Listing in Hong Kong Highlights of listing requirements for the Main Board versus Growth Enterprise Market

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Сapital Markets

Listing requirements

Hong Kong Main Board Hong Kong Growth Enterprise Market

Track record and market capitalisation requirements

• Tradingrecordofnotlessthanthreefinancialyears(exceptwherenotedbelow)

• Tradingrecordofnotlessthantwofinancialyears

• Managementcontinuityforatleastthethreeprecedingyearsandcontinuityofownershipandcontrolforatleastthemostrecentauditedfinancialyear

• Mustbeundersubstantiallythesamemanagementforthetwoprecedingfullfinancialyearsandupuntilthedateoflistingandhavecontinuityofownershipandcontrolfortheprecedingfullfinancialyearandupuntilthedateoflisting

• Threetests(itissufficienttomeetanyonetest):

I.Profittest–ProfitsofatleastHK$20millionformostrecentyearandof

HK$30millionforthefirsttwoyearsinaggregate–MarketcapitalisationofatleastHK$200millionatthetimeof

listing

II.Marketcapitalisation/revenue/cashflowtest–RevenueofatleastHK$500millionforthemostrecent

auditedfinancialyear–PositivecashflowfromoperatingactivitiesofatleastHK$100

millioninaggregateforthethreeprecedingfinancialyears–MarketcapitalisationofatleastHK$2billionatthetimeof

listing

III.Marketcapitalisation/revenuetest–RevenueofatleastHK$500millionforthemostrecent

auditedfinancialyear–MarketcapitalisationofatleastHK$4billionatthetimeoflisting

UndertheMarketcapitalisation/revenuetest,theExchangemayacceptashortertradingrecordperiodundersubstantiallythesamemanagementifthenewapplicantcandemonstratethat:

–itsdirectorsandmanagementhavesufficientandsatisfactoryexperienceofatleastthreeyearsinthelineofbusinessandindustryofthenewapplicant;and

–managementcontinuityforthemostrecentauditedfinancialyear

I.Noprofitrequirement

II.PositivecashflowfromoperatingactivitiesofatleastHK$20millioninaggregateforthetwoprecedingfinancialyears

III.MarketcapitalisationofatleastHK$100millionatthetimeoflisting

TheExchangemayacceptashortertradingrecordperiodandwaiveorvarytheownershipandmanagementrequirementsfor:

–newly-formed“project”companies;and–naturalresourcesexploitationcompanies

supportedbyreasonsacceptabletotheExchange

• Afocusedlineofbusinessnotspecificallyrequired,butthecorebusinessshouldmeettheminimumfinancialrequirement

• N/A

Minimum public float

• MarketcapitalisationofatleastHK$50millionheldbythepublicatthetimeoflisting

• MarketcapitalisationofatleastHK$30millionheldbythepublicatthetimeoflisting

• Minimum25%oftheissuer’stotalissuedsharecapitalatthetimeoflisting

• TheExchangemay,atitsdiscretion,acceptapercentageofpublicfloatbetween15%and25%ifthemarketcapitalisationoftheissueratthetimeoflistingexceedsHK$10billion

Future prospects

• Nospecificrequirementbuttheapplicantisrequiredtoincludeageneralstatementoffutureplansandprospects

• Statementofbusinessobjectivesfortheperiodcoveringtheremainingfinancialyearduringwhichlistingoccursandthetwofullfinancialyearsthereafter

• Inclusionofprofitforecastisoptional

Listing requirements

Hong Kong Main Board Hong Kong Growth Enterprise Market

Accounting standards

• FinancialstatementsmustbepreparedinaccordancewitheitherHongKongFinancialReportingStandards,InternationalFinancialReportingStandards,orPRCCAS

• GenerallyacceptedaccountingprinciplesintheUnitedStatesofAmerica(USGAAP)orotheraccountingstandardsmaybeacceptedbytheExchangeundercertaincircumstances

• GenerallyacceptedaccountingprinciplesintheUnitedStatesofAmerica(USGAAP)areacceptableifthecompanyislisted,orwillbesimultaneouslylisted,oneithertheNewYorkStockExchangeortheNASDAQNationalMarket

• Ingeneral,theaccountants’reportcoversatleastthethreecompletefinancialyearsimmediatelyprecedingtheissueoftheprospectus

• Ingeneral,theaccountants’reportcoversatleasttwocompletefinancialyearsimmediatelyprecedingtheissueoftheprospectus

• Thelatestfinancialperiodreportedonbythereportingaccountantsmustnothaveendedmorethansixmonthsbeforethedateofthelistingdocument

Corporate governance

• Atleastthreeindependentnon-executivedirectorsrequired

• Auditcommitteerequired • Complianceofficerrequired

• Requiredtoappointacomplianceadviserfortheperiodcommencingoninitiallistingandendingonpublicationoffinancialresultsforthefirstfullfinancialyearafterlisting

• Requiredtoappointacomplianceadviserfortheperiodcommencingoninitiallistingandendingonpublicationoffinancialresultsforthesecondfullfinancialyearafterlisting

Acceptable jurisdictions

• Australia,Bermuda,Brazil,BritishColumbia(Canada),BritishVirginIslands,California(USA),CaymanIslands,Cyprus,France,Germany,HongKongandotherPeople’sRepublicofChina,Italy,Japan,Jersey,Luxembourg,Singapore,theIsleofMan,Ontario(Canada)andtheUnitedKingdom

• OtherjurisdictionswhicharesubjecttoappropriatestandardsofshareholderprotectionthatareequivalenttothoserequiredunderHongKonglawmaybeconsidered

• Forsecondarylistings,otherjurisdictionswillbeconsidered

Restrictions on controlling shareholders

• Acontrollingshareholderatthetimeoflistingmustundertake:–Nottodisposeofanyofhisinterestintheissuerwithinsixmonthsoflisting–Nottodisposeofhisinterestintheissuerintheperiodbetweensixandtwelvemonthsafterlisting,suchthathe

wouldceasetobea“controllingshareholder”(definedasatleasta30%interestintheissuer)

• Asignificantshareholderatthetimeoflistingmustundertakenottodisposeofhisinterestintheissuerwithinsixmonthsoflisting

Other considerations

• Competingbusinessesofcontrollingshareholdersordirectorsareallowedbutfulldisclosureisrequired

• Competingbusinessesofmanagementshareholders,substantialshareholdersordirectorsareallowedbutfulldisclosureisrequired

• Newissuemustbefullyunderwritten • Nounderwritingrequirement

• Listedissuerisnotallowedtoissuenewsecuritiesinthefirstsixmonthsafterlisting

• Listedissuerisnotallowedtoissuenewsecuritiesinthefirstsixmonthsafterlistingexceptforthepurposeofacquiringassetswhichwillcomplementitsbusiness

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19.09.2012