Form B accompanying Annual Audit Report.

The recognised stock exchange(s) shall review the Form B and the accompanying annual audit report, submitted in terms of clause (d) of sub-regulation (3) of regulation 33 and clause (a) of sub-regulation (3) of regulation 52, in the manner specified in .

95. The recognised stock exchange(s) shall review the Statement on Impact of Audit Qualifications and the accompanying annual audit report submitted in terms of clause (d)    of sub-regulation (3) of regulation 33 and clause (a) of sub-regulation (3) of regulation 52.

Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) (Amendment)Regulations, 2016 dated 25/05/2016 w.e.f 01.04.2016

LODR – SCHEDULE VIII

‘MANNER OF REVIEWING FORM B ACCOMPANYING ANNUAL AUDITED RESULTS [See Regulations 33(6) and 33(7) , 52(3)(b) and 52(3)(c) and 95]

A. REVIEW BY STOCK EXCHANGE(S)

The stock exchange(s) shall adopt the following procedure for reviewing the Form B and accompanying annual audit reports submitted in terms of clause (d) of sub-regulation (3) of regulation 33 and clause (a) of sub-regulation (3) of 52:

1. Stock exchange(s) shall carry out preliminary scrutiny of reports accompanied by Form B including seeking necessary explanation from the listed entity concerned and consider the same based on materiality of the modified opinion(s).

2. The parameters for ascertaining the materiality of modified opinion(s) shall be the impact of these modified opinions on the profit and loss and financial position of the listed entity.

3. For the purpose of uniformity, stock exchange(s) shall consult one another for deciding the criteria for preliminary scrutiny.

4. Further, stock exchange(s) shall also consult one another for distributing the work in case shares of the listed entity concerned are listed on more than one stock exchange(s).

5. Upon examining the audit reports based on the above parameters, stock exchange(s) shall refer those cases, which, in their opinion, need further examination, to the Board.

6. Stock exchange(s) shall display the list of listed entities which have filed their audit reports along with Form B

B. REVIEW BY THE QUALIFIED AUDIT REPORT REVIEW COMMITTEE

1. The qualified audit report review committee shall be constituted by the board comprising of representatives from Institute of Chartered Accountants of India, stock exchange(s), Ministry of Corporate Affairs etc.

2. The qualified audit report review committee shall review the cases received from the stock exchange(s) and guide the Board in processing the annual audit reports with modified opinion(s).

3. After analyzing the modified opinion(s) in audit reports, qualified audit report review committee may make the following recommendations:

a. If qualified audit report review committee is of the view that the impact of modified opinion is not significant, it may recommend rectification of such modified opinion in the subsequent financial year;

b. If qualified audit report review committee is of the view that the impact of modified opinion is significant and the explanation given by the listed entity concerned in Form B is unsatisfactory, the case may be referred to the Financial Reporting Review Board of Institute of Chartered Accountants of India, for their opinion on whether the modified opinion is justified.

c. Based on the opinion of the financial reporting review board, qualified audit report review committee may recommend the following:

i. If Financial Reporting Review Board opines that modified opinion is justified, qualified audit report review committee may recommend submission of revised pro-forma financial results, incorporating the effect of the modified opinion, to the stock exchange(s) in the manner as specified in para (E) below.

ii. If financial reporting review board is of the view that modified opinion is not justified, Institute of Chartered Accountants of India may take up the matter appropriately with the statutory auditor of the listed entity.

d. If a modified opinion is not quantifiable, qualified audit report review committee may recommend rectification of such modified opinion in the subsequent financial year.

C. Based on the recommendations of qualified audit report review committee and/or the opinion of Financial Reporting Review Board, the Board may direct the listed entity concerned to rectify its modified opinion and/or submit the revised pro-forma financial results in the manner specified in sub-para (3) of para (B).

D. The Board may, at any stage, in the interest of investors, take any other necessary action as it deems fit.

E. SUBMISSION OF REVISED PRO-FORMA FINANCIAL RESULTS

1. The listed entity shall undertake the following steps for submission of revised pro-forma financial results:

a. The listed entity shall submit revised pro-forma financial results, incorporating the effect of the modified opinion, to the stock exchange(s) within two months from the date of receipt of such direction from Board.

b. The accounting impact of such modified opinion shall be carried out as a prior period item in the financial statements of the subsequent financial year.

F. The review of all Form Bs and the accompanying annual audit reports shall be carried out twice a year based on the reports received up to half year ending on June and December of every year and for this purpose, the following timelines are prescribed: