Meaning of Statutory Report and its Main Contents

Meaning of Statutory Report and its Main Contents


Meaning of Statutory Report and its Main Contents

A Statutory Report, also known as a statutory financial statement or an annual report, is a formal document that a company is required by law to prepare and present to its shareholders and regulatory authorities. The contents of a statutory report are typically prescribed by company laws and regulations in the jurisdiction where the company operates. The main purpose of a statutory report is to provide shareholders and other stakeholders with a comprehensive overview of the company's financial and operational performance during a specific period, usually the fiscal year. 

Here are the main contents typically found in a statutory report:

Title and Cover Page:

The report typically begins with a cover page featuring the company's name, logo, and the fiscal year for which the report is prepared.

Table of Contents:

An organized listing of the sections and topics covered in the report, makes it easier for readers to navigate the document.

Chairperson's or Director's Message:

A message from the company's chairperson, CEO, or managing director that provides an overview of the company's performance, strategic direction, and key achievements during the year.

Corporate Information:

General information about the company, including its registered office, business activities, industry sector, and legal form.

Financial Statements:

This section is a critical component of the statutory report and includes:

Balance Sheet (Statement of Financial Position)- A snapshot of the company's financial position at the end of the fiscal year, showing assets, liabilities, and shareholders' equity.

Income Statement (Profit and Loss Statement)- A summary of the company's revenues, expenses, and profit or loss for the fiscal year.

Cash Flow Statement- A statement detailing the company's cash flows from operating, investing, and financing activities.

Statement of Changes in Equity- An overview of changes in shareholders' equity, including details of share capital, reserves, and retained earnings.

Notes to the Financial Statements: Explanatory notes that provide additional information, accounting policies, and disclosures about specific items in the financial statements.

Auditor's Report:

The independent auditor's report, which provides an opinion on whether the financial statements present a true and fair view of the company's financial position and comply with accounting standards and legal requirements.

Corporate Governance Report:

Information about the company's corporate governance practices, including the composition of the board of directors, committees, and adherence to corporate governance guidelines and principles.

Management Discussion and Analysis (MD&A):

A narrative section where management discusses the company's performance, challenges, risks, and future outlook. It often includes a review of the industry, market trends, and strategies.

Directors' Report:

A report prepared by the board of directors typically covers the company's achievements, operations, performance, and significant events during the fiscal year.

Remuneration Report:

Information about the compensation of the company's directors and key executives, including details of salaries, bonuses, stock options, and other forms of compensation.

Shareholder Information:

Details on the company's share capital, dividends, and information for shareholders, such as the date of the annual general meeting (AGM) and procedures for voting.

Sustainability and Social Responsibility:

Information about the company's efforts related to environmental, social, and governance (ESG) practices, sustainability initiatives, and social responsibility programs.

Risk Management and Financial Review:

Information on the company's risk management strategies and a financial review that discusses financial performance, liquidity, and capital management.

Declaration of Compliance:

A statement of compliance with relevant corporate and regulatory requirements, such as accounting standards, listing rules, and corporate governance codes.

Other Information:

Supplementary information or additional reports, such as segment reports, geographical analysis, or information specific to the company's industry.

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