Contents of Annual Report
There is no all-acceptable list of contents of annual report. The Companies Act and other relevant acts on company management mainly focus on accounting disclosures to be given in the annual report. However, in addition to accounting disclosures, annual report incorporates many other aspects. The following contents are usually found in the annual reports of a company:
Company Profile: In modem time, companies usually give a general business profile at the beginning of their annual reports. The company profile highlights the general business activities, company mission, vision, goals, and policies.
Message from the Chairman: The chairman of the board of directors gives a message to the shareholders. In his message, the chairman briefs about the company’s general affairs, objectives, performance during last year, future plans, contribution to the economy, employment conditions, labor relations, accounting practices, and prospect of the company.
Composition of Board of directors: Composition of the board of directors is an essential element of annual report. In this section, the names and address of all directors are mentioned.
Management Structure: Some companies show their management structure in the annual reports.
Shareholding Pattern: In modern time, capital structure of the company and shareholding pattern by the directors and general public are separately shown in the annual report. Such a disclosure is necessary to determine whether the company is owned by a few directors or by mass people. It is also useful for the purpose of corporate governance of the company.
Notice of Annual General Meeting (ACM): Notice of annual general meeting is a common part of annual report. The purpose of this notice is to inform the shareholders regarding the date and place of the ensuing annual general meeting.
Directors’ Report: The directors draft a short statement on company activities which is called directors’ report. This report presents an overall picture of the company on behalf of the Board of Directors.
Auditors’ Report: At the end of accounting year, the company has to prepare balance sheet, profit and loss account, cash flow statement and other related schedules to support the accounts. After preparation of accounts, it is to be audited. The auditors issue a certificate named auditors’ report which is enclosed in the annual report.