Via media release on the 22nd of July 2022 (see 22-187MR), ASIC has extended the financial reporting deadlines for unlisted entities for balance dates between 24 June 2022 and 7 July 2022.
In announcing the extended deadlines, ASIC acknowledged the pressure on resources that smaller unlisted entities seeking to comply with the financial reporting and audit requirements have experienced because of uncertain and challenging COVID-19 conditions, including:
- Travel restrictions/staff resignations leading to reduced staff numbers.
- Fluctuations in COVID-19 case numbers leading to higher staff absences.
- Companies preparing consolidated financial statements for the first time.
- Unstable economic conditions making judgments on asset values, provisions and disclosures more difficult.
It is hoped that in extending the deadlines, smaller entities are given adequate time to comply with the financial and audit requirements. As a consequence of the extended reporting deadlines, similar extensions will be provided for unlisted companies to hold their AGMs.
For a summary of the new reporting deadlines, including consequential relief, see table below:
*NB: Relief does not apply to registered foreign companies
**Similar extended deadlines for sending reports to members operate by reference to the AGM date
The amending instrument extending the reporting deadlines, ASIC Corporations (Extended Reporting and Lodgement Deadlines—Unlisted Entities) Instrument 2020/395, is expected to be registered on the Federal Register of Legislation by the end of July 2022.
This announcement follows similar deadline extensions provided for reporting periods ending up to 7 January 2022. At present, there is no indication that ASIC will be extending deadlines for financial reporting for other balance dates (eg after 7 July 2022).
Before taking advantage of these extended deadlines, Directors must still consider the needs of shareholders and other users of their financial reporting information, as well as any borrowing covenants/other obligations they must comply with.
VIRTUAL AGM REQUIREMENTS
Permission for Companies to hold virtual only meetings has expired. An unlisted entity will only be permitted to hold virtual only meetings if this is expressly required or permitted by the entity’s constitution. You therefore may need to consider amending your constitution at your upcoming AGM to facilitate wholly virtual general meetings in future years if you want to hold virtual only general meetings.
Hybrid meetings (a physical meeting with an online or other remote option) are still permitted, provided the terms of your constitution does not restrict this.
If you have any questions in relation to this article, please don’t hesitate to contact a member of our Corporate & Commercial team.
This article was written by Kate Landells (Principal Solicitor).
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