Accounts & Audit Daily
Dear Reader,
Today’s newsletter analytically summarizes the top stories reported at taxmann.com.
Meaning of KPIs
KPIs are numerical measures of the issuer company's historical financial or operational performance and financial or operational positions and can be broadly classified into the following categories:
a) GAAP Financial Measures
b) Non-GAAP Financial Measures
c) Non-Financial measures (part of financial reporting)
d) Operational measures (not part of financial reporting)
Applicability of the Technical Guide
This Technical Guidance is issued to provide guidance to the practitioners in reporting requirements relating to only those Key Performance Indicators (KPIs) which have been disclosed under the "Basis for Issue Price" section of the offer documents in case of an initial public offer (IPO) in India in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (hereinafter referred to as the "ICDR Regulations"). The Technical Guide is also applicable to issuer companies for disclosing the KPIs in the offer documents as per the requirements of ICDR Regulations. The Technical Guide is applicable only to IPO as outlined in the ICDR Regulations. The Technical Guide has been developed considering the offer or sale of securities in India to prospective Indian investors only.
Disclosure of KPIs in Offer Documents
An issuer company should provide disclosures that clearly demonstrate:
i. the definition of KPIs and the basis of their calculation
ii. the usefulness of the KPIs to investors and other stakeholders
iii. the additional purposes for which management uses such measures (e.g., for incentive and compensation arrangements, to manage its business, to allocate resources, or as a debt covenant)
Recommended by LinkedIn
Roles and Responsibilities- Practitioners
KPIs disclosed in the offer document shall be certified by the statutory auditor(s) or Chartered Accountants or firm of Chartered Accountants, holding a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India or by Cost Accountants, holding a valid certificate issued by the Peer Review Board of the Institute of Cost Accountants of India.
Practitioners should report only on the financial information where they have professional expertise and should refrain from reporting on the Operational measures (not part of financial reporting). The Practitioners should be careful while issuing such reports and restrict their responsibility only towards accounting matters, and their work should be performed in accordance with the Technical Guide. The Practitioners should refrain from reporting on any legal matters.
Liability for Misstatement in Prospectus
Every person who authorises the issue of the prospectus is liable to pay compensation to every person who subscribes for securities on the faith of the prospectus, for any loss or damage that the latter may have sustained by reason of any untrue statement included therein. However, a chartered accountant giving his consent shall be liable only in respect of an untrue statement, if any, made by him in his capacity as an expert.
Signing the Report
Where the report is issued in a firm name, it should be signed by the member in his individual name, as partner/proprietor, as the case may be, for and on behalf of the firm, as in the case of other reports /certificates, along with his membership number, the firm's registration number and Unique Document Identification Number (UDIN).
Who are Eligible to Make the Reports
The reports to be included in a prospectus can be issued by a Practitioner who should be an independent Chartered Accountant with respect to the issuer company.
That’s it from us for today! Stay Tuned for more updates from Taxmann.com.
Get your own set of 'Keys' to accelerate your ability to Read, Understand, Analyse & Interlink the Financial Statements!
Look inside the book here: https://taxmann.social/ErFTK
Like It? Buy Now with Free Expedited Shipping & Get a Limited Period Discount! https://taxmann.social/JrFLP
Sales Associate at Microsoft
1yCongrats