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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