Definitions

10

For purposes of this ASRS, the following terms have the meanings attributed below:

10(a)

Applicable financial reporting framework means the financial reporting framework adopted by the entity in the preparation of general or special purpose financial information of the entity that is acceptable based on the nature of the entity or as required by applicable law or regulation.  In Australia, an applicable financial reporting framework that may be used in preparing such financial information is represented by the Australian Accounting Standards which are International Financial Reporting Standards (IFRS) compliant (as issued by the International Accounting Standards Board), or applicable law, such as the Corporations Act 2001.  Other frameworks that may be used are the International Financial Reporting Standards, issued by the International Accounting Standards Board and the Generally Accepted Accounting Principles of the United States.

10(b)

Addressees mean the parties to whom the auditor addresses the comfort letter, and includes the requesting parties and the responsible party of the entity.

10(c)

Auditor means the person or firm appointed to audit an entity’s financial report. 

10(d)

Auditor’s statement means a statement made by the auditor that based on the procedures performed, nothing has come to the auditor’s attention that caused the auditor to believe that specified matters do not meet specified criteria.

10(e)

Bring down comfort letter means a letter prepared and issued by the auditor subsequent to the issuance of the initial comfort letter, that updates and reaffirms the results of the specified procedures described in that comfort letter as at a certain date.

10(g)

Closing date means the date on which the issuer of the securities or selling security holder delivers the securities to the underwriter in exchange for the proceeds of the offering.

10(h)

Comfort letter means a letter issued by an auditor in accordance with this ASRS under the terms of the engagement letter to requesting parties in relation to an entity’s financial information related to, and/or included in an offering document.

10(i)

Comparison date and comparison period mean the dates as of which, and periods for which, data at the cut-off date and data for the change period are to be compared.

10(j)

Cross-border offering means an offering or listing that occurs in a jurisdiction other than the entity’s domicile, and which may or may not occur concurrently in the entity’s domicile.

10(k)

Cut-off date means the date to which certain procedures performed on change period financial information, as described in the comfort letter, are to relate.

10(l)

Domestic offering means a securities offering that occurs in Australia.

10(m)

Entity means the party whose financial statements or financial information is the subject of the comfort letter engagement.  The entity may or may not be the Issuer.

10(n)

Financial forecast means financial information of a predictive character prepared based on assumptions made by the entity as to future events, expected to take place on the dates described, and the actions expected to be taken at the date the financial information is prepared.

10(o)

Financial information means information of a historical or pro forma financial nature that is the subject matter of the comfort letter. 

10(p)

Offering means the making available of an entity‟s equity or debt securities to parties (who may be in overseas jurisdictions) ordinarily through:

  1. the sale of securities to the public under a prospectus;
  2. foreign offerings;
  3. an exempt transaction or offering (for example, a private placement of equity or debt securities to a limited number of investors, or an offering of debt securities issued or backed by public sector entities);
  4. certain securities transactions covered by specific laws or regulations (for example, exchange of shares in merger transactions); or
  5. acquisition transactions in which there is an exchange of equity.

10(q)

Private placement means securities offered for sale or issue in a prospectus to a limited number of investors, which are exempt, by law or regulation from certain content, distribution or registration requests in certain jurisdictions (“exempt offering”).

10(r)

Procedures mean procedures performed by the auditor which are specified by the requesting parties.  The auditor does not determine whether the extent of such procedures is sufficient for the purposes of the requesting parties.  Procedures may also be referred to as agreed-upon procedures.

10(s)

Pro forma financial information means non-IFRS financial information that is intended to show the effects of proposed or completed transactions for illustrative purposes.[5] The non-IFRS financial information is adjusted by pro forma adjustments to illustrate the impact of an event(s) or transaction(s) in the financial information as if the event had occurred, or the transaction had been undertaken at an earlier date selected for the purposes of the illustration, ordinarily the beginning of the reporting period.

10(v)

Responsible party of the entity means those charged with governance of the entity (ordinarily the Board of Directors) who are responsible for the preparation of the offering document, and who engage the auditor to issue a comfort letter to the requesting parties and provide a copy to the responsible party.

10(w)

Underwriter means any person or their agent who has purchased, or intends to purchase securities from an issuer with a view to, or offers or sells for an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking.  This ASRS also uses the term underwriter to refer to the managing or lead underwriter who ordinarily negotiates the underwriting agreement on behalf of a group of underwriters whose exact composition is not determined until shortly before an offering document becomes effective.  The underwriters may or may not be named in the offering document, and are commonly the requesting parties.

10(x)

Underwriting agreement means a formal agreement between the underwriter(s) and the responsible party of the entity with respect to the entity’s offering document.  It may specify the form and content of the comfort letter to be requested of the auditor, or that the form and content is to be specified by the requesting parties at a later time.  The auditor is not a party to the underwriting agreement.

2

See RG 230 Disclosing non-IFRS financial information (December 2011) issued by Australian Securities and Investments Commission for further guidance on pro forma financial information included in transaction documents such as those referred to in this ASRS.