Provisions of the Sarbanes-Oxley Act of 2002 Applicable to Non-US Companies

Reacting to the series of disclosures of financial fraud involving US companies, including Enron and WorldCom, and falling stock markets, the US Congress passed the Sarbanes-Oxley Act of 2002 (the "Act") last week and President George Bush signed the Act into law on 30 July 2002.

The Act contains sweeping public company accounting and disclosure provisions that are applicable both to US publicly traded companies and to non-US companies that either have securities registered under the U.S. Securities Exchange Act of 1934 (the "Exchange Act") or who have registered securities under the U.S. Securities Act of 1933 (the "Securities Act"). This includes non-US companies that have only registered debt securities, such as high yield notes, under the Securities Act. Certain provisions of the Act also may apply to non-US companies that have contractually undertaken to file periodic reports under the Exchange Act.

Some of the provisions of the Act that apply to these non-US companies include the following:

• Any periodic report filed under the Exchange Act that contains financial statements must be accompanied by a certification signed by both the Chief Executive Officer and the Chief Financial Officer certifying that the report complies with the requirements of the Exchange Act and the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the filing company. This certification requirement appears to be effective immediately. The Act provides for criminal penalties if a person gives a certification knowing that the report does not meet the requirements recited in the certification.
• The Act bans most loans by a company to its executive officers and directors if the loans are made, modified or renewed after 30 July 2002, subject to exceptions for extensions of credit made in the ordinary course of business and on arm's length terms by consumer credit companies and banks.
• The U.S. Securities and Exchange Commission (the "SEC") is required to implement regulations by 29 August 2002 requiring detailed certifications by the Chief Executive Officer and the Chief Financial Officer in each annual and quarterly report filed by a company with the SEC relating to, among other things: the absence of any untrue statement, or omission, of a material fact in the report; the financial statements' fair presentation of the company's financial condition and results of operations; responsibility for establishing and maintaining internal controls and the results of an evaluation of the company's internal controls.
• If a company is required to prepare an accounting restatement due to the company's material noncompliance with financial reporting requirements under the US securities laws due to misconduct, the Chief Executive Officer and Chief Financial Officer of the company will be required to disgorge any incentive or equity based compensation received, and any profits from the sale of the company's securities effected, during the 12 month period following the issuance of the noncompliant financial statements.
• The SEC is required to issue rules within 180 days after the Act is signed by President Bush requiring the disclosure in financial statements included in each annual or quarterly report of all material off-balance sheet transactions that may have a material impact on the company's financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses.
• The SEC also is required to issue rules within 180 days after the Act is signed by President Bush requiring companies to disclose (1) in periodic reports whether they have adopted a code of ethics for senior financial officers and, if not, why not and (2) immediately any change in or waiver of the code of ethics for senior financial officers.