ICAI’s Guidance Note on Reports in Company Prospectuses (Revised 2016)

Guidance Note on Reports in Company Prospectuses (Revised 2016) issued by ICAI

A. ICAI issues Revised (2016) Edition of ‘Guidance Note on Reports in Company Prospectuses’

The ICAI has released ‘Guidance Note on Reports in Company Prospectuses (Revised 2016)’ relating to reporting requirements relating to financial information to be included in the ‘prospectus/ offer documents’ such as DRHP, DLoF, PPD, etc. filed on or after 1 Jan. 2017.

As per ICAI this Guidance Note is issued for providing guidance to the practitioners in reporting requirements relating to financial information to be included in the prospectus in case of initial public offering (IPO). This Guidance Note, apart from the IPO, is also applicable to other type of filings for the issue of securities (equity shares, debentures and notes etc.) such as letter of offer (in case of right issue), placement document (in case of Qualified Institutional Buyers ‘QIBs’) etc. and filings for the issue of units under SEBI (Infrastructure Investment Trusts) Regulations, 2014, as amended and SEBI (Real Estate Investment Trusts) Regulations, 2014, as amended to the extent applicable. The Guidance Note is drafted considering the offer or sale of the securities in India. Accordingly, the guidance or formats included may need to be modified based on other international guidance or practices, in case an offer or sale of the securities is made outside India.

It may be noted that ICAI had issued the “Guidance Note on Reports in Company Prospectuses” in 2006 for guidance of members undertaking engagements and issuing reports in company prospectuses. This Guidance Note was based on the provisions of Companies Act, 1956 and SEBI (Disclosure and Investor Protection) Guidelines, 2000 (DIP Guidelines 2000). However, subsequently a number of developments have taken place in the laws and regulations which deal with the matters to be included in the companies’ prospectuses including the reports to be given by auditors/ chartered accountants therein, necessitating the need to revise/ update this Guidance Note, like the Companies Act, 1956 is replaced by the Companies Act 2013. Further, DIP Guidelines 2000 also replaced by the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. Therefore ICAI has issued this revised edition of ‘Guidance Note on Reports in Company Prospectuses’.

ICAI’s Guidance Note on Reports in Company Prospectuses (Revised 2016)

B. ICAI issues Exposure Draft of ‘Guidance Note on Reports in Company Prospectuses (Revised 2016)’ for comments

The ICAI had issued exposure draft of “Guidance Note on Reports in Company Prospectuses (Revised 2016)” on 10 Sept. 2016, inviting comments from the Members and other Stakeholders latest by 10 Oct. 2016.

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