SGX RegCo to extend deadline for audited annual reports for firms with large China operations

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 market 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 ended Dec 31, 2019 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. 

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.

Issuers are still required to release their unaudited financial statements for FY Dec 2019 by Feb 29, 2020, as per current listing requirements. If there are any material adjustments subsequently made by auditors that create material variance from the previously announced unaudited full year results, this must also be immediately disclosed according to listing rules.

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

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."

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 said.

Issuers seeking the waiver are required to notify SGX RegCo via the RegCo Submissions Portal and make the necessary disclosures upon confirmation from SGX RegCo.

In addition, such 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. Applications for the waiver are to be made through Acra's existing online system if issuers fulfil the criteria. Acra will waive the fees for these applications for extension of time.