National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- decision exempting the Filer from the requirement in s. 3.1 of NI 52-107 that financial statements be prepared in accordance with Canadian GAAP for so long as the Filer prepares its financial statements in accordance with IFRS-IASB -- for financial periods beginning on or after January 1, 2010 -- Filer must provide specified disclosure regarding change to IFRS-IASB -- if the Filer files interim financial statements prepared in accordance with Canadian GAAP in the year that the Filer adopts IFRS-IASB, those interim financial statements must be restated using IFRS-IASB -- Filer wishes to change to IFRS-IASB to reduce costs and enhance efficiencies with respect to the financial preparation process.
Applicable Legislative Provisions
National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency, s. 3.1.
October 21, 2009
IN THE MATTER OF
THE SECURITIES LEGISLATION OF ONTARIO
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 January 1, 2010 (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 British Columbia, Alberta, 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 incorporated under the laws of Ontario on December 6, 2005; the registered and head office of the Filer is located at 8 King Street East, Suite 710, Toronto, Ontario M5C 1B5;
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 Venture Exchange;
4. the Filer is a junior natural resource corporation currently focused on uranium exploration in the Roraima Basin in Guyana, South America;
5. 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;
6. 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;
7. 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;
8. subject to obtaining the Exemption Sought, the Filer intends to adopt IFRS-IASB for its financial statements for periods beginning on and after January 1, 2010;
9. the Filer's financial year is the last day of December in each calendar year;
10. the Filer believes that the early adoption of IFRS-IASB will allow it greater access to consultants to assist with the conversion to IFRS-IASB, which the Filer believes will reduce costs and enhance efficiencies with respect to the Filer's financial statement preparation process;
11. the Board of Directors of the Filer (the Board) approved early adoption of IFRS-IASB on August 27, 2009 with effect from January 1, 2010, subject to the Filer obtaining the Exemption Sought;
12. 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 January 1, 2010 and has concluded that all parties will be adequately prepared for the Filer's adoption of IFRS-IASB for periods beginning on or after January 1, 2010;
13. 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; and
14. the Filer will disseminate a news release not more than seven days after the date of this decision document 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 its conversion plan to adopt IFRS-IASB;
(b) the exemptions available under IFRS 1 First-time Adoption of International Financial Reporting Standards that the Filer expects to apply in preparing financial statements in accordance with IFRS-IASB;
(c) the 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; and
(d) the impact of adopting IFRS-IASB on the key line items in the Filer's interim financial statements for the period ended June 30, 2009;
15. the Filer will update the information set out in the news release in its subsequent management's discussion and analysis, including, to the extent the Filer has quantified such information, quantitative information regarding the impact of adopting IFRS-IASB on the key line items in the Filer's financial statements.
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, subject to the following conditions:
(a) provided that and only for so long as the Filer prepares its financial statements for financial periods beginning on or after January 1, 2010 in accordance with IFRS-IASB;
(b) provided that the Filer provides all of the communication as described and in the manner set out in paragraphs 14 and 15;
(c) provided that if the Filer files interim financial statements prepared in accordance with Canadian GAAP in the year that the Filer adopts IFRS-IASB, upon the adoption of IFRS-IASB the Filer will restate any previous interim statements for the financial year in which it adopted IFRS-IASB that were originally prepared using Canadian GAAP together with the related restated interim management's discussion and analysis as well as the certificates required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings; and
(d) provided that 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.