Finance

6.
An annual report is a blanket report on a company's activities throughout the preceding

year. It gives a clear vision to all the stakeholders about the company's financial information.
The Annual Report also provides a great tool to compare the financial statements of different
periods. The company needs to prepare an Annual Report and submit it with the Registrar.
The companies listed on the Stock Exchanges need to prepare an Annual Report for different
time intervals as suggested by the Stock Exchange Board.
A usual Annual Report includes,
1. General corporate information
2. Operating and financial review
3. Director's Report
It is a report issued by the Board of Directors which states the compliance with Financial,
Accounting, and Corporate Social Responsibility criterion. It gives the information to
shareholders about transparency, the company's future expansion project.
4. Corporate governance information
This statement gives the idea about the Corporate Governance of a firm. Corporate
Governance means a set of principles and mechanisms which tells us how the firm is
governed.
5. Chairpersons statement
This statement is prepared by the senior most person of a firm which tells the shareholders
about the activities and performance during the preceding year.
6. Auditor's report
This report is issued by the external/internal auditor who is a Chartered Accountant. Auditor's
report gives a verdict on the company's activities and performance.
7. Financial statements, including
-The balance sheet also known as Statement of Financial Position

The balance sheet is a list of closing balances which becomes the opening balances of a next
year. Stakeholders can work out various ratios from the figures in a balance sheet to make an
investment decision.
-Income statement also profit and loss statement.
The activities which were carried out in a previous year results in either a profit or loss for a
firm. To calculate it, the company prepares an Income Statement.
-Cash flow statement
It shows changes in Cash and Cash Equivalent of a firm due to Financing, Investing, and
Operating activities.
-Notes to the financial statements
Notes are extra information provided to support the financial information.
8. Accounting policies
The company explains the various accounting policies used in the previous year. It also states
whether the company is thinking about changing the current policy.
7. An annual report is a blanket report on a company's activities throughout the preceding

year. It gives a clear vision to all the stakeholders about the company's financial information.
The Annual Report also provides a great tool to compare the financial statements of different
periods which helps stakeholders to make an investment decision. Companies listed on a
Stock Exchange need to prepare an annual report for different time intervals.
The significance of an investor studying Annual Report is as follows:
1. Transparency
The information provided by the company has to be true and accurate. Hence it should
portray the correct financial image of a company. The investor while making an investment
decision will study the Annual Report to find out the transparency in business activities.
2. Mission and Vision Statement

A Mission Statement defines the company's business activities whereas Vision Statement
provides company's goals and where it wants to be in the future. This can be studied to find
out the seriousness of the bus
3. Compliance
The Directors Report issued by the Board of Directors states the compliance with financial,
corporate social responsibility, and accounting industry standards. This aids the investor
while making an investment decision.
4.Performance
The Chairperson's statement and Financial statement give the idea about the performance of a
company. An investor can compare the financial statements of various years or different
ratios can help him to compare the performance with industry standards.
5. Corporate Governance & Corporate Social Responsibility
Corporate Governance is a system of rules and processes by which a firm directed and
controlled. If a Corporate Governance is strong then there are fewer chances of the company
committing fraud.
6. Accounting Policies
An Investor can find out the various policies the company is following. The company also
states whether there will be a change in policy. Accordingly, an Investor can take an
Investment decision.

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6.

An annual report is a blanket report on a company's activities throughout the preceding

A usual Annual Report includes,

1. General corporate information

2. Operating and financial review

4. Corporate governance information

7. Financial statements, including

-The balance sheet also known as Statement of Financial Position

-Income statement also profit and loss statement.

-Cash flow statement

-Notes to the financial statements

Notes are extra information provided to support the financial information.

7. An annual report is a blanket report on a company's activities throughout the preceding

The significance of an investor studying Annual Report is as follows:

2. Mission and Vision Statement

5. Corporate Governance & Corporate Social Responsibility

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