(1) The relief in section 7 is available to a company and its directors in relation to a relevant financial year where all of the following are satisfied:Nature of company(a) at the end of the relevant financial year, the company was:(i) a public company; or(ii) a large proprietary company; or(iii) a small proprietary company in relation to which paragraph 292(2)(b) of the Act applies;(b) the company was not, at any time during the relevant financial year, any of the following:(i) a disclosing entity;(ii) a borrower in relation to debentures;(iii) the guarantor of such a borrower;(iv) a financial services licensee;Holding entity(c) there was a holding entity in relation to the company at the end of the relevant financial year;Note: This requires that the holding entity was party to the deed of cross guarantee at the end of the relevant financial year: see definition of holding entity in section 6.(d) the relevant financial year and the financial year (relevant holding entity financial year) of the holding entity ended on the same date;(e) the holding entity was not a small proprietary company for the relevant holding entity financial year;Opt-in notice(f) if:(i) the company did not rely on the relief available under this instrument or ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 in respect of the financial year before the relevant financial year; or(ii) the holding entity of the company was not the same for the relevant financial year and the financial year before;the company has lodged by the relevant time a notice signed by a director or secretary with ASIC using ASIC Form 389, containing a statement that the company has taken advantage of relief under this instrument together with the identity of the holding entity;Initial procedures in applying for relief(g) before the end of the first financial year (first reliance year) in respect of which the company took advantage of relief under this instrument or a previous order (being a financial year at the end of which the company was one of the wholly-owned entities of the holding entity):(i) the directors of the company resolved that the company should obtain the benefit of this instrument or a previous order and the directors have not revoked that resolution or resolved to the contrary; and(ii) in respect of every other entity (the other entity) which has become a party to the deed of cross guarantee after 13 August 1998 and before the end of the first reliance year (irrespective of whether the other entity has taken advantage of relief under this instrument, ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 or ASIC Class Order [CO 98/1418]) the directors of that other entity have made a statement:Note: ASIC Class Order [CO 98/1418] was made on 13 August 1998.(A) signed by at least one director, and made before the end of the financial year in which it became a party to the deed of cross guarantee; and(B) stating that in the directors’ opinion immediately before the execution of the deed of cross guarantee or assumption deed by the other entity there were reasonable grounds to believe that the other entity would be able to pay its debts as and when they become due and payable;(h) either of the following applies:(i) before the end of the first reliance year, the directors of the company made a statement, signed by at least one director, stating that in the directors’ opinion immediately before the execution of the deed of cross guarantee or assumption deed by the company there were reasonable grounds to believe that the company would be able to pay its debts as and when they become due and payable;(ii) the company became a party to the deed of cross guarantee before 1 July 1997 and has lodged with ASIC by the relevant time a financial report or financial statements containing an unqualified directors’ declaration (required by subsection 295(4) of the Act) or an unqualified directors’ statement (required by section 301 or 302 of the Law as it stood before the Company Law Review Act 1998) in respect of a financial year which ended after becoming a party to the deed of cross guarantee and before the relevant financial year);Annual resolution (i) at or about the end of the relevant financial year, the directors of the company:(i) considered the advantages and disadvantages associated with the company remaining a party to the deed of cross guarantee and taking advantage of the relief afforded by this instrument; and(ii) resolved either:(A) that the company should continue to remain a party to the deed of cross guarantee; or(B) that the company should seek to revoke the deed of cross guarantee in respect of the company;Deed of cross guarantee and membership of the closed group(j) either:(i) the company remained as a wholly-owned entity of the holding entity at all times in the period from the end of the relevant financial year until the date on which the consolidated financial statements required by paragraph (r) are lodged with ASIC; orNote: The circumstances in which the company will cease to be a wholly-owned entity of the holding entity include if either the company or the holding entity cease to be parties to the deed of cross guarantee: see definitions of holding entity and wholly-owned entities in section 6.(ii) otherwise, both the following apply:(A) within one month after ceasing to be a wholly-owned entity of the holding entity, the company became party to another deed of cross guarantee with another holding entity, which has been lodged with ASIC;(B) after making reasonable and diligent enquiries, the directors of the company have no reason to believe at the relevant time that the company may not be able to obtain relief under this instrument in respect of its next financial year;(k) except in relation to a deed of cross guarantee lodged with ASIC before 1 July 2004, at the relevant time:(i) a company holds office as trustee under the deed of cross guarantee; and(ii) if the person holding office as trustee under the deed of cross guarantee is a Group Entity (within the meaning of that deed), another person that is a company holds office as alternative trustee under that deed;(l) where the deed of cross guarantee was lodged with ASIC before 1 July 2004, that deed was approved by ASIC for the purposes of a previous order;(m) before the end of the relevant financial year:(i) the following have been lodged with ASIC:(A) the deed of cross guarantee; and(B) if the company became party to the deed of cross guarantee by an assumption deed—that assumption deed; and(ii) where the lodgement of a deed referred to in subparagraph (i) occurred on or after 1 July 2004— a certificate relating to that deed has also been lodged with ASIC by the relevant time, where that certificate conforms with the definition of certificate as it appears in this instrument or the definition of Certificate or certificate as it appeared in a previous order at the time that the deed was lodged;Foreign entities (n) as at the end of the relevant financial year, each member of the closed group other than the holding entity is:(i) a company; or(ii) a body incorporated in Australia, the United Kingdom, New Zealand, Singapore or Hong Kong;(o) if a foreign entity (including the holding entity where it is a foreign entity) is party to the deed of cross guarantee, the directors of the company and the holding entity are satisfied (as evidenced by resolutions of the directors of those two entities), before the holding entity lodges the consolidated financial statements, that, on the basis of appropriate recent advice, the deed of cross guarantee is in a class of documents generally enforceable in the place of incorporation or formation of the foreign entity as against the foreign entity;Bodies regulated by APRA(p) as at the end of the relevant financial year, no party to the deed of cross guarantee was a body regulated by APRA;Variations to deed of cross guarantee (q) at the relevant time neither the company nor the holding entity have terminated, repudiated or attempted to repudiate or terminate or agreed to any variation of the deed of cross guarantee except by any of the following:(i) an assumption deed that was either:(A) lodged with ASIC together with a certificate relating to that deed, where that certificate conforms with the definition of certificate as it appears in this instrument or the definition of Certificate or certificate as it appeared in a previous order at the time that the deed was lodged; or(B) where the assumption deed was lodged with ASIC before 1 July 2004—approved by ASIC;(ii) a revocation deed that was lodged with ASIC and under which the deed of cross guarantee ceased to apply to one or more entities other than the company;(iii) the substitution of a trustee, or addition or substitution of an alternative trustee:(A) contemplated by the deed of cross guarantee; and(B) if the variation was lodged with ASIC before 1 July 2004—approved by ASIC;(iv) any variation to reflect any amendment of ASIC Pro Forma 24;Consolidated financial statements (r) the holding entity has prepared and lodged with ASIC by the relevant time consolidated financial statements together with notes for the relevant holding entity financial year;(s) if the holding entity is a registered foreign company:(i) where the holding entity is controlled by a disclosing entity formed or incorporated in Australia, a company or a registered scheme, the holding entity prepared the consolidated financial statements in accordance with the requirements of Chapter 2M (including subsection 295(4)) of the Act as if the holding entity were a public company; and(ii) where subparagraph (i) does not apply and a law in the place of origin of the holding entity applies to the preparation of the consolidated financial statements:(A) the holding entity reasonably believes that it prepared the consolidated financial statements in accordance with the requirements of that law; and(B) the consolidated financial statements covered the holding entity and at least those controlled entities which are part of the extended closed group (and included a note making it clear which entities were covered by the consolidated financial statements); and(iii) where neither subparagraph (i) nor (ii) applies—the holding entity prepared the consolidated financial statements in accordance with the requirements of Chapter 2M of the Act as to the form and content of consolidated financial statements, as if the holding entity were a public company and covering at least those entities in the extended closed group; and(iv) unless subparagraph (i) applies—the holding entity has lodged with ASIC by the relevant time a document signed by a director in accordance with a resolution of directors containing a statement as to whether, as at the date of the document, there are reasonable grounds to believe that the members of the extended closed group (identified in the note required by subparagraph (u)(ii)) will be able to meet any liabilities to which they are, or may become, subject because of the deed of cross guarantee;Note: Where subparagraph (i) applies, such a statement will need to be included in the directors’ declaration that is prepared because of subparagraph (i): see paragraph (v).(t) the consolidated financial statements include adequate provision in relation to the liabilities of any parties to the deed of cross guarantee (other than a trustee or alternative trustee that is not a Group Entity within the meaning of the deed) which are not consolidated where it is probable that those liabilities will not be fully met by those parties;(u) the notes to the consolidated financial statements:(i) include a short statement of the nature of the deed of cross guarantee; and(ii) list the parties to the deed of cross guarantee as at the end of the relevant financial year, separately identifying:(A) the members of the closed group; and(B) the other members of the extended closed group; and(iii) give details (including dates) of parties to the deed of cross guarantee which, during or since the relevant financial year, have been:(A) added by an assumption deed; or(B) removed by a revocation deed; or(C) the subject of a notice of disposal; and(iv) give details (including dates and reasons) of any entities which obtained relief under this instrument or ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 at the end of the immediately preceding financial year but which were ineligible for relief in respect of the relevant financial year; and(v) if the consolidated financial statements cover entities which are not members of the closed group, set out the additional consolidation information in respect of the consolidation of the entities which are members of the closed group (after eliminating all transactions between members of the closed group); and(vi) if the consolidated financial statements cover entities which are not parties to the deed of cross guarantee, set out the additional consolidation information in respect of the consolidation of the holding entity and those entities which are parties to the deed of cross guarantee and controlled by the holding entity (after eliminating all transactions between parties to the deed of cross guarantee); and(vii) if there are any parties to the deed of cross guarantee (other than a trustee or alternative trustee that is not a Group Entity within the meaning of the deed) which are not controlled by the holding entity, set out the additional consolidation information in respect of those parties (either individually or in aggregate);(v) if the holding entity is a company or is a registered foreign company to which subparagraph (s)(i) applies—the directors’ declaration of the holding entity for the relevant financial year includes a statement as to whether, as at the date of the declaration, there are reasonable grounds to believe that the members of the extended closed group (identified in the note required by subparagraph (u)(ii)) will be able to meet any liabilities to which they are, or may become, subject because of the deed of cross guarantee;Auditor of the holding entity (w) if the holding entity’s financial report is required to be audited, the auditor of the holding entity is satisfied by the relevant time that paragraph (r), (s), (t) and (u) (as applicable) have been complied with;Compliance with conditions(x) the company has complied with each of the following as they apply to the company:(i) the conditions in section 9; and(ii) the requirements in paragraph 6(1)(f) and subsection 7(3) of ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 (as continued in force by section 17).(2) In this section, relevant time means, in relation to a relevant financial year, 4 months after the end of the year.
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