Notice of Doing a Better Job for Disclosing 2008 Annual Reports
To do a better job for disclosing listed companies' annual reports of 2008 and in accordance with regulations in the "Rules No.2 on Contents and Format of Information Disclosure by Companies Publicly Issuing Securities -- Contents and Format of Annual Reports" (Amendment in 2007, hereinafter referred to as the "Rules on Annual Reports") and the "SSE Stock Listing Rules" (hereinafter referred to as the "Listing Rules"), the Shanghai Stock Exchange (SSE) hereby notifies as follows:
1. The directorate of every listed company should organize relevant personnel to carefully study the "Rules on Annual Reports", carry out requirements of the "Announcement of the China Securities Regulatory Commission (CSRC) [2008] No.48", implement relevant documents newly issued by the CSRC and the SSE, and promptly compile, submit and disclose annual reports of 2008;
2. Any company listed on the SSE before December 31, 2008 should compile, submit and disclose the annual report of 2008 before April 30, 2009. Any company newly listed between January 1 and April 30, 2009 should also disclose its annual report of 2008 before April 30, 2009 if it fails to disclose the audited financial accounting information of 2008 in its listing announcement.
If a listed company predicts it is unable to do so, it should submit written report to the SSE before April 15, 2009 and announce the reason, solutions and deadline of the postponed disclosure. The SSE will suspend trading of its stock and derivatives from May 1, 2009, and at the same time publicly criticize the company and the personnel concerned;
3. According to the principle of balanced disclosure, the SSE, in order to avoid too concentrated disclosure of annual reports of listed companies, will allow a daily maximum of 45 listed companies to disclose their annual reports. Listed companies should, in line with the schedules stipulated with the SSE, arrange their compilation work and timely disclose their annual reports.
Schedules for listed companies to disclose their annual reports and any changes will be announced on the SSE's website;
4. The directors, supervisors, senior management and other secrecy-bound personnel of a listed company should hold secret-keeping obligations during the compilation of the annual report, and they should by no means divulge the contents in any ways before the disclosure.
Prior to the annual report is officially disclosed, if the performance information is divulged in advance or abnormal fluctuation happens to trading of stock or its derivatives because of performance rumors, the listed company should disclose the performance express according to Article 11.3.5 and 11.3.6 of the "Listing Rules";
5. A listed company should issue the performance prediction before January 31, 2009 according to Article 11.3.1 and 11.3.2 of the "Listing Rules";
6. A listed company should, in accordance with the "Notice on Amendment in Regulations for Listed Companies' Cash Dividend" (CSRC Decree [2008] No.57), list the amount of cash dividend in the past 3 years and its proportion to net profit, and also complete the amendments to the Articles of Association before June 30, 2009, specifying its cash dividend policy.
A listed company, making profits in 2008 but having no scheme of cash profit distribution, should present reasons in the announcement on directorate resolution that discuss and approve the annual report, and make clear the usage and usage plan for the undistributed profits;
7. If a listed company put forward proposals of cash dividend, bonus shares or capitalization from capital public reserve, which have been approved by the shareholders' meeting, it should, according to the "Rules on Shareholders' Meeting of Listed Companies" (Zheng Jian Fa [2006] No.21), implement the detailed plans within 2 months after the shareholders' meeting;
8. If a listed company's major shareholders made promises on the company's performance in 2008, the directorate should pay attention to the fulfillment of the promise. If the company's performance in 2008 fails to reach the level as the major shareholders promised, the company should urge the major shareholders and related parties to fulfill relevant promises as agreed;
9. A listed company should specify the establishment and improvement of its internal control system in the "Statement on Corporate Governance Structure", including but not limited to the establishment of internal control system, the operation of the inspection and supervision mechanism on internal control, the guidance of the directorate and its audit committee, and also the implementation of the plans required by the "Basic Standard for Enterprises' Internal Control (Cai Kuai [2008] No.7)" and other regulations;
10. SSE-listed companies in the SSE Corporate Governance Sector, those who issue foreign capital stocks listed abroad and financial companies should disclose the directorates' self-evaluation reports of the internal control (hereinafter referred to as "internal control reports") together with the annual reports of 2008. Other qualified listed companies are encouraged to do so. Listed companies are encouraged to engage auditing institutions to verify and evaluate their internal control. In doing so, they should disclose the opinions of auditing institutions.
SSE-listed companies in the SSE Corporate Governance Sector, those issue foreign capital stock listed abroad and financial companies should disclose the reports on the fulfillment of social responsibilities (hereinafter referred to as social responsibilities reports) together with the annual reports of 2008. Other qualified listed companies are encouraged to do so.
Separate directorate resolution should be made for a company's disclosure of internal control report and social responsibilities report. The internal control report, the opinions of auditing institution on internal control and the social responsibilities report should be disclosed on the SSE website as the attachments to the full text of the annual report.
11. When auditing a listed company's annual financial report, the certified public accountant should issue special remarks on the listed company's capital occupation by controlling shareholders and other related parties in line with the regulations of the "Notice of Some Issues on Regulating Fund Transfer Between Listed Companies and Related Parties and Outward Guarantee Provided by Listed Companies" (Zheng Jian Fa [2003] No.56). A Listed company is also required to disclose the special remarks on the SSE's website when releasing the annual report.
A listed company with capital occupation by major shareholders and their affiliated enterprises for non-operational purpose should make additional disclosure of the occupation date, amount, reasons, persons in charge and the directorate's solutions in the "Creditor's Rights and Liabilities between Related Parties" in the "Significant Events" in the full texts of the annual report and the 7.4.3 "listed Companies' Capital Occupation and Clearing Progress in 2008"(see attachment) in the annual report abstract;
12. If a listed company's directors, supervisors, senior management and shareholders with more than 5% shares are suspected of illegal purchase and sale of shares during the reporting period, or such suspected irregularities happen and the profits from them are disclosed to be withdrawn by the company, the listed company should disclose the time and amount of the profits withdrawn by the directorate in the "Significant Events" in the full texts of the annual report;
13. In implementing the new accounting standards, if a listed company has changed or adjusted the items and the amount of the previously disclosed balance sheets at the beginning of 2008 according to the "Explanation No.2 on Accounting Standards for Business Enterprises" (Cai Kuai [2008] No.11) and the "Notice of Implementing Accounting Standards in Annual Reports of 2008" (Cai Kuai Han [2008] No.60) of the Ministry of Finance as well as the latest regulations of the CSRC, it should submit them as a single proposal together with the annual report to the directorate for discussion, and make remarks on the changed or adjusted items and the amount in the directorate resolution.
If a listed company has made changes of accounting policies and accounting estimations or the adjustments to significant accounting errors but not for implementing the new accounting standards, it should make remarks in the annual report according to the requirements of the "Rules on Annual Reports". In addition, when submitting the annual report, it should also submit to the SSE the written opinions of the directorate, the board of supervisors and independent directors as well as relevant remarks by the accounting firm concerning the above changes and modifications. The remarks should include the reasons for the above changes and modifications, the detailed accounting treatment, the affected amount on previous years' financial conditions and operational results concerning retroactive adjustments, and whether necessary communication has been conducted with former accounting firm concerning the change of accounting firm.
In addition, if the listed company needs to make retroactive adjustments to its financial data of the previous reporting period in the annual report for modifying accounting errors, it should disclose in the form of temporary announcement before or on the disclosure date of the annual report according to the CSRC's regulations.
14. If the accounting firm issues a non-standard audit report (audit report with stressed issues and unqualified opinions as well as audit report with non-unqualified opinions) to a listed company's financial accounting report of 2008, the listed company should submit relevant documents to the SSE according to the regulations of Chapter VI of the "Listing Rules".
If the accounting firm issues the audit report with disclaimer of opinion or adverse opinion to a company's financial report of 2008, the listed company should disclose a risk alert every half-month from the disclosure day of the annual report of 2008 to the settlement day of the involved issues or the disclosure day of the semi-annual report of 2009. The risk alert should contain the company's latest operation performance and the progress of the involved issues;
15. A listed company should disclose its extraordinary profit and loss of 2008, require the certified public accountant to verify its trueness, accuracy and completeness, and include related contents of extraordinary profit and loss in the accounting statement's annotations appended in the audit report in accordance with regulations in the "Explanatory Announcement No.1 on Information Disclosure for Companies Offering their Securities to the Public - Extraordinary Profit and Loss (2008)"(CSRC Announcement [2008] No. 43);
16. A listed company which has issued convertible bonds should disclose relevant contents in the annual report according to the requirements of Chapter VI of the "Listing Rules".
Commercial banks, insurance companies, securities companies and companies engaged in real estate development should execute the special information disclosure regulations formulated by the CSRC on special industries or businesses;
17. A listed company should apply to the SSE for exemption if it is unable to disclose information according to the "Rules on Annual Reports" due to such special reasons as commercial secrets. Moreover, it should detail the reasons for not performing relevant requirements. Upon approval by the SSE, the company can be exempted from information disclosure, but it should give the reasons in relevant chapters of the annual report;
18. A listed company should complete compilation of the annual report within two working days after the certified public accountant issue an auditing report, and submit the following documents to the SSE within two working days after the directorate approves the annual report:
1) The full text of the annual report of 2008 (including the audited annual financial report) and its abstract (one copy for each) signed by the current legal representative and sealed by the company;
2) The resolution of the directorate, the written confirmation of the annual report of 2008 signed by directors and the senior management, and special remarks and independent opinions on the outward guarantee signed by independent directors;
3) The resolution of the board of supervisors and a written verification opinion of the annual report of 2008 put forward by the board of supervisors in the form of its resolution;
4) An auditing report (original document) and the special remarks (original document) issued by the certified public accountant on the capital occupation by the controlling shareholders and other related parties of the company;
5) The PDF/WORD file and XBRL instance documents of the annual report of 2008 (generated by the SSE information disclosure reporting system). Every listed company should file completely and correctly the content required by the information disclosure reporting system and the content to be disclosed in PDF file. The XBRL instance documents will be disclosed on the SSE website together with the PDF file. (for compilation and submission requirements of e-document, please refer to the business memo of the "Disclosure of Annual Report of 2008" in the Section of Listed Companies on the SSE website);
6) The application form for disclosure of the annual report of 2008 (downloadable from the SSE's website), ready-to-disclose announcements and the application form for disclosure of announcements (one copy for each); and
7) Other documents required by the SSE.
A listed company should prepare for enough texts and disks of the annual report and abstract for typesetting and proofreading by the designated newspapers. A listed company should submit the above documents before 15:30 on the trading day prior to the disclosure, and can't contact designated newspapers for publishing the annual report and abstract until the SSE completes relevant registration procedures;
19. Listed companies are encouraged to publish their annual reports on their own websites, yet the time can not be earlier than the disclosure time on the SSE's website;
20. A listed company which has issued domestically listed foreign shares should also publish contents of its annual report overseas at the same time, and timely submit the published foreign newspapers to the SSE for record;
21. The SSE will implement after-action check toward the annual reports of the listed companies. After receiving the examination opinions of the SSE, the companies are supposed to provide written explanations on the issues involved. Besides, they should also publish relevant supplementary and modification announcements in the designated newspapers and websites, and disclose the modified full texts of the annual reports on the SSE's website.
Shanghai Stock Exchange
December 30, 2008