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Announcement regarding Manner of Signing of Certificates by Chartered Accountants
February, 06th 2016
     Standard on Assurance Engagement (SAE) 3420
Assurance Engagements to Report on the Compilation of
Pro Forma Financial Information Included in a Prospectus

                                                  Contents
                                                                                                  Paragraph(s)
Introduction
Scope of this SAE ....................................................................... 1­8
Effective Date .. ...................................................................................................9
Objectives............................................................................................. ........... 10
Definitions.................................................................................................... .... 11
Requirements
Framework for Assurance Engagements........................ .................................. 12
Engagement Acceptance .................................................................................. 13
Planning and Performing the Engagement ................................................. 14­27
Written Representations .................................................................................... 28
Forming the Opinion ................................................................................... 29­30
Form of Opinion ......................................................................................... 31­34
Preparing the Assurance Report ...................................................................... 35
Application and Other Explanatory Material
Scope of this SAE ............................................................................................ A1
Purpose of Pro Forma Financial Information Included in a Prospectus ..... A2­A3
Compilation of Pro Forma Financial Information ........................................ A4­A5
Nature of Reasonable Assurance Engagement ............................................... A6
Definitions ................................................................................................. A7­A9
Engagement Acceptance ...................................................................... A10­A12
Planning and Performing the Engagement ............................................ A13­A44
Written Representations ................................................................................. A45
Forming the Opinion .............................................................................. A46­A50
Preparing the Assurance Report ........................................................... A51­A57
Material Modifications vis-à-vis ISAE 3420
Appendix: Illustrative Practitioner's Report with an Unmodified Opinion


Standard on Assurance Engagements (SAE) 3420, Assurance Engagements to
Report on the Compilation of Pro Forma Financial Information Included in a
Prospectus, should be read in t he cont ext of t he " Preface to the
Standards on Quality Control, Auditing, Review, Other Assurance and Related
Services".
Introduction
Scope of this SAE
1.     This Standard on Assurance Engagements (SAE) deals with reasonable
assurance engagements undertaken by a practitioner1 to report on the
responsible party's2 compilation of pro forma financial information included in a
prospectus. The SAE applies where:
             Such reporting is required by securities law or the regulation of the
             securities exchange ("relevant law or regulation") in the jurisdiction in
             which the prospectus is to be issued; or
             This reporting is generally accepted practice in such jurisdiction. (Ref:
             Para. A1)
Nature of the Practitioner 's Responsibility
2.      In an engagement performed under this SAE, the practitioner has no
responsibility to compile the pro forma financial information for the entity; such
responsibility rests with the responsible party. The practitioner's sole
responsibility is to report on whether the pro forma financial information has been
compiled, in all material respects, by the responsible party on the basis of the
applicable criteria.
3.       This SAE does not deal with non-assurance engagements in which the
practitioner is engaged by the entity to compile its historical financial statements.
Purpose of Pro Forma Financial Information Included in a Prospectus
4.       The purpose of pro forma financial information included in a prospectus
is solely to illustrate the impact of a significant event or transaction on unadjusted
financial information of the entity as if the event had occurred or the transaction
had been undertaken at an earlier date selected for purposes of the illustration.
This is achieved by applying pro forma adjustments to the unadjusted financial
information. Pro forma financial information does not represent the entity's actual
financial position, financial performance, or cash flows. (Ref: Para. A2­A3)
Compilation of Pro Forma Financial Information
5.      The compilation of pro forma financial information involves the
responsible party gathering, classifying, summarizing and presenting financial
information that illustrates the impact of a significant event or transaction on
unadjusted financial information of the entity as if the event had occurred or the
transaction had been undertaken at the selected date. Steps involved in this
process include:
             Identifying the source of the unadjusted financial information to be used in
             compiling the pro forma financial information, and extracting the
             unadjusted financial information from that source; (Ref: Para. A4­A5)
             Making pro forma adjustments to the unadjusted financial information for
             the purpose for which the pro forma financial information is presented;
             and

1   The term "practitioner" is described in the Framework for Assurance Engagements, paragraphs 1, 22 and 23.
2   The Framework for Assurance Engagements, paragraph 24, describes the meaning of the term "responsible party."
        Presenting the resulting       pro   forma    financial   information   with
        accompanying disclosures.
Nature of Reasonable Assurance Engagement
6.      A reasonable assurance engagement to report on the compilation of pro
forma financial information involves performing the procedures set out in this
SAE to assess whether the applicable criteria used by the responsible party in
the compilation of the pro forma financial information provide a reasonable basis
for presenting the significant effects directly attributable to the event or
transaction, and to obtain sufficient appropriate evidence about whether: (Ref:
Para. A6)
        The related pro forma adjustments give appropriate effect to those
        criteria; and
        The resulting pro forma column (see paragraph 11(c)) reflects the proper
        application of those adjustments to the unadjusted financial information.
It also involves evaluating the overall presentation of the pro forma financial
information. The engagement, however, does not involve the practitioner
updating or reissuing any reports or opinions on any historical financial
information used in compiling the pro forma financial information, or performing
an audit or review of the financial information used in compiling the pro forma
financial information.
Relationship with Other Professional Pronouncements
7.      The performance of assurance engagements other than audits or
reviews of historical financial information requires the practitioner to comply with
the Framework for Assurance Engagements. The Framework includes
requirements in relation to such topics as engagement acceptance, planning,
evidence, and documentation that apply to all assurance engagements, including
engagements in accordance with this SAE. This SAE expands on how the
Framework is to be applied in a reasonable assurance engagement to report on
the compilation of pro forma financial information included in a prospectus. The
Framework also defines and describes the elements and objectives of an
assurance engagement, provides context for understanding this SAE.
8.       Compliance with the Framework requires, among other things, that the
practitioner:
        Comply with the independence and other requirements of the Code of
        Ethics, issued by the Institute of Chartered Accountants of India; and
        Implement quality control procedures that are applicable to the individual
        engagement.
Effective Date
9.      This SAE is effective for assurance reports dated on or after 01st April
2016.

                                         2
Objectives
10.    The objectives of the practitioner are:
(a)   To obtain reasonable assurance about whether the pro forma financial
      information has been compiled, in all material respects, by the
      responsible party on the basis of the applicable criteria; and
(b)   To report in accordance with the practitioner's findings.
Definitions
11.      For purposes of this SAE, the following terms have the meanings
attributed below:
(a)   Applicable criteria ­ The criteria used by the responsible party when
      compiling the pro forma financial information. Criteria may be established
      by an authorized or recognized standard-setting organization or by law or
      regulation. Where established criteria do not exist, they will be developed
      by the responsible party. (Ref: Para. A7­A9)
(b)   Pro forma adjustments ­ In relation to unadjusted financial information,
      these include:
      (i)     Adjustments to unadjusted financial information that illustrate the
              impact of a significant event or transaction ("event" or
              "transaction") as if the event had occurred or the transaction had
              been undertaken at an earlier date selected for purposes of the
              illustration; and
      (ii)    Adjustments to unadjusted financial information that are
              necessary for the pro forma financial information to be compiled
              on a basis consistent with the applicable financial reporting
              framework of the reporting entity ("entity") and its accounting
              policies under that framework. (Ref: Para. A15­A16)
      Pro forma adjustments include the relevant financial information of a
      business that has been, or is to be, acquired ("acquiree"), or a business
      that has been, or is to be, divested ("divestee"), to the extent that such
      information is used in compiling the pro forma financial information
      ("acquiree or divestee financial information").
(c)   Pro forma financial information ­ Financial information shown together
      with adjustments to illustrate the impact of an event or transaction on
      unadjusted financial information as if the event had occurred or the
      transaction had been undertaken at an earlier date selected for purposes
      of the illustration. In this SAE, it is presumed that pro forma financial
      information is presented in columnar format consisting of (a) the
      unadjusted financial information; (b) the pro forma adjustments; and (c)
      the resulting pro forma column. (Ref: Para. A2)
(d)   Prospectus ­ A document issued pursuant to legal or regulatory

                                        3
       requirements relating to the entity's securities on which it is intended that
       a third party should make an investment decision.
(e)    Published financial information ­ Financial information of the entity or of
       an acquiree or a divestee that is made available publicly.
(f)    Unadjusted financial information ­ Financial information of the entity to
       which pro forma adjustments are applied by the responsible party. (Ref:
       Para. A4­A5)
Requirements
Framework for Assurance Engagements
12.      The practitioner shall not represent compliance with this SAE unless the
practitioner has complied with the requirements of both this SAE and the
Framework for Assurance Engagements.
Engagement Acceptance
13.     Before agreeing to accept an engagement to report on whether pro
forma financial information included in a prospectus has been compiled, in all
material respects, on the basis of the applicable criteria, the practitioner shall:

(a)    Determine that the practitioner has the capabilities and competence to
       perform the engagement; (Ref: Para. A10)

(b)    On the basis of a preliminary knowledge of the engagement
       circumstances and discussion with the responsible party, determine that
       the applicable criteria are suitable and that it is unlikely that the pro forma
       financial information will be misleading for the purpose for which it is
       intended;

(c)    Evaluate the wording of the opinion prescribed by the relevant law or
       regulation, if any, to determine that the practitioner will likely be able to
       express the opinion so prescribed based on performing the procedures
       specified in this SAE; (Ref: Para. A54­A56)
(d)    Where the sources from which the unadjusted financial information and
       any acquiree or divestee financial information have been extracted have
       been audited or reviewed and a modified audit opinion or review
       conclusion has been expressed, or the report contains an Emphasis of
       Matter paragraph, consider whether or not the relevant law or regulation
       permits the use of, or reference in the practitioner's report to, the modified
       audit opinion or review conclusion or the report containing the Emphasis
       of Matter paragraph with respect to such sources;
(e)    If the entity's historical financial information has never been audited or
       reviewed, consider whether the practitioner can obtain a sufficient
       understanding of the entity and its accounting and financial reporting
       practices to perform the engagement; (Ref: Para. A31)

                                         4
(f)       If the event or transaction includes an acquisition and the acquiree's
          historical financial information has never been audited or reviewed,
          consider whether the practitioner can obtain a sufficient understanding of
          the acquiree and its accounting and financial reporting practices to
          perform the engagement; and
(g)       Obtain the agreement of the responsible party that it acknowledges and
          understands its responsibility for: (Ref: Para. A11­A12)
          (i)     Adequately disclosing and describing the applicable criteria to the
                  intended users if these are not publicly available;
          (ii)    Compiling the pro forma financial information on the basis of the
                  applicable criteria; and
          (iii)   Providing the practitioner with:
                  a.      Access to all information (including, when needed for
                          purposes of the engagement, information of the
                          acquiree(s) in a business combination), such as records,
                          documentation and other material, relevant to evaluating
                          whether the pro forma financial information has been
                          compiled, in all material respects, on the basis of the
                          applicable criteria;
                  b.      Additional information that the practitioner may request
                          from the responsible party for the purpose of the
                          engagement;
                  c.      Access to those within the entity and the entity's advisors
                          from whom the practitioner determines it necessary to
                          obtain evidence relating to evaluating whether the pro
                          forma financial information has been compiled, in all
                          material respects, on the basis of the applicable criteria;
                          and
                  d.      When needed for purposes of the engagement, access to
                          appropriate individuals within the acquiree(s) in a business
                          combination.
Planning and Performing the Engagement
Assessing the Suitability of the Applicable Criteria

14.     The practitioner shall assess whether the applicable criteria are suitable,
as required by the Framework for Assurance Engagements3, and in particular
shall determine that they include, at a minimum, that:
(a)       The unadjusted financial information be extracted from an appropriate
          source; (Ref: Para. A4­A5, A27)

3   The Framework for Assurance Engagements, paragraph 16.
                                              5
(b)    The pro forma adjustments be:
       (i)     Directly attributable to the event or transaction; (Ref: Para. A13)

       (ii)    Factually supportable; and (Ref: Para. A14)
       (iii)   Consistent with the entity's applicable financial reporting
               framework and its accounting policies under that framework; and
               (Ref: Para. A15­A16)

(c)    Appropriate presentation be made and disclosures be provided to enable
       the intended users to understand the information conveyed. (Ref: Para.
       A2­A3, A42)
15.     In addition, the practitioner shall assess whether the applicable criteria
are:
(a)    Consistent, and do not conflict, with relevant law or regulation; and
(b)    Unlikely to result in pro forma financial information that is misleading.
Materiality
16.     When planning and performing the engagement, the practitioner shall
consider materiality with respect to evaluating whether the pro forma financial
information has been compiled, in all material respects, on the basis of the
applicable criteria. (Ref: Para. A17­ A18)
Obtaining an Understanding of How the Responsible Party Has Compiled
the Pro Forma Financial Information and Other Engagement Circumstances
17.     The practitioner shall obtain an understanding of: (Ref: Para. A19)
(a)    The event or transaction in respect of which the pro forma financial
       information is being compiled;
(b)    How the responsible party has compiled the pro forma financial
       information; (Ref: Para. A20­A21)
(c)    The nature of the entity and any acquiree or divestee, including: (Ref:
       Para. A22­A23)
       (i)     Their operations;
       (ii)    Their assets and liabilities; and
       (iii)   The way they are structured and how they are financed;
(d)    Relevant industry, legal and regulatory, and other external factors
       pertaining to the entity and any acquiree or divestee; and (Ref: Para.
       A24­A26)
(e)    The applicable financial reporting framework and the accounting and
       financial reporting practices of the entity and of any acquiree or divestee,
       including their selection and application of accounting policies.
Obtaining Evidence about the Appropriateness of the Source from Which

                                         6
the Unadjusted Financial Information Has Been Extracted
18.     The practitioner shall determine whether the responsible party has
extracted the unadjusted financial information from an appropriate source. (Ref:
Para. A27­A28)
19.    If there is no audit or review report on the source from which the
unadjusted financial information has been extracted, the practitioner shall
perform procedures to be satisfied that the source is appropriate. (Ref: Para.
A29­A31)
20.    The practitioner shall determine whether the responsible party has
appropriately extracted the unadjusted financial information from the source.
Obtaining Evidence about the Appropriateness of the Pro Forma
Adjustments
21.      In evaluating whether the pro forma adjustments are appropriate, the
practitioner shall determine whether the responsible party has identified the pro
forma adjustments necessary to illustrate the impact of the event or transaction
at the date or for the period of the illustration. (Ref: Para. A32)

22.     In determining whether the pro forma adjustments are in accordance with
the applicable criteria, the practitioner shall determine whether they are:

(a)    Directly attributable to the event or transaction; (Ref: Para. A13)
(b)    Factually supportable. If acquiree or divestee financial information is
       included in the pro forma adjustments and there is no audit or review
       report on the source from which such financial information has been
       extracted, the practitioner shall perform procedures to be satisfied that the
       financial information is factually supportable; and (Ref: Para. A14, A33­
       A38)

(c)    Consistent with the entity's applicable financial reporting framework and
       its accounting policies under that framework. (Ref: Para. A15-A16)
Modified Audit Opinion or Review Conclusion, or Emphasis of Matter
Paragraph, with Respect to the Source from Which the Unadjusted
Financial Information Has Been Extracted or the Source from Which the
Acquiree or Divestee Financial Information Has Been Extracted
23.     A modified audit opinion or review conclusion may have been expressed
with respect to either the source from which the unadjusted financial information
has been extracted or the source from which the acquiree or divestee financial
information has been extracted, or a report containing an Emphasis of Matter
paragraph may have been issued with respect to such source. In such
circumstances, if the relevant law or regulation does not prohibit the use of such
a source, the practitioner shall evaluate:

(a)    The potential consequence on whether the pro forma financial information
                                         7
       has been compiled, in all material respects, on the basis of the applicable
       criteria; (Ref: Para. A39)
(b)    What further appropriate action to take; and (Ref: Para. A40)
(c)    Whether there is any effect on the practitioner's ability to report in
       accordance with the terms of the engagement, including any effect on the
       practitioner's report.
Source from Which the Unadjusted Financial Information Has Been
Extracted or Pro Forma Adjustments Not Appropriate
24.      If, on the basis of the procedures performed, the practitioner identifies
that the responsible party has:
(a)    Used an inappropriate source from which to extract the unadjusted
       financial information; or
(b)    Omitted a pro forma adjustment that should be included, applied a pro
       forma adjustment that is not in accordance with the applicable criteria or
       otherwise inappropriately applied a pro forma adjustment,
the practitioner shall discuss the matter with the responsible party. If the
practitioner is unable to agree with the responsible party as to how the matter
should be resolved, the practitioner shall evaluate what further action to take.
(Ref: Para. A40)
Obtaining Evidence about the Calculations within the Pro Forma Financial
Information
25.     The practitioner shall determine whether the calculations within the pro
forma financial information are arithmetically accurate.
Evaluating the Presentation of the Pro Forma Financial Information
26.     The practitioner shall evaluate the presentation of the pro forma financial
information. This shall include consideration of:
(a)    The overall presentation and structure of the pro forma financial
       information, including whether it is clearly labeled to distinguish it from
       historical or other financial information; (Ref: Para. A2­A3)
(b)    Whether the pro forma financial information and related explanatory notes
       illustrate the impact of the event or transaction in a manner that is not
       misleading; (Ref: Para. A41)
(c)    Whether appropriate disclosures are provided with the pro forma financial
       information to enable the intended users to understand the information
       conveyed; and (Ref: Para. A42)

(d)    Whether the practitioner has become aware of any significant events
       subsequent to the date of the source from which the unadjusted financial
       information has been extracted that may require reference to, or
       disclosure in, the pro forma financial information. (Ref: Para. A43)

                                        8
27.      The practitioner shall read the other information included in the
prospectus containing the pro forma financial information to identify material
inconsistencies, if any, with the pro forma financial information. If, on reading the
other information, the practitioner identifies a material inconsistency or becomes
aware of a material misstatement of fact in that other information, the practitioner
shall discuss the matter with the responsible party.




If correction of the matter is necessary and the responsible party refuses to do
so, the practitioner shall take further appropriate action. (Ref: Para. A44)
Written Representations
28.    The practitioner     shall   request   written   representations   from   the
responsible party that:
(a)    In compiling the pro forma financial information, the responsible party has
       identified all appropriate pro forma adjustments necessary to illustrate the
       impact of the event or transaction at the date or for the period of the
       illustration; and (Ref: Para. A45)
(b)    The pro forma financial information has been compiled, in all material
       respects, on the basis of the applicable criteria.
Forming the Opinion
29.     The practitioner shall form an opinion on whether the pro forma financial
information has been compiled, in all material respects, by the responsible party
on the basis of the applicable criteria. (Ref: Para. A46­A48)
30.      In order to form that opinion, the practitioner shall conclude whether the
practitioner has obtained sufficient appropriate evidence about whether the
compilation of the pro forma financial information is free from material omissions,
or inappropriate use or application of a pro forma adjustment. That conclusion
shall include an evaluation of whether the responsible party has adequately
disclosed and described the applicable criteria to the extent that these are not
publicly available. (Ref: Para. A49­A50)
Form of Opinion
Unmodified Opinion
31.      The practitioner shall express an unmodified opinion when the
practitioner concludes that the pro forma financial information has been
compiled, in all material respects, by the responsible party on the basis of the
applicable criteria.
Modified Opinion
32.     Where the relevant law or regulation precludes publication of a
prospectus that contains a modified opinion with regard to whether the pro forma
financial information has been compiled, in all material respects, on the basis of
the applicable criteria and the practitioner concludes that a modified opinion is

                                         9
nevertheless appropriate in accordance with the Framework for Assurance
Engagements, the practitioner shall discuss the matter with the responsible party.
If the responsible party does not agree to make the necessary changes, the
practitioner shall:
(a)    Withdraw from the engagement; or
(b)    Consider seeking legal advice.
33.      Where the relevant law or regulation may not preclude publication of a
prospectus that contains a modified opinion with regard to whether the pro forma
financial information has been compiled, in all material respects, on the basis of
the applicable criteria and the practitioner determines that a modified opinion is
appropriate in accordance with the Framework for Assurance Engagements, the
practitioner shall apply the requirements in the Framework for Assurance
Engagements regarding modified opinions.
Emphasis of Matter Paragraph
34.      In some circumstances, the practitioner may consider it necessary to
draw users' attention to a matter presented or disclosed in the pro forma financial
information or the accompanying explanatory notes. This would be the case
when, in the practitioner's opinion, the matter is of such importance that it is
fundamental to users' understanding of whether the pro forma financial
information has been compiled, in all material respects, on the basis of the
applicable criteria. In such circumstances, the practitioner shall include an
Emphasis of Matter paragraph in the practitioner's report provided that the
practitioner has obtained sufficient appropriate evidence that the matter does not
affect whether the pro forma financial information has been compiled, in all
material respects, on the basis of the applicable criteria. Such a paragraph shall
refer only to information presented or disclosed in the pro forma financial
information or the accompanying explanatory notes.
Preparing the Assurance Report
35.    The practitioner's report shall include the following basic elements: (Ref:
Para. A57)
(a)    A title that clearly indicates that the report is an independent assurance
       report; (Ref: Para. A51)
(b)    An addressee(s), as agreed in the terms of engagement; (Ref: Para. A52)
(c)    Introductory paragraphs that identify: (Ref: Para. A53)
       (i)     The pro forma financial information;
       (ii)    The source from which the unadjusted financial information has
               been extracted, and whether or not an audit or review report on
               such a source has been published;
       (iii)   The period covered by, or the date of, the pro forma financial
               information; and

                                        10
      (iv)    A reference to the applicable criteria on the basis of which the
              responsible party has performed the compilation of the pro forma
              financial information, and the source of the criteria;
(d)   A statement that the responsible party is responsible for compiling the pro
      forma financial information on the basis of the applicable criteria;
(e)   A description of the practitioner's responsibilities, including statements
      that:
      (i)     The practitioner's responsibility is to express an opinion about
              whether the pro forma financial information has been compiled, in
              all material respects, by the responsible party on the basis of the
              applicable criteria;
      (ii)    For purposes of this engagement, the practitioner is not
              responsible for updating or reissuing any reports or opinions on
              any historical financial information used in compiling the pro forma
              financial information, nor has the practitioner, in the course of this
              engagement, performed an audit or review of the financial
              information used in compiling the pro forma financial information;
              and
      (iii)   The purpose of pro forma financial information included in a
              prospectus is solely to illustrate the impact of a significant event or
              transaction on unadjusted financial information of the entity as if
              the event had occurred or the transaction had been undertaken at
              an earlier date selected for purposes of the illustration.
              Accordingly, the practitioner does not provide any assurance that
              the actual outcome of the event or transaction at that date would
              have been as presented;
(f)   A statement that the engagement was performed in accordance with SAE
      3420, `Assurance Engagements to Report on the Compilation of Pro
      Forma Financial Information Included in a Prospectus', which requires
      that the practitioner comply with ethical requirements and plan and
      perform procedures to obtain reasonable assurance about whether the
      responsible party has compiled, in all material respects, the pro forma
      financial information on the basis of the applicable criteria;
(g)   Statements that:
      (i)     A reasonable assurance engagement to report on whether the pro
              forma financial information has been compiled, in all material
              respects, on the basis of the applicable criteria involves
              performing procedures to assess whether the applicable criteria
              used by the responsible party in the compilation of the pro forma
              financial information provide a reasonable basis for presenting the
              significant effects directly attributable to the event or transaction,
              and to obtain sufficient appropriate evidence about whether:

                                        11
                      The related pro forma adjustments give appropriate effect
                      to those criteria; and
                      The pro forma financial information reflects the proper
                      application of those adjustments to the unadjusted
                      financial information;
       (ii)    The procedures selected depend on the practitioner's judgment,
               having regard to the practitioner's understanding of the nature of
               the entity, the event or transaction in respect of which the pro
               forma financial information has been compiled, and other relevant
               engagement circumstances; and
       (iii)   The engagement also involves evaluating the overall presentation
               of the pro forma financial information;
(h)    Unless otherwise required by law or regulation, the practitioner's opinion
       using one of the following phrases, which are regarded as being
       equivalent: (Ref: Para. A54­A56)
       (i)     The pro forma financial information has been compiled, in all
               material respects, on the basis of the [applicable criteria]; or
       (ii)    The pro forma financial information has been properly compiled on
               the basis stated;
(i)    The practitioner's signature;
(j)    The date of the report; and
(k)    The place of signature.
                                       ***
Application and Other Explanatory Material
Scope of this SAE (Ref: Para.1)
A1.     This standard does not deal with circumstances where pro forma
financial information is provided as part of the entity's financial statements
pursuant to the requirements of an applicable financial reporting framework.
Purpose of Pro Forma Financial Information Included in a Prospectus
(Ref: Para. 4, 11(c), 14(c), 26(a))
A2.     Pro forma financial information is accompanied by related explanatory
notes that often disclose the matters set out in paragraph A42.
A3.     Different presentations of pro forma financial information may be
included in the prospectus depending on the nature of the event or transaction
and how the responsible party intends to illustrate the impact of such event or
transaction on the unadjusted financial information of the entity. For example, the
entity may acquire a number of businesses prior to an initial public offering. In

                                        12
such circumstances, the responsible party may choose to present a pro forma
net asset statement to illustrate the impact of the acquisitions on the entity's
financial position and key ratios such as debt to equity as if the acquired
businesses had been combined with the entity at an earlier date. The responsible
party may also choose to present a pro forma income statement to illustrate what
the results of operations might have been for the period ended on that date. In
such cases, the nature of the pro forma financial information may be described
by titles such as "Pro Forma Balance Sheet as at March 31, 20X1" and "Pro
Forma Statement of profit and loss for the Year Ended March 31, 20X1."
Compilation of Pro Forma Financial Information
Unadjusted Financial Information (Ref: Para. 5, 11(f), 14(a))
A4.     In many cases, the source from which the unadjusted financial
information has been extracted will be published financial information such as
annual or interim financial statements.
A5.     Depending on how the responsible party chooses to illustrate the impact
of the event or transaction, the unadjusted financial information may comprise
either:
       One or more single financial statements, such as a statement of
       financial position and a statement of profit and loss; or
       Financial information that is appropriately condensed from a complete set
       of financial statements, for example, a statement of net assets.
Nature of Reasonable Assurance Engagement (Ref: Para. 6)
A6.     In this SAE, describing the pro forma financial information as being
"properly compiled" means that the pro forma financial information has been
compiled, in all material respects, by the responsible party on the basis of the
applicable criteria.
Definitions
Applicable Criteria (Ref: Para. 11(a))
A7.       Where established criteria for compiling the pro forma financial
information do not exist, the responsible party will have developed the criteria
based on, for example, practice in a particular industry or the criteria of a
jurisdiction that has developed established criteria, and disclosed that fact.
A8.     The applicable criteria for compiling the pro forma financial information
will be suitable in the circumstances if they meet the benchmarks set out in
paragraph 14.
A9.      Accompanying explanatory notes may include appropriate additional
detail about the criteria to describe how they illustrate the effects of the particular
event or transaction. This may include, for example:
       The date at which the event is assumed to have occurred or the
       transaction been undertaken.
                                          13
           The approach used for allocating income, overheads, assets and
           liabilities between relevant businesses in a divestment.
Engagement Acceptance
Capabilities and Competence to Perform the Engagement (Ref: Para. 13(a))
A10. The Code of Ethics, issued by the Institute of Chartered Accountants of
India requires the practitioner to maintain appropriate professional knowledge
and skill, including an awareness and understanding of relevant technical,
professional and business developments, in order to provide competent
professional service4. In the context of this requirement of the Code of Ethics,
relevant capabilities and competence to perform the engagement also include
matters such as the following:
           Knowledge and experience of the industry in which the entity operates;
           An understanding of the relevant securities laws and regulations and
           related developments;
           An understanding of the listing requirements of the relevant securities
           exchange and of capital market transactions such as mergers,
           acquisitions and securities offerings;
           Familiarity with the process of preparing a prospectus and listing
           securities on the securities exchange; and
           Knowledge of the financial reporting frameworks used in the preparation
           of the sources from which the unadjusted financial information and, if
           applicable, the acquiree's financial information have been extracted.
The Responsible Party's Responsibilities (Ref: Para. 13(g))
A11. An engagement in accordance with this SAE is conducted on the
premise that the responsible party has acknowledged and understands that it has
the responsibilities set out in paragraph 13(g). In some jurisdictions, such
responsibilities may be specified in the relevant law or regulation. In others, there
may be little or no legal or regulatory definition of such responsibilities. An
assurance engagement to report on whether pro forma financial information has
been compiled, in all material respects, on the basis of the applicable criteria is
based on the assumption that:
(a)        The practitioner's role does not involve taking responsibility for compiling
           such information; and
(b)        The practitioner has a reasonable expectation of obtaining the information
           necessary for the engagement.
Accordingly, this premise is fundamental to the conduct of the engagement. To
avoid misunderstanding, agreement is reached with the responsible party that it
acknowledges and understands that it has such responsibilities as part of

4   The Code of Ethics, paragraphs 130.1-130.3.
                                                  14
agreeing and recording the terms of the engagement as required by the
Framework for Assurance Engagements.
A12. If law or regulation prescribes in sufficient detail the terms of the
engagement, the practitioner need only record the fact that such law or regulation
applies and that the responsible party acknowledges and understands its
responsibilities as set out in paragraph 13(g).
Planning and Performing the Engagement
Assessing the Suitability of the Applicable Criteria
Directly Attributable Adjustments (Ref: Para. 14(b)(i), 22(a))
A13. It is necessary that the pro forma adjustments be directly attributable to
the event or transaction to avoid the pro forma financial information reflecting
matters that do not arise solely as a result of the event or that are not an integral
part of the transaction. Directly attributable adjustments exclude those that relate
to future events or are dependent on actions to be taken once the transaction
has been completed, even if such actions are key to the entity entering into the
transaction (for example, closing of redundant production sites after an
acquisition).
Factually Supportable Adjustments (Ref: Para. 14(b)(ii), 22(b))
A14. It is also necessary that the pro forma adjustments be factually
supportable in order to provide a reliable basis for the pro forma financial
information. Factually supportable adjustments are capable of objective
determination. Sources of factual support for the pro forma adjustments include,
for example:
       Purchase and sale agreements.
       Financing documents for the event or transaction, such as debt
       agreements.
       Independent valuation reports.
       Other documents relating to the event or transaction.
       Published financial statements.
       Other financial information disclosed in the prospectus.
       Relevant legal or regulatory actions, such as in the area of taxation.
       Employment agreements.
       Actions of those charged with governance.
Adjustments Consistent with the Entity's Applicable Financial Reporting
Framework and Its Accounting Policies under that Framework (Ref: Para.
11(b)(ii), 14(b)(iii), 22(c))
A15.    For the pro forma financial information to be meaningful, it is necessary

                                         15
that the pro forma adjustments be consistent with the entity's applicable financial
reporting framework and its accounting policies under that framework. In the
context of a business combination, for example, compiling the pro forma financial
information on the basis of the applicable criteria involves consideration of such
matters as:
       Whether differences exist between the acquiree's accounting policies and
       those of the entity; and
       Whether accounting policies for transactions undertaken by the acquiree
       that the entity has not previously entered into are policies that the entity
       would have adopted for such transactions under its applicable financial
       reporting framework, taking into account the entity's particular
       circumstances.
A16. Consideration of the appropriateness of the entity's accounting policies
may also be necessary in some circumstances. For example, as part of the event
or transaction, the entity may propose to issue complex financial instruments for
the first time. If this is the case, it may be necessary to consider:
       Whether the responsible party has selected appropriate accounting
       policies to be used in accounting for such financial instruments under its
       applicable financial reporting framework; and
       Whether it has appropriately applied such policies in compiling the pro
       forma financial information.
Materiality (Ref: Para. 16)
A17. Materiality with regard to whether the pro forma financial information has
been compiled, in all material respects, on the basis of the applicable criteria
does not depend on a single quantitative measure. Instead, it depends on the
size and nature of the omission or inappropriate application of an element of the
compilation as described in paragraph A18, whether or not intentional. Judgment
about these aspects of size and nature will, in turn, depend on such matters as:
       The context of the event or transaction;
       The purpose for which the pro forma financial information is being
       compiled; and
       The related engagement circumstances.
The determining factor could be the size or the nature of the matter, or a
combination of both.
A18. The risk of the pro forma financial information not being considered
compiled, in all material respects, on the basis of the applicable criteria may arise
when there is evidence of, for example:
       Use of an inappropriate source from which to extract the unadjusted
       financial information.
       Incorrect extraction of the unadjusted financial information from an
                                         16
        appropriate source.
        In relation to adjustments, the misapplication of accounting policies or the
        failure of the adjustments to be consistent with the entity's accounting
        policies.
        Failure to make an adjustment required by the applicable criteria.
        Making an adjustment that is not in accordance with the applicable
        criteria.
        A mathematical or clerical mistake in the calculations within the pro forma
        financial information.
        Inadequate, incorrect or omitted disclosures.
Obtaining an Understanding of How the Responsible Party Has Compiled
the Pro Forma Financial Information and Other Engagement Circumstances
(Ref: Para. 17)
A19. The practitioner may obtain this understanding through a combination of
procedures such as:
        Inquiring of the responsible party and other entity personnel involved in
        compiling the pro forma financial information.
        Inquiring of other appropriate parties such as those charged with
        governance and the entity's advisors.
        Reading relevant supporting documentation such as contracts or
        agreements.
        Reading minutes of meetings of those charged with governance.
   How the Responsible Party Has Compiled the Pro Forma Financial Information
   (Ref: Para. 17(b))
A20. The practitioner may obtain an understanding of how the responsible
party has compiled the pro forma financial information by considering, for
example:
        The source from which the unadjusted financial information has been
        extracted.
        The steps taken by the responsible party to:
        o      Extract the unadjusted financial information from the source.
        o      Identify the appropriate pro forma adjustments, for example, how
               the responsible party has obtained acquiree financial information
               in compiling the pro forma financial information.
        The responsible party's competence in compiling pro forma financial
        information.
        The nature and extent of oversight by the responsible party of other entity
        personnel involved in compiling the pro forma financial information.
                                        17
       The responsible party's approach to identifying appropriate disclosures to
       support the pro forma financial information.
A21. In a business combination or divestment, areas that may give rise to
complexity in the compilation of the pro forma financial information include
allocations of income, overheads, and assets and liabilities among or between
the relevant businesses. Accordingly, it is important that the practitioner
understand the responsible party's approach and criteria for such allocations and
that the explanatory notes accompanying the pro forma financial information
disclose these matters.
Nature of the Entity and Any Acquiree or Divestee (Ref: Para. 17(c))
A22. An acquiree may be an incorporated entity or a separately identifiable
unincorporated operation within another entity such as a division, branch or line
of business. A divestee may be an incorporated entity such as a subsidiary or
joint venture, or a separately identifiable unincorporated operation within the
entity such as a division, branch or line of business.
A23. The practitioner may have all or part of the required understanding of the
entity and any acquiree or divestee, and their respective environments, if the
practitioner has audited or reviewed their financial information.
Relevant Industry, Legal and Regulatory, and Other External Factors (Ref: Para.
17(d))
A24. Relevant industry factors include industry conditions such as the
competitive environment, supplier and customer relationships, and technological
developments. Examples of matters the practitioner may consider include:
       The market and competition, including demand, capacity, and price
       competition.
       Common business practices within the industry.
       Cyclical or seasonal activity.
       Product technology relating to the entity's products.
A25. Relevant legal and regulatory factors include the legal and regulatory
environment. This encompasses, among other matters, the applicable financial
reporting framework in accordance with which the entity or, if applicable, the
acquiree prepares its periodic financial information, and the legal and political
environment. Examples of matters the practitioner may consider include:
       Industry-specific accounting practices.
       Legal and regulatory framework for a regulated industry.
       Legislation and regulation that significantly affect the entity's or, if
       applicable, the acquiree's or divestee's operations, including direct
       supervisory activities.
       Taxation.

                                        18
       Government policies currently affecting the conduct of the entity's or, if
       applicable, the acquiree's or divestee's business, such as monetary
       policies (including foreign exchange controls), fiscal policies, financial
       incentives (for example, government aid programs), and tariffs or trade
       restrictions policies.
       Environmental requirements affecting the entity's or acquiree's or
       divestee's industry and business.
A26. Examples of other external factors affecting the entity and, if applicable,
the acquiree or divestee that the practitioner may consider include the general
economic conditions, interest rates and availability of financing, and inflation or
currency revaluation.
Obtaining Evidence about the Appropriateness of the Source from Which
the Unadjusted Financial Information Has Been Extracted
Relevant Factors to Consider (Ref: Para. 14(a), 18)
A27. Factors that affect the appropriateness of the source from which the
unadjusted financial information has been extracted include whether there is an
audit or review report on the source and whether the source:
       Is permitted or specifically prescribed by the relevant law or regulation, is
       permitted by the relevant securities exchange with which the prospectus
       is to be filed, or is used as such under normal market custom and
       practice.
       Is clearly identifiable.
       Represents a reasonable starting point for compiling the pro forma
       financial information in the context of the event or transaction, including
       whether it is consistent with the entity's accounting policies and is at an
       appropriate date or covers an appropriate period.
A28. An audit or review report on the source from which the unadjusted
financial information has been extracted may have been issued by another
practitioner. In this situation, the need by the practitioner reporting under this
SAE for an understanding of the entity and its accounting and financial reporting
practices pursuant to the requirements of paragraphs 17(c) and (e), and to be
satisfied that the source from which the unadjusted financial information has
been extracted is appropriate, is not diminished.
No Audit or Review Report on the Source from Which the Unadjusted Financial
Information Has Been Extracted (Ref: Para. 19)
A29. When there is no audit or review report on the source from which the
unadjusted financial information has been extracted, it is necessary for the
practitioner to perform procedures in relation to the appropriateness of that
source. Factors that may affect the nature and extent of these procedures
include, for example:
       Whether the practitioner has previously audited or reviewed the entity's
                                        19
       historical financial information, and the practitioner's knowledge of the
       entity from such engagement.
       How recently the entity's historical financial information was audited or
       reviewed.
       Whether the entity's financial information is subject to periodic review by
       the practitioner, for example, for purposes of meeting regulatory filing
       requirements.
A30. The entity's financial statements for the period immediately preceding
that of the source from which the unadjusted financial information has been
extracted are likely to have been audited or reviewed, even if the source from
which the unadjusted financial information has been extracted itself is not. For
example, the source from which the unadjusted financial information has been
extracted may be interim financial statements that have not been audited or
reviewed whereas the entity's financial statements for the immediately preceding
financial year may have been audited. In such a case, procedures that the
practitioner may perform, having regard to the factors in paragraph A29, in
relation to the appropriateness of the source from which the unadjusted financial
information has been extracted include:
       Inquiring of the responsible party about:
              The process by which the source has been prepared and the
              reliability of the underlying accounting records to which the source
              is agreed or reconciled.
              Whether all transactions have been recorded.
              Whether the source has been prepared in accordance with the
              entity's accounting policies.
              Whether there have been any changes in accounting policies
              from the most recent audited or reviewed period and, if so, how
              such changes have been dealt with.
              Its assessment of the risk that the source may be materially
              misstated as a result of fraud.
              The effect of changes in the entity's business activities and
              operations.
       If the practitioner has audited or reviewed the immediately preceding
       annual or interim financial information, considering the findings of such
       audit or review and whether these might indicate any issues with the
       preparation of the source from which the unadjusted financial information
       has been extracted.
       Corroborating the information provided by the responsible party in
       response to the practitioner's inquiries when the responses appear
       inconsistent with the practitioner's understanding of the entity or the
       engagement circumstances.
                                       20
       Comparing the source with the corresponding prior period financial
       information and, as applicable, the immediately preceding annual or
       interim financial information, and discussing significant changes with the
       responsible party.
Historical financial information of the entity never audited or reviewed (Ref: Para.
13(e))
A31. Other than in the case of an entity formed for purposes of the transaction
and which has never had any trading activity, it is unlikely that relevant law or
regulation will permit an entity to issue a prospectus if its historical financial
information has never been audited or reviewed.
Obtaining Evidence about the Appropriateness of the Pro Forma
Adjustments
Identification of Appropriate Pro Forma Adjustments (Ref: Para. 21)
A32. Informed by the practitioner's understanding of how the responsible party
has compiled the pro forma financial information and other engagement
circumstances, the practitioner may obtain evidence regarding whether the
responsible party has appropriately identified the necessary pro forma
adjustments through a combination of procedures such as:
       Evaluating the reasonableness of the responsible party's approach to
       identifying the appropriate pro forma adjustments, for example, the
       method used in identifying appropriate allocations of income, overheads,
       assets and liabilities among the relevant businesses.
       Inquiring of relevant parties within an acquiree regarding the approach to
       extracting the acquiree financial information.
       Evaluating specific aspects of the relevant contracts, agreements or other
       documents.
       Inquiring of the entity's advisors regarding specific aspects of the event or
       transaction and related contracts and agreements that are relevant to the
       identification of appropriate adjustments.
       Evaluating relevant analyses and worksheets prepared by the responsible
       party and other entity personnel involved in compiling the pro forma
       financial information.
       Obtaining evidence of the responsible party's oversight of other entity
       personnel involved in compiling the pro forma financial information.
       Performing analytical procedures.
Factual Support for Any Acquiree or Divestee Financial Information
Included in the Pro Forma Adjustments (Ref: Para. 22(b))
Divestee financial information
A33. In the case of a divestment, the divestee's financial information will be
derived from the source from which the unadjusted financial information has
                                        21
been extracted, which will often be audited or reviewed. The source from which
the unadjusted financial information has been extracted will therefore provide the
basis for the practitioner to determine whether there is factual support for the
divestee financial information. In such a case, matters to consider include, for
example, whether income and expenses attributable to the divestee that are
recorded at the consolidated level have been appropriately reflected in the pro
forma adjustments.
A34. Where the source from which the unadjusted financial information has
been extracted has not been audited or reviewed, the practitioner may refer to
the guidance in paragraphs A29­A30 in determining whether the divestee
financial information is factually supportable.
Acquiree financial information
A35. The source from which the acquiree financial information has been
extracted may have been audited or reviewed. Where the source from which the
acquiree financial information has been extracted has been audited or reviewed
by the practitioner, the acquiree financial information will, subject to any
implications arising from the circumstances addressed in paragraph 23, be
factually supportable.
A36. The source from which the acquiree financial information has been
extracted may have been audited or reviewed by another practitioner. In this
situation, the need by the practitioner reporting under this SAE for an
understanding of the acquiree and its accounting and financial reporting practices
pursuant to the requirements of paragraphs 17(c) and (e), and to be satisfied that
the acquiree financial information is factually supportable, is not diminished.
A37. When the source from which the acquiree financial information has been
extracted has not been audited or reviewed, it is necessary for the practitioner to
perform procedures in relation to the appropriateness of that source. Factors that
may affect the nature and extent of these procedures include, for example:
       Whether the practitioner has previously audited or reviewed the
       acquiree's historical financial information, and the practitioner's
       knowledge of the acquiree from such engagement.
       How recently the acquiree's historical financial information was audited or
       reviewed.
       Whether the acquiree's financial information is subject to periodic review
       by the practitioner, for example, for purposes of meeting regulatory filing
       requirements.
A38. The acquiree's financial statements for the period immediately preceding
that of the source from which the acquiree financial information has been
extracted often will have been audited or reviewed, even if the source from which
the acquiree financial information has been extracted itself is not. In such a case,
procedures that the practitioner may perform, having regard to the factors in
paragraph A37, in relation to whether the acquiree financial information is
factually supportable include:
                                        22
       Inquiring of the acquiree's management about:
       o       The process by which the source from which the acquiree
               financial information has been extracted has been prepared and
               the reliability of the underlying accounting records to which the
               source is agreed or reconciled.
       o       Whether all transactions have been recorded.
       o       Whether the source from which the acquiree financial information
               has been extracted has been prepared in accordance with the
               acquiree's accounting policies.
       o       Whether there have been any changes in accounting policies
               from the most recent audited or reviewed period and, if so, how
               such changes have been dealt with.
       o       Its assessment of the risk that the source from which the
               acquiree financial information has been extracted may be
               materially misstated as a result of fraud.
       o       The effect of changes in the acquiree's business activities and
               operations.
       If the practitioner has audited or reviewed the immediately preceding
       annual or interim financial information, considering the findings of such
       audit or review and whether these might indicate any issues with the
       preparation of the source from which the acquiree financial information
       has been extracted.
       Corroborating the information provided by the acquiree's management in
       response to the practitioner's inquiries when the responses appear
       inconsistent with the practitioner's understanding of the acquiree or the
       engagement circumstances.
       Comparing the source from which the acquiree financial information has
       been extracted with the corresponding prior period financial information
       and, as applicable, the immediately preceding annual or interim financial
       information, and discussing significant changes with the acquiree's
       management.
Modified Audit Opinion or Review Conclusion, or Emphasis of Matter
Paragraph, with Respect to the Source from Which the Unadjusted
Financial Information Has Been Extracted or the Source from Which the
Acquiree or Divestee Financial Information Has Been Extracted
Potential Consequence (Ref: Para. 23(a))
A39. Not all modified audit opinions, review conclusions or Emphasis of Matter
paragraphs with respect to either the source from which the unadjusted financial
information has been extracted or the source from which the acquiree or divestee
financial information has been extracted may necessarily affect whether the pro
forma financial information can be compiled, in all material respects, on the basis
of the applicable criteria. For example, a qualified audit opinion may have been
                                        23
expressed on the entity's financial statements because of the non-disclosure of
remuneration for those charged with governance as required by the applicable
financial reporting framework. If this is the case and these financial statements
are used as the source from which the unadjusted financial information has been
extracted, such qualification may have no consequence on whether pro forma
net asset and income statements can be compiled, in all material respects, on
the basis of the applicable criteria.
Further Appropriate Action (Ref: Para. 23(b), 24)
A40. Further appropriate action that the practitioner may take includes, for
example:
           In relation to the requirement in paragraph 23(b):
                   Discussing the matter with the responsible party.
                   Where possible under relevant law or regulation, making a
                   reference in the practitioner 's report to the modified audit opinion,
                   review conclusion, or the Emphasis of Matter paragraph, if, in the
                   practitioner 's professional judgment, the matter is of sufficient
                   relevance and importance to users' understanding of the pro
                   forma financial information.
           In relation to the requirement in paragraph 24, where possible under
           relevant law or regulation, modifying the practitioner's opinion.
           Where possible under relevant law or regulation, withdrawing from the
           engagement.
           Seeking legal advice.
Evaluating the Presentation of the Pro Forma Financial Information

Avoiding Association with Misleading Financial Information (Ref: Para.
26(b))
A41. The Code of Ethics issued by the Institute of Chartered Accountants of
India requires that a practitioner should not be associated with reports, returns,
communications or other information where he believes that the information5:

(a)        Contain a materially false or misleading statement;
(b)        Contain statements or information furnished negligently; or
(c)        Omits or obscures any information required to be included where such
           omission or obscurity would be misleading.
Disclosures Accompanying the Pro Forma Financial Information
(Ref: Para. 14(c), 26(c))
A42.       Appropriate disclosures may include matters such as:

5   The Code of Ethics, paragraph 110.2.
                                            24
       The nature and purpose of the pro forma financial information, including
       the nature of the event or transaction, and the date at which such event is
       assumed to have occurred or transaction been undertaken;
       The source from which the unadjusted financial information has been
       extracted, and whether or not an audit or review report on such a source
       has been published;
       The pro forma adjustments, including a description and explanation of
       each adjustment. This includes, in the case of acquiree or divestee
       financial information, the source from which such information has been
       extracted and whether or not an audit or review report on such a source
       has been published;
       If not publicly available, a description of the applicable criteria on the
       basis of which the pro forma financial information has been compiled; and
       A statement to the effect that the pro forma financial information has been
       compiled for illustrative purposes only and that, because of its nature, it
       does not represent the entity's actual financial position, financial
       performance, or cash flows.
Relevant law or regulation may require these or other specific disclosures
Consideration of Significant Subsequent Events (Ref: Para. 26(d))
A43. As the practitioner is not reporting on the source from which the
unadjusted financial information has been extracted, there is no requirement for
the practitioner to perform procedures to identify events after the date of the
source that require adjustment of, or disclosure in, such source. Nevertheless, it
is necessary for the practitioner to consider whether any significant events
subsequent to the date of the source from which the unadjusted financial
information has been extracted have come to the practitioner's attention that may
require reference to, or disclosure in, the explanatory notes to the pro forma
financial information to avoid the latter being misleading. Such consideration is
based on performing the procedures under this SAE or the practitioner's
knowledge of the entity and the engagement circumstances. For example, after
the date of the source from which the unadjusted financial information has been
extracted, the entity may have entered into a capital transaction involving the
conversion of its convertible debt into equity, non-disclosure of which could result
in the pro forma financial information being misleading.
Material Inconsistency with Other Information (Ref: Para. 27)
A44. Further appropriate action that the practitioner may take if the
responsible party refuses to revise the pro forma financial information or the
other information as appropriate includes, for example:
       Where possible under relevant law or regulation:
               Describing the material inconsistency in the practitioner 's report.
               Modifying the practitioner 's opinion.
                                         25
               withdrawing from the engagement.
       Seeking legal advice.
Written Representations (Ref: Para. 28(a))
A45. In some circumstances, the types of transactions involved may require
the responsible party to select accounting policies for the pro forma adjustments
that the entity has not previously had to articulate because it had no relevant
transactions. In such a case, the practitioner may request the responsible party
to expand the written representations to include confirmation that the selected
accounting policies constitute the entity's adopted policies for such types of
transactions.
Forming the Opinion Assurance on Further Matters Required by the Relevant Law or Regulation (Ref: Para. 29) A46. Relevant law or regulation may require the practitioner to express an opinion on matters other than whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria. In some of these circumstances, it may not be necessary for the practitioner to perform additional procedures. For example, the relevant law or regulation may require the practitioner to express an opinion about whether the basis on which the responsible party has compiled the pro forma financial information is consistent with the entity's accounting policies. Compliance with the requirements in paragraphs 18 and 22(c) of this SAE provides a basis for expressing such an opinion. A47. In other circumstances, the practitioner may need to perform additional procedures. The nature and extent of such additional procedures will vary with the nature of the other matters on which the relevant law or regulation requires the practitioner to express an opinion. Statement of the Practitioner's Responsibility for the Report A48. The relevant law or regulation may require the practitioner to include in the practitioner's report an explicit statement asserting or confirming the practitioner's responsibility for the report. The inclusion of such an additional legal or regulatory statement in the practitioner's report is not incompatible with the requirements of this SAE. Disclosure of the Applicable Criteria (Ref: Para. 30) A49. The responsible party need not repeat in the explanatory notes accompanying the pro forma financial information any criteria that are prescribed by the relevant law or regulation, or promulgated by an authorized or recognized standard-setting organization. Such criteria will be publicly available as part of the reporting regime and are therefore implicit in the responsible party's compilation of the pro forma financial information. A50. Where the responsible party has developed any specific criteria, it is 26 necessary that those criteria be disclosed so that users may obtain a proper understanding of how the pro forma financial information has been compiled by the responsible party. Preparing the Assurance Report Title (Ref: Para. 35(a)) A51. A title indicating that the report is the report of an independent practitioner, for example, "Independent Practitioner's Assurance Report on the Compilation of Pro Forma Financial Information Included in a Prospectus," affirms that the practitioner has met all of the relevant ethical requirements regarding independence as required by the Framework for Assurance Engagements6. This distinguishes the report of the independent practitioner from reports issued by others. Addressee(s) (Ref: Para. 35(b)) A52. The relevant law or regulation may specify the addressee(s) of the report. Alternatively, the practitioner may agree with the entity who the addressee(s) will be as part of the terms of the engagement. Introductory Paragraphs (Ref: Para. 35(c)) A53. As the pro forma financial information will be included in a prospectus that contains other information, the practitioner may consider, if the form of presentation allows, including a reference that identifies the section where the pro forma financial information is presented. This helps readers identify the pro forma financial information to which the practitioner's report relates. Opinion (Ref: Para. 13(c), 35(h)) A54. Whether the phrase "pro forma financial information has been compiled, in all material respects, on the basis of the [applicable criteria]," or the phrase "pro forma financial information has been properly compiled on the basis stated" is used to express the opinion in any particular jurisdiction is determined by the law or regulation governing reporting on pro forma financial information in that jurisdiction, or by generally accepted practice in that jurisdiction. A55. The relevant law or regulation in some jurisdictions may prescribe the wording of the practitioner's opinion in terms other than those specified above. Where this is the case, it may be necessary for the practitioner to exercise judgment to determine whether performing the procedures set out in this SAE would enable the practitioner to express the opinion in the wording prescribed by law or regulation, or whether further procedures would be necessary. A56. When the practitioner concludes that performing the procedures set out in this SAE would be sufficient to enable the practitioner to express the opinion in the wording prescribed by law or regulation, it may be appropriate to regard that wording as being equivalent to the two alternative wordings of the opinion 6 The Framework for Assurance Engagements, paragraph 16. 27 specified in this SAE. Illustrative Report (Ref: Para. 35) A57. A practitioner's report with an unmodified opinion is set out in the Appendix. Material Modifications vis-à-vis ISAE 3420, "Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus" Deletions 1 Paragraph 32 of ISAE 3420 deals with circumstances where the relevant law or regulation precludes publication of a prospectus that contains a modified opinion with regard to whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria and the practitioner concludes that a modified opinion is nevertheless appropriate, the practitioner shall discuss the matter with the responsible party and if the responsible party does not agree to make the necessary changes, the practitioner shall withhold the report or withdraw from the engagement or consider seeking legal advice. Since in India, the practice of withholding the report is not in vogue, the option of withholding the report by the practitioner has been deleted. Similarly in paragraph A40 and paragraph A44, the option of withholding the report by the practitioner has been deleted. 28 Appendix (Ref: Para. A57) Illustrative Practitioner's Report with an Unmodified Opinion INDEPENDENT PRACTITIONER'S ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION INCLUDED IN A PROSPECTUS [Appropriate Addressee(s)] Report on the Compilation of Pro Forma Financial Information Included in a Prospectus We have completed our assurance engagement to report on the compilation of pro forma financial information of ABC Company by [the responsible party]. The pro forma financial information consists of [the pro forma balance sheet as at [date]], [the pro forma statement of profit and loss for the period ended [date]], [the pro forma cash flow statement for the period ended [date],] and related notes [as set out on pages xx­xx of the prospectus issued by the company]. The applicable criteria on the basis of which [the responsible party] has compiled the pro forma financial information are [specified in [Securities Regulation XX] and described in [Note X]]/[described in [Note X]]. The pro forma financial information has been compiled by [the responsible party] to illustrate the impact of the [event or transaction] [set out in Note X] on the [company's financial position as at specify date] [and] [the company's/its financial performance [and cash flows] for the period ended specify date] as if the [event or transaction] had taken place at [specify date] [and specify date respectively]. As part of this process, information about the company's [financial position], [financial performance] [and cash flows] has been extracted by [the responsible party] from the company's financial statements [for the period ended [date]], on which [[an audit]/[a review] report]/[no audit or review report] has been published.7 [The Responsible Party's] Responsibility for the Pro Forma Financial Information [The responsible party] is responsible for compiling the pro forma financial information on the basis of the [applicable criteria]. This responsibility includes the responsibility for designing, implementing and maintaining internal control relevant for compiling the pro forma financial information on the basis of the [applicable criteria] that is free from material misstatement, whether due to fraud or error. The .................... {Responsible party} is also responsible for identifying and ensuring that the Company complies with the laws and regulations applicable to its activities, including compliance with the provisions of the laws and regulations for the compilation of Pro Forma Financial Information. 7 Where the audit or review report has been modified, reference may be made to where the modification has been described in the prospectus. 29 Practitioner 's Responsibilities Our responsibility is to express an opinion , as required by .................[Reference to the relevant law or regulation], about whether the pro forma financial information has been compiled, in all material respects, by ... ... ... ... ... ... . [the responsible party] on the basis of the ........................[applicable criteria]. We conducted our engagement in accordance with Standard on Assurance Engagements (SAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the Institute of Chartered Accountants of India. This Standard requires that the practitioner comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether ................. [the responsible party] has compiled, in all material respects, the pro forma financial information on the basis of the ........................[applicable criteria]. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information. The purpose of pro forma financial information included in a prospectus is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at .................[specify date] would have been as presented. A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by [the responsible party] in the compilation of the pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether: The related pro forma adjustments give appropriate effect to those criteria; and The pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information. The procedures selected depend on the practitioner's judgment, having regard to the practitioner 's understanding of the nature of the company, the event or transaction in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances. The engagement also involves evaluating the overall presentation of the pro forma financial information. 30 We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, [the pro forma financial information has been compiled, in all material respects, on the basis of the ............................ [applicable criteria]]/[the pro forma financial information has been properly compiled on the basis stated]. Report on Other Legal or Regulatory Requirements [Relevant law or regulation may require the practitioner to express an opinion on other matters (see paragraphs A46­A47). The form and content of this section of the practitioner 's report will vary with the nature of such other reporting responsibilities.] For XYZ and Co. Chartered Accountants Firm Registration number Signature (Name of the Member Signing the Report) (Designation8) Membership Number Place of Signature Date 8 Partner or Proprietor, as the case may be. 31
 
 
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