Written by Sharon on .
What Is Included in an Annual Report?
The annual report is an integral part of corporate reporting. Since the annual reports are based on specific legal requirements, the items that are included in the report vary.
Most annual reports provide a fundamental overview of the business over the past year. The sections typically included in an annual report are an opening letter from the chairman, a business profile, analysis by management and financial information.
The annual report usually starts with an introduction and a letter from the chairman, primary owner or the CEO of the company to the shareholders providing a snapshot of the significant developments in the past year, company initiatives and a brief summary of the financials. Key elements included in this section are the challenges that the business faced, its successes and insight into the growth of the company.
The section is followed by a table of contents.
This section includes the vision and mission statement of the company, details of directors, officers and registered and corporate office, investor profile, the products or services that are the main source of revenue for the business, competitor profile and risk factors of the business.
Management Discussion and Analysis
The section provides an overview of the business performance over the past three years and discusses profit margins, sales and income.
If the business has launched a new product or service or there are drastic shifts in sales and marketing efforts, they should be included in this section. The other topics of discussion include new hires, business acquisitions and other information that the management thinks would be beneficial for the stakeholders.
The financial statements are the most important part of the annual report that allows current and future investors, shareholders, employees and other business stakeholders to determine how well the company has performed in past, its ability to pay off its debts and its plans for growth. The statements that are included are:
- Balance sheet
- Cash flow statement
- Income statement
- Statement to shareholders
These statements show whether the company has made a profit or loss in the past year, how much earnings it has retained and the proportion of revenues to operational expenses. Apart from the financial statements, information about the market price of shares of the company and the dividends paid have to be provided.
Other elements included in the annual reports are:
- Notes to accounts with details about the accounting policies
- Comments by auditors on the financials of the company.
- Disclaimers about forecasted income and expenses
- Stories, infographics and photographs
How do you Write a Good Annual Report?
Annual reports are important elements of a brand’s transparency and accountability. However, rather than writing a ponderous document that only a few can understand, businesses are creating annual reports that speak to a broad group of people.
These reports communicate the values and goals of the brand. Producing creative reports that are highly visual and narrative-driven can help businesses connect with shareholders, investors and customers.
What you should be doing when preparing your next annual report.
- Plan – Creating annual reports take longer than you think. You should set a date of when you need the printed report on your desk and work backwards, allowing for collating of the data, writing of the report, design and printing.
- Tell a story – Engage with your audience, what are you trying to say, is this a journey of how the organisation has improved or how your message is being sent. What was the aim and how did you get there.
- Use infographics – Make your data visual. Create charts, tables and infographics to highlight key financials and achievements.
- Go digital – As well as a printed copy use the content to create digital versions of your report for online use, as a downloadable pdf on your website or using snippets to create content on social media platforms and for use in HTML emailers.
- Get people involved – Show key people what you are planning and doing, don’t leave it to the last moment just before going to print. Get people on board at an early stage to ensure a smooth project and to minimise those last minute changes.
Use Compelling Design
A well-designed report that is engaging and professional can be used as a marketing tool by a business. Ideally, readers should be able to scan through the document and get the information they need.
Creating an annual report is a long-term process that requires an organized system for recording and tracking data, media clipping, photographs and a list of business achievements. While a number of companies create the annual reports in-house, others may hire a design firm to compile, proofread and finalise the document.
If you’re planning your next annual report and would like to discuss how you could do it differently, get in touch below – we’ve two decades of experience in brochure design and have produced a wide range of materials using different formats, materials and bindings.