Under section 35B of the Financial Reporting Act 1993, the Registrar of Companies gives the following notice together with
a statement of reasons.
N o t i c e
1. Title-This notice is the Financial Reporting Act (Overseas Companies) Exemption Notice 2012.
2. Commencement-This notice comes into force on 16 November 2012.
3. Expiry-This notice expires on the close of 15 November 2017.
4. Interpretation-(1):
Act means the Financial Reporting Act 1993.
approved auditor means a person who is qualified in accordance with the laws of the specified jurisdiction in which the exempt overseas company is incorporated (including overseas legislation).
exempt overseas company means an overseas company:
(a) that is incorporated in a specified jurisdiction; and
(b) which is not an issuer.
overseas financial statements means the financial statements (if any) and consolidated group financial statements (if any) that are required to be prepared for the exempt overseas company, or the group of which it forms part, in accordance with the laws of the specified jurisdiction in which the exempt overseas company is incorporated (including overseas legislation).
overseas GAAP, in relation to an exempt overseas company, means the accounting practice, principles, and standards of the specified jurisdiction in which the exempt overseas company is incorporated, as specified in the third column of the Schedule.
overseas legislation, in relation to an exempt overseas company, means the legislation of the specified jurisdiction in which the exempt overseas company is incorporated, as specified in the second column of the Schedule.
required financial statements, in relation to an exempt overseas company, means:
(a) the overseas financial statements prepared for the company; and
(b) the financial statements referred to in section 8(1) of the Act for its New Zealand business prepared as if that business were conducted by a company formed and registered in New Zealand.
specified jurisdiction means a jurisdiction specified in the first column of the Schedule.
(2) Any term or expression that is defined in the Act and used, but not defined, in this notice has the same meaning as in
the Act.
5. Exemptions for directors of exempt overseas companies-(1) Every director of an exempt overseas company is exempted from the following provisions of the Act in respect of the company:
(a) Sections 10(1), 11, 13 and 14 of the Act, except to the extent that they apply to financial statements for the exempt overseas company’s New Zealand business; and
(b) section 19(3) of the Act to the extent that it requires copies of the financial statements and group financial statements of the company together with a copy of the approved auditor’s report on those statements, to be delivered to the Registrar for registration.
6. Conditions-The exemptions in clause 5 are subject to the conditions that:
(a) the required financial statements comply with overseas GAAP; and
(b) if, in complying with overseas GAAP, the required financial statements do not give a true and fair view of the matters to which they relate, the directors add information and explanations that will give a true and fair view of those
matters; and
(c) exempt overseas companies must deliver the required financial statements to the Registrar for registration within the same period as the financial statements must be filed in accordance with the laws of the specified jurisdiction in which the exempt overseas company is incorporated; and
(d) When delivered to the Registrar for registration, the required financial statements must be accompanied by:
(i) in the case of the financial statements for the exempt overseas company’s New Zealand business, an auditor’s report which complies with section 16 of the Act; and
(ii) to the extent that laws of the specified jurisdiction in which the exempt overseas company is incorporated (including overseas legislation) require that the financial statements and/or consolidated group financial statements that are required to be prepared for the exempt overseas company must be audited, an auditor’s report from an approved auditor that complies with the requirements of the relevant overseas legislation.
7. Accounting periods to which exemption apply-For the purposes of section 35D of the Act, the exemptions in
clause 5 apply to the following accounting periods of an exempt overseas company:
(a) An accounting period of the company that commenced before the exemption is granted (including an accounting period that ended before the exemption is granted) if:
(i) in the case of copies of financial statements or group financial statements that are required to be delivered for registration under section 19 of the Act, the exemption is granted before those documents are required to be delivered for registration under that section; or
(ii) in any other case, the exemption is granted before the financial statements or group financial statements for that period are required to be completed; and
(b) subsequent accounting periods.
Dated at Wellington this 15th day of November 2012.
Schedule
Overseas Legislation and GAAP of Specified Jurisdictions
Specified Jurisdiction Overseas Legislation Overseas GAAP
Australia The Corporations Act 2001 (Australia) Australian equivalents to International Financial Reporting Standards
United Kingdom The Companies Act 1985 (UK) and the Companies Act 2006 (UK) Generally accepted accounting principles of the
United Kingdom or international accounting standards (within the meaning of Regulation (EC) No. 1606/2002
United States of America The Securities Exchange Act of 1934 (US) and the Code of Federal Regulations (US) Generally accepted accounting practice in the
United States of America
Singapore Companies Act (Chapter 50) (Singapore) Singapore Financial Reporting Standards
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Statement of Reasons
This notice comes into force on 16 November 2012 and expires on 15 November 2017.
This notice applies in respect of overseas companies that are incorporated in the countries specified in the Schedule
(exempt overseas companies) and that are not issuers within the meaning of the Financial Reporting Act 1993 (the Act).
The effect of this notice is to exempt directors of the exempt overseas companies from certain financial reporting obligations under the Act. In particular, the directors of those companies will not be required to prepare and file financial statements for the companies where there is no equivalent requirement under law of the jurisdiction in which they are incorporated.
The directors of those companies will instead be able to provide the financial statements or group financial statements that are required of them to meet financial reporting obligations under the laws of the country in which they are incorporated.
The main differences in the financial statements provided by exempt overseas companies relying on the exemptions are:
- The directors of those companies will prepare and register audited financial statements for the New Zealand business
and the financial statements or consolidated financial statements that they are required to prepare in the country in which they are incorporated;
- the date on which the financial statements, including separate financial statements for the company’s New Zealand business, will be required to be registered will be within 20 working days of the date they are required to be signed by the directors under the laws of the country in which the company is incorporated;
- the financial statements and/or consolidated financial statements will comply with generally accepted accounting principles applying in the country in which the exempt company is incorporated (rather than generally accepted accounting practice in New Zealand); and
- the financial statements and/or consolidated financial statements will be audited in accordance with, and the auditor’s report will provide the information required under, the laws of the country in which the exempt company is incorporated instead of the Act.
The Registrar considers it appropriate to grant the exemptions because of the following reasons:
- The Registrar considers that unless the exemptions are granted, it would be unduly onerous or burdensome for the directors of exempt overseas companies to prepare financial statements that comply with section 10 of the Act;
- the exemptions address the particular difficulties experienced by exempt overseas companies that carry on business in
New Zealand. The Registrar is satisfied that the exemptions are not broader than what is reasonably necessary to address these difficulties and still require that group financial statements be filed in New Zealand;
- an exempt overseas company relying on the exemptions will still be required to file audited financial statements for their New Zealand business prepared in accordance with New Zealand generally accepted accounting practice as if that business was a company formed and registered in New Zealand;
- the Registrar is satisfied that the financial statements or consolidated financial statements required to be prepared under the laws of the specified jurisdictions provide sufficient information to avoid any detriment to members of the public who have dealings with the exempt overseas companies; and
- the Registrar has had regard to the financial reporting requirements that must be complied with by exempt overseas companies who rely on the exemptions. The exemptions are limited to the directors of overseas companies incorporated in the specified jurisdictions who must comply with the financial reporting and audit requirements under the laws applying
in those jurisdictions.
Date of notification in the New Zealand Gazette: 15 November 2012.
This notice is administered by the Registrar of Companies.