Raising Capital for Kazakh Corporates

Transcription

1 Raising Capital for Kazakh Corporates Financial Consideration on listing in Hong Kong and Experience Sharing on Kazakhmys listing in Hong Kong 30

2 Agenda IPO financial deliverables Acceptable accounting standards Financial disclosures and experience sharing Post-listing financial reporting requirements Other issues Our credentials Page 2

3 IPO financial deliverables Public report / letters Accountants report on historical financial information Letter on profit forecast (if prospectus contains the forecast) Letter on pro forma financial information (adjusted net tangible assets and earnings per share) Review report on any half-yearly or quarterly financial information published by the listing applicant (as required by the regulations in its home listing venue) in respect of a period end subsequent to the latest audited period covered by the accountants report Private letters Comfort letter on adequacy of working capital Comfort letter on statement of indebtedness HKSIR 400 comfort letter (assistance re due diligence on Hong Kong prospectus) SAS 72 review and comfort letter (S144A / Regulation S offering) Page 3

4 Acceptable accounting standards Accounting standards Primary listing Secondary listing HKFRS or IFRS PRC GAAP (for H-share companies only) Other acceptable accounting standards (only for companies also listed outside Hong Kong): US Other acceptable accounting standards (only for companies also listed outside Hong Kong): Canada, Japan, Singapore, UK Reconciliation to HKFRS or IFRS Reconciliation to HKFRS or IFRS N/A No reconciliation required Reconciliation to HKFRS or IFRS Note: Applicable to both accountants report at listing stage and post-listing financial reports Page 4

5 Financial disclosures Accountants reports and periodic financial reports must normally contain financial information that includes specific disclosures required under: HKFRS or IFRS Hong Kong Listing Rules Hong Kong Companies Ordinance SEHK may waive some or all of the above disclosure requirements for secondary listing applicants on a case-bycase basis, taking into account factors including: Disclosures required under the laws and rules of the primary listing venue and the alternative accounting standards adopted Alternative disclosures with respect to material items to provide additional information to investors Page 5

6 Experience Sharing on Kazakhmys Listing Incorporated and listed in the UK Historical financial statements were prepared that complies with disclosure requirements under UK laws and London listing rules An analysis was performed in comparing the disclosure requirements under UK laws and London listing rules vs. HK listing rules and Companies Ordinance Waivers were obtained to dispense with requirement to disclose certain specific information required only under Hong Kong listing rules and Companies Ordinance Accountants report in Hong Kong prospectus contains historical financial information that complies with disclosure requirements under UK laws and London listing rules Similar waiver obtained for periodic financial reports issued after the Hong Kong listing Page 6

7 Post-listing financial reporting requirements Overseas issuers may engage overseas auditors (i.e., non-hong Kong auditors) The overseas auditor must be an independent practicing accountant of good standing if the overseas issuer maintains a primary listing in Hong Kong have international name and reputation be a member of a recognized body of accountants acceptable to the SEHK Acceptable to SEHK if the authority supervising such overseas auditor has cooperation/ communication arrangement with the relevant authorities in Hong Kong SEHK normally accepts overseas auditors for overseas issuers maintaining a secondary listing in Hong Kong Page 7

8 Post-listing financial reporting requirements Annual results: audited Announcement to be released within 3 months after year end Annual report to be released within 4 months after year end not less than 21 days before annual general meeting ( AGM ) Half-yearly results: not required to be audited or reviewed Announcement to be released within 2 months after period end Interim report to be released within 3 months after period end Quarterly results: not mandatory for Main Board companies If required by listing venue outside Hong Kong announcement to be released simultaneously in Hong Kong Page 8

9 Other issues Related party and connected transactions Related parties disclosures Disclosure requirements for financial reporting purposes under HKAS 24 / IAS 24 Related Parties Disclosures Connected transactions Requirements under Chapter 14A Connected Transactions of Hong Kong Listing Rules Definition of connected persons is different from that of related parties under the above accounting standards: some overlap Page 9

10 Other issues Group reorganization and listing structure First time adoption of IFRS/HKFRS Acquisition of material subsidiary or business during the track record period Disclosure of pre-acquisition financial information (audited) Acquisition of business or subsidiary after the track record period Disclosure of three-year financial information (audited) Page 10

11 Ernst & Young s credentials Our credentials in assisting companies listing in Hong Kong Market share of Hong Kong Main Board listings in 2010 others 69% Ernst & Young 31% Note: Calculation based on companies raising funds above US$150 million Source: Listed company information compiled by Ernst & Young Ernst & Young is a market leader in assisting companies to list in Hong Kong. In 2010, we assisted 15 companies that raised funds in excess of US$150 million to list in Hong Kong. This represented a 31% share of these IPOs listing on the Main Board, ranking us first by market share. Our significant IPO clients in recent years include: 2006: We helped ICBC successfully launch its IPO, which represented the largest ever IPO at that time in terms of funds raised 2007: We assisted market leaders in their respective industries with their IPOs, including Fosun International and BYD Electronic 2008: We assisted China Railway Construction Corp and CSR Corporation to list in March and August, respectively 2009: We assisted 13 companies to list in Hong Kong, including China Pacific Insurance Last year we helped 20 companies to list in Hong Kong, the highest number of IPOs in recent years In this year till July, we assisted another 8 medium size companies successfully launch their IPOs in Hong Kong. Among all 8 companies, Milan Station was another big success in terms of oversubscription and IPO debut performance, it recorded an oversubscription multiple of over 2000 times and increased 66% on debut from its offer price Over the past five years, we have helped over 70 enterprises to list in Hong Kong Page 11

12 Ernst & Young s credentials Selected Ernst & Young IPO clients listing on Hong Kong Main Board Selected Ernst & Young IPO clients listing on Hong Kong Main Board (cont ) Advanced Semiconductor Manufacturing Corporation China BlueChemical Computime Group Embry Holdings Hunan Nonferrous Metals Corporation Industrial and Commercial Bank of China Shanghai Prime Machinery Zhaojin Mining Industry Zhuzhou CSR Times Electric # secondary listing BYD Electronic (Int l) Capxon International Electronic Centron Telecom Int l China Agri-Industries Eyang Holdings Fosun Int l Franshion Properties Global Sweeteners Kingsoft Corporation KWG Property Holding Regent Manner Int l Xinhua Winshare Publishing and Media Tao Heung Holdings Zhong An Real Estate A8 Digital Music Holdings China Railway Construction Corporation CSR Corporation Little Sheep Group Maoye Int l Holdings Xtep Int l Holdings Asia Cassava Resources Holdings Ausnutria Dairy Corporation BBMG Corporation China Pacific Insurance China Singyes Solar Technologies China South City China Vanadium Titano- Magnetite Mining CPMC Holdings Shenguan Holdings Sany Heavy Equipment Silver Base Group Wynn Macau Yuzhou Properties Biostime China ITS (Holdings) China Liansu Group China SCE Property China Sanjiang Fine Chemicals Chu Kong Petroleum and Natural Gas Steel Pipe China Suntien Green Energy Corporation CITIC Dameng Convoy Financial Evergreen Int l Goodbaby Int l Int l Mining Machinery Leoch Int l Technology Magic Holdings Int l NVC Lighting Technology Sijia Group SITC Int l Holdings Springland Int l Xinjiang Goldwind Science & Technology Zhongsheng Group 2011 (July) Baofeng Modern Int l China Kingstone Mining Far East Horizon Milan Station Newton Resources China Fiber Optic Network System Prince Frog Int l Kazakhmys PLC # Page 12

13 Ernst & Young Assurance Tax Transactions Advisory About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. For more information about the organization, please visit Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients Ernst & Young, China. All Rights Reserved. FEA no This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither the Ernst & Young China practice nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.