Sample Financial Statements 2015/161 - Nelson CPA

1 Sample Financial Statements 2015 /161. For the Year Ended 31 December 2015 . 13 April 2016. Sample Manufacturing Company Limited Directors' report and Financial Statements For the year ended 31 December 2015 . LAM Chi Yuen Nelson MOK Yu Kwan Stephanie . 1. This set of Sample Financial Statements is designed for a fictitious company, Sample Manufacturing Company Limited, with the assumption that it is incorporated in hong kong and has no subsidiary. All the entities, persons and figures in the Statements are fictitious and are used only as a basis for discussion. It is not intended to cover all accounting practices generally accepted in hong kong nor designed for a particular entity or industry. Endeavour has been made to provide accurate information but no guarantee can be made to ensure that the information is accurate and complete all the times. Users of this set of Statements should have their own research and analysis and exercise their own judgements.

2 Appropriate professional advice on their situation would be required before using or acting on the information. 2010-16 Nelson Consulting Limited Page 1 of 43. Sample Manufacturing Company Limited Directors' report and Financial Statements For the year ended 31 December 2015 . Table of Contents I. Directors' report 3. II. Independent auditor's report 4. III. Statement of profit or loss and other comprehensive income 5. IV. Statement of Financial position 6. V. Statement of changes in equity 7. VI. Statement of cash flows 8. VII. Notes to Financial statements2 9. 1. General information 9. 2. Statement of compliance with hong kong Financial Reporting Standards 9. 3. Summary of significant accounting policies 9. 4. Changes in accounting policies 19. 5. Critical accounting estimates and judgement 19. 6. Revenue 20. 7. Other income 20. 8. Finance costs 20. 9. Profit before tax 21. 10.

3 Income tax in the statement of profit or loss and other comprehensive income 21. 11. Emoluments and other matters relating to directors 22. 12. Dividends 22. 13. Property, plant and equipment 23. 14. Investment property 24. 15. Lease premium for land 25. 16. Interests in associates 26. 17. Interests in joint ventures 27. 18. Non-current Financial assets 29. 19. Trading securities 29. 20. Inventories 29. 21. Trade and other receivables 30. 22. Cash and cash equivalents 30. 23. Trade and other payables 31. 24. Bank loans and overdrafts 31. 25. Obligations under finance leases 32. 26. Income tax in the statement of Financial position 32. 27. Share capital 33. 28. Capital disclosures 33. 29. Loans to directors and bodies corporate controlled by them 34. 30. Commitments 35. 31. Financial instruments 35. 32. Fair value measurement of Financial instruments 41. 33. Related party transactions 42.

4 34. Contingent liabilities 42. 35. Comparative figures 42. 36. Parent and ultimate holding company 42. 37. Possible impact of amendments, new standards and interpretations issued but not yet effective for the year 43. 2. Additional notes and/or notes with more details may be required depending on specific circumstances, say contingent assets, events after the reporting period and etc. 2010-16 Nelson Consulting Limited Page 2 of 43. Sample Manufacturing Company Limited Directors' report The directors have pleasure in submitting their annual report together with the audited Financial Statements for the year ended 31 December 2015 . Principal activities CO 390(1)(b) The company's principal activities are the manufacturing and sale of garment products and HKAS rental business on its property investment. Share capital Cap. 622D Details of share capital of the company are set out in note 27 to the Financial Statements .

5 Result and dividend The profit of the company for the year ended 31 December 2015 and the state of the company's affairs as at that date are set out in the Financial Statements on pages 5 to 43. Cap. 622D S. 7 An interim dividend of HK$[ ] (2014: HK$[ ]) per share was paid on [ ]. The directors recommend the payment of a final dividend of HK$[ ] (2014: HK$[ ]) per share for 2015 . Charitable donations Cap. 622D Charitable donations of HK$[ ] (2014: HK$[ ]) were made by the company during the year. Property, plant and equipment Movements in property, plant and equipment are set out in note 13 to the Financial Statements . Directors CO 390(1) The directors during the Financial year and up to the date of this report were: Miss Bonnie Hung Miss Melody Lam (appointed on 4 June 2015 ). Mr. Tony Ton (resigned on 1 April 2015 ). There is no provision in the company's articles of association for the retirement and rotation of directors.

6 All the existing directors continue in office. Directors' interests in transactions, arrangements or contracts Except for those disclosed in the Financial Statements , no other transactions, arrangements or contracts of significance in relation to the company's business to which the company, and any of its fellow subsidiaries was a party, and in which a director of the company had a material interest, subsisted at the end of the year or at any time during the year. Arrangements to acquire shares or debentures At no time during the year was the company, any of its holding companies or fellow subsidiaries a party to any arrangement to enable the directors of the company to acquire benefits by means of the acquisition of shares in or debentures of the company or any other body corporate. Business review CO 388(1)(b) The company prepared a special resolution which is passed by the members to the effect that the company is exempted from preparing the business review.

7 Auditors Nelson CPA Limited retire and, being eligible, offer themselves for re-appointment. A. resolution for the re-appointment of Nelson CPA Limited as the company's auditors is to be proposed at the forthcoming annual general meeting. By order of the board CO 391 Mei Mei King Secretary hong kong , [Date]. 2010-16 Nelson Consulting Limited Page 3 of 43. Independent auditor's report HKSA To the Shareholders of Sample Manufacturing Company Limited (Incorporated in hong kong with limited liability). CO 405 We have audited the Financial Statements of Sample Manufacturing Company Limited ( the HKSA Company ) set out on pages 5 to 43, which comprise the statement of Financial position as at 31. December 2015 , and the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

8 HKSA Directors' responsibility for the Financial Statements The directors of the company are responsible for the preparation of the Financial Statements that give a true and fair view in accordance with hong kong Financial Reporting Standards issued by the hong kong Institute of Certified Public Accountants and the hong kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. HKSA Auditor's responsibility Our responsibility is to express an opinion on these Financial Statements based on our audit. [This report is made solely to you, as a body, in accordance with section 405 of the hong kong Companies Ordinance (Cap. 622), and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of the report].

9 3. We conducted our audit in accordance with hong kong Standards on Auditing issued by the hong kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements . The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Financial Statements , whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.

10 An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Financial Statements . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. HKSA Opinion CO 406 In our opinion, the Financial Statements give a true and fair view of the [ Financial position of the company / state of the company's affairs] as at 31 December 2015 and of its [ Financial performance / profit / result] and cash flows for the year then ended in accordance with hong kong Financial Reporting Standards and have been properly prepared in [compliance/accordance]. with the hong kong Companies Ordinance. HKSA Nelson CPA Limited Certified Public Accountants HKSA [Address], [Date]. 3. The revised paragraph is based on the recommendation found in the Professional Risk Management Bulletin, Auditors' Duty of Care to Third Parties and the Audit Report, issued by the HKICPA in May 2003.