Securities And Exchange Board Of India - Subsection
Section 26(7) in Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009
(7)No issuer shall make an initial public offer, unless as on the date of registering prospectus or red herring prospectus with the Registrar of Companies, the issuer has obtained grading for the initial public offer from at least one credit rating agency registered with the Board.Explanation. - For the purposes of this regulation:(I)"net tangible assets" mean the sum of all net assets of the issuer, excluding intangible assets as defined in Accounting Standard 26 (AS 26) issued by the Institute of Chartered Accountants of India;(II)"project" means the object for which monies are proposed to be raised to cover the objects of the issue;(III)In case of an issuer which had been a partnership firm, the track record of distributable profits of the partnership firm shall be considered only if the financial statements of the partnership business for the period during which the issuer was a partnership firm, conform to and are revised in the format prescribed for companies under the Companies Act, 1956 and also comply with the following:(a)adequate disclosures are made in the financial statements as required to be made by the issuer as per Schedule VI of the Companies Act, 1956;(b)the financial statements are duly certified by a Chartered Accountant stating that:(i)the accounts and the disclosures made are in accordance with the provisions of Schedule VI of the Companies Act, 1956;(ii)the accounting standards of the Institute of Chartered Accountants of India have been followed;(iii)the financial statements present a true and fair view of the firm's accounts;(IV)in case of an issuer formed out of a division of an existing company, the track record of distributable profits of the division spun-off shall be considered only if the requirements regarding financial statements as provided for partnership firms in Explanation III are complied with;(V)"bid-ask spread" means the difference between quotations for sale and purchase;(VI)The term -infrastructure sector" inclUdes the facilities or services as specified in Schedule X.
