Annual report

Annual report

The annual report is vital instrument organisations use to inform stakeholders about their accomplishments, difficulties, and financial performance. It offers a thorough overview of the business’s operations, highlighting significant accomplishments, tactical objectives, and potential outcomes. Through this document, companies hope to promote accountability, trust, and transparency towards shareholders, investors, employees, and the general public. 

What is an annual report? 

A full summary of an organisation’s financial performance, activities, accomplishments, and potential for the future is provided in a comprehensive document called an annual report. It also includes financial statements and other information about the business’s operations, strategies, governance, and management. In yearly reports, the organisation’s financial performance and state are made public to benefit stakeholders like shareholders, investors, employees, and regulators. 

Understanding an annual report 

A company’s operating and financial operations throughout the previous year are intended to be publicly disclosed in the mandatory annual report. Shareholders and other interested parties often get the report, which they use to assess the company’s financial performance and make investment decisions. In the front section of the report, there is typically a stunning array of graphics, photos, and text that details the company’s operations for the previous year and, on occasion, makes predictions for the future. The back of the report contains the study’s robust financial and operational data. 

 You should include the chairman’s letter, a business profile, a management strategy analysis, and your financial statements. They are the four primary parts of your annual report. Your annual report may serve as a marketing tool, including creative components like visual design and a story. You must learn how to write a solid annual report to help your company’s management choices and build relationships with individuals who will help you expand your business. 

Importance of an annual report 

The annual report is very important since it gives a thorough summary of an organisation’s finances, operations, and prospects for the future. It is essential for fostering stakeholder confidence and ensuring accountability and transparency.  

 Annual reports are used by both public and private businesses to provide crucial managerial and financial data to clients, shareholders, staff members, and the media. Here are various justifications for why firms must provide annual reports: 

  • It gives a chance to showcase a company’s most significant accomplishments, anticipated outcomes for the upcoming year, and broad aims and objectives. 
  • It provides details on the company’s financial situation. 
  • It introduces the important players in your company to the public and other stakeholders. 
  • It explains to the company’s shareholders and staff its growth plan for the upcoming year. 
  • It is useful as a management decision-making tool. 

 Investors use annual reports to determine a company’s financial health, make wise investment choices, and measure managerial efficiency. Regulators use them to guarantee adherence to legal and regulatory standards. Annual reports are a communication tool to share successes, plans, and dangers with shareholders, staff members, and the general public, promoting transparency and upholding credibility. 

Uses of an annual report 

Annual reports are used in the following ways: 

  • Investors and stakeholders use annual reports to assess an organisation’s fiscal stability, profitability, and overall performance. 
  • Annual reports offer vital data for decision-making procedures like choosing investments, evaluating risks, and finding areas for development. 
  • Annual reports satisfy legal and regulatory requirements, ensuring responsibility to shareholders and regulatory organisations. 
  • Annual reports, which offer information on the business’s operations, strategies, and financial outcomes, assist organisations in maintaining successful contact with shareholders. 
  • Organisations can evaluate their position and pinpoint areas of competitive advantage or weakness with the help of annual reports that allow for industry benchmarking and comparisons with rivals. 

Types of annual reports 

Annual report

The following are the types of annual reports: 

  • Financial statements 

An organisation’s financial health, including its revenues, expenses, and cash flows, is outlined in the balance sheet, income statement, and cash flow statement. 

  • Management discussion and analysis (MD&A) 

A narrative examination of the financial statements is provided by management discussion and analysis (MD&A), which covers the organisation’s financial performance, trends, risks, and potential outcomes. 

  • Corporate governance report 

The corporate governance report describes the organisation’s corporate governance, the board of directors’ makeup, executive compensation, and compliance and ethical standards. 

  • Auditor’s report 

The independent auditors who compile the auditor’s report express an opinion on the fairness and correctness of the organisation’s financial statements, assuring stakeholders that the disclosed financial data is reliable. 


  • Sustainability report 

The organisation’s efforts and performance in environmental sustainability, social responsibility, and corporate citizenship are highlighted in a sustainability report, often known as corporate social responsibility (CSR). 

Frequently Asked Questions

Annual reports include details about past performance, a statement from the CEO, financial data, and targets and goals for the next year. 

The steps to write an annual report are: 

  • An executive summary that provides a broad overview of the report should be the first. 
  • It should include a message from the CEO or chairman detailing significant accomplishments and challenges. 
  • It should have current financial statements available. 
  • It should analyse the company’s performance, market trends, and competitive environment. 
  • It should talk about important efforts, projects, and upcoming plans. 
  • It should use visuals like graphs and charts. 
  • It should provide a summary and predictions for the following year. 
  • The report should be truthful, open, and compliant with legal standards. 

A source of multiyear fund statistics and performance made available to fund shareholders and potential investors is a mutual fund annual report with a fund’s prospectus and declaration of supplementary information. 

To read an annual report, the letter to shareholders summarising the company’s performance, should be read before an annual report begins. To evaluate the company’s financial situation, look at the financial statements, which include the balance sheet, cash flow statement and income statement. Pay close attention to the footnotes and the management’s commentary and analysis for more information. Examine its key performance indicators, strategy, and dangers to comprehend the company’s operations and prospects fully. 

An organisation’s management team, which often includes the CEO, CFO, and other important individuals in charge of financial reporting and strategic communication, prepares the annual report. 


Related Terms

    Read the Latest Market Journal

    One Dollar at a Time: The Potential of Fractional Shares

    Published on May 20, 2024 28 

    Table of contents 1. Introduction 2. Dollar-Cost Averaging 3. Popularity of Dollar-Cost Averaging 4. Small...

    Unit Trusts vs Exchange Traded Funds (ETFs) – Which is better for your portfolio?

    Published on May 20, 2024 26 

    Imagine you are dining at a nice restaurant, feeling overwhelmed by the variety of seemingly...

    Weekly Updates 20/5/24 – 24/5/24

    Published on May 20, 2024 14 

    This weekly update is designed to help you stay informed and relate economic and company...

    What is CFD? With 2 Practical Examples

    Published on May 15, 2024 98 

    In this article, you will learn what CFD (Contract for Difference) is, the costs and...

    What is ESG investing, and why is it important?

    Published on May 15, 2024 75 

    Over the last five years, Environmental, Social, and Governance (ESG) investing has evolved from being...

    What are fixed-income funds?

    Published on May 15, 2024 49 

    In the diverse world of unit trusts, various funds employ distinct investment strategies aligned with...

    Hong Kong Value Stocks Q2 2024

    Published on May 14, 2024 117 

    After a long period of sluggishness, Hong Kong market has begun to pick up. The...

    Weekly Updates 13/5/24 – 17/5/24

    Published on May 13, 2024 44 

    This weekly update is designed to help you stay informed and relate economic and company...

    Contact us to Open an Account

    Need Assistance? Share your Details and we’ll get back to you


    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

    An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

    Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

    Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

    The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions.  

    The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

    The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

    This advertisement has not been reviewed by the Monetary Authority of Singapore.  


    Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
    250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
    Tel: (65) 6230 8133 Fax: (65) 65383066