Crackdown on late or non lodgement of financial reports

Friday, 01 November 2002

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Richard Cockburn

    As a company director in these times, complying with your reporting obligations on time is now more important than ever.

    If you're a listed company director, lodging your financial reports on time ultimately impacts on the integrity of Australian capital markets. So to ensure the market is properly informed, we're running projects designed to follow up companies who fail to lodge their financial reports on time.

    When to lodge

    If you're a listed company, with a 30 June balance date, you must lodge your financial reports with us by 30 September. If you're a listed company with a half year reporting cycle ending on 31 December, you must lodge your reports with us within 75 days after the end of the half-year. We will be checking the timeliness of these lodgements.

    Effect of the FSR Act

    The Financial Services Reform (FSR) Act altered the definitions in the Corporations Act that determine which listed companies can use the shorter content prospectus requirements for "continuously quoted securities". Because of this change, suspended companies may try to take advantage of the lower disclosure regime without having fully complied with the disclosure regime. We intend to ensure that companies that do not comply with their disclosure obligations in a timely manner won't be able to use the shorter content prospectus for a period determined by ASIC.

    How we will follow up late or non lodgement

    Where we believe your company has either not lodged your financial report or has not lodged it on time, we will send a letter:

    • asking you for an explanation, and

    • inviting you to make submissions to us on section 713(6) of the Corporations Act 2001.

    This section enables us to make an order prohibiting a company using the shorter prospectus content requirements for continuously quoted securities. We will assess your response against the criteria in our Policy Statement 43: Accounts and audit relief [PS 43]. To satisfy the policy, you will be expected to provide evidence that the delay was due to factors beyond your company's control. If your response does not meet our PS 43 requirements, you risk an order being made against your company under section 713(6) of the Corporations Act. Such an order will have two effects:

    1. The order will prevent your company using the shorter content prospectus for the period of the order.

    2. The order may exclude your company from the interim ASIC Class Order 02/272, as amended by Class Orders 02/334 & 02/716, which provides relief to permit placements of securities of a listed class, despite the operation of section 707 of the Corporations Act.

    If you don't lodge your financial reports in response to our request, you may expect to receive a formal demand for lodgement made under section 1274(11) of the Corporations Act. Failure to comply with this demand will result civil proceedings being brought against your company. Section 1274(11) allows a court to make an order for costs against the company or any of its officers responsible for the default.

    Our action against IPWorld Limited

    Recently, we declared that IPWorld Limited, formerly known as Australian Authorised Investments Limited, may not rely on the special prospectus content rules under section 713 of the Corporations Act 2001(Act) for continuously quoted securities. We made the declaration after IPWorld failed to lodge its financial reports for the 2000 and 2001 financial years with ASIC, within the prescribed period. IPWorld lodged its 2000 and 2001 financial reports with us more than five months after the prescribed lodgement date for each report. The 2001 auditor's report was not lodged until almost 12 months after the prescribed date. This determination will require IPWorld to comply with the full prospectus disclosure requirements of the Act in relation to any prospectus it may issue until 30 September 2003.

    To help you avoid this situation, read and follow Information Release 01/12 available at


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