Compilation Rules for Information Disclosures by Companies That Offer Securities to the Public (No. 11): Notes Appended to Financial Statements of Companies Engaged in Real Property Development Business Special Provisions

Issued: February 6 2001
Effective: as of date of issue
Interpreting authority: China Securities Regulatory Commission
Applicability: For the purposes of these Provisions, "Companies engaged in real property development business" include those that specialize in real property development and those that engage in real property development as a sideline business (Article 1).

Main contents: The Special Provisions require companies engaged in real property development business to comply with additional disclosure requirements in making notes to their financial statements (Article 2). These requirements include additional disclosure regarding the major accounting policies of the issuer, such as principles and methods for the recognition of real property sales income, rental income and management income (Article 3). In respect of inventory, the issuer is required to itemize interim-housing property and provisions for suspended, delayed or idle projects (Article 4). In addition, the issuer shall disclose in itemized form the proceeds from pre-sale (Article 5). Where the issuer has provided security for the mortgages of property purchasers, it shall disclose all outstanding secured amounts and the extent of their risks (Article 8).
Related legislation: PRC, Company Law (Revised), Dec 25 1999, CLP 2000 No.1 p4 and PRC, Securities Law, Dec 29 1998, CLP 1999 No.1 p25
Repealed legislation: Restrictive provisions concerning issue of shares by the real property industry as stipulated in the Questions Concerning the Industrial Policies on Enterprises Applying to Issue Shares to the Public in 1993 Circular, 1993; Several Provisions Concerning the Issuing of Shares Circular, Dec 26 1996, CLP 1997 and Making a Success of Work on Issuing Shares in 1997 Circular, Sep 10 1997, CLP 1997 No.10 p12