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Note to subscribers for the amendments to
the rules governing the listing of securities on the Growth Enterprise Market
("GEM Listing Rules")
Update No. 16
26th August 2002
Dear Sirs,
Amendments to the GEM Listing Rules in relation to the financial disclosure provisions
We enclose reprinted pages of the GEM Listing Rules incorporating amendments to Chapters 7 and 18, and part A of Appendix 1,
together with the filing instructions.
These amendments relate to the financial disclosure provisions as follows:
Treatment of revalued assets in the first annual accounts published after listing
Currently the GEM Rules require that where a listed issuer has caused any property assets to be valued or has caused any
valuation to be made of any other tangible assets and included such a valuation in the prospectus relating to its initial public offer, the assets shall be stated at
valuation in the listed issuer's financial statements. These requirements will cease to apply for new listing applications, where the advance booking form is dated
on or after 1st September, 2002. However, if a listed issuer has valued any property assets, or has valued any other tangible assets, and included such a valuation
in the prospectus relating to its initial public offering and those assets are not stated at such valuation (or at subsequent valuation) in the first annual accounts
published after listing, then the listed issuer is required to disclose in its first annual report published after listing the amount of such valuation and the
additional depreciation (if any) that would be charged against the income statement had those assets been stated at such valuation (or subsequent valuation).
Content requirements for financial statements
The following will apply for accounting periods ending on or after 1st September, 2002 although earlier adoption is encouraged:
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The requirement to disclose a "statement of movements in equity other than those arising from capital transactions with shareholders and distributions
to shareholders" in financial statements will be amended to require disclosure of a "statement of changes in equity" in financial statements.
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Listed issuers will be required to disclose details of any significant change in an accounting estimate that has a material effect in the
current period or which is expected to have a material effect in subsequent periods. If it is impracticable to quantify the effect of the change, this fact should be
disclosed.
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Yours faithfully
For and on behalf of
The Stock Exchange of Hong Kong Limited
Karen Lee
Head of Listing, Regulation and Risk Management
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