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).

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

Section 158

Waiver of requirements of this Chapter void

Section 159

Variation of contract mentioned in prospectus

Section 160

Liability for untrue statements in prospectus

Section 161

Liability of experts and others

Section 162

Offences in respect of untrue statements in prospectus

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)


Name, address and incorporation


Directors and management (names and addresses, term of appointment, remuneration, etc.)


Auditor (name and address)


Attorney, banker, stockbroker, trustee and underwriter (names and addresses)


Secretary (name, address and professional qualifications)


History, state of affairs and prospects of company


Purpose of the offer


Share capital of the company (particulars)


Loans (details of material loans)


Options or preferential rights in respect of shares


Shares issued or to be issued otherwise than for cash


Property acquired or to be acquired


Amounts paid or payable to promoters


Commissions paid or payable in respect of underwriting


Preliminary expenses and issue expenses


Material contracts


Interest of directors and promoters


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.


Time and date of the opening and of the closing of the offer


Issue price


Minimum subscription


Statement as to adequacy of capital


Statement as to listing on stock exchange


Requirements for prospectus of mining company

Table 5: Part I of schedule 3 of the Companies Act (matters to be included in prospectus)


Report by auditor of company


Report by auditor where business undertaking to be acquired


Report by auditor where body corporate will become a subsidiary


Auditor not qualified to make reports


Qualification in respect of references to period of five years


Adjustment of figures in reports


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)

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