JC Master · Listed Company Securities Compliance Column | As annual report disclosures by listed companies enter their peak period, is the shareholder meeting’s review of the “annual report” truly a mandatory step?

　　The high-quality development of the capital market hinges on the compliance foundation of listed companies. As the registration-based system is fully implemented and regulatory frameworks are iteratively refined, securities compliance has become a central pillar for the stable operation of listed offices. Accurately aligning with regulatory guidance and fortifying compliance safeguards are critical enablers for enterprises to navigate market cycles.

　　To this end, we have established this dedicated column, focusing on the core areas of securities compliance for listed companies: summarizing the key points of new regulatory rules, deconstructing the rationale behind typical enforcement actions, dissecting the essence of court rulings, and thoroughly examining the practical challenges of compliance. Adopting a legal‑professional perspective, we employ clear, pragmatic language and scenario‑based analysis to interpret compliance requirements, map out risk pathways, and provide actionable guidance, helping companies strengthen their internal control systems, mitigate compliance risks, and enhance the effectiveness of their compliance management.

　　When compliance thrives, enterprises thrive; when compliance is stable, development is stable. We hope this column will serve as a trusted professional partner for listed companies—helping them discern regulatory trends, address compliance challenges, mitigate compliance risks, and strengthen the foundations of sustainable growth—so that together we can foster the sound and healthy development of the capital market.

　　According to the “Guidelines on Articles of Association of Listed Companies” and related supporting regulations, promulgated and implemented by the China Securities Regulatory Commission on March 28, 2025, annual reports are no longer required to be submitted for approval at a shareholders’ meeting. However, based on publicly disclosed announcements, the vast majority of listed companies still opt to adhere to the traditional practice and submit their annual reports for shareholder review.

　　Is the shareholders’ meeting’s review of the annual report really a mandatory step? Today, drawing on the latest market‑disclosed data, we’ll lay out the logic once and for all:

　　I. Latest Market Data

　　As of the end of March 2026, according to preliminary statistics, among A-share listed companies that have disclosed their 2025 annual reports:

　　1. Approximately 78% of companies have included the “2025 Annual Report” on the agenda for consideration at their annual general meetings.

　　2. Approximately 22% of companies, as trendsetters closely following the latest regulatory requirements, have chosen not to submit their applications, having already completed revisions to their articles of association and other internal governance documents and optimized their corporate governance structures.

　　3. The approval rate for annual reports remains steady, with unanimous adoption becoming the norm—emphasizing a strong sense of ceremony while ensuring that all procedural steps are rigorously followed.

　　On one hand, regulations are being relaxed; on the other, all market participants remain steadfast in their compliance. Behind this stark contrast lies the most authentic compliance rationale of listed companies.

　　II. What exactly has the new regulation changed?

　　The 2023 edition of the Company Law of the People’s Republic of China, the 2025 Guidelines on Articles of Association for Listed Companies, and the latest rules issued by each stock exchange have collectively streamlined the annual report preparation process:

　　1. The annual report is no longer a statutory mandatory item for review by the shareholders’ meeting and does not require approval by the shareholders’ meeting;

　　2. Statutory disclosure process: review by the Audit Committee → deliberation by the Board of Directors → written conofficeation by directors and senior management → external disclosure;

　　3. The shareholders’ meeting focuses on core matters, including profit distribution, the reappointment or replacement of the accounting office, directors’ remuneration, and major capital‑related decisions.

　　From a regulatory perspective, the preparation and review of the annual report have been delegated to the Audit Committee and the Board of Directors, eliminating the need to submit it to the shareholders’ meeting for a separate vote.

　　III. If a review is not required, why do most companies still insist on submitting it?

　　1. The company’s articles of association have not been amended; the internal “highest law” must be observed.

　　This is the most fundamental and widely applicable constraint. To this day, the articles of association of some listed companies still include provisions requiring annual reports to be submitted to the shareholders’ meeting for deliberation. While laws and regulations set the minimum standards, the articles of association constitute the company’s highest internal governing rules; unless they have been amended or repealed, they must be strictly adhered to in order to avoid procedural violations and regulatory risks.

　　2. Continuation of Market Practices

　　Annual report, board of directors’ report, directors’ remuneration, profit distribution, and the reappointment or replacement of the accounting office have long been the standard, fixed agenda items for the annual shareholders’ meeting.

　　In the highly regulated A-share market, “following the crowd” is the safest compliance strategy.

　　3. Safeguarding Shareholders’ Right to Information

　　The annual report is a comprehensive summary of a listed company’s key information for the entire year, covering financials, operations, corporate governance, risks, and more. Proactively submitting it to the shareholders’ meeting for review is, at its core, an exercise in full disclosure to shareholders and in subjecting the company to external oversight. In a context where independent directors face increasingly stringent accountability and investor awareness of their rights is on the rise, adding an extra layer of review not only enhances transparency but also provides an additional safeguard against reputational risks and ensures greater compliance.

　　4. Bundled with legally mandated mandatory review items, naturally incurring no additional costs.

　　Profit distribution, the reappointment or replacement of the accounting office, and directors’ remuneration are matters that must be deliberated at the shareholders’ meeting by law. Since the annual shareholders’ meeting already needs to be convened, with materials prepared and procedures initiated—allowing the annual report to be reviewed concurrently—it entails virtually no additional cost while significantly enhancing corporate governance standards and improving market perception, delivering exceptional value for money.

　　IV. Practical Guidelines for Listed Companies

　　1. The articles of association have not been amended: they must still be submitted to the shareholders’ meeting for deliberation and shall be strictly implemented in accordance with the articles.

　　2. The articles of association have been revised: you may choose independently based on the actual circumstances;

　　3. Under no circumstances should the following be omitted: the profit distribution plan, the reappointment or replacement of the accounting office, and directors’ remuneration.