Rulebooks: Contents

Rulebooks
Mainboard Rules
Catalist Rules
Definitions and Interpretation
Chapter 1 Introduction
Chapter 2 Sponsors
Chapter 3 Disciplinary and Appeals Procedures, and Enforcement Powers of the Exchange
Chapter 4 Equity Securities
Chapter 5 Reserved
Chapter 6 Reserved
Chapter 7 Continuing Obligation
Chapter 8 Changes in Capital
Chapter 9 Interested Person Transactions
Chapter 10 Acquisitions and Realisations
Chapter 11 Takeovers
Chapter 12 Circulars, Annual Reports and Electronic Communications
Chapter 13 Trading Halt, Suspension and Delisting
Chapter 14 Transition Rules
Appendices
Practice Notes
Code of Corporate Governance 2012
Code of Corporate Governance 2018
SGX-ST Rules
CDP Clearing Rules
CDP Settlement Rules
DVP Rules [Entire Rulebook has been deleted]
CDP Depository Rules
Futures Trading Rules
SGX-DC Clearing Rules
SIAC DT Arbitration Rules
SIAC DC Arbitration Rules
Archive
Rule Amendments

  Versions
(1 version)
 
Sep 29 2011 onwards

1013

(1) Where an issuer enters into a discloseable transaction, a major transaction, a very substantial acquisition or a reverse takeover and accepts a profit guarantee or a profit forecast (or any covenant which quantifies the anticipated level of future profits) from a vendor of assets / business, the issuer's announcement in Rule 1010 must contain information on the profit guarantee or the profit forecast, including the following:
(a) The views of the board of directors of the issuer in accepting the profit guarantee or the profit forecast and the factors taken into consideration and basis for such a view;
(b) The principal assumptions including commercial bases and assumptions upon which the quantum of profit guarantee or the profit forecast is based;
(c) The manner and amount of compensation to be paid by the vendor in the event that the profit guarantee or the profit forecast is not met and the conditions precedent, if any, and the detailed basis for such a compensation; and
(d) The safeguards put in place (such as the use of a banker's guarantee) to ensure the issuer's right of recourse in the event that the profit guarantee or the profit forecast is not met, if any.
For the avoidance of doubt, the term "profit guarantee" can only be used for transactions where the vendor will compensate the issuer in cash for any shortfall in the level of profits when it provides a quantifiable anticipated level of future profits.
(2) With reference to Rule 1013(1), where the transaction is a major transaction, a very substantial acquisition or a reverse takeover, the shareholders' circular must contain the information in Rule 1013(1) and the following:
(a) A confirmation from the auditors of the business / assets to be acquired that they have reviewed the bases and assumptions, accounting policies and calculations for the profit guarantee or the profit forecast, and their opinion on the bases, assumptions, policies and calculations; and
(b) A statement by the financial advisor to the issuer as to whether or not they are of the view that the transaction is on normal commercial terms and is not prejudicial to the interest of the issuer and its shareholders.
(3)
(a) Where the profit guarantee or the profit forecast has been met, the issuer should immediately announce this via SGXNET. Where the profit guarantee or the profit forecast has not been met, the issuer should immediately announce via SGXNET the following:
(i) the variance between the profit guarantee or the profit forecast and the actual profit, and the reason for the variance;
(i) any variation of the rights of the issuer; and
(ii) the possible course(s) of action by the issuer to protect the interests of the shareholders of the issuer, if any. Notwithstanding this, the issuer must provide timely updates on the specific course of action including its progress and outcome of the action.
(b) Where there is any material variation or amendment in the terms of the agreement, the issuer must immediately make an announcement of such a variation. Where such a variation prejudices the issuer, the board of directors of the issuer must disclose the basis for the acceptance of such a variation.

Added on 29 September 2011.