Mutual Reliance Review System for Exemptive Relief Applications -- relief from the requirement to provide the most recent interim financial statements and pro forma financial statements for a significant acquisition in a Business Acquisition Report -- Business Acquisition Report contains the interim financial statements and pro forma financial statements included in a prospectus of the issuer dated October 8, 2004.
National Instrument 51-102, Continuous Disclosure Obligations, s. 8.4.
Citation: Gienow Windows & Doors Income Fund, 2005 ABASC 2
December 30, 2004
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, QUÉBEC,
NEW BRUNSWICK, NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
GIENOW WINDOWS & DOORS INCOME FUND
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from the Filer for (i) a decision under the securities legislation of the Jurisdictions (the "Legislation") to exempt the Filer from the requirement to include in the business acquisition report to be filed by the Filer under Part 8 of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102") in connection with the Filer's acquisition of interests in Gienow Windows & Doors Limited Partnership (the "Partnership") and Farley Windows Inc. ("Farley") on October 19, 2004, the financial statement disclosure prescribed in that Part, provided that such business acquisition report includes the Prospectus Financial Statements (as defined below), and (ii) in Quebec, for a revision of the general order that will provide the same result as an exemption order (the "Requested Relief"),
Under the Mutual Reliance Review System for Exemptive Relief Applications:
(a) Alberta is the principal regulator for this application, and
(b) this MRRS decision document evidences the decision of each Decision Maker.
Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.
This decision is based on the following facts represented by the Filer:
1. The Filer is an open-ended, limited purpose trust established under and governed by the laws of the Province of Alberta pursuant to an amended and restated deed of trust dated October 19, 2004 (the "Deed of Trust").
2. The Filer's head office is located at 7140 - 40th Street S.E., Calgary, Alberta T2C 2B6.
3. The Filer has been a reporting issuer or the equivalent in each of the Jurisdictions since October 8, 2004, being the date on which a receipt was issued for a (final) prospectus of the Filer dated October 7, 2004 (the "Prospectus") in respect of an initial public offering of 16,500,000 trust units (the "Offering").
4. To the best of its knowledge, the Filer is not in default of any requirements of the Legislation.
5. The trust units of the Filer are listed on the Toronto Stock Exchange. As at December 22, 2004, there were 25,147,500 trust units issued and outstanding.
6. Although the Filer is also a reporting issuer or the equivalent in Prince Edward Island, the Yukon Territory, the Northwest Territories and Nunavut, the Requested Relief is not being sought in these jurisdictions on the basis that NI 51-102 is not in force in such jurisdictions.
7. Although the Filer is also a reporting issuer in British Columbia, the Requested Relief is not being sought in this jurisdiction on the basis that Part 8 of NI 51-102 does not apply in British Columbia pursuant to BC Implementing Rule 51-801.
8. The Prospectus was prepared in accordance with the form requirements of Ontario Securities Commission Rule 41-501 General Prospectus Requirements ("OSC Rule 41-501") and the Legislation in Jurisdictions other than Ontario which impose comparable requirements or which permit compliance with the Ontario requirements for purposes of complying with the applicable Legislation in the local jurisdiction (collectively, the "Long Form Prospectus Rules").
9. The Prospectus included the financial statement disclosure required under Part 6 of OSC Rule 41-501 for "significant acquisitions" in respect of Gienow Building Products Ltd. ("GBPL") and Farley. The Partnership had acquired the operating assets and related window and door manufacturing and assembly business of GBPL and its subsidiaries after the close of business on June 30, 2004.
10. The Filer closed the Offering on October 19, 2004, and immediately thereafter completed its indirect investment in the Partnership for an initial 98% limited partnership interest therein and its indirect purchase of all of the issued and outstanding shares of Farley (together, the "Transactions").
11. The Transactions constitute "significant acquisitions" within the meaning of Part 8 of NI 51-102 for which a business acquisition report is required to be filed.
12. Pursuant to the Long Form Prospectus Rules, the Prospectus included the following financial statement disclosure:
(a) audited financial statements of Farley for the 12 months ended December 31, 2003, 2002 and 2001 (with a balance sheet as at December 31, 2003 and 2002), together with an auditors' report thereon;
(b) audited financial statements of GBPL for the 12 months ended February 1, 2004, 2003 and 2002 (with a balance sheet as at February 1, 2004 and 2003), together with an auditors' report thereon;
(c) unaudited interim financial statements of Farley for the 6 months ended June 30, 2004 and 2003 (with a balance sheet as at June 30, 2004);
(d) unaudited interim financial statements of GBPL for the 5 months ended June 30, 2004 and 2003 (with a balance sheet as at June 30, 2004), prepared as of the close of business on June 30, 2004;
(e) pro forma financial statements (including a pro forma balance sheet and pro forma income statement) of the Filer as at and for the 12 month period ended December 31, 2003 and the 6 month period ended June 30, 2004, together with a compilation report thereon
(together, the "Prospectus Financial Statements").
13. The Prospectus was filed 12 days before the closing of the Transactions.
14. Compliance with the financial statement disclosure requirements under the Long Form Prospectus Rules does not necessarily satisfy the financial statement disclosure requirements under Part 8 of NI 51-102.
15. Pursuant to section 8.4(2) of NI 51-102, the business acquisition report to be filed in connection with the Transactions is required to include, among other things, interim financial statements of the acquired businesses for the most recently completed interim period that ended before the date of acquisition and the comparable period in the preceding financial year. In the circumstances of the Transactions, the most recently completed interim period is the period ended September 30, 2004. The Prospectus included financial statement disclosure as at and for the interim periods ended June 30, 2004.
16. Interim financial statements of Farley as at and for its interim period ended September 30, 2004, and therefore pro forma financial statements of the Filer as at and for the same period, are not available. The business acquisition report to be filed in connection with the Transactions will, however, include interim financial statements of the Partnership as at and for its interim period ended September 30, 2004.
17. After giving effect to the closing of the Transactions, and based on the historical and pro forma financial statement information contained in the Prospectus, the relative significance of the Partnership to the Filer under the asset, investment and income measures of significance contemplated in Part 8 of NI 51-102 is between 60% and 80% and the relative significance of Farley to the Filer under each such measure is between 20% and 40%.
18. Other than completion of the Transactions, there have been no material changes relating to Farley from June 30, 2004, being the date of the most recent financial statements of Farley included in the Prospectus, to October 19, 2004, being the date of closing of the Transactions.
Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.
The decision of the Decision Makers under the Legislation is that the Requested Relief is granted provided that the business acquisition report to be filed by the Filer in connection with the Transactions includes the Prospectus Financial Statements.