Amendments to Clause 31 of Equity Listing Agreement
CS.Alagar
As you are aware pursuant to 31 of the listing agreement listed companies are required to send six copies of annual report to SE’s in which their shares are listed.
In order to enhance the quality of financial reporting being done by listed companies, SEBI vide its circular No.CIR/CFD/DIL/7/2012 dated August 13, 2012 has decided to put in place a system to monitor the audit qualifications contained in the audit report accompanying the audited annual financial statements submitted by listed companies.
Accordingly, the Listed Companies are required to file Form A (unqualified / matter of emphasis i.e audit observation) or the Form B (Audit qualification) at the time of filing Audited Annual Reports to the SE’s under clause 31.
The forms shall be signed by a) Chief Executive Officer / Managing Director, b) Chief Financial Officer, c) Auditor and d) Chairman of the Audit Committee.
The declaration received in Form B shall be processed as below;
Ø Stock exchanges will conduct the preliminary scrutiny of the reports accompanied by Form B.
Ø In case the SE’s need opinion or further details, the cases may be referred to the SEBI - QARC (Qualified Audit Review Committee).
Ø In case QARC needs further clarity, the cases may be forwarded to ICAI – FRRB (Financial Reporting Review Board).
Ø If in the opinion of ICAI –FRRB / QARC the audit qualification is justified, SEBI may ask the company to restate the books of accounts and inform the shareholders by making an announcement to the Stock Exchanges. SEBI may also state that these should be reflected in the annual report of subsequent financial year.
Ø If ICAI –FRRB feels that the audit qualification is not justified it may ask the statutory auditor to provide necessary clarifications and may take action.
In this regard, clause 31 of the listing agreement has been amended and new clause 31A has been inserted.
Thanks & Regards
CS M Alagar,B.Com.,ACS,LLB
Director
Genicon Business Solutions Pvt.Ltd
Udhayam Royal Terrace
No.13/1, Basement
Tanjore Road
(Near Krishna Ghana Sabha)
T. Nagar
Chennai – 600 017
Tel:044 4208 8484
M :91-9003199947
Emaiil: ala...@geniconsolutions.com