Financial reporting and accounting newsletter - May 2015

By Kylee Byrne - May 19, 2015

In this month’s newsletter, we highlight the following governance-related changes to the ASX listing rules, which are effective for 30 June 2015 year-ends:
  • disclosure of the entity’s Corporate Governance Statement in its annual report or on the entity’s website;
  • specific new disclosure requirements in relation to non-compliance with a recommendation of the ASX Corporate Governance Council; 
  • requirement to lodge an Appendix 4G with the ASX; and 
  • issuance of the third edition of the ASX Corporate Governance Council Principles and Recommendations.

1. Disclosure in Annual Report or on Website

Under the modified Listing Rule 4.10.3, a listed entity will be able to include its Corporate Governance Statement either in its annual report or on its website. If the entity discloses its Corporate Governance Statement on its website, its annual report will need to include the URL of the page on its website where its Corporate Governance Statement can be found. 

This amendment to Listing Rule 4.10.3 is in keeping with the reforms made in the third edition of the ASX Corporate Governance Council Principles and Recommendations and, in particular, the ASX Corporate Governance Council’s desire to afford greater flexibility to listed entities to make their corporate governance disclosures either in their annual report or on their website.

2. ‘If Not, Why Not’ Disclosures

The amendments to Listing Rule 4.10.3 discussed above, also make it clearer what an entity should disclose if it has not followed a recommendation of the ASX Corporate Governance Council for any part of the reporting period. The modified rule requires the entity to disclose the following information:

  • the recommendation which has not been followed;
  • the period during which the recommendation was not followed;
  • the reasons for not following the recommendation; and 
  • what (if any) alternative governance practices it adopted in lieu of the recommendation during that period. 

3. New Appendix 4G

Under new Listing Rule 4.7.3, regardless of whether an entity chooses to include its Corporate Governance Statement in its annual report or on its website, it must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. Each ASX listed entity must provide to ASX, with its annual report, a completed Appendix 4G which has a key to where the various disclosures suggested in the recommendations or required under Listing Rule 4.10.3 can be found.

Under new Listing Rule 4.7.4, if an entity chooses to include its Corporate Governance Statement under Listing Rule 4.10.3 on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of Listing Rule 4.10.3. 

4. Third Edition of the ASX Corporate Governance Council Principles and Recommendations

The ASX Corporate Governance Council issued the third edition of the Corporate Governance Principles and Recommendations, which takes effect for an entity’s first full financial year commencing on or after 1 July 2014. Accordingly entities with a 30 June reporting date will be expected to measure their governance practices against the recommendations in the third edition commencing with the financial year ended 30 June 2015.

The Corporate Governance Principles and Recommendations are structured around, and seek to promote, the following 8 central principles:

There are also 29 specific recommendations intended to give effect to the general principles, as well as explanatory commentary in relation to both the principles and the recommendations. 


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