During the review process, the Exchange sent 87 letters to issuers.  The letters contained more than 250 enquiries and observations, including requests for explanations of possible non-compliance.

Based on the responses to the Exchange's enquiries, there were no significant breaches of the Listing Rules or accounting standards that would render the financial statements misleading, would require their restatement or warrant disciplinary action.  Where there were omitted disclosures, they were not material to the financial statements as a whole and the Exchange obtained confirmation from issuers that the required information would be provided in future financial reports.

Key observations and findings included:

• Issuers should note that in addition to disclosure requirements in accounting standards, the Listing Rules also have disclosure requirements relating to financial information under Appendix 16 to the Main Board Rules and its Growth Enterprise Market Rules equivalent;
   
• Issuers should enhance their explanations of significant events and transactions in their annual and interim reports;
   
• Issuers should enhance their disclosures relating to goodwill and intangible assets and management should ensure that the assumptions for growth rates applied in their discounted cash flows are achievable over the period under consideration; and
   
• Issuers should follow good practices when providing non-International Financial Reporting Standards/Hong Kong Financial Reporting Standards financial information to ensure that such information is clearly distinguished from the financial information prepared in accordance with accounting standards.

The Exchange encourages directors and other persons responsible for financial reporting to take note of the matters discussed in the report, in particular the requirements of the Listing Rules, accounting standards and other regulatory disclosure requirements.  Issuers should consult early with their auditors and other external professional advisers to gain insight into any changes to the above requirements and their implications on their periodic financial reports.  Issuers should also continue improving their systems and checklists to ensure that all the required disclosures are made and that the information provided is specific, relevant, consistent and clear so that it will be useful to investors.

The report is available under the "Rules & Regulations – Rules and Guidance on Listing Matters – Guidance Materials – Financial reporting matters" section of the HKEx website.

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