The saying “ we can’t judge a book by its cover” also applies to the analyzing of the annual reports. As investors, we often tend to look at how glossy and impressive or unimpressive the annual report looks. We do not have enough patience to read every page and every word in the report. We tend to look at the photo of the smartly dressed directors/management team and other available photo available. Next, perhaps we turn to the Income Statement to see how much profits the company has made. Once this “process” is done, we would then conveniently misplace the annual reports.

Interestingly, a plain-looking cover might reflect the conservatism of the management team who believes that its fund can be put to better use elsewhere in the business proper. Of course, an impressive annual report might indicate a dynamic and imaginative company.

Whichever is the choice, the ultimate barometer is the content of the annual report.

A typical annual report is so thick and unwelcoming as it contains so much of the following information and documents:

• The “company” story
• Group Corporate Information
• Group Structure
• Board of Directors
• Directors’ Profile

• The Chairman’s Statement or Message from the Chairman
• Director’s report
• Statement by Directors and Statutory Declaration
• Review of Operation

• Five-year Financial Highlights
• Share Performance

• Statement of Corporate Governance
• Additional Compliance Information
• Audit Committee Report
• Statement on Internal Control
• Auditors’ Report or Report Of The Auditors;

Financial Statements

• Balance Sheets
• Income Statements
• Statements of Changes in Equity
• Cash Flow Statements
• Notes to the Financial Statements

• Financial Calender or Corporate Calender
• Analysis/Statistics of Ordinary Shareholdings and Warrants
• List of Property
  

• Notice of Annual General Meeting
• Statement Accompanying Notice Of Annual General Meeting
• Form Of Proxy
  

The next forthcoming articles shall focus on the basic understanding what’s in the above-mentioned individual report/document and things that we should look out for.

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Related Entries

• Other Sources Of Information
• Reading The Directors’ Profile
• Samples of Corporate Finance Roles And Responsibilities
• All Topics Under The Heading Of Financial Accounting Ratio Analysis Or The Interpretation Of Financial Statements In The Annual Report
• IPO Price – How Fair Is It?