Page 175 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes 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 last six
months, if applicable.

6. Certain prescribed particulars in regard to the company and other listed companies under
the same management which made any capital issue during the last 3 years.
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 fl uctuations,
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 fi ve fi nancial 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.

9.10 SEBI Guidelines relating to Disclosure on Prospectus

Every prospectus submitted to Stock Exchange Board of India (SEBI) for vetting shall, in addition
to the requirements of schedule II to the Act, contain/specify certain particulars as are announced
from time to time.

9.11 Abridged Form of Prospectus

Section 56(3) requires that no one shall issue any form of application for shares in or debentures of
a company unless the same is accompanied by a memorandum (Known as ‘Abridged Prospectus’)
containing such salient features of prospectus as may be prescribed. Thus, instead of appending
full prospectus, an ‘abridged prospectus’ need only be appended to the application form.

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