Authors: Andrew Rankin, James Dickson, James Macdonald, Mark Williamson
Practical guidance for public companies during the COVID-19 pandemic.
1. Do we need to make ASX announcements about the impact of COVID-19 on our business?
Answer: A number of companies have already announced that their previous guidance no longer holds but that they’re not in a position to give any updated guidance at this point. It is better to disclose to the market than not disclose if COVID-19 has materially disrupted your business even if you cannot yet predict the outcome. The nature of any announcement will turn on each company’s particular circumstances. Please get in touch with your usual Piper Alderman contact for specific advice in relation to your organisation’s particular situation or a member of our Corporate Governance team.
2. How are we going to hold our AGM?
Answer: It will not be possible for many companies to hold their AGM if a meeting cap of 100 people is applied. ASIC has announced that it is going to adopt a no action position in relation to delays of up to 2 months. ASIC has also stated that it considers hybrid AGMs (ie a combination of a physical meeting and online participation at the same meeting) to be permissible under the Corporations Act but companies need to check whether their constitution restricts AGMs being held in this way. ASIC has also stated that it is adopting a no action stance in relation to virtual AGMs. There is however some doubt whether the Corporations Act permits virtual AGMs. A virtual AGM is where shareholders are only given the opportunity to participate at the AGM using online technology rather than attend the meeting at a venue. Companies that are concerned about the validity of virtual meetings should seek specific advice. In the case of listed entities, you should talk to ASX now if you will have logistical problems with convening your next AGM.
3. What if our auditors miss the audit deadline?
Answer: Generally a public company must lodge its audited financial reports within 4 months of the financial year end. Companies that are unable to lodge their audited reports by the due date may apply to ASIC for an extension of time. However, generally ASIC cannot grant an extension of time or other relief after the lodgment date has passed. If, in the case of listed entities, your auditors are not meeting the timetable to deliver your audit report you need to talk to ASX to avoid automatic suspension under Listing Rule 17.
These FAQs are provided as a guide to some of the issues you may need to consider. The answers are general in nature and are not intended as legal advice. Before acting on any information provided, please contact us for advice that takes into your organisation’s situation.
