Further guidance to Hong Kong listed companies in light of the outbreak of COVID-19

Publication of preliminary results

As stated in the Joint Statement, where a listed company is unable to obtain agreement from its auditors but is otherwise in all respects able to satisfy its financial reporting obligations under the Listing Rules, it should publish such preliminary results (without the agreement with its auditors) on or before the deadline. The FAQs further provide that in such circumstances, a listed company may consider including the following information in the preliminary results announcement:

1. a statement to the effect that the results have not been agreed with its auditors;
   
   
2. an explanation for the lack of agreement with auditors and where available, the expected date that the results may be agreed with auditors;
   
   
3. whether the results have been agreed with the audit committee and if there is disagreement, details of the disagreement; and
   
   
4. (where applicable) details of the any uncertainties as to potential adjustments to the financial figures (whether due to the lack of supporting evidence or relating to the impairment or valuation of assets or liabilities).

In such circumstances, SEHK will not normally suspend trading of the securities of the listed company, even if there are uncertainties on certain financial items, or if the listed company cannot provide breakdown of financial figures normally in notes to financial statements.

If the listed company’s financial results are subsequently agreed by auditors, it should publish a further announcement, stating that that the previously published results have been agreed with auditors. If there are adjustments to the accounts, the announcement should clearly explain the adjustments and where appropriate, publish the revised results that have been agreed with auditors. Where the listed company is subsequently aware of any material differences and/or has obtained the outstanding information, it should publish a supplemental announcement to clearly explain the differences and/or disclose the outstanding information when the information is available and where appropriate, revised results that have been agreed with auditors.

SEHK and SFC understand that the accounts of a listed company may have material differences compared to its eventual audited financial statements. SEHK and SFC will not take disciplinary action solely because of such differences. They will consider whether the listed company and its directors have been diligent and reasonable in their treatment of account or put on a good faith effort on the available information. Nonetheless, to minimise potential material differences, the audit committee is encouraged to discuss the key audit matters with the auditors as early as possible.

Publication of other financial information

If a listed company’s operations are severely affected by the COVID-19 outbreak and cannot prepare its management accounts, as recommended in the Joint Statement, the listed company should consult with the SEHK on the financial information that it is able to report on as soon as possible. SEHK will assess whether the publication of this information will be sufficient to maintain an orderly, informed and fair market so that trading in the listed company’s securities can continue.

Publication of audited financial statements

If a main board listed company cannot publish its annual report by 30 April 2020, or if a GEM listed company cannot publish its annual report by 31 March 2020, SEHK may waive the requirement and allow a later publication date based on the particular circumstances of the listed company and information SEHK obtained during the consultation process. SEHK will consider, among others, the financial information the listed company is able to publish before 31 March 2020 and the effect of the COVID-19 outbreak on the company.

Calculation of size tests

For the purposes of the size tests, financial figures in the preliminary results announcements can be used to compute the assets ratio, profits ratio and revenue ratio, provided that the listed company must ensure the accuracy of figures used. Where such figures are revised in subsequent audited accounts, the listed company should re-compute the relevant percentage ratios and comply with any additional requirements if the proposed transaction falls under a higher classification.

Holding of annual general meetings ("AGMs")

For listed companies incorporated overseas or in the PRC, SEHK may consider waiving the relevant Listing Rules requirement on the holding of AGMs on a case-by-case basis. However, the directors should also observe the relevant requirements under the laws and regulations in their jurisdictions and the listed companies' own articles of association.

For listed companies incorporated in Hong Kong, the Companies Ordinance (Cap. 622 of the laws of Hong Kong) requires companies to hold the AGM within six months and directors to lay the annual financial statements at its AGM within the period of six months after the end of the financial year. SEHK will not grant any waiver that would result in contravention with the Companies Ordinance.

Last reviewed 6 March 2020