Proposed Listing Rule Amendments

28 February 2000

Ms Deborah Hambleton
National Listings Counsel
Australian Stock Exchange
GPO Box 1784 Q
MELBOURNE VIC 3000

Dear Ms Hambleton

Proposed Listing Rule Amendments 1 July 2000

The Group of 100 is pleased to comment on the proposed amendments. Our comments on the proposals relate to the half year/preliminary final report. While these comments are based on the Appendix 4B as proposed some members have raised the fundamental question as to whether the use of a fixed-form Appendix 4B is the most appropriate vehicle for provision of information to the market. For example, it has been suggested that the submission of press releases which include at least the information required to be reported in compliance with Appendix 4B and the provision of the "For Market Release" report would provide entities with more flexibility and scope to meet the listing requirements and inform the market in an integrated way.

Although it is noted in the proposals (paragraph 4.2) that the requirements are based on exposure drafts of forthcoming AASB Standards it is unfortunate that the draft is not based on the standards themselves. We presume that the revision of the proposals reflect the AASB Standards which are operative for half-years and financial years beginning on 1 July 2000.

We note that AASB Standards have been issued in respect of ED 91 "Financial Report Disclosures" and ED 93 "Statement of Financial Performance and Ancillary Amendments" but that AASB Standards have not been issued in respect of ED 95 "Discontinuing Operations" and ED 96 "Interim Financial Reporting". As the new AASB has not been appointed and is unlikely to meet for some time, the status of work on ED95 and ED96 is unclear and the likely operative dates of these standards is uncertain. It is highly likely that in these instances the operative dates will commence after 1 July 2000. The Group of 100 believes that the requirements of Appendix 4B should reflect and be consistent with the requirements of AASB Standards which are operative for the period and date of the report. While companies are permitted to adopt new and amended Accounting Standards early,they are not obliged to do so. As such the listing requirements should not pre-empt the operative dates of standards.

In addition, AASB 1010 "Recoverable Amount of Non-Current Assets" and AASB 1041 "Revaluation of Non-Current Assets" are operative from 1 July 2000.

Specific comments are as follows:

Sales revenue and operating revenue. Consistency with the terminology and groupings employed in the amended AASB 1018 is necessary. For example, the term operating revenue has been replaced by revenue from ordinary activities. The Group of 100 believes that if revenue from ordinary activities and operating revenue are to be interpreted as being different guidance should be included in Appendix 4B.

In addition, the required calculation of ratios as percentages of sales (Item P1 and 9.1) is too inflexible and does not take account of the types of revenue generating activities other than sales of, for example, financial institutions and service providers. It is suggested that sales revenue or revenue from ordinary activities be defined in terms of the amount reported in the profit and loss statement in accordance with the applicable Accounting Standards (e.g. AASB 1018, AASB 1032 and AASB 1038).
There is potential for difficulties in interpretations of the components of item 1.2 Item 1.20 may be interpreted as comprising all expenses and revenues from ordinary activities and as such include items 12.5 and 12.6.
Additional cross-referencing of line items would be useful to preparers. For example, we suggest that Item 1.4 include a cross-reference to Item 16.7.

Yours sincerely

Bryce JH Denison
National President