Hong Kong Ordinances

COMPANIES ORDINANCE - SECT 129D

Directors' report to be attached to balance sheet

(Past version on 30/06/1997).

(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"
(全資附屬公司) 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)

"wholly owned subsidiary" (全資附屬公司)