Companies to carry out semi-annual reporting unless special circumstances exist

Prior to the amendment, companies listed on the SGX were required to announce their financial results on a quarterly basis. Under the new rules, companies only need to announce their financial results on a half-yearly basis unless the specified circumstances set out in the Listing Rules apply.

When quarterly reporting will be required

A company will have to report its financials on a quarterly basis if it has received a disclaimer of opinion, adverse opinion or qualified opinion from its auditors on its latest financial statements:

• A qualified opinion arises when the company’s auditor concludes that misstatements (or if there is insufficient evidence, the possible effects of undetected misstatements) are material but not pervasive to the financial statements; 
• An adverse opinion arises when misstatements are concluded to be both material and pervasive; and
• A disclaimer of opinion arises when the auditor has insufficient evidence on which to base its opinion and concludes that the possible effects of any undetected misstatements could be both material and pervasive to the financial statements. 

A company will also have to report its financials on a quarterly basis if its auditors have expressed a material uncertainty relating to going concern on its latest financial statements. A material uncertainty relating to going concern is expressed if the auditor has significant doubts on the company’s ability to continue as a going concern. There may or may not also be a modified opinion, depending on whether there has been adequate disclosure of the material uncertainty. If adequate disclosure has been made, the auditor will not need to modify its opinion, but must nevertheless highlight that the material uncertainty exists.

Commencing mandatory quarterly reporting

In each of the above situations, companies must immediately make an announcement. They then have a one-year grace period to commence quarterly financial reporting. The SGX has the discretion to shorten the one-year grace period. If the company’s audit issues are resolved within the grace period, it will not need to commence quarterly reporting.

A company that is required under the Listing Rules to report its financial results quarterly must state in its quarterly results announcement that the announcement is pursuant to an SGX requirement. It must also provide, in each of its quarterly reports, updates on its efforts to resolve its audit issues and a confirmation from the Board that the impact of the audit issues on the financial statements have been adequately disclosed.

Voluntary quarterly reporting

All other companies need only do semi-annual reporting though they are encouraged to consider providing voluntary business updates to shareholders in between their half-yearly financial reports. As the quarterly financial report announcements of such companies will not state that the announcement is pursuant to an SGX requirement, the public will be able to distinguish such companies from those whose quarterly financial reporting is mandatory. Companies that are voluntarily announcing their quarterly financial results will not be required to publish semi-annual results at the half-year mark as they will have published their second quarter results.

The Listing Rules have also been amended to make clear that disclosure must be made of information that is trade-sensitive and to enhance continuous disclosure obligations in respect of various specific transactions. These are covered in "Information to Be Disclosed if It Would Influence an Investor to Trade Even if It Is Not Price-Sensitive" and "Listing Rules Amended to Enhance Disclosures for Various Transactions" respectively.