Ann: WAV/RULE: EVO: EVO - Application for waiver from Rule 10.4.2

• Release Date: 31/12/14 10:33
• Summary: WAV/RULE: EVO: EVO - Application for waiver from Rule 10.4.2
• Price Sensitive: No
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					EVO
31/12/2014 10:33
WAV/RULE
NOT PRICE SENSITIVE
REL: 1033 HRS Evolve Education Group Limited

WAV/RULE: EVO: EVO - Application for waiver from Rule 10.4.2

NZX Regulation Decision
Evolve Education Group Limited (EVO)
Application for a waiver from NZX Main Board Listing Rule 10.4.2

31 December 2014

Waiver from NZX Main Board Listing Rule 10.4.2

Decision

1. On the conditions set out in paragraph 2 below, and on the basis that the
information provided by Evolve Education Group Limited ("EVO") is complete
and accurate in all material respects, NZX Regulation ("NZXR") grants EVO a
waiver from NZX Main Board Listing Rule ("Rule") 10.4.2 to the extent that
EVO is required to deliver to NZX, and make available to Quoted Security
holders, a half-year report for the six month period ending 30 September
2014, on or before 31 December 2014.

2. The waiver in paragraph 1 above is provided on the condition that:

a. EVO provides a market update ("Market Update") to NZX for release to the
market for the period to, and as at, 31 January 2015 and for the period to,
and as at, 31 March 2015, including for the relevant period, and as at the
relevant date (as applicable), the following minimum information in respect
of EVO and its subsidiaries ("EVO Group"):

i. the total number of ECE centres, home-based ECE businesses and other
businesses or companies owned;

ii. the total number of ECE centre licences held;

iii. the total number of ECE home-based licences held;

iv. the total number of licensed child places across all ECE centres;

v. the total number of licensed home-based child places across all home-based
ECE businesses;

vi. an update on the progress of integration of the Initial Portfolio into
the EVO Group, including by reference to the statements regarding that
integration process included in the Prospectus;

vii. the total amount of funds spent by the EVO Group on acquisition of the
Initial Portfolio;

viii. to the extent that EVO has drawn down on any of its borrowing
facilities (including any of the senior revolving facility, acquisition
facility or lease guarantee facility with ASB Bank Limited, as disclosed in
the Prospectus), the total amount of such borrowings and the amount of such
borrowings per facility;

ix. details of any known actual or pending changes to Government policy, or
any applicable legislation, that EVO considers is likely to materially affect
ECE funding; and

x. details of any other matter, event or issue which EVO considers is likely
to materially negatively affect the PFI, when considering the effect of the
events as a whole; and

b. the Market Update must be provided to NZX:

i. in respect of the period to, and as at, 31 January 2015, on or before 27
February 2015; and

ii. in respect of the period to, and as at, 31 March 2015, on or before 30
April 2015.

3. The conditions set out in paragraph 2 above, in no way prejudice EVO's
continuous disclosure obligations under Rule 10.1 which, subject to the
requirements of that Rule, require EVO to immediately disclose any Material
Information, including any material variation from the PFI, to NZX for
release to the market.

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.

6. Pursuant to section 359 of the Financial Markets Conduct Act 2013, NZXR
consulted the Financial Markets Authority ("FMA") when making this
determination and FMA has confirmed that it is in agreement with this
decision and the above considerations. Further, in accordance with NZX
policy, NZXR consulted with the Chair of the NZ Markets Disciplinary Tribunal
when making this determination.

Reasons

7. In coming to the decision to provide the waiver set out in paragraph 1
above, NZXR has considered that:

a. The purpose of a half-year report is to provide the market with updated
information on the financial position of an Issuer, giving a holistic view of
the Issuer's financial performance to assist investors and potential
investors with their investment decision.

b. As at 30 September 2014, being the end of the period in respect of which
EVO is required to provide a half-year report, EVO existed solely as a
special purpose vehicle, incorporated to undertake the IPO and to enter into
conditional contracts to acquire the Initial Portfolio on Listing.  Neither
EVO nor the EVO Group had commenced operations. EVO has since Listed and
commenced operations.

c. The Prospectus contained audited financial statements for EVO for the
period to, and as at, 31 August 2014 (with additional disclosure for
subsequent events to 14 November 2014).  If EVO were required to provide a
half-year report for the period ended, and as at, 30 September 2014, that
report would only reflect EVO's limited activities as a special purpose
vehicle. In effect, such a report would reflect an additional month's update
to the 31 August 2014 financial statements included in the Prospectus and
disclose the additional costs incurred by EVO since 31 August 2014. EVO
considers, and NZXR agrees, that provision of the accounts required under
Rule 10.4.2 would provide an out of date view of the financial position of
EVO and the EVO Group, and may confuse investors as to the current position
of the company.

d. EVO has submitted, and NZXR has no reason not to believe, that it is not
practicable for EVO to prepare accurate updated pro forma financial
statements for the period ended, and as at, 30 September 2014, due to the
complexity of aggregating the underlying financial information in respect of
the Initial Portfolio and consolidating and reconciling different accounting
policies applied across each business acquired.

e. Further, updated pro forma financial statements to 30 September 2014 may
also provide an inaccurate view to the market of EVO's financial position
given the process for settlement of acquisitions of the Initial Portfolio and
integration of the Initial Portfolio into the EVO Group. Although limited pro
forma financial information was provided in the Prospectus, this was
primarily as a condition of the exemption relief obtained by EVO from the
Securities Act 1978 and Securities Regulation 2009.  That information
required significant explanation to provide offerees accurate context for the
basis of preparation and the context within which the information was being
provided.

f. The conditions of the waiver provide an alternative basis on which EVO
will update the market on the performance of the company in the period to 31
March 2015, ahead of the preliminary full year financials due at the end of
May 2015.  The release of the Market Updates will provide the market with
information on how EVO is progressing against information included in the
Prospectus (including the PFI), to allow the market to assess the performance
of EVO in the absence of the half-year financial statements that would
otherwise have been prepared under Rule 10.4.2.

g. The Prospectus provided PFI which, EVO submits, more accurately reflects
EVO's position as an operating business.  EVO is subject to continuous
disclosure obligations under Rule 10.1, which requires EVO to immediately
disclose any Material Information to NZX for release to the market.  Under
this Rule, EVO would be required to announce immediately any material
variation from the PFI (subject to the relevant safe harbours in the Rule).

h. There is precedent for this decision.

Appendix One

1. Evolve Education Group Limited ("EVO") is a listed Issuer, with its
ordinary shares quoted on the NZX Main Board Market.  EVO is subject to the
NZX Main Board Listing Rules ("Rules").

2. EVO was incorporated on 20 May 2014 for the purpose of acquiring an
initial portfolio of early childhood education ("ECE") centres, home-based
ECE businesses, and other related businesses, including:

o all the shares in Lollipops Educare Holdings Limited, which owns and
operates 30 ECE centres and the infrastructure that will be used by EVO to
manage the additional ECE centres that it will acquire;

o a further 55 ECE centres ("Additional Owned ECE Centres"); and

o all the shares in the PORSE group of companies, which owns and operates a
home-based ECE business and is an accredited training provider.
(together, the "Initial Portfolio").

3. Prior to Listing, EVO was a special purpose vehicle incurring adviser and
other costs associated with the acquisition process for the Initial
Portfolio.  EVO did not own or operate any ECE centres, home-based ECE
businesses, or any other businesses.

4. EVO sought funding for the acquisition of the Initial Portfolio through an
initial public offering ("IPO").  A prospectus for the IPO was prepared and
registered on 14 November 2014 (the "Prospectus").

5. EVO was granted the Securities Act (Evolve Education Group Limited)
Exemption Notice 2014 in relation to the content of financial information in
the Prospectus. In accordance with this exemption notice, subject to
conditions, the Prospectus was not required to include the historic financial
information usually required under clauses 12(3)(a) to (e) of Schedule 1 to
the Securities Regulations 2009 in respect of the Additional Owned ECE
Centres and other related businesses that EVO had contracted to acquire.

6. The Prospectus instead contained a range of financial information,
including:

o audited accounts for EVO for the period from incorporation to 31 August
2014, updated for subsequent events that occurred up to the date of the
Prospectus;

o prospective financial information for the period commencing on
incorporation of EVO and ending 31 March 2015 and the year ending 31 March
2016 (the "PFI").

o a pro forma statement of financial position showing EVO's expected
financial position immediately upon completion of the IPO and completion of
the acquisition of the entire Initial Portfolio; and

o summary financial statements, and audited financial statements, for
Lollipops Educare Holdings Limited and the PORSE group of companies,
separately.

7. The IPO completed with the Listing of EVO on 5 December 2014.

8. From 4 December 2014, EVO began settling the acquisitions of the Initial
Portfolio with the funds raised from the IPO.  EVO expects to continue
settling the acquisitions and integrating the companies through to 31 March
2015.

9. EVO has a balance date of 31 March. Under Rule 10.4.2, EVO is required to
make available to Quoted Security holders, and to deliver to NZX for release
to the market, a half-year report for the six month period ending 30
September 2014 on or before 31 December 2014.

Appendix Two

Rule 10.4.2
Each Issuer shall within three months after the end of the first six months
of each financial year of the Issuer:
(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,
a half-year report. That half-year report shall be delivered to NZX before,
or at the same time as, it is made available to Quoted Security Holders in
accordance with Rule 10.4.4. That half-year report shall include the
information and otherwise address the matters prescribed by the relevant
section of Appendix 1.
End CA:00259492 For:EVO    Type:WAV/RULE   Time:2014-12-31 10:33:57