UKLR 10 Annex 1 Reverse takeover circulars – financial information

A reverse takeover circular must include the following information:

1. (1)

   when a listed company is acquiring an interest in a target which will result in a consolidation of the target’s assets and liabilities with those of the listed company:

   1. (a)

      audited consolidated financial information that covers:

      1. (i)

         the target; and

      2. (ii)

         the target’s subsidiary undertakings, if any,

      for a reporting period of 2 years up to the end of the latest financial period for which the target or its parent has prepared audited accounts; and

   2. (b)

      an explanation of the proposed accounting treatment of the target in the listed company’s next audited consolidated accounts;

2. (2)

   when a listed company is acquiring an interest in a target that will be accounted for as an investment, and the target’s securities that are the subject of the transaction are admitted to an investment exchange that enables intra-day price formation:

   1. (a)

      the amounts of the dividends or other distributions paid in the past 2 years; and

   2. (b)

      the price per security and the imputed value of the entire holding being acquired at the close of business at the following times:

      1. (i)

         on the last business day of each of the 6 months prior to the announcement of the transaction;

      2. (ii)

         on the day prior to the announcement of the transaction; and

      3. (iii)

         on the latest practicable date prior to the submission of the reverse takeover circular;

3. (3)

   when a listed company is acquiring an interest in a target that will be accounted for using the equity method in the listed company’s annual consolidated accounts:

   1. (a)

      a narrative explanation of the proposed accounting treatment of the target in the issuer’s next audited consolidated accounts;

   2. (b)

      audited consolidated financial information that covers:

      1. (i)

         the target; and

      2. (ii)

         the target’s subsidiary undertakings, if any,

         for a reporting period of 2 years up to the end of the latest financial period for which the target or its parent has prepared audited accounts, if available; and

4. (4)

   where the information in (1), (2) or (3) is not available:

   1. (a)

      a statement by the board that the information is not available;

   2. (b)

      an explanation as to how the value of the consideration has been arrived at; and

   3. (c)

      a statement by the board that it considers the consideration to be fair as far as the security holders of the company are concerned.

A reverse takeover circular must include, for each of the periods covered by the audited financial information in UKLR 10 Annex 1 1.1R(1) and 1 1.1R(3), the following information:

1. (1)

   a balance sheet and its explanatory notes;

2. (2)

   an income statement and its explanatory notes;

3. (3)

   a cash flow statement and its explanatory notes;

4. (4)

   a statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners;

5. (5)

   the accounting policies;

6. (6)

   any additional explanatory notes;

7. (7)

   the audit report; and

8. (8)

   if the audited financial information includes a modified report:

   1. (a)

      whether the modification or emphasis-of-matter paragraph is significant to shareholders; and

   2. (b)

      if the modification or emphasis-of-matter paragraph is significant to shareholders, the reason for its significance.