An Annual Report is a formal financial statement issued yearly by a corporate. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareholders. Companies publish annual reports and send abridged versions to shareholders free of cost. A detailed annual report is sent on request. Remember an annual report of a company is the best source of information about the financial health of a company.

Following are the features of Annual Report:

One must read an Annual Report with emphasis on the following:

• Director’s Report and Chairman’s statement, which are related to the current and future operational performance of a company.
• Auditors’ Report (including Annexure to the Auditors Report)
• Profit and Loss Account.
• Balance Sheet.
• Notes to accounts attached to the Balance Sheet