Periodic reporting and the accounting standards form an integral part of the information that contributes to transparent trading in accordance with the provisions of the Stock Exchange Act and the Listing Rules. One of the tasks of the SWX is to enforce the transparency provisions that apply to issuers.
ProgressNow! invest Ltd uses the International Financial Reporting Standards (IFRS; formerly IAS) as its accounting standard in establishing its consolidated annual financial statements. According to Admission Board Communiqué no. 8/2001 of 14 May 2001, issuers who have not specifically selected another accounting standard for their interim reporting (e.g., IFRS) must apply Swiss GAAP FER 12, which sets out the minimum content requirements (disclosure). In the present case, the minimum requirements of Swiss GAAP FER 12 apply to the interim report for 2002.
It is a new requirement that, for all interim financial reports as of the financial year that begins on or after 1 January 2003, both in terms of the form of presentation and disclosure, the same accounting standard as used in the annual financial statements must be applied. This means that issuers who apply IFRS in the annual financial statements in future must apply IAS 34 (Interim Reporting) in their financial statements (see Admission Board Communiqué no. 12/2002 of 25 November 2002).
According to Swiss GAAP FER 12 mrn 3, the previous year's figures must be disclosed for the corresponding period. If an issuer voluntarily discloses figures in addition to the minimum required figures, Swiss GAAP FER 12 requires disclosure of the corresponding figures of the previous year. ProgressNow! invest Ltd's consolidated balance sheet as of 30 June 2002 and its profit and loss account for the first semester of 2002 do not contain the previous year's figures, which is a violation of applicable provisions. In the present case, the company should have disclosed the previous year's figures for the period from 1 January 2001 to 30 June 2001 (profit and loss account) and the figures as of 31 December 2001 (balance sheet).
The Additional Rules for the Listing of Investment Companies (ZR InvG) set out that the current value (market value) for each security must be disclosed (Art. 18 in combination with Art. 17 point 1 ZR InvG). The market value of shareholder loans and convertible bonds relating to private equity investments were not disclosed for each security (individual investment). The company's interim report for 2002 only contains information on the relevant acquisition values and a global valuation adjustment of these positions.
Swiss GAAP FER 12 mrn 6 sets out that the notes contained in the half year report must cover the company's prospects for the current financial year. The notes contained in the company's interim report for 2002 fail to comment on the prospects for the period after 1 July 2002.
The Executive Committee of the Admission Board has decided that, taken together, these three shortcomings, which are uncontested by the company, constitute a violation of basic provisions of the Listing Rules and the applicable minimum disclosure requirements pursuant to Swiss GAAP FER 12. A reprimand with publication has therefore been issued against ProgressNow! invest Ltd.
