New Market Procedures and Templates

Transcription

1 New Market Procedures and Templates 14 March 2014 Consultation Draft

2 Contents Introduction Directors Acknowledgements Template Business Update Template Listing Document Template... 7 NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

3 Introduction The following templates are prescribed pursuant to New Market Rule 70 and relate to the operation of the New Market Rules. The New Market Procedures and Templates are made pursuant to the New Market Listing Rules and can be enforced as if the requirements they contain were included in the New Market Listing Rules. NZX has only included the templates on which it wishes to consult in this consultation draft of the New Market Procedures and Templates. The final New Market Procedures and Templates will include additional prescribed templates covering matters such as allotments, buybacks and corporate actions. These prescribed templates will be in a similar form to the forms prescribed under the NZX Main Board Rules. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

4 1. Directors Acknowledgements Template The following is the form for the director s acknowledgement for the purposes of New Market Rule 9: NEW MARKET Director Acknowledgement NZX Limited Level 1, NZX Centre, 11 Cable Street PO Box 2959 Wellington Attention: NZX Regulation regulation@nzx.com Acknowledgement pursuant to New Market Listing Rule 9 I, [name of Director], a Director of [name of New Market company] ( the New Market company ) hereby acknowledge that: (a) (b) I am aware that the New Market company is contractually bound to observe the Listing agreement between the New Market company and NZX, and the New Market Listing Rules from time to time; and I will use my best endeavours to procure compliance by the New Market company with the New Market Listing Rules. Dated this [date] day of [month] [year].. [name of Director] NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

5 2. Business Update Template The following is the template that sets out the requirements for the business update for the purposes of New Market Rule 34: 2.1. A business update must be in writing and be attributed to a director or senior manager of the New Market company A business update must contain the information and be presented in the tabular format, as set out in the table below: [Name of New Market Company] - Business Update for the period [xx ] to [xx] A description of any major changes or developments that have a key effect on a New Market company s business, or stated strategy and plans that have occurred: (a) since the last business update was announced to the market; or (b) if this is the first business update, that have occurred since the listing document was issued. General Commentary and Review In particular, updates in relation to the following matters must be included where they will have a key effect on a New Market company s business, or stated strategy and plans: Customers / Suppliers Potential opportunities Government regulation or disciplinary action against business Contingent liabilities A comparison of the New Market company s performance against its key operating milestones for the business update period, against either: Performance against Key Milestones (a) the key operating milestones contained in the New Market company s listing document; or (b) if the New Market company has reset its key operating milestones in an interim update, against the reset milestones. Key Milestone Reset Commentary If this is the first business update since an interim update in which key operating milestones were reset, commentary as to the reasons for the reset of the key operating milestones. Further disclosures A statement of any changes of Directors or senior managers. Future events A statement of the timetable for general meetings and investor events, such as roadshows or investor days. A statement of the date when the next Business Update is scheduled to be released. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

6 Other Information A statement of the results of a shareholders meeting if not already released to the market by way of an interim update. The New Market is a registered market operated by NZX Limited, a registered exchange. The New Market is a market for smaller companies that are typically at the earlier stage of business development and the risks of investing in companies listed on the New Market may be higher than investing in other companies. Some of the factors that may give rise to these risks are: Risk warning The New Market Rules require companies to keep the market informed about important events, but the disclosure rules differ from those that apply to companies listed on the NZX Main Board. Sometimes a New Market company may be aware of the price sensitive information, but may not be required to release that information to the market. Trading volumes may be low, and share prices may be volatile, which means it may take longer to sell or buy shares in the New Market companies. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

7 3. Listing Document Template The following is the information that is required to be included in the listing document for the purposes of New Market Rule 3: (A) Front Page Disclosure Statement that there are differences between the New Market and other markets operated by NZX. In particular, [Name of New Market company] on the New Market will not be subject to continuous disclosure but will provide a business update as to performance against the Key Operating Milestones contained on page [x] of this document on a quarterly basis. The New Market Listing Rules require companies to keep the market informed about important events, but the disclosure rules differ from those that apply to companies listed on the NZX Main Board. Sometimes a New Market company may be aware of price sensitive information, but may not be required to release that information to the market. Trading volumes may be low, and share prices volatile, which means it may take longer to sell or buy shares in New Market companies. As a consequence, you should consider the suitability of an investment in New Market companies and discuss with your NZX Advisor whether you meet the criteria to invest in the New Market. If you are unsure of your suitability, you can complete a Financial Needs Analysis at [insert website link] which may assist. Statement in bold containing a warning if the New Market company is currently loss making or has received an audit opinion to which section 5.2 clause (3) applies. Statement that the document contains restricted disclosure (i.e. not as much information as a prospectus prepared under the SMA or a product disclosure statement prepared under the FMCA). Reference to where further information can be found in relation to the offer (New Market website, New Market company s ticker) Reference to FMA regulating conduct in New Zealand s financial markets including regulating financial advisers and NZX as the operator of a registered market. Recommendation to seek professional advice. Reference to financial adviser s complaints process. (B) Contents Page 1. Key Information Summary 2. About the Issuer 2.1 Business Details 2.2 Strategy and Plans 2.3 Key Operating Milestones 2.4 Directors and Senior Management 2.5 Control 3. Use of Proceeds 4. Description of the Offer NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

8 5. Financial Information 5.1 Summary Financial Statements for Most Recent Accounting Period 5.2 Audit Report 5.3 Extracted Financial Statements for prior periods 6. Risks 7. Summary of Other Material Matters 8. Further Information 9. Certifications 9.1 New Market advisor certification 9.2 Director certification 10. Directory Content Requirements 1 Key Information Summary 1) A 1-2 sentence description of the New Market company s business, including how long the New Market company has been conducting its operations; 2) Provide the following table as at the date of the Disclosure Document about the offer: Description of the Product Price Maximum Number of securities offered Maximum Number of Securities being offered as a percentage of share capital as at the date of the Disclosure Document Minimum Number of securities that must be allotted for the offer to proceed Number of shares following offer (if fully subscribed) Offer opens Offer closes NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

9 Allotment date Quotation Date First Dividend Payment Date 3) Provide the following table of indicative information about the New Market company as at the date immediately following the allotment of the securities being offered in the Disclosure Document: Indicative Implied Market Cap Indicative Enterprise Value Indicative Total Shares on Issue If Minimum Amount allotted If Maximum Amount allotted 4) State any material assumptions on which the table required by (3) is based. 5) Provide a statement as to the New Market company s dividend policy. 6) Provide a list of the most significant principal risks and a cross-reference to where further information about risks can be found in the Disclosure Document. 7) State the name of the New Market advisor and a brief (no more than 2 sentence) biography for the New Market advisor. 2 About the New Market company 2.1 Business Details 1) A brief description (no more than one page) of the New Market company s business in further detail, including details of: a) Major customers; b) Major suppliers; c) Principal assets and if the principal assets are not owned the basis on which the New Market company operates those assets; and d) Material restrictions on the New Market company to make a distribution or borrow. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

10 2.2 Strategy and Plans 1) Provide a description of the directors strategy and plans for the business and a reference to section 3 that discusses use of proceeds. 2.3 Key Operating Milestones 1) A Key Operating Milestone is an objective that will have a significant impact on the New Market company s business performance, revenues and/ or expenses. 2) Complete the following table in relation to the end of each of the next 2 consecutive accounting periods following the date of the disclosure document Key Operating Milestone Projection as at [end of first accounting period following date of disclosure document] Projection as at [end of second accounting period following date of disclosure document] ) Provide a brief description of the key assumptions on which the projections contained in the table required by (1) are based. 4) State that the New Market company will not be subject to continuous disclosure but will report against the Key Operating Milestones in a business update as explained further in section 8. 5) Provide a reference to where further financial information relating to the New Market company can be found in the prospectus. 2.4 Directors and Senior Management 1) The name and a brief (no more than 2 sentences) biography of Directors and Senior Management, identifying those Directors who are Independent Directors. 2) If a person has a right to appoint or remove a Director (other than shareholders acting in general meeting or directors acting to fill a casual vacancy) the name of that person. 3) The nature and amount of Directors fees. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

11 2.4 Directors and Senior Management 4) If the New Market company pays a Director or an Associated Person of a Director for services (including the reimbursement of expenses, but excluding Directors fees) state: a) the amount of such payments and whether such payments are limited; b) the nature of the services to which such payments relate. 5) A brief summary of any transaction entered into, or relationship between a Director or an Associated Person of a Director and the New Market company, in the five years prior to the date of the Disclosure Document, if the transaction is material to either party, and is not described elsewhere in the Disclosure Document. 6) If the New Market company, director of the New Market company, senior manager or a promoter has, during the 5 years preceding the specified date been: a) adjudged bankrupt or insolvent; b) convicted of a crime involving dishonesty; c) prohibited from acting as a director of a company or taking part in the management of an entity; or d) placed in statutory management, voluntary administration, liquidation, or receivership; provide a statement to that effect and the name, and any alternative or former name or names, of the New Market company, director, senior manager or promoter concerned. 7) If a director or senior manager of the New Market company has in the past 10 years: a) been a director or senior manager of a company that failed due to insolvency and their role was current within 2 years before that event; b) had their membership of a professional organisation refused, suspended or cancelled; c) been subject to civil penalty proceedings or other enforcement proceedings concerning financial markets legislation; d) has been the subject of disciplinary action by a licensed market or other authority responsible for regulating securities markets; e) been convicted of an offence or required to pay a pecuniary penalty in respect of conduct performed as a director or senior manager of an entity; provide a statement to that effect. 8) A brief description of the composition and role of the Audit Committee and any other Board Governance Committees of the New Market company. 2 About the New Market company 2.5 Control 1) If applicable, complete the following table that describes the capital raising history of the New Market company over the past 3 years: Date of issuance Number and nature of securities issued (if options specify conversion ratio) Identity of subscriber (either as a class (e.g. wholesale investors) or specifically if a Director or Associated Person) Price per security Total consideration received by the New Market company and specifying the nature of the consideration if not received in cash NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

12 2) Provide the names and holdings of any current substantial security holders of the New Market company; 3) Provide a brief summary of any transaction entered into or relationship between a substantial security holder and the Issuer in the five years prior to the date of the Disclosure Document if the transaction is material to either party, and not disclosed elsewhere in the Disclosure Document; 4) State the holdings of directors and senior management of the New Market company as at the date of the Disclosure Document; 5) State the number of securities that are subject to restricted transfer or escrow provisions ( restrictions ), the nature of those restrictions and the identity of the beneficial holders of the shares to which the restrictions relate. 3 Use of Proceeds 1) State the directors of the New Market company s intentions as to the use of the proceeds raised by the offer (including the amount that is estimated to be payable for issue expenses) and how the use of proceeds will assist the Issuer in fulfilling its strategy and plans (as outlined in section 2.2, above); 2) State whether the proceeds of the offer can be used for any other purpose than that stated under clause (1); 3) If applicable, state how the proceeds of the offer will be used to pay a director or an associated person of the New Market company. 4 Description of the Offer 1) Provide the following statement, with any necessary modifications: The product being offered in this Disclosure Document is a share. A share gives you the rights attributed to a share by the Issuer s constitution and the Companies Act 1993, including the right to share in the returns of the Issuer and any distribution of surplus assets, the right to receive notices of meeting and the right to vote on a poll or shareholder resolution. 2) Provide a description of the person to whom and manner in which application and payment for the securities must be made. 3) State whether or not interest is payable in relation to application moneys. 4) Provide a description of the offer process, including: a) if a bookbuild is being used a high level description of the bookbuild and when and how pricing information will be available; b) the name of any underwriter and the nature of the underwriting commitment; c) the use of deferred and/or conditional trading and settlement. 5) If the offer is being made by a holder of previously allotted securities: a) state that the offeror has liability as an issuer of equity securities and has obligations as an issuer under the Securities Act and/or the Financial Markets Conduct Act, as applicable; and b) provide any information about the holder of previously allotted securities as offeror that, but for this paragraph, would be required under section 7(1) of this Disclosure Document. 6) Provide a brief description of any charges, or the practices of the New Market company or any associated person in relation to charges, that will or may affect the amount of the returns to investors. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

13 5 Financial Information 5.1 Summary financial statements for most recent accounting period 1) Provide summary financial statements (if practicable, in tabular form) in respect of the issuing group for the accounting period that immediately precedes the date of the Disclosure Document. 2) The amounts contained in the summary financial statements must be taken from accounts that were registered under the Financial Reporting Act 1993 and that were audited. 3) The summary financial statements, referred to in this section 5.1 must comply with FRS-43, other than in relation to events occurring after the balance date of the Issuer. 4) State that the full financial statements that were used to prepare the summary financial statements contained in the Disclosure Document are available on the New Market company s webpage. 5) If the issuing group is currently loss making, state the directors opinion as to the matters that are required to occur for the issuing group to break-even. 5.2 Audit report 1) The New Market company must obtain a report in relation to the financial statements referred to in paragraph 5.1, from a qualified auditor who has been approved by NZX, and signed by that auditor stating: a) the work done by the auditor; and b) the scope and limitations of the audit; and c) the existence of any relationship (other than that of auditor) that the auditor has with, or any interests that the auditor has in, the New Market company or any of its subsidiaries; and d) whether the auditor has obtained all information and explanations that he or she has required; and e) whether, in the auditor s opinion, as far as appears from an examination of them, proper accounting records have been kept by the group; and f) whether or not, in the auditor s opinion, the financial statements contained or referred to in the prospectus under clause 5.1, i) comply with generally accepted accounting practice; and ii) give a true and fair view of the matters to which they relate, taking into account information or explanations of the kind referred to in section 14(2) of the Financial Reporting Act 1993 (if any); and g) if the statements referred to in paragraph (f) do not so comply or give a true and fair view, the respects in which they do not. 2) Where the audit report referred to in section 5.2(1) is unmodified, state that the audit report is available on the New Market company s webpage on the New Market website. 3) Where the audit report that relates to the financial statements referred to in section 5.1 is modified (including where the opinion is adverse, qualified or disclaimed), expresses an emphasis of matter, or contains an other matter paragraph, the Disclosure Document must contain the audit report. 5.3 Extracted financial statements for prior accounting periods 1) Provide the following table: a) in relation to the three consecutive accounting periods immediately preceding the date of the Disclosure Document; b) with information either: NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

14 i) taken from financial statements for those periods that have been registered under the Financial Reporting Act and that have been audited; or ii) if no such financial statements exist, with amounts that would have appeared if the financial statements had they been registered but such amounts need not be audited: Selected Financial Information Statement of Financial Performance Date Date Date Revenue EBITDA Net profit after tax Dividends Selected Financial Information Statement of Financial Position Date Date Date Total assets Total tangible assets Total liabilities Total interest bearing liabilities Selected Financial Information Statement of Cashflows Date Date Date Net cash from operating activities Net cash from investing activities Net cash from financing activities Net change in cash NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

15 Opening cash balance Closing cash balance 2) State any information that is contained in the table described in (1) above that is non-gaap and explain the basis for the non-gaap treatment. 3) The full financial statements that were used to prepare the table referred to in this section 5.3(1) must be placed on the New Market Issuer s website and the Disclosure Document must refer to where that information is available. 6 Risks 1) Provide a brief description of the principal risks. 2) Provide a statement as to where further information about the principal risks is available, and if this information is available on the New Market website or Register a statement as to the nature of this information and the headline under which it has been filed. 3) The description required by section 6(1) must not be longer than 2 pages of the Disclosure Document. 4) The risks disclosed in accordance with section 6(1) must be ranked by severity and likelihood and grouped appropriately for the benefit of investors. 5) For the purposes of this section principal risks are risks that the New Market company reasonably regards as probable and capable of having a moderate effect on either: a) the New Market company failing to deliver its stated strategy and plans (contained in section 2.1 of the Disclosure Document); or b) the New Market company failing to meet its projections in relation to the key operating milestones (contained in section 2.3 of the Disclosure Document). 7 Summary of Other Material Matters 1) A 1-2 sentence summary in relation to each matter that is material to the offer of the securities other than those contained elsewhere in the Disclosure Document, set out in the financial statements, or a matter that arises by virtue of a material contract being entered into in the New Market company s ordinary course of business. 2) A statement that further information about such matters is available on the New Market website and if applicable, the Register and a statement as to the nature of that information and the headline under which it has been filed. 3) The title of every material contract entered into by any member of the New Market company s issuing group at any time in the 2 years preceding the date of the Disclosure Document and a statement that such contracts are available on the New Market website. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

16 8 Further Information 1) State that the New Market company is subject to the periodic disclosure requirements of the New Market but is not subject to the continuous disclosure obligations that apply to other markets operated by NZX. 2) State when the New Market company s first business update following the date of the Disclosure Document is due and that thereafter the New Market company will provide business updates on a quarterly basis. 3) State where the New Market company s business and interim update made by the New Market company can be found. 4) Provide a statement: a) that the following information is available by making a request to the New Market company and that if the investor provides the Next Market company with an address that the following information will be provided electronically: i) the full financial statements from which the information provided in section 5 has been extracted; ii) the issuing group s financial statements that relate to accounting periods after the date of the Disclosure Document; iii) the New Market company s annual report; and b) explaining how a request for that information should be made; and c) a statement as to whether there is any charge payable for such information, and if so, the amount of the charge. 5) The Disclosure Document must state that further information about the offer and the New Market company is available on the New Market website at: [insert link], including: a) the New Market company s constitution; b) the full audited financial statements that were used to prepare the summary financial statements set out in section 5.1 of the Disclosure Document; c) the full financial statements that were used to prepare the extracted financial statements set out in section 5.3 of the Disclosure Document; d) any auditor s opinion in relation to the financial statements available on the New Market website; e) any material contracts referred to in the Disclosure Document. 9 Certifications 1) Provide a declaration from the New Market advisor as at the date of the Disclosure Document that: a) the Directors of the New Market company are fit and proper persons to govern the New Market company; b) the New Market company is appropriate for listing, by reference to guidelines published by NZX from time to time; c) Directors and senior management of the New Market company are capable of managing a listed company; d) the New Market advisor and its executives are independent from the New Market company. 2) Provide a statement from the Directors of the New Market company as to whether, in their opinion, after due enquiry by them, any of the following has materially and adversely changed during the period between the date of the latest financial statements contained or referred to in the prospectus and the specified date: a) the trading or profitability of the issuing group: b) the value of the issuing group s assets: c) the ability of the issuing group to pay its liabilities due within the next 12 months. NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17

17 10 Directory 1) The Disclosure Document must contain a Directory at the end of the document. 2) The Directory must include contact details for: the New Market company; the offeror (if applicable); New Market advisor; auditor; solicitors; registry; experts named in the Disclosure Document (and a statement as to their qualifications); promoter underwriter (if applicable) NEW MARKET PROCEDURES AND TEMPLATES CONSULTATION DRAFT 14 MARCH of 17