Kathmandu. KATHMANDU: The Securities Board of Nepal (SEBON) has set new criteria for reviewing the financial statements submitted by the companies for the issuance of the initial public offering (IPO).
The Securities Board of Nepal (SEBON) has issued the Financial Statements Review Criteria-2082 for the initial public offering (IPO). According to the Securities Board of Nepal (SEBON), this criterion will come into effect from April 1.
According to the new criteria, the audited financial statements of the last 3 fiscal years, the audited financial statements of the last fiscal year and the certified unrefined financial statements of the interim period will be reviewed or scrutinized.
Under what circumstances is it reviewed or investigated?
If more than 75,000 percent of the sales income of the corporate entity (income directly related to the business) is in the business proceeds or any other such heading.
If the tax, tariff and other amounts to be paid to the government or government agency are potential liabilities and adjusting these amounts does not meet the net worth, net profit and other liability criteria of the company for public issue.
If the taxes, duties and other amounts payable to the government or government agency are in the potential liability and the net worth of the organization is half or less than the paid-up capital when adjusting these amounts.
If you have at least 30 percent of your main asset related business.
If there is a change in the accounting policy and accounting estimates of the corporate entity (except as per clear instructions from the relevant regulator) and the net worth, net profit and other financial criteria of the company for public issuance are met as a result of this change.
If at least 30 percent of the average business income in three years is transacted with the person concerned (excluding transactions with government regulators).
If the company’s net worth, net profit and other financial criteria are met for public issuance due to non-operating income (other than directly related to the business) or reserve fund (other than profit and loss transfer) or both.
If there is any deficiency mentioned in the auditor’s report and the adjustment of the amount related to that deduction does not meet the net worth, net profit and other financial criteria of the company for public issue.
The auditor has restated the financial statements for reasons other than the restatement of the financial statements of the previous year for the correction of the shortcomings mentioned in the report issued by the auditor and if the financial statements such as net worth, net profit and other financial statements of the company are found to meet the criteria.
If the company’s net worth, net profit and other financial criteria for public issuance are found to have been adjusted in the financial statements of the corporate body in the previous years and due to this adjustment, the net worth, net profit and other financial criteria of the company have been met for public issuance.
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