AKC
03/10/2014 16:29
WAV/RULE
REL: 1629 HRS Auckland Council
WAV/RULE: AKC: AKC - Application for waiver from Rule 10.4.1(b) and 10.4.4
NZX Regulation Decision
Auckland Council ("AKC")
Application for a waiver from NZX Main Board/Debt Market Listing Rules
10.4.1(b) and 10.4.4
3 October 2014
Waiver from Listing Rules 10.4.1(b) and 10.4.4
Decision
1. On the basis that the information provided to NZX Regulation ("NZXR") is
full and accurate in all material respects, and subject to the conditions in
paragraph 2 below, NZXR grants Auckland Council ("AKC") a waiver from NZX
Debt Market Listing Rules ("Rules") 10.4.1(b) and 10.4.4 to the extent that
these Rules require AKC to send to Security Holders a copy, or a notice that
they can request a copy, of its annual report.
2. The waiver in paragraph 1 above is provided on the conditions that:
a. AKC sends to Security Holders a notice that states that:
i. Security Holders may request the document described in paragraph (b) of
these conditions;
ii. AKC's most recent annual report and half-year reports are available in
electronic format on AKC's website and the annual report continues to be made
available in hard copy at public locations designated by AKC;
b. For the purposes of the condition in paragraph 2(a), the document must
contain at least:
i. AKC's audited consolidated financial statements (including the auditor's
report) as required to be prepared by AKC under section 69 of the Local
Government Act 2002; and
ii. such information as prescribed in the Rules in relation to annual
reports, in particular, the information required under Rule 10.4.5, but
excluding that prescribed by Rule 10.4.5(h);
c. in the notice for the purposes of paragraph 2(a) of these conditions,
attention is drawn to the fact that information concerning AKC's corporate
governance is contained in the annual report and on AKC's website, and
directing them to the relevant parts of that report and website;
d. AKC's most recent annual report and half-year reports continue to be made
available on AKC's website and the annual report continues to be made
available at public locations designated by AKC; and
e. AKC's annual report and half-year reports are released to the market by
AKC on an ongoing basis, no later than when they are made publicly available
elsewhere.
3. Pursuant to section 36NM of the Securities Markets Act 1988, NZXR has
drawn attention of this application to the Financial Markets Authority.
4. The information on which this decision is based is set out in Appendix One
to this decision. This waiver will not apply if that information is not or
ceases to be full and accurate in all material respects.
5.The Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
6. In coming to the decision to provide the waiver set out in paragraph 1
above, NZXR has considered that:
a. AKC is subject to regulation as a local authority under the Local
Government Act 2002 which imposes reporting obligations on AKC in excess of
what is required under the Rules, including to prepare:
i. annual financial statements in accordance with generally accepted
accounting principles;
ii. an annual plan for each financial year (other than the first year of the
LTCCP); and
iii. an LTCCP every three years, which contains information in relation to
the following ten year period;
b. As a result of the above, AKC's annual report is required to contain
information that significantly exceeds that required of corporate Issuers
under the Rules;
c. AKC submits, and NZXR accepts, that p)roviding hard copies of the annual
report creates an additional burden for AKC, with little additional benefit
to Security Holders, as much of this information is relevant only to AKC's
public functions as a local authority;
d. The conditions of this waiver require AKC to still make available, upon
request of a Security Holder, the information relevant for investors as
required under the Rules, including AKC's consolidated financial statements
and auditor's report;
e. NZXR is satisfied with the level of disclosure contained in the document
that AKC is required to make available to Security Holders on request in
accordance with the condition in paragraph 2a, above. AKC has submitted, and
NZX accepts, that AKC's annual report will continue to be easily accessible
for Security Holders as the report is available both online, and in hard copy
at public locations designated by AKC;
f. AKC is still subject to continuous disclosure under Rule 10.1, which
requires AKC to disclose any Material Information to NZX for release to the
market; and
g. There is precedent for this decision.
ENDS
Appendix One
1. AKC is a Listed Issuer with Debt Securities Quoted on the NZX Debt Market.
2. AKC is subject to comprehensive disclosure requirements under Part 6 of
the Local Government Act 2002. In particular, AKC is required to prepare:
a. An annual report containing, among other things, audited consolidated
financial statements;
b. An annual plan which must include forecast financial statements and a
funding impact statement for each financial year (other than the first year
of the Long Term Community Council Plan ("LTCCP")); and
c. An LTTCP every three years that is audited by the Auditor-General and
contains a description of the services and capital works that AKC proposes to
undertake, including forecast financial statements for each of the ten years
covered by the plan, a summary of AKC's plans for each activity it undertakes
for the next ten years, and a document setting out how expenditure will be
funded and the likely level of each source (rates, fees and charges, etc.).
3. AKC's annual report is a large document (approximately 900 pages in
length).
4. Under Rule 10.4.4, AKC must make its annual report available by sending to
holders of AKC's quoted securities ("Security Holders") either a copy of the
annual and half-year report or a notice detailing a Security Holder's right
to receive a copy of the relevant report and the ways in which Security
Holders can obtain or request a copy.
Appendix Two
Rule 10.4.1 provides:
10.4.1 Subject to Rule 10.4.3 each Issuer shall within three months of the
end of each Issuer's financial years:
(a) Deliver to NZX electronically, in the format specified by NZX from time
to time; and
(b) Make available to each Quoted Security holder in accordance with Rule
10.4.4,
an annual report. That annual report shall be delivered to NZX before or at
the same time as it is made as it is made available to Quoted Security
holders in accordance with Rule 10.4.4, and shall contain all information:
(c) required by law;
(d) required in a preliminary announcement by Rule 10.3.2; and
(e) required by Rule 10.4.4, Rule 10.4.5 and Rule 10.4.7.
The financial statements in that annual report shall be audited and shall be
accompanied by an audit report in accordance with the requirements of the
Financial Reporting Act 1993.
Rule 10.4.4 provides:
10.4.4 An Issuer shall make an annual report or half-year report available to
Quoted Security holders as required by Rule 10.4.1 or Rule 10.4.2, by sending
to Quoted Security holders either:
(a) A copy of the annual report or half-year report (as the case may be); or
(b) A notice containing the statements referred to in section 209(3) of the
Companies Act 1993 and complying with section 209A and 209B of the Companies
Act 1993.
Provided that for the purposes of Rule 10.4.4 and Rule 10.4.6, sections 209
and 209B of the Companies Act 1993 shall be deemed modified so that:
(c) references in that section to "shareholders" shall be deemed to be
references to members of the relevant Class of Quoted Security holders of
that Issuer; and
(d) in respect of an Issuer which is not a company, references to "company"
shall be deemed to be references to the Issuer;
(e) in respect of a Managed Fund, references to "board of a company" shall be
deemed to be references to the Manager; and
(f) references to "annual report" shall (for the purposes of compliance with
Rule 10.4.2) be deemed to be a reference to a half-year report; and
(g) section 209(3)(d) shall not apply to the half-year report; and
(h) references to "annual report" shall be deemed to be references to an
annual report as required by Rule 10.4.1.
Provided also that an Issuer will be deemed to have made any half-year report
available to Quoted Security holders if that Issuer's most recent annual
notification under Rule 10.4.4(b) explicitly stated that it applied to the
next half-year report under the Rules. Where a half-year report is deemed to
have been made available in this way, a Quoted Security holder's election in
respect of receipt of the relevant annual report, if any, shall apply in
connection with that half-year report, except that an election to receive a
concise annual report must be treated to include an election to receive the
relevant half-year report.
End CA:00256077 For:AKC Type:WAV/RULE Time:2014-10-03 16:29:07
