Annual Report

The annual report is the comprehensive report on a business organization’s activities all over the preceding years. Annual reports are created to provide shareholders and various other interested parties information about the financial performance of the company and its activities.  Many of the jurisdictions require firms to create and reveal the annual reports and most of them need the annual report to be field at the firms or company’s registry.

Business organizations listed on the stock exchange should report at more regular intervals (depending upon the regulations of the stock exchange involved).

Generally annual reports would include:

• Reports of directors' responsibilities
• Mission statement
• Invitation to a firm's AGM
• Corporate governance statement of compliance
• Chairperson's report
• CEO's report
• Auditor's statement on the corporate governance

 And the financial statements including:

• Statement of  the retained earnings
• Notes to the financial reports or statements
• Income statement
• Cash flow statement
• Balance sheet
• Auditor's report on the financial statements
• Accounting policies

Other details deemed relevant to the stakeholders might be included such as the report on operations for the manufacturing companies or the corporate social responsibility reports for firms with socially-sensitive or environmentally operations. In the case of bigger firms, it is generally a colorful, sleek, high gloss publication. The information given in the report is useful to the investors in order to understand the firm's future direction and financial position. The financial reports are generally compiled in the compliance with International Financial Reporting Standards and the domestic Generally Accepted Accounting Principles, and domestic legislation (example, the Sarbanes–Oxley Act of 2002 in the U.S.). In the US a more complete version of report is know as Form 10-K, which is submitted to the U.S. Securities and Exchange Commission.

Questionnaire:

• What is annual report?
• What are the items included in the annual report of a company?