Annual reports for Commonwealth companies (RMG 137)

Audience

This guide applies to the directors, chief financial officers, chief operating officers, program managers and officers responsible for contributing to the delivery of the annual report within Commonwealth companies.

This guide applies to annual reports being prepared for reporting periods that begin on or after 1 July 2020.

Key points

This guide:

  • sets out how to prepare and publish an annual report
  • outlines mandatory content for annual reports
  • provides guidance on satisfying the mandatory digital publication requirements including standard data templates that companies are required to complete when producing and publishing the annual report using the Digital Reporting Tool.

For access to the Digital Reporting Tool, company annual report coordinators should email digitalannualreportproject@finance.gov.au.

Resources

Related resources including appendices (containing tables and data templates), glossary terms and relevant sections of the PGPA Act and Rule are located in the right hand menu bar.

Appendix A: List of requirements template - Commonwealth companies 

  • This appendix contains the template list of requirements set out in Schedule 2B of the PGPA Rule, required to be included in companies’ annual reports. This appendix is found under Tools and templates.
  • The list of requirements can be used as a checklist to ensure that the mandatory PGPA requirements have been met.  

Appendix B: Digital Reporting Tool data templates

  • This appendix contains all the data templates that are required to be completed for the Digital Reporting Tool and is available under Tools and templates.
  • Where a provision has an associated data template, a cross-reference to that template is provided above the provision.
  • The financial data templates only capture a subset of the required information from the financial statements.
  • The non-financial data templates help to meet minimum reporting requirements for either part or all of the provisions that they relate to.

Have you joined the Annual Reports GovTEAMS community?

The Digital Annual Reports Team hosts a community which provides useful information and training material on how annual report coordinators can use the Digital Reporting Tool to produce and publish an annual report.

To join the community email digitalannualreportproject@finance.gov.au.

What is an annual report?

An annual report is a document prepared each year by the directors of a Commonwealth company.

The primary purpose of annual reports of companies is accountability. They serve to inform the Parliament (through the responsible Minister), other stakeholders, educational and research institutions, the media and the general public about the performance of companies in relation to activities undertaken. Annual reports are also a key reference document and a document for internal management. They form a critical part of the historical record.

Annual reports are also a key accountability mechanism of the Commonwealth performance framework, through the reporting of the actual performance of companies in the annual report against the planned performance information outlined in their corporate plans.

The annual report must be presented to Parliament by the responsible Minister.
 

Annual report principles

Annual reports for a company should:

  • be written in plain English and provide sufficient information and analysis for the Parliament to make a fully informed judgement on company performance
  • align with the overall Commonwealth resource management framework, PGPA Act, PGPA Rule and the Commonwealth performance framework
  • be developed by taking into account merit reporting – the relative benefits and costs of reporting. 
     

Role of the Corporations Act 2001

Companies are subject to a number of reporting requirements under the Corporations Act 2001 (Corporations Act). The PGPA Act acknowledges these requirements, in particular, the need for companies to produce a financial report, directors’ report and auditor’s report. Together, these reports constitute the annual report.
 

Annual report requirements

This guide is divided into two parts, each providing information on the requirements for annual reports. These parts are:

List of Annual Report Requirements

Part 1 - Publication and presentation requirements

This part provides details of the requirements for the presentation of annual reports to the Parliament, including:

  • Overarching requirements
  • Approval requirements
  • Presentation timing and production standards
  • Plain English and clear design
  • Requirement to publish annual reports using the Digital Reporting Tool.

Overarching requirements

The PGPA Act acknowledges the reporting requirements of the Corporations Act. In particular, the need for companies to produce a financial report, directors’ report and auditor's report. Collectively, these reports constitute the annual report. A copy of these reports must be provided to the responsible Minister and be tabled in Parliament.

The PGPA Rule prescribes reporting requirements, in addition to those prescribed under the Corporations Act, for companies. It is expected that this additional information be integrated in the directors’ report. Commonwealth company directors must give the annual report to the responsible Minister the earlier of the following:

  • 21 days before the next annual general meeting after the end of the reporting period for the company; or
  • 4 months after the end of the reporting period for the company.

There is scope for a company to apply in writing to their responsible Minister for an extension where it is not reasonably possible to meet the above timeframes. The Acts Interpretation Act 1901 allows a Minister to grant an extension where he or she considers it reasonable in the circumstances.

Companies are required to provide a report by the Auditor-General on their financial statements. The report must be prepared in accordance with auditor’s report rules under the Corporations Act.

The company’s responsible Minister is required to table the annual report in each House of Parliament.

  • If the company is a wholly-owned Commonwealth company, or is not required to hold an annual general meeting, tabling must occur as soon as practicable after the Minister has received the documents.
  • In all other cases, the responsible Minister must table the documents as soon as practicable after the annual general meeting of the company.


Approval requirements

 

Approval requirements

 

The annual report must be approved by the directors of the Commonwealth company. The annual report must also be signed by a director of the company and include details of how and when approval was given.


Presentation timing and production standards

The annual report for a Commonwealth company must comply with guidelines for presenting documents to the Parliament which are published by PM&C and titled Tabling Guidelines

Towards the end of a reporting period, PM&C may issue a Tabling Circular containing the tabling timetable, which will reflect the Parliament’s expectations for the timing of the presentation of annual reports.

Normally annual reports are tabled on or before 31 October and it is expected annual reports are tabled prior to the October Estimates Hearings. This ensures annual reports are available for scrutiny by the relevant Senate standing committee.

Where companies are unable to meet the timing set out in PM&C’s circular, they should contact tabling@pmc.gov.au for further advice.

The Tabling Circular may also provide delivery instructions, and key tasks for tabling annual reports when the Parliament is not sitting. 

Guidance on the production standards for annual reports tabled in the Parliament are set out in the Printing Standards on the Parliament of Australia website.


Plain English and clear design

Annual reports are key documents of accountability and transparency to the Parliament and the public. Annual reports should be prepared to best provide readers with a clear account of the operations and performance of the company for the reporting period.

The annual report must be relevant, reliable, concise, understandable and balanced, this can be achieved by:

Plain English

 

Tables, graphs, diagrams and charts should be used where appropriate to provide additional context to the information. Consistent with the Printing standards, companies must have regard to limiting the use of colour and illustrations to where it enhances the reader’s understanding of the material. An excessive use of colour, illustrations and photography is not usually required for the purposes of accountability and reporting to the Parliament. 


Requirement to publish annual reports using the Digital Reporting Tool

The annual report must be published using the Digital Reporting Tool which is administered by the Finance Minister, as soon as practicable after the annual report for a Commonwealth company has been presented to the Parliament.

The Digital Reporting Tool enables companies to draft content and publish annual reports to the Transparency Portal at transparency.gov.au in a fully accessible HTML format, and generate a printed report for Tabling (using the Word export feature). Commencing from the 2018-19 reporting period all Commonwealth entities’ and companies’ annual reports are to be published on and accessible from transparency.gov.au shortly after the presentation of these reports to the Parliament.

Once the annual report is tabled it is expected by Parliament that the annual report is also published on the Transparency Portal before the October Estimates Hearings. Publishing the annual report to Transparency Portal at the time the report is tabled will also meet the tabling guidelines requirement to publish an online version.

The Digital Reporting Tool contains a collection of templates for standard data sets that must be completed for the company's annual report. These templates reflect mandatory data requirements as set out by the PGPA Rule and are designed to assist companies to meet the reporting requirements. To assist companies in the preparation of their annual report, a copy of the required data templates are provided in Appendix B under Tools and templates. 

The Digital Reporting Tool is designed to assist companies to undertake a streamlined and more efficient annual reporting and publication process. Annual report coordinators should consider developing the annual report content directly in the Digital Reporting Tool and using the mandatory reporting templates provided within the relevant section of the company's annual report itself.

This approach helps to focus the content of the report on the reporting requirements of the Parliament, rather than some of the broader publication elements that are not core to the accountability or reporting requirements. The digital content can be exported from the Digital Reporting Tool, to be printed for tabling purposes. Adding further graphic design elements at this point in the publication process is possible but is not necessary to meet the tabling requirements. The Digital Annual Reports GovTeams Community provides a step-by-step guide on how to use the Digital Reporting Tool.

Further, the Australian Government Digital Service Standard, available at www.dta.gov.au, provides information about the legal and policy obligations of companies in relation to online publishing, including a range of mandatory requirements, including compliance with Web Content Accessibility Guidelines, which the Digital Reporting Tool assists companies in meeting by producing the HTML format.

Part 2 - PGPA annual report content requirements

evaluation methods

Commonwealth companies must ensure that the following content is included in their annual report:

  • Purposes
  • Performance
  • Responsible Minister
  • Ministerial directions and government policy orders
  • Information about directors
  • Organisational structure and location
  • Statement on governance
  • Related entity transactions
  • Significant activities and changes affecting the company
  • Judicial decisions and reviews by outside bodies
  • Obtaining information from subsidiaries
  • Executive remuneration
  • Audit committee
  • List of annual report requirements
  • Disclosure requirements for government business enterprises
The annual report for a Commonwealth company must include the purposes of the company as included in the company’s corporate plan for the period.

The corporate plan and annual report are the bookends of the reporting cycle.

evaluation methods

A company’s corporate plan must set out its purposes at the beginning of the reporting period. The annual report must include the purposes as stated in the company’s corporate plan.

The annual report for a Commonwealth company must include information on the results of measurement and assessment of the company’s performance during the reporting period, including against any performance measures and any targets included in the company’s corporate plan for the period.

The annual report must include the current responsible Minister’s name and the name of any other responsible Ministers during the financial year being reported on.

The title of the responsible Minister(s) must also be included.

Annual reports must include details of any directions issued by the responsible Minister, or other Minister(s), under the company’s constitution, an Act or an instrument during the reporting period.

Under the PGPA Act, the government may make a government policy order that specifies a policy of the Australian Government that is to apply to one or more companies. A company that is subject to a government policy order is required to include this information in its annual report.

A Commonwealth company must also include in their annual report if they did not comply with a direction or order, and include particulars of the non-compliance.

The associated data template can be found under the Tools and templates in Appendix B
(PGPA Rule Section 28E (f) (i) –(v) – Directors).

The annual report for a Commonwealth company must include the following information about each director of the company during the reporting period:

Contents of an Annual Report


For the purposes of annual reporting, an executive member is an employee of the company responsible for executive functions in the management and administration of the company.

Non-executive members are independent of corporate management and not employees of the company.

The associated data template can be found under the Tools and templates in Appendix B
(PGPA Rule Section 28E (ga)(i)-(iv) – Management of Human Resources).

Annual reports must include an outline of the organisational structure of the company (and any subsidiaries) and an outline of the location (whether or not in Australua) of major activities or facilities of the company.

The annual report must include the following information which is designed to give readers a high-level understanding of the organisation.

Commonwealth companies must include statistics on the number of employees of the company (with reference to ongoing employees and non-ongoing employees), at the end of the reporting period and the previous reporting period, in relation to each of the following:

It must also include an outline of the location (whether or not in Australia) of major activities or facilities of the company.

All human resources statistics are to be calculated and reported on an actual head count basis (number of employees) as at the end of each reporting period.

If a company believes the level of disaggregation of employee data could result in significant risk of unintentional identification and consequential harm to a specific employee, then the company has the discretion to report that employee’s data at a higher level without further disaggregation. It is important when considering this, that the level of aggregation of information doesn’t make the reporting “meaningless” or be seen to obfuscate other details. 

As an example, the company could count the employee in the Total figures, but not include them in the breakdown of the data, with a clarifying footnote as to why the Total figures differ from the sum of the breakdown of the data.

The annual report must include information on the main corporate governance practices that the company had in place during the financial year.

The content of this statement is at the discretion of the directors; however, it is suggested that the review should include:

  • board committees of the company and their main responsibilities
  • education and performance review processes for directors
  • ethics and risk management policies
  • any legislation that specifically applies to the company, by name.

The annual report for a Commonwealth company must include the following:

The decision making process undertaken by the directors of the company for making a decision if:

  • the decision is to approve the company paying for a good or service from another Commonwealth entity or a company, or providing a grant to a Commonwealth entity or a company
  • the company, and the Commonwealth entity or the company, are related entities
  • the value of the transaction, or if there is more than one transaction, the aggregate value of those transactions, is more than $10 000 (inclusive of GST).

If the annual report includes the information above, then the following must be included:

  • if there is only one transaction—the value of the transaction ; and
  • if there is more than one transaction—the number of transactions and the aggregate of value of the transactions.
A related entity means a Commonwealth entity or a company (a body) is a related entity of a Commonwealth entity or a company (also a body) if:
  • an individual is the accountable authority of both bodies, or
  • an individual is a member of the accountable authority, or a director of the board, of both bodies, or
  • an individual is a member of the accountable authority of one body and a director of the board of the other body, or
  • an individual is the accountable authority of one body and a member of the accountable authority, or director of the board, of the other body.

The annual report must include the decision making process undertaken by the directors of the company when it enters into a procurement or grant transaction where a director of the company holds a similar position in the organisation that provides the good or service or receives the grant.

The organisation providing the good or service or receiving the grant may take the form of a Commonwealth entity, Commonwealth company or a private company. 

The annual report must detail any significant activities and changes that affected the operations or structure of the company during the period.

This may include:

  • forming or participating in the formation of a company, significant partnership, trust or unincorporated joint venture
  • acquiring or disposing of a significant business or shareholding in a company
  • amendments to the constitution of the company and to any relevant legislation
  • commencing or ceasing a significant business activity
  • changes to the membership structure of the company
  • amendments to legislation that specifically apply to the company, by name (if applicable).

The annual report must include information on any judicial decisions or decisions of administrative tribunals that have occurred in the reporting period.

The annual report must also include particulars of any report on the company given during the period by:

  • the Auditor-General, or
  • a Committee of either or both Houses of the Parliament, or
  • the Commonwealth Ombudsman, or
  • the Office of the Australian Information Commissioner, or
  • the Australian Securities and Investments Commission.

The annual report must provide an explanation if directors have been unable to obtain information from a subsidiary that is required to be included in the annual report and the effect of not having the information in the annual report.

The associated data template can be found under the Tools and templates in Appendix B
(PGPA Rule Section 28E (oa) – Executive Remuneration).

Commonwealth companies are required to include information about executive remuneration.

For guidance on reporting executive remuneration refer to RMG No. 139: Commonwealth companies Executive Remuneration Reporting Guide for Annual Reports.

The associated data template can be found under the Tools and templates in Appendix B
(PGPA Rule Section 28E (ob)(ii)-(v) – Audit committee).

Annual reports for Commonwealth companies must include the following information about the audit committee for the company:

  • a direct electronic address of the charter determining the functions of the audit committee
  • the name of each member of the audit committee
  • the qualifications, knowledge, skills or experience of those members
  • information about each of those members' attendance at meetings of the audit committee
  • the remuneration of each of those members.

For further information on the repointing requirements for Audit Committees, see RMG 202: Audit Committees.

Companies should note all annual reports must include a list of requirements to be provided in a consistent format for all companies.

The mandatory table can be located in Appendix A of this guide, in Schedule 2B of the PGPA Rule, and available at www.legislation.gov.au.

The list of requirements must be included as an appendix to the annual report. If an item specified in the checklist is not applicable to the company, it should be reported as “not applicable” rather than omitted from the list.

Entities must also provide details of the location of the information in the annual report that addresses each of the mandatory requirements specified by the PGPA Rule

In addition to the above requirements, a government business enterprise (GBE) that is a company is required to disclose the following in the annual report:

  • An assessment of:
    • significant changes in the company's overall financial structure and financial condition during the reporting period 
    • any events or risks that could cause financial information that is reported not to be indicative of future operations or financial condition.
  • Dividends paid or recommended in relation to the reporting period. Details on dividends are also required under the Corporations Act 2001.
  • Details of any community service obligations the GBE has, including:
    • an outline of actions the GBE has taken to fulfil those obligations
    • an assessment of the cost of fulfilling those obligations.

Information can be excluded where the directors believe, on reasonable grounds, that it is commercially sensitive and would likely result in unreasonable commercial prejudice to the GBE. The annual report must state whether commercially sensitive information has been excluded.


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