THE CORPORATIONS LAW

CHAPTER 2L - DEBENTURES

PART 2L.2 - DUTIES OF BORROWER

SECTION 260GF   DUTY TO GIVE TRUSTEE AND ASIC QUARTERLY REPORTS  

260GF(1)  Quarterly reports.  

Within 1 month after the end of each quarter, the borrower must:

(a)  give the trustee a quarterly report that sets out the information required by subsections (4), (5) and (6); and

(b)  lodge a copy of the report with ASIC (see section 351).

260GF(2)  First quarter.  

The first quarter is the period of 3 months ending on a day fixed by the borrower, by written notice to the trustee. The day must be less than 6 months after the first issue of a debenture under the trust deed.

260GF(3)  Subsequent quarters.  

Each of the subsequent quarters are periods of 3 months. The trustee may allow a particular quarter to be a period of less than 3 months if the trustee is satisfied that special circumstances justify doing so.

260GF(4)  Content of quarterly report.  

The report for a quarter must include details of:

(a)  any failure by the borrower and each guarantor to comply with the terms of the debentures or the provisions of the trust deed or this Chapter during the quarter; and

(b)  any event that has happened during the quarter that has caused, or could cause, 1 or more of the following:

(i) any amount deposited or lent under the debentures to become immediately payable

(ii) the debentures to become immediately enforceable

(iii) any other right or remedy under the terms of the debenture or provisions of the trust deed to become immediately enforceable; and

(c)  any circumstances that have occurred during the quarter that materially prejudice:

(i) the borrower, any of its subsidiaries, or any of the guarantors; or

(ii) any security or charge included in or created by the debentures or the trust deed; and

(d)  any substantial change in the nature of the business of the borrower, any of its subsidiaries, or any of the guarantors that has occurred during the quarter; and

(e)  any of the following events that happened in the quarter:

(i) the appointment of a guarantor

(ii) the cessation of liability of a guarantor body for the payment of the whole or part of the money for which it was liable under the guarantee

(iii) a change of name of a guarantor (if this happens, the report must also disclose the guarantor's new name); and

(f)  the net amount outstanding on any advances at the end of the quarter if the borrower has created a charge where:

(i) the total amount to be advanced on the security of the charge is indeterminate; and

(ii) the advances are merged in a current account with bankers, trade creditors or anyone else; and

(g)  any other matters that may materially prejudice any security or the interests of the debenture holders.

Note:

Paragraph (f) - the borrower has a duty to inform the trustee about charges as they are created (see section 260GE).

260GF(5)  [Money to related body corporate]  

If the borrower has deposited money with, or lent money to, a related body corporate during the quarter, the report must also include details of:

(a)  the total of the money deposited with, or lent to, the related body corporate during the quarter (see subsection (7)); and

(b)  the total amount of money owing to the borrower at the end of the quarter in respect of the deposits or loans to the related body corporate.

Disregard any amount that the borrower deposits with an ADI in the normal course of the borrower's business.

260GF(6)  [Liability of related body corporate]  

If the borrower has assumed a liability of a related body corporate during the quarter, the report must also include details of the extent of the liability assumed during the quarter and the extent of the liability as at the end of the quarter.

260GF(7)  [Details of deposits and liabilities]  

For the purposes of subsections (5) and (6), the report:

(a)  must distinguish between deposits, loans and assumptions of liability that are secured and those that are unsecured; and

(b)  may exclude any deposit, loan or assumption of liability on behalf of the related body corporate if it has:

(i) guaranteed the repayment of the debentures of the borrower; and

(ii) secured the guarantee by a charge over all of its property in favour of the trustee.

260GF(8)  Formalities.  

The report must:

(a)  be made in accordance with a resolution of the directors; and

(b)  specify the date on which the report is made.