- Combined report reviewing issuers’ annual reports, as well as corporate governance and environmental, social and governance practices to facilitate issuers in discharging their reporting obligations and enhancing governance
- Findings show high compliance rate and continuous improvement in reporting and governance practices
- Newly launched AI-based platform, the Annual Report Explorer, to assist issuers in preparing annual reports
The Stock Exchange of Hong Kong Limited (Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), is pleased to present today (Thursday) a report (Report) on the findings and recommendations of its annual review of issuers’ annual reports, as well as issuers’ corporate governance (CG), and environmental, social and governance (ESG) practices1 for the 2024 financial year.
The reviews are published in a combined report with the aim of providing issuers with a single point of reference to facilitate them in discharging their reporting obligations and enhancing governance.
In reviewing the annual reports, the Exchange assessed issuers’ compliance with the specific disclosure requirements under the Listing Rules (Rules) with the assistance of artificial intelligence (AI) technology. A thematic approach was used to review specific areas, including financial statements with auditors’ modified opinions, management discussion and analysis, and financial disclosure under prevailing requirements (including accounting standards). The review of issuers’ CG practices focused on board gender diversity, tenure of independent non-executive directors (INEDs) and overboarding of INEDs. The ESG report review analysed issuers’ readiness to adopt the new climate requirements that have come into effect in January 2025.
The Exchange is pleased to note that issuers continued to achieve a high rate of compliance with the disclosure Rules and accounting standards. From its thematic review, the Exchange identified room for improvement in the quality of disclosure in certain areas, including management discussion and analysis and material securities investment activities, for which recommendations have been provided and updated on the Guide on Preparation of Annual Report (Annual Report Guide).
Along with the publication of the Report and the updated Annual Report Guide, the Exchange today is also pleased to announce the launch of the Annual Report Explorer, which assists issuers in preparing annual reports and investors in accessing disclosure of their interests. Featuring an AI-powered search engine, the platform transforms the Annual Report Guide into a web-based guide with interactive features to enable issuers and advisers to easily access and navigate the Exchange’s guidance. It is also built in with a disclosure repository to allow users to view disclosure made by different issuers (by industry and market capitalisation). Findings and recommendations from the Exchange’s latest review are also accessible on the platform.
The Exchange also observed continuous improvement on issuers’ CG and ESG practices and has provided recommended actions to help issuers prepare for new requirements under the CG Code and ESG Reporting Code.
HKEX Head of Listing, Katherine Ng, said: “This year, we are presenting results of our reviews together to facilitate issuers in identifying areas requiring attention and preparing for the next reporting season. As part of the ongoing journey toward better reporting practices and governance, we encourage issuers to take note of the latest guidance and go beyond minimum requirements. Particularly, issuers should strive for well-integrated and consistent disclosure across all reporting areas. We are also excited to introduce our new AI-powered Annual Report Explorer, supporting issuers on their compliance journey, raising the reporting standards, and fostering better market transparency.”
Report is available under the “Listing Regulations – News & Publications – Reports – Regular Review Reports – Annual Review of Issuers’ Reports” section of the HKEX’s website.
Annual Report Guide is available under the “Listing Regulations – Rules & Resources – Guidance – Guidance Materials for Listed Issuers – 10. Continuing obligations” section of the HKEX’s website.
Annual Report Explorer is available under the “Listing Regulations – Rules & Resources – Guidance – Others” section of the HKEX’s website.
Note:
- Excluding reports issued by collective investment schemes listed under Chapter 20 of the Listing Rules for the Main Board and secondary listed issuers.
About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code: 388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.
As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.
HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.
www.hkexgroup.com
Ends