THE COMPANIES ORDINANCE, 1972

PART II

Matters to be contained in every prospectus issued to the public

10.  The number, description and amount of any shares in or debentures of the company and its subsidiaries for which any person has, or is entitled to be given, an option to subscribe, together with the following particulars of the option, that is to say-

(a) the period during which it is exercisable ;

(b)   the price to be paid for shares or debentures subscribed for under it;

(c)   the consideration (if any) given or to be given for it, or for the right to it;

(d)   the names and addresses of the persons to whom it, or the right to it, has been given or, if given to a class or classes of shareholders or debenture holders as such, particulars of the relevant class or classes of shares or debentures held by them.

11.  The number and amount of shares and debentures of the company or its subsidiaries which within the two preceding years have been issued, or agreed to be issued, as fully or partly paid up for cash and for a consideration other than cash respectively, the extent to which they are paid up, or credited as paid up or agreed to be so credited, and in the case of shares or debentures issued or agreed to be issued for a consideration other than cash, the consideration for which those shares or debentures have been issued or are proposed or intended to be issued.

12.  The names, descriptions and addresses of the directors and any proposed directors of the company, and the particulars required by sections 111 and 169 to be entered in the registers of directors' holdings and of directors respectively in respect of each director, and the particulars which would be required to be so entered in respect of each proposed director if he had been appointed a director immediately before the prospectus is issued :

Provided that until section 111 comes into operation it shall not be necessary to include in a prospectus the particulars which are or would be required to be entered in the register of directors' holdings.

13.  The names and addresses and professional qualifications—

(a)   of the company's secretary ;

(b)   of the auditors of the company ;

(c)   of the registrar and transfer agent (if other than the company's secretary) who will keep the register in which the shares or debentures will be registered.

14.  Particulars of the directors' existing service contracts and directors' and proposed directors' proposed service contracts with the company, its holding company and its subsidiaries, and with subsidiaries of its holding company. Without prejudice to the generality of the preceding sentence, particulars shall not be deemed sufficient unless they include particulars of all remuneration, pensions, retirement benefits and provisions within the meaning of section 146 payable or which may become payable to each director and proposed director and to their respective dependants.

15.  Full particulars of the nature and extent of the interest (if any) of every promoter and director and proposed director of the company and of its holding company and subsidiaries (if any) in the promotion of, or in the assets acquired or proposed to be acquired by, the company, or, where the interest of such a promoter, director or proposed director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or shares or otherwise by any person either to induce him to become a promoter or director, or to qualify him as a director, or otherwise for services rendered or to be rendered by him or by the firm in connection with the promotion or formation of the company.

16.—(1) As respects any assets to which this paragraph applies—

(a)   the names and addresses of the vendors ;

(b)   the amount 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 payable to each vendor ;

(c) short particulars of any transaction relating to the property completed within the two preceding years in which any vendor of the assets 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.

(2)  The amount (if any) paid or payable as purchase money in cash, shares or debentures for any assets to which this pragraph applies, specifying the amount (if any) payable for goodwill.

(3)  The assets to which this paragraph applies are assets purchased or acquired by the company, or proposed so to be purchased or acquired, which is to be paid for wholly or partly out of the proceeds of the issue of shares or debentures offered for subscription by the prospectus, or the purchase or acquisition of which has not been completed at the date of the issue of the prospectus, other than assets—

(a)   the contract for the purchase or acquisition of which 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

(b)   as respects which the amount of the purchase money is not material.

(4)  Every person shall for the purposes of this paragraph, be deemed to be a vendor who has entered into any contract, absolute or conditional, for the sale or purchase, or for any option of purchase, of any assets to be acquired by the company, in any case where—

(a)   the purchase money is not fully paid at the date of the issue of the prospectus ;

(b)   the purchase money is to be paid or satisfied wholly or in part out of the proceeds of the issue offered for subscription by the prospectus ;

(c)   the contract depends for its validity or fulfilment on the result of that issue.

(5)  Where any assets to be acquired by the company are to be taken on lease or hire, this paragraph shall have effect as if the expression "vendor" included the lessor or letter on hire, and the expression "purchase money" included the consideration for the lease or hire, and the expression "sub-purchaser" included a sub-lessee or sub-hirer.

17.—(1) A report by the auditors of the company with respect to—

{a) profits and losses and assets and liabilities, in accordance with sub-paragraph (2) or (3) of this paragraph, as the case requires; and;

(b) the rates of the dividends (if any) paid by the company in respect of each class of shares in the company in respect of each of the five financial years immediately preceding the issue of the prospectus, giving particulars of each such 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 in respect of any of those years ; and, if no accounts have been made up in respect of any part of the period of five years ending on a date three months before the issue of the prospectus, containing a statement of that fact.

(2)  If the company has no subsidiaries, the report shall—

(a)   so far as regards profits and losses, deal with the profits or losses of the company in respect of each of the five financial years immediately preceding the issue of the prospectus ; and

(b)   so far as regards assets and liabilities, deal with the assets and liabilities of the company at the last date to which the accounts of the company were made up.

(3)  If the company has subsidiaries, the report shall—

(a)   so far as regards profits and losses, deal separately with the company's profits and losses as provided by the last foregoing sub-paragraph, and in addition, deal either—

(i) as a whole with the combined profits or losses of its subsidiaries, so far as they concern shareholders and debenture holders of the company ; or

(ii) individually with the profits or losses of each subsidiary so far as they concern shareholders and debenture holders of the company ; or, instead of dealing separately with the company's profits or losses, deal as a whole with the profits or losses of the company and, so far as they concern shareholders and debenture holders ' of the company, with the combined profits or losses of its subsidiaries ; and

(b)   so far as regards assets and liabilities, deal separately with the company's assets and liabilities as provided by the last foregoing subparagraph and, in addition, deal either—

(i) as a whole with the combined assets and liabilities of its subsidiaries, with or without the company's assets and lia-bilites ; or

(ii) individually with the assets and liabilities of each subsidiary ; and shall indicate as respects the assets and liabilities of the subsidiaries the allowance to be made for persons other than shareholders of the company.

(4) Until section 143 of this Ordinance comes into operation sub-paragraph (3) of this paragraph shall not take effect and for the purposes of sub-paragraph (2) a company which has subsidiaries shall be deemed not to have subsidiaries.

18. 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 in the purchase of any business, a report made by accountants (who shall be named in the prospectus and must be qualified under section 157 of this Ordinance to audit the accounts of any company) upon—

(a)   the profits or losses of the business in respect of each of the five financial years immediately preceding the issue of the prospectus ; and

(b)   the assets and liabilities of the business at the last date to which the accounts of the business were made up.

19.—(1) If—

(a)   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 or in an overseas company ; and

(b)   by reason of that acquisition or anything to be done in consequence thereof or in connection therewith that body corporate or overseas company will become a subsidiary of the company ;

a report made by accountants (who shall be named in the prospectus and must be qualified under section 157 of this Ordinance to audit the accounts of any company) upon—

(i) the profits or losses of the other body corporate or of the overseas company in respect of each of the five financial years immediately preceding the issue of the prospectus, and (ii) the-assets and liabilities of the other body corporate or of the overseas company at the last date to which the accounts of the body corporate or overseas company were made up.

(2) The said report shall—

(a) indicate how the profits or losses of the other body corporate or of the overseas company dealt with by the report would, in respect of the shares to be acquired, have concerned shareholders and debenture holders of the company, and what allowance would have fallen to be 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

(b) where the other body corporate or the overseas company 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 paragraph 17(3) of this Schedule in relation to the company and its subsidiaries.

(3) Until section 143 of this Ordinance comes into operation paragraph (b) of sub-paragraph (2) of this paragraph shall be treated as omitted therefrom.

20.  If since the end of its last complete financial year the company or any of its subsidiaries has acquired, or agreed to acquire, or is proposing to acquire, a business or shares in another body corporate or in an overseas company which will by reason of such acquisition become a subsidiary of the company, a report made by accountants (who shall be named in the prospectus and must be qualified under section 157 of this Ordinance to audit the accounts of any company) in respect of the matters specified in paragraph 18 in respect of that business or in paragraph 19 in respect of that other body corporate or that overseas company.

21.  If any of the information required by paragraphs 17 to 20 inclusive to be contained in an accountants' or auditors' report is based upon a valuation of assets, the reports shall so state, and if the amounts involved are significant, the prospectus shall—

(a)   state the names, qualifications and addresses of the persons by whom each such valuation was made ; and

(b) summarise the reports containing such valuations, setting out the dates and bases on which they were made.

22.  A statement of—

(a) the total amount owing by the company and its subsidiaries (if any) to banks for borrowing (whether on overdraft or otherwise) ,

(b)   the total amount of the secured indebtedness of the company and its subsidiaries (if any) registered and registrable under section 92 of the Ordinance ;

(c)   the total cost (inclusive of tax) of one year's interest on the debentures issued by the company and its subsidiaries (if any) and the debentures (if any) offered for subscription by the prospectus ; and

(d)   the total cost (inclusive of tax) of one year's fixed preference dividend on the preference shares issued by the company and its subsidiaries (if any) and the preference shares (if any) offered for subscription by the prospectus.

23. A statement by the directors that in their opinion the working capital of the company and its subsidiaries (if any) is sufficient, or, if they are not of that opinion, how it is proposed to provide the additional working capital which the directors consider to be necessary.

24- A statement as to the financial and trading prospects of the company and its subsidiaries (if any), together with any material information which is relevant thereto, including, if known to the directors, special trade factors or risks (if any) which are not mentioned elsewhere in the prospectus and are unlikely to be known by the general public, but which may materially affect the future profits of the company and its subsidiaries (if any).

25.  The dates of, parties to and general nature of every 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 issue of the prospectus.

26.  The amount or estimated amount of preliminary expenses of forming the company (unless already written off out of the company's profits or revenue reserves) and the persons by whom any of those expenses (except so far as written off as aforesaid) have been paid or are payable, and the amount or estimted amount of the expenses of the issue of the shares or debentures offered for subscription by the prospectus and the persons by whom any of those expenses have been paid or are payable.

27.  A statement whether there is pending against the company, its holding company, any of its subsidiaries, or any of the subsidiaries of its holding company, any litigation which may materially affect the interests of the company, and if so the parties to and the nature of that litigation.