The prospectus
Reference has been made to the prospectus and to the pre-listing statement. This requires some elaboration. According to one exchange:
"When a company applies for a listing, it must produce a pre-listing statement containing certain prescribed information concerning the company, its business and its prospectus. While the pre-listing statement may promote investment in the company's shares, it is not an invitation to the public to subscribe for shares, but rather aimed at enabling potential investors to make an informed investment decision regarding the company's shares. If the pre-listing statement contains a public offer, it will also have to comply with the prospectus provisions contained in Section 148 and Schedule 3 of the Companies Act."
As regards the prospectus, the two relevant sections of the Companies Act were discussed earlier. Sections 145 and 146 determine that a prospectus must be prepared and issued in the case of a public offer. A public offer, as noted earlier, is:
• An offer for subscription (the proceeds accrue to the company) (section 145)
• An offer for sale (the proceeds do not accrue to the company, but to the existing shareholders) (section 146).
Section 148 of the Act ("Matters to be stated in prospectus") determines that:
"1 (a) Every prospectus issued in terms of this Act shall contain a fair representation of the state of the affairs of the company, the shares of which are being offered and shall state at least the matters specified in, and set out the reports referred to in, Part I and Part II of Schedule 3."
The title of Schedule 3 reads: "Matters which must be stated in a prospectus in addition to those specified in the Act". Thus, all information / requirements relating to the prospectus are outlined in three documents:
• Sections of the Companies Act relating to the prospectus
• Part I of Schedule 3 of the Companies Act (matters)
• Part II of Schedule 3 of the Companies Act (reports).
The documents are elaborate; consequently only the headings are provided (see tables 4-6).
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Section 148 |
Matters to be stated in prospectus |
|
Section 149 |
Statement on face of issued prospectus |
|
Section 150 |
Consent of person named as director |
|
Section 151 |
Consent by experts and others |
|
Section 152 |
Contracts and translations thereof to be attached to prospectus |
|
Section 153 |
Where the issue is underwritten |
|
Section 154 |
Signing, date and date of issue, of prospectus |
|
Section 155 |
Registration of prospectus |
|
Section 156 |
Time limit for issue of prospectus |
|
Section 157 |
Advertisement as to prospectus |
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Section 158 |
Waiver of requirements of this Chapter void |
|
Section 159 |
Variation of contract mentioned in prospectus |
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Section 160 |
Liability for untrue statements in prospectus |
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Section 161 |
Liability of experts and others |
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Section 162 |
Offences in respect of untrue statements in prospectus |
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Section 163 |
No diminution of liability under any other law or the common law |
Table 4: Sections of the companies act relating to the prospectus (sections 148 to 163)
|
1. |
Name, address and incorporation |
|
2. |
Directors and management (names and addresses, term of appointment, remuneration, etc.) |
|
3. |
Auditor (name and address) |
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4. |
Attorney, banker, stockbroker, trustee and underwriter (names and addresses) |
|
5. |
Secretary (name, address and professional qualifications) |
|
6. |
History, state of affairs and prospects of company |
|
7. |
Purpose of the offer |
|
8. |
Share capital of the company (particulars) |
|
9. |
Loans (details of material loans) |
|
10. |
Options or preferential rights in respect of shares |
|
11. |
Shares issued or to be issued otherwise than for cash |
|
12. |
Property acquired or to be acquired |
|
13. |
Amounts paid or payable to promoters |
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14. |
Commissions paid or payable in respect of underwriting |
|
15. |
Preliminary expenses and issue expenses |
|
16. |
Material contracts |
|
17. |
Interest of directors and promoters |
|
18. |
Particulars of the offer (class of shares, nominal value of the shares if applicable, number of shares offered, issue |
|
price, and other conditions of the offer. |
|
|
19. |
Time and date of the opening and of the closing of the offer |
|
20. |
Issue price |
|
21. |
Minimum subscription |
|
22. |
Statement as to adequacy of capital |
|
23. |
Statement as to listing on stock exchange |
|
24. |
Requirements for prospectus of mining company |
Table 5: Part I of schedule 3 of the Companies Act (matters to be included in prospectus)
|
25. |
Report by auditor of company |
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26. |
Report by auditor where business undertaking to be acquired |
|
27. |
Report by auditor where body corporate will become a subsidiary |
|
28. |
Auditor not qualified to make reports |
|
29. |
Qualification in respect of references to period of five years |
|
30. |
Adjustment of figures in reports |
|
31. |
Report by directors as to material changes |
Table 6: Part II of schedule 3 of the Companies Act (reports to be set out in prospectus)
