Procedure and formats issued by SEBI for conducting limited review of all entities considered for Consolidation on quarterly basis

The Securities and Exchange Board of India (SEBI) had vide notification dated 9^th May 2018 amended various provisions of SEBI (LODR) Regulations, 2015 (which were recommended by Kotak Committee earlier). Two of these amendments were the amendment to Regulation 33(3)(b) and insertion of Regulation 33(8) which was effective from 1^st April 2019.

The wordings of these amended Regulations are as follows:-

33(3)(b) In case the listed entity has subsidiaries, in addition to the requirement at clause (a) of sub-regulation (3), the listed entity shall also submit quarterly/year-to-date consolidated financial results.

33(8) “The Statutory auditor of a listed entity shall undertake a limited review of the audit of all the entities/companies whose accounts are to be consolidated with the listed entity as per AS 21 in accordance with guidelines issued by the Board on this matter”.

Prior to this amendment (till the end of financial year 2018-19), the SEBI (LODR) Regulations, 2015 as well as Section 129(3) of the Companies Act, 2013 only mandated the requirement of consolidation of accounts on an annual basis.

As per the amendment to Regulation 33(3)(b) of SEBI (LODR) Regulations, which is effective from 1^st April 2019, i.e., with effect the quarter ending 30^th June 2019, all listed companies having subsidiaries need to prepare and submit consolidated financial results on a quarterly basis.

Further, as per the requirement of newly inserted Regulation 33(8) of SEBI (LODR) Regulations, the Statutory auditor of listed entity needs to undertake a limited review of the audit of all the entities/companies whose accounts are to be consolidated with the listed entity, and it needs to be done with effect from the quarter ending on 30^th June 2019.

For this purpose, SEBI has issued a Circular dated 29^th March 2019, for prescribing the following:-

• Procedure to be followed by Statutory Auditors of Listed entities for conducting limited review of all entities considered for consolidation as per Regulation 33(8).
• Revision in formats of Standalone & Consolidated Limited Review Reports– to be submitted with unaudited financial results
• Revision in formats of Standalone & Consolidated Audit Reports – to be submitted with audited financial results

 A copy of SEBI Circular dated 29^th March 2019 is available on following link:-

https://www.sebi.gov.in/legal/circulars/mar-2019/procedure-and-formats-for-limited-review-audit-report-of-the-listed-entity-and-those-entities-whose-accounts-are-to-be-consolidated-with-the-listed-entity_42537.html

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