Prospectus is the only window through which the potential investor can look into the soumdness of the company's venture. Hence the Companies Act intends to secure the fullest :disclosure of all material and essential particulars in a prospectus. The Act provides that every prospechls issued by or on behalf of a company must state the matters and set out the reports specified in "Schedule it" givenanthe end ofthe
The Government has revised the format at prospectus given in Schedule II of the Compames Act, 1956. The revised format has been made effective from Ist NoNTember, 1991. This hasbeen done to provide for greater disclosure of information regarding the company, its management, the project proposed to be undertaken by the comp.rrlv and the management perception of risk factors so as to enable the investors to take an informed decision regarding investment in shares or debentures offered through pubic issue.
Matters to be specified. Elnetly stated, as per revised " a prospechus must contain at least the following particulars:
I. Compawy s name and aaddre.ss of its registered erp office.
2. The nan?es and addresses etc. of company promoters and the* background.
3. The main objects of the company, its history and present business.
N. The names, addresses and occupation of manager, managing director and other directors (giving their directorship in other companies).
5. The size of present issue giving separately reservation for preferential allotment to promoters and others:
6. The date of opening and closing of the subscription list and the date of earliest closing of the issue.
7. The names and address of the company secretary, legal advisor, auddtors, lead rnanagers, bamkers and brokers to the issue, :
8. The name and address of the trustee Imder debentures trust deed (in case of debenture issue).
9 Consewt of directors. anditQrs, solicitors, managers to tl.e issue, bankers to the company, barkers tG the issue and experts.
16 Thenamesand addresses ofthe unde riters, finders ritten amount - underwriting cotntr.issiott and declaration by Board of Directors that thy utrder tilers have slrffiaent resources to discharge their respective rbligaLo:ts 18 The ntaterial detail.v about the project, namely, its location, plam and machmerv, technology, process etc., collaboration, any performance guarantee or assistance in marketing by the collaborators, infrastncture facilities for raw materials and utilities like water, electricity etc. schedule of tpiementation of the project and progress so far
IS. The nature of the prod.uct(v whether consumer or industrial approach to marketing and proposed marketing set up and export possibilities and export obhgations, if anv. 19. f utureprospecI. expected capacity utilisaaon during the first Ill tea years frmtl the date of cmnmenceinent of production, and the expected year when the company would be able to earn cash profits and net profits.
20. Stoclr exchange quotations the higlVlow stock exclrange price in each of the last three years and monthly higlVlow during last SiY months (where applicable).
21. Theparhculars a issuesmade duringthe last three years the company and other listed compaulics under the same management
22. The particulars of outstanding litigabon and criminal prosecution
23, The particulars of default, if any, m meeting statutory dues mstthlLonal dues and towards instrument holders like debentures fixed deposits, etc., m relation to the company and other companies promoted be t e same private promoters and listed on stock
24. 51anagementpercephon of rtif factors e.g. sensitivity to fores exchange rate fluctuations, diff culty in availability of raw materials or in marketing of products, cost time overrun etc
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