The Hong Kong and China Gas Company Limited, Annual Report 2015

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And we can study further moreover for financial information item in Statement of financial position of the Company in the Annual Report Page 167, which can see the between 2014 and 2015 relevant information of assets, liabilities and capital and reserves. That can help user easy to making investment decisions for which buying, selling, keep holding Towngas investment or investing another company.

Faithful representation means the information must be free of error and bias, not misleading, complete and neutral. All information should be necessary for users to understand the statement is described, including all footnote and working. By free of error and bias presentation of financial information, the depiction should be neutral, not weighted and misleading. Otherwise it may be lead to control the financial information by the users who are favourably or not with the statement. That can be capable to difference decisions making for users which the financial information is relevant. Faithful representation does not mean accurate in all of item and there are no errors or omissions in the description of the statment. It is used to prepare the reported information has been appled and selected with no errors in this process.

As a shareholder, some information show out with a total sum up, that may be mislead if there is no a list of disclose, by the standard of qualitative characteristics is not accepted. So we can find some footnote and working in the Annual Report Page 125 for Benefits and interests of directors. This working is show out all director how many emoluments fee, salary allowances and performance bonus under faithful representation.

Another working also show out in the Annual Report Page 129 for Property, plant and equipment with detail. The footnote is present all the property, plant and equipment in cost, accumulated depreciation and net book value. This is clearly with free of error and bias to tell the value with detail footnote. All company must pay tax for the governemnt in a complex calculation. In the Annual Report Page 153 for Deferred taxation, it will study in all detail with the movements and offsetting of balances in deferred tax liabilities and assets during the year. The Annual report is prepared with no errors or omissions in the description in this process, and reliability finanacial information for making investment decisions as a shareholder.

Comparability means the information must be comparable to the financial statement in same company with different period of time, or same period of time with different company in same industry or role of business. The users can clearly to identify trends of economic performance and financial position reporting of the company. After comparability, the users can make a decisions for buying, selling, keep holding the investment or investing another company. Financial information comparability is not improved by making different items look similar any more. It is improved to present the items look different. Comparability is a important activities when making decisions to let you the degree of return from investment. We can study in the Annual Report Page 62 for Comparison of Ten-year Results. It can be present out how Towngas working 10 years business compare with the same industry in Hong Kong. By the Annual Report Page 150 for Trade and other payables, it list out all the trade payable both 2014 and 2015. It is a useful information to compare with other company in Hong Kong for financial performance. Finally, is the most important information for shareholder, it show in the Annual Report Page 167 for Statement of financial position of the Company. It is a clearly report for shareholder to compare Towngas financial performance with 2014 and 2015, if there is any drecreased in profit, that must effect the shareholder investment activities.

Understandability means the financial information must be understandable to read for users of the statements. It must be clearly to persent with supporting as relevant footnotes and details working. It is a need to explain, classifying and characterising detail of each item and complex financial statement. There may be some information is too complex and not easy to understand, so that why we need an appearance from financial reports, it help users to easy understand what the company financial status are. But those report are not completed that may lead to misleading to public.

In some terms of accounting definition is difficult to under for shareholder, the Annual Report has be written clearly for which objective to present. Page 99 for Summary of significant accounting policies (f) Property, plant and equipment, it show out equipments stated at cost less accumulated depreciation and accumulated impairment and present different kind of equipments have different kind of year depreciation in straight-line basis. It lead shareholder to be more easy to understand this report before make any decisions.

(HKICPA, CHAPTER 3, QC5 - QC34)

PART C

From those qualitative characteristics, the most important is “Understandability”. If the report is well prepare with relevance and faithful representation information, can be comparability with differnet period or different company, but it is wroten in term of symbol to present that is not a useful financial inforamtion. To detect the information are not relevance and faithful representation or comparability to another company, frist and mainly process that the report is understandable to read.

Conclusion

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