Review of financial reporting Transeuro Energy Corp

359 7th Ave SW, Suite 2800
T2P 3N9 Calgary, Alberta
Canada

Our reference: 12/7141
Date: 17.01.2013

1. Introduction
Pursuant to the Securities Trading Act section 15-1 subsection (3), The Financial Supervisory Authority of Norway (Finanstilsynet) has reviewed certain accounting related topics related to the financial reporting of Transeuro Energy Corp (Transeuro).  Reference is made to previous correspondence, most recently the issuer's reply of 29 October 2012.

Below is a summary of the topics addressed by the review. The review is hereby considered closed.

2.  Annual report and half-yearly financial report

2.1 Corporate governance
The issuer shall, in the management report or in a document referred to in the management report, give an account of its policies and practice for corporate governance in conformity with the Norwegian Accounting Act section 3-3(b), cf. Securities Trading Regulations section 5-7 subsection (3).  Transeuro has not provided this account in its reporting for 2011 as it was not aware of the applicable rules. 

Transeuro has provided a statement of corporate governance for 2011 in its Information Circular that is mailed to the Company's shareholders each year in advance of the Annual General Meeting.  Transeuro has informed Finanstilsynet that it will include the information required by the Norwegian Accounting Act section 3-3(b) in future management reports.  Finanstilsynet notes this for the record and has no further comments in this regard.  

2.2  Management report in the annual report
A management report must be prepared in accordance with the Accounting Act section 3-3a. For 2011, Transeuro has issued consolidated financial statements and management's discussion and analysis and other public disclosures.  The management discussion and analysis was prepared in accordance with NI 51-102.  The Company was not aware of the additional Norwegian disclosure requirements.  In July 2012, Transeuro requested an exemption from these requirements.
In a letter dated 17 January 2013, Finanstilsynet granted an exemption for these disclosures as Finanstilsynet has determined that the Canadian periodic disclosure requirements are “equivalent” to the requirements contained in articles 13 of Directive 2007/14/EC, cf. article 4 of the Transparency Directive.

2.3 Individual accounts by the parent company
The annual financial statements must contain audited financial statements of the parent company and for the consolidated group. Third country issuers may apply to Finanstilsynet for exemption from the obligation to prepare and present parent company financial statements provided the consolidated financial statements contain specific information.  The company has not filed parent company financial statements for 2011 and had not requested an exemption from this obligation.  During July 2012, Transeuro requested an exemption from this obligation.

In a letter dated 17 January 2013, Finanstilsynet granted an exemption for these disclosures as Finanstilsynet has determined that the Canadian periodic disclosure requirements are “equivalent” to the requirements contained in articles 17 of Directive 2007/14/EC, cf. article 4 of the Transparency Directive. 

2.4 Statement in the annual report and half-yearly financial report
In accordance with section 5-5 subsection (2) no. 3 of the Securities Trading Act, the annual financial report must contain a statement made by the persons responsible within the issuer to the effect that, to the best of their knowledge, the financial statements prepared in accordance with the applicable set of accounting standards give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer and the group taken as a whole and that the management report includes a fair review of the development and performance of the business and the position of the issuer and the group taken as a whole, together with a description of the principal risks and uncertainties that they face.

In accordance with section 5-6 subsection (2) no. 3 of the Securites Trading Act, the half-yearly financial report must contain a statement made by the persons responsible within the issuer to the effect that to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with applicable set of accounting standards give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer and the group taken as a whole and that the half-yearly management report gives a fair review of the important events that have occurred during the first six months of the year and their impact on the condensed set of financial statements.

The statements should be drawn up by the persons responsible for the preparation and presentation of financial statements under the accounting rules applicable to the issuer concerned. The statement must be publicised as a part of the annual financial report or the half-yearly financial report.  These statements have not been made with respect to the 2011 Annual Report or the half-yearly report for 2011.  During July 2012, Transeuro requested an exemption from this requirement.

In a letter dated 17 January 2013, Finanstilsynet granted an exemption to Transeuro for these statements as Finanstilsynet has determined that the Canadian periodic disclosure requirements are “equivalent” to the requirements contained in articles 15 of Directive 2007/14/EC, cf. article 4 of the Transparency Directive.

3.  Closing
Finanstilsynet has not considered whether the above matters are subject to the securities legislation's provisions regarding the requirement to disclose inside information in accordance with the Securities Trading Act section 5-2 subsection (1) and section 3-2. Finanstilsynet expects the undertaking to consider its requirement to disclose inside information on a continuous basis.

Finanstilsynet expects the board of directors of Transeuro to be informed of this letter.

Finanstilsynet has forwarded a copy of this letter to the issuer's appointed auditor and to Oslo Børs.

On behalf of Finanstilsynet

Gaute S. Gravir
Head of Section

 Tine Svae
 Special Adviser

 

Enclosure:
Exemption according to the security trading regulation section 5-7