Prospectus ‑ Shares reserved for subscription on firm allotment basis ‑ Whether excluded in arriving at number of shares offered to public for subscription - Companies Law - No. 6/150/6440,

Circular : No. 6/150/6440, dated 3 ‑ 5 ‑ 1962. Subject:- Prospectus ‑ Shares reserved for subscription on firm allotment basis ‑ Whether excluded in arriving at number of shares offered to public for subscription In a recent prospectus, it was observed that shares which were reserved for subscription on firm allotment basis were included in the number of shares offered to the public for subscription stated in the prospectus. Such a presentation would almost invariably be confusing to the intending investors and might well be, in certain circumstances, deemed to be misleading. Subsequently, a revised prospectus was filed by the company concerned showing the correct number of shares actually offered to the public. However, such remedial action might not be entirely satisfactory, particularly when newspaper announcements had been made and prospectus issued to the public on the erroneous basis mentioned earlier. Furthermore, the expenses involved in making further newspaper announcements and reprinting and issue of the amended prospectuses to all persons to whom the earlier prospectus was issued, might result in increased expenditure raising capital, which do not appear to be desirable. Companies, who are likely to make public issue of share capital in the future or are engaged in or associated with such matter, should ensure that shares reserved for subscription or firm allotment basis are excluded in arriving at the number of shares offered to the public for subscription to be mentioned in the prospectus.