Companies Update 10/08



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Trading Calendar 2009

Corporate Governance







Companies Update
22 December 2008
Update no 10/08

Important information for ASX Listed Entities

The early closing times for Market Control and CAO on the trading days preceding Christmas Day and New Year's Day have been announced. Normal trading will cease at 2.00 pm AEDT on each of Wednesday 24 December 2008 and Wednesday 31 December 2008. A summary of the trading schedule on those dates is set out in ITS Circular 2008/018 available on ASX Online.

Market Control will be closed from 3.30 pm AEDT on each of these days.

CAO will be closed from 4.30 pm AEDT on each of these days. 

The Reporting Calendar for the 2009 calendar year (22 KB) identifying the deadlines for periodic reports of listed companies with balance dates of 31 December or 30 June is now available on Listed companies are referred to Chapter 4 (PDF 191 KB) and Chapter 5 (PDF 113 KB) of the Listing Rules, and Listing Rule 17.5 (PDF 129 KB), in relation to their periodic reporting obligations.

ASX has declared the non-business and non-trading days for 2009. 

'Business day' is defined in listing rule 19.12 (PDF 148 KB) as:

Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day. 

The ASX Market Rules define 'trading day' as:

a day determined by ASX to be a Trading Day and notified to Market Participants. 

The Trading Calendar for the 2009 year  identifying public holidays, both national and state, is now available on It indicates whether they are non-business days (no ASTC settlement) and/or non-trading days (equities market closed). Any weekday not included in the attached calendar is a 'business day' and 'trading day' as defined. 

ASX reserves the right to declare other days as non-business days and non-trading days. 
All home branches for listed entities and the Company Announcements Office will be open for business on all trading days, even though that day may be a non-business day or a public holiday in the State of that home branch. 

The time limits set out in the timetables contained in the Appendices to the Listing Rules are by reference to business days. Listed entities are reminded that if they are preparing a timetable for an issue or offer to existing security holders, a dividend, a call, a capital reorganisation, or any similar corporate action, the draft timetable may be lodged with ASX on a confidential basis for discussion with their Issuers Adviser.

The ASX Corporate Governance Council (Council) released the Corporate Governance Principles and Recommendations (Revised Principles) 2nd edition in August 2007. The effective date for the Revised Principles was 1 January 2008. The first companies required to report against the Revised Principles are those whose financial year will end on 31 December 2008. 

Each year ASX conducts a review of companies' corporate governance statements in their annual reports to monitor compliance with listing rule 4.10.3 (PDF 191 KB) which requires companies to report on the extent to which they have followed the Council's Principles and Recommendations. The results of these reviews are generally released in May/June each year. ASX will begin its review of the annual reports of 31 December 2008 balancing companies in about March 2009. 

This Companies Update reminds those companies reporting against the Revised Principles of the key areas where the Revised Principles have changed. The table on pages 42 - 44 of the Revised Principles provides a comparison between the 2003 Principles and the Revised Principles. 

Revised Principles - Key changes

  • There are now eight Principles instead of ten and 26 instead of 28 Recommendations. Principle 8 has been amalgamated into Principles 1 and 2, and Principle 10 amalgamated into Principles 3 and 7.
  • Guidance to Principle 2: Structure the Board to Add Value - Box 2.1 contains a list of "relationships affecting independent status" that a company should take into account when determining the independence of a director rather than providing a "definition" of independence. Companies are required to disclose the existence of the relationships and their reasons for considering a director "independent" notwithstanding the existence of one of these relationships. 
  • Principle 3: Promote Ethical and Responsible Decision-Making - The Revised Principles recommend that companies establish and disclose trading policies or a summary of these policies. Box 3.2 suggests that the content of trading policies include: identifying whether trading windows or blackouts are used and whether the company prohibits the hedging of unvested options or trading in products that limit the economic risk of security entitlements in the company over unvested entitlements. Companies are reminded of the need to disclose the location of trading policies 
  • Principle 7: Recognise and Manage Risk. The changes to Principle 7 in the Revised Principles were designed to place more emphasis on management reporting to the Board and the articulation of risks in a way that will provide more helpful information to investors. The Council has also issued Revised Supplementary Guidance to Principle 7 which gives examples of "helpful" and "unhelpful" reporting on Principle 7. This Guidance is not designed to act as a template for reporting but rather to guide entities about the sorts of issues that reporting should cover. Principle 7 now makes it clear that material business risks involve both financial and non-financial risks. Companies are encouraged to adopt appropriate risk oversight and management policies and internal control systems.
  • Recommendation 7.1 recommends that companies establish and disclose policies for the oversight and management of material business risks and disclose a summary of these policies
  • Recommendation 7.2 recommends that board require management to design and implement risk management systems for the oversight and management of "material business risks". Boards should also disclose that they have received a report from management as to the effectiveness of companies' management of material business risks. The commentary to Recommendation 7.2 includes a wide range of "material business risks" for companies to consider
  • Recommendation 7.3 requires boards to disclose that they have received assurance from the CEO/CFO that the declaration under section 295A of the Corporations Act is founded on a sound system of risk management and internal control which is operating effectively in all material respects in relation to financial reporting risks. 

Prior reviews of disclosure under Principle 7 indicate that areas for improvement included the following:

  • Entities not complying with listing rule 4.10.3 by either not reporting that they have adopted the Recommendations in Principle 7 or not providing "if not, why not" reporting
  • Entities not providing policies or summaries either in the corporate governance statement or on their websites or advising in the corporate governance statement where these policies can be located 
  • Ensuring that policies are sufficiently comprehensive to inform investors of the nature of the entities' "material business risks".
  • Recommendation 9.4 was deleted and commentary has been added to Recommendation 8.2 suggesting companies may wish to consult shareholders about equity-based incentive plans involving the issue of new shares to executives, other than directors, prior to implementing them.

Areas of focus in review of 2008 annual corporate governance reports

Areas of focus in 2008 review
In addition to the usual reports on levels of adoption and "if not, why not reporting" the review of corporate governance statements in 2008 annual reports will also focus on:

  • Blanket statements - Some entities approach corporate governance reporting by providing a "blanket statement" stating that the entity has adopted all of the corporate governance Principles and Recommendations. This year these entities will be referred to the ASX Issuers Department. The most likely response from the Issuers Department will be to review the entity's annual report and website and to write to the entity suggesting that this form of disclosure is not helpful to investors and encouraging the entity to provide more helpful disclosure.
  • Independence of directors - Whether independence is addressed and where directors are deemed independent notwithstanding existence of Box 2.1 relationships whether the company has disclosed its reasons for considering the director to be independent.
  • Trading policies - The establishment and disclosure of trading policies. 
  • Listing Rule 12.7 (PDF 86 KB) - Where companies are required to establish audit committees and meet the composition requirements in Recommendation 4.1 whether they have done so.
  • Principle 7- Whether annual reports specifically refer to the establishment and disclosure of risk management policies and that management has reported to the board on the management of material business risks. Whether the annual report mentions the "effectiveness" of the risk management system and the sorts of risks being disclosed.

Follow up from results of review of 2007 corporate governance statements
As a separate activity, following last year's review ASX Issuers identified 333 companies whose corporate governance disclosure was unhelpful in certain areas. ASX Issuers contacted these companies. ASX Issuers will review the 2008 reports for these companies to assess whether there has been an improvement in reporting. In cases where there has been no improvement, the most likely response from the Issuers Department will be to write to the company for release to the market asking the company to explain its non compliance with listing rule 4.10.3 in relation to the relevant Principle or Recommendation and to provide a statement to the market which complies with the relevant Recommendation.

In order to assist listed entities and others to implement and interpret the Revised Principles, ASX is involved in a number of educational seminars and awareness raising programs nationwide. 

The Revised Principles and the Revised Supplementary Guidance to Principle 7 are on the ASX website at

To help keep our Listed Entities informed of information and events ASX will be sending emails to the Company Secretary's Office from time to time. You are receiving this email because you have been identified as a key contact within the Company Secretary's Office at your organisation. If you would like to update your email address please do so via the Directors/Senior Management page on ASX Online for Companies. Feel free to forward this email to any relevant parties within your organisation.