The recent SEBI ICDR amendments require the disclosure of all criminal proceedings involving senior management in the IPO offer documents.

“All criminal proceedings involving key managerial personnel and senior management of the issuer and also the actions by regulatory authorities and statutory authorities against such key managerial personnel and senior management of the issuer shall also be disclosed,” the amendment said.

Until now, there was no disclosure requirement for KMPs and senior management in this regard for IPOs.

Issuers are allowed to hit the market with IPOs even if the employees have stock appreciation rights, provided they are fully exercised. This will provide greater flexibility to companies with employee incentive schemes. Details of stock appreciation rights and the total number of equity shares resulting from the exercise of such SARs are required to be included in the draft offer document.

Repayment of existing loans that may have been availed for the purpose of capital expenditure are required to be considered towards determining the extent of issue proceeds proposed to be utilised for capital expenditure purposes.

Compliance officers

Compliance officers of the issuers have to necessarily be a company secretary. This is to ensure higher accountability and better monitoring of securities law compliance.

A company may voluntarily choose to provide proforma financial statements of acquisitions and divestments even if these are below the materiality threshold specified in the ICDR Regulations or if these have been completed prior to the latest period for which financial information is disclosed in the draft offer document or the offer document.

This threshold implies 20 per cent or more of the turnover, net worth or profit before tax of the latest consolidated financial statements of the company.