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FAQ 6.30

Requirements in relation to bonus issue

​6.30What are the circumstances where the listed corporation, or the external auditors/reporting accountants, is required to provide confirmations that the available reserves for capitalization are adequate to cover the entire bonus issue under Rule 6.31(3)4 of the ACE LR and paragraph 1(dA) in Part B, Annexure GN17-B5 of Guidance Note 17?
​The following table clarifies the obligations of the listed corporation and the external auditors/reporting accountants in providing the relevant confirmations required for purposes of complying with Rule 6.31(3) of the ACE LR and paragraph 1(dA) in Part B, Annexure GN17-B of Guidance Note 17:
AceFAQ 6.30-table(i).PNG
AceFAQ 6.30-table(ii).PNG
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4Rule 6.31(3) stipulates that a listed corporation must ensure that the available reserves for capitalisation are adequate to cover the entire bonus issue of securities. If the reserves for capitalisation are not based on the annual audited financial statements of the listed corporation, such reserves must be verified and confirmed by the external auditors or reporting accountants of the listed corporation. Where a confirmation by the external auditors or reporting accountants is required, the reserves for capitalisation, which may be adjusted for subsequent events, must be based on the latest audited financial statements or the latest quarterly report, whichever is the later.
5Paragraph 1(dA) of Part B, Annexure GN17-B provides that a listed corporation must file the following documents in support of the listing application for a bonus issue:
​(a)​confirmation from the listed corporation on the adequacy of the reserves for capitalization; and
​(b)​where the confirmation from the external auditors or reporting accountants is required, the report from the external auditors or reporting accountants.