January 8, 2018
Mikhail Zhukov
Chief Executive Officer
Zemenik Trading Limited
Dositheou, 42
Strovolos, 2028, Nicosia
Cyprus
Re: Zemenik Trading Limited
Draft Registration Statement on Form F-1
Submitted December 12, 2017
CIK No. 0001721181
Dear Mr. Zhukov:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form F-1 submitted December 12, 2017
General
1. Please provide us with copies of all written communications, as defined
in Rule 405
under the Securities Act, that you, or anyone authorized to do so on
your behalf, present
to potential investors in reliance on Section 5(d) of the Securities
Act, whether or not
they retain copies of the communications.
Presentation of Financial and Other Information, page ii
Mikhail Zhukov
FirstName LastNameMikhail Zhukov
Zemenik Trading Limited
Comapany2018
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2. Please clarify here, and elsewhere as appropriate, if the Acquisition
resulted in a change
in control over Headhunter FSU Limited and advise us.
Market and Industry Data, page iv
3. We note references throughout the prospectus to third-party market
data derived from the
reports you identify on page iv. Please provide us with copies of
these reports, clearly
cross-referencing each statement in the prospectus with the underlying
factual support.
Also provide a consent from J'Son & Partners to the use of the 2017
report that it
prepared in anticipation of this offering.
Prospectus Summary, page 1
4. Please clarify what "Key Accounts" are on first use as you discuss
financial performance
using this term throughout your prospectus, but do not define it until
page 77.
Overview, page 1
5. Please balance the disclosure of your revenues with disclosure of your
net income (loss)
for the same periods.
Status as a "Controlled Company", page 13
6. Please tell us whether Highworld Investments Limited and ELQ Investors
Limited and
their respective owners will act as a group for purposes of Regulation
13D-G.
Corporate and Capital Structure, page 16
7. Please briefly explain why you are incorporated in Cyprus when your
business operations
are in Russia and the Commonwealth of Independent States ("CIS"). Also
explain why
your top level corporate structure consists of three holding company
that alternate
between Cyprus, then Russia and then Cyprus. In your discussion,
address that this
structure does not comply with formal requirements of Russian law that
states that a
shareholder of a wholly owned subsidiary cannot itself be a wholly
owned company.
8. Please revise your reference to "Free Float" in the diagram of your
corporate structure
to refer instead to the percentage of shares that will be held by
public shareholders.
Risk Factors
We engage in de minimis activities relating to Crimea..., page 27
9. You state that you believe that United States and EU sanctions do not
preclude you from
conducting your current business. Please advise us of the basis for
your belief.
Russian companies can be forced into liquidation on the basis of form
non-compliance with
Mikhail Zhukov
FirstName LastNameMikhail Zhukov
Zemenik Trading Limited
Comapany2018
January 8, NameZemenik Trading Limited
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certain applicable legal requirements, page 35
10. Please disclose whether you will rectify existing breaches by
restructuring your
subsidiaries before you complete this offering.
Dividend Policy, page 59
11. Tell us if there are any material currency export regulations that may
affect the ability of
your Russian and other subsidiaries to remit funds to you to pay
dividends or for other
corporate purposes. Please update your disclosures as appropriate.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 85
12. We note that in your results of operations discussion you attribute
the change in operating
costs and expenses to increases in personnel headcount and investment
in brand
development. Please tell us what consideration you gave to quantifying
the increases in
headcount and investment in brand development. In this regard, it may
be beneficial to
provide comparative headcount data to assist in explaining significant
increases related to
changes in personnel levels. We refer you to Section III. D of SEC
Release 33-6835.
Our Industry, page 104
13. You disclose here and throughout the prospectus the growth
opportunities in your market
and your growth strategy. Please balance your disclosure by providing
risk factor and
other disclosure addressing the specific challenges you may face in
realizing your growth
plans. For example, on page 8 you state that there is relatively low
penetration for online
recruitment services in Russia. Discuss the causes for that low
penetration and the
obstacles the company may face in overcoming those challenges.
Relevant Provisions of Cypriot Law, page 154
14. Please discuss whether the exchange on which your securities will be
listed will permit
the potential personal liability of a shareholder beyond its
investment in your securities.
Material Cyprus Tax Considerations
Taxation of Capital Gains, page 173
15. Please state whether capital gains tax will be imposed on sales of the
ADSs if your ADSs
are listed on your proposed exchange. Also discuss whether you hold
immovable
property in Cyprus.
Stamp Duty, page 176
16. Please disclose how the imposition of a stamp tax will affect
purchases and sales of the
Mikhail Zhukov
FirstName LastNameMikhail Zhukov
Zemenik Trading Limited
Comapany2018
January 8, NameZemenik Trading Limited
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ADSs.
Material Russian Tax Considerations
Taxation of Dividends and other distributions (including distributions in
kind), page 178
17. In the third full paragraph on page 179, please clarify whether the
exclusion from the 0%
taxable rate applicable to "low tax" jurisdictions would apply to you.
Notes to the Consolidated Financial Statements
Note 4. Significant Accounting Policies
(i) Revenue, page F-15
18. We note that you recognize revenue for CV database access, Job
postings and Bundled
subscriptions on a straight-line basis, with terms ranging from one
day to twelve months.
Please indicate the typical length of the subscription terms for each
of your services.
Furthermore, tell us when subscription terms commence.
Consolidated Financial Statements
Note 6. Operating Segments, page F-18
19. We note that your Russia reportable segment produces substantially all
of your revenues
and EBITDA, predominately generated by your Moscow and St. Petersburg
operations.
We also note that key performance indicators such as revenue and
customers are
disaggregated by your Moscow and St. Petersburg operations. Please
explain to us your
consideration of whether the Moscow and St. Petersburg operations,
individually or
combined, are operating and/or reportable segments under the criteria
in paragraph 5 of
IFRS 8. As part of your response, please address the following: .
Tell us the title and describe the role of the CODM and each of the
individuals who
report to the CODM;
Tell us who is held accountable, if anyone, for the Moscow and/or
St.
Petersburg revenue streams. Also tell us the title and role of the
people these
individuals report to in the organization;
Describe any information regularly provided to the CODM that
pertains to your
operations in Moscow and St. Petersburg and tell us how frequently
it is prepared;
and
Describe any information regularly provided to the Board of
Directors that pertains
to your operations in Moscow and St. Petersburg and tell us how
frequently it is
prepared.
You may contact Joseph Cascarano, Staff Accountant, at 202-551-3376 or
Robert
Littlepage, Accountant Branch Chief, at 202-551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Courtney Lindsay ,
Staff Attorney, at 202-551-7237 or Kathleen Krebs, Special Counsel, at
202-551-3350 with any
Mikhail Zhukov
Zemenik Trading Limited
January 8, 2018
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other questions.
FirstName LastNameMikhail Zhukov
Comapany NameZemenik Trading Limited Division of Corporation Finance
June 16, 2017 Page 5 Office of Telecommunications
FirstName LastName