IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, BRITISH COLUMBIA, MANITOBA, NEW BRUNSWICK, NEWFOUNDLAND AND LABRADOR,
NOVA
SCOTIA, ONTARIO, PRINCE EDWARD ISLAND, Qu�bec AND SASKATCHEWAN
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
DAVIS + HENDERSON INCOME FUND
MRRS DECISION DOCUMENT
WHEREAS the local securities
regulatory authority or regulator (the "Decision Maker") in each of Alberta,
British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia,
Ontario, Prince Edward Island, Qu�bec and Saskatchewan (the "Jurisdictions")
has received an application from Davis + Henderson Income Fund (the "Fund") for
a decision under the securities legislation (the "Legislation") of
the Jurisdictions to exempt the Fund from filing and distributing annual financial
statements,
an annual report and an annual filing, where applicable, for its fiscal year
ended December 31, 2001, as would otherwise be required pursuant to applicable
Legislation;
AND WHEREAS under the Mutual Reliance Review System
for Exemptive Relief Applications (the "System"), the Ontario Securities
Commission is the principal regulator for this application;
AND WHEREAS the Fund has represented to the Decision
Makers that:
1. The Fund is a limited purpose trust established under the laws of Ontario pursuant to
an amended and restated declaration of trust dated November 6, 2001. The Fund is
authorized to issue an unlimited number of units. As of January 15, 2002, 18,955,000 units
were issued and outstanding.
2. The Fund holds common shares and notes issued by D+H Holdings Corp., an
Ontario corporation, which holds units of Davis + Henderson, Limited Partnership
("Davis +
Henderson L.P."), a British Columbia limited partnership. The Fund also
holds shares in Davis + Henderson G.P. Inc., the general partner of Davis +
Henderson L.P.
3. The Fund offered 17,235,000 units of the Fund pursuant to an initial public
offering by
way of a final prospectus dated December 11, 2001 (the "Prospectus")
and an additional 1,720,000 by way of over-allotment option as described in
the Prospectus. The
closing of the offering occurred on December 20, 2001 and the closing of the
over-allotment option occurred on January 10, 2002.
4. The Fund used the total proceeds of the offering and the over-allotment
option to indirectly acquire a 49.98% interest in Davis + Henderson L.P., which
in turn
acquired the
cheque supply outsourcing business formerly carried on as a division of MDC
Corporation Inc. ("MDC")
5. The fiscal year end of the Fund occurred on December 31, 2001.
6. The Prospectus contains
(i) audited balance sheets of Davis + Henderson L.P. as at December 31, 2000 and 1999 and audited statements of operations and divisional equity and cash flows for each of the years in the three year period ended December 31, 2000,
(ii) an unaudited balance sheet of Davis + Henderson L.P. as at September 30, 2001 and unaudited statements of operations and divisional equity and cash flows for the nine month periods ended September 30, 2001 and 2000, together with notes to those financial statements,
(iii) an unaudited pro forma consolidated balance sheet of the Fund as at September 30, 2001 and unaudited pro forma consolidated statements of operations and distributable cash for the nine month period ended September 30, 2001 and the year ended December 31, 2000, together with notes to those financial statements, and
(iv) an audited balance sheet of the Fund as at December 11, 2001.
7. The Fund's financial position as at
December 31, 2001 is substantially reflected in the pro forma financial statements
included in the Prospectus. Other than the
offering described in the Prospectus, there were no material acquisitions or
dispositions of units of the Fund during the period from December 11, 2001
to December 31, 2001 (the "Stub Period").
8. Meetings of unitholders will be held to elect trustees of the Fund, commencing in 2003,
such that no proxy circular is expected to be distributed to unitholders in respect of the
year ending December 31, 2001.
9. The only operations of the Fund prior to the end of its fiscal year ended December 31,
2001 involved the issuance of 17,235,000 units, the purchase of the common shares and
notes of D+H Holdings Corp., the purchase of common shares of Davis + Henderson G.P. as
described in the Prospectus.
10. The benefit to be derived from unitholders of the Fund from receiving financial
statements, an annual report and an annual filing in respect of the fiscal year ended
December 31, 2001 would be minimal in view of the short period from the date of the
Prospectus to the Fund's fiscal year end (20 days) and the nature of the business carried
on by the Fund and by its trustees.
11. The expense to the Fund of preparing, filing and sending to its unitholders financial
statements, an annual report and an annual filing in respect of the fiscal year ended
December 31, 2001 would not be justified in view of the benefit to be derived by the
unitholders from receiving such statements and information.
12. The Fund will prepare, file and deliver to all its unitholders unaudited financial
statements for the period ended March 31, 2002 within the applicable time period and will
prepare, file and deliver to all its unitholders a proxy circular in respect of the year
ended December 31, 2002 within the applicable time period.
AND WHEREAS under the
System, this MRRS Decision Document evidences the decision of each Decision
Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied
that the test contained in the Legislation that provides the Decision Maker with the
jurisdiction to make the Decision has been met;
The DECISION of the Decision Makers under the
Legislation is that the Fund is exempted from the requirement to file and distribute
annual financial statements, an annual report and an annual filing, where applicable, for
its fiscal year ended December 31, 2001, provided that
a) the Fund's interim financial statements for the period ended March 31, 2002 will include the Stub Period, and
b) the Fund's audited annual financial statement and the annual report, where applicable, for the period ended December 31, 2002 will include the Stub Period.
DATED February 4, 2002
R. Stephen Paddon | Lorne Morphy |
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Relief
granted to a limited purpose trust from requirement to file annual financial
statements, an annual
report and an annual filing, where applicable. Financial position of the
trust at year-end was reflected in financial statements which were included in
prospectus filed
just prior to year-end.
Applicable Ontario Provisions
Securities Act, R.S.O. 1990, c.S.5, as am. s.80(b)(iii).