The annual report comprises information about the company, and some commentators believe that it is the primary source of information about a company’s activities and strategies.
Information found in the annual report includes material framed by statutory and regulatory requirements, including:
- the directors’ report
- the financial report
- the auditor’s report on the financial report.
Additional non-compulsory reporting which supports good corporate governance is normally reflected in reports from the chairman and the chief executive of the company. The emergence of corporate social responsibility and sustainability reports are further examples of the non-compulsory reporting which companies are choosing to provide shareholders with to enhance market knowledge and understanding of their strategies and performance operating the business.
Guide to understanding annual reports
The annual report is only useful to those who can understand and interpret the messages conveyed. You can use our guide to help clients look for the right things in a report, and understand what each part of the report is for.