preferential allotment to promoters and others.
3. Terms of the present issue. (i) Terms of payment. (ii) How to
apply. (iii) Any special tax benefits.
4. Particulars of the issue. (i) objects. (ii) Project cost. (iii)
Means of Financing
(including contribution of promoters).
5. Company management and project. (i)
History and main objects and present business of the company. (ii) Promoters
and their background. (iii) Location of the project. (iv) Collaborations, if
any. (v) Nature of the product (s), export possibilities (vi) Future prospects
(vii) Stock market data. For share/debentures of the company including high and
low price in each of the last three years and monthly high and low during the
six months, if applicable.
6. Certain prescribed particulars in regard to the company including
high and low price in each of the last three years and monthly high and low
during the last six months, if applicable.
7. Outstanding litigations relating to financial matters or criminal
proceedings against the company or directors under Schedule XIII.
8. Management perception of risk factors (e.g., sensitivity to foreign
exchange rate fluctuations, difficulty in availability of raw materials or in
marketing of products, cost/time over-run, etc.)
Part II of Schedule II requires the company to give detailed
information. This part is further sub-divided into three parts viz., General
Information, Financial Information and Statutory and Other Information.
General Information shall include information on matters
like: (i) Consent of directors, auditors, solicitors, managers to the issue,
Registrars to the issue, Bankers of the Company, Bankers to the issue and
experts. (ii) Change, if any, in directors and auditors during the last 3 years
and reasons therefor. (iii) Procedure and time schedule for allotment and issue
of certificates. (iv) Names and address of Company Secretary, legal advisor,
Lead Managers, Co-managers, Auditors, Bankers to the issue. (v) Authority for
the issue and details of resolution passed therefor.
Financial information includes: (i) reports of the auditors
of the company with respect to its profits and losses and assets and
liabilities and the dividends paid during the five financial years immediately
preceding the issue of prospectus; (ii) report by the accountants (who should
be named) on the profits or losses for the preceding 5 financial years and on
the assets and liabilities on a date which must not be more than 120 days
before the date of the issue of the prospectus.
Statutory and Other information includes information about.
(i) Minimum subscription. (ii) Expenses of the issue. (iii) Underwriting
commission and brokerage. (iv) Previous public or rights issue; if any, giving
particulars about date of allotment, refunds, premium/discount, etc. (v) Issue
of shares otherwise than for cash. (vi) Commission or brokerage on previous
issue. (vii) Particulars about purchase of property, if any. (viii) Revaluation
of assets , if any. (ix) Material contracts and time and place where such
documents may be inspected. (x) Debentures and redeemable preference shares or
other instruments issued but remaining outstanding on the date of the prospectus
and terms of their issue.
Part III of the Schedule gives explanations of certain
terms and expressions used under Part-I and Part -II of the Schedule.
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