The Australian Stock Exchange Essay Research Paper — страница 5

profit levels required. 4) The entity’s aggregated profit from continuing operations for the last 3 full financial years must have been at least $1 million. 5) The entity’s profit from continuing operations for the last full financial year must have been at least $400,000. 6) If the entity’s financial statements for the last full financial year cover a period that ended more than 2 months before the date it applied for admission, the listing rules require the entity to give ASX each of the following. a) Financial statements for the period since the end of that financial year dated no more than 2 months before the date it applied for admission, reviewed by a registered auditor (or overseas equivalent), showing that the entity is making profit from continuing operations. The

financial statements must have been prepared to Australian Accounting Standards. Financial statements for foreign entities may be prepared and audited to other standards acceptable to ASX. This rule does not apply if the financial statements would cover a period of less than 2 months. b) If the last full financial year ended more than 6 months before the application is made, and half yearly financial statements have been prepared, a copy of those statements reviewed by a registered auditor (or overseas equivalent). THE NET TANGIBLE ASSETS TEST FOR AN ENTITY To meet the net tangible assets test, an entity must have tangible assets of at least $2 million, after deducting the costs of fund raising, and satisfy each of the following. 1) Either: a) Less than half the entity’s total

tangible assets (after raising any funds) must be cash or in a form readily convertible to cash; or b) Half or more of the entity’s total tangible assets (after raising any funds) are cash or in a form readily convertible to cash, and there are binding contracts to invest or spend enough money for the proportion to be reduced to less than half. The binding contracts must not be subject to conditions precedent except ones relating to the satisfaction of a minimum subscription condition of the fund raising, and admission to the official list. 2) The entity must have enough working capital to carry out it’s stated objectives. If the prospectus or information memorandum does not contain a statement that the entity has enough working capital, the entity must give the ASX one form

an independent expert. 3) The entity’s business must be developed to the point where it is reasonably likely that the entity will generate revenue from its ordinary activities within 3 years after admission. If the ASX requires it, the entity must give ASX a written statement to that effect from an independent expert. As you can clearly see the profit test and the net tangible assets test are very complicated. Although the above two are not of my own work and have been extracted form the text “A Guide To Listing On ASX”, I saw the necessity to show and explain in specific detail. Both of these tests can be explained in a simpler form. In general a company may be eligible for consideration if it: -Issues a prospectus; -Has (or will following the issue of a prospectus) at

least 500 shareholders holding a marketable parcel (i.e. a minimum value of A$2,000) of shares; -The issue of each share to be listed is at 20 cents; -And either: -The company: -Is a going concern which has an aggregate audited operating profit, before income tax, over the past three years of at least A$1,000,000. A$400,000 of which comes from the 12 months immediately preceding the application; and -The company has been in predominantly the same business activity for the past three full financial years. -Or the company -Has net tangible assets less than A$2 million; and -Either has binding contracts for the investment or expenditure of at least 50% of its funds; or -it has sufficient funds to carry out its stated objectives and can provide a statement in the company’s

prospectus by an independent expert to that effect and the independent expert provides a written opinion that there is a reasonable expectation of the company providing 3 years. As it was stated earlier, one particular requirement for general admission is No.8. The entity must satisfy either the profit test or the applicable net tangible assets test. Firstly it is important that we see that the two tests are flexible and not all requirements have to be fully met. The ASX has evolved rules of conduct and procedures to monitor the activities of it’s members. These are contained in ASX business rules. It has developed rules that must adhered to by listed entities, known as the listing rules. This self-regulatory process, operating within the general framework of the Corporations