城市電訊(香港)成立于1992年,有限公司(CTI)，本公司的業務是提供綜合電信服務并在香港通過自己的自建光纖網絡。是一家城市電信的全資子公司,香港寬頻網絡有限公司(“香港寬頻”),是增長最快的,在香港第二大寬帶服務提供商。“香港寬頻”提供了一個多樣化的投資組合的創新產品,服務超過1027000訂閱寬帶、本地電話和ip - tv服務。該公司已經建立了一個穩固的市場地位與頂級應用程序和實踐使其大幅增長。該公司3000年引以為傲發展人才力量，具備很強的競爭優勢。

城市電訊有限在香港證券交易所上市(股票代碼:1137)在1997年8月與ADR在納斯達克上市,全國市場(股票代號:CTEL)1999年11月在美國。除了在香港的業務,該集團在加拿大也有分公司和廣州。(“城市電訊(香港)有限公司,2010年)

Established in 1992, City Telecom (H.K.) Limited (CTI) provides integrated telecommunications services in Hong Kong via its own self-built fibre network. City Telecom's wholly-owned subsidiary, Hong Kong Broadband Network Limited (HKBN), is the fastest growing and second largest broadband service provider in Hong Kong. HKBN offers a diversified portfolio of innovative products that service over 1,027,000 subscriptions for broadband, local telephony and IP-TV services. The Company has built a solid market position with top-of-the-line applications and practices enabling it substantial growth. The company takes great pride in developing its 3,000 Talent force into a competitive advantage.

City Telecom was listed on The Stock Exchange of Hong Kong Limited (Stock Code: 1137) in August 1997 with an ADR Listing on the Nasdaq National Market (Ticker Symbol: CTEL) in the US in November 1999. In addition to the operations in Hong Kong, the Group also has branch offices in Canada and Guangzhou. (City Telecom (HK) Limited, 2010)

The company annual reports represent the normal starting point for any assessment of financial performance in a year. It is a detail report on public listed company financial activities throughout the whole year. Annual reports are prepared to give stakeholder interests, or another people who interested about the company’s financial performance.

In addition, by law such public listed companies in Hong Kong Exchanges and Clearing Limited (HKEx) are required to prepare and disclose some information about their affairs to their shareholders and to the public by annual reports. Annual report also be filed at the Hong Kong company’s registry which is required by company law and ordinance. (HKEx, 2004)

Annual reports are reporting on the management of the company by the direction, and management performance over the previous year. Moreover, many public listed companies seen annual reports as a good chance to build up their corporate goodwill and reputation with a wider range of stakeholders and it acts as an advertising channel to show the company images to customers, investors, partners, suppliers, and local community.

Lastly, it acts like a tool to educate and inform stakeholders and shareholder the company is potential growing company and worth to make investment. For the company can outline their future business strategy and direction, it explain their company objectives, visions and missions. The key message pass on the annual report for the public is on company financial performance during the period of a year and it is fulfill legal and regulatory responsibilities which are required in Hong Kong Company Law.

In order to illustrate the learning on financial performance for a public domain as case study, we take City Telecom (HK) Limited (CTI) as an example, it was listed on The Stock Exchange of Hong Kong Limited (Stock Code: 1137) in August 1997 with an ADR Listing on the Nasdaq National Market (Ticker Symbol: CTEL) in the US in November 1999. published annual report on their financial statement every year.

During the financial year, there are plenty of classes of information currently available for the public, stakeholders should pay attention with major events happened to the company annual report, these types of available information can help the stakeholders have a guidance on CTI general and basic information on their financial statement.

Firstly, it is Chairman’s statement which normally let stakeholders know company’s visions on the company and the industry development. It concluded the previous year of financial performance and the future policy of the organization.

This is a financial review on the company current year performance. This part provides how the management views its business for the past financial year. In other words, it provides the meaning to the figures underlying in the financial report.

In the Director report tells stakeholders what the directors did in the past financial year. We can examine the past performance of the executive directors. In this part of report, we can have a profile of Directors and Senior Management. We can justify and have a look on that they are really qualified in the senior management team. “What are their interests in the company?” Are there any related parties transaction which required disclosure? Are there any share option scheme operated by the company? Are there any conflict of interest on the directors regarding to their roles in the society or in other companies? Are there any connected transaction between the companies and directors such that the directors can benefit in certain way? Are there sufficient public float of the company to the meet the listing rules requirement?

Stakeholders have a guideline and fundamental information on the qualification and make a justification on this critical examination of directors report as a company need to disclose information and make an awareness for the public interest.

Normally, in this part, we know the corporate governance structure of the company. It is the major check of the health of the company because a good internal monitoring system within the organization will help make sure the company is acting in the best interest of the company. For example, are there any supervisory board, audit committee, remuneration committee? Does the director attend every board meeting? Are all directors independent in nature? Are there sufficient internal control to ensure the company will not commit fraud, for example, the internal audit procedures or external audit procedures in order to ensure that the clear path and policy on auditing.

What are the structure of the mentioned committee? Does the committee maintain a low standard of control or a high level of involvement in the operation?

In the auditor’s report which gives an assurance on the figures provided by the company. The reputation of the auditor whether there is any qualified opinion or disclaimer apart from a clean report.

Lastly, the most important part of available information is financial reports with preparation of the profit and loss account, balance sheet and cash flow statement. For example, income statement shows the company profitability ability, balance sheet prepare the company’s current position.

Moreover, the accounting policies mention the standard adopted by the company for comparability purpose. The currently available from the published annual report notes to financial statement are the only way for the stakeholders know the details of the assets / liabilities and also the detailed breakdown of the operating segment. The information provided in the financial report to have a summary on profitability of the organization, the health of the future business development in the industry. And also the risk involved by the company, for example, liquidity risk on cash flow, credit risk on loan, market risk on industry competition, any estimation in coming to the existing figures.

By using City Telecom (HK) Limited (CTI) as an example, stakeholders know how the intern to make a critical examination on their investment on this public list company and to have a brief reflection and interest to external stakeholders.

Given that shareholders and public to receive certain specified information, different group of stakeholders have different reflection and interest on the annual report. The income statement and balance sheet show a general business and economic activities which information reflects the interests to external stakeholders.

Investors – Investors provide the capital investment as shareholders and they own part of company rights. Investor may want to know if the company worth investing and whether the profit is sustainable or even growing. They consider their interest on profitability ratios, their return on investment are the main concern on financial performance.

Lenders – Lenders are groups of people who loaned funds to the organization under the formal contract terms and conditions. In order to secure that the company can have ability to pay back the loans or interest on their debt, lenders may pay more focus on the organization liquidity ratios and profitability ratios. On another party such bank would like to know whether the company is financially viable and financial performance status yearly on Financial (leverage) Ratios.

Suppliers – Entrepreneur may want to know whether such industry can still allow his entry and suppliers may want to know if this company can be your partner because of the brand.

Employees – Human capital is an important external reflection on their assurance about the stability and profitability of the organization. Without employees, a company cannot be formed.

Customers – Customers are the major involvement in the organization, they pay for the services and loyalty to the company products.
Government - Government might want to the know the number of customers using broadband, the coverage operated by the company, Inland Revenue Department (IRD) might want to know when the company starts to pay tax if it is making a profit. Politician may want to know if the company is going to do some property development which might cause damage to the environment. Also Hong Kong Stock Exchange (HKSE) may want to know if you are fully complied with its listing rules.

Moreover, the Telecommunications Regulatory authority (e.g. OFTA) may want to know whether the company is encouraging competition in the market or just monopoly.

From the external stakeholder interest, they assess a company financial performance base on the figures of the annual report, they can assess the company financial health by the financial ratios. Financial ratios are the primary tools for the analysis of annual reports which provides the basis for valuing a business and justify the company financial health. It is a large number of ratios can be calculated for a public listed company for deciding and judging the company financial statement situation. The method taken focus on a set of important ratio that identify the critical drivers of value and financial health.

There are four major categories for reviewing a public listed company financial health and performance metrics:
- Liquidity Ratios
- Profitability Ratios
- Efficiency Ratios
- Investment (leverage) Ratios
We summarize a diagrammatic representation in each group for financial analysis per the classification.
External stakeholders should be calculated the ratios and justify how to illustrate CTI annual report figures to consider their investment on performance analysis.

Liquidity ratios measure the firm’s abilities to meet its maturing short-term obligations. Investors can use liquidity ratios to measure current assets which can be turned into cash quickly. This means that CTI the available entity cash in short term period, it is easy to extract the amount of trade debtors and trade creditors and cash receivable and payable within the next twelve months. From the annual report, we can work on the liquidity ratios on CTI will going into immediate liquidation, they may receive regular receipts of cash from debtors and CTI can balance these transactions to pay to its creditors.

Profitability ratios measure management’s overall effectiveness in generating “profits.” We can use profitability ratios to measure the level of earnings in comparison to a base such as assets, sales, or capital. It reviewed two profitability ratios, one is Return on Equity, another one is Profit Margin which can be used to measure the profitability on Operating Income to Sales and Return on Assets.
Operating Income to Sales compares Earning before Interest and Taxes to Sales. By using this, we place more concern on operating results and we pay more attention on cash flow concepts.

Moreover, return on assets measures on the net income returned on each dollar of assets. This ratio helps to calculate the company earning from shareholder investment in assets. That means higher rates of return on average total assets.

For the investors, return on assets is always modified to ensure accurate calculation of profit returns.
For the external stakeholders, these rations look at the internal working of the organization, they measure the efficiency with the business manages its assets and liabilities and stakeholders to consider the organization resources are well utilized and well managed. Also, it helps to increase organization profitability and cash flow.

The above ratios examined by all users for creditors, employees, managers and shareholders but for the public listed company annual report which important for the investors to determine the financial performance for the listed company, we need to know about the investment ratios. It is the most important tools to decide the company in stock market is worth to invest on or keep for the future investment. We can justify by the ratios of Dividend yield, Earnings per share, Price to earning ratio, Capital gearing ratio, etc. We take a CTI annual report for the financial year ended 31 Aug 2009 and 2010 as an example to work on comparison for investors benefit on their important factors to determine CTI worth for investment or the trend of market growth.

We summarize the essential factors from CTI annual report, based on the company turnover and others investment ratios:
We can get important investment ratios from Table 1, first, the turnover HK$1,478,239,000 to HK$1,574,687,000 for year 2009 and 2010 respectively, there is 6.5% increase in the sales volume. As a result of that, from CTI annual statement, their earnings per share is dropped from 32.4 HK cents to 30.7 HK cents. But total dividend per share is increased from 19 HK cents to 20 HK cents and their capital expenditures increased 20.3% from HK$286,734,000 to HK$344,844,000. It mainly looked from the ordinary shareholder’s point of view, it is a fair comparison to compare an organization one year’s earnings relating to the number of shares issue in the stock market, they assess CTI annual statement currently available investment ratios are provided to the public investors to consider the health and growth of the company.

In order to consider another issue, another investment ratio EBITDA of CTI, it reflect a company for any period means, without duplication, net income/(loss) for such period, plus the following to the extent deducted in calculating such net income/(loss): interest expense/(income), income taxes, depreciation and amortization expense (excluding any such non cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation.

We can acquire a lot of financial information from the annual report and investors base on the ratios can get benefits for their investment. On the other hand, there would have a risk or problems in annual report. Most likely, the annual report contains forward looking statements and information which will be involved risks, uncertainties and assumptions in the future. Normally forward-looking financial statement are concerned an organization plans, goals and objectives, strategies planning and management, future events and company performance on business. At the same time, stakeholders need to be audited on the financial statement because public listed company mainly underlying the current market status and not always easily noticed and stated clearly in the financial statement. Their assumptions are based on the past historical fact and figures but it could affect organization future earnings per share and cannot assure the development and market share in coming year.

From the annual report of CTI, business is mainly on telecommunications and advance technology on their fiber infrastructure, technology and market are changing rapidly, as a result of changing in technology, competitors will catch up with the technology development, CTI will lose their market share and find that keen competition for another mobility or 3G technology change. Moreover, Hong Kong telecommunications are governed by OFTA, CTI will face the problems on changes in domestic telecommunications regulatory, environment protection issues, or the changes in rules and regulations by ordinance. The polices that Hong Kong Government apply to their businesses, increased market competition in the business such as International Direct Dialing (IDD), fixed telecommunications network services (FTNS), broadband services, the profits will greatly affect by competition. In order to continue developing and maintain the market share, CTI need pay more investment on their capital expenditure on their network. In addition, CTI need to maintain growth and introduce new products and services, to provide the continued development and stability of the technological advance structure, their coming year planning need to be invested more on expenditure, thus it will greatly affected financial performance. Therefore, investors in an required annual reports to be audited at the financial statement.

From CTI point of view, they need to provide the correct, accurate and up-to-date outcome financial materials which are indicated in the financial statement. The information contained in the annual report as the date of statement was made and CTI no need to update any such statement or information after the date of financial statement and no responsibility for unanticipated events. So that the investors to pay attention on the justifications that the date of financial performance in currently or in the future investment as the base on the figure of annual report.

Repurchase refers to the listed companies to use cash, buy from the stock market the company of a certain amount of shares outstanding, is a kind of internal between the company and shareholders equity transfer behavior, was introduced in the 1990 s the capital market in our country.In this paper, first of all, this paper introduces the general situation of the company stock repurchase system, and the advantages and disadvantages of the system, then introduces the analysis of a number of countries or regions outside the stock repurchase market access and other relevant provisions, on the basis of the analysis of the development of stock repurchase in China and the legislative status quo.Defect is proposed in this paper, the existing legislation perfection of a series of targeted countermeasures, to make our country securities market operation more specification.

In our country, stock repurchase is under the background of reform of non-tradable shares, the large proportion in order to solve the state-owned shares and the insider control problem of the unreasonable equity structure such as introduced in the 1990 s.In May 2005, the securities and futures commission to the society through public solicitation about stock repurchase, trying to solve the non-tradable shares into a dilemma.On June 16, 2005, the securities and futures commission has issued a "buy back the social public shares by listed companies management method (trial)", provide the share repurchase of listed companies with the corresponding code of conduct.The company law are revised, for the smooth implementation of the stock repurchase provides a good legal environment.

Stock buyback as a adjust corporate equity structure and capital structure mode of capital operation, listed companies is of special significance to our country.Perfect stock repurchase to regulate, to China's listed companies and stock market unique to provide legal protection.At the same time, in the process of share repurchase of listed companies there are all kinds of problems, such as stock repurchase of listed companies reduce the company's registered capital, corporations and produces the related party transactions between the controlling shareholder, minority shareholders interests will be affected by damage, etc.The existence of these problems, makes perfect stock repurchase to regulate necessary, in order to solve the problems in reality.