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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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Takeover Rules Module (TKO) [VER7/02-16]
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  • TKO 9 Profit Forecasts

    • TKO 9.1 References to profit forecasts

      • TKO 9.1.1

        A reference in this TKO Section 9 to:

        (a) a "profit forecast" includes a forecast of loss; and
        (b) a "profit" includes a loss.

        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 9.2 Standards of care

      • TKO 9.2.1

        When a profit forecast is to be given by a Bidder or Target to shareholders, the Directors of the respective Bidder or Target:

        (a) are responsible for the compilation of the profit forecast; and
        (b) in so doing, must compile the forecast with the highest standards of objectivity, care and accuracy.

        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.2.1 Guidance

          The hazards attached to the forecasting of profits must in no way detract from the necessity of maintaining the highest standards of accuracy and fair presentation in all communications to shareholders in a Bid.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 9.3 Assumptions

      • TKO 9.3.1

        When a profit forecast appears in any document addressed to shareholders in connection with a Bid, the material assumptions, including the commercial assumptions, upon which the Directors have based their profit forecast, must be stated and explained in the document.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.3.2

        When, after a Bid Document has been posted, a profit forecast is given in a public announcement (whether by newspaper or any other means of publication), any assumptions on which the forecast is based must be included in the announcement.

        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]
        [Amended] RM164/2015 (Made 9th December 2015). [VER7/02-16]

    • TKO 9.4 Reports in connection with profit forecasts

      • TKO 9.4.1

        In all cases, the assumptions, accounting policies and calculations for a profit forecast must be examined and reported on by the auditors or reporting accountants.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.4.2

        When income from land and buildings is a material element in a profit forecast, that part of the forecast must be examined and reported on by an independent external valuer. This Rule does not apply where the income is virtually certain, for example, known rents receivable under existing leases.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.4.3

        Any relevant profit forecast which has been made before the commencement of the Bid Period must be examined, repeated and reported on in the document sent to shareholders.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.4.3 Guidance

          The DFSA may waive or modify the application of TKO Rule 9.3.3 if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules. In exceptional circumstances, the DFSA may accept that, because of the uncertainties involved, it is not possible for a forecast previously made to be reported on in accordance with the Rules nor for a revised forecast to be made. In these circumstances, shareholders must be given a full explanation of why the requirements of the Rules are not capable of being met.


          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.4.4

        When a Bid Document has been posted, the reports shall be included in the document containing the forecast or, when the forecast has been made in a public announcement (whether by newspaper or any other means of publication), in a document which shall be sent to shareholders with a minimum of delay after the announcement is published. The reports must be accompanied by a statement that those making them have given and not withdrawn their consent to publication.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 9.5 Statements to be treated as profit forecasts

      • TKO 9.5.1

        The following statements must be treated as profit forecasts:

        (a) an estimate of profit for a period which has already expired;
        (b) a profit forecast for a limited period (for example, for the following quarter); and
        (c) any unaudited interim and preliminary profit figures published during a Bid Period, excepting unaudited statements of annual or interim results which have already been published.

        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

        • TKO 9.5.1 Guidance

          1. When no figure is mentioned, or even if the word "profit" is not used, the DFSA may consider that certain forms of words constitute a profit forecast, particularly when considered in context. Examples include statements that "profits will be somewhat higher than last year" and "performance in the second half year is expected to be similar to our performance and results in the first half year" (when interim figures have already been published). Whenever a form of words puts a floor under, or a ceiling on, the likely profits of a particular period or contains the data necessary to calculate an approximate figure for future profits, it will be treated by the DFSA as a profit forecast which must be reported on in accordance with this Rule. In cases of doubt the DFSA must be consulted.
          2. A dividend forecast will not normally be considered a profit forecast unless, for example, it is accompanied by an estimate as to dividend cover.

          Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

    • TKO 9.6 Miscellaneous rules relating to forecasts

      • TKO 9.6.1

        When a Bidder or Target includes a forecast in a document, any document subsequently sent out by that entity in connection with that Bid must contain a statement by the Directors that:

        (a) the forecast remains valid for the purpose of the Bid; and
        (b) the accountants and others who reported on the forecast have indicated that they have no objection to their reports continuing to apply.

        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.6.2

        When a forecast of profit before taxation appears in a document addressed to shareholders, it must be accompanied by a forecast of earnings per Share arising from the profit.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.6.3

        Whenever a profit forecast is made in relation to a period in which trading has already commenced, any previously published profit figures in respect of any expired part of that trading period, together with comparable figures for the same part of the preceding year, must be stated.


        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]

      • TKO 9.6.4

        All the relevant provisions of this Section apply also to a profit forecast prepared on an inflation-adjusted basis, in which case:

        (a) the basis of computation underlying such a forecast must be stated; and
        (b) the forecast must be accompanied by a corresponding forecast prepared on a historical cost basis.

        Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]