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Chapter: 32  COMPANIES ORDINANCE

Section Num: 129D  Version Date 01/12/2005

Directors' report to be attached to balance sheet

(1) There shall be attached to every balance sheet laid before a company in general meeting a report by the directors with respect to the profit or loss of the company for the financial year and the state of the company's affairs as at the end thereof.

(2) Every directors' report so attached shall be approved by the board of directors and signed on behalf of the board either by the chairman of the meeting at which it was approved or by the secretary of the company.

(3) The report shall-

(a) state the principal activities of the company and of its subsidiaries in the course of the financial year and any significant change in those activities in that year;

(b) state the amount, if any, which the directors recommend should be paid by way of dividend;  (Amended L.N. 283 of 1986)

(c) state the amount, if any, which the directors propose to carry to reserves within the meaning of the Tenth Schedule;

(d) if the company (not being the wholly owned subsidiary of a company incorporated in Hong Kong) has no subsidiaries and has in the financial year made donations for charitable or other purposes to a total amount of not less than $10000, state the total amount of such donations;

(Amended 3 of 1997 s. 34)

(e) if the company (not being the wholly owned subsidiary of a company incorporated in Hong Kong) has subsidiaries and the company and its subsidiaries have between them made donations for charitable or other purposes to a total amount of not less than $1000, state the total amount of such donations;

(f) if significant changes in the fixed assets of the company or of any of its subsidiaries have occurred in the financial year, contain particulars of the changes;

(g) if, in the financial year, the company has issued any shares, state the reason for making the issue, the classes of shares issued and, as respects each class of shares, the number issued and the consideration received by the company for the issue;

(h) if, in the financial year, the company has issued any debentures, state the reason for making the issue, the classes of debentures issued and, as respects each class of debentures, the amount issued and the consideration received by the company for the issue;

(Amended 12 of 2005 s. 9)

(i) state the names of the persons who, at any time during the financial year, were directors of the company;

(ia) contain in respect of any contract referred to in section 162A(1)(a) the information required to be included in the report by that section;  (Added 6 of 1984 s. 90)

(j) if, at the end of the financial year, there subsists a contract with the company or the company's subsidiary or holding company or a subsidiary of the company's holding company in which a director of the company has, or at any time in that year had, in any way, whether directly or indirectly, an interest, or there has, at any time in that year, subsisted a contract with the company or the company's subsidiary or holding company or a subsidiary of the company's holding company in which a director of the company had, at any time in that year, in any way, whether directly or indirectly, an interest (being, in either case, in the opinion of the directors, a contract of significance in relation to the company's business and in which the director's interest is or was material), contain-  (Amended 6 of 1984 s. 90)

(i) a statement of the fact of the contract's subsisting or, as the case may be, having subsisted;

(ii) the names of the parties to the contract (other than the company);

(iii) the name of the director (if not a party to the contract);

(iv) an indication of the nature of the contract; and

(v) an indication of the nature of the director's interest in the contract;

(k) if, at the end of the financial year, there subsist arrangements to which the company or the company's subsidiary or holding company or a subsidiary of the company's holding company is a party, being arrangements whose objects are, or one of whose objects is, to enable directors of the company to acquire benefits by means of the acquisition of shares in, or debentures of, the company or any other body corporate, or there have, at any time in that year, subsisted such arrangements as aforesaid to which the company or the company's subsidiary or holding company or a subsidiary of the company's holding company was a party, contain a statement explaining the effect of the arrangements and giving the names of the persons who at any time in that year were directors of the company and held, or whose nominees held, shares or debentures acquired in pursuance of the arrangements;  (Amended 6 of 1984 s. 90)

(l) contain particulars of any other matters so far as they are material for the appreciation of the state of the company's affairs by its members, being matters the disclosure of which will not, in the opinion of the directors, be harmful to the business of the company or of any of its subsidiaries.

(4) As respect a company entitled to the benefit of any provision contained in Part III (exceptions for special classes of company) of the Tenth Schedule, subsection (3) shall have effect as if paragraph (f) were omitted.

(5) For the purposes of subsection (3)(d) and (e), "wholly owned subsidiary" shall be construed in accordance with section 124(4).

(6) The references in subsection (3)(j) to a contract do not include references to a director's contract of service or to a contract between the company and another undertaking, being a contract in which a director of the company has or had an interest by virtue only of his being a director of that other undertaking.  (Amended 12 of 2005 s. 9)

(Added 80 of 1974 s. 12)

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