In accordance with the company law, every registered company is required to publish its balance sheet and profit and loss account within a prescribed period. Public sector banks are required to publish their balance sheets within six months of the year end.
Balance sheets and profits and loss accounts are generally published as part of the annual report booklet and distributed among all concerned.
While the balance sheets and profit and loss accounts are figure oriented and follow generally accepted accounting principles and standards, the annual reports additionally contain narrative statements, comparative analyses, charts and pictures and all such presentation values aimed at putting the balance sheets and profit and loss figures and ratios in their proper perspective.
Annual reports, besides being mandatory, are also relevant as information sharing and image-building documents. A well brought out annual report that is widely distributed, can help create a favourable image or impression about the organization and its progress and performance during the year.
A typical annual report of a large organization would cover the following details:
1. Board of directors
2. Top management team
3. Names of auditors
4. Progress at a glance
5. Performance highlights and working results
6. Directors’ report
7. Accounting policies adopted
8. Balance sheet
9. Profit and loss account
10. Schedules to be annexed to the balance sheet
11. Notes on account, wherever necessary
12. Auditors’ report
13. Commentary on the financial statements
14. Ratios and statements
15. Remuneration paid to the top management
16. Changes in the board
There could be some additions or deletions to this list depending upon the nature of the organizations and the regulatory requirements. The annual reports, it should be noted, cover not only the mandatory details, but also what the organization itself wishes to share.
For example, chairman’s statement or message is often included in some annual reports. In fact some chairman’s statements, like that of Hindustan Lever, are so erudite and insightful in terms of providing economic and industry status reports and even management thoughts and HRD dimensions, that they are quite often looked forward to and widely read, including by those not connected with the industry or that particular institution.
Recognizing this, such statements and highlights are also published in the newspapers for facilitating a wider readership. Nowadays, they are also put on the websites, facilitating greater access.
As a business communicator, one’s concern would be with the entire document or the booklet, covering the contents as well as the overall get- up. Progressive organizations all over the world devote considerable time, effort and resources in bringing out their annual reports.
In many organizations, the task of bringing out the annual report is entrusted to a specialized team of people in the economic research, public relations or communications department, facilitating continuity and dedicated efforts.
Apart from the substance or the content, much attention is also directed at the design, printing, layout, pictures and charts all of which form part of the booklet. Like in any serious effort, here too, much advance plans needs to be done in obtaining performance details, verifying their accuracy, deciding on the layout and other presentation values concerning the report.