An annual report summarizes a company's activities and financial performance over the preceding year. It communicates information to shareholders and other stakeholders and helps build confidence in the company. An annual report includes sections on directors and management, auditors' reports, financial statements such as the balance sheet, cash flow statement, profit and loss statement, and notes on accounting policies. The financial statements provide a snapshot of the company's financial position and performance.

2. What is annual report?
 An annual report is a comprehensive report on
a company’s activities throughout the preceding
year.
Annual reports are intended to give share
holders and other interested people information
about company’s activities and financial
performance.

3.  Communicating with investors : An annual
report is an important element of a financial
communication strategy to attract and retain
investors.
 Building customers’ confidence : Annual
reports keep customers informed on the status
of a company and help build confidence in it
as a long-term suppliers.

4. Importance of annual report
 Attracting and retaining employees :
Employees want to know that are working for a
progressive company that can offer them
secure future and strong job opportunities.
 Informing and influencing the media :
Journalists monitor companies’ activities to
report on financial and business performance.
They pay particular attention to company’s
results and its prospects.

5. CONTENTS OF ANNUAL
REPORTS
 Directors and Management
 Annual general meeting
 Report of board of directors to members
 Management report
 Auditors report
 CAG report
 Financial statement
 Shareholder’s fund and policy holder’s fund details
 Significant accounting policies, notes and disclosure
 Segment reporting schedule
 Balance sheet abstract

6. Directors and management:
 The director’s role is to represent and serve the
interests of shareholders by overseeing and
appraising the Company’s strategy, policies and
performance.
 The Management Board are responsible for
management decisions and operations across the
Company's brands.
Annual general meeting:
 Gathering of the directors and stockholders of
every incorporated firm, required by law to be held
each calendar year.

7. Report of board of directors to members:
 Board of directors issue a report quarterly, half
yearly and annually giving details about the
companies, policies, programs, and formulating
strategies about the company to members.
Management report:
 Management report is a statement made by
management and it is used to compare the actual
results achieved with the budgeted forecast levels.
This report helps the management to see where
they went wrong and they apply other measures
to improve the business.

8. Auditors report:
 An auditor's report provides an opinion of the
validity and reliability of a company or
organization’s financial statements.
 The goal of an auditor's report is ultimately to
document reasonable assurance that a company’s
financial statements are free from material error.
CAG report:
 CAG report shows all receipts and expenditure of
the government of India and the state
government.

9. Financial statement:
 It is prepared to know profit or loss and also the
financial position of the business.
Shareholder’s fund and policy holder’s fund:
 Shareholder's funds are usually the shares in the
company, any share issue premium, retained
profits and possibly other reserved that have been
accumulated.
 Policyholders funds represent customer deposits
plus interest credited at contract rates.

10. Significant accounting policies, notes and disclosure:
 The disclosure of some of the accounting policies
followed in the preparation and presentation of the
financial statements is required by law in some cases.
Segment reporting schedule:
 In an annual report, the purpose of business segment
reporting is to provide an accurate picture of a public
company's performance to its shareholders. For upper
management, business segment reporting is used to
evaluate each segment's income, expenses, assets,
liabilities and so on in order to assess profitability and
riskiness.

11. Balance sheet abstract:
 An abstract balance sheet is a kind of
financial statement that shows what the
business is worth at one point in time. A
standard company’s balance sheet has
three parts, assets, liabilities and
ownership equity or capital.

12. Balance sheet Proforma
Particulars Current
year’s(rs)
Privious
years’s(rs)
I. EQUITY AND LIABILITIES
Shareholders’ funds
(a) Share capital
(b) Reserves and surplus
Minority interest Non-current liabilities
(a) Long-term borrowings
(b) Deferred tax liabilities (net)
(c) Other long-term liabilities
(d) Long-term provisions
Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
TOTAL
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13. Cash Flow Statement
 Cash flows are inflows and outflows of
cash and cash equivalents.
 Inflows refers to receipts.
 outflow refers to payments.

14. Cash flow Statement Proforma
PARTICULARS CY (RS) PY(RS)
I)CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Depreciation and amortisation expense
Bad Debts written off
Provision for doubtful receivables
Provision for doubtful advances
Advances written-off
Provision for diminution in value of long-term
investments
Interest expense
Profit on sale of fixed assets
Unrealised exchange loss /gain
Exchange difference on translation of foreign currency
cash and cash equivalents
Dividend income
Interest income
Profit on redemption of mutual funds and sale of other
current investments
Operating profit before working capital changes
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15. Profit and loss account
 The profit and loss statement is a summary
of the financial performance of a business
over time (monthly, quarterly or annually
is most common). It reflects the past
performance of the business and is the
report most often used by small business
owners to track how their business is
performing.

16. Profit and loss account
 As the name indicates the profit and loss
statement (also known as a statement of
financial performance or an income
statement) measures the profit or loss of
a business over a specified period. A
profit and loss statement summarises
the income for a period and subtracts
the expenses incurred for the same
period to calculate the profit or loss for
the business.

17. Profit and loss account proforma
PARTICULARS Current
year (rs)
Previous
year (rs)
Revenue
(+)Net income
TOTAL REVENUE
Expenses:
(a) Employee benefit expense
(b) Operation and other expenses
(c) Finance costs
(d) Depreciation and amortisation expense
(-)TOTAL EXPENSES
PROFIT BEFORE TAX
(-)Tax
PROFIT FOR THE YEAR
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