Section 3 Updated As at 26 07 2018

SECTION 3
CONTENTS OF PROSPECTUS / INTRODUCTORY DOCUMENT
GENERAL
This Section sets out the basic requirements for the contents of a prospectus, which
should be complied with in addition to the requirements of the Companies Act and any
other applicable law.
The requirements of this Section are not exhaustive. Additional information that are not
required by the Rules may be included at the discretion of the Entity according to the
particular nature of the business of the issuer and of the Securities for which Listing is
sought.
The Exchange reserves the absolute right to require disclosure of any additional
information as it considers appropriate in any particular case. If the Exchange requires
such information, it shall inform the applicant in writing of the additional information
required.
In the event of a listing of Securities by way of an Offer for Subscription, Offer for Sale
or Introduction on the Empower Board in the Alternate Market Segment, the applicant
Entity shall produce the Prospectus and Introductory Document (as applicable) in soft
copy form and host such document on the websites of the Entity, the sponsor and the
Exchange.
CONTENTS OF A SHARE PROSPECTUS
3.1 SHARES
3.1.1 CORPORATE INFORMATION
a. Name and registered address
b. Date, place and authority of incorporation
c. Name and address of bankers, auditors (if any) of the Entity, bankers
to the issue, lawyers, registrars, secretaries, auditors, managers to the
issue. In the event the shares of the applicant Entity are to be listed on
the Empower Board in the Alternate Market Segment, the Entity shall
additionally disclose the name and address of the sponsor.
3.1.2 OBJECTIVES OF THE ISSUE

a. Details of the intended application of the proceeds of the issue and in
the event the proceeds are being applied for multiple purposes, the
breakdown of the proceeds to be utilized for each purpose.
b. If the funding required to achieve the objects of the issue exceeds the
amount expected to be mobilised through the issue, the means of
funding the full cost of the objects of the issue.
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c. If the funds are utilized to acquire assets, a description of each asset,
basis of determination of the price of the assets, any amount payable,
if any, for goodwill, any relationship of the Entity with the seller and
any other material information regarding the acquisition.
d. If the proceeds may or will be used to finance acquisitions of any other

businesses, a brief description of such businesses and its future
prospects. The Entity should also provide the opinion of experts on the
valuation of the acquisition where applicable.
e. If any material part of the proceeds is to be used to discharge, reduce or

retire debt, details of such debt.
3.1.3 PARTICULARS OF SHARES FOR WHICH APPLICATION IS BEING MADE
a. Nature and classification of the shares for which admission is sought and
a description of the rights of holders of such shares, in particular the
voting rights, entitlement to share in the profits and, in the event of
liquidation, in any surplus and any other special rights.
Where there is or is to be more than one class of Securities of the
Entity in issue, like particulars shall be given for each additional class.
b. The following disclosures pertaining to the shares of the Entity which

are locked-in and which are not locked-in, in terms of Rules 2.1.1(d)
and 2.1.1(e) of these Rules:
Category of Locked-in The time period No. of No. of shares as a

shareholders Shares after which the shares percentage of total
(Pre-Listing) shares will be number of shares in
available for trading issue
Non Public Locked-in 6th month
Public Locked-in 6th month

Public Not Locked- Not applicable

in
Total
The Entity hereby confirms that the information furnished herewith shall remain
unchanged until the Date of Listing.
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For the purposes of this Rule, the terms ‘Non Public Shareholders’ and
‘Public Shareholders’ shall have the same meaning as set out in Rules
2.1.1 (d) and 2.1.1(e) of these Rules.
3.1.4 CONSIDERATION
a. A statement that the consideration for which the shares are to be

issued is fair and reasonable to the Entity and to all existing
shareholders as required by the Companies Act.
b. A disclosure on the basis of determination of the consideration for

which shares are to be issued (IPO Price) / Price Band in the case of
Offer through Book Building (Price Band), as set out in APPENDIX 3C.
AND
c. (i) Disclosures pertaining to a competent independent valuation in

determining and justifying the IPO Price/Price Band in
summarized form and qualifications and relevant experience of
the independent valuer; in the event the valuation report is
issued by a Firm of Valuers, qualifications and relevant
experience of the individuals responsible for preparing the
valuation report;
and,
(ii) A Declaration by the independent valuer that;
- The valuer is neither a related party of the applicant Entity

as defined in Sri Lanka Accounting Standards nor has a
significant interest or financial connection with the applicant
entity and/or the group;
- The valuer is a member of good standing in a professional

association relevant to the valuation assignment undertaken
and has the necessary skills and resources available at his
disposal to arrive at a competent independent opinion in
determining the IPO Price/Price Band; and,
- The valuer has made all the inquiries that he believes are
desirable and appropriate in order to arrive at a competent
independent opinion.
OR
If the applicant Entity opts not to follow the procedure set out in
paragraph (c) (i) and (ii) above, the Entity shall publish a research
report prepared by the Investment Bank/IPO Manager to the issue,
together with the Prospectus, justifying the IPO Price/Price Band
which contains a section setting out the basis and methodologies used
to determine the IPO Price/Price Band.
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3.1.5 BASIS OF ALLOTMENT
a. Subject to Rule 3.1.5 (b) the number and/or percentage of shares to

be allotted to the public, employees, financial institutions etc. by
category and the manner in which the allotment is to be carried out.
Where there is or is to be more than one class of shares (Other Class
of Shares) in issue, like particulars shall be given for each additional
class in accordance with these rules and subject to Rule 3.1.5 (b).
b. (i) 1. In the event the value of an initial public offering of a

particular share class is of or more than Rupees Three
Billion (Rs.3,000,000,000/-),
- 40% of the offered shares of that particular

share class or;
- shares of that particular share class to the

maximum value of Rupees One Billion Five
Hundred Million (Rs, 1,500,000,000/-)
whichever is lower, to be initially made available for

allotment to retail individual investors (Retail Individual
Investor Category).
For the purposes of Rule 3.1.5(b)(i)(1), ‘Retail Individual Investor’

shall mean an individual investor who subscribes for a value of
not more than Rupees Two Hundred Thousand (Rs. 200,000/-)
in a particular share class.
2. In determining the basis of allotment within the Retail

Individual Investor Category, individual investors who
subscribe for a smaller number of shares shall be given
priority.
(ii) 1. In the event the value of a public offering of a particular

share class is less than Rupees Three Billion (Rs.
3,000,000,000/-)
a minimum of 40% of the offered shares of that

particular share class to be initially made available for
allotment to Retail Individual Investor Category.
For the purposes of Rule 3.1.5(b)(ii)(1), ‘Retail Individual

Investor’ shall mean an individual investor who subscribes for
maximum of Three Thousand (3,000) shares or a value of not
more than Rupees Hundred Thousand (Rs. 100,000/-) in a
particular share class, whichever is higher.
2. In determining the basis of allotment within the Retail

Individual Investor Category, individual investors who
subscribe for a smaller number of shares shall be given
priority.
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(iii) A minimum of 10% of the offered shares of a particular share
class, in a public offering to be initially made for allotment to
Growth or Balanced Unit Trusts operated by Managing
Companies licensed by the SEC to operate such unit trusts,
where such unit trust comprises of not less than Five Hundred
(500) unit holders resident in Sri Lanka who together hold at least
50% of that fund (Unit Trust Investor Category)
(iv) In the event of an under-subscription in the Retail Individual

Investor Category, the Unit Trust Investor Category shall be
given first priority in the allotment of the under-subscribed
shares.
Note - For additional information pertaining to the Unit Trust Investor

Category please refer the SEC Directive dated 6th June 2011
(SEC/LEG/11/06/01). The said Directive is hosted on the CSE website,
under the tab titled “SEC Directives”.
3.1.6 COST OF THE ISSUE

An estimate of the total cost of the issue and the anticipated source of
funds to finance such cost.
3.1.7 PROFILE OF THE ENTITY
a. A description of the business carried out by the Entity. In situations where

the Entity carries on two or more activities which are material in respect
of turnover and/or profit of the Entity information as to the relative
importance of each such activity has to be stated.
b. The names of the ten largest holders of shares, the number of shares
and the percentage of shares they hold as at the date of submission
of the listing application to the Exchange.
c. If the Entity is a holding company, details of the group structure

preferably in the form of a chart. If the Entity is a subsidiary/associate,
the name and number of shares held by the holding Entity.
d. Number of employees in the Entity or group and the details of labour

unions and details of any significant agreements entered into between
the labour unions and the Entity.
e. Degree of dependence on key customers and suppliers
f. Future strategies, assumptions on which future strategies are

based and risks associated with such future strategies.
3.1.8 DIRECTORS
a. Name, address, and business experience of directors and details of

other directorships held.
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b. (i) The directors shareholdings (in respect of all classes of shares)
in the Entity at the date of submission of the listing application
to the Exchange.
(ii) Sales and purchases of shares made by the directors during the
year immediately preceding the date of the issue of the
Prospectus with the prices of such purchases and sales.
c. (i) The aggregate emoluments including bonus and/or profit sharing

payments made to directors during the last completed financial
year.
(ii) An estimate of the aggregate emoluments including bonus

and/or profit sharing payments payable to directors for the
current financial year.
d. Directors interest in any assets acquired, disposed or leased by the

Entity during the past two years preceding the issue; and proposed to be
acquired, disposed or leased during the two years succeeding the issue
including the consideration thereon or an appropriate negative
statement.
e. Full particulars of any contract or arrangement in force at the date of the

application in which a director of the Entity is materially interested in
relation to the business of the Entity or an appropriate negative
statement.
f. Whether any director or a person nominated to become a director is

or was involved in the following events:-
(i) a petition under any bankruptcy laws filed against such person
or any partnership in which he was a partner or any corporation
of which he was an executive officer.
(ii) such person was convicted for fraud, misappropriation or
breach of trust or any other similar offence which the Exchange
considers a disqualification.
(iii) or an appropriate negative statement.
3.1.9 STATED CAPITAL
a. Details of all classes of shares issued for the two (02) years preceding
the date of the prospectus, such as dates of allotment, consideration
received per share, number of shares issued.
b. Details immediately preceding two years of the date of the prospectus

of the number of shares, price, date of the shares redeemed, re-
purchased in terms of Sections 63, 64, 66, 67, 68, 69, 93 and 100 of
the Companies Act and of any reduction of stated capital in terms of
Section 59 of the Companies Act.
c. Amount of any outstanding convertible Debt Securities and details

regarding its conversion to equity.
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d. If shares/ Other Class of Shares are subscribed or sold privately, in
conjunction with the public issue of shares, the details should be given
of the number, price and features of the shares/Other Class of Shares
privately placed.
e. Any statutory restrictions on the free transferability of shares.
3.1.10 MANAGEMENT
a. Name and address of the Chief Executive Officer.
b. Brief account of the business experience of the Chief Executive Officer

including the principal business of any enterprise in which such
occupation or employment was carried out.
c. Whether the Chief Executive Officer or a person nominated to become

the Chief Executive Officer is or was involved in the following events:-
(i) petition under any bankruptcy laws filed against such person
or any partnership in which he was a partner or any
corporation of which he was an executive officer.
breach of trust or any other similar offence which the
Exchange considers a disqualification.
d. The name and business experience of the senior management. Where

the management of the Entity has been outsourced to a third party,
details of such third party including their business experience and
competencies and the duties outsourced.
e. (i) The aggregate emoluments including bonus and/or profit

sharing payments made to the Chief Executive Officer and the
senior management team during the last completed financial
year.
(ii) An estimate of the aggregate emoluments including bonus

and/or profit sharing payments payable to the Chief Executive
Officer and the senior management team for the current
financial year.
3.1.11 MANAGEMENT AGREEMENTS

Details of any management agreement presently in force or currently being
considered including particulars of any consideration passing to or from the
Entity.
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3.1.12 FINANCIAL INFORMATION
a. The following financial statements should be included in the Prospectus:
(i) Audited financial statements made up to a date not more than 12

months from the date of submission of the listing application.
(ii) Interim financial statements which shall conform to the Sri Lanka
Accounting Standards (SLAS) 35 and include group and
company results separately in the case of a Holding Company
and made up to a date not more than 3 months from the date of
submission of the listing application.
(iii) Summarised profit and loss account and balance sheet for the
five years preceding the date of the Application stating the
Accounting Policies adopted by the Entity certified by the
Auditors. Qualifications carried in any of the Auditors Reports
covering the period in question and any material changes in
Accounting Policies in the relevant period should be disclosed.
(The Entity may illustrate its financial information by way of graphs).
If the review of the listing application takes longer than usual due to any reason
whatsoever, the Exchange reserves the right to require such financial
statements to be made up to a more recent date.
b. Dividend policy of the Entity - Classes of Securities and rights attached

to the respective classes of Securities regarding dividends, rates of
the dividends, if any, paid by the Entity in respect of each class of
shares for three financial years immediately preceding the issue of the
prospectus.
c. Start-up Entities and New Entities
(i) A statement showing the forecast profit and loss account and
balance sheet for a three (03) year period together with the
assumptions and risk factors on which such statements are
based,
or
(ii) A sector study including the details of how the Entity intends
positioning itself in the market stating assumptions and risk
factors.
d. Any other complete and accurate information that would have a

material impact in the understanding of the financial information
provided in this Section.
e. Particulars of Debt and Loan Capital
(i) Particulars of loan capital outstanding as at the date of
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application or an appropriate negative statement.
(ii) Particulars of term loans, other borrowings or
indebtedness in the nature of borrowings, including bank
overdrafts and liabilities under acceptance (Other than
normal trading bills) or acceptance credits or an
appropriate negative statement.
(iii) Leasing, lease purchase and hire purchase commitments,
or an appropriate negative statement.
(iv) Guarantees and other material contingent liabilities or an
(v) A statement of mortgages and charges on the assets of the
Entity, as at the date of application or an appropriate
negative statement.
3.1.13 TAXATION (IF APPLICABLE)
Any tax concessions or tax exemptions applicable to the Entity
3.1.14 TAKE-OVER OFFERS
a. Information of takeover offers by third parties in respect of the Entity’s

shares during the past two years. Give details of price and other
consideration of such offers.
b. Take-over offers made by the Entity in respect of shares of a third party.

Give details of price and other consideration of such offers.
3.1.15 LITIGATION, DISPUTES AND CONTINGENT LIABILITIES
a. Details on any legal, arbitration or mediation proceedings which may

have or have had in the recent past significant effects on the Entity’s
financial position or profitability.
b. Details of penalties imposed by regulatory and state authorities.
c. A statement of contingent liabilities that would affect current and future

profits of the Entity.
3.1.16 CORPORATE GOVERNANCE PRACTICES
a. DIRECTORS
Names of directors who are ‘independent’ and in the event a director

does not qualify as ‘independent’, but if the board, taking into account
all the circumstances, is of the opinion that the director is nevertheless
‘independent’, the board shall specify the basis for its determination.
The criteria for defining ‘independence’ is set out in Rule 7.10.4 of the
Rules.
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b. REMUNERATION COMMITTEE
Names of directors on the remuneration committee, a statement of the

remuneration policy and the aggregate remuneration paid to the
executive and non-executive directors.
The term “remuneration” means cash and all non-cash benefits

whatsoever received in consideration of employment with the Listed
Entity (excluding statutory entitlements such as Employees Provident
Fund and Employees Trust Fund).
c. AUDIT COMMITTEE
Names of directors on the audit committee.
3.1.17 REPORTS BY EXPERTS
In the case of a statement or report attributed to an expert, a statement that

he has not withdrawn his written consent to the issue of the prospectus with
the statement or report included in the form and context in which it is
included.
3.1.18 UNDERWRITING/MINIMUM SUBSCRIPTION
a. Name, and details of the Underwriter.
b. In the event the issue is not underwritten the minimum subscription

that must be raised in the opinion of the directors in order to provide
the sums as set out in the fourth schedule of Companies Act. In the
event that the issue is under subscribed the prospectus shall specify
consequences of such under subscription and what action the issuer
will take in this connection.
3.1.19 INSPECTION OF DOCUMENTS
a. A reasonable time (being not less than fourteen days) during which
and a place in Colombo at which the following documents (or copies
thereof) where applicable may be inspected:
(i) Articles of Association
(ii) Material contracts and management agreements or in the case
of contracts not reduced into writing a Memorandum giving full
particulars thereof.
(iii) Reports, letters, valuations and statements by any expert any
part of which is extracted or referred to in the prospectus.
(iv) The audited accounts of the Entity for five (05) financial years
immediately preceding the publication of the prospectus, as
applicable.
b. The prospectus and the Articles of Association of the Entity shall be
hosted in the Entity’s web site and/or the Colombo Stock Exchange’s
web site for a period of not less than fourteen (14) days.
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c. the summarized form of the report prepared by a competent
independent valuer/the research report prepared by the Investment
Bank/IPO Manager to the Issue (as applicable) shall also be hosted
on the websites of the Colombo Stock Exchange and the Entity for a
period of two (02) months commencing from the date of granting
approval in principle for listing of shares of the Entity by the Colombo
Stock Exchange.
3.1.20 OTHER REQUIREMENTS
a. The business which the subscribers or promoters intend that the

company should carry out during the period of five years from the date
of commencement of business by the company (as applicable).
b. The time of opening and closing of the subscription lists.
c. Short particulars of any 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.
d. The amount, if any paid within the two preceding years or payable as
commission (but not including commission to sub-underwriters) for
subscribing or agreeing to subscribe or procuring or agreeing to
procure subscriptions, for any shares in or debentures of the company,
or the rate of any such commission.
e. Any amount or benefit paid or given within the two preceding years or
intended to be paid or given to any promoter and the consideration for
the payment or the giving of the benefit (as applicable).
f. The dates or 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.
g. In the case of a company which has been carrying on business or a

business which has been carried on for less than three years, the
length of time during which the business of the company or the
business to be acquired, as the case may be, has been carried on.
h. A statement that the shares allotted under this issue shall be credited
to the investors’ CDS account indicated in the application form and
therefore, share certificates shall not be issued. Applications which do
not carry a valid CDS account number shall be rejected and no
allotment shall be made to such investor.
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3.1.21 DECLARATIONS
a. Declaration by the directors
Declaration by the directors of the Entity in the following form:-
"This Prospectus has been seen and approved by the directors of the
Entity and they collectively and individually accept full responsibility for
the accuracy of the information given and confirm that provisions of the
CSE Listing Rules and of the Companies Act No. 07 of 2007 and any
amendments to it from time to time have been complied with and after
making all reasonable enquiries and to the best of their knowledge and
belief, there are no other facts the omission of which would make any
statement herein misleading or inaccurate. Where representations
regarding the future performance of the Entity have been given in the
Prospectus, such representations have been made after due and careful
enquiry of the information available to the Entity and making
assumptions that are considered to be reasonable at the present point
in time in the best judgement of the directors."
b. Declaration by the Managers to the Issue
A statement by the Entity managing the issue that to the best of its
knowledge and belief the Prospectus constitutes full and true disclosure
of all material facts about the issue and issuer; and where appropriate, it
has satisfied itself that profit forecasts have been stated by the directors
after due and careful enquiry.
c. Declaration by the Entity
A statement shall be made as follows:-
"An application has been made to the Colombo Stock Exchange for
permission to deal in and for a listing for all securities in a particular class
issued by the Entity and those Securities of the same class which are
the subject of this issue. Such permission will be granted when the
shares are listed on the Colombo Stock Exchange. The Colombo Stock
Exchange assumes no responsibility for the correctness of any of the
statements made or opinions expressed or reports included in this
prospectus. Listing on the Colombo Stock Exchange is not to be taken
as an indication of the merits of the Entity or of the Securities issued”
DEBT
This Section sets out the basic requirements for the contents of a Debt prospectus,
which should be complied with in addition to the requirements of the Companies Act and
any other applicable law.
The name and address of the Trustees to the Issue shall be set out in the Prospectus.
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3.2. CONTENTS OF A PROSPECTUS FOR AN UNLISTED ENTITY – DEBT
Prospectus may be organised in the manner prescribed in Appendix 3 A of the

Rules.
3.2.1 OFFER AT A GLANCE
‘Offer at a Glance’ shall include:
a. Type/s of Debt Security

b. Interest Rate/s
c. Tenor
d. Yield
e. Issue Price
f. Issue Date
g. Maturity Date
h. Dates of Payment of Interest
i. Methods of Payment of Principal and Interest (Eg. Cheque, bank draft,
RTGS, SLIPS)
j. Details of the rating attached to the Debt Securities to be listed
k. minimum subscription amount
3.2.2. CORPORATE INFORMATION
a. Name and registered address
b. Date, place and authority of incorporation
c. Name and address of bankers, auditors of the Entity, bankers to the

issue, lawyers, registrars, secretaries, auditors, managers to the issue.
3.2.3 NATURE OF THE DEBT SECURITIES TO BE OFFERED

Rights and obligations of Debt Securities holders and risks and benefits
attached to such Debt Securities.


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retire debt, details of such debt.
3.2.5 OTHER DEBT SECURITIES
Nature and classification of the other debt securities in issue as at the date of
this prospectus and a description of the rights of holders of such debt
securities, in particular entitlement in the profits and, in the event of liquidation,
in any surplus and any other special rights.
Amount of any outstanding convertible Debt Securities and the details

3.2.6 BASIS OF ALLOTMENT (IF APPLICABLE)
(i) Number and/or percentage of Debt Securities to be allotted to the public,

employees, financial institutions etc. by category and the manner in
which the allotment is to be carried out.
(ii) In the event the Debt Securities to be offered hereunder are BASEL III
Compliant Debt Securities as defined in Rule 2.2.1 (l) of these Rules,
the Entity shall include:
(a) the following statements;
(i) The Debt Securities offered hereunder shall be allotted only

to ‘Qualified Investors’ as defined in the Listing Rules of the
Colombo Stock Exchange, on a basis to be determined by
the Entity; and,
(ii) The secondary trading in such Debt Securities listed on the

Colombo Stock Exchange shall be limited to ‘Qualified
Investors’ as defined in the Listing Rules of the Colombo
Stock Exchange.
(b) the definition of ‘Qualified Investor’ in conformity with Rule 2.2.1(l)

of the Listing Rules of the Colombo Stock Exchange.
3.2.7 MINIMUM SUBSCRIPTION REQUIREMENT APPLICABLE FOR AN INVESTOR
a. The minimum subscription requirement applicable for an investor in

accordance with Rule 2.2.1(h) of the Rules; and,
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b. Provide a statement that, any application in excess of the minimum
subscription requirement shall be in multiples of Rupees Ten
Thousand (Rs. 10,000).
3.2.8 PROFILE OF THE ENTITY

c. If the Entity is a holding company, details of the group structure,

preferably in the form of a chart. If the Entity is a subsidiary/associate,
the name and number of shares held by the holding Entity.
d. Future strategies, assumptions on which future strategies are based

and risks associated with such future strategies.
3.2.9 DIRECTORS
a. Name, address, and business experience of directors and details of

other directorships held.
b. Directors’ interest in any assets acquired, disposed or leased by the

Entity during the past two years preceding the issue; and proposed to be
acquired, disposed or leased during the two years succeeding the issue
including the consideration thereon or an appropriate negative
statement.
c. Full particulars of any contract or arrangement in force on the date of the

application in which a director of the Entity is materially interested in
relation to the business of the Entity or an appropriate negative
statement.
d. Whether any director or a person nominated to become a director is

or was involved in the following events:-
(i) a petition under any bankruptcy laws filed against such person
(ii) such person was convicted for fraud, misappropriation or breach

of trust or any other similar offence which the Exchange
considers a disqualification; or
(iii) an appropriate negative statement.
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3.2.10 MANAGEMENT
a. Name of the Chief Executive Officer.


or any partnership in which he was a partner or any
corporation of which he was an executive officer.
breach of trust or any other similar offence which the
Exchange considers a disqualification; or
(iii) an appropriate negative statement.

3.2.11 DETAILS RELATING TO CONFLICT OF INTERESTS
Any conflict of interests which may arise between the Trustee/its directors and
the applicant Entity.
a. The following financial Information should be included in the Prospectus:
(i) Audited financial statements made up to a date not more than

12 months from the date of submission of the listing
application.
(ii) Interim financial statements which shall conform to the Sri

Lanka Accounting Standards (LKAS) 34 and include group and
company results separately in the case of a Holding Company
and made up to a date not more than 3 months from the date
of submission of the listing application.
(iii) Summarised profit and loss account and balance sheet for the
five years preceding the date of the application stating the
Accounting Policies adopted by the Entity certified by the
Auditors. Qualifications carried in any of the Auditors Reports
covering the period in question and any material changes in
Accounting Policies in the relevant period should be
disclosed.
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(The Entity may illustrate its financial information by way of graphs).
If the review of the listing application takes longer than usual due to any
reason whatsoever, the Exchange reserves the right to require the financial
information to be made up to a more recent date.
3.2.13 TAXATION (IF APPLICABLE)
Any tax concessions or tax exemptions applicable to the Entity.

b. Details of penalties imposed by regulatory and state authorities

3.2.15 UNDERWRITING
a. Name and details of the Underwriter, and the minimum subscription

(as applicable).
b. In the event the issue is not underwritten and the issue is under
subscribed, the prospectus shall specify consequences of such under
subscription and what action the issuer will take in this connection.

a. Provide a statement that until the date of maturity of the debt security,
the following documents (or copies thereof), where applicable, may be
inspected at a specified place in Sri Lanka:
(i) Articles of Association
(ii) Trust Deed.
(iii) Material contracts and management agreements or in the case
(iv) Reports, letters, valuations and statements by any expert any
(v) The audited accounts of the Entity for each of the five (05)
financial years immediately preceding the publication of the
prospectus, as applicable.
b. Provide a statement that from the date of opening of the subscription

list until the date of maturity of the debt security, the Prospectus,
Articles of Association of the Entity and Trust Deed shall be hosted on
the Entity’s website and the Exchange’s website.
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3.2.17 DECLARATIONS
"This Prospectus has been seen and approved by the directors of

the Entity and they collectively and individually accept full
responsibility for the accuracy of the information given and confirm
that provisions of the CSE Listing Rules and of the Companies Act
No. 07 of 2007 and any amendments to it from time to time have
been complied with and after making all reasonable enquiries and
to the best of their knowledge and belief, there are no other facts
the omission of which would make any statement herein
misleading or inaccurate. Where representations regarding the
future performance of the Entity have been given in the
Prospectus, such representations have been made after due and
careful enquiry of the information available to the Entity and making
assumptions that are considered to be reasonable at the present
point in time in the best judgement of the directors.
An application has been made to the Colombo Stock Exchange for

permission to deal in and for a listing of all securities in a particular
class issued by the Entity and those Securities of the same class
which are the subject of this issue. Such permission will be granted
when the Securities are listed on the Colombo Stock Exchange.
The Colombo Stock Exchange assumes no responsibility for the
correctness of any of the statements made or opinions expressed
or reports included in this Prospectus. Listing on the Colombo
Stock Exchange is not to be taken as an indication of the merits of
the Entity or of the Securities issued”.
knowledge and belief the Prospectus constitutes full and true
disclosure of all material facts about the issue and issuer; and
where appropriate, it has satisfied itself that profit forecasts have
been stated by the directors after due and careful enquiry.
A statement that the Debentures allotted under this issue shall be

credited to the investors’ CDS account indicated in the application form
and therefore, Debenture certificates shall not be issued. Applications
which do not carry a valid CDS account number shall be rejected and
no allotment shall be made to such investor.
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3.3 CONTENTS OF A PROSPECTUS FOR A LISTED ENTITY - DEBT
3.3.1 OFFER AT A GLANCE
‘Offer at a Glance’ shall include:

b. Interest Rate/s
c. Tenor
d. Yield
e. Issue Price
f. Issue Date
g. Maturity Date
RTGS, SLIPS)
j. Details of the rating attached to the Debt Securities to be listed
k. Details of the guarantee (if applicable)
l. Minimum subscription amount

Rights and obligations of Debt Securities holders and risks and benefits




retire debt, details of such debt (quantum and interest rate).
Nature and classification of the other debt securities in issue as at the date
of this prospectus and a description of the rights of holders of such debt
securities, in particular entitlement in the profits and, in the event of
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liquidation, in any surplus and any other special rights.
Amount of any outstanding convertible Debt Securities and the details

3.3.5 BASIS OF ALLOTMENT (IF APPLICABLE)
(i) Number and/or percentage of Debt Securities to be allotted to the

public, employees, financial institutions etc. by category and the
manner in which the allotment is to be carried out.
(ii) In the event the Debt Securities to be offered hereunder are BASEL
III Compliant Debt Securities as defined in Rule 2.2.1 (l) of these
Rules, the Entity shall include:
(a) the following statements;
(i) The Debt Securities offered hereunder shall be allotted only

to ‘Qualified Investors’ as defined in the Listing Rules of the
Colombo Stock Exchange, on a basis to be determined by
the Entity; and,
(ii) The secondary trading in such Debt Securities listed on the

Colombo Stock Exchange shall be limited to ‘Qualified
Investors’ as defined in the Listing Rules of the Colombo
Stock Exchange.
(b) the definition of ‘Qualified Investor’ in conformity with

Rule 2.2.1(l) of the Listing Rules of the Colombo Stock
Exchange.
3.3.6 DISCLOSURES RELATING TO CONFLICT OF INTERESTS
Any conflict of interests which may arise between the Trustee/its directors and
the applicant Entity.
3.3.7 MINIMUM SUBSCRIPTION REQUIREMENT APPLICABLE FOR AN INVESTOR
a. The minimum subscription requirement applicable for an investor in

accordance with Rule 2.2.1(h) of the Rules; and,
b. Provide a statement that, any application in excess of the minimum

subscription requirement shall be in multiples of Rupees Ten
Thousand (Rs. 10,000).”
Provide a statement that the following financial information is hosted on the

Entity’s website and the Exchange website
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(i) Audited financial statements of the Entity made up to a date
not less than 12 months from the date of submission of the
listing application;
(ii) Interim financial statements of the Entity made up to a date not

less than 3 months from the date of submission of the listing
application; and
(iii) Summarized financial statement for the five years preceding

the date of the application stating the accounting policies
adopted by the Entity certified by the auditors. Qualifications
carried in any of the Auditors Reports covering the period in
question and any material changes in accounting policies
during the relevant period should be disclosed.
whatsoever, the Exchange reserves the right to require the financial
information to be made up to a more recent date.

b. A statement of contingent liabilities that would affect current and future

3.3.10 UNDERWRITING
a. Name and details of the Underwriter, and the minimum subscription

(as applicable).
b. In the event the issue is not underwritten and the issue is under
subscribed, the prospectus shall specify consequences of such under
subscription and what action the issuer will take in this connection.

a. Provide a statement that until the date of maturity of the debt security,
the following documents (or copies thereof), where applicable, may be
inspected at a specified place in Sri Lanka:
(i) Articles of Association.

(ii) Trust Deed
(iii) Material contracts and management agreements or in the case
(iv) Reports, letters, valuations and statements by any expert any
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(v) The audited accounts of the Entity for each of the five (05)
financial years immediately preceding the publication of the
prospectus, as applicable.
b. Provide a statement that from the date of opening of the subscription list
until the date of maturity of the debt security, the prospectus, Articles of
Association of the Entity and Trust Deed shall be hosted in the Entity’s
web site and the Exchange’s web site.
3.3.12 DECLARATIONS
"This Prospectus has been seen and approved by the directors of the
Entity and they collectively and individually accept full responsibility for
the accuracy of the information given and confirm that provisions of the
CSE Listing Rules and of the Companies Act No. 07 of 2007 and any
amendments to it from time to time have been complied with and after
making all reasonable enquiries and to the best of their knowledge and
belief, there are no other facts the omission of which would make any
statement herein misleading or inaccurate. Where representations
regarding the future performance of the Entity have been given in the
Prospectus, such representations have been made after due and careful
enquiry of the information available to the Entity and making
assumptions that are considered to be reasonable at the present point
in time in the best judgement of the directors.
An application has been made to the Colombo Stock Exchange for

permission to deal in and for a listing of all securities in a particular class
issued by the Entity and those Securities of the same class which are
the subject of this issue. Such permission will be granted when the
Securities are listed on the Colombo Stock Exchange. The Colombo
Stock Exchange assumes no responsibility for the correctness of any of
the statements made or opinions expressed or reports included in this
Prospectus. Listing on the Colombo Stock Exchange is not to be taken
as an indication of the merits of the Entity or of the Securities issued”
knowledge and belief the Prospectus constitutes full and true disclosure
of all material facts about the issue and issuer; and where appropriate, it
has satisfied itself that profit forecasts have been stated by the directors
after due and careful enquiry.
A statement that the Debentures allotted under this issue shall be credited
to the investors’ CDS account indicated in the application form and
therefore, Debenture certificates shall not be issued. Applications which do
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not carry a valid CDS account number shall be rejected and no allotment
shall be made to such investor.
3.4 CONTENTS OF AN INTRODUCTORY DOCUMENT FOR UNLISTED ENTITIES SEEKING A

LISTING OF SHARES OR DEBT
3.4.1 DETAILS OF THE ENTITY
a. Name and address of the Entity

b. Date and place of incorporation
c. Name of the Company Secretary
d. Name and address of the auditors
e. Name and address of the sponsor, in the event the shares of the
applicant Entity are to be listed on the Empower Board in the Alternate
Market Segment
3.4.2 DETAILS OF THE BOARD OF DIRECTORS
a. Name
b. Qualifications
c. Experience
d. Directorships on other Boards
3.4.3 CAPITAL STRUCTURE
a. Details of all classes of shares issued for the two years preceding the
date of the Introductory Document such as dates of allotment,
consideration received per share and the number of shares issued.
b. Details immediately preceding two years of the date of the Introductory

Document of the number of shares, price, date of the shares
redeemed, re-purchased in terms of Sections 63, 64, 66, 67, 68, 69,
93 and 100 of the Companies Act and of any reduction of stated capital
in terms of Section 59 of the Companies Act.
c. Amount of any outstanding convertible Debt Securities and details

d. If Securities of the same or another class are subscribed or sold

privately, in conjunction with the public issue of Securities, details
should be given of the number, price and features of the Securities
privately placed.
e. Any statutory restrictions on the free transferability of Securities.
3.4.4. PROFILE OF THE ENTITY

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c. Details pertaining to Non-Public Shareholders
(i) Names of the Non-Public Shareholders and their relationship

with the applicant Entity.
This Rule shall not be applicable to Entities seeking a listing of

its Securities on the Empower Board in the Alternate Market
Segment.
(ii) Following disclosures pertaining to shares of the Entity which

are locked-in and which are not locked-in in terms of
Rule 2.1.1 (f) of these Rule.
Category of Locked-in The months Number Number of shares

shareholders Shares after which of shares as a percentage of
(Pre-Listing) shares will be the total number
available for of shares in issue
trading

Public Not Locked- Not applicable

in
Total
The Entity hereby confirms that the information furnished herewith shall
remain unchanged until the Date of Listing.
d. Degree of dependence on key customers and suppliers.
e. If the Entity is a holding company details of the group structure. If the

Entity is a subsidiary/associate, the name and number of shares held
by the holding Entity.
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f. Number of employees in the Entity or group and the details of labour
unions and details of any significant agreements entered into between
the labour unions and the Entity.
g. Future plans, assumptions on which future plans are based and risks
associated with such plans.
3.4.5 MANAGEMENT
a. Name and address of the Chief Executive Officer.


breach of trust or any other similar offence which the Exchange
considers a disqualification.

a. Details on any legal, arbitration or mediation proceedings, which may

b. Details of penalties imposed by Regulatory and State authorities.
The following financial statements / information should be included in the

Introductory Document:
a. Audited financial statements made up to past 3 years from the date of

submission of the listing application.
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b. Interim financial statements which shall conform to the Sri Lanka
Accounting Standard (LKAS) 34 and include group and company
results separately in the case of a Holding Company and made up to
a date not more than 3 months from the date of submission of the
listing application.
If the review of the listing application takes longer than usual, due to any
reason whatsoever, the Exchange reserves the right to require the financial
statements referred to in Rules 3.4.7 (a) and (b) above to be made up to a
more recent date.
c. Dividend policy of the Entity including the classes of securities and

rights attached to the respective classes of securities regarding
dividends, rates of the dividends (if any) paid by the Entity in respect
of each class of securities for three (03) financial years immediately
preceding the date of the listing application.
d. In the event the applicant Entity has an operating history of less than
three (3) years the following information shall be disclosed;
(i) A statement reflecting the forecasted profit and loss account,

balance sheet and cash flow statement for a three (03) year
period together with the assumptions and risk factors on which
such statements are based on; and,
(ii) A sector study including the details of how the Entity intends to
position itself in the market, together with assumptions and risk
factors.
e. Details of loan capital outstanding as at the date of the listing

application or an appropriate negative statement.
f. Details of term loans, other borrowings or indebtedness in the nature

of borrowings, including bank overdrafts and liabilities under
acceptance (other than normal trading bills) or acceptance credit or an
g. Details on leasing, lease purchase and hire purchase commitments of

the applicant Entity or an appropriate negative statement.
h. Details on guarantees and other material contingent liabilities of the

applicant Entity or an appropriate negative statement.
i. A statement of mortgages and charges on the assets of the applicant

Entity, as at the date of the listing application or an appropriate
negative statement.
j. Any other information that would have a material impact on making

investment decisions.”
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3.4.8 REFERENCE PRICE
a. A disclosure on the Reference Price and the basis of determination of

the Reference Price in the Introductory Document as set out in
Appendix 3D.
AND
b. (i) Disclosures pertaining to a competent independent valuation
in determining and justifying the Reference Price in
summarized form and qualifications and relevant experience of
the independent valuer; or in the event the valuation report is
issued by a Firm of Valuers, the qualifications and relevant
experience of the individuals responsible for preparing the
valuation report;
and,
(ii) A Declaration by the independent valuer that;

- The valuer is neither a related party of the applicant
Entity as defined in Sri Lanka Accounting Standards
nor has a significant interest in or financial connection
with the applicant Entity and/or the group;
- The valuer is a member of good standing in a
professional association relevant to the valuation
assignment undertaken and has the necessary skills
and resources available at it/his disposal to arrive at a
competent independent opinion in determining the
Reference Price; and,
- The valuer has made all the inquiries that he believes
are desirable and appropriate in order to arrive at a
competent independent opinion.
OR
(iii) If the applicant Entity opts not to follow the procedure set out
in Rules 3.4.8 (b) (i) and (ii) above, the Entity shall publish a
research report prepared by the Investment Bank/Manager to
the Introduction together with the Introductory Document,
justifying the Reference Price, which contains a section setting
out the basis and methodologies used to determine the
Reference Price.
For the purpose of this Rule ‘Reference Price’ shall mean the initial listing price of the
shares to be listed by way of an Introduction, as determined by the Entity.
3.4.9 DECLARATION BY THE DIRECTORS
This Introductory Document has been seen and approved by the directors of the
Entity and they collectively and individually accept full responsibility for the
accuracy of the information given and confirm that after making all reasonable
enquiries and to the best of their knowledge and belief, there are no other facts
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the omission of which would make any statement herein misleading or
inaccurate.
3.4.10 CORPORATE GOVERNANCE PRACTISES
a. DIRECTORS
Names of directors who are ‘independent’ and in the event a director

does not qualify as ‘independent’, but if the board, taking into account
all the circumstances, is of the opinion that the director is nevertheless
‘independent’, the board shall specify the basis for its determination.
The criteria for defining ‘independence’ is set out in Rule 7.10.4 of the
Rules.
b. REMUNERATION COMMITTEE
Names of directors on the remuneration committee, a statement of the

remuneration policy and the aggregate remuneration paid to the
executive and non-executive directors.
The term “remuneration” means cash and all non-cash benefits

whatsoever received in consideration of employment with the Listed
Entity (excluding statutory entitlements such as Employees Provident
Fund and Employees Trust Fund).
c. AUDIT COMMITTEE
Names of directors on the audit committee.
3.4.11 ANY OTHER REQUIREMENTS
(a) In the event of a listing of shares by way of an Introduction, the

Introductory Document shall contain a statement that;
(i) the Introductory Document and the Articles of Association of

the Entity shall be hosted on the Entity’s website and the
Colombo Stock Exchange’s website for a period of not less
than seven (7) Market Days prior to the submission of the
Declaration referred to in Appendix 2D and not less than
fourteen (14) Market Days from the date of submission of such
Declaration; and,
(ii) the summarized form of the report prepared by a competent

independent valuer/the research report prepared by the
Investment Bank/Manager to the Introduction (as applicable),
shall be hosted on the Entity’s website and the Colombo Stock
Exchange’s website for a period of two (02) months from the
date of granting approval in principle for the listing of shares of
the Entity by the Colombo Stock Exchange.
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(b) In the event of a listing of Debt Securities by way of an Introduction,
the Introductory Document shall contain a statement that the
Introductory Document, Articles of Association of the Entity and Trust
Deed shall be hosted on the Entity’s website and the Colombo Stock
Exchange’s website at least seven (7) Market Days prior to the
submission of the Declaration referred to in Appendix 2D until the date
of maturity of the Debt Security.
(c) In the event the Debt Securities to be listed are BASEL III Compliant
Debt Securities as defined in Rule 2.2.1 (l) of these Rules, the Entity
shall also include:
(i) a statement that the secondary trading in such Debt Securities to

be listed on the Colombo Stock Exchange shall be limited to
‘Qualified Investors’ as defined in the Listing Rules of the
Colombo Stock Exchange.
(ii) the definition of ‘Qualified Investor’ in conformity with Rule

2.2.1(l) of the Listing Rules of the Colombo Stock Exchange.
3.4.12 LISTING DEBT - TRUSTEES
In the event of issue of Debt Securities, any conflict of interests which may arise
between the Trustee/its directors and the applicant Entity shall be disclosed in the
Introductory Document.
3.5 CONTENTS OF AN INTRODUCTORY DOCUMENT FOR LISTED ENTITIES - DEBT
3.5.1 DETAILS OF THE DEBT SECURITIES TO BE LISTED

b. Interest Rate/s
c. Tenor
d. Yield
e. Price at which the Debt Securities were issued
f. Issue Date
g. Maturity Date
RTGS, SLIPS)
j. Details of the rating including the basis for assigning the rating and an
interpretation of the risk profile.
The rights and obligations of Debt Securities holders and risks and benefits
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a. Nature and classification of the other debt securities in issue as at

the date of this Introductory Document; and
b. A description of the rights of holders of such debt securities, in

particular entitlement in the profits and, in the event of liquidation, in
any surplus and any other special rights.
c. Amount of any outstanding convertible Debt Securities and the details

regarding its conversion to equity; and
d. Any history of default of the applicant Entity in relation to a debt issue

or an appropriate negative statement.
Provide a statement that the following financial statements of the Entity are
hosted on the Entity’s website and the Exchange website:
i. Audited financial statements of the Entity

ii. Interim financial statements of the Entity
whatsoever, the Exchange reserves the right to require the financial statements
to be made up to a more recent date.
3.5.5 DISCLOSURES RELATING TO CONFLICT OF INTERESTS
Any conflict of interests which may arise between the Trustee/its directors and the
Entity.
a. Provide a statement that the Introductory Document, Articles of

Association of the Entity and Trust Deed shall be hosted in the Entity’s
web site and the Exchange’s web site at least seven (7) Market Days
prior to the submission of the Declaration referred to in Appendix 2 D until
the date of maturity of the Debt Security.
b. In the event the Debt Securities to be listed are BASEL III Compliant Debt
Securities as defined in Rule 2.2.1 (l) of these Rules, the Entity shall
include:
(i) a statement that the secondary trading in such Debt Securities to be

listed on the Colombo Stock Exchange shall be limited to ‘Qualified
Investors’ as defined in the Listing Rules of the Colombo Stock
Exchange.
(ii) the definition of ‘Qualified Investor’ in conformity with Rule 2.2.1(l) of

the Listing Rules of the Colombo Stock Exchange.
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3.5.7 DECLARATION BY THE DIRECTORS
This Introductory Document has been seen and approved by the directors of the
Entity and they collectively and individually accept full responsibility for the
accuracy of the information given and confirm that after making all reasonable
enquiries and to the best of their knowledge and belief, there are no other facts
the omission of which would make any statement herein misleading or
inaccurate.
APPENDIX 3A
ORGANIZATION OF THE PROSPECTUS - DEBT
Table of Contents
Offer at a Glance
Details of the Offer
Key Terms of the Debentures
Risks, Benefits
Use of the Proceeds
Company – the Business, corporate structure, future strategies,
Graphs
Directors, Senior Managers, and their remuneration
Financial Information
Taxation
Additional Information
- Important Contracts, Dividend Policy,
Major Shareholders, Material litigation
Statutory Requirements
Glossary of Terms
Appendix - Notes to Financial Statements
Application Form
Application process
Corporate Information
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APPENDIX 3B
MINIMUM CONTENT OF A TRUST DEED
The following shall be included in the Debenture Trust Deed:
Description of Debentures
- The key features of the Debentures constituted by the Trust Deed

including the Debenture types, issue price, face value, rate of interest,
maturity date or redemption schedule, and the interest payment date.
- Whether Debentures are secured or unsecured and if secured, the nature
of the security.
- The ranking of the Debenture holders amongst all other Debenture
holders and as against all other obligations of the Applicant Entity.
- Other features embedded to the Debentures [i.e. Any Options (Put/Call)
attached to the Debentures].
- A covenant by the applicant Entity that the Debentures shall be freely

transferable and registration of such transfer shall not be subject to any
restrictions save and except to the extent required for compliance with
statutory requirements.
Covenants by the Applicant Entity to comply with Trust Deed and Debentures
- The Trust Deed shall provide for a covenant by the Applicant Entity to
comply with the provisions of the Trust Deed and terms and conditions of
the Debentures.
Covenants by the Applicant Entity to repay principal and interest
- The Trust Deed shall provide for a covenant by the Applicant Entity to pay
interest and redeem in full all outstanding Debentures in accordance with
the terms and conditions of the Debentures.
- Where the Applicant Entity has an option to redeem the Debentures before
the maturity date of such Debentures, the Trust Deed shall provide a
clause setting out the conditions and the procedures by which such an
option can be exercised.
- Where the Debenture holders have an option to call for redemption of the
Debentures before the maturity date of such Debentures, the Trust Deed
shall provide a clause setting out the conditions and the procedures by
which such an option can be exercised.
Reporting covenants by the Applicant Entity
- The Trust Deed shall provide covenants to ensure that the Applicant Entity
shall immediately notify the Trustee in the event that the Applicant Entity
becomes aware of the happening of any of the following event/s that has
caused or could cause:
(i) Any amount secured or payable under the Debenture to become
immediately payable.
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(ii) Any event, in the opinion of the Applicant Entity that may lead to
the acceleration of either the payment of interest or redemption.
(iii) Any other right or remedy under the terms and conditions of the
Debentures or the provisions or covenants of the Trust Deed to
become immediately enforceable.
submit to the Trustee the interim financial statements (unaudited) and the
audited financial statements within a stipulated timeframe and all
published financial and other information, which is normally provided to
ordinary shareholders at the time that it is sent to the shareholders.
submit to the Trustee a certificate in writing that the interest and the
principal amount has been paid to the Debenture holders in accordance
with the terms or conditions of the Debentures and provisions of the Trust
Deed, immediately upon such payments become due.
submit to the Trustee within one month after the end of every quarter, a
certificate that the Entity has complied with each and all of the covenants
with the details required below.
Where the Guarantor (where applicable) is a bank licensed by the Central

Bank of Sri Lanka and having a rating as specified in Rule 2.2.1(c) (i) of
these Listing Rules, the Trust Deed shall provide for a covenant by such
Guarantor, to submit to the Trustee within one month after the end of every
quarter, a confirmation to the effect that the Guarantor is maintaining the
rating obtained at the time of issuing the debentures. Such Guarantor may
submit such confirmation to the Trustee instead of the certificate.
The certificate shall include details of:

(i) Whether or not any limitation of liabilities or borrowing as
prescribed by the Articles of Association of the Applicant Entity has
been exceeded;
(ii) Whether or not the Applicant Entity and the Guarantor (where
applicable) have observed and performed all the covenants and
obligations binding upon them respectively pursuant to the Trust
Deed;
(iii) Whether or not any event has happened which has caused or
could cause the security created by the Trust Deed to become
enforceable (for secured Debentures);
(iv) Whether or not any material trading or capital loss has been
sustained by the Applicant Entity or the Guarantor (where
applicable);
(v) Whether or not any circumstances materially affecting the
Applicant Entity or the Guarantor (where applicable) have occurred
which adversely affect the Debentures;
(vi) Whether any contingent liabilities have been incurred by the
Applicant Entity or the Guarantor (where applicable). If so, to state
the amount incurred, and whether or not any contingent liability
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has matured or is likely to mature within the next twelve months,
which will materially affect the ability of the Applicant Entity or the
Guarantor to repay the Debentures;
(vii) Whether the Applicant Entity or the Guarantor (where applicable)
has assumed a liability of a related body corporate during the
quarter, the certificate shall also include details of the extent of the
liability assumed during the quarter and the extent of the liability at
the end of the quarter;
(viii) Whether or not there has been any change in any accounting
method or method of valuation of assets or liabilities of the
Applicant Entity;
(ix) Whether or not any circumstances have arisen which render
adherence to the existing method of valuation of assets or liabilities
of the Applicant Entity misleading or inappropriate;
(x) Any substantial change in the nature of the Applicant Entity's or
the Guarantor's business (where applicable) since the issue of the
Debentures;
(xi) Whether or not any action has been taken by the Board of
Directors of the Applicant Entity in terms sections 219 and 220 of
the Companies No. 7 of 2007 during the quarter.
The certificate shall be made in accordance with a resolution of the

directors and specify the date on which the certificate was made; and,
Where an Applicant Entity or a Guarantor fails to deliver the certificate to
the Trustee, the Trustee shall inform the Debenture holders of that fact.
- The Trust Deed shall provide for a covenant to ensure that, in the event
the Applicant Entity creates a charge, the Entity shall submit to the Trustee
the written details of the charge within 21 days after it is created. Where
the amount to be advanced on the security of the charge is indeterminate,
the Entity shall submit to the Trustee the written details of the amount of
each claim, within 5 market days from the date the claim is made.
Appointment, Removal and Resignation of a Trustee
- The Trust Deed shall provide the conditions for the appointment, resignation
and removal of the Trustee by the Applicant Entity and the Debenture
holders.
- The Trust Deed shall provide that the Applicant Entity shall be notified of
any removal of a Trustee and subsequent appointment of a Replacement
Trustee by the Debenture holders.
- The Trust Deed shall provide that any removal of a Trustee and the
subsequent appointment of a Replacement Trustee by the Applicant Entity
shall be with the consent of an agreed majority of Debenture holders.
- The Trust Deed shall provide for a covenant by the Applicant Entity to take
reasonable steps to replace the Trustee as soon as practicable after
becoming aware that:
(i) The Trustee has ceased to exist.
(ii) The Trustee is in the situation of conflict of interests.
(iii) The Trustee has ceased to perform its function as a Trustee.
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(iv)The Trustee is in the situation of unsuitability and does not eliminate
such situation within 90 days, after them ascertaining or of them been
informed that the Trustee has such situation.
- The existing Trustee shall continue to act as a Trustee until a new Trustee
is appointed.
Other Covenants by the Applicant Entity
- The Applicant Entity shall at all times carry on and conduct its affairs in a
proper and appropriate manner.
- The Applicant Entity shall immediately provide a copy of the Trust Deed
to the Debenture holders, on request.
- The Applicant Entity shall at all times maintain records all of its published
information and make them available for inspection by the Trustee and the
Debenture holders.
- The Applicant Entity shall:
(i) at all times maintain a correct Register of Debenture holders
including the names and addresses of all Debenture holders, the
number and value of Debentures held by each Debenture holder,
the date of issue of Debentures, the date on which each Debenture
holder became registered as the holder and the date on which he
ceased to be so registered.
(ii) permit the Trustee and the Debenture holders at all reasonable
times to inspect the Register of Debenture Holders and to take any
copies thereof, upon the payment of a reasonable copying and
administration fee as may be determined by the company.
- The Applicant Entity shall submit to the Trustee any information which the
Trustee may require in order to discharge its duties and obligations as
Trustee under the Trust Deed relating to the Applicant Entity’s affairs to
the extent permitted by law and the Listing Rules.
Events constituting default and remedy of such default
A list of all events constituting a default by the Applicant Entity including the
following:
- where the Applicant Entity makes default in the payment of any interest
due on the whole or any part of the Debentures after the date such interest
is payable or in the payment of any principal monies payable under the
Trust Deed in respect of any Debenture.
- where any liquidation, bankruptcy, insolvency, receivership or similar
action or proceeding is commenced against the Applicant Entity.
- where a winding up order has been made against or an effective resolution
has been passed for the winding up of the Applicant Entity.
- where there is a breach by the Applicant Entity of any terms or conditions
in the Debentures or provisions of the Trust Deed or any other documents
relating to the issue, offer or invitation in respect of the Debentures.
- where the Applicant Entity stops or threatens to stop payment of its debts
or ceases to carry on its business.
- where any other indebtedness of the Applicant Entity becomes due and
payable prior to its stated maturity or where security created for any other
indebtedness becomes enforceable.
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- where there is a revocation, withholding or modification of a license,
authorization or approval that impairs or prejudices the Applicant Entity’s
ability to comply with the terms and conditions of the Debentures or the
provisions of the Trust Deed or any other document relating to the issue,
offer or invitation in respect of the Debentures.
- Where any mortgage, charge, pledge, lien or other encumbrance, present
or future is created or assumed by the Applicant Entity contrary to the
terms or conditions of the Debentures and the provisions of the Trust
Deed.
In any of the events above, the Trustee at its discretion may, and if so
requested in writing by the Debenture holders of at least one fifth in nominal
value of the Debenture outstanding or if so directed by a Special Resolution
of the holders, shall give notice to the Applicant Entity that Debentures
become immediately due and payable at their principal amount, together with
accrued interest as provided in the Trust Deed.
Enforcement of obligations
- The manner of enforcing obligations shall be described in the Trust Deed.
Application of monies received by the Trustee
Where there are any monies received by the Trustee from the Applicant Entity under
the Trust Deed, the Trust Deed shall provide for the manner and order of priority in
which these amounts are applied or payable.
Remuneration of the Trustee
Fees to be paid to the Trustee for the performance of its duties as Trustee and any
additional services it may provide.
Expenses of the Trustee
The Trust Deed shall provide for a covenant by the Applicant Entity to immediately
reimburse all expenses borne by the Trustee in the administration of the Trust and
state the modalities of reimbursement.
Powers and Duties of Trustee
- The Trust Deed shall set out provisions relating to the powers and duties
of the Trustee.
- The Trust Deed shall contain the following statements by the Trustee:
(i) that it is duly qualified to act as Trustee.
(ii) that it shall exercise reasonable diligence to ascertain whether the
guarantee (where applicable) provided for the Debentures will be
sufficient to cover the conditions under which the guarantee was
issued.
(iii) that it shall ensure that all documents required to be submitted by the
Applicant Entity and the Guarantor in terms of the covenants set out
in the Trust Deed are forwarded in a timely manner.
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(iv) that it shall exercise reasonable diligence to ascertain whether the
Applicant Entity or any Guarantor has committed any breach of the
terms and conditions of the Debentures or provisions of the Trust Deed
or whether an event of default has occurred or is continuing to occur,
on perusal of the documents submitted in terms of the covenants set
out in the Trust Deed.
- The Trust Deed shall contain the following covenants:
(i) Trustee may rely upon any certificate or report given or statement
made by the auditors or an officer of the Applicant entity or the
Guarantor, if it has reasonable grounds for believing that the auditor
or officer was competent to give or make the certificate, report or
statement.
(ii) Trustee shall give notice in writing to the Debenture holders as soon
as practicable if the Applicant Entity or Guarantor (where applicable)
fails to remedy any breach of terms and conditions of the Debentures
or the provisions/covenants of the Trust Deed.
(iii) where an event of default has occurred and is continuing to occur, the
Trustee shall exercise such rights and powers vested in it by the Trust
Deed and use a reasonable degree of skill and diligence in exercising
such powers.
(iv) Trustee shall, in the event the Applicant Entity or the Guarantor (where
applicable) fails to remedy any breach of terms and conditions of the
Debentures or the provisions/covenants of the Trust Deed:
 call a meeting of the Debenture holders with notice to the
Applicant Entity;
 inform the Debenture holders of the failure at the meeting;
and
 submit proposals for the protection of the Debenture
holders’ interests or call for proposals from the Debenture
holders at the meeting as the Trustee considers necessary
or appropriate and obtain their directions.
(v) Trustee shall give notice in writing to the Applicant Entity as soon as
practicable if the Trustee discovers that it is not eligible to be appointed
or to act as Trustee.
(vi) The matters which are within the powers of the Trustee, the Trustee
may decide without reference to the Debenture holders.
(vii) Where there is a breach by the Applicant Entity of the terms and
conditions of the Debentures and the provisions of the Trust Deed, the
Trustee may authorize or waive such breach where the Trustee is
authorized to do so by resolution of a stipulated majority of the
Debenture holders.
(viii)The Trustee may appoint a person to chair the meeting of Debenture
holders. If the Trustee does not exercise this power, the Debenture
holders present at the meeting may appoint a person to chair the
meeting.
Exemptions and indemnifications of Trustee from liability
- Terms and conditions of Debentures and provisions in the Trust Deed or a

term of a contract with the Debenture holders secured by the Trust Deed, shall
be void in so far as the term or provision would have the effect of:
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(i) exempting a Trustee from liability for:
 the failure to carry out its duties as the Trustee; or
 the failure to exercise the degree of care and diligence
required of it as the Trustee.
(ii) indemnifying the Trustee against that liability, unless the term
or provision:
 releases the Trustee from liability for something done or
omitted to be done before the release is given; or
 enables a meeting of debenture holders to approve the
release of the Trustee from liability for something done or
omitted to be done before the release is given.
Such release will be effective when approved by Debenture
holders if the Debenture holders who vote for the resolution
represent 75% of the nominal value of the Debentures.
- A Trustee is not liable for anything done or omitted to be done in accordance
with a direction given to the Trustee by the Debenture holders at any meeting
called.
Meeting
- The Trust Deed shall contain provisions for setting out the notice period for
the meeting of Debenture holders
- The Trust Deed shall contain provisions which states that the meetings may
be convened at the request of the Applicant Entity, Trustee or Debenture
holders of at least one fifth in nominal value of the Debentures outstanding or
an agreed percentage of Debenture holders to consider any matter affecting
their interest.
- There shall be a quorum requirement for the transaction of business at the
meetings. The quorum for the passing of special resolutions shall be explicitly
stated.
Modifications of the Trust Deed
- The Trust Deed shall contain the conditions under which the provisions of the
Trust Deed or the terms and conditions of the Debentures may be modified.
Others
- The Applicant Entity to be responsible for paying any stamp duty and other
similar duties or taxes on or in connection with the Trust Deed or Debentures
(if applicable).
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APPENDIX 3C
BASIS FOR OFFER PRICE
The Offer Price was/will be determined (in the case of an Offer through Book Building)
by the Entity in consultation with the .................... (eg: Name of the Investment Bank/
Independent Valuer). The Net Asset Value per share of the Equity (NAV) is Rs. XXX
and the Offer Price is XX times the NAV.
(In the case of price band, the lower end of the price band is XX times the NAV of the
Entity and the higher end of the price band is XX times the NAV of the Entity.)
INVESTORS SHOULD READ THE FOLLOWING SUMMARY WITH THE RISK

FACTORS INCLUDED ON PAGE NO. XXX AND THE DETAILS ABOUT THE
ENTITY AND ITS FINANCIAL STATEMENTS INCLUDED IN THIS PROSPECTUS.
1. QUALITATIVE FACTORS
The qualitative factors that were considered by the Entity when arriving at the Offer
Price/Price Band should be mentioned here, OR alternatively the Entity could provide
the necessary cross references to the relevant sections in the Prospectus.
2. QUANTITATIVE FACTORS
2.1 Adjusted Earnings Per Share (EPS) & Average Return on Equity (ROE
%)
For Main Board entities: at least for last three (03) years based on the
Audited Financial Statements and as per the
latest interim financial statement (Not
Annualized):
For Dirisavi Board entities: at least for last one (01) year based on the
Annualized):
Year Ended Basic Diluted

EPS EPS (Rs). ROE P/E
(Rs).
March 31/ December 31
20XX,
20XX,
20XX,
Average EPS
Three months ended:
March 31/ June
30/September 30/
December 3120XX (Not
Annualised)
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Note:
Earnings per share (Rs.) = Net profit as restated, attributable to equity shareholders
Weighted Average number of equity shares outstanding
during the year/period
Return on Equity (%) = Net profit after tax, as restated

Net Assets as at the end of the year / period
2.2 Price/Earnings Ratio (P/E) in relation to Offer Price of Rs. XXX
a. Based on financial year ended March 31/December 31 20XX (as applicable)

Basic & Diluted EPS of Rs. XXX, the P/E Ratio is XXX
b. Based on average EPS of Rs. XXX, the P/E Ratio is XXX
c. Industry P/E XXX
Name of the Peer

Particulars P/E
Entity
Highest
Lowest
Industry Composite
Source: ..................... Sector Classification: ............................
2.3 NAV
(i) As per the latest audited financial statements (eg: as on March 31/
December 31 20XX, – Rs. XXX)
(ii) As per the latest interim financial statements (eg: as on March 31/June
30/September 30/December 31 20XX, – Rs. XXX)
(iii) Post IPO: Rs. XXX (date)
(iv) Offer Price: Rs. XXX
2.4 Comparison of Accounting Ratios
The comparable ratios of the entities which are to some extent similar in business,
are given below (as per the latest audited financial statements):
Peer Entity NAV (Rs.) EPS (Rs.) P/E ROE %
Source: ....................., Sector Classification of peers:..................................
Note: If the Entity is of the view that there are no comparable listed entities to
compare with, that fact should be disclosed in this schedule together with the reasons
for such unavailability.
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APPENDIX 3D
BASIS FOR REFERENCE PRICE AT AN INTRODUCTION
The Reference Price was determined by the Entity in consultation with the
.................... (eg: Name of the Investment Bank/Independent Valuer). The Net Asset
Value per share of the Equity (NAV) is Rs. XXX and the Reference Price is XX times
the NAV.
INVESTORS SHOULD READ THE FOLLOWING SUMMARY WITH THE RISK FACTORS INCLUDED
ON PAGE NO. XXX AND THE DETAILS ABOUT THE ENTITY AND ITS FINANCIAL STATEMENTS
INCLUDED IN THIS INTRODUCTORY DOCUMENT.
1. QUALITATIVE FACTORS
The qualitative factors that were considered by the Entity when arriving at the
Reference Price should be mentioned here, OR alternatively the Entity could
provide the necessary cross references to the relevant sections in the
Introductory Document.
2. QUANTITATIVE FACTORS
2.1.1 Adjusted Earnings Per Share (EPS) & Average Return on Equity
(ROE %)
For Main Board entities: at least for last three (03) years based on the
Annualised):
For Diri Savi Board entities: at least for last one (01) year based on the
Annualised):
Financial Year Ended Basic EPS Diluted

ROE P/E
(Rs). EPS (Rs).
March 31/December 31,
20XX
20XX
20XX
Average EPS
Latest three months
ended: March 31/June
30/September
30/December 31, 20XX
(Not Annualised)
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Note:
Earnings per share (Rs.) = Net profit as restated, attributable to equity shareholders
Weighted Average number of equity shares
outstanding during the year/period
Return on Equity (%) = Net profit after tax, as restated

Net Assets as at the end of the year / period
2.2 PRICE/EARNINGS RATIO (P/E) IN RELATION TO REFERENCE PRICE

OF RS. XXX
a. Based on financial year ended March 31/December 31, 20XX (as

applicable) Basic & Diluted EPS of Rs. XXX, the P/E Ratio is XXX
b. Based on average EPS of Rs. XXX, the P/E Ratio is XXX
c. Industry P/E XXX
Name of the Peer

Particulars P/E
Entity
Highest
Lowest
Industry Composite
Source: ..................... Sector Classification: ............................
2.3 NAV
(i) As per the latest audited financial statements (eg: as on March

31/December 31, 20XX – Rs. XXX)
(ii) As per the latest interim financial statements (eg: as on March 31/June
30/September 30/December 31, 20XX – Rs. XXX)
(iii) Post Listing : Rs. XXX (date)
(iv) Reference Price : Rs. XXX
2.4 COMPARISON OF ACCOUNTING RATIOS
The comparable ratios of entities which are to some extent similar in business are
given below (as per the latest audited financial statements):
Peer Entity NAV (Rs.) EPS (Rs.) P/E ROE %
Source: ..................... Sector Classification of peers:.............................
Note: If the Entity is of the view that there are no comparable listed entities to compare
with, that fact should be disclosed in this schedule together with the reasons for such
unavailability.
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SECTION 3

CONTENTS OF PROSPECTUS / INTRODUCTORY DOCUMENT

CONTENTS OF A SHARE PROSPECTUS

3.1.1 CORPORATE INFORMATION

a. Name and registered address

b. Date, place and authority of incorporation

3.1.2 OBJECTIVES OF THE ISSUE

d. If the proceeds may or will be used to finance acquisitions of any other

e. If any material part of the proceeds is to be used to discharge, reduce or

3.1.3 PARTICULARS OF SHARES FOR WHICH APPLICATION IS BEING MADE

b. The following disclosures pertaining to the shares of the Entity which

Category of Locked-in The time period No. of No. of shares as a

Public Locked-in 6th month

Public Not Locked- Not applicable

a. A statement that the consideration for which the shares are to be

b. A disclosure on the basis of determination of the consideration for

c. (i) Disclosures pertaining to a competent independent valuation in

(ii) A Declaration by the independent valuer that;

- The valuer is neither a related party of the applicant Entity

- The valuer is a member of good standing in a professional

a. Subject to Rule 3.1.5 (b) the number and/or percentage of shares to

b. (i) 1. In the event the value of an initial public offering of a

- 40% of the offered shares of that particular

- shares of that particular share class to the

whichever is lower, to be initially made available for

For the purposes of Rule 3.1.5(b)(i)(1), ‘Retail Individual Investor’

2. In determining the basis of allotment within the Retail

(ii) 1. In the event the value of a public offering of a particular

a minimum of 40% of the offered shares of that

For the purposes of Rule 3.1.5(b)(ii)(1), ‘Retail Individual

2. In determining the basis of allotment within the Retail

(iv) In the event of an under-subscription in the Retail Individual

Note - For additional information pertaining to the Unit Trust Investor

3.1.6 COST OF THE ISSUE

3.1.7 PROFILE OF THE ENTITY

a. A description of the business carried out by the Entity. In situations where

c. If the Entity is a holding company, details of the group structure

d. Number of employees in the Entity or group and the details of labour

e. Degree of dependence on key customers and suppliers

f. Future strategies, assumptions on which future strategies are

a. Name, address, and business experience of directors and details of

c. (i) The aggregate emoluments including bonus and/or profit sharing

(ii) An estimate of the aggregate emoluments including bonus

d. Directors interest in any assets acquired, disposed or leased by the

e. Full particulars of any contract or arrangement in force at the date of the

f. Whether any director or a person nominated to become a director is

3.1.9 STATED CAPITAL

b. Details immediately preceding two years of the date of the prospectus

c. Amount of any outstanding convertible Debt Securities and details

e. Any statutory restrictions on the free transferability of shares.

a. Name and address of the Chief Executive Officer.

b. Brief account of the business experience of the Chief Executive Officer

c. Whether the Chief Executive Officer or a person nominated to become

d. The name and business experience of the senior management. Where

e. (i) The aggregate emoluments including bonus and/or profit

(ii) An estimate of the aggregate emoluments including bonus

3.1.11 MANAGEMENT AGREEMENTS

a. The following financial statements should be included in the Prospectus:

(i) Audited financial statements made up to a date not more than 12

(The Entity may illustrate its financial information by way of graphs).

b. Dividend policy of the Entity - Classes of Securities and rights attached

c. Start-up Entities and New Entities

d. Any other complete and accurate information that would have a