Business review in directors' report: New Companies Ordinance requirement

The new Companies Ordinance (Cap 622) introduces a mandate for the annual directors' report of Hong Kong-incorporated public and "large" private and guarantee companies - the inclusion of an analytical and forward-looking business review. This requirement aims to enhance the information usefulness of the annual reports. This article questions whether this aim could be achieved in view of its conflicting overlap with the current Listing Rules requirements, the repetition of information already available in the financial statements, the notable lack of clear guidance on and intrinsic difficulty with some of the minimum disclosures and the tendency for its forward-looking disclosures to be of limited use.