New segments on NewConnect

In the 23.06.2016 dn the Warsaw Stock Exchange adopted Resolution No. 646 / 2016 on segmentation rynkuNewConnect and the rules and procedure of classification of these segments. The decision confirms the interest in the management of the Warsaw Stock Exchange NewConnect market and attempts to improve. There should therefore be a concern that the new leadership WSE does not attach importance to the market for small companies.

Surely, the intention of the resolution is to show which companies are worthy of investment, and not only in the financial and economic sphere but also in compliance with the obligations of information and accuracy of reporting. Since the beginning of the end of May WSE companies excluded 12 3 including only passed on a regulated market. A lot of penalties and the suspension was due to the failure to execute or to communicate its periodic reports. In the resolution, the company, which encountered again on the penalty kwaliifшkuja not the most attractive segment

On the other hand, the evaluation criteria established companies and assigned to the segment NewConnect Focus require annual growth in sales, profit and dividend payment. The company rapidly increasing market share or investments will not enter the NewConnect and the Focus can be an interesting investment. What is true is required only 5 7 criteria. Not paid attention to the liquidity of the shares. The resolution comes into force on July 4 2016 year. Time will verify the correctness of the criteria. We believe that the time will force further changes.

The adoption of the resolution is an action in the right direction as far as it will encourage investors to return to the market, we will soon see. Below the most important parts of the resolution 646 your evaluation.

§ 1

Shares listed on the NewConnect market may be subject to one qualification

the following segments:

1) NewConnect Focus,

2) NewConnect Base

3) NewConnect Alert.

§ 2

1. NewConnect segment Focus, hereinafter referred to as “segment NC Focus”, can be the issuer’s shares, subject to paragraph. 2 and 3, will be fulfilled if at least five of the following conditions:

1) the average value of the issuer’s capitalization exceeds 12.000.000 zł;

2) price / earnings ratio is higher than and lower than 0 50;

3) a price / book value is higher than and lower than 0 10;

4) dividend rate is higher than 0;

5) book value shown in the last published periodical report exceeds 1.000.000 zł;

6) the difference between the proceeds from the sale of 4 fiscal quarters / years preceding the quarter in which it was published last before qualifications periodic report, and the proceeds from the sale of 4 immediately preceding fiscal quarters / fiscal years, is positive ;

7) the difference between the sum of the net proceeds from 4 fiscal quarters / years preceding the quarter in which it was published before the date of the last periodic report skills, and the sum of the net proceeds from 4 immediately preceding fiscal quarters / years Rotary has a positive value.

2. Qualifications segment NC Focus is made under the condition that all of the following additional reasons:

1) the issuer’s shares are listed on the NewConnect market for at least 12 months;

2) the average share price was higher than the issuer 10 cents;

3) the issuer’s book value shown in the last published interim report can not be negative;

4) shares of the issuer are not marked in a special way on the basis of

§ 150 paragraph. Appendix No. 1 2 to the Alternative Trading System;

5) in the last 12 months, subject to point 6), the issuer

It has not been applied none of the measures set out below has been applied or not more than one of them:

a) the obligation specified in § 15b Alternative Trading System Rules, or

b) the obligation referred to in § 17b Alternative Trading System Rules, or

c) warning penalty under § 17c Alternative Trading System Rules, or

d) fine under § 17c Alternative Trading System Rules, or

e) the suspension of trading in shares of the issuer pursuant to paragraph § 12. 3 Alternative Trading System Rules;

6) during the last months 3 the issuer has not imposed any of the measures referred to in point 5) point a) – e), or the turnover of its shares is not subject to suspension under paragraph § 11. 1 2 point) or 3) of the Alternative Trading System.

3. In special situations, despite the fulfillment of the conditions and circumstances referred to in paragraph. 1 and 2, the Management Board may decide to ineligibility of the shares of an issuer segment NC Focus.

4. In the case of the issuer’s shares are classified at the periodical verification segment NC Focus, these shares are marked in a special way in the WSE information services and on the www.newconnect.pl – from the third trading day after the day of the trading participants made about qualifications.

§ 3

1. NewConnect segment Base, hereinafter referred to as “segment NC Base”, are classified, subject to § 6, shares of issuers that have not been qualified to the NewConnect segment of the Focus or the NewConnect segment Alert.

2. In the case of the issuer’s shares are classified at the periodical verification to NC Base segment, these shares are marked in a special way in the WSE information services and on the www.newconnect.pl – from the third trading day after the day of the trading participants made about qualifications.

§ 4

1. NewConnect segment Alert, hereinafter referred to as “segment NC alert”, are classified, subject to § 6, the shares of the issuer if there is at least one of the following reasons:

1) the average share price was lower than the issuer 5 cents;

2) the issuer’s book value shown in the last published interim report is negative;

3) during the last 12 months has been imposed on the issuer more than one once any of the funds listed below or that have been imposed on him at all, during this period, two or more of these measures:

a) the obligation specified in § 15b Alternative Trading System Rules, or

b) the obligation referred to in § 17b Alternative Trading System Rules, or

c) warning penalty under § 17c Alternative Trading System Rules, or

d) fine under § 17c Alternative Trading System Rules, or

e) the suspension of trading in shares of the issuer pursuant to paragraph § 12. 3 Alternative Trading System Rules;

4) issuer’s shares are marked in a special way on the basis of paragraph § 150. Appendix No. 1 2 to the Alternative Trading System;

5) the statutory auditor issued a negative opinion on the financial statements of the issuer for the last financial year or the consolidated financial statements of the issuer for the last financial year, or issued a position on the refusal to issue an opinion, and the situation has not changed before qualifying.

2. In the case of the issuer’s shares are classified at the periodical verification to alert the NC segment, these shares:

a) they are marked in a special way in the WSE information services and on the www.newconnect.pl,

b) they are removed from the portfolio index.

c) they are traded in the single price system

– from the third trading day after the day of the trading participants made about qualifications.

§ 5

1. Second periodically verifies indicators, conditions and circumstances referred to in § 2 and 4, and the qualifications of the shares in the segments referred to in § 1, two trading days before the last trading day of March, June, September and December each year, subject to paragraph. § 2 and 6 – 8.

2. The values ​​referred to in paragraph § 2. 1 1 point), para. 2 2 point) or § 4 paragraph. 1 1 point) are calculated on the day periodic verification as the arithmetic mean of the last 3 calendar months (including the month in which the periodic verification is made, with the exception of the last three trading days this month).

3. The values ​​referred to in paragraph § 2. Point 1 2) – 4) are calculated on the day periodic verification, according to the methodology used by the Exchange and published on the website of the Exchange.

4. Information on shares classified segments, referred to

in § 1, at the periodical verification shall be communicated to the public

in the form of a message on the composition of the segment, at the latest trading day following the day of qualifications.

§ 6

1. In the case referred to in paragraph § 2. 2 4 point), the shares of the issuer are removed from the segment respectively Focus or NC NC Base and qualified for the NC segment Alert, regardless of periodic verification.

2. In the event that the Management Board that the issuer does not perform obligations set out in the Rules of the Alternative Trading System or performs the duties improperly, as well as the finding of a violation by the issuer of other rules or regulations in force in the alternative trading system, the Management Board, taking into account the degree of and the resulting violation of range, it may decide to remove the action of the issuer, respectively from the segment of NC or NC Focus Base and classifying the segment NC or NC alert Base, regardless of periodic verification.

3. In special situations, including in the event the Management Board, pursuant to the Alternative Trading System or commonly applicable provisions of law, the decision to suspend trading in shares of a particular issuer or their exclusion from the market, the Management Board, taking into account the circumstances of the case, may decide to removing the shares of the issuer, respectively segment Focus or NC NC Base and qualifying them to segment the NC or NC alert Base, regardless of periodic verification.

4. In the cases referred to in paragraph. 1 – 3, the provisions of paragraph § 3. § 2 or 4 paragraph. 2 apply mutatis mutandis.

§ 7

1. The first periodic verification and classification of the shares in the segments referred to in § 1, takes place on September 28 2016 r., Subject to paragraph. 2 and 3.

2. In the case of issuers whose shares on 28 September 2016 year. Will be listed for less than 3 months, and issuers whose shares will be after this date for the first time introduced to the alternative trading system, the first periodic verification and qualification within the deadline specified in § 5 paragraph. 1, but not earlier than after 3 months from the date of the first listing of the issuer’s shares on the NewConnect market, subject to paragraph. 3.

3. Until the expiry of the deadline referred to in paragraph. 2, the shares of the issuer qualifies for the NC Base segment, subject to their possible eligibility for the NC segment Alert in the case referred to in paragraph § 4. 1 4 point).