15 CRITICAL DISCLOSURE REQUIREMENTS

IN OFFER DOCUMENT OF IPO

IPO – MCX & Speciality Restaurants

By:

Rucha Kavthekar (64)

Devanshi Mehta (87)

Darshana Mhatre (91)

Arpita Nair (96)

Nilesh Patil (112)

Vivek Patil (115)

Aditya Phatak (121)

Anushikha Sanghvi (135)

ContentsGlossary.........................................................................................................................................3

INITIAL PUBLIC OFFERING (IPO)....................................................................................5

15 CRITICAL DISCLOSURES................................................................................................9

Disclosure 1: Capital Structure.................................................9

Disclosure 2: Basis of Issue Price............................................11

Disclosure 3: Promoters’ Contribution...................................13

Disclosure 4: Lock-In Requirements.......................................14

Disclosure 5: Objects Of The Offer.........................................15

Disclosure 6: IPO Grading (2.5 A):..........................................19

Disclosure 7: Basis of Allotment.............................................21

Disclosure 8: Minimum Subscription.....................................24

Disclosure 9: Outstanding Litigation......................................26

Disclosure 10: Pricing Method...............................................27

Disclosure 11: Green Shoe Option.........................................28

Disclosure 12: Underwriting...................................................34

Disclosure 13: Financial Statements......................................36

Disclosure 14: Risk Factors.....................................................39

Disclosure 15: Management and Other Disclosures..............51

Disclosure 16 : Dividend Policy..............................................54

PROPOSED CHANGES BY SEBI IN IPO PROCESS .............................................56

BIBLIOGRAPHY.......................................................................................................................57

2

Glossary

Draft offer document: refers to the first document filed by companies with SEBI and stock exchanges for approval, who after reviewing, communicate their observations to the Company, which the company has to incorporate in the offer document. SEBI typically requires a period of 30 days for processing a draft offer document. The draft offer document is placed by SEBI on its website for public comments for a period of 21 days.

Red herring prospectus: A red herring prospectus (RHP) is a preliminary registration document that is filed with SEBI in the case of book building issue which does not have details of either price or number of shares being offered or the amount of issue. This means that in case price is not disclosed, the number of shares and the upper and lower price bands are disclosed. On the other hand, an issuer can state the issue size and the number of shares are determined later. In the case of book-built issues, it is a process of price discovery as the price cannot be determined until the bidding process is completed. Hence, such details are not shown in the Red Herring prospectus filed with ROC in terms of the provisions of the Companies Act. Only on completion of the bidding process, the details of the final price are included in the offer document. The offer document filed thereafter with ROC is called a prospectus.

Offer Document: means the final prospectus in the case of a public issue/offer for sale which is filed and registered with the Registrar of Companies and the stock exchanges. Since 1992, the entire IPO regulation is driven by disclosures-inform the investors as much as is possible and is relevant for him to take an informed investment decision. The disclosure requirements regarding the issuance of securities are covered in detail in the SEBI (Disclosure and Investor Protection) Guidelines, 2000.Filed with the ROC and SE’s it covers all the relevant information to help an investor to make his/her investment decision.

Green Shoe Option: Green Shoe option means an option of allocating shares in excess of the shares included in the public issue and operating a post-listing price stabilizing mechanism for a period not exceeding 30 days in accordance with the provisions of Chapter VIIIA of DIP Guidelines, which is granted to a company to be exercised through a Stabilizing Agent. This is an arrangement wherein the issue would be over allotted to the extent of a maximum of 15% of the issue size. From an investor’s perspective, an issue with green shoe option provides more probability of getting shares and also that post listing price may show relatively more stability as compared to market.

3

Underwriting: of shares is a guarantee or insurance given by the underwriter to the company that the shares offered to the public will be subscribed in full.

ASBA: Stands for ‘Applications Supported by Blocked Account’. It is a process approved by SEBI for providing an alternative mode of payment in issues whereby the application money remains in the investors’ account till finalization of basis of allotment in the issue. ASBA process would require retail individual investors bidding at cut-off, to apply through Self Certified Syndicate Banks (SCSBs), in which the investors have bank accounts. SCSBs would accept the applications, block the fund to the extent of bid payment amount, upload the details in the electronic bidding system of BSE or NSE, unblock once basis of allotment is finalised and transfer the amount for allotted shares, to the issuer. This would co-exist with the current procedure of investors applying through sub syndicate/ syndicate members with cheque as a payment instrument.

Escrow: An escrow is a legal arrangement to help parties perform their contracts and avoid disagreements. The escrow agreement has three parties: a "depositor", an "escrow agent" and a "beneficiary". In the typical escrow, the depositor is required to entrust money or property with an escrow agent. The escrow agent holds the escrow deposit until it can be released to the beneficiary upon the happening of some future event, or the performance of some condition.

Book Building: means a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document;

Margin Amount: The amount paid by the Bidder at the time of submission of the Bid, being 100% of the Bid Amount.

Retail Individual Bidders: Individual Bidders (including HUFs and Eligible Employees) who have Bid for an amount less than or equal to Rs. 200,000 in any of the bidding options in this Issue.

4

INITIAL PUBLIC OFFERING (IPO)

What is an IPO?

An IPO is when a company which is presently not listed at any stock exchange makes either a

fresh issue of shares or makes an offer for sale of its existing shares or both for the first time

to the public. Through a public offering, the issuer makes an offer for new investors to enter

its shareholding family.

The shares are made available to the investors at the price determined by the promoters of the

company in consultation with its investment bankers.

The successful completion of an IPO leads to the listing and trading of the company’s shares

at the designated stock exchanges.

Why does a company make an IPO?

Going public provides an opportunity to the companies to raise cash for setting up a

project or for diversification/expansion or sometimes for working capital or even to

retire debt or for potential acquisitions. This is called fresh issue of capital where the

proceeds of the issue go to the company.

Companies also go public to provide a route for some of the existing shareholders

including venture capitalists to exit fully or partially from the company’s shareholding

or for promoters to partially dilute their holding. This is called an offer for sale where

the proceeds of the issue go to the selling shareholders and not to the company.

It increases the company’s ability to raise debt at finer rates. The company also gets a

continuing window for raising more capital, both from the domestic and overseas

equity markets. Acquisitions also become simpler as instead of cash payouts,

companies can use shares as a currency. Of course, listing carries a considerable

degree of prestige for the company.

Listing also lends liquidity to the stock, which is very critical for the success of

employee stock ownership plans, which help to attract top talent.

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Eligibility Norms for Making an IPO

SEBI has stipulated the eligibility norms for companies planning an IPO which are as

follows:

i. Net tangible assets of at least Rs. 3 crore in each of the preceding three full years

ii. Distributable profits for at least three out of the immediately preceding five years

iii. Net worth of at least Rs. 1 crore in each of the preceding three full years

iv. The issue size should not exceed 5 times the pre-issue net worth

v. If there has been a change in the company’s name, at least 50% of the revenue for

preceding one year should be from the new activity denoted by the new name

Alternative Route

Recognizing that many good companies, for one reason or the other, may not be able to

comply with all the eligibility norms, two other alternative routes are available to such

companies:

Alternative I:

i. Issue shall be through book building route, with at least 50% to be mandatory allotted

to the Qualified Institutional Buyers (QIBs).

ii. The minimum post-issue face value capital shall be Rs. 10 crore or there shall be a

compulsory market-making for at least 2 years

OR

Alternative II:

i. The “project” is appraised and participated to the extent of 15% by FIs/Scheduled

Commercial Banks of which at least 10% comes from the appraiser(s).

ii. The minimum post-issue face value capital shall be Rs. 10 crore or there shall be a

compulsory market-making for at least 2 years. In addition to satisfying the aforesaid

eligibility norms, the company shall also satisfy the criteria of having at least 1000

prospective allotted in its issue.

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Exemptions to certain category of entities from the eligibility norms

The following categories of entities are eligible for exemption from entry norms.

i. A banking company including a local area bank set up under the Banking Regulation

Act, 1949

ii. A corresponding new bank set up under the Banking Companies Act, 1970

iii. An infrastructure company

iv. Whose project has been appraised by a Public Financial Institution (PFI)

v. Not less than 5% of the project cost is financed by any of the PFI

vi. Rights Issue by a listed company

Minimum Public Shareholding Requirement

Clause 40A of the BSE Listing Agreement requires at least 25% of the post issue paid up

capital to be with the ‘public’ (i.e. other than promoter and promoter group).

As per rule 19(2) (b) of the Securities Contract (Regulation) Rules, a minimum of 25% of

each class of security must be offered to the public for subscription. However, at least 10%

can be offered if the following 3 conditions are fulfilled:

Minimum 2 MM securities (excluding reservations, firm allotment & promoter contribution)

to be offered to the public

Minimum offer size – Rs. 100 crores

Issuance through book building with 60% QIB allocation

Continuous public shareholding since listing also needs to be maintained as per Clause 40A

of the listing agreement.

The aforesaid requirement of maintaining minimum level of public shareholding on a

continuous basis will not be applicable to government companies (as defined under Section

617 of the Companies Act, 1956), infrastructure companies (as defined under Chapter II

Clause 14(4) of the SEBI ICDR Regulations 2009) and companies referred to the Board for

Industrial and Financial Reconstruction.

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Safety Net for Small Retail Investors:

• ‘Safety Net’ mechanism is being considered only for the small retail investors, who

would be compensated by the promoters and other entities selling shares through IPOs

in the event of the company’s shares plunging below a certain threshold limit within

six months of listing or the time-frame set by SEBI.

• The 'safety net' is one of the key proposals being discussed by Sebi for its primary

market reforms. It has been felt that such a provision would help in fair pricing of

IPOs, besides providing investors some sort of a capital protection guarantee. As per

the current regulations, the companies are allowed to provide such ‘safety nets’ during

their IPOs, but it is not mandatory for them to make such provisions and only a few

companies have provided such facility for investors in the past.

• These measures will stimulate financial savings among households as well as give a

fillip to the mutual fund industry. More and more households should be encouraged to

save in financial instruments rather than in gold.

• Many companies and investment bankers have come under the criticism of over-

pricing of IPOs after their shares fell below the public offer price levels in several

cases.

• The sources said the companies could be allowed to pass on the costs of ‘safety net’

provision to the investment bankers, who are primarily responsible for fixing the price

of shares to be sold through IPOs.

New definition for 'small or retail investors'

There is some ambiguity in current regulations for the definition of small or retail investors.

For IPOs, the investors putting in up to Rs two lakhs are considered retail investors, while

already listed companies distinguish small and large individual shareholders as those holding

shares worth up to Rs one lakh and those holding shares worth more than Rs one lakh,

respectively.

Introduction of e-IPO:

E-IPO would allow investors to bid for IPO shares electronically and without any physical

paperwork. SEBI has cleared the ground for E-IPOs, which could cut down the time taken

between close of an offer and listing from 12 days now to 5 days.

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15 CRITICAL DISCLOSURES

Disclosure 1: Capital Structure

The capital structure must be presented in the following manner:

(a) Authorised, issued, subscribed and paid up capital (Number of instruments, description

and aggregate nominal value).

(b) Size of the present issue, giving separately promoters’ contribution, firm allotment/

reservation for specified categories and net offer to public.

After the details of capital structure, the following notes must also be incorporated:

(a) Details such as date of issue, number of shares, face value, issue price, nature of

allotment.

(b) Note relating to promoters' contribution and lock-in period.

(c) Details of all ’buy-back’ and `stand by’ and similar arrangements for purchase of

securities by promoters, directors and lead merchant bankers.

To facilitate transition to the revised Schedule VI, Ministry of Corporate Affairs vide its

circular dated 5 September 2011 has clarified that the presentation of financial statements for

the limited purpose of Initial Public Offer (IPO)/Follow on Public Offer (FPO) may be made

as per the pre-revised Schedule VI.

9

Case Study

Disclosure MCX(Company1 ) Speciality Restaurant(Co. 2)

Capital Structure Authorised Share Capital

70,000,000 Equity Shares

Issued, Subscribed And

Paid Up Share

Capital

50,998,369

Present Offer In Terms Of

This Red Herring

Prospectus*

6,427,378

Equity Capital After The

Offer

50,998,369 Equity Shares

fully paid-up

Authorised Share Capital:

580,000,000

Issued, Subscribed And

Paid-Up Capital

Before The Issue:

352,182,420

Present Issue In Terms Of

This

Prospectus: 11,739,415

Equity Shares

Equity Capital After The

Issue:

46,957,657 Equity Shares

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Disclosure 2: Basis of Issue Price

Issue price is the price at which IPO is offered to the investors. Issue price can either be fixed (fixed price issue) or a price band between floor price and cap price (book-building issue). It is necessary for the company to disclose the basis applicable in calculation of the issue price. (Either in case of book building or fixed price issue).

SEBI and Stock Exchange Guidelines

(a) The basis for issue price/ floor price/ price band shall be disclosed and justified on the basis of the following information, which shall be also disclosed separately:

(i) Earnings Per Share, i.e., EPS pre-issue for the last three years (as adjusted for changes in capital).

(ii) P/E pre-issue.

(iii) Average Return on Net Worth in the last three years.

(iv) Minimum Return on Increased Net Worth required to maintain pre issue EPS.

(v) Net Asset Value per share based on last balance sheet.

(vi) Net Asset Value per share after issue and comparison thereof with the issue price.

(vii) Comparison of all the accounting ratios of the issuer company as mentioned above with the industry average and with the accounting ratios of the peer group (i.e., companies of comparable size in the same industry (indicate the source from which industry average and accounting ratios of the peer group has been taken).

(viii) The face value of shares (including the statement about the issue price/ floor price/ price band being “X” times of the face value), provided the projected earnings shall not be used as a justification for the issue price in the prospectus.

(b) The Lead Merchant Banker shall not proceed with the issue in case the accounting ratios mentioned above do not justify the issue price.

(c) In case of book built issues, the red herring prospectus shall state that the final price would be determined on the basis of the demand from the investors.

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Case Study

Disclosure MCX(Company1 ) Speciality Restaurant(Co. 2)

Basis of Issue Price Qualitative Factors

Leadership Position in the

commodity futures industry –

Market share in terms of the

total value of

Commodities futures contracts

traded on our Exchange in

Fiscal 2011 was 82.4% of the

Indian commodity

Experienced Board of

Directors and management

Product and service

innovation

Technology Infrastructure

Scalable technology platform

and business model

Integrated infrastructure and

network of alliances.

Comparison of Accounting

Ratios with Industry Peers

There are no listed companies

in India that engage in a

business similar to that of

MCX. Hence, it is not

possible to provide an

industry comparison in

relation to our Company.

Qualitative Factors

A leading portfolio of core

brands including our flagship

brand, Mainland China

Focus on guest needs

Experienced Founder and

Promoter, management team

and dedicated staff

Diversified business model

Strategic locations

Robust processes and scalable

model

Strong financial position and

profitability

Comparison with Industry

peers

We believe that none of the

listed companies in India are

engaged exclusively in the fine

dining restaurant business.

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Disclosure 3: Promoters’ Contribution

Promoters’ contribution in any issue shall be in accordance with the following provisions

TYPE OF ISSUE PROMOTER’S CONTRIBUTION

Public Issue by Unlisted Companies Not less than 20% of the post issue capital

Offers for Sale Not less than 20% of the post issue capital

Public Issues by Listed Companies

Either to the extent of 20% of the proposed

issue or ensure post-issue shareholding to the

extent of 20% of the post-issue capital

Composite Issues

At the option of the promoter(s) be either 20%

of the proposed public issue or 20% of the post-

issue capital.

Issue of Convertible Security Not less than 20% of the post issue capital.

Securities Ineligible for Computation of Promoters’ Contribution

Where the promoters of any company making an issue of securities have acquired equity

during the preceding three years, before filing the offer documents with the Board, such

equity shall not be considered for computation of promoters contribution if it is;

(i) acquired for consideration other than cash and revaluation of assets or capitalisation of

intangible assets is involved in such transaction(s); or

(ii) resulting from a bonus issue, out of revaluation reserves or reserves created without

accrual of cash resources 76(or against shares which are otherwise ineligible for computation

of promoters’ contribution);

In case of public issue by unlisted companies, securities which have been acquired by the

promoters during the preceding one year, at a price lower than the price at which equity is

being offered to public shall not be eligible for computation of promoters’ contribution.

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Disclosure 4: Lock-In Requirements

Lock-in period in any issue shall be in accordance with the following provisions

TYPE LOCK-IN PERIOD

Minimum Specified Promoters’ Contribution in Public Issues 3 years

Excess Promoters’ Contribution 1 year

Pre-issue share capital of an unlisted company 1 year

securities issued on firm allotment basis 1 year

Case Study

Multi Commodity Exchange Of India Limited

The details of the Equity Shares forming part of the Promoter‘s contribution which shall be

locked in for a period of three years have been provided below:

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Speciality Restaurants Limited

The details of promoter’s contribution and lock-in period are as follows

Disclosure 5: Objects Of The Offer

The object of raising funds through the issue, that is whether for fixed asset creation and/ or

for working capital or any other purpose, shall be disclosed clearly in the prospectus.

The disclosure should be in reference to the following points

Funds Requirement

(a) The requirement for funds proposed to be raised through the issue shall be disclosed

clearly.

(b) Where the company proposes to undertake more than one activity, i.e diversification,

modernisation, expansion, etc., the total project cost shall be given activity- wise or

project wise as the case may be.

(c) Where the company is implementing the project in a phased manner, the cost of each

phase, including the phase, if any, which has already been implemented, shall be

separately given.

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Funding Plan (Means of Finance)

(a) An undertaking shall be given in the prospectus by the issuer company confirming

firm arrangements of finance through verifiable means towards 75% of the stated

means of finance, excluding the amount to be raised through proposed Public/ Rights

issue, have been made

(b) The balance portion of the means of finance for which no firm arrangement has been

made shall be mentioned without specification

Funds Deployed

(a) Actual expenditure incurred on the project (in cases of companies raising capital for a

project) upto a date not earlier than two months from the date of filing the prospectus

with the Registrar of Companies, as certified by a Chartered Accountant.

(b) A cash flow statement showing funds which have been brought in as promoters’

contribution and have been deployed prior to the public issue.

Case Study

Multi Commodity Exchange Of India Limited

MCX in its offer document has not followed the SEBI structure of disclosure pertaining to

Objects of the Offer regarding fund requirement, fund planning and fund deployment as the

Offer is an offer purely for sale and its main objective is to provide liquidity to its equity

share holders. It has covered this section of the disclosure in three heads as follows

Objective:

Here it states that the objects of the Offer was to achieve the benefits of listing on the BSE

and to carry out the sale of 6,427,378 Equity Shares by the Selling Shareholders The listing

of the Equity Shares will enhance thier brand name and provide liquidity to the existing

shareholders. Listing will also provide a public market for the Equity Shares in India. It

mentions that the Company will not receive any proceeds from the Offer.

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Offer Expenses:

Here it discloses in brief the offer related expenses pertaining to underwriting fees, selling

commission, fees payable to the BRLMs, legal counsels, Bankers to the Offer, Escrow

Collection Banks and the Registrar to the Offer, printing and stationery expenses, advertising

and marketing expenses and all other incidental and miscellaneous expenses for listing the

Equity Shares on BSE. It has also given a small table showing the breakup of the expenses

Monitoring of Utilization of Funds:

Here it menstions that since the Offer is a pure offer for sale and the Company would not

receive any proceeds from the Offer, the Company has not appointed a Monitoring Agency

for the Offer.

Speciality Restaurants Limited

Speciality Restaurants is a public issue hence it has disclosed in extreme details all the

requirements as per SEBI guidelines in disclosure of objects of offer.

It first mentions the objects of the offer are to deploy the funds issues for four purposes

namely:

1. Development of New Restaurants;

2. Development of a food plaza;

3. Repayment of portions of term loan facilities; and

4. General corporate purposes

It has further dissected each of these activities under the following heads and explained in

detail the deployment of funds for each purpose

Issue Proceeds and Net Proceeds

The details of the proceeds of the Issue are set forth in the table below:

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Utilisation of the Net Proceeds

The proposed utilisation of the Net Proceeds is set forth in the table below:

Deployment of the Net Proceeds

The Net Proceeds are expected to be deployed in accordance with the schedule set forth

below

It has also mentioned in detail the expenses pertaining to each of the objects of issue

including issue related expenses

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Disclosure 6: IPO Grading (2.5 A): Unlisted company can go for IPO of equity shares if following conditions are satisfied as on

the date of filing of Prospectus (in case of fixed price issue) or Red Herring Prospectus (in

case of book built issue) with ROC:

1. The unlisted company s h o u l d h a v e obtained grading for the IPO from at

least one credit rating agency.

2. Disclosures of all the grades obtained, along with the rationale/ description

furnished by the credit rating agency/agencies for each of the grades obtained,

have been made in the Prospectus (in case of fixed price issue) or Red Herring

Prospectus (in case of book built issue).

3. The expenses incurred for grading IPO should be been borne by the company

obtaining grading for IPO.

IPO Grading and its meaning:

Grade 1: Poor fundamentals

Grade 2: Below average fundamentals

Grade 3: Average fundamentals

Grade 4: Above Average fundamentals

Grade 5: Strong fundamentals

IPO grading is not optional. A Company which has filed the draft offer document for its IPO

with SEBI on or after 1st May, 2007, is required to obtain grade for the IPO from at least one

Credit Rating Agencies (CRA). IPO grading is independent, unbiased and relative assessment

of fundamentals of the IPO issue. It can be used by investor as a tool to aid investment

decisions.

IPO grades cannot be rejected. However the issuer has the option of opting for another

grading by a different agency. In such case all grades obtained for the IPO have to be

disclosed. IPO grading can be done either before filing the draft offer documents with SEBI

or thereafter. IPO grading can be done either before filing the draft offer documents with

SEBI or thereafter. IPO grading is done without taking into account the issue price of the

security in the IPO.

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What IPO grading does not do -

1. An IPO grade is NOT a suggestion or recommendation as to whether one should

subscribe to the IPO or not. IPO grade needs to be read together with the disclosures

made in the prospectus including the risk factors as well as the price at which the

shares are offered in the issue.

2. IPO Grading is NOT a recommendation to buy, sell or hold the securities graded.

3. It is NOT a comment on the valuation or pricing of the IPO graded nor is it an

indication of the likely listing price of the securities graded.

IPO Grading is analysis of fundamentals. It is based on following:

1. Business Prospect

2. Financial Performance

3. Management capabilities

4. Compliance and litigation history

5. Corporate governance

Speciality Restaurant 4/5 By CRISIL

MCX 5/5 By CRISIL

IPO Rating

IPO Ratings are provided by various financial institutions & independent brokers. Few

popular IPO Rating providers in India are Capital Market, Money Control, S P Tulsian's IPO

recommendations etc.

Capital Market Publishers India Pvt. Ltd. is an India based financial information service

provider. Information provided by CapitalMarket.com (CM) includes corporate databases,

corporate news, streaming stock quotes from BSE and NSE, IPO information, mutual funds

information, equity research etc.

Rating Scale:    Low 1 - 100 High

Speciality Restaurant 48/100

MCX 50/100

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Disclosure 7: Basis of AllotmentIn a public issue of securities, the Executive Director/Managing Director of the Designated

Stock Exchange along with the post issue Lead Merchant Banker and the Registrars to the

Issue shall be responsible to ensure that the basis of allotment is finalised in a fair and proper

manner in accordance with the following guidelines:

This section shows percentage of issue size and number of equity shares which are available

for allotment to QIB’s, retail individual investors, and non institutional bidders depending

upon the process which is selected.

For book building process

QIB- At least 50% of the Net Issue being allotted. However, upto 5% of the Net QIB

Portion shall be available for allocation proportionately to Mutual Funds only.

Non institutional bidders- Not less than 15% of the Net Issue or the Net Issue less

allocation to QIBs and Retail Individual Bidders.

Retail individual bidders- Not less than35% of the Net Issue or the Net Issue less

allocation to QIBs and Non-Institutional Bidders.

Case Study

Multi Commodity Exchange Of India Limited

Offer of up to 6,427,378 Equity Shares of the Company. The Offer comprises a Net Offer of

6,177,378 Equity Shares to the public and an Employee Reservation Portion of up to 250,000

Equity Shares. The Offer will constitute 12.60% of the post Offer paid up capital of the

Company. The Net Offer will constitute 12.11% of the post Offer paid up capital of our

Company.

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22

Speciality Restaurants Limited

Public Issue of 11,739,415 Equity Shares for cash at a price of Rs. 150 per Equity Share

(including share premium of Rs. 140 per Equity Share) aggregating to Rs. 1,760.91 million.

The Issue will constitute 25% of the post-Issue paid-up equity share capital of the company.

23

Disclosure 8: Minimum Subscription

As per SEBI Guidelines following are requirements of disclosure related to minimum

subscription:

(a) Non-UnderWritten

“If the issuing company does not receive the minimum subscription of 90 per cent of

the issued amount on the date of closure of the issue, or if the subscription level falls below

90 per cent. after the closure of issue on account of cheques having being returned unpaid or

withdrawal of applications, the issuing company shall forthwith refund the entire subscription

amount received. If the issuing company fails to refund the entire subscription amount within

15 days from the date of the closure of the issue, it is liable to pay the amount with interest to

the subscribers at the rate of 15 per cent per annum for the period of the delay.”

(b) UnderWritten

"If the issuing company does not receive the minimum subscription of 90 per cent of

the net offer to public including devolvement of Underwriters within 60 days from the date of

closure of the issue, the issuing company shall forthwith refund the entire subscription

amount received with interest to the subscribers at the rate of 15 per cent per annum for the

period of the delay beyond 60 days.”

• Exceptions:

1. Divestment: In case the IPO is with the intension of divestment of stakeholders share,

minimum subscription clause is ot applicable

2. Infrastructure: These relaxations would be applicable to Infrastructure Companies

as defined under Section 10(23G) of the Income Tax Act, 1961, provided their

projects are appraised by any Developmental Financial Institution (DFI) or IDFC or

IL&FS. The projects must also have a participation of at least 5% of the project cost

(in debt and/or equity) by the appraising institution. 

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Disclosure MCX Speciality Restaurant Comment

Minimum

Subscription

In terms of the SEBI

Regulations the

requirement for

minimum subscription is

not applicable to the

Offer.

Our Company shall

ensure that the number

of prospective allotees

to whom Equity Shares

will be Allotted shall not

be less than 1,000. Any

expense incurred by our

Company on behalf of

the Selling Shareholders

with regard to refunds,

interest for delays, etc.

for the Equity Shares

being offered through

the Offer, will be

reimbursed by the

selling Shareholders to

our Company, in

proportion to the Equity

Shares contributed by

the Selling Shareholders

to the Offer.

If our Company does not

receive the minimum

subscription of 90% of the

Issue, including

devolvement of

Underwriters within 60

days from the Bid/ Issue

Closing Date, our

Company shall forthwith

refund the entire

subscription amount

received. If there is a delay

beyond eight days after our

Company becomes liable

to pay the amount, our

Company shall pay interest

as prescribed under Section

73 of the Companies Act.

Further, we shall ensure

that the number of

prospective Allottees to

whom Equity Shares will

be Allotted shall not be less

than 1,000.

In MCX, Minimum

subscription requirement

is not applicable as it is

an offer for Sale

(divestment)

This is as per Minimum

Subscription Clause

6.3.8.4 of SECURITIES

AND EXCHANGE

BOARD OF INDIA

(DISCLOSURE AND

INVESTOR

PROTECTION)

GUIDELINES, 2000)

Offer for sale

6.3.8.4.1The

requirement of

minimum subscription

shall not be applicable to

offer for sale.

Financial Technologies

(India) Limited is

divesting 5.18%, SBI is

divesting 4.14%, to the

total offer.

25

Disclosure 9: Outstanding Litigation

Litigation of Issuer / Promoter / Promoter Group / Directors of Company

Company to inform the Exchange of the developments with respect to any dispute in

conciliation proceedings, litigation, assessment, adjudication or arbitration to which it is a

party or the outcome of which can reasonably be expected to have a material impact on its

present or future operations or its profitability or financials.

MCX Disclosures

Speciality Restaurant Disclosures

26

Observation from Case Study

1. In Specialty Restaurants, the aggregate amount of the outstanding litigations was

clearly mentioned in summarized form,

2. But in MCX, no doubt the outstanding amounts were mentioned, but they were

mentioned in the description

3. The description ran over in over 15 pages, making it pretty inconvenient to calculating

the total aggregate amount.

Disclosure 10: Pricing MethodThere are two types of IPO pricing methods followed

Fixed Pricing: In the fixed price method, the company, or 'issuer', values the company and

prices the share at a pre-determined price.

Book Building: The issuer sets a price range within which the investor is allowed to bid for

shares. The price is then decided according to demand and supply forces

Book Building is basically a capital issuance process used in Initial Public Offer (IPO)

which aids price and demand discovery. It is a process used for marketing a public offer of

equity shares of a company. It is a mechanism where, during the period for which the book

for the IPO is open, bids are collected from investors at various prices, which are above or

equal to the floor price. The process aims at tapping both wholesale and retail investors. The

offer/issue price is then determined after the bid closing date based on certain evaluation

criteria. 

The Process: 

1. The Issuer who is planning an IPO nominates a lead merchant banker as a 'book

runner'.

2. The Issuer specifies the number of securities to be issued and the price band for

orders. 

3. The Issuer also appoints syndicate members with whom orders can be placed by the

investors. 

4. Investors place their order with a syndicate member who inputs the orders into the

'electronic book'. This process is called 'bidding' and is similar to open auction. 

5. A Book should remain open for a minimum of 5 days. 

27

6. Bids have to be entered within the specified price band

7. Bids can be revised by the bidder before the issue closes. 

8. On the close of the book building period the 'book runner evaluates the bids on the

basis of the evaluation criteria which may include – 

a. Price Aggression 

b. Investor quality 

c. Earliness of bids, etc. 

9. The book runner and the company conclude the final price at which it is willing to

issue the stock and allocation of securities. 

10. Generally, the number of shares are fixed; the issue size gets frozen based on the price

per share discovered through the book building process. 

11. Allocation of securities is made to the successful bidders. The rest get refund orders.

12. Book Building is a good concept and represents a capital market which is in the

process of maturing. 

Disclosure 11: Green Shoe OptionInvestors buy shares of companies in an initial public offering (IPO) in the hope that the

shares would trade in the secondary market at a price higher than the original selling price.

Investors would certainly be anxious if the price of the shares in the secondary market is

highly volatile in the period immediately following the listing date. Such volatility is

detrimental to investor confidence, to the image of the issuer company and the issue

managers, and to capital markets at large. This necessitates some sort of price stabilization

mechanism. One such price stabilization mechanism is the Green Shoe Option (GSO).

Green Shoe Options (GSOs), or over-allotment options were introduced by the Securities and

Exchange Board of India (SEBI), the Indian market regulator, in 2003 to stabilize the

aftermarket price of shares issued in IPOs.

The green shoe option is a post listing price stabilizing mechanism, by which the company

intends to ensure that the share’s price on the stock exchanges does not fall below the issue

price.

The term “Green shoe Option” derived its name from the company in US which exercised

this mechanism for the first time.

28

In a book built issue, the issuer company and the merchant bank solicit indications of interest

from institutional investors in order to construct a demand curve. Book building is a process

of price discovery. The issuer discloses a price band or floor price before the opening of the

issue of the securities offered.

It is at this stage that the issuer company and the merchant bank decide whether to avail of

the GSO. This decision is taken after considering various factors such as the level of

confidence of the issuer company and the merchant bank about the price band determined by

them, the expectation regarding investors’ response, the market sentiment, and so on.

In order to manage the book building process, the issuer company designates one merchant

bank as the book running lead manager (BRLM) or book runner. Once the issue is declared

open, the BRLM accepts bids from investors. On the closing of the issue, the company, in

consultation with the merchant bank, decides the cut off price, or the price at which shares

will be allotted to the investors.

The issue price is not set according to any explicit rule; rather, it is based on the interpretation

of the investors’ indications of interest that is made by the Issuer Company and merchant

bank. The price is set at a level at which demand exceeds supply, and the shares are allocated

to the bidders at this price. Thus, the book building procedure resembles an auction, with

some important differences. The most important difference is that the pricing and allocation

rules are not announced early on, but are left to the discretion of the issuer company and the

merchant bank.

Rationale for including GSOs in IPO Issue:

Investors in an IPO could be anxious about various things: before the allotment of shares,

they are generally anxious whether they will get the shares; after they get the shares, they

worry about how the secondary market will react in the period immediately following the day

of listing.

Will the market open above the issue price or will it open below? If the market price

immediately following the listing day is higher than the issue price, it implies that the issue

price was underestimated, a phenomenon known as underpricing. On the other hand, if the

market price immediately following the listing day is lower than the issue price, it implies

that the issue price was over-estimated, a phenomenon known as overpricing. From the

perspective of an investor, IPO underpricing as well as overpricing are worrisome.

29

Underpricing may appear beneficial to those investors who were actually allocated shares in

an IPO. Overpricing, which results in the shares selling at a price lower than the issue price,

may cause panic among the most vulnerable investors, the retail individual investors (RIIs).

The inclusion of GSOs in the IPO issue of an issuer company can be justified on five

grounds: (1) avoiding panic among RIIs, (2) signaling confidence in the IPO price, (3)

protecting the reputation of merchant banks, (4) enhancing liquidity in the aftermarket, and

(5)favoring preferred clients.

(1) Avoiding panic among small investors

Small investors anywhere are likely to panic if the price of the shares they received in an IPO

were to fall immediately after listing. In their panic, they may try to sell their shares at low

prices, and may exit the capital markets altogether in some cases. The price may fall in the

immediate aftermarket because of the activities of flippers. Flippers, also known as stags in

stock market jargon, are investors who bid for shares only to sell them on the listing day,

hoping to make a huge profit in a short period.

In India, the SEBI is in favour of encouraging participation of retail investors in the primary

market for securities. Towards this end, it has taken various measures over the last few years.

The minimum investment limit for RIIs has been raised to INR 2 lakhs. The minimum offer

to public has been hiked to 25% of the issue; in an issue made through the book building

process, a minimum of 35% of the net offer to public category is required to be made to RIIs.

It is in this context that the SEBI introduced GSOs to protect RIIs, and to reassure them that

their interests would be taken care of by the issuer company, the merchant bankers, and the

regulator.

(2) Signaling confidence

The price at which the shares are issued in a book-built IPO is determined in two stages. In

the first stage, the issuer company and the merchant banker decide the price band within

which investors can bid or the floor price above which the investors are required to bid. This

price band or floor price is decided based on various qualitative and quantitative factors. In

the second stage, the issuer company and the merchant bank that are designated as the book

running lead manager (BRLM) decide the issue price after receiving bids from the investors.

Thus, there is a lot of subjectivity in the IPO pricing.

30

Many investors, especially small investors, are usually unable to make up their minds

whether to bid or not to bid for the shares at the stated price band, as they stand to lose if the

price turns out to be unsustainable. In this context, the issuer company and the merchant bank

can signal confidence in the issue by availing of the GSO mechanism. By so doing, the

merchant banks back up their claims of the price being fair by proposing to buy shares from

the secondary market if their claims were to be disproved and the aftermarket price were to

fall below the issue price. By offering price support, the merchant bank signals that the issue

is not overpriced; therefore, investors would be willing to buy at the offer price. Such a signal

is expected to boost the confidence of investors in participating in the primary markets.

(3) Merchant bank reputation

Merchant banks may prevail upon the issuers to avail of GSOs in their IPO issue to retain or

enhance their reputation. Given that the merchant bank plays an important role in arriving at

the price band or the floor price; they risk facing the ire of the investors if the share trades at a

price below the issue price in the immediate aftermarket. Thus, the reputation of a merchant

bank may be affected if an issue managed by them has a bad opening. The market share of

merchant banks (underwriters) fell significantly after the issues managed by them fared

poorly in the aftermarket. Merchant banks can prevent such a loss of reputation by availing of

the GSO mechanism, and trying to prop up the price of the share if it were to fall below the

issue price in the immediate aftermarket.

(4) Liquidity

Investors expect the market to stay liquid and transparent when trading begins in the

secondary market. Liquidity is defined as the ease with which shares can be traded at prices

that reflect the underlying demand and supply conditions. Green shoe options help improve

the liquidity of markets in two ways. Firstly, due to the over-allotment of shares, more shares

would go to the investors than it would have if GSOs were not present. The larger the number

of shares in the hands of the investors, the greater the possibility there these shares will be

traded in the secondary market. Secondly, if the aftermarket prices of the shares were to go

below the issue price during the GSO window period, the stabilizing agent would buy shares

from the market, thereby enhancing liquidity.

31

(5) Favoring preferred investors

In some jurisdictions (especially in the US) merchant banks avail of the GSO so that they can

issue shares to some of their preferred clients, who often happen to be institutional investors.

During the planning phase of IPOs, merchant banks go on a road show, meeting institutional

investors and other sophisticated investors, in order to gauge the potential demand for the

IPO and the price at which the shares could be sold. The merchant bank then makes a

favorable allotment to such institutional investors.

The process of GSOs in India:

The GSO process involves the appointment of a merchant bank as a stabilizing agent (SA) by

the issuer company; the SA enters into an agreement with promoters or other pre-issue

shareholders to ‘borrow’ a certain number of shares from them. Pre-issue shareholders are

usually the promoters or other individuals who were already holding shares in the company at

the time of the IPO. The details of such an agreement have to be disclosed in the offer

document. The extent of borrowed shares is restricted to 15% of the issue size.

The issuer company needs to pass a shareholder resolution for availing the GSO, for

appointing a stabilizing agent, and for carrying out the market stabilizing activity in the

aftermarket. The shares borrowed from the pre-issue shareholders are allotted together with

the shares being issued in the IPO; thus, the SA obtains the funds that need to be deposited in

a separate bank account, known as the GSO bank account. In case the market price of the

shares falls below the issue price during the GSO window period, the SA can buy shares from

the market with these funds. The GSO window period refers to 30 calendar days from the

date of listing, during which time the stabilizing activity can be carried out. The shares

bought by the SA are kept in a separate dematerialized account, known as the GSO demat

account. It is implied that the SA would sell the shares that were bought previously, if the

market price rises significantly. In this regard, the SA has full discretion about the quantity,

price, and timing of buying or selling. This stabilizing activity is allowed for a maximum

period of 30 days after listing.

At the end of the stabilization period, the SA would be left with a balance of cash, or shares,

or both. If the aftermarket price did not fall below the issue price, the SA would not have

engaged in any trading activity. In such cases, the SA would be left with cash proceeds from

the over-allotment, which would be handed over to the issuer company. The company would

32

then issue fresh shares to the promoters or other pre-issue shareholders from whom the SA

had initially borrowed the shares.

If the aftermarket price of the shares fell below the issue price during the first 30 days after

listing, the SA would buy shares from the market with the cash at its disposal. This activity

would result in the SA having some shares in the GSO demat account, and/or cash. If the SA

is left with the exact number of shares that it had borrowed from the promoters or other pre

issue shareholders, it would return the same to them. However, if the number of shares at the

disposal of the SA is less than the number of borrowed shares, it would pay the issuer

company to allot new shares to fill the shortfall. It is also possible that the SA is left with

more shares than it had borrowed. The SEBI (ICDR) Regulations, 2009 (henceforward

referred to as the SEBI Regulations) are silent about this possibility; it is expected that the SA

would conduct its buying and selling program in a manner that would ensure that such an

eventuality did not occur. If any cash is left with the SA, this has to be transferred to the

Investor Education and Protection Fund (IEPF) set up by the SEBI, after deducting

reasonable expenses incurred by the SA.

A notable feature of the regulation of GSOs in India is the invocation of the doctrine of unjust

enrichment; according to this, neither the issuer company nor the promoters or pre-issue

shareholders can derive any profit from the stabilizing activity. The profits, if any, would be

used for protecting and educating investors. Another notable feature of the regulation of

GSOs in India is that it is optional; it is left to the discretion of the issuer-company.

Apart from GSOs, the SEBI Regulations also contain an enabling provision for issuer

companies to provide for a safety-net arrangement. The idea of a safety net is as follows: if

the shares trade at a price below the issue price in the period immediately following the

listing date, a specially designated entity would buy the shares from the investors. The issuer

company and the merchant bank are required to ascertain the financial capacity of the

designated entity, and make requisite disclosures in the offer document.

The safety-net arrangement is solely intended to protect the interests of small investors. Thus,

the regulations provide that such an arrangement should provide for an offer to purchase up

to a maximum of 1000 shares from the “original resident retail individual allottees at the

issue price within a period of six months from the last date of dispatch of security certificates

or credit of demat account.”

33

Disclosure MCX(Company1 ) Speciality

Restaurant(Company 2)

Green shoe option No such contract was

entered into between the

company and the

underwriters.

No such contract was

entered into between the

company and the

underwriters.

Disclosure 12: Underwriting

The procedure by which an underwriter brings a new security issue to the investing public in

an offering is called underwriting. In such a case, the underwriter will guarantee a certain

price for a certain number of securities to the party that is issuing the security (in exchange

for a fee). Thus, the issuer is secure that they will raise a certain minimum from the issue,

while the underwriter bears the risk of the issue.

When a company decides to make an issue of securities to the public through book-building,

the entire net offer should be compulsorily underwritten by the book runner/syndicate

members.

Definition of 'Underwriter'

A company or other entity that administers the public issuance and distribution of securities

from a corporation or other issuing body is an underwriter. An underwriter works closely

with the issuing body to determine the offering price of the securities, buys them from the

issuer and sells them to investors via the underwriter's distribution network.

The word "underwriter" is said to have come from the practice of having each risk-taker write

his or her name under the total amount of risk that he or she was willing to accept at a

specified premium. In a way, this is still true today, as new issues are usually brought to

market by an underwriting syndicate in which each firm takes the responsibility (and risk) of

selling its specific allotment.

34

Underwriters generally receive underwriting fees from their issuing clients, but they also

usually earn profits when selling the underwritten shares to investors. However, underwriters

assume the responsibility of distributing a securities issue to the public. If they can't sell all of

the securities at the specified offering price, they may be forced to sell the securities for less

than they paid for them, or retain the securities themselves.

TYPES OF UNDERWRITING:-

1. Firm Underwriting

Generally, underwriters agree to buy such number of shares or debentures which are

not to be taken up by the public but sometimes, the underwriting agreement provides

that the underwriters will purchase certain shares (as greed upon) themselves. Such an

agreement of outright purchase of securities with the underwriters is called Firm

Underwriting. This liability is in addition to the shares not taken up by the public.

Such an agreement creates confidence in the minds of investing public.

2. Sub-Underwriting/ Partial Underwriting:

In case of large issue, an underwriter does not wish to carry the whole risk on his

shoulders; he may enter into the contract with other underwriters to share the risk.

This contract entered into between the main underwriter and the other underwrites is

called Sub-underwriting and the other underwriters are called Sub-underwriters. The

company is nowhere in the picture. Sub-underwriters are offered a commission

slightly below the underwriting commission.

3. Syndicate Underwriting:

This is an underwriting agreement between the issuing company and 2-3 or more

firms of underwriters to underwriters a large issue. They agree with the company to

share the joint responsibility in an agreed ratio. Some-times, these underwriters to the

contract form a new consortium or syndicate. Such a system is called Syndicate

Underwriting.

35

Disclosure 13: Financial Statements

A financial statement (or financial report) is a formal record of the financial activities of a

business, person, or other entity. For a business enterprise, all the relevant financial

information, presented in a structured manner and in a form easy to understand, are called the

financial statements. They typically include four basic financial statements, accompanied by

a management discussion and analysis:

1. Statement of Financial Position: It also referred to as a balance sheet, reports on a

company's assets, liabilities, and ownership equity at a given point in time.

2. Statement of Comprehensive Income: It also referred to as Profit and Loss statement

(or a "P&L"), reports on a company's income, expenses, and profits over a period of

time. A Profit & Loss statement provides information on the operation of the

enterprise. These include sale and the various expenses incurred during the processing

state.

3. Statement of Changes in Equity: It explains the changes of the company's equity

throughout the reporting period

4. Statement of cash flows: It reports on a company's cash flow activities, particularly its

operating, investing and financing activities.

The Prospectus should disclose:

A. As per 6.10.2.7 (d),details of ‘Other Income’ in all cases where such income (net of

related expenses) exceeds 20% of the net profit before tax, including:

(i) The sources and other particulars of such income; and

(ii) An indication as to whether such income is recurring or non-recurring, or has

arisen out of business activities/other than the normal business activities.

B. Profits and losses in accordance with clauses 6.10.2.2 or 6.10.2.3(a), depending on

whether the company has any subsidiaries or not.

Cash Flow Statement (CFS)

36

The cash flow statement is mandatory part of a company’s financial reports. It records the

amounts of cash and cash equivalents entering and leaving a company. The CFS allows

investors to understand how a company’s operations are running, where its money is coming

from and how it is being spent.

The cash flow statement is distinct from the income statement and balance sheet because it

does not include the amount of future incoming and outgoing cash has been recorded on

credit. Therefore, cash is not the same as net income, which, on the income statement and

balance sheet, includes cash sales and sales made on credit.

The Cash Flow Statement is divided into three distinct sections:

(1) Cash Flows from Operating Activities: Here you'll find how much money the

company received from its actual business operations. This does not include cash

received from other sources, such as investments. To calculate the cash flow from

operating activities, the company starts with net income (from the income statement),

then adds back in any depreciation expenses, deferred taxes, accounts payable and

accounts receivables, and one-time charges .

(2) Cash Flows from Investing Activities: This section shows how much money the

company has received (or lost) from its investing activities. It includes money that the

company has made (or lost) by investing its excess cash in different investments

(stocks, bonds, etc), money the company has made (or lost) from buying or selling

subsidiaries, and all the money the company has spent on its physical property, such

as plants and equipment.

(3) Cash Flow from Financing Activities: This is where the company reports the money

that it took in and paid out in order to finance its activities. In other words, it

calculates how much money the company spent or received from its stocks and bonds.

This includes any dividend payments that the company made to its shareholders, any

money that it made by selling new shares of stock to the public, any money it spent

buying back shares of its stock from the public, any money it borrowed, and any

money it used to repay money it had previously borrowed.

Profit and Loss Statement (P & L)

37

It is a financial statement that summarizes the revenues, costs and expenses incurred during a

specific period of time - usually a fiscal quarter or year. These records provide information

that shows the ability of a company to generate profit by increasing revenue and reducing

costs. The P&L statement is also known as a "statement of profit and loss", an "income

statement" or an "income and expense statement".

Disclosure MCX(Company1 ) Speciality

Restaurant(Company2)

Other Income

The company has included a

separate annexure briefing in

detail the sources of all such

other income and whether

such income is recurring or

non-recurring in nature.

The company has included

the summary statement of

other income.

However, as the amount of

other income is not

exceeding 20% of the Net

Profit Before Tax, it is not a

necessity for the company to

mention the sources of such

income nor does it have to

mention whether such

income is recurring or non-

recurring in nature.

Disclosure MCX(Company1 ) Speciality

Restaurant(Company2)

Profit and Loss Statement

The company has included

the standalone and

consolidated statements of

its profits and losses.

The company has included

the standalone statements of

its profits and losses.

38

Disclosure 14: Risk Factors

The disclosure of the issuer's management to give its view on the Internal and external risks

faced by the company. Here, the company also makes a note on the forward-looking

statements. This information is disclosed in the initial pages of the document and it is also

clearly disclosed in the abridged prospectus. It is generally advised that the investors should

go through all the risk factors of the company before making an investment decision. Risk

factors are an important part of a company’s disclosure documents. They caution potential

and existing investors about specific, material risks that should be considered when making

an investment decision.

Case Study

Multi Commodity Exchange Of India Limited

Internal Risks

1. They are subject to certain risks relating to the operation of an electronic trading

platform and may be unable to keep up with rapid technological changes. Any

failure to keep up with industry standards in technology and respond to participant

preferences could cause their market share to decline, which could have an adverse

effect on their business and operations.

Exchange markets are characterised by rapid technological change, change in usage

patterns, change in client preferences, frequent product and service introductions and the

emergence of new industry standards and practices. These changes could render their

existing technology uncompetitive or obsolete. As all trading on their Exchange is

conducted exclusively on an electronic basis, they are heavily dependent on their

information technology system and the technology they use for their electronic trading

platform.

In the last three fiscals, they have experienced six instances of technical problems during

trading hours. These technical problems were due to issues with, among other things,

their network, hardware and software that caused trading halts ranging between 30

39

minutes and 90 minutes, during which their team detected and fixed the error and

restarted the trading system. Any future instances of technical problems may adversely

affect their business and operations.

Increasing the trading volumes on their trading platforms, as well as their ability to

continue to grow their business, will depend, in part, on their ability to:

increase the number of devices, such as trader work stations and other

connectivity devices capable of sending orders to their electronic trading platform;

enhance their existing services and maintain and improve the functionality and

reliability of their electronic platform, in particular, reducing network downtime

or disruptions;

develop or license new technologies that address the increasingly sophisticated

and varied needs of their members;

increase capacity to cope with increasing trading volume on their online platform

during peak trading hours or unusual market volatility;

anticipate and respond to technological advances or service offerings by

competitors and emerging industry practices on a cost-effective and timely basis;

continue to attract and retain highly skilled technology staff to maintain and

develop their existing technology and to adapt to and manage emerging

technologies;

develop new services and technology that address the increasingly sophisticated

and varied needs of their existing and prospective clients; and

respond to failure of systems due to power or telecommunications failure, acts of

God, war or terrorism, human error, natural disasters, fire, sabotage, hardware or

software malfunctions or defects, computer viruses, acts of vandalism or similar

events.

They cannot assure you that they will be able to successfully implement new technologies

or adapt their proprietary technology to their members’ requirements or emerging

industry standards in a timely and cost effective manner, or at all. Any failure to keep up

with industry standards in technology and respond to participant preferences could cause

their market share to decline, which could have an adverse effect on their business and

results of operations.

40

2. They could be harmed by employee misconduct or errors that are difficult to detect

and any such incidences could adversely affect their financial condition, results of

operations and reputation.

Employee misconduct or errors could exposethemto business risks or losses, including

regulatory sanctions and serious harm to their reputation. Such employee misconduct

include bindingthemto transactions that exceed authorised limits that present

unacceptable risks to us, hiding unauthorised or unsuccessful activities and improper use

of confidential information. It is not always possible to detect or deter misconduct, and

the precautions they take to prevent and detect such activity may not be effective in all

cases. Their employees and agents may also commit errors that could subjectthemto

claims and proceedings for alleged negligence, as well as regulatory actions in such case,

their business, financial condition, results of operations and reputation could be adversely

affected.

3. Their inability to renew or maintain their statutory and regulatory permissions and

approvals in connection with trading of commodities and operation of their business

would adversely affect their operations and profitability.

They are required to obtain and maintain various statutory and regulatory permissions and

approvals for the trading of commodities on their exchange and operating their business.

In the future, they will be required to renew such permissions and approvals and obtain

new permissions and approvals for trading of commodities. While they believe that they

will be able to renew or obtain such permissions and approvals as and when required,

there can be no assurance that the relevant authorities will issue any such permissions or

approvals in the timeframe anticipated bythemor at all. Failure bythemto renew, maintain

or obtain the required permissions or approvals may result in the interruption of the

trading of commodities and may subsequently have a material adverse effect on their

business, financial condition and results of operations.

41

4. They depend on their executive officers and other key personnel, and their business

may be adversely affected if they fail to retain these professionals or attract new

ones.

Their future success depends in large part upon the continued service of their executive

officers, as well as various key management, technical and trading operations personnel.

Some of these individuals have significant experience in the commodities trading industry

and financial services markets and possess skills and understanding of how various

businesses in their industry operate. The loss of service of their executive officers and key

managerial personnel could have an adverse effect on their business, financial condition

and results of operations.

Their future success also depends, in significant part, upon their ability to continue to

recruit and retain highly skilled and specialised individuals as employees. The level of

competition in their industry for people with these skills is intense. If any of their key

personnel or other professionals were to leave, they cannot assure you that they would be

able to replace these key personnel in a timely manner. Significant losses of key

personnel, particularly to their competitors, could have an adverse effect on their

business, financial condition and results of operations.

5. They do not own several properties used by them for their operations. Any

termination of the relevant lease or leave and license agreements in connection with

such properties or their failure to renew those agreements could adversely affect

their operations.

Currently, five of the six properties used by them for their operations are not owned by

them. Further, the lease on one of these five properties is in the process of being renewed.

Any termination of the lease or leave and licenses in connection with such properties

which are not owned by them or their failure to renew the same and upon favourable

conditions, in a timely manner or at all could adversely affect their operations.

42

External Risks

1. Their future results of operations are difficult to predict and are subject to

fluctuations caused by various factors beyond their control.

Their results of operations may fluctuate in the future due to a number of factors, many of

which are beyond their control. As such, their results of operations during any fiscal and

from period to period are difficult to predict and their historical results of operations in

any particular period may not be an indication of their future performance. Their business

and results of operations may be affected by the following factors:

real and perceived supply and demand imbalances in the underlying commodities

economic downturns or stagnant economic growth in Indian and global markets

a decrease in demand for commodities and futures in the Indian and global

markets

an increase in prevailing interest rates in India

competition from global and Indian commodity exchanges

fluctuations in the value of and returns from investment instruments in which they

invest their surplus cash and funds

changes in government policies affecting the commodities and futures industry in

India; and

accidents or natural disasters

Due to the above factors, you should not rely on past performance to predict their future

performance. An occurrence of any of the above factors may adversely affect their

business and results of operations, which may vary significantly from the expectations of

their shareholders, market analysts and the investing public.

2. They are subject to risks arising from exchange rate fluctuations.

While most of their expenditure, as well as their accounts as a whole, are denominated in

Indian Rupees some of their expenditures are denominated in foreign currencies. As a

result, fluctuations in foreign exchange rates, in particular the exchange rate of U.S.

Dollars for Indian Rupees, may affect their results of operation. They do not currently

hedge their foreign currency exchange rate exposure.

Speciality Restaurants Limited

43

Internal Risks

1. Their ability to maintain their competitive position and to implement their business

strategy is dependent to a significant extent on their senior management team and

other key personnel.

They depend on their current senior management for the implementation of their strategy

and the operation of their day-to-day activities. Furthermore, relationships of members of

senior management are important to the conduct of their business. Competition for

experienced management personnel in the fine dining sector is intense, the pool of

qualified candidates is limited, and they may not be able to retain the services of their

senior executives or key personnel or attract and retain high-quality senior executives or

key personnel in the future. Consequently, there can be no assurance that these

individuals will continue to make their services available to them in the future. Any

significant loss of senior management or key personnel could materially and adversely

affect their business, financial condition, results of operations and prospects.

In addition, if any member of their senior management team or any of their other key

personnel joins a competitor or forms a competing company, they may consequently lose

their proprietary know-how including pricing of their menu items, new restaurant

launches and pricing relating to the procurement of raw material. Their key management

personnel have entered into confidentiality and/or non-competition agreements with us.

However, if any disputes arise between any of their key management personnel and us, it

may be difficult for them to enforce these agreements.

2. General and industry-specific economic fluctuations could adversely affect their

business, financial condition, results of operations and prospects.

Their business, financial condition, results of operations and prospects depend on a

variety of general economic and industry-specific factors. The fine dining sector of the

restaurant industry is highly fragmented and competitive and is affected by changes in

national, regional and local economic conditions, consumer credit, taxation,

unemployment and changing demographic trends. In the second half of 2007, they

experienced a slowdown due to the downturn experienced by global financial markets in

that period which continued and substantially increased in 2008 and continued to some

44

extent in the first half of 2009. In the second half of 2011, they again experienced a

slowdown due to the domestic economic conditions in India and tightened credit

conditions experienced globally as a result of the Eurozone debt crisis. In periods of

economic uncertainty, consumers tend to decrease their discretionary, restaurant

spending, which may materially and adversely affect their business, financial condition,

results of operations and prospects.

The performance of individual restaurants may also be adversely affected by factors such

as changing guest traffic patterns and the establishment of nearby competing restaurants.

In response to such developments, they may need to increase their marketing efforts,

adjust their pricing or take other actions, which may adversely affect their results of

operations. These factors are generally beyond their control, and their ability to manage

the risks they present is important to their operations. Reduced guest traffic in their

restaurants for any reason, increased costs of doing business or reduced prices for their

products as a result of these or other considerations could adversely affect their business,

financial condition, results of operations and prospects.

3. Their agreement with Pepsi Foods Private Limited has expired, and any failure to

enter into a new agreement may have an adverse impact on their business, results of

operations and financial condition.

Their agreement with Pepsi Foods Private Limited (“Pepsi”) under which their Company

had agreed to purchase and Pepsi had agreed to provide Pepsi beverages as their preferred

cold beverage supplier at their restaurants during the term of the agreement expired on

March 31, 2012. Under this agreement, Pepsi paid a specified amount to them annually

for the purpose of carrying out joint marketing and promotional activities. A new

agreement with Pepsi is currently under negotiation. If they are unable to enter into a new

agreement with Pepsi, they may continue to incur a higher cost in relation to beverages

sold as well as a decrease in their marketing budget which may have an adverse impact on

their results of operations and financial condition.

4. Their inability to identify, open and operate new restaurant locations profitably may

adversely affect their business.

45

Identifying and securing the best restaurant locations is essential to their business. Good

location is generally one of the most important elements for restaurant success. Their

business development strategy depends in part on their ability to assess locations and

successfully open restaurants in new and existing markets. Desirable locations may be

limited for many reasons, including the general lack of prime real estate in the markets in

which they compete and restrictions in some of these markets on the use of certain

locations for restaurants. As a result, desirable locations for new restaurants or for the

relocation of existing restaurants may not be available at an acceptable cost or on

acceptable terms or at all. Further, they may not correctly identify prime locations that

can support the restaurants they open. For example, in April 2011, they closed a Mainland

China restaurant in Delhi because it was located in a mall that was not receiving high

guest traffic. Certain additional factors, some of which are beyond their control, that

could adversely affect their new restaurants include the availability of adequate financing

and fit-out costs.

In addition, they have in the past and may in the future experience delays or higher-than-

anticipated costs in opening new restaurants. They may also experience delays or fail to

obtain required government approvals or licenses and permits to operate their corporate

restaurants. Any such delays or failures to obtain relevant government approvals and/or

licenses and permits can have an adverse impact on their revenues, as they may start

incurring lease costs when they run past their fit out period under the terms of their lease

agreements. They may also start incurring significant employee-related expenses, as they

typically relocate their restaurant management and staff to new restaurants three months

in advance of a new restaurant opening.

They depend in large part on their ability to operate new restaurants on a profitable basis.

They typically incur a significant amount of start-up costs including architecture and

design fees and construction costs. Any cost escalations can lead to an increase in their

capital expenditure and delay their breakeven period. They cannot guarantee that they can

recoup their costs and operate new restaurants profitably in the short-term or at all.

Furthermore, they cannot guarantee that any new restaurant they open will obtain

operating results similar to those of their existing restaurants. In addition, if they open

new restaurants in their existing geographic locations, the sales performance and guest

traffic of their existing restaurants near new restaurants may decline as a result or the new

restaurants may not yield the desired results. This may in turn, adversely affect their

46

ability to achieve the anticipated growth in revenue and profitability of their entire

restaurant business.

5. Outbreaks of disease affecting their supply chain could adversely affect their

business, financial condition, results of operations and prospects.

Outbreaks of disease affecting their supplies of poultry and fish products could

significantly affect their ability to purchase such commodities, their operations and their

costs of doing business. Among the diseases that could affect their supplies are highly

contagious diseases that may spread rapidly through countries and regions. Even in

countries with high veterinary standards, pigs sometimes contract foot and mouth disease

and cattle “mad cow disease” (bovine spongiform encephalopathy).

In addition, avian influenza is a highly contagious viral disease that affects poultry and

that has since 2005 spread rapidly in Asia. They select poultry suppliers who monitor

their supply for the presence of avian influenza and other diseases. They also perform

independent tests when there is a high risk of infection in the regions in which their

suppliers operate, when they change providers (or their providers change production

facilities) or in case of any guest complaints. Although avian influenza has not been

detected in the production facilities of any of their suppliers, there can be no guarantee

that it will not affect their suppliers in the future, and there can be no assurance that avian

influenza will not spread within India, including the regions in which their suppliers’

production facilities are located. If their third-party suppliers’ poultry populations were to

be infected, they may not be able to locate additional suppliers of poultry products or may

be able to obtain poultry only at greatly increased prices that could adversely affect their

results of operations.

Any outbreak of disease affecting their supply chain, or even one that does not affect their

suppliers, may also create adverse publicity regarding their products, resulting in

declining demand. Because they depend on third-party suppliers for these commodities,

the risk of purchasing affected products is largely beyond their control. As a result of

these and other factors, any outbreak of disease, or the possibility of an outbreak of

disease, affecting their supply chain could adversely affect their business, financial

condition, results of operations and prospects.

47

6. Their use of imported foodstuffs and equipment exposes them to the risk of the

imposition or increase of tariffs, duties, quotas and other limitations on imported

foodstuffs.

They depend to a certain extent on ingredients and equipment that are imported from

China by local third party suppliers in Mumbai from whom they purchase such

ingredients and equipment. They may in future, directly import certain ingredients or

additional items from China or other countries. India has in place import quotas and

tariffs on food products imported from China, which generally increases prices for

imported products. They have no control over the imposition of such measures and such

restrictions may increase in the future, thereby increasing the costs of these commodities

and negatively affecting their results of operations.

In addition, Indian authorities may ban imports of foodstuffs into India, as a result of

health or other considerations. These and other measures that reduce the supply of

imported foodstuffs available on global markets, or the supply available in India, may

cause prices for certain of their ingredients to increase, thereby increasing their costs. To

the extent that they are not able to increase the price of the products sold in their

restaurants without negatively affecting demand or to adjust their menu offerings to

compensate for higher costs of ingredients, the imposition or continuation of such

measures could adversely affect their business, financial condition, results of operations

and prospects.

7. They face risks associated with the expansion of their business in Indian cities and

other locations as well as into new restaurant formats.

They currently plan to expand their operations in new locations in existing as well as new

Metros and Tier I cities, and opportunistically, in Tier II cities in India. They may also

opportunistically expand in certain international locations. These locations and cities will

be new operating environments for us, located, in some instances, a great distance from

their Mumbai headquarters. Although they seek to supervise these operations by use of

their management teams in certain designated hub cities in which they operate that are

relatively nearby, they may have less control over their activities and these businesses

may face more uncertainties with respect to their operational needs. In future, they may

launch new restaurant formats and develop additional brands to cater to different

48

segments of the population. For example, they are in the process of developing an all day

Italian cafe concept to cater to the 18 – 30 age groups. They do not have substantial

experience in such new restaurant concepts and brands. They may face challenges

resulting in substantially greater costs as compared to their existing restaurants, restaurant

formats and brands when entering new markets or new restaurant concepts and brands,

such challenges include identifying and hiring experienced personnel, selecting and

securing the best restaurant locations in light of the local real estate market and obtaining

relevant regulatory approvals. They may face problems in establishing a reliable supply

chain and raw materials may be available only at higher-than-anticipated costs, if at all. In

addition, they may face additional challenges due to the unfamiliarity of consumers in the

new markets or new restaurant concepts and brands, with their brands and, in some cases,

their cuisines. They may also face competition from existing restaurant operators already

established in these new locations and cities, and they may be able to respond more

promptly to changes in guest needs and preferences. New markets or new restaurant

concepts and brands may also have different competitive conditions, consumer tastes and

discretionary spending patterns than their existing markets or their existing restaurant

concepts and brands.

External Risks

1. A slowdown in economic growth in India could cause their business to suffer.

Their performance and the growth of their business are necessarily dependent on the

health of the overall Indian economy. As a result, any slowdown in the Indian economy

could adversely affect their business. India’s economy could be adversely affected by a

general rise in interest rates, inflation, natural calamities, such as earthquakes, tsunamis,

floods and drought, increases in commodity and energy prices, and protectionist efforts in

other countries or various other factors. In addition, the Indian economy is in a state of

transition. It is difficult to gauge the impact of these fundamental economic changes on

their business. Any slowdown in the Indian economy could adversely affect their

business, results of operations, financial condition and prospects.

2. Their ability to raise foreign capital may be constrained by Indian law.

49

As an Indian company, they are subject to exchange controls that regulate borrowing in

foreign currencies. Such regulatory restrictions limit their financing sources for their

business operations or acquisitions and other strategic transactions, and consequently

could constrain their ability to obtain financings on competitive terms and refinance

existing indebtedness. In addition, they cannot assure you that the required approvals will

be granted tothemwithout onerous conditions, or at all.

3. Regional hostilities, terrorist attacks or social unrest in India and South Asia or

other countries, could adversely affect the financial markets and the trading price of

the Equity Shares could decrease.

Terrorist attacks and other acts of violence or war including those involving India, the

United States or other countries, may adversely affect the Indian and worldwide financial

markets. On November 26, 2008, terrorists staged a coordinated attack on several

prominent international hotels and various other locations in the financial centre of

Mumbai. Such terrorist acts may result in a loss of business confidence and have other

consequences that could adversely affect their business, results of operations, financial

condition and prospects. Increased volatility in the financial markets, including economic

recession, can have an adverse impact on the economies of India and other countries.

In addition, South Asia has from time to time experienced instances of civil unrest and

hostilities among neighbouring countries. Present relations between India and certain of

its neighbouring countries continue to be fragile because of issues such as terrorism,

armament and other political and social matters. Increased tensions and hostilities may

occur in the future and on a wider scale. Events of this nature in the future, as well as

social and civil unrest within other countries in Asia, could influence the Indian economy

by disrupting communications and making travel and transportation more difficult.

India has also experienced social unrest, communal disturbances and riots in some parts

of the country during recent times. Such political and social tensions could create a

perception that investments in Indian companies involve greater degrees of risk. These

hostilities and tensions could lead to political or economic instability in India and a

possible adverse affect on the Indian economy, their business, future financial

performance and the trading price of the Equity Shares.

50

Disclosure 15: Management and Other Disclosures

i. Board of Directors.

ii. Compensation of Managing Directors/ Whole time Directors.

iii. Compliance with Corporate Governance requirements.

iv. Shareholding of Directors, including details of qualification shares held by them.

v. Interest of the Directors.

vi. Change, if any, in the directors in last three years and reasons thereof, wherever

applicable.

vii. Management Organisation Structure.

viii. Details regarding Key Management Personnel.

ix. Employees.

x. Disclosures regarding employees stock option scheme/ employees stock purchase

scheme of the issuer company, if any, as required by the Guidelines or Regulations of

the Board relating to Employee Stock Option Scheme and Employee Stock Purchase

Scheme.

xi. Payment or Benefit to Officers of the Company (non-salary related).

Promoters/ Principal Shareholders:

i. Details about promoters who are individuals

ii. Details about promoters which are companies

iii. Common pursuits

iv. Interest of promoters

v. Payment or benefit to promoters of the issuer company

vi. Related party transactions as per the Financial Statements

Case Study

Multi Commodity Exchange Of India Limited

Shareholding of Directors:

51

Their Articles do not require their Directors to hold any qualification shares in the Company.

The following is the shareholding of the Directors in the Company as of the date of this Red

Herring Prospectus:

Sr. No Name of Director Number of Equity Shares

1. Venkat Chary 12,500

2. V. Hariharan 541,032

3. Joseph Massey 31,250

4. Lambertus Rutten 8,750

5. P.G. Kakodkar 1,875

6. Paras Ajmera 540,529

7. C. M. Maniar 1,250

8. Shvetal S. Vakil 1,250

Changes in Board of Directors in the last three years:

Name Date of

App./

Change/

Cessation

Reason for the Change

K. Venugopal Jan 10, 2012 Appointment as a nominee of SBI

B.Sriram Jan 10, 2012 Cessation due to withdrawal of nomination by SBI

P. Satish Dec 28, 2011 Appointment as a nominee of NABARD

S. Balan Dec 28, 2011 Cessation due to withdrawal of nomination by

NABARD

Usha Suresh Feb 14, 2011 Appointment as nominee of FMC

Anupam

Mishra

Feb 7, 2011 Cessation due to withdrawal of nomination by FMC

Ashima Goyal May 29, 2010 Appointment as nominee of FMC

K.T. Chacko May 29, 2010 Appointment as nominee of FMC

B. Sriram April 22,

2010

Appointment as nominee of the SBI

Anup Banerji April 22, Cessation due to withdrawal of nomination by SBI

52

2010

Ajit Ranade April 1, 2010 Cessation due to expiry of term of nomination by the

FMC

Prakash Apte April 1, 2010 Cessation due to expiry of term of nomination by the

FMC

S. Balan Sept 4, 2009 Appointment as nominee of NABARD

P. Satish Sept 4, 2009 Cessation due to withdrawal of nomination by

NABARD

R.M.

Premkumar

Aug 10, 2009 Appointment as nominee of FMC

Lambertus

Rutten

July 1, 2009 Change in designation as Managing Director and CEO

Joseph Massey July 1, 2009 Change in designation as Non- Executive Director

P. Satish May 20, 2009 Appointment as nominee of NABARD

R.

Balakrishnan

May 20, 2009 Cessation due to withdrawal of nomination by

NABARD

S. Narayan April 1, 2009 Cessation

Asha Das April 1, 2009 Cessation due to expiry of term of nomination by the

FMC

Speciality Restaurants Limited

Shareholding of Directors:

The shareholding of our Directors as of the date of filing this Prospectus is set forth below:

Name of Director Number of Equity Shares held

Anjan Chatterjee 16,529,905

Suchhanda Chatterjee 11,970,000

Indranil Ananda Chatterjee 19

Susim Mukul Datta Nil

Tara Sankar Bhattacharya Nil

Jyotin Mehta Nil

53

Dushyant Rajnikant Mehta Nil

Vishal Satinder Sood Nil

Changes in Board of Directors in the last three years:

Name Date of Appointment/

Change/ Cessation

Reason

Phiroz Savak Sadri August 18, 2009 Resignation

Dushyant Rajnikant Mehta August 18, 2009 Appointment

Ravi Chandra Adusumalli December 17, 2009 Resignation

Vishal Satinder Sood December 17, 2009 Appointment

Jayanta Chatterjee February 9, 2011 Resignation

Rajesh Dubey February 9, 2011 Resignation

Biswajit Mukhopadhyay February 9, 2011 Resignation

Indraneil Palit February 9, 2011 Resignation

Jyotin Mehta February 9, 2011 Appointment

Tara Sankar Bhattacharya February 9, 2011 Appointment

Susim Mukul Datta February 9, 2011 Appointment

Disclosure 16 : Dividend Policy:

The company needs to disclose its dividend policies. Following disclosures are expected:

1. Dividend policy of the Company

2. Rate of Dividend and Amount of Dividend paid for the last five financial years :

3. Information about changes, if any, in dividends announced and dividends paid and time gap between the dividends announced and dividends paid.

4. Information about Dividend Yield.

54

5. Taxation aspects of dividend distribution.

MCX:

MCX has paid dividends in past and hence has made the data regarding history of dividends available. The data is as follows:

Fiscal 2007 2008 2009 2010 2011

Face value of Equity Share

(per share) 10 5 5 5 10

Dividend on Equity Shares

(in Rs million) 857.64 234.62 205.29 203.99 254.99

Dividend rate (%) 220% 60% 50% 50% 50%

Dividend tax (in Rs million) 120.27 39.87 34.89 33.88 41.37

However, the amounts paid as dividends in the past are not necessarily indicative of our dividend amounts, if any payable or to be paid, or our dividend policy, in the future.

Speciality Restaurants:

Following were disclosures from Speciality Restaurents:

The declaration and payment of dividends will be recommended by our Board of Directors and approved by our shareholders, in their discretion, subject to the provisions of the Articles of Association of our Company and the Companies Act.

The dividend, if any, will depend on a number of factors, including but not limited to the earnings, capital requirements contractual restrictions and overall financial position of our Company. In addition, our ability to pay dividends may be impacted

55

by a number of factors, including restrictive covenants under the loan or financing arrangements we may enter into.

Our Company has no stated dividend policy and has not paid any dividend in the last five years.

PROPOSED CHANGES BY SEBI IN IPO PROCESS:Some of the major decisions likely to be approved by the SEBI board at its August 16

meeting are:

1. Halving the bidding period for public offerings to five days. So that the process

completes faster.

2. Making the object clause of prospectuses of issuing companies more specific.

In a book-build issue, general corporate expenses will not exceed 20% of the

estimated issue size. At present, issuers keep a large amount under general corporate

expenses to keep the issue size ambiguous. In case the issuer adds or deletes to the

object clause that changes the issue size by 20%, SEBI may ask the issuer to re-file

the draft RHP.

3. The regulator is planning to allow investors to apply for IPOs and FPOs online

ie. electronically, and use credit and debit cards for e-payment of application money.

4. The minimum application size for all investors is proposed to be increased to

INR 15,000. By doing so, SEBI intends to gratify more number of smaller applicants

in cases of oversubscribed issues. This would also ensure wider participation of retail

public in the primary market thereby improving liquidity of the stock.

5. ‘Safety net mechanism’ can be implemented where a certain portion of the

investment made by retail shareholders in the IPOs could be guaranteed for a fixed

period, which could be for six months, even if the shares’ value plunge below the IPO

allotment price during this time. Small retail investors would be compensated by the

promoters and other entities selling shares through IPOs in the event of the company’s

shares plunging below a certain threshold limit within six months of listing or the time

frame set by SEBI.

6. Tighter guidelines for large companies that don't have a track record of making

profits. Such companies, which seek to issue IPOs, will now sell a minimum of 75%

56

of the issue to qualified institutional bidders (Previously it was 50%). 15% shall be

allocated to non-institutional investors and 10% to retail investors.

7. The market regulator is also planning to send a strong signal to Indian

promoters to price issues conservatively. In case a new issue trades at 20% below

the offer price for three months, the promoters (not the company) will have to

mandatorily buy 5% of the issue size from original allotees whose application amount

is not more than Rs 50,000.

BIBLIOGRAPHY

WEBSITES:

o Sebi.gov.in

o Bse india.com

DOCUMENTS:

o Multi Commodity Exchange Of India Limited – Red Herring Propspectus

o Speciality Restaurants Limited - Prospectus

o Securities and Exchange Board of India (Disclosure and Investor Protection)

Guidelines, 2000

57