29 November 2002

The General Manager
Corporate Governance Division
The Treasury
Langton Crescent
PARKES ACT 2600

Dear Sir

CLERP 9

The Group of 100 strongly supports measures to enhance and strengthen the transparency of corporate governance and financial reporting. As part of this process the G100 is preparing a Code of Conduct for Chief Financial Officers and senior finance executives which will be released shortly. The G100 has also initiated a review of its Guide to 'Review of Operations and Financial Condition'.

The G100 is broadly supportive of the proposals made in CLERP 9 and our detailed responses are attached. In addition, the following proposals are of particular concern:

• The time available to companies to prepare for and implement the Year 2005 target for adoption of IASB standards. At this stage the final provisions of a number of standards which will have a significant impact on Australian financial reporting are unlikely to be issued by the IASB and the AASB until 2003 and 2004.
• The proposal to require companies to respond to market speculation. We are seriously concerned about the potential for mischief and misinformation that this may induce.
• The funding and resources available to the FRC to enable it to perform its expanded role.

The G100 believes that the Corporations Act should be amended to require:

• directors to present a narrative report comprising a discussion and analysis of the company's objectives and business strategy, operations and financial condition. We propose that the Corporations Act Section 299 specify the main heads of discussion and that guidance on the nature and content of discussion be provided separately. As previously advised, a G100 Working Party is presently reviewing the Guide to 'Review of Operations and Financial Condition'; and
• an auditor that has resigned attend the AGM and be available to explain to members the reasons for the resignation and for the directors to comment on the reasons.

Should you wish to discuss our response to these proposals please contact me on (02) 9323 1602.

Yours sincerely

Tom Pockett
National President

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