ASX Appendix 4C Users – Changes to Quarterly Reporting Requirements

6 Apr 2020

Introduction

If your ASX listed Company is an Appendix 4C user, changes to quarterly reporting will come into effect on and from the quarter ending 31 March 2020.

New Template for Appendix 4C

A new Appendix 4C. This is available from https://www.asx.com.au/regulation/rules/asx-listing-rules.htm under the “Appendices” tab. The key differences are:

Section 8 to calculate the number of quarters funding the Company has, and if less than two, requires the Company to answer the following:
- Whether it expects to continue the current level of net operating cash flows, and if not, why?
- Steps or proposals to raise further cash to fund its operations and if so:
  - What those steps/proposals are; and
  - How much confidence it has in achieving success?
- Does the Company expect to be able to:
  - Continue its operations;
  - Meet its business objectives; and
  - If so, on what basis?

Note: this streamlines the previous process because it removes the automatic “query letter regime” in funding shortfall circumstances. The relevant questions and answers are now contained in the new Appendix 4C.

Deletion – former sections 6, 9 and 10.
Changes to the Compliance Statement:
- Minor changes to Notes 1 and 2;
- The name of the person or body authorised to release of Appendix (see new Note 4); and
- New Notes 4 and 5.

The new Appendix 4C should be used for the current quarter and subsequent quarters reporting.

Quarterly Activities Report (QAR)

A major change is that going forward, a QAR must be lodged together with the Appendix 4C. The QAR must include the following information:

Details of the Company’s business activities for the quarter. This must include:
- Any material developments and material changes in those activities; and
- A summary of the expenditure incurred on the above activities.

If no substantive business activities occurred in the quarter – then that fact must be stated.

A description of, and an explanation for, any payments to, or to an associate of, a related party of the Company included in Section 6 of the Appendix 4C.
If a “use of funds” statement or expenditure program (i.e. from prospectus, PDS or information memorandum) applies to the quarter, then a comparison of the Company’s actual expenditure against the estimated expenditure in the same period is required.

Auditing/Approval of Appendix 4C and QAR

The Appendix 4C is not required to be audited or reviewed by the Company’s auditors before it is released to the market. However, the ASX expects that the Appendix 4C will be examined through the audit process, and material errors or omissions be:

Communicated to the Board by the auditor; and
The subject of an announcement to the market describing such errors or omissions.

In addition, the ASX generally expects the Appendix 4C and QAR to be approved and authorised for release by the Company’s Board or a committee of the Board. This is not a listing rule requirement but a matter of good governance.

For any questions regarding these changes, please do not hesitate to contact BoardRoom.