National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 52-107, s. 9.1 Acceptable Accounting Principles, Auditing Standards and Reporting Currency -- A reporting issuer wants to early adopt IFRS for purposes of preparing its financial statements -- The issuer has assessed the readiness of its staff, board, audit committee, auditors and investors -- The issuer will provide detailed disclosure regarding its early adoption of IFRS as set out in CSA Staff Notice 52-320 in a news release filed as soon as practicable after the decision and provide similar information by re-filing its MD&A for its financial year ended February 28, 2009 -- The issuer will restate any financial statements prepared in accordance with Canadian GAAP for interim periods for the fiscal year in which they intend to adopt IFRS -- If the issuer's first IFRS-IASB financial statements are filed in an interim period, the interim financial statements will include the opening statement of financial position at the date of transition to IFRS-IASB.
Applicable Ontario Provisions
National Instrument 52-107, s. 9.1.
July 9, 2009
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Filer from the requirement in section 3.1 of National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107) that financial statements be prepared in accordance with Canadian GAAP for financial periods beginning on and after March 1, 2009 (the Exemption Sought), for so long as the Filer prepares the financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) (IFRS-IASB).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
1. the Ontario Securities Commission is the principal regulator for this application, and
2. the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (the Passport Jurisdictions).
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. the Filer is a corporation continued on April 1, 2009 under the laws of the Province of British Columbia; the Canadian registered and local business office of the Filer is located at Suite 1700 Park Place, 666 Burrard Street, Vancouver, British Columbia, Canada V6C 2X8;
2. the Filer is a reporting issuer in the Jurisdiction and the Passport Jurisdictions. The Filer is not (to its knowledge) in default of its reporting issuer obligations under the Legislation or the securities legislation of the Passport Jurisdictions;
3. the Filer's securities are listed on the TSX Stock Exchange and the London Stock Exchange's Alternative Investment Market (AIM) and are in the process of being listed on the Johannesburg Stock Exchange;
4. the Filer is engaged in the exploration and development of platinum group metals prospects in the Republic of South Africa through its wholly owned South African subsidiary Boynton Investments (Pty) Limited (Boynton);
5. the Filer is a Canadian reporting issuer, an AIM company and has committed to its controlling shareholder group to become listed on the Johannesburg Stock Exchange;
6. the Canadian Accounting Standards Board has confirmed that publicly accountable enterprises will be required to prepare their financial statements in accordance with IFRS-IASB for financial statements relating to fiscal years beginning on or after January 1, 2011;
7. NI 52-107 sets out acceptable accounting principles for financial reporting under the Legislation by domestic issuers, foreign issuers, registrants and other market participants. Under NI 52-107, a domestic issuer must use Canadian GAAP. Under NI 52-107, only foreign issuers may use IFRS-IASB;
8. in CSA Staff Notice 52-321 Early Adoption of International Financial Reporting Standards, Use of US GAAP and Reference to IFRS-IASB, staff of the Canadian Securities Administrators recognized that some issuers may wish to prepare their financial statements in accordance with IFRS-IASB for periods beginning prior to January 1, 2011 and indicated that staff were prepared to recommend exemptive relief on a case by case basis to permit a domestic issuer to do so, despite section 3.1 of NI 52-107;
9. subject to obtaining the Exemption Sought, the Filer intends to adopt IFRS-IASB for its financial statements for periods beginning on and after March 1, 2009;
10. the Filer's financial year is the last day of February in each calendar year;
11. the Filer believes that the adoption of IFRS-IASB will avoid potential confusion for the users of its financial statements because the reporting requirements of its primary regulators would be satisfied using one accounting standard; the use of a single accounting standard would eliminate complexity and cost from the Filer's financial statement preparation process; and IFRS-IASB is the acceptable standard where the Filer's assets and operations are located;
12. the Filer has devised a comprehensive IFRS-IASB conversion plan which is being implemented with the assistance of an external accounting firm and progress on the conversion plan is monitored on a weekly basis;
13. the Board of Directors of the Filer (the Board) approved early adoption of IFRS-IASB on May 22, 2009 with effect from March 1, 2009;
14. the Filer has carefully assessed the readiness of its staff, Board, audit committee, auditors, investors and other market participants for the adoption by the Filer of IFRS-IASB for financial periods beginning on or after March 1, 2009 and has concluded that all parties will be adequately prepared for the Filer's adoption of IFRS-IASB for periods beginning on or after March 1, 2009;
15. the Filer has considered the implications of early adopting IFRS-IASB on its obligations under securities legislation including, but not limited to, those relating to CEO and CFO certifications, business acquisition reports, offering documents, and previously released material forward looking information;
16. the Filer will disseminate a news release as soon as practicable after the date of this decision, and prior to filing its interim financial statements for the interim period ending May 31, 2009, disclosing relevant information about its conversion to IFRS-IASB as contemplated by CSA Staff Notice 52-320 Disclosure of Expected Changes in Accounting Policies Relating to Changeover to International Financial Reporting Standards, including:
(a) the key elements and timing of the Filer's changeover plan;
(b) the accounting policy and implementation decisions the Filer has made or will have to make;
(c) the exemptions available under IFRS 1 First-time Adoption of International Financial Reporting Standards (IFRS 1) that the Filer expects to apply in preparing financial statements in accordance with IFRS-IASB;
(d) major identified differences between the Filer's current accounting policies and those the Filer is required or expects to apply in preparing financial statements in accordance with IFRS-IASB;
(e) the impact of adopting IFRS-IASB on the key line items in the Filer's interim financial statements for the period ending November 30, 2008;
17. the Filer will re-file its annual management's discussion and analysis for the year ending February 28, 2009, as soon as practicable after the date of this decision and prior to filing its interim financial statements for the interim period ending May 31, 2009.
18. the refiled annual management's discussion and analysis will contain the information set out in the news release, including, to the extent known, quantitative information regarding the impact of adopting IFRS-IASB on key line items in the Filer's annual financial statements for the year ending February 28, 2009.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:
(a) the Filer prepares its annual financial statements for years beginning on or after March 1, 2009 in accordance with IFRS-IASB;
(b) the Filer prepares its interim financial statements for interim periods beginning on or after March 1, 2009 in accordance with IFRS-IASB, except that if the Filer files interim financial statements prepared in accordance with Canadian GAAP for one or more interim periods in the financial year in which the Filer adopts IFRS-IASB, the Filer will restate and re-file those interim financial statements in accordance with IFRS-IASB, upon its adoption of IFRS-IASB;
(c) the Filer provides the communications in the manner and in the time periods set out in paragraphs 16, 17 and 18; and
(d) if the Filer files its first IFRS-IASB financial statements in an interim period, those interim financial statements will present all financial statements with equal prominence, including the opening statement of financial position at the date of transition to IFRS-IASB.