6.0 The Offer document shall contain the following:

SECTION I - CONTENTS OF THE PROSPECTUS

6.1 The offer document shall contain all material information which shall be true and adequate so as to enable the investors to make informed decision on the investments in the issue.

6.1.1 The offer document shall also contain the information and statements specified in this chapter.

6.2 Cover Pages

6.2.1 Front Outer Cover Page
6.2.1.1    a) The front cover page of the prospectus shall be white and no patterns or
pictures shall be printed on this page.

b)The cover page paper shall be of adequate thickness (preferably minimum 100 gcm.  quality).

1. The word "Prospectus"
2. The name of the issuer company and address of the registered office of the company along with telephone fax number and E.mail address.
3. The nature, number, price and amount of the instruments offered.

"This being the first issue of the company, there has been no formal market for the securities of the company. The issue price (has been determined and justified by the Lead Merchant Banker and the issuer company as stated under Justification of Premium paragraph - in case of premium issue) should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can be given regarding an active or sustained trading in the shares of the company nor regarding the price at which the equity shares will be traded after listing."

b) In case of issue proposed to be listed on the Over the Counter Exchange of India and / or where market maker has been appointed, the concluding sentence of the above risk factor shall read as under:

"No assurance can be given regarding the price at which the equity shares of the company will be traded after listing."

v) The following general risk shall be incorporated:

"Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, investors must rely on their own examination of the issuer and the offer including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document."

Specific attention of investors shall be invited to the summarised and detailed statement of Risk Factors by indicating their page number(s) in the �General Risks�.

vi) �Issuer�s Absolute Responsibility� clause shall be incorporated as under :

"The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this offer document contains all information with regard to the issuer and the issue, which is material in the context of the issue, that the information contained in the offer document is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect."

7. a) The name and address of only of the Lead Merchant Banker who files the offer document with Board along with its telephone, fax number and E.mail address shall appear on the front outer cover page.

 

 
 
 

b) The names of the other Lead Merchant Bankers, Co-Managers, etc. may be mentioned on the back cover page.

7. The name and address of the Registrar to the issue along with the telephone number and fax number.
8. Issue Opening Date
9. Credit Rating, if applicable
10. Name/s of stock exchanges where listing of the securities is proposed.

6.2.2.1 Index shall appear on the Front Inside Cover Page.

6.2.3 Inner Cover Pages

6.2.3.1The other risk factors shall be printed in clear readable font (preferably of minimum point 10 size) starting on the first inner cover page to be numbered page i (and, if need be, shall continue on subsequent pages ii, iii, etc. as distinct from the page number of the offer document proper which would run as 1, 2, 3, etc.) in addition to appearing in the Part I of the Prospectus.

6.2.3.2 The risk factors shall be classified as those which are specific to the project and internal to the issuer company and those which are external and beyond the control of the issuer company. Management perception of the internal and external risk factors shall be given immediately after each of the risk factors and not as a separate heading under management perception.

6.2.4 Back Cover Pages

1. Back Inside Cover Page and Back Outside Cover Page shall be in white.

PART I

6.3 General Information

6.3.1 Name and address of registered office of the issuer company.

6.3.2 Letter of intent / industrial license and declaration of the Central Govt./RBI about non-responsibility for financial soundness or correctness of statements.

6.3.3 Disclaimer Clause

6.3.3.1 A prospectus shall contain the following disclaimer clause in bold capital letters:

"It is to be distinctly understood that submission of offer document to SEBI should not in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the issue is proposed to be made or for the correctness of the statements made or opinions expressed in the offer document. Lead Merchant Banker, ______________ has certified that the disclosures made in the offer document are generally adequate and are in conformity with SEBI (Disclosures and Investor Protection) Guidelines in force for the time being. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue.
 
 
 
 
 
 

It should also be clearly understood that while the Issuer Company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the offer document, the Lead Merchant Banker is expected to exercise Due Diligence to ensure that the Company discharges its responsibility adequately in this behalf and towards this purpose, the Lead Merchant Banker _______________________ has furnished to SEBI a Due Diligence Certificate dated ________________ in accordance with SEBI (Merchant Bankers) Regulations 1992 which reads as follows :

1. We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators etc. and other materials in connection with the finalisation of the offer document pertaining to the said issue;
2. On the basis of such examination and the discussions with the Company, its Directors and other officers, other agencies, independent verification of the statements concerning the objects of the issue, projected profitability, price justification and the contents of the documents mentioned in the Annexure and other papers furnished by the company.

(a) the offer document forwarded to SEBI is in conformity with the documents, materials and paper relevant to the issue;

(b) all the legal requirements connected with the said issue, as also the guidelines, instructions, etc. issued by SEBI, the Government and any other competent authority in this behalf have been duly complied with; and

(c) the disclosures made in the offer document are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed issue.

iii. We confirm that beside ourselves, all the intermediaries named in the prospectus are registered with SEBI and till date such registration is valid.

iv. We have satisfied ourselves about the worth of the underwriters to fulfill their underwriting commitments.

The filing of offer document does not, however, absolve the company from any liabilities under section 63 or 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed issue. SEBI, further reserves the right to take up, at any point of time, with the lead merchant banker(s) any irregularities or lapses in offer document."

6.3.4 Disclaimer Statement from the Issuer

6.3.4.1 A statement to the effect that the issuer accepts no responsibility for statements made otherwise than in the prospectus or in the advertisement or any other material issued by or at the instance of the issuer and that anyone placing reliance on any other source of information would be doing so at his own risk should be incorporated .

6.3.5 Filing of offer document with the Board and RoC

a) Under this head, the office of the Board where the offer document has been filed shall be mentioned.

2. The RoC where copy of the offer document, having attached thereto the Material Contracts and Documents referred to elsewhere in the offer document, has been filed shall also be mentioned.

6. Names of regional stock exchange and other stock exchanges where

6.3.7 Provisions of sub-section (1) of section 68A of the Companies Act, relating to punishment for fictitious applications, shall be mentioned.

6.3.8 Minimum Subscription Clause

Following statements shall appear:

6.3.8.1 For Non-underwritten Public Issues

" If the company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the company becomes liable to pay the amount, the company shall pay interest as per Section 73 of the Companies Act 1956."

6.3.8.2 For Underwritten Public Issues

"If the company does not receive the minimum subscription of 90% of the net offer to public including devolvement of Underwriters within 60 days from the date of closure of the issue, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the company becomes liable to pay the amount, the company shall pay interest prescribed under Section 73 of the Companies Act 1956."

6.3.8.3 For Composite Issues

1. The Lead Merchant Banker shall ensure that the requirement of "minimum subscription" is satisfied both jointly and severally, i.e., independently for both rights and public issues.
2. If the company does not receive the minimum subscription in either of the issues the company shall refund the entire subscription received.

6.3.8.4.1The requirement of minimum subscription shall not be applicable to offer for sale.

5. Public issues by infrastructure companies
1. The requirement of minimum subscription shall not be applicable to an eligible infrastructure company, provided disclosures regarding the alternate source of funding is made in the offer documents.

6.3.10 Issue Schedule

1. Date of opening of the issue
2. Date of closing of the issue
3. Date of earliest closing of the issue

1. Name and address of auditors and lead managers.
2. Name and address of registrars to the issue.
3. Name and address of trustee under debenture trust deed (in case of debenture issue)

1. The credit rating obtained from a credit rating agency for the proposed issue of debt security including convertible instruments.
2. If the rating has been obtained from more than one credit rating agencies, disclosures shall be made of all ratings including unaccepted rating.
3. All the credit ratings obtained during the previous three years before filing of the offer document for any of its listed debt-securities at the time of accessing the market through a rated debt-security shall be disclosed.

1. Names and addresses of the underwriters and the amount underwritten by them
2. Declaration by board of directors of the issuer company that the underwriters have sufficient resources to discharge their respective obligations.

1. The name, address telephone number, fax and E.mail number and address of Compliance Officer.
2. The investor�s attention shall also be invited to contact the compliance officer in case of any pre-issue / post-issue related problems such as non-receipt of letters of allotment / share certificates / refund orders / cancelled stockinvests, etc.

6.4.1 The lead merchant banker shall present the capital structure in the following manner:

1. Authorised issued subscribed and paid up capital (Number of instruments, description, aggregate nominal value)
2. Size of present issue giving separately promoters contribution, firm allotment / reservation for specified categories and net offer to public. (Number of instruments, description, aggregate nominal value and issue amount shall be given in that order, Name(s) of group companies to be given, in case, reservation has been made for shareholders of the group companies)
3. Paid-up Capital

1. after the issue
2. after conversion of securities (if-applicable)

6.4.2 Notes to Capital Structure

1. After the details of capital structure, the following notes shall be

1. Note relating to promoters' contribution and lock-in period stating date of allotment, date when made fully paid up, Nature of allotment (rights, bonus, etc.), number of securities, face value of securities, issue price of securities, percentage of promoters contribution to total issued capital and the date up to which the securities are locked-in.

(i) percentage of contribution by the promoters whose name figured in the prospectus as promoters in the paragraph on "Promoters and their background" and the date up to which the securities are locked-in.

(ii) An illustrative format of promoters contribution whose name figures in prospectus is specified in Schedule IX.

c) statement that promoters contribution has been brought in not less than the specified minimum lot and from persons defined as promoters under the Guidelines.

d) Statement that the promoters undertake to accept full conversion, if the promoters contribution is in terms of the same optionally convertible security as is being offered to the public.

e) Details of all "buy-back" and `stand by� and similar arrangements for purchase of securities by promoters, directors and lead merchant bankers shall be disclosed.

6. An over-subscription to the extent of 10% of the net offer to public can be retained for the purpose of rounding off to the nearer multiple of 100 while finalising the allotment.
7. A disclosure to the effect that the securities offered through this public/ rights issue shall be made fully paid up or may be forfeited within 12 months from the date of allotment of securities in the manner specified in clause 8.6.2.
8. A note stating that;-

1. unsubscribed portion in any reserved category may be added to any other reserved category.
2. The unsubscribed portion, if any, after such inter se adjustments amongst the reserved categories shall be added back to the net offer to the public.

6. In case of under-subscription in the net offer to the public portion spillover to the extent of undersubscription shall be permitted from the reserved category to the net public offer portion.

1. names of the ten largest shareholders as on the date of filing of the prospectus with the registrar of Companies;
2. number of shares held by shareholders at (i) above including number of shares which they would be entitled to upon exercise of warrant, option, rights to convert a debenture, loan or other instrument;
3. particulars as in (i) and (ii) above as on a date two years prior to the date of filing the prospectus with the Registrar of Company, -
4. Particulars as in (i) and (ii) above as on a date 10 days prior to the date of filing of the prospectus with the Registrar of the Company;
5. if the issuer company has made an initial public offering within the immediately preceding two years, the above information shall be given separately indicating the names of persons who acquired shares by subscriptions to the public issue and those who acquired the shares by allotment on a firm basis or by private placement.

1. the aggregate shareholding of the Promoters group and of the directors of the Promoters, where the promoter is a company;
2. aggregate number of securities purchased or sold by the Promoters Group and the directors of the promoter during a period of six months preceding the date on which the draft prospectus is filed with Board and to be updated by incorporating the information in this regard till the time of filing the prospectus with the Registrar of the Company;
3. the maximum and minimum price at which purchases and sales referred to in (ii) above were made along with the relevant dates.

Explanation I

For the purpose of sub-clauses (i) to (iii) of clause k above, the term 'promoter' shall include -

a) the person or persons who are in over-all control of the company.

b) the person or persons who are instrumental in the formulation of a plan or programme pursuant to which the securities are offered to the public;

c) the persons or persons named in the prospectus as promoters(s) :

Provided that a director / officer of the issuer company or person, if they are acting as such merely in their professional capacity shall not be included in the Explanation.
 
 

Explanation II

'Promoter Group' shall include-

a) the promoter,

b) an immediate relative of the promoter (i.e. any spouse of that person, or any parent, brother, sister or child of the person or of the spouse);and

1. in case promoter is a company-

1. a subsidiary or holding company of that company;
2. any company in which the promoter holds 10% or more of the equity capital or which holds 10% or more of the equity capital of the Promoter;
3. any company in which a group of individuals or companies or combinations thereof who holds 20% or more of the equity capital in that company also holds 20% or more of the equity capital of the issuer company; and

i) any company in which 10% or more of the share capital is held by the promoter or an immediate relative of the promoter' or a firm or HUF in which the 'Promoter' or any one or more of his immediate relative is a member;

ii) any company in which a company specified in (i) above, holds 10% or more, of the share capital;

iii) any HUF or firm in which the aggregate share of the promoter and his immediate relatives is equal to or more than 10% of the total, and

e) all persons whose shareholding is aggregated for the purpose of disclosing in the prospectus "shareholding of the promoter group".
 
 

Explanation III - The Financial Institution, Scheduled Banks, Foreign Institutional Investors (FIIs) and Mutual Funds shall not be deemed to be a promoter or promoter group merely by virtue of the fact that 10% or more of the equity of the issuer company is held by such institution.

Provided that the Financial Institutions, Scheduled banks, Foreign Institutional Investors, shall be treated as promoters or promoter group for the subsidiaries or companies promoted by them or for the mutual fund sponsored by them.

6.5 Terms of the present issue

6.5.1 Terms of payments

6.5.1.1 The caption "Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders in Case of Public Issues" shall appear and shall contain the following statement:

"The company agrees that as far as possible allotment of securities offered to the public shall be made within 30 days of the closure of public issue. The company further agrees that it shall pay interest @15% per annum if the allotment letters / refund orders have not been despatched to the applicants within 30 days from the date of the closure of the issue. However applications received after the closure of issue in fulfillment of underwriting obligations to meet the minimum subscription requirement, shall not be entitled for the said interest."
 
 
 
 

6.5.2 Arrangements for Disposal of Odd Lots

1. a) Any arrangements made by the issuer company for providing liquidity for and consolidation of the shares held in odd lots, particularly when such odd lots arise on account of issues by way of rights, bonus, conversion of debentures/warrants etc., shall be intimated to the shareholders/investors.

6.5.2.2 Lead Merchant Banker shall ascertain whether the companies coming for fresh issue of capital propose to set up trusts in order to provide service to the investors in the matter of disposal of odd lot shares of the company held by them and if so, disclosures relating to setting up and operation of the trust shall be contained in the offer document.

6.5.2.3 Whenever any issue results in issue of shares in odd lots, the issuer company, shall as far as possible issue certificates in the denomination of 1-2-5-10-20-50 shares.

6.5.3 Rights of the instrument holders

6.5.4 How to apply - availability of forms, prospectus and mode of payment

6.5.4.1Applications by mutual funds

1. Lead Merchant Bankers shall clearly incorporate necessary disclosures under the heads "Procedure for applications by mutual funds" and "Multiple Applications"to indicate that a separate application can be made in respect of each scheme of an Indian mutual fund registered with the Board and that such applications shall not be treated as multiple applications.
2. The applications made by the AMCs or custodians of a Mutual Fund shall clearly indicate the name of the concerned scheme for which application is being made.

6.5.4.2.1 The Lead merchant banker shall ensure the following disclosures:

1. the name and address of at least one place in India from where individual NRI applicants can obtain the application forms.
2. "NRI applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the reserved category. The NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not use the forms meant for reserved category."

1. The disclosures regarding manner of obtaining and mode of drawing stockinvests, non-utilisation of stockinvests by third party, time period for utilisation of stockinvests by the purchasers and disposal of applications accompanied by stock invest as specified by RBI shall be incorporated at the appropriate places in the offer document.
2. Name of the bank through which the stockinvests shall be realised, shall be given in the prospectus.
3. The following paragraph shall be incorporated at the appropriate places in the prospectus.

6.5.5 Despatch of Refund Orders

6.5.5.1 The following clause shall be incorporated in the prospectus:

"The company shall ensure despatch of refund orders of value over Rs.1500/- and share/debenture certificates by Registered Post only and adequate funds for the purpose shall be made available to the Registrars by the issuer company ".

6.5.6 Undertaking by the Issuer Company.

6.5.6.1 The following undertaking by the issuer company shall be incorporated in the offer document :

1. that the complaints received in respect of the Issue shall be attended to by the issuer company expeditiously and satisfactorily;
2. that the issuer company shall take necessary steps for the purpose of getting the securities listed in the concerned stock exchange within the specified time;
3. that the issuer company shall apply in advance for the listing of equities on the conversion of Debentures / Bonds;
4. that the funds required for despatch of refund orders/allotment letters/ certificates by registered post shall be made available to the Registrar to the Issue by the issuer company;
5. that the promoters� contribution in full, wherever required, shall be brought in advance before the Issue opens for public subscription and the balance, if any, shall be brought in pro rata basis before the calls are made on public;
6. that the certificates of the securities/refund orders to the non-resident Indians shall be despatched within specified time.
7. that no further issue of securities shall be made till the securities offered through this offer document are listed or till the application moneys are refunded on account of non-listing, undersubscription, etc.
8. that necessary cooperation with the credit rating agency(ies) shall be extended in providing true and adequate information till the debt obligations in respect of the instrument are outstanding.

6.5.7.1 A statement by the Board of Directors of issuer company to the effect that�

1. all monies received out of issue of shares or debentures to public shall be transferred to separate bank account other than the bank account referred to in sub-section (3) of section 73;
2. details of all monies utilised out of the issue referred to in sub-item(i) shall be disclosed under an appropriate separate head in the balance-sheet of the company indicating the purpose for which such monies had been utilised; and
3. details of all unutilised monies out of the issue of shares or debentures, if any, referred to in sub-item(i) shall be disclosed under an appropriate separate head in the balance-sheet of the company indicating the form in which such unutilised monies have been invested.

6.6 Particulars of the issue

6.6.1 Objects

6.6.2 Project Cost

1. Where the company proposes to undertake more than one activity i.e diversification, modernisation, expansion etc. the total project cost shall be given activity- wise.
2. Where the company is implementing the project in a phased manner, the cost of each phase including the phase, if any, which has already been implemented shall be separately given.
3. The total project cost shall reflect the cost involved in each of the projects mentioned under the section on " Objects of the issue".

6.6.4 Appraisal

6.6.4.1 (a) The scope and purpose of the appraisal along with the date of appraisal shall be disclosed in the offer document.

(b) The offer document shall contain the cost of the project and means of finance as per the appraisal report.

(c) The weaknesses and threats, if any, given in the appraisal report, shall be disclosed in the offer document by way of risk factors.

6.6.5 Deployment of funds in the project

1. Actual expenditure incurred on the project (in cases of companies raising capital for a project) upto a date not earlier than 2 months from the date of filing the prospectus with Registrar of Companies.
2. Means and source of financing including details of "bridge loan" or other financial arrangement, which may be repaid from the proceeds of the issue.
3. Year wise break up of the expenditure proposed to be incurred on the said project.
4. Investment avenues in which the management proposes to deploy issue proceeds pending its utilisation in the proposed project.

6.7 Company, Management and Project

6.7.1 History and main objects and present business of the company

6.7.2 Subsidiary(ies) of the company, if any

6.7.3 Promoters and their Background

1. A complete profile of the promoters including their age, educational qualifications, experience in the business or employment and in the proposed line of business, their business and financial activities shall be furnished.
2. In case, the promoters are companies, history of the companies and the promoters of the companies shall be furnished.
3. Details in change of management of the companies if any, including details of the persons who are holding the controlling interest together with the applicability and compliance of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

6.7.4 Key Managerial Personnel

1. A paragraph on the key managerial personnel shall be incorporated giving full details of the personnel recruited as on the date of filing of the offer document with the Board indicating name, date of joining, qualification, details of previous employment etc.
2. The Lead Merchant Banker shall verify and ensure that the persons whose name appear in this para are in the employment of the company as permanent employees."
3. Any change otherwise than by way of retirement in the normal course in the key senior managerial personnel particularly in charge of production, planning, finance and marketing within one year prior to the date of filing the offer document with the Board shall be disclosed.

6.7.6 Location of the Project

6.7.7 Plant and machinery , technology, process, etc.

1. Details in a tabular form to be given shall include the machines required to be bought by the company, cost of the machines, name of the suppliers, the date of placement of order and the date / expected date of supply.
2. In case of machines yet to be delivered, the date of quotations relied upon for the cost estimates given, shall also be mentioned.
3. Percentage and value terms the plant and machinery for which orders are yet to be placed shall be stated and also be given by way of a risk factor.
4. Details of second hand machinery bought / proposed to be bought, if any, including the age of the machines, balance estimated life, etc. shall also be given.

6.7.8.1 Following information regarding persons/entities with whom technical and financial agreements have been entered into to be given:

1. place of registration and year of incorporation;
2. paid up share capital;
3. turnover of the last financial year of operation;
4. general information regarding such persons relevant to the issuer.

9. Infrastructure facilities for raw materials and utilities like water, electricity,

6.7.10 Schedule of implementation of the project and progress made so far, giving details of land acquisition, civil works, installation of plant and machinery, trial production, date of commercial production, etc.

6.7.11 The products

6.7.11.1 Nature of the product/ s - consumer / industrial and end users

2. (a) Market including details of the competition, past production figures for the industry, existing installed capacity, past trends and future prospects regarding exports (if, applicable), demand and supply forecasts (if given, should be essentially with assumptions unless sourced from a market research agency of repute), etc. to be given.

6.7.11.3 Approach to marketing and proposed marketing set up.

6.7.11.4 Export possibilities and export obligations, if any (in case of a company providing any "service" particulars, as applicable, be furnished)

6.7.12 Future prospects

6.7.12.1 Capacity & Capacity Utilisation

1. A table shall be incorporated giving the existing installed capacities for each product, capacity utilisation for these products in the previous 3 years, proposed capacities for existing as well as proposed products and the assumptions for future capacity utilisation for the next three years (from the date of commencement of commercial production) in respect of existing as well as proposed products.
2. If the projected capacity utilisation is higher than the actual average capacity utilisation by more than 25% during the previous 3 years, how the company proposes to achieve the projected levels of capacity utilisation in view of its failure to achieve levels of similar capacity utilisation in the past, shall be stated.

6.7.13.1 Particulars of:-

1. high, low and average market prices of the share of the company during the preceding three years;
2. monthly high and low prices for the six months preceding the date of filing the draft prospectus with Board which shall be updated till the time of filing the prospectus with the Registrar of Company / Stock Exchange concerned;
3. number of shares traded on the days when the high and low prices were recorded in the relevant stock exchange during said period of (i) and (ii) above;
4. the stock market data referred to above shall be shown separately for periods marked by a change in capital structure, with such period commencing from the date the concerned stock exchange recognises the change in the capital structure (e.g. when the shares have become ex-rights or ex-bonus);
5. the market price immediately after the date on which the resolution of the Board of Directors approving the issue was approved;
6. the volume of securities traded in each month during the six months preceding the date on which the prospectus is filed with ROC; and
7. to volume of business transacted along with high, low and average prices of shares of the company shall also be stated for respective periods.

1. A summary of past financial results after adjustments as given in the auditors report for the past three years containing significant items of income and expenditure shall be given.
2. An analysis of reasons for the changes in significant items of income and expenditure shall also be given, inter alia, containing the following:

1. unusual or infrequent events or transaction;
2. significant economic changes that materially affected or (are likely to effect income from continuing operations;
3. known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations;
4. future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known;
5. the extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices;
6. total turnover of each major industry segment in which the company operated
7. status of any publicly announced new products or business segment;
8. the extent to which business is seasonal;
9. any significant dependence on a single or few suppliers or customers;
10. competitive conditions.

6.9 Financial of Group Companies

6.9.1 The following information for the last 3 years based on the audited statements in respect of all the companies, firms, ventures, etc. promoted by the promoters irrespective of whether these are covered under section 370 (1)(B) of the Companies Act, 1956 shall be given, wherever applicable:

1. Date of Incorporation;
2. Nature of activities;
3. Equity Capital;
4. Reserves (excluding revaluation reserve);
5. Sales;
6. Profit after tax (PAT);
7. Earnings per share (EPS); and
8. Net Asset Value (NAV);
9. The highest and lowest market price of shares during the preceding six months with suitable disclosures for changes in capital structure during the period and the market value on the date of filing the prospectus with the Registrar of Companies;
10. If any of the companies has made public or rights issue in the preceding three years, the issue price of the security, the current market price and particulars of changes in the capital structure, if any, since the date of issue and a statement regarding the cost and progress of implementation of the project in comparison with the cost and implementation schedule given in the offer document;
11. Information regarding adverse factors related to the company and in particular regarding;

1. whether the company has become a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 or is under winding up;
2. whether the company has made a loss in the immediately preceding year and if so, the profit or loss figures for the immediately preceding three years.

2. (a) In case, the issuer company has more than five listed group companies, the financial information may be restricted to the five largest listed companies to be determined on the basis of market capitalisation one month before the date of filing draft prospectus with the Board.

3. If the promoters have disassociated themselves from any of the companies/firms during preceeding three years, the reasons therefor and the circumstances leading to the disassociation shall be furnished together with the terms of such disassociation.

4. (a) In case there are common pursuits among these companies, the reasons

2. The related business transactions within the group shall also be mentioned.
1. The significance of these transactions on the financial performance of the company/companies shall be stated.

6.10 Following particulars in regard to the company and other listed companies under the same management within the meaning section 370 (1)(B) of the Companies Act, 1956 which made any capital issue during the last three years shall be given

1. Name of the company
2. Year of Issue
3. Type of Issue (Public/ Rights/Composite)
4. Amount of issue
5. Date of closure of issue
6. Date of completion of delivery of share/debenture certificates
7. Date of completion of the project, where object of the issue was financing the project
8. Rate of dividend paid

6.11.1 Issuer Company

1. A separate para entitled "Promise Vs Performance - Last three issues" shall be given indicating whether all the objects mentioned in the respective offer Documents relating to the earlier issues by the company were met and whether all projections made in the said offer documents were achieved.
2. If not, non-achievement of objects/projections shall be brought out distinctly shortfall and delays shall be quantified.

1. A separate para on issues of group/associate companies entitled "Promise Vs Performance - Last one Issue of group/associate companies" shall be given indicating whether all the objects mentioned in the respective offer Documents relating to group/ associate companies were met and whether all projections made in the offer documents were achieved.
2. If not, non-achievement of objects/ projections shall be brought out distinctly. Shortfall and delays shall be quantified.

6.12.1 No projections of profits shall be made except

1. by a company which has not completed twelve months of commercial operations and its audited operative results are not available; or
2. by a company which is undertaking a new project or is proposing to substantially expand its activities beyond 100% of the existing capacity.

i) the projections are based solely on an appraisal by a public financial institution or a scheduled commercial bank;

ii) such appraising agency has financed the project or part thereof or is committed to finance the project or part thereof;

iii) the projections are not for a period exceeding two years from the date of expected commencement of commercial production or three years from the date of closure of the issue, whichever is later;

iv) the major assumptions on which projections are base are specified.

Explanation

For the purpose of eligibility of banks or FIs to appraise the projects and give projections in the offer documents, it is clarified that:

a) The subsidiaries of banks/FIs are not eligible for the purpose of giving projections in the offer documents.

If a project is appraised by a subsidiary of a bank or FI and the project is financed/committed to be financed by the parent bank/FI, the projections made by the subsidiaries cannot be given in the offer documents.

2. If a bank/FI has appraised a project and has extended assistance by way of lease finance/hire purchase which is part of means of finance of the project as given in the offer document, the projections made by such banks/FIs can be given in the offer document.
1. If the appraisal is done by a bank/FI which is holding the equity of the company before the issue or is participating in the firm allotment category, the projection made by such bank/FI can be given in the offer document and a disclosure of the extent of their participating in the equity of the company should be given.
2. Provided that participation of banks/FI in the reserved category on competitive basis shall not eligible for giving projections as allotment to them is not certain.
3. In case of rights issues, if the banks/FIs are the shareholders and give an undertaking that they would subscribe to their entitlement fully or partially, and if projects are appraised by them, projections can be given and a disclosure of the extent of their taking up the rights shares should be made in the offer document.
4. Underwriting by the banks/FIs shall not be considered as financing the project and projections given by them shall not be given in the offer documents.

1. The forecast of the estimated profits for the financial year ending immediately before the date of the prospectus (if such information has not already been given in the offer document) and for the financial year ending immediately after the date of the prospectus, duly supported by an auditors' certificate, shall be given in the prospectus.
2. The major assumptions on which the forecast is based shall be specified and the auditor should give assurance on the arithmetical calculations derived from such assumptions.
3. A specimen of Auditor�s Certificate is given in Schedule XIV.

1. the forecast period has already been covered in projections.
2. the company has not commenced commercial production.

6.13.1 Following information shall be disclosed for all issues irrespective of the issue price.

1. Earnings per share i.e. EPS pre-issue for the last three years (as adjusted for changes in capital);
2. P/E pre-issue and comparison thereof with industry P/E where available (giving the source from which industry P/E has been taken) ;
3. average return on net worth in the last three years;
4. minimum return on increased net worth required to maintain pre-issue EPS;
5. Net Asset Value per share based on last balance sheet;
6. Net Asset Value per share after issue and comparison thereof with the issue price.

Provided further that the accounting ratios disclosed in the prospectus in support of basis of the issue price shall be calculated after giving effect to the consequent increase in capital on account of compulsory conversions outstanding, as well as on the assumption that the options outstanding, if any, to subscribe for additional capital will be exercised.

g) An illustrative format of disclosure in respect of basis for issue price is given in Schedule XV.
 
 

6.14 Outstanding litigations or Defaults

1. All pending litigations in which the promoters are involved, defaults to the financial institutions/banks, non-payment of statutory dues and dues towards instrument holders like debenture holders, fixed deposits, and arrears on cumulative preference shares by the promoters and the companies/firms promoted by the promoters, shall be listed in the prospectus together with the amounts involved and the present status of such litigations/defaults. The likely adverse effect of these litigations/defaults, etc. on the financial performance of the company shall also be mentioned.
2. Further, the cases of pending litigations, defaults, etc. in respect of companies/firms/ventures with which the promoters were associated in the past but are no longer associated shall also be disclosed in case their name(s) continues to be associated with particular litigation(s).
3. i) The above information is required to be furnished in addition to the litigations against the company or against any other company whose outcome could have a materially adverse effect of the position of the company.

2. Further, all the litigations against the promoter or directors involving violation of statutory regulations or criminal offence shall be furnished in the offer document.

4. i) The pending proceedings initiated for economic offences against the directors, the promoters, companies and firms promoted by the promoters shall be disclosed separately indicating their present status.

5. Outstanding litigations, defaults, etc., pertaining to matters likely to affect operations and finances of the company including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII to the Companies Act, 1956 (1 of 1956) shall be furnished in the prospectus in the prescribed format.
6. The lead merchant banker shall ensure to appropriately incorporate in the prospectus and as risk factor(s), information regarding pending litigations, defaults, non payment of statutory dues, proceedings initiated for economic offences/Civil offences (including the past cases, if found guilty), any disciplinary action taken by the Board/ stock exchanges against the company/Promoters and their other business ventures (irrespective of the fact whether they fall under the purview of Sec 370 (1B) of the Company's Act, 1956) / Directors.
7. The name(s) of small scale undertaking(s) or any other creditors to whom the company owes a sum exceeding Rs. 1 lakh which is outstanding more than 30 days; and

8. i) If any of the above mentioned litigations, etc., arise after the filing of the offer document, the facts shall be incorporated appropriately in the prospectus (and as risk factors).

2. In case there are no such cases a distinct negative statement is required to be made in this regard in the prospectus.

6.16 Disclosure on Investor Grievances and Redressal System

The offer documents shall disclose the arrangements or any mechanism evolved by the company for redressal of investor grievances.

1. The company shall disclose the time normally taken by it for disposal of various types of investor grievances.
2. Similar disclosure shall be made in regard to the listed companies under the same management within the meaning of Section 370 (1B) of the Companies Act for the period of 3 years prior to the date of filing of the offer documents with ROC / Stock Exchange.

6.17 General Information

6.17.1 Consent of directors, auditors, solicitors/ advocates, managers to the issue, Registrar of Issue, Bankers to the company, bankers to the issue and experts.

6.17.2 Expert opinion obtained, if any

6.17.3 Change, if any, in directors and auditors during the last three years, and reasons, thereof

6.17.4 Authority for the issue and derails of resolution passed for the issue

6.17.4 Procedure and time of schedule for allotment and issue of certificates

6.17.5 Names and address of the company secretary, legal adviser, lead managers, co-managers, auditors, bankers to the company, bankers to the issue and brokers to the issue.

6.18 Financial Information

6.18.1 A report by the auditors of the company with respect to-

1. profits and losses and assets and liabilities, in accordance with clause 6.18.2 or 6.18.3 of this clause, as the case may require; and
2. the rates of dividends, if any, paid by the company in respect of each class of shares in the company for each of the five financial years immediately preceding the issue of the prospectus, giving particulars of each class of shares on which such dividends have been paid and particulars of the cases in which no dividends have been paid in respect of any class of shares for any of those years;

6.18.2 If the company has no subsidiaries, the report shall -

1. so far as regards profits and losses, deal with the profits or losses of the company (distinguishing items of a non- recurring nature) for each of the five financial years immediately preceding the issue of the prospectus; and
2. so far as regards assets and liabilities, deal with the assets and liabilities of the company and the last date to which the accounts of the company were made up.

1. so far as regards profits and losses, deal separately with the company�s profits or losses as provided by 6.18.2 and in addition deal either -

8. as a whole with the combined profits or losses of its subsidiaries, so far as they concern members of the company or

1. individually with the profits or losses of each subsidiary so far as they concern members of the company

1. so far as regards assets and liabilities, deal separately with the company�s assets and liabilities as provided by 6.18.2 and in addition, deal either �

or without the company�s assets and liabilities or

ii) individually with the assets and liabilities of each subsidiaries

and shall indicate as respects the assets and liabilities of the subsidiaries, the allowance to be made for persons other than members of the company.

6.18.4 If the proceeds, or any part of the proceeds, of the issue of the shares or debentures are or is to be applied directly or indirectly -

1. in the purchase of any business; or
2. in the purchase of an interest in any business and by reason of that purchase, or anything to be done in consequence thereof, or in connection therewith; the company will become entitled to an interest as respects either the capital or profits and losses or both, in such business exceeding fifty percent thereof;
3. a report made by accountants (who shall be named in the prospectus) upon-

1. the profits or losses of the business of each of the five financial years immediately preceding the issue of the prospectus and
2. the assets and liabilities of the business at the last date to which the accounts of the business were made up, being a date not more than one hundred and twenty days before the date of the issue of the prospectus.

1. the proceeds, or any part of the proceeds, of the issue of the shares or debentures are or is to be applied directly or indirectly in any manner resulting in the acquisition by the company of shares in any other body corporate; and
2. by reason of that acquisition or anything to be done in consequence thereof or in connection therewith, that body corporate will become a subsidiary of the company; and
3. a report made by accountants (who shall be named in the prospectus) upon�

1. the profits or losses of the other body corporate for each of the five financial years immediately preceding the issue of the prospectus; and
2. the assets and liabilities of the other body corporate at the last date to which its accounts were made up.
3. The said report shall -

1. indicate how the profits or losses of the other body corporate dealt with by the report would, in respect of the shares to acquired, have concerned members of the company and what allowance would have fallen to me made, in relation to assets and liabilities so dealt with for holders of other shares, if the company had at all material times held the shares to be acquired; and
2. where the other body corporate has subsidiaries deal with the profits or losses and the assets and liabilities of the body corporate and its subsidiaries in the manner provided by sub-clause (2) above in relation to the company and its subsidiaries.

6.18.7 Other provisions relating to accounts of the issuer company

1. All significant accounting policies and standards followed in the preparation of the financial statements shall be disclosed.
2. Statements of Assets and Liabilities and Profit and Loss or any other financial information shall be incorporated after making the following adjustments, wherever quantification is possible:

1. Adjustments / rectification for all incorrect accounting practices or failures to make provisions or other adjustments which resulted in audit qualifications;
2. Material amounts relating to adjustments for previous years shall be identified and adjusted in arriving at the profits of the years to which they relate irrespective of the year in which the event triggering the profit or loss occurred;
3. a) Where there has been a change in accounting policy, the profits or losses of the earlier years (required to be shown in the offer documents) and of the year in which the change in the accounting policy has taken place shall be re-computed to reflect what the profits or losses of those years would have been if a uniform accounting policy was followed in each of these years.

 

 
 
 

b) If an incorrect accounting policy is followed, the re-computation of the financial statements shall be in accordance with correct accounting policies;

4. a) Statement of profit or loss shall disclose both the profit or loss arrived at

loss from extraordinary items.

b) An illustrative format of the disclosure of profits and losses on this basis is specified at Schedule X.

v. a) The statement of assets and liabilities shall be prepared after deducting the balance outstanding on revaluation reserve account from both fixed assets and reserves and the networth arrived at after such deductions.

vi. A suggested format of assets and liabilities is specified at Schedule XI.

c) The turnover disclosed in the Profit and Loss Statement shall be bifurcated into:-

1. turnover of products manufactured by the company;
2. turnover of products traded in by the company; and
3. turnover in respect of products not normally dealt in by the company but included in (ii) above, shall be mentioned separately.

1. the sources and other particulars of such income; and
2. an indication as to whether such income is recurring or non-recurring, or has arisen out of business activities/other than the normal business activities.

ii) Disclosure of these changes in the activities of the company shall include discontinuance of lines of business, loss of agencies or markets and similar factors.

f) The following accounting ratios shall be given for each of the accounting periods for which financial information is given.

1. Earnings per Share: This ratio shall be calculated after excluding extra ordinary items.
2. Return on net worth: This ratio shall be calculated excluding revaluation

 

 
 
 

reserves.

3. Net Asset Value per share. This ratio shall be calculated excluding revaluation reserves.

2. In case of any change in the share capital since the date as of which the financial information has been disclosed in the offer document, a note explaining the nature of the change shall be given.
3. An illustrative format of the Capitalisation Statement is specified at Schedule XIII.

8. i) Break-up of total outstanding unsecured loans taken by the company, promoters/group companies/associate companies and others shall be given in the offer documents.

2. In respect of each such unsecured loan of the former category, the terms and conditions including interest rates and the repayment schedule.
1. If the loan can be recalled by the lenders at any time, the fact to be given as a risk factor.
2. Profits after tax are often affected by the tax shelters which are available.
3. Some of these are of a relatively permanent nature (for example, arising out of export profits) while others may be limited in point of time (for example, tax holidays for new undertakings).
4. Tax provisions are also affected by timing differences which can be reversed in the future (for example, the difference between book depreciation and tax depreciation).
5. For a proper understanding of the future tax incidence, these factors shall be identified and explained through proper disclosures.
6. An illustrative format of statement in respect of tax shelter is specified in Schedule XII.

6.19.1 Minimum Subscription

6.19.2 Expenses of the issue giving separately fee payable to :-

1. Advisers
2. Registrars to the Issue
3. Managers to the Issue
4. Trustees for the debenture-holders

6.19.4 Previous issue for cash

6.19.5 Previous public or rights issue, if any:

(during last five years)

1. Date of allotment: Closing Date:

 

 
 
 

Date of refunds

Date of listing on the stock exchange:

2. If the issue (s) at premium or discount and the amount thereof
3. The amount paid or payable by way of premium, if any, on each share which had been issued within the two years preceding the date of the prospectus or is to be issued, stating the dates or proposed dates of issue and, where some shares have been or are to be issued at a premium and other shares of the same class at a lower premium, or at par or at a discount, the reasons for the differentiation and how any premiums received have been or are to be disposed off.

6.19.7 Issue of shares otherwise than for cash

6.19.8 Debentures and redeemable preference shares and other instruments issued by the company outstanding as on the date of prospectus and terms of issue.

6.19.9 Option to subscribe

1. The details of option to subscribe for securities to be dealt with in a depository.
2. The lead merchant banker shall incorporate a statement in the offer document and in the application form to the effect that the investor shall have an option either to receive the security certificates or to hold the securities in dematerialised form with a depository.

1. As respects any property to which this clause applies-

1. the names, address, descriptions and occupations of the vendors;
2. the amount paid or payable in cash, shares or debentures to the vendor and, where there is more than one separate vendor, or the company is a sub-purchaser, the amount so paid or payable to each vendor, specifying separately the amount, if any, paid or payable for goodwill;
3. the nature of the title or interest in such property acquired or to be acquired by the company;
4. short particulars of every transaction relating to the property completed within the two preceding years, in which any vendor of the property to the company or any person who is, or was at the time of the transaction, a promoter, or a director or proposed director of the company had any interest, direct or indirect, specifying the date of the transaction and the name of such promoter, director or proposed director and stating the amount payable by or to such vendor, promoter, director or proposed director in respect of the transaction.

2. The property to which sub-clause (a) applies is a property purchased or acquired by the company or proposed to be purchased or acquired, which is to be paid for wholly or partly out of the proceeds of the issue offered for subscription by the prospectus or the purchase or acquisition of which has not been completed at the date of issue of the prospectus, other than property -

1. the contract for the purchase or acquisition whereof was entered into in the ordinary course of the company�s business, the contract not being made in contemplation of the issue nor the issue in consequence of the contract; or
2. as respects which the amount of the purchase money is not material.

3. for the purpose of this clause, where a vendor is a firm,, the members of the firm shall not be treated as separate vendors
4. if the company proposes to acquire a business which has been carried on for less than three years, the length of time during which the business has been carried

1. i) Details of directors, proposed directors, whole-time directors, their remuneration, appointment and remuneration of managing directors, interests of directors, their borrowing powers and qualification shares.

b) The dates, parties to, and general nature of -

1. every contract appointing or fixing the remuneration of a managing director or manager whenever entered into, that is to say, whether within or more than, two years before the date of the prospectus;
2. every other material contract, not being a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company or a contract entered into more than two years before the date of the prospectus.

3. Full particulars of the nature and extent of the interest, if any, of every director or promoter-

1. in the promotion of the company; or
2. in any property acquired by the company within two years of the date of the prospectus or proposed to be acquired by it.
3. Where the interest of such a director or promoter consists in being a member of a firm or company, the nature and extent of the interest of the firm or company, with a statement of all sums paid or agreed to be paid to him or to the firm or company in cash or shares or otherwise by any person either to induce him to become, or to qualify him as, a director, or otherwise for services rendered by him or by the firm or company, in connection with the promotion or formation of the company.

6.19.13 Restrictions, if any, on transfer and transmission of shares / debentures and on their consolidation / splitting.

6.19.14 Revaluation of assets, if any (during last five years)

6.19.15 Material contracts and inspection of documents, eg

1. Material contracts
2. Documents
3. Time and place at which the contracts together with documents will be available for inspection from the date of prospectus until the date of closing of the subscription list.

6.20 The abridged prospectus shall contain the disclosures as specified under Section I of Chapter VI.

6.20.1 The disclosure requirement as specified shall also be applicable in case of abridged prospectus.

6.21 General Information

6.21.1 Name and address of registered office of the company

6.21.2 Name/s of stock exchanges where listing of the securities is proposed.

6.21.3 Date of opening, closing and earliest closing of the issue

6.21.4 Disclaimer Clause

6.21.5 Name and address of lead managers.

6.21.6 Name and address of registrars to the issue.

6.21.7 Name and address of trustee under debenture trust deed (in case of debenture issue)

6.21.8 Rating for the proposed debenture/ preference shares issue, if any, obtained from any other Credit Rating Agency

6.21.9 (a) The name, address telephone number, fax number and address of Compliance Officer.

(b) The investor�s attention shall also be invited to contact the compliance officer in case of any pre-issue / post-issue related problems such as non-receipt of letters of allotment / share certificates / refund orders / cancelled stockinvests, etc.

6.21.10 Provisions of sub section (1) of section 68A of the Companies Act, relating to punishment for fictitious applications.

6.21.11 Declaration about the issue of allotment letters/refunds within a period of 30 days and interest in case of delay in dispatching refund/ allotment letters @ 15% p.a. as at the rate as may be specified.

6.21.12 Risk Factors and Issue Highlights:

6.21.13 The Risk Factors and management perception on the same shall be printed along with Issue Highlights with equal treatment in printing in all respects.

6.22 Capital Structure of the company

6.22.1 Following details shall appear

1. Authorised, issued, subscribed and paid up capital (Number of instruments, description, aggregate nominal value)
2. Size of present issue giving separately promoters contribution, firm allotment/ reservation for specified categories and net offer to public.
3. (Number of instruments, description, aggregate nominal value and issue amount shall be given in that order, Name(s) of group companies to be given, in case, reservation has been made for shareholders of the group companies )
4. Paid-up Capital

1. after the issue
2. after conversion of securities (if-applicable)

6.22.2 A disclosure to the effect that the securities offered through this public/ rights issue shall be made fully paid up or forfeited within 12 months from the date of allotment of securities in a manner as specified in clause 8.5.2.

6.23 Terms of the present issue

6.23.1 Authority for the issue, terms of payment and procedure and time schedule for allotment and issue of certificates.

6.23.2 The caption "Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders in Case of Public Issues" shall appear.

6.23.2 How to apply - availability of forms, prospectus and mode of payment

6.23.2.1 Applications by NRIs

a) In the application form meant for Indian Public, the declaration relating to Nationality and Residentship shall be shown prominently as under:

"Nationality and Residentship (Tick whichever is applicable)

1. I am / We are Indian National(s) resident in India and I am/we are not applying for the said equity shares as nominee(s) of any person resident outside India or Foreign National(s).
2. I am / We are Indian National(s) resident in India and I am / We are applying for the said equity shares as Power of Attorney holder(s) of Non-Resident Indian(s) mentioned below on non-repatriation basis.
3. I am / We are Indian National(s) resident outside India and I am/we are applying for the said equity shares on my / our own behalf on non-repatriation basis."

2. The application form meant for NRIs shall not contain provision for payment through NR(O) accounts.

8. On the face of the form, the following legend shall be printed in a box:

1. Attention of NRIs shall be invited to the following:

1. the name and address of at least one place in India from where individual NRI applicants can obtain the application forms.
2. Such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the reserved category.
3. Such NRIs who wish to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not use the form meant for reserved category.

1. Instructions to applicants to mention the number of application form on the reverse of the instruments to avoid misuse of instruments submitted along with the applications for shares/debentures in public issues.
2. Provision in the application form for inserting particulars relating to savings bank / current account number and the name of the bank with whom such account is held, to enable the Registrars to print the said details in the refund orders after the names of the payees.
3. Disclosure of PAN/GIR number in respect of applications for monetary value of the investment of Rs.50,000 and above.
4. Giving an option to investors to either receive securities in the form of physical certificates or hold them in dematerialised form.

6.24 Particulars of the issue

6.24.1 Objects

2. Project Cost

6.25 Company, Management and Project

6.25.1 History and main objects and present business of the company

6.25.2 Promoters and their Background

6.25.3 Names, address and occupation of manager, managing director, and other directors (including nominee-directors, whole-time directors (giving their directorships in other companies)

6.25.4 Location of the Project

6.25.5 Plant and machinery , technology, process, etc

6.25.6 Collaboration, any performance guarantee or assistance in marketing by the collaborators

6.25.7.Infrastructure facilities for raw materials and utilities like water, electricity,
etc.

6.25.8 Schedule of implementation of the project and progress made so far, giving details of land acquisition, civil works, installation of plant and machinery, trial production, date of commercial production etc

6.25.9 The products

6.25.9.1 Nature of the product/s - consumer / industrial and end users

6.25.9.2 Market including details of the competition, past production figures for the industry, existing installed capacity, past trends and future prospects regarding exports (if, applicable), demand and supply forecasts (if given, should be essentially with assumptions unless sourced from a market research agency of repute), etc. to be given.

6.25.9.3 Source of data used shall be mentioned.
6.25.9.3 Approach to marketing and proposed marketing set up

6.25.9.4 Export possibilities and export obligations, if any (in case of a company providing any "service" particulars, as applicable, be furnished)

6.25.10 Future prospects

6.25.11 Stock Market Data

i) Particulars of:-

1. high, low and average market prices of the share of the company during the preceding three years;
2. monthly high and low prices for the six months preceding the date of filing the draft prospectus with Board which shall be updated till the time of filing the prospectus with the Registrar of Company / Stock Exchange concerned.
3. number of shares traded on the days when the high and low prices were recorded in the relevant stock exchange during said period of (i) and (ii) above;
4. the stock market data referred to above shall be shown separately for periods marked by a change in capital structure, with such period commencing from the date the concerned stock exchange recognises the change in the capital structure (e.g. when the shares have become ex-rights or ex-bonus);
5. the market price immediately after the date on which the resolution of the Board of Directors approving the issue was approved;
6. the volume of securities traded in each month during the six months preceding the date on which the offer document is filed with ROC.
7. Along with high, low and average prices of shares of the company, details relating to volume of business transacted should also be stated for respective periods.

1. Name of the company
2. Year of issue
3. Type of issue (public/ rights/ composite)
4. Amount of issue
5. Date of closure of issue
6. Date of despatch of share/ debenture certificate completed
7. Date of completion of the project, where object of the issue was financing of a project
8. Rate of dividend paid

i) Following information shall be disclosed:-

1. Earnings per share i.e. EPS pre-issue for the last three years (as adjusted for changes in capital);
2. P/E pre-issue and comparison thereof with industry P/E where available (giving the source from which industry P/E has been taken) ;
3. average return on net worth in the last three years;
4. minimum return on increased net worth required to maintain pre-issue EPS;
5. Net Asset Value per share based on last balance sheet;
6. Net Asset Value per share after issue and comparison thereof with the issue price.

Provided further that the accounting ratios disclosed in the prospectus in support of basis of the issue price shall be calculated after giving effect to the consequent increase of capital on account of compulsory conversions outstanding, as well as on the assumption that the options outstanding, if any, to subscribe for additional capital will be exercised.

6.28 Management perceptions of risk factors (e.g. Sensitivity to foreign exchange rate fluctuations, difficulty in availability of raw materials or in marketing of products, cost/ time overrun).

6.29 Outstanding litigations

6.30 Whether all Payment/ Refunds, Debentures, Deposits of banks or companies, Interest on Deposits, Debenture Interest, Institutional Dues have been paid up to date.

6.31 If not, details of the arrears if any to be stated.

6.30 Any material development after the date of the latest balance sheet and its impact on performance and prospects of the company.
6.32 Expert opinion obtained if any.

6.33 Change, if any, in directors and auditors during the last three years and reasons thereof.

6.34 Option to Subscribe.

1. The details of option to subscribe for securities to be dealt in a depository.
2. The lead merchant banker shall incorporate a statement in the offer document and in the application form to the effect that the investor shall have an option either to receive the security certificates or to hold the securities in dematerialised form with a depository.
3. ⁶In case of public issues by unlisted companies, the lead merchant banker shall incorporate a statement in the offer documents that the trading in the securities shall be in dematerialised form only for all the investors."

6.36 Financial Performance of the Company for the Last Five Years:(Figures to be taken from the audited annual accounts in tabular form)

1. Balance Sheet Data: Equity Capital, Reserves (State Revaluation Reserve, the year of revaluation and its monetary effect on assets) and borrowings
2. Profit and Loss data: Sales, Gross profit, Net profit, dividend paid, if any
3. Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company
4. Lead Merchant Banker shall ensure that the financial information about the issuer company appearing in the abridged prospectus, is as per Auditors� report of the prospectus.

1. Minimum subscription clause shall appear followed by the statement given below:

SECTION III. CONTENTS OF THE LETTER OF OFFER

6.38 The letter of offer shall fulfil the requirements and shall contain disclosures as specified under Section I of this Chapter for the prospectus under the following heads:

Explanation:

For the purpose of rights issue, wherever the word 'RoC' appears, the same shall be deemed to refer Regional Stock Exchange.

6.39 Cover Pages

6.39.1. The front and back cover pages of the letter of offer shall comply with the requirements specified under clause 6.2 of Section I of this Chapter.

6.40 General information
6.40.1 Name and address of registered office of the company.

6.40.2 Issue listed at: [Name (s) of the Stock Exchanges]

6.40.3 Opening, closing dates of the issue.

6.40.4 Name and address of Lead Merchant Bankers.

6.40.5 Name and address of Trustees under Debenture Trust Deeds (in case of debenture/ issue).

6.40.6 Rating for the Debenture/Preference Shares, if any, obtained from any Credit Rating Agency.

6.40.7  Provisions of sub-section (1) of Section 68A of the Companies Act, 1956 relating to punishment for fictitious applications.

6.40.8 Declaration about the issue of allotment letters/refunds within a period of 7 weeks and interest in case of delay in refund at the prescribed rate under Section 73(2)/(2A).

6.40.9 Declaration by the Board of Directors stating that all moneys received out of issue of shares or debentures through an offer document shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of section 73;

6.40.10 Minimum Subscription Clause: The minimum subscription clause shall be incorporated as under:

6.40.11 For Non-underwritten Rights Issue

1. If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue.
2. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

1. If the Company does not receive minimum subscription of 90% of the issue including devolvement of underwriters, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue.
2. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the company will pay interest for the delayed period, at prescribed rates in sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

1. Issued, subscribed and paid-up capital
2. Size of present issue
3. Paid up capital -

1. after the present issue.
2. after the conversion of debentures (if applicable)

4. (i) Details of promoters holding (pre-issue and post issues) and the lock-in.

2. Pre and Post Issue shareholding pattern.
1. Promoters intention to subscribe to their entire rights entitlement.

6.42 Terms of the present issue

6.42.1 Authority for the issue, terms of payments and procedure and time schedule for allotment and issue of certificates.

6.42.2 How to apply - availability of forms, letter of offer and mode of payment.

6.42.3 Special tax benefits to company and shareholders under the Income tax Act, if any.

6.43 Particulars of the issue

6.43.1 Object of the issue.

6.43.2 Project Cost.

6.43.3 Means of financing (including contribution of promoters).

6.44 Company, management and project

6.44.1 History, main objects and present business of the company.

6.44.2  Background of promoters, Managing Director/ Whole time Director and names of nominees of institutions, if any, on the Board of Directors including key management personnel.

6.44.3 Location of the Project.

6.44.4 Plant and Machinery, technology, process etc.

6.44.5 Collaboration, performance guarantee if any, or assistance in marketing by the collaborators.

6.44.6 Infrastructure facilities for raw materials and utilities like water, electricity,
etc.

6.44.7 Schedule of implementation of the project and progress made so far, giving details of land acquisition, execution of civil works, installation of plant and machinery, trial production, date of commercial production, if any.

6.44.8 the products -

1. Nature of product(s)- consumer / industrial and end users.
2. Existing, licensed and installed capacity of the product, demand of the product - existing, and estimated in the coming years as estimated by a Government authority or by any other reliable institution, giving source of the information.
3. Approach to marketing and proposed marketing set up (in case of company providing services, relevant information in regard to nature / extent of services etc. to be furnished).

6.44.10Change, if any, in directors and auditors during the last three years and reasons thereof.

6.45 Financial performance of the company for the last five years:

(Figures to be taken from the audited annual accounts in tabular form)

6.45.1 Balance Sheet Data: Equity Capital, Reserves (State Revaluation Reserve, the year of revaluation and its monetary effect on assets) and borrowings.

6.45.2 Profit and Loss data: Sales, Gross profit, Net profit, Dividend paid if any.

6.45.3 Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company.

6.45.4 Stock market quotation of shares / debentures of the company, if any, (high/low price in each of the last three years and monthly high /low price during the last six months)

6.45.5 Details of any pending litigations, defaults against the company, these group companies and the business relationship of these companies with the issuing company.

6.45.6 Promise versus performance for the earlier Public / Rights issues of the Company, or group companies.

6.45.7 Financial performance of the subsidiary company / group company.

6.45.8 Justification of premium.

9. 6.45.9Risk Factors and Management perception of risk factors.

6.46.1 Working results of the company under following heads

(a) (i) Sales / turnover

(ii) Other income

(b) Estimated gross profit/loss

(excluding depreciation and taxes)

(c) (i) Provision for depreciation

(ii) Provision for taxes

(d) Estimated net profit/loss

6.46.2 Material changes and commitments, if any, affecting financial position of the company.

6.46.3 Week-end prices for the last four weeks; current market price; and highest and lowest prices of equity shares during the period with the relative dates.

6.47 Following particulars in regard to the listed companies under the same management within the meaning of section 370(1B) which made any capital issue in the last three years.

1. Name of the company.
2. Year of issue.
3. Type of issue

4. Amount of issue.
5. Date of closure of issue.
6. Date of despatch of share/debenture certificate completed.
7. Date of completion of the project, where object of the issue was financing of a project.
8. Rate of Dividend paid.

6.48.1 Any material development after the date of the latest balance sheet and its impact on performance and prospects of the company.

49. Outstanding litigation

6.51 Statutory and other information

6.51.1 Option to Subscribe
(a) The details of option to subscribed for securities to be dealt in a depository.

(b) The lead merchant banker shall incorporate a statement in the offer document and in the application form to the effect that the investor shall have an option either to receive the security certificates or to hold the securities in dematerialised form with a depository.

6.51.2 Material contracts and time and place of inspection.

6.52 Undertaking by Directors

" No statement made in this Form shall contravene any of the provisions of the Companies Act, 1956 and the rules made thereunder. All the legal requirements connected with the said issue as also the guidelines, instructions etc. issued by SEBI, Government and any other competent authority in this behalf have been duly complied with".

Signature of Directors Place : .......................