INVESTORS often ignore two of the most important sections of a company's annual report: the financial statement and the directors' report. The latter, because it is required under the Companies Ordinance, tends not to paint quite as rosy a picture as the chairman's statement, Deloitte Touche Tohmatsu audit partner Stephen Taylor says. Profit-and-loss accounts, balance sheets, cash-flow statements and (for listed companies) management's disclosure-and-analysis reports can also be revealing, he says. But the policies behind these figures emerge only in the notes to the financial statement. Investors should not expect to pick up an annual report and understand it fully the first time. 'It's like understanding a [foreign] language,' Mr Taylor says.