In India, every company must be registered with the Ministry of Corporate Affairs (under Section 217 of the Companies Act, 2013) and must submit an Annual Report at the end of the financial year. This report contains summaries of the business operations and the financial position. It offers a proper picture of how the business has performed in the last year and must be presented to shareholders, potential investors, and analysts.
And it’s not just major companies that do this. Non-profit organizations and smaller companies may also publish annual reports to give their customers a look at their performances as well as future goals.
So let’s have a look at the key details that must be included in an Annual Report. This will help when the time comes to create one for your company.
Message from the Chairman
An Annual Report is an essential corporate document or digital presentation. It starts with an introduction, along with a short message from the chairman/ majority owner or CEO of the company. The message typically contains a brief explanation of the major developments in the company during the past year, company initiatives, and a brief snapshot of the company’s financial status. The chairman’s message also includes issues that the company faced, its successes, and how much the company has grown in the past financial year.
Table of Contents
The next section you need to insert in your corporate report is a Table of Contents. An Annual Report often runs into multiple pages. This ends up creating confusion when the audience or individuals are looking for a particular piece of information but can’t seem to find it. The table of contents can direct them to the right section and page which contains the much sought-after information.
This is the section of your corporate report where you mention the company’s mission and vision statements. It can also include information about the board of directors, other officers in the company, registered and corporate address, investor profiles, the products and services that the company has to offer, etc.
Business Performance Analysis and Discussion
Want to know how the company has performed in the last few years? This is the section of the Annual Report that will give your audience an overview of the profit margins, sales, and income.
If a new product has been launched and has done phenomenally well in terms of sales and an increase in revenue, then these details must be included here. Similarly, if there are any other changes in the company’s performance, be it related to new marketing methods, products or services introduced, etc. this is the section to use to highlight the same. You may also include topics of discussion such as new hires, business acquisitions, and other information that might be beneficial to the shareholders.
Financial statements are the most essential part of the Annual Report. By including these in your business report, existing and potential investors, employees and other shareholders get a look at the company’s performance, financial status, and future plans for expansion if any. The statements that are included are:
- Balance sheet
- Income statement
- Cash flow statement
- Statement to shareholders
Including these statements allows the audience to see what the company’s profits and losses were over the specified time period, how much revenue was earned, and how much was utilized for operating expenses. Besides the financial statements, additional information could extend to the company’s market price of shares along with the dividends paid to shareholders.
We’ve listed out the more crucial or key inclusions in any Annual Report. Besides all of the above, there are more pieces of information that are recommended to be included. This is because they are also beneficial to the audience in some way or the other. These elements include:
- Information about any changes to accounting policies
- Auditors’ comments on the company’s financials
- Disclaimers about predicted income and expenses
- Stories, infographics, and photographs relating to the information in each section to make the Annual Report more visually appealing
What do you want to include in your Annual Report?
Creating an Annual Report is definitely overwhelming and time-consuming. At Report Yak, we can help you craft the perfect business report with just the necessary information to be presented to your shareholders, potential investors, and other colleagues. If you would like to book a consultation with us, call 1800 121 5955 or write to us at [email protected]. For more information as well as samples of the work we’ve done, check out the DesignMyReport website.