If the company is a 'grandfathered' large proprietary company, it is required to prepare a financial report but is exempt from lodging it with ASIC if it meets certain conditions.

'Grandfathered' proprietary companies are those former exempt proprietary companies that satisfy the criteria in s319(4) of the Corporations Act, that is they:

• continue to meet 'exempt proprietary company' definition at all times since 30 June 1994,

• were large at end of first financial year ending after 9 December 1995,

• had the financial report audited for 1993 and each subsequent year,

• lodged notice within 4 months of end of first financial year ending after 9 December 1995.

Class order [CO 98/0099] allows large proprietary companies with foreign company shareholders (but not controlled by a foreign company) to be 'grandfathered'.

This exemption arises under s319(4) to (6) of the Corporations Law (as preserved in the Corporations Act through the transition provision in the table in s1408(7) of that Act), and requires the company to have its financial report audited before the reporting deadline specified in Chapter 2M of the Corporations Act in order to maintain its exemption from lodging financial reports.

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