What is Annual Business Report – The Business Communication

An annual business report is the report prepared and published at the end of an accounting year is called annual report. An annual report is one of the various publications made out by companies. All the public limited companies are obliged to prepare a report at the end of every accounting year for their shareholders. An annual report is comprised of the audited accounts of the company with the auditor’s report, the director’s report and any other presentations on the funds, performance and activates of the company.

Contents of Annual Business Reports

There is no all acceptable list of contents of annual report. The Companies Act and other relevant acts on company management mainly focus on accounting disclosures to be given in the annual business report. However, in addition to accounting disclosures, annual report incorporates many other aspects. The following contents are usually found in the annual reports of a company:

  • Company profile: In modern time, companies usually give a general business profile at the beginning of their annual reports. The company profile highlights the general business activities, company mission, vision, goals, and policies.
  • Message from the chairman: The chairman of the board of directors gives a message to the shareholders. In his message, the chairman briefs about the company’s general affairs, objectives, performance during last year, future plans, contribution to the economy, employment conditions, labor relations, accounting practices and the prospect of the company.
  • Composition of Board of Directors: Composition of the board of directors is an essential element of the annual report. In this section, the names and address of all directors are mentioned.
  • Management Structure: Some companies show their management structure in the annual reports.
  • Shareholding pattern: In modern time, the capital structure of the company and shareholding pattern by the directors and general public separately shows in the annual report. Such a disclosure is necessary to determine whether the company is owned by a few directors or by mass people. It is also useful for the purpose of corporate governance of the company.
  • Notice of Annual General Meeting: Notice of annual general meeting is a common part of annual report. The purpose of this notice is to inform the shareholders regarding the date and place of the ensuing annual general meeting.
  • Director’s report: The directors draft a short statement on company activities which is called directors report. This report presents an overall picture of the company on behalf of the Board of Directors.
  • Auditor’s report: At the end of accounting year, the company has to prepare a balance sheet, profit and loss account, cash flow statement and other related schedules to support the accounts. After preparation of accounts, it is to be audited. The auditors issued a certificate named auditor’s report which is enclosed in the annual report.
  • Audited financial statements: Audited financial statements are the key part of an annual business report. This par contains profit and loss account or income statement, balance sheet, cash flow statement and owner’s equity statement. These statements explain the financial health of the company including its profits, assets and external liabilities.
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