{"id":8269,"date":"2024-12-18T07:37:43","date_gmt":"2024-12-18T07:37:43","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8269"},"modified":"2024-12-18T08:56:04","modified_gmt":"2024-12-18T08:56:04","slug":"ca-certificate-criteria-tracing-for-drhp-sme-ipo","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/","title":{"rendered":"CA Certificate: Criteria tracing for DRHP-SME IPO"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-8272\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/12\/SME-IPO.jpg\" alt=\"SME IPO\" width=\"690\" height=\"438\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e02347e7080\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e02347e7080\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#SME_IPOs_Overview\" title=\"SME IPOs Overview\">SME IPOs Overview<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Eligibility_for_SME_IPO\" title=\"Eligibility for SME IPO:\">Eligibility for SME IPO:<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#NSE_Emerge\" title=\"NSE Emerge\">NSE Emerge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#BSE_SME\" title=\"BSE SME\">BSE SME<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#CA_Certificate_for_SME_IPO_CriteriaSteps_tracing_for_DRHPRHPProspectus\" title=\"CA Certificate for SME IPO: Criteria\/Steps tracing for DRHP\/RHP\/Prospectus\">CA Certificate for SME IPO: Criteria\/Steps tracing for DRHP\/RHP\/Prospectus<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Criteria_Explanation_Steps_tracing_DRHP_RHP_or_Prospectus_for_SME_IPO\" title=\"Criteria Explanation &amp; Steps tracing DRHP, RHP, or Prospectus for SME IPO \">Criteria Explanation &amp; Steps tracing DRHP, RHP, or Prospectus for SME IPO <\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Comparison_to_Restated_Financial_Information\" title=\"Comparison to Restated Financial Information: \">Comparison to Restated Financial Information: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Mathematics_Accuracy_of_Amounts_Totals_Percentages_and_Ratios\" title=\"Mathematics Accuracy of Amounts, Totals, Percentages, and Ratios: \">Mathematics Accuracy of Amounts, Totals, Percentages, and Ratios: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Comparison_to_Schedules_Derived_from_Accounting_Records\" title=\"Comparison to Schedules Derived from Accounting Records: \">Comparison to Schedules Derived from Accounting Records: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Specific_Components_of_Non-GAAP_Measures\" title=\"Specific Components of Non-GAAP Measures: \">Specific Components of Non-GAAP Measures: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Comparison_to_Accounting_Records\" title=\"Comparison to Accounting Records: \">Comparison to Accounting Records: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Currency_conversion_accuracy\" title=\"Currency conversion accuracy: \">Currency conversion accuracy: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caindelhiindia.com\/blog\/ca-certificate-criteria-tracing-for-drhp-sme-ipo\/#Comparison_to_Audited_Financial_Statements\" title=\"Comparison to Audited Financial Statements: \">Comparison to Audited Financial Statements: <\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"SME_IPOs_Overview\"><\/span><a href=\"https:\/\/carajput.com\/blog\/sme-ipos-listing-opportunities-for-both-smes-startups\/\"><span style=\"color: #000080;\">SME IPOs Overview<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Small and medium enterprises can raise capital by offering shares to the public through SME IPOs. These IPOs enable SMEs to list their shares on specific SME platforms of stock exchanges, namely NSE Emerge and BSE SME, designed exclusively for smaller enterprises. <span style=\"font-size: 16px;\">SME IPOs serve as a gateway for small businesses to access public funding while offering investors an opportunity to participate in small and medium enterprise growth stories. <\/span><span style=\"font-size: 16px;\">Stringent eligibility criteria and mandatory underwriting enhance investor confidence. Small and medium enterprises <\/span><span style=\"font-size: 16px;\">stocks remain a vital investment avenue for those seeking exposure to emerging enterprises. Chartered accountants Certificate required verifying financial figures disclosed in documents like the Draft Red Herring Prospectus, Red Herring Prospectus, or the Prospectus.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Eligibility_for_SME_IPO\"><\/span><span style=\"color: #000080;\"><strong>Eligibility for SME IPO<\/strong>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h4><span class=\"ez-toc-section\" id=\"NSE_Emerge\"><\/span><span style=\"color: #000080;\"><strong>NSE Emerge<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Registered under the Companies Act (1956\/2013).<\/li>\n<li>Minimum track record of 3 years.<\/li>\n<li>Positive net worth for at least 2 out of 3 financial years.<\/li>\n<li>No pending legal or regulatory proceedings.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"BSE_SME\"><\/span><span style=\"color: #000080;\"><strong>BSE SME<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Net worth of at least \u20b91 crore for 2 preceding financial years.<\/li>\n<li>Net tangible assets of \u20b93 crores.<\/li>\n<li>Should support dematerialized securities.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"CA_Certificate_for_SME_IPO_CriteriaSteps_tracing_for_DRHPRHPProspectus\"><\/span><span style=\"color: #000080;\"><strong>CA Certificate for SME IPO: Criteria\/Steps tracing for DRHP\/RHP\/Prospectus<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The &#8220;Auditor Circle Up Criteria&#8221; outlines a systematic approach for tracing and verifying financial figures disclosed in documents like the Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), or the Prospectus. The procedure ensures that the disclosed numbers correspond to the company\u2019s financial records without providing assurance on their appropriateness for particular purposes. This framework is vital in due diligence processes for IPOs and capital market transactions, enabling auditors to provide an objective basis for verifying disclosed financial data while delineating the scope of their review. Objective of the CA certificate is to ensure traceability and numerical accuracy without providing assurances about the appropriateness, definitions, or interpretations of the disclosed figures. CA used the methodology for this certificate to Relies on direct matching, arithmetic verification, and validation of prepared schedules. Chartered accountants doing their jobs with Disclaimers related to repeatedly emphasizing no representation on:<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Usefulness or reliability of numbers.<\/li>\n<li>Reasons for changes across periods.<\/li>\n<li>Adequacy of classifications.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Criteria_Explanation_Steps_tracing_DRHP_RHP_or_Prospectus_for_SME_IPO\"><\/span><span style=\"color: #000080;\"><strong>Criteria Explanation &amp; Steps tracing DRHP, RHP, or Prospectus for SME IPO <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Criteria Explanation &amp; Steps Tracing &amp; Verifying Financial Figure Disclosure in Documents Like Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), or the Prospectus. Below is a breakdown of the criteria and their application while CA issues the certificate towards Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), or the Prospectus:<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Comparison_to_Restated_Financial_Information\"><\/span><span style=\"color: #000080;\">Comparison to Restated Financial Information: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered Accountants Needed to Check if the identified amount matches the corresponding amount in the restated financial statements (consolidated or standalone) included in the Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), or the Prospectus.<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Mathematics_Accuracy_of_Amounts_Totals_Percentages_and_Ratios\"><\/span><span style=\"color: #000080;\">Mathematics Accuracy of Amounts, Totals, Percentages, and Ratios: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered Accountants Needed to Recompute and confirm the arithmetic accuracy of totals, percentages, and ratios disclosed in the Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), or the Prospectus.<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Comparison_to_Schedules_Derived_from_Accounting_Records\"><\/span><span style=\"color: #000080;\">Comparison to Schedules Derived from Accounting Records: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered accountants are needed to verify amounts in a schedule prepared by the company derived from its accounting records. Confirm the mathematical accuracy of the schedule. And Chartered Accountants Needed to reconcile the numbers are not traced back to accounting records. No tests on definitions, reasonableness, or usefulness.<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Specific_Components_of_Non-GAAP_Measures\"><\/span><span style=\"color: #000080;\">Specific Components of Non-GAAP Measures: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered accountants are needed to verify non-GAAP measures to:<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Restated financial information.<\/li>\n<li>Schedules are derived from accounting records.<\/li>\n<li>Arithmetic accuracy of the calculation of these measures.<\/li>\n<li>But Chartered Accountants are doing their job via the use of limited to arithmetic verification; the appropriateness of non-GAAP definitions is not assessed.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Comparison_to_Accounting_Records\"><\/span><span style=\"color: #000080;\">Comparison to Accounting Records: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered accountants needed to trace the identified amount directly to the company\u2019s accounting records.<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Currency_conversion_accuracy\"><\/span><span style=\"color: #000080;\">Currency conversion accuracy: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered accountants are needed to confirm the accuracy of currency conversions (e.g., rupees to USD) using the specified exchange rate. But Chartered Accountants are doing their job, but there is no validation of the exchange rate&#8217;s appropriateness.<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Comparison_to_Audited_Financial_Statements\"><\/span><span style=\"color: #000080;\">Comparison to Audited Financial Statements: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\">Chartered accountants Needed to match the identified amount to the company\u2019s audited standalone or consolidated financial statements for the indicated period.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>SME IPOs Overview Small and medium enterprises can raise capital by offering shares to the public through SME IPOs. These IPOs enable SMEs to list their shares on specific SME platforms of stock exchanges, namely NSE Emerge and BSE SME, designed exclusively for smaller enterprises. SME IPOs serve as a gateway for small businesses to &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[116],"tags":[1131],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8269"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8269"}],"version-history":[{"count":4,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8269\/revisions"}],"predecessor-version":[{"id":8274,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8269\/revisions\/8274"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}