GEM - Listing Rules

Listing Rules Amendments to the GEM Listing Rules in relation to the financial disclosure provisions and the general disclosure obligation

Note to subscribers for the amendments to the rules governing the listing of securities on the Growth Enterprise Market
("GEM Listing Rules")

Update No. 9

13th September, 2001

Dear Sirs,

Amendments to the GEM Listing Rules in relation to the financial disclosure provisions and the general disclosure obligation

We enclose amendments to the GEM Listing Rules relating to the financial disclosure provisions in the GEM Listing Rules and the general disclosure obligation in Rule 17.10. The amendments are modelled closely on equivalent provisions in the Main Board Listing Rules and are as follows:

Financial Disclosure

Ą@	The contents of income statements and balance sheets have been expanded.
Ą@	Half-year reports must include a balance sheet, income statement, cashflow statement together with their respective comparative figures and statement of movements in equity.
Ą@	Half-year results announcements must include an income statement and a Management Discussion and Analysis.
Ą@	Preliminary announcements of annual results must either (i) include a complete set of financial statements, an auditors' report and a Management Discussion and Analysis; or (ii) include an income statement, a Management Discussion and Analysis, and details of any qualification to or modification of the auditors' report, provided that the annual report is submitted to the Exchange for publication on the GEM website as soon as reasonably practicable. The Management Discussion and Analysis need not be audited.
Ą@	Accountants' Reports in listing documents and circulars must now include balance sheets, income statements, cash flow statements and statements of movements in equity for each financial year or period covered by the accountants' report.
Ą@	Listed Financial Conglomerates are required to include additional financial information in their accounts.
Ą@	GEM issuers are required to disclose segment information in accordance with the accounting standards that they have adopted for their annual report.

The current disclosure requirements in respect of quarterly results announcements and quarterly reports have not been amended and remain unchanged.

The General Disclosure Obligation

Ą@	Additional guidance has been provided on the general disclosure obligation set out in rule 17.10.

A number of consequential changes have also been made to the GEM Listing Rules.

Effective Dates

The additional disclosures required in preliminary announcements of results, half-year and annual reports are applicable for accounting periods ending on or after 1st October, 2001. Earlier adoption is encouraged.

The additional requirements for accountants' reports to include balance sheets, income statements, cashflow statements and statements of movements in equity for each financial year or period covered by the accountants' report will apply to:

Ą@	All listing applications, including reverse takeovers treated as a new listing application, where the advance booking Form 5A is dated on or after 1st October, 2001.
Ą@	Major transactions and very substantial acquisitions where the latest period reported on in the accountants' report ends on or after 1st October, 2001.

The additional guidance on the general disclosure obligation is effective immediately.

Reprinted pages of the GEM Listing Rules are enclosed together with filing instructions.

Yours faithfully,
For and on behalf of
The Stock Exchange of Hong Kong Limited

Karen Lee
Head of Listing, Regulation and Risk Management

The amendments to the relevant section of the GEM Listings Rules have been marked-up for your reference, please click here to see the amendments to the respective chapters.