What is included in an annual report?
An annual report is a document that sets out an organisation’s key milestones and financial reporting for the year. For many organisations the annual report is a requirement under legislation. So, what must be included in an annual report? Often, regulations require organisations to include a simple directors’ report, financial details and an auditor’s statement.
In addition, many companies and not-for-profits use their annual report as an annual overview to highlight their achievements, and for use in marketing or fundraising. These highlights could reports on outcomes that are not just financial, including environmental, sustainability and governance (ESG) reports.
At its simplest, an annual report includes:
- a directors’ report
- financial details
- an auditor’s statement.
How to structure an annual report?
An annual report generally features some basic sections to provide an overview of the organisation. These include:
- Cover and credits
- Acknowledgement of Country
- Contents
- Annual highlights
- CEO report – providing a year in review with specific outcomes and achievements
- Chair or directors’ report – setting the achievements of the organisation into a broader context in line with the strategic plan
- Vision, strategy and mission statement
- Key achievements
- Project reports, often divided into sections for different segments of the business. Sometimes case studies or breakout sections
- Financial statements
- Auditor’s statement.
What is an annual report?
The compulsory reporting must be included for the financial year of the annual report. Most organisations also choose to include additional information to inform their customers, donors and other stakeholders. This often goes to their strategies and key outcomes.
Most organisations also provide insights into their future actions, and plans for growth. Throughout 2021 and 2022, many leaders have described how their business has overcome the challenges of recent years: pandemic, supply chain disruptions, and skills shortages.
Explaining this can demonstrate the organisational capacity and resilience. Likewise, engagement and partnerships with other organisations are important to note in an annual report. A corporate annual report would also include the remuneration report for key executives.
What is a directors’ report?
The Chief Executive Officer’s report within the annual report can provide readers with useful information about the financial and performance outcomes of the business. It provides analysis and operational highlights of the year, such as recruitments, launches, developments or products. This report is written in formal language with a corporate tone.
Now, to the drafting of the report
While the annual report is an important corporate document, it should also have the personality of the organisation. Each report should be framed around a particular key message. Often this is linked to the corporate mission or strategy. For example, for a peak body, it could be a focus on consumers or member advocacy. For a business, it could be on operational resilience or creating new opportunities. The key message is the consistent theme, around which the rest of the content is based.
Tips for writing an annual report
- Make time and determine a structure
An annual report can be a sizeable document. Often it involves collating information from across the organisation, and extracting highlights from different departments. This all takes time.
- Ensure consistency
Ensuring consistency across the copy is important for the reader. This involves a considered approach to bring all the elements and make them work together.
- Use headings, graphics and breakout case studies if possible
Headings or graphics can also help to break up the text and enhance readability. Equally, to bring annual reports to life, use real examples of the organisation’s work in action. This can help to lift the content and make the strategy more relatable.
