What is in an Annual Report?

by Investing School on June 30, 2010

An annual report is some that happens once a year or annually, as it is aptly named. It is a comprehensive report on the company activities from the year preceding. These reports are important because it is vital to the shareholders and other interested people to understand how the company is performing. You will find that most jurisdictions will require that companies disclose their annual reports. They may even require that the annual report be filed at the company’s registry. If a company is listed on a stock exchange then they are required to report but even more frequently.
The annual report will typically include the following items:

  • The Chairman’s report
  • CEO’s report
  • Auditor’s report regarding Corporate Governance
  • The company’s mission statement
  • The Statement of Corporate Governance of Compliance
  • Statement of Directors’ responsibilities
  • An Invitation to the company’s AGM
  • The Auditor’s report on financial statements
  • The Balance Sheet
  • Statement of retained earnings
  • The Income statement
  • Cash flow statement
  • Notes related to the financial statements
  • Accounting policies

Depending on the company, there might be additional information that is included. There might be a report specific to the operations of the company. Larger companies will take the time and expense to make their annual reports very visually appealing. These will include pictures and a high level of publication. Appearance is important but the information is vital that is contained in the report. This is the measure that will give a clear picture of a company’s financial health.

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