EXPLANATORY STATEMENT
STATUTORY RULES 1986 NO. 136
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL
COMPANIES REGULATIONS (AMENDMENT)
Section 577 of the Companies Act 1981 (“the Act”) provides in sub-section (1) that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters that are necessary or convenient to be prescribed for carrying out or giving effect to the Act. Sub-section 577(2) of the Act provides that the power of the Governor-General to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council for Companies and Securities (“the Council”).
2. The Council was established under an agreement between the Commonwealth and the States, executed on 22 December 1978 (“the agreement”), that provides the framework for a co-operative Commonwealth-State scheme for a uniform system of law and administration in relation to company law and the regulation of the securities industry in the six States and the Australian Capital Territory.
3. Under sub-clause 45(1) of the agreement, the Council may consider a proposal for the amendment of regulations made under the Commonwealth Acts enacted for the purpose of the co-operative companies and securities scheme. Should the Council approve any draft amending regulation which gives effect to such a proposal, the Commonwealth is then required,
under sub-clause 45(2) of the agreement, to submit the draft regulations to the Federal Executive Council for making by the Governor-General.
4. The accompanying regulations are identical in form and substance to draft regulations approved by the Council.
5. The purpose of the accompanying regulations is to make amendments to the Companies Regulations (“the Regulations”) consequent upon amendments made to the Act by the Companies Amendment Act 1985 (“the 1985 Act”),
6. The accompanying regulations are expressed to be made pursuant to section 4 of the Acts Interpretation Act 1901. That section provides that where an Act that does not come into operation immediately upon its enactment amends another Act in such a manner that the other Act, as amended, will confer power to make regulations then, unless the contrary intention appears, that power may be exercised before the amending Act comes into operation.
7. Any regulations made in pursuance of section 4 of the Acts Interpretation Act 1901 take effect on the day on which the amending Act comes in operation or on the day on which the regulations would have taken effect if the amending Act had been in operation when the regulations were made, whichever is the later.
8. Sections 3 to 12 (inclusive) of the 1985 Act have been proclaimed to come into operation on 30 June 1986.
9. Details of the accompanying regulations are set out as follows.
Regulation 1: Annual Return
10. Sub-section 263(1) of the Act, which was amended by section 5 of the 1985 Act, provides that a company shall lodge with the National Companies and Securities Commission an annual return of the company in the prescribed form, containing a list of members and such other particulars as are prescribed and accompanied by the prescribed documents.
11. The purpose of this regulation is to amend the CR by inserting a new regulation 56A:
(a) prescribing Form 66 as the form of annual return of a company; and
(b) prescribing the following as the documents that must accompany the annual return:
(i) in the case of an exempt proprietary company that has appointed an auditor - a certified copy of the auditor’s report where the auditor has included a statement of reasons for not being satisfied as to any matter required to be examined by him; and
(ii) in the case of a public company, an exempt proprietary company that was not an exempt proprietary company during the whole of the financial year to which the annual return relates or a proprietary company that is not an exempt proprietary company - certified copies of the profit and loss account, balance sheet, group accounts (if the company is a holding company), directors’ report, auditor’s report and directors’ statement.
Regulation 2: Schedule 1
12. Schedule 1 to the Regulations lists the forms that have been prescribed for use in respect of various provisions of the Act and the Regulations.
13. This regulation amends Schedule 1 by omitting Forms 66 (Annual return of a company having a share capital) and 67 (Annual return of a company not having a share capital) and substituting a new Form 66 (Annual return of a company) which will be used by all companies.
Regulation 3: Schedule 2
14. This regulation omits the existing Forms 66 (Annual return of a company having a share capital) and 67 (Annual return of a company not having a share capital) and substitutes a new Form 66 (Annual return of a company).
15. The new Form 66 is divided into three parts:
(a) the annual return;
(b) a statement of changes in particulars shown on annual return; and
(c) directions for completing annual return and statement of changes in particulars shown on annual return.
16. It is intended that the Commission should be able to partially prepare a company’s annual return using information previously lodged with the Commission by the company. The partially completed return would then be served on the company, which will be required to complete it and lodge it with the Commission. New provisions, sub-sections 263(1A) and (1B), which have been inserted in the Act, will facilitate the preparation of an annual return in this manner.
17. Another new provision which has been inserted in the Act, section 265A, provides that where a company should have lodged a document with the Commission giving details of changes in company officers, registered office or the like, that document will be deemed to have been lodged with the Commission if all of the particulars required to have been included in it are included in the company’s annual return. The “Statement of changes in particulars shown on an annual return” is designed to facilitate the inclusion of such information in a company’s annual return.
18. The new Form 66 contains one new disclosure requirement: the provision of 7 items of ‘key financial data’ about a company’s financial position. However, this is off-set by the elimination of some items, such as particulars of indebtedness, and the simplification of other items, such as details of share capital. In addition, exempt proprietary companies that have not appointed an auditor will be relieved of the obligation to attach a copy of their accounts and directors’ report to their annual return.
19. The items of ‘key financial data’ to be supplied are the operating profit or loss after extraordinary items and income tax, share capital and reserves, current assets and liabilities and other assets and liabilities. This item must be completed by all companies except exempt proprietary companies which have appointed an auditor and unlimited exempt proprietary companies.