Australia financial regulator ASIC has announced that it will extend the deadline for both listed and unlisted entities to lodge financial reports by one month for certain balance dates up to and including 7 July 2020 balance dates.
The regulator stated that the extended deadlines for lodgement of financial reports will assist those entities whose reporting processes take additional time due to current remote work arrangements, travel restrictions and other impacts of COVID-19.
Where possible, entities should continue to lodge within the normal statutory deadlines, having regard to the information needs of shareholders, creditors and other users of their financial reports, or to meet borrowing covenants or other obligations.
This additional relief announced today builds on earlier relief announced for unlisted entities with 31 December 2019 to 31 March 2020 year ends to provide additional time for unlisted entity financial reports) and will extend deadlines for lodging financial reports for all listed and unlisted entities for balance dates to 7 July 2020 where the reporting deadline has not already passed.
Unlisted entities will now be able to take one additional month to lodge financial reports for year ends from 31 December 2019 to 7 July 2020.
Listed entities will be able to take one additional month to report for full year and half-year financial reports for 21 February 2020 to 7 July 2020 balance dates. (The 7 July 2020 date accommodates entities that use a provision in the Corporations act that allows their financial year to be changed by plus or minus 7 days each year).
Listed entities will be required to inform the market when they rely on the extended period for lodgement. These entities may also find it desirable to explain the reasons for relying on the extended deadlines. An instrument extending the deadlines is expected to be registered on the Federal Register of Legislation by the end of next week.
As far as holding annual general meetings, ASIC said that it has adopted a ‘no action’ position where public companies do not hold their Annual General Meetings (AGMs) within five months after the end financial years that end from 31 December 2019 to 7 July 2020, but do so up to seven months after year end. For public companies with 1 June 2020 to 7 July 2020 year ends, the ‘no action’ position also applies where holding an AGM in January or February 2021 results in the requirement to hold an AGM in the 2020 calendar year not being met.
The Act requires public companies to hold an AGM within five months of year end and at least once every calendar year. Public companies with financial years ending from 31 December 2019 to 7 July 2020 may find it difficult to hold their AGM by the statutory deadline due to the restrictions on large gatherings, travel restrictions and concerns from members about attending large group meetings given COVID-19. ASIC’s no action position also allows additional time for distribution of financial reports to members prior to the AGM for those companies that have relied on our extension of time for lodgement of financial reports.
Companies who choose to delay their AGM should refrain from holding their AGMs in the peak holiday period in late December 2020 and early January 2021.
ASIC had previously adopted a ‘no action’ position where public companies hold their AGMs for 31 December 2019 year ends by the end of July 2020 (refer: 20-068MR Guidelines for meeting upcoming AGM and financial reporting requirements).
The Treasurer has issued a determination amending the Act for six months from 6 May 2020 which facilitates meetings, including AGMs, being held using one or more technologies (virtual technology) that give all persons entitled to attend a reasonable opportunity to participate without being physically present in the same place.
To assist companies and responsible entities, ASIC has issued guidance setting out its views on the appropriate approach to calling and holding meetings using virtual technology and the requirements of the determination.
For companies with reporting periods ending after 7 July 2020, ASIC said it will continue to monitor how market conditions and COVID-19 developments are affecting financial reporting and AGM obligations.
More information and details can be found on ASIC’s website.