Requirements in relation to bonus issue

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6.29

What are the circumstances where the listed issuer, 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 paragraph 6.30(3)4 of the Main LR and paragraph 1(dA) in Part B, Annexure PN28-B5 of Practice Note 28?

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The following table clarifies the obligations of the listed issuer and the external auditors/reporting accountants in providing the relevant confirmations required for purposes of complying with paragraph 6.30(3) of the Main LR and paragraph 1(dA) in Part B, Annexure PN28-B of Practice Note 28:

MainFAQ 6.29- table.PNG MainFAQ 6.29-table 2.PNG

 

​​4 ​Paragraph 6.30(3) stipulates that a listed issuer 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 issuer such reserves must be verified and confirmed by the external auditors or reporting accountants of the listed issuer. 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.
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​​5 Paragraph 1(dA) of Part B, Annexure PN28-B provides that a listed issuer must file the following documents in support of the listing application for a bonus issue: (a) confirmation from the listed issuer 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.
​​(a)​confirmation from the listed issuer 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
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