Pursuant to section 207L of the Companies Act 1993, the Registrar of Companies gives the following notice (to which is appended a statement of reasons of the Registrar).

Notice

1. Title—This notice is the Companies Act (General Electric International, Inc.) Exemption Notice 2020.

2. Commencement—This notice comes into force on the date of its notification in the New Zealand Gazette.

3. Expiry—This notice expires on the close of 31 July 2024.

4. Application—An exemption granted by this notice applies to the 2015 to 2023 accounting periods of the exempt overseas company.

5. Interpretation—In this notice, unless the context otherwise requires:

Act means the Companies Act 1993;

deadline for exemption period A means the close of the day that is 9 months after the commencement of this notice;

deadline for exemption period B—

1. in respect of the 2018 and 2019 accounting periods, means the close of the day that is 9 months after the commencement of this notice:
2. in respect of the 2020 to 2023 accounting periods, means the close of the day that is 20 working days after the group financial statements of the exempt overseas company are required by section 202 of the Act to be signed;

exempt overseas company means General Electric International, Inc.;

exemption period A means the 2015 to 2017 accounting periods of the exempt overseas company, and in respect of each accounting period, includes the subsequent period provided under the Act to prepare the financial statements and deliver them to the Registrar for registration;

exemption period B means the 2018 to 2023 accounting periods of the exempt overseas company, and in respect of each accounting period, includes the subsequent period provided under the Act to prepare the financial statements and deliver them to the Registrar for registration;

group financial statements of the exempt overseas company means financial statements for the group of companies that comprises the exempt overseas company and its subsidiaries;

NZ GAAP means New Zealand’s generally accepted accounting practice;

parent company means General Electric Company;

specified financial statements for exemption period A, in relation to the exempt overseas company, means the following financial statements of the exempt overseas company, prepared with financial information obtained from the financial statements of the exempt overseas company’s parent company:

1. schedules of financial position;
2. schedules of operations; and
3. schedules of changes in shareowner’s equity;

specified financial statements for exemption period B, in relation to the exempt overseas company, means unaudited, consolidated, US GAAP compliant group financial statements of the exempt overseas company, including:

1. schedules of financial position;
2. schedules of operations; and
3. schedules of changes in shareowner’s equity;
   prepared with financial information obtained from the financial statements of the exempt overseas company’s parent company, and in addition (referred to herein as the “additional documents”):
4. statement of cash flows; and
5. notes comprising significant accounting policies and other explanatory information; and
   US GAAP means generally accepted accounting principles in the United States of America.

6. Exemptions for directors of the exempt overseas company—Every director of the exempt overseas company is exempted from the following provisions in respect of the exempt overseas company:

1. for exemption period A—
   1. sections 202 and 207 of the Act, except to the extent that those sections require audited, NZ GAAP compliant financial statements to be prepared for the exempt overseas company’s New Zealand business in accordance with sections 204 and 207 of the Act; and
   2. section 207E of the Act to the extent that it requires copies of the group financial statements of the exempt overseas company to be delivered to the Registrar for registration; and
2. for exemption period B—
   1. section 202 of the Act to the extent that it requires the group financial statements of the exempt overseas company to comply with NZ GAAP; and
   2. section 207 of the Act to the extent that it requires the group financial statements of the exempt overseas company to be audited.

7. Conditions for exemption period A—The exemption in clause 6(a) is subject to the following conditions:

1. The financial information for the specified financial statements for exemption period A is obtained from the consolidated financial statements of the exempt overseas company’s parent company and the parent company’s financial statements comply with US GAAP;
2. The specified financial statements for exemption period A are accompanied by reports by the auditor of the exempt overseas company’s parent company confirming that the specified financial statements for exemption period A have been subjected to audit procedures performed in conjunction with the audit of the parent company’s consolidated financial statements which has been conducted in accordance with the relevant standards relating to auditing or assurance that are in force in the United States of America; and
3. The directors of the exempt overseas company must ensure that the following documents are delivered to the Registrar for registration before the deadline for exemption period A:
   1. a copy of the specified financial statements for exemption period A together with a copy of the auditor’s report described in clause 7(b);
   2. a copy of the parent company’s annual report filed with the United States Securities and Exchange Commission in accordance with the requirements of the laws of the United States of America; and
   3. a memorandum signed by the directors of the exempt overseas company stating:

      A that the specified financial statements for exemption period A comprise financial statements of the exempt overseas company, prepared with financial information obtained from the financial statements of the exempt overseas company’s parent company;

      B that the financial statements of the exempt overseas company’s parent company comply with US GAAP; and

      C to the extent that the specified financial statements for exemption period A are not consolidated group financial statements of the exempt overseas company, the reasons why they are not consolidated.

8. Conditions for exemption period B—The exemption in clause 6(b) is subject to the following conditions:

1. The specified financial statements for exemption period B are accompanied by reports by the auditor of the exempt overseas company’s parent company confirming that the specified financial statements for exemption period B (other than the additional documents) have been subjected to audit procedures performed in conjunction with the audit of the parent company’s consolidated financial statements, which has been conducted in accordance with the relevant standards relating to auditing or assurance that are in force in the United States of America;
2. the directors of the exempt overseas company must ensure that the following documents are delivered to the Registrar for registration before the applicable deadline for exemption period B:
   1. a copy of the specified financial statements for exemption period B together with a copy of the auditor’s report described in clause 8(a);
   2. a copy of the parent company’s annual report filed with the United States Securities and Exchange Commission in accordance with the requirements of the laws of the United States of America; and
   3. a memorandum signed by the directors of the exempt overseas company stating that the specified financial statements for exemption period B:

      A are unaudited; and

      B comply with US GAAP; and

3. the directors of the exempt overseas company must, as soon as practicable, notify the Registrar if the financial reporting requirements in relation to the exempt overseas company in the United States of America change in a way that is relevant to the exemption provided by this notice.

Dated at Wellington this 5th day of May 2020.

ROB RENDLE, Deputy Registrar of Companies.

Statement of Reasons

This notice, which comes into force on the date of its notification in the New Zealand Gazette and expires on 31 July 2024, exempts the directors of General Electric International, Inc. (“company”), a company incorporated in the United States of America (US), from certain provisions of the Companies Act 1993 (“Act”).

Exemptions of two different scopes apply to the 2015 to 2017 and 2018 to 2023 accounting periods respectively to exempt the company from certain reporting requirements under the Act.

Exemption with Respect to 2015 to 2017 Accounting Periods

For accounting periods 2015 to 2017, the effect of the exemption is to exempt the company from the requirement to file consolidated group financial statements for the group comprising the company and its subsidiaries. In place of these financial statements, the company is required to deliver the following to the Registrar for registration:

1. the audited, consolidated group financial statements that comply with US generally accepted accounting principles (US GAAP), that its parent company, General Electric Company (“parent”), is required to prepare under the law in the US; and
2. unaudited financial statements for the company, including schedules of financial position, schedules of operations, and schedules of changes in shareowner’s equity.

The company will still be required to file audited financial statements for its New Zealand business, and these statements must be prepared in accordance with New Zealand’s generally accepted accounting practice.

However, the exemption for the 2015 to 2017 accounting periods only applies where the following conditions are met:

1. the financial statements for the company are prepared using financial information from the parent’s financial statements; and
2. the financial statements for the company are accompanied by a report from the auditor of the parent confirming that the financial statements for the company have been subjected to audit procedures performed in conjunction with the audit of the parent’s consolidated group financial statements.

If the above conditions are not met, the exemption will not apply and the company will be required to file financial statements for the 2015 to 2017 accounting periods that comply with all provisions of the Act.

Exemption with Respect to 2018 to 2023 Accounting Periods

For accounting periods 2018 to 2023, the effect of the exemption is to exempt the company from the requirement for its consolidated group financial statements to be audited or to comply with New Zealand’s generally accepted accounting practice.

The company will be required to deliver the following to the Registrar for registration:

1. the audited, consolidated group financial statements that comply with US GAAP, that its parent is required to prepare under the law in the US;
2. unaudited, consolidated, US GAAP compliant group financial statements of the group comprising the company and its subsidiaries; and
3. audited financial statements for its New Zealand business, prepared in accordance with New Zealand’s generally accepted accounting practice.

However, the exemption for the 2018 to 2023 accounting periods only applies if the group financial statements for the group comprising the company and its subsidiaries are accompanied by a report from the auditor of the parent confirming that the financial statements for that group (other than the statement of cash flows and the notes comprising significant accounting policies and other explanatory information) have been subjected to audit procedures performed in conjunction with the audit of the parent’s consolidated group financial statements.

If the above conditions are not met, the exemption will not apply and the company will be required to file financial statements for the 2018 to 2023 accounting periods that comply with all provisions of the Act.

Appropriate to Grant Exemption

The Registrar considers that it is appropriate to grant the exemption because:

1. the Registrar has had regard to the financial reporting requirements that must be complied with by the company in its home jurisdiction under which it is not required to prepare group financial statements for the group comprising the company and its subsidiaries;
2. the Registrar has weighed the costs against the benefits of compliance;
3. the Registrar has acknowledged that there is a lower benefit, and potentially higher costs, associated with providing financial information that is several years old, and has therefore decided to grant a broader exemption for certain earlier accounting periods;
4. the company will still be required to file:
   1. audited financial statements for its New Zealand business, prepared in accordance with New Zealand’s generally accepted accounting practice;
   2. the audited, consolidated group financial statements that comply with US GAAP, that its parent is required to prepare under the law in the US;
   3. unaudited financial statements providing financial information about the company or the group comprising the company and its subsidiaries (depending on the accounting period); and
   4. reports from the auditor of the parent confirming that (other than the statement of cash flows and the notes comprising significant accounting policies and other explanatory information) the financial statements for the company or the group comprising the company and its subsidiaries have been subjected to audit procedures performed in conjunction with the audit of the parent’s consolidated financial statements; 
5. the statement of cash flows and the notes comprising significant accounting policies and other explanatory information required for the 2018 to 2023 accounting periods fall outside the scope of the report from the auditor because, for US GAAP purposes, no separate audit procedures are undertaken at an entity level (as opposed to the parent group consolidated level) to analyse that information (e.g. given that cash flows are prepared using the indirect method);
6. the Registrar is satisfied that the financial statements required to be filed under the terms of the exemption provide sufficient information to avoid any detriment to members of the public who have dealings with the company; and
7. the Registrar is satisfied that the exemption is not broader than what is reasonably necessary to address the matters that gave rise to the exemption.

Additional Time Provided Due to COVID-19

The Registrar has provided 9 months from the commencement of this notice to meet the deadlines under this notice with respect to accounting periods 2015 to 2019. While 6 months would normally be provided, the Registrar considers 9 months to be appropriate in light of the challenges presented by COVID-19.

Date of Notification in the New Zealand Gazette: 5 May 2020.

This notice is administered by the Registrar of Companies.