Cap. 622 sub. leg. D

Companies (Directors’ Report) Regulation(Cap. 622, section 452(3)) (Enacting provision omitted—E.R. 1 of 2013)[3 March 2014] L.N. 163 of 2013 1. (Omitted as spent—E.R. 1 of 2014) 2. Interpretation In this Regulation— directors’ report (董事報告) means— (a) the report required to be prepared under section 388(1) of the Ordinance; or (b) the consolidated report required to be prepared under section 388(2) of the Ordinance; parent company (母公司) means a parent undertaking that is a company; (L.N. 47 of 2013)parent undertaking (母企業) has the same meaning as in Part 9 of the Ordinance; (35 of 2018 s. 97)reporting exemption (提交報告豁免) means a reporting exemption within the meaning of Division 2 of Part 9 of the Ordinance; (L.N. 47 of 2013) specified undertaking (指明企業), in relation to a company, means— (a) a parent company of the company; (b) a subsidiary undertaking of the company; or (c) a subsidiary undertaking of the company’s parent company; (L.N. 47 of 2013; 35 of 2018 s. 97) subsidiary undertaking (附屬企業) has the same meaning as in Part 9 of the Ordinance. (35 of 2018 s. 97) 3. Directors’ interests (1) A directors’ report for a financial year must contain a statement that complies with subsection (3) if, at the end of the financial year, there subsists arrangements—(a) to which the company or a specified undertaking of the company is a party; and (L.N. 47 of 2013)(b) 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.(2) A directors’ report for a financial year must contain a statement that complies with subsection (3) if at any time in the financial year there have subsisted arrangements—(a) to which the company or a specified undertaking of the company was a party; and (L.N. 47 of 2013)(b) whose objects were, or one of whose objects was, 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.(3) The statement must—(a) explain the effect of the arrangements referred to in subsection (1) or (2); and (b) give the names of the persons who at any time in that financial year were directors of the company and held, or whose nominees held, shares or debentures acquired under the arrangements. (3A) Subsections (1) and (2) do not apply in respect of a company that falls within the reporting exemption for the financial year. (L.N. 47 of 2013)(4) In this section—shares (股份) has the meaning given by section 1(1) of Schedule 1 to the Ordinance. (35 of 2018 s. 98)(L.N. 47 of 2013) 4. Donations (1) If a specified company— (14 of 2025 s. 82)(a) has no subsidiary undertakings; and (b) has in a financial year made donations for charitable or other purposes to a total amount of not less than $10,000, a directors’ report for the financial year must state the total amount of those donations. (2) If—(a) a specified company has subsidiary undertakings; and (14 of 2025 s. 82)(b) the company has in a financial year made donations (whether on its own or by its subsidiary undertakings) for charitable or other purposes to a total amount of not less than $10,000, a directors’ report for the financial year must state the total amount of those donations. (3) In this section—specified company (指明公司) means a company that is not—(a) a wholly owned subsidiary of a company incorporated in Hong Kong or a re-domiciled company; or(b) any other company that falls within the reporting exemption for the financial year;wholly owned subsidiary (全資附屬公司) is to be construed in accordance with section 357(3) of the Ordinance. (14 of 2025 s. 82)(4) (Repealed 14 of 2025 s. 82) 5. Shares issued If, in any financial year of a company, the company has issued any shares, a directors’ report for the financial year must state—(a) the reason for making the issue; (b) the classes of shares issued; and (c) for each class of shares, the number of shares issued and the consideration received by the company for the issue. 5A. Debentures issued If, in any financial year of a company, the company has issued any debentures, a directors’ report for the financial year must state—(a) the reason for making the issue; (b) the classes of debentures issued; and (c) for each class of debentures, the amount issued and the consideration received by the company for the issue. (L.N. 47 of 2013) 6. Equity-linked agreements (1) If, in any financial year of a company, the company has entered into an equity-linked agreement, a directors’ report for the financial year must state—(a) the reason for entering into the agreement; (b) the nature and terms of the agreement including, if applicable—(i) the conditions that must be met before the company issues any shares; (ii) the conditions that must be met before a third party may require the company to issue any shares; and (iii) any monetary or other consideration that the company has received or will receive under the agreement; (c) the classes of shares issued under the agreement; and (d) for each class of shares, the number of shares that have been issued under the agreement. (2) If, at the end of a financial year of a company, there subsists an equity-linked agreement entered into by the company, a directors’ report for the financial year must state—(a) the classes of shares that may be issued under the agreement; (b) for each class of shares, the number of shares that may be issued under the agreement; (c) any monetary or other consideration that the company has received or will receive under the agreement; and (d) any other conditions or terms that remain to be met before the shares are issued. (3) In this section—equity-linked agreement (股票掛鈎協議)—(a) means—(i) an agreement that will or may result in the company issuing shares; or (ii) an agreement requiring the company to enter into the agreement specified in subparagraph (i); and(b) includes—(i) an option to subscribe for shares; (ii) an agreement for the issue of securities that are convertible into, or entitle the holder to subscribe for, shares in the company; (iii) an employee share scheme; and (iv) a share option scheme; but (c) does not include—(i) an agreement to subscribe for shares in a company that is entered into pursuant to the company’s offer of its shares to the public; and (ii) an agreement to subscribe for shares in a company that is entered into pursuant to an offer made to the members of the company in proportion to their shareholdings; offer (要約) includes an invitation to the public to subscribe for shares in a company. 7. Recommended dividend A directors’ report for a financial year must state the amount (if any) that the directors of the company recommend should be paid by way of dividend for the financial year. 8. Reasons for resignation, etc. (1) This section applies if—(a) a director of a company has in a financial year resigned from the office or refused to stand for re-election to the office; and (b) the company has received a notice in writing from the director specifying that the resignation or refusal is due to reasons relating to the affairs of the company (whether or not other reasons are specified). (2) A directors’ report for the financial year must contain a summary of the reasons relating to the affairs of the company.(3) This section does not apply in respect of a company that falls within the reporting exemption for the financial year. (L.N. 47 of 2013) 9. Permitted indemnity provision (1) If, when a directors’ report prepared by the directors of a company is approved in a financial year of the company in accordance with section 391(1)(a) of the Ordinance, a permitted indemnity provision (whether made by the company or otherwise) is in force for the benefit of one or more directors of the company, or of its associated company, the directors’ report for the financial year must contain a statement that the permitted indemnity provision is in force as required by section 470 of the Ordinance. (2) If, at any time in the financial year to which a directors’ report prepared by the directors of a company relates, a permitted indemnity provision (whether made by the company or otherwise) was in force for the benefit of one or more persons who were then directors of the company, or of its associated company, the directors’ report for the financial year must contain a statement that the permitted indemnity provision was in force as required by section 470 of the Ordinance. (3) In this section—permitted indemnity provision (獲准許的彌償條文), in relation to a company, means a provision that—(a) provides for indemnity against liability incurred by a director of the company to a third party; and (b) meets the requirements specified in section 469(2) of the Ordinance; third party (第三者), in relation to a company, means a person other than the company or its associated company. 10. Material interests in transaction, arrangement or contract (1) A directors’ report for a financial year of a company must state the particulars of any transaction, arrangement or contract—(a) entered into by a specified undertaking of the company; and (b) in which a person who at any time in the financial year of the company was a director of the company had, directly or indirectly, a material interest. (2) The particulars referred to in subsection (1) are—(a) the principal terms of the transaction, arrangement or contract; (b) the fact that the transaction, arrangement or contract was entered into or subsisted in the financial year;(c) the names of the parties to the transaction, arrangement or contract; (d) the name of the director having the material interest and the nature of that interest; and (e) (if the director is treated as having the material interest by virtue of subsection (3)) the name of the director’s connected entity and the nature of the connection. (3) For the purposes of this section, a director of a public company is treated as having a material interest in a transaction, arrangement or contract entered into by a specified undertaking of the company if a connected entity of that director has a material interest in that transaction, arrangement or contract. (4) In this section, a reference to a transaction, arrangement or contract is a reference to a transaction, arrangement or contract that is significant in relation to the company’s business. (5) For the purposes of subsection (4), a transaction, arrangement or contract is not significant in relation to the company’s business if, after consideration, the directors of the company are of the opinion that it is not significant in relation to the company’s business. (6) For the purposes of this section, an interest that a director of a company has in a transaction, arrangement or contract is not material if, after consideration, the directors of the company are of the opinion that it is not material. (7) This section does not apply in respect of—(a) a company that falls within the reporting exemption for the financial year; (b) a transaction, arrangement or contract unless it was entered into in the financial year or subsisted at any time in that year; (c) a transaction, arrangement or contract between the company and its specified undertaking in which a director of the company has a material interest; or (d) a director’s contract of service. (8) In this section—(a) a reference to a director includes a shadow director; and (b) a reference to a connected entity, in relation to a director, is a reference to an entity connected with the director within the meaning of section 486 of the Ordinance.(L.N. 47 of 2013)