1. What is an 'Annual Report?

An annual publication that public corporations must provide to shareholders to describe their operations
and financial conditions. The front part of the report often contains an impressive combination of
graphics, photos and an accompanying narrative, all of which chronicle the company's activities over the
past year. The back part of the report contains detailed financial and operational information.

2. What Are the Contents of an Annual Report?

Chairmans Speech: Chairmans speech highlights corporate activities, strategies, researches, labor
relations, main achievements, focuses on future goals, growth. In corporate annual report, the chairmans
speech may not always be found but may be provided to shareholders as a separate document. Chairmans
speech may concentrate on economic condition of the industry to which the corporate unit belongs and
the economy of the country.

Directors Report: Section 217 of the Company law makes it mandatory on the part of directors to
make out and attach to every balance sheet laid in an annual general meeting of the company, a report,
known as directors report.

Auditors Report: Section 227 of the Companies Act says that the auditors shall make a report to the
members of the company. It is the obligatory duty of the directors to get the accounts of company audited
every year by qualified auditors.

Balance Sheet: Balance sheet which is also known as position statement provides a birds eye view on
companys financial position as well as condition. This statement indicates whatever company has and
whatever company owes. The excess of assets over liabilities is known as owners equity/shareholders
funds.

Profit and Loss Account: The profit and loss account which is also known as Income Statement
indicates net profits earned by company during current financial year. Income statement also indicates
profits available for distribution and appropriation after meeting tax liabilities. Profit and Loss
Appropriation Account or Retained Earnings Account is also submitted with profit and loss account
which indicates appropriations made during the period.

Schedules: An average annual report generally contains some schedules forming part of balance sheet
and others forming part of profit and loss account. These schedules are attached with financial statements
for giving detailed information regarding items concerned.

Cash Flow Statement: The accounting standard AS-3 (Revised) cash flow statements issued by ICAI
in March 1997 has made obligatory on the part of companies for reporting its cash flows as per the
requirements of the standard. Detailed discussion has been made in chapter 5 entitled cash flow statement
regarding preparation of cash flow statement as per provisions of AS-3.

Accounts of Subsidiary: Section 212 of the Companies Act 1956 requires companies to provide
statement pursuant to section 212 regarding informations about subsidiaries duly signed by directors and
company secretary on behalf of the board of directors along with detailed information regarding directors
of different subsidiaries along with secretary auditors and bankers. An information about the addresses of
registered offices is also to be attached.

Corporate Governance: Corporate Governance focuses on a companys structure and processes to

ensure transparent and responsible corporate behavior corporate Governance is not a sati exercise rather it
is a dynamic process effective corporate Governance not only reduces the agency costs incurred due to
division of ownership but it helps in saving of time and resources of investors..

Accounting Policies: It has been observed that an average annual report in India use to contain a
statement of disclosure on accounting policies followed by the company while preparing financial
statements. It may be due to the mandatory compliance of AS-1.Accounting policies are the specific
accounting principles and the methods of applying those principles.

3. Why Annual report are written?

Mission & Vision statement of the company.
Corporate information.
Products overview and financial highest in last 5 to 10 years.
Director's report.
Management discussion and analysis
Report and Corporate Governance.
Information on shares of the company.
Auditors Report.
Notes to Accounts.

4. What are the steps to write annual report?

Work out your timetable.
Start to think about the content.
What you want to say - meeting your audiences need.
Determine your key messages.
Agree your writing style.
Decode on your structure.
Workout the likely content for each page.
Workout who your contributions will be.
Decide how you are going to get the information you need.
Start writing.
Read through your draft.
Send your material out for review.
Incorporate feedback.
Reissue and seek further feedback.
Ask your contributions to sign off the content.
Provide the final copy to your design agency.
Capture the lessons for next time.