Firms with large China operations can apply to SGX to defer audited results

Singapore

LISTED firms with significant China operations that are struggling to complete their statutory audit by the regulatory deadline due to the novel coronavirus outbreak can now apply to get an unprecedented reprieve from the frontline regulator.

The Singapore Exchange Regulation (SGX RegCo) on Friday said it would grant an extension of up to two months for select companies that are due to have their audited full-year results prepared for shareholders' approval during the annual general meetings (AGMs).

This means that such companies that successfully apply for an extension can hold their AGMs by June 30, 2020, with the annual reports containing the audited results to be sent to shareholders and SGX at least 14 days before the AGM.

However, issuers are still required to release their unaudited financial statements for FY Dec 2019 by Feb 29, 2020, as per current listing requirements.

The waiver will be granted to issuers with a financial year-end of Dec 31, 2019, that have "significant" operations in China or whose principal business is in China, and whose statutory audit for the fiscal year was affected by travel restrictions and other measures imposed by authorities due to the virus outbreak.

"The waiver follows feedback received from audit professionals of their practical difficulties in performing the statutory audits for FY Dec 2019," SGX RegCo said in a media statement.

This is the first time that the regulator has given a blanket extension for issuers to hold their AGMs.

In addition, issuers are also required to get approval for the extension from the Accounting and Corporate Regulatory Authority (Acra) or other relevant regulatory authorities where applicable. Acra will process and allow applications through its existing online system for eligible issuers. It will waive the fees for these applications for extension of time.

Firms seeking the waiver are also required to notify SGX RegCo how they have met the criteria for the extension and provide an indicative timeline to convene their AGMs. Upon confirmation from SGX RegCo, issuers have to make the necessary disclosures via SGXNet.

Even with this waiver, issuers were "reminded" that they remain subject to continuous disclosure obligations under the listing rules. "This means that all material information, whether price-sensitive or trade-sensitive information, must be disclosed on a timely basis," said SGX RegCo.

When the issuers' operations are "materially affected" by the virus outbreak, SGX RegCo expects "timely disclosure" on the financial impact or any other material aspects that should be made immediately via regulatory announcements.

"We also encourage issuers with People's Republic of China operations to provide voluntary updates via SGXNet as to the extent - if any - they have been affected by the 2019-nCoV situation," SGX RegCo said.

SGX RegCo is closely monitoring the situation to see if any further measures are required, it added.