ASX Appendix 5B Users – Changes to Quarterly Reporting Requirements

7 Apr 2020

Introduction

If your ASX listed Company is an Appendix 5B user, changes to quarterly reporting will come into effect on and from the quarter ending 31 March 2020.

New Template for Appendix 5B

A new Appendix 5B will apply. 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 5B.

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

The new Appendix 5B should be used for the current quarter and subsequent quarters reporting.

Quarterly Activities Report (QAR)

The content of the QAR as required by ASX Listing Rule 5.3 (QAR for mining exploration entities)/5.4 (QAR for oil and gas exploration entities) has been amended and can be found at https://www.asx.com.au/documents/rules/Chapter05.pdf.

The material change is the addition of ASX Listing Rule 5.3.4/5.4.4 – if a “use of funds” statement or expenditure program (i.e. from prospectus, PDS or information memorandum) applies to the quarter, then comparison of the Company’s actual expenditure against the estimated expenditure is required.

If the Company does not already do so, please note that the Appendix 5B and QAR must now be lodged with the ASX at the same time.

Auditing/Approval of Appendix 5B and QAR

The Appendix 5B 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 5B 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 5B 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.