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The China Securities Regulatory Commission
Circular of China Securities Regulatory Commission on Auditing of Mid-term Financial Reports of B Share Listed Companies
ZhengJianGuoZi [1998] No.16
July 17, 1998
According to the newly amended No.3 Rules Concerning Information Disclosure of Public Listed Companies, Contents and Forms of Mid-term-Report,
security companies whose shares are under special treatment, that intend to apply for share allotment in the latter half of the year,
or that propose plans of sharing bonus or of converting public accumulated funds into share capital to be implemented in the latter
half of the year, and those are in circumstances of other forms recognized by the Commission and Stock Exchanges, must be audited.
Companies with foreign capital listed in domestic markets (including those issue A shares concurrently) shall, in principle, be subject
to the Rules. However, auditing of their mid-term reports may be applied to the following provisions:
1.
With regard to companies whose share are under special treatment, only domestic auditing of mid-term financial report (refers to the
auditing by Chinese CPAs of financial reports produced in line with Chinese accounting standards according to the independent auditing
principle of Chinese CPAs, hereinafter the same) is required and overseas auditing (refers to the auditing of financial reports adjusted
in line with international accounting standards or accounting standards of major overseas financing venues according to international
auditing principles or auditing principles of major overseas financing venues, hereinafter the same) and review is not required.
2.
Companies that intend to apply for share allotment in the latter half of the year may not conduct mid-term domestic, overseas auditing
and review. However, valid domestic auditing report must be attached, according to respective requirement of the Commission, when
materials of applying for share allotment are submitted. Valid overseas auditing report must be submitted if required by security
regulatory authorities of major overseas financing venues.
3.
With regard to companies that propose plans of sharing bonus or of converting public accumulated funds into share capital to be implemented
in the latter half of the year, no overseas auditing or review is required.
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