Tips for Preparing Compelling Annual Report

By Aulia R. Sungkar

The writer is director of ALVEO

Annual Report is development and performance report which a company makes every year. Annual Report serves several functions, including as the source of information regarding the growth a company or an organization, and performances it has delivered. Annual Report is also a medium for promotion and marketing, increasing the appeal of the company in the eyes of the shareholders and the stakeholders.

It is important for a company to know how to create an Annual Report that refers to the criteria of the Financial Services Authority (OJK). So, how should a company prepare its Annual Report based on these criteria?

General

These criteria deal with the languages in Annual Report. It is advisable that the report is written in two languages (Indonesian and English) , either in one book or in separate books.

The use of fonts and the readable font size are other basic elements to be considered, and the Annual Report must be printed on high quality materials.

Highlights of Important Financial Data

The Highlights of Important Financial Data refer to the information disclosure regarding the financial position, company results, and financial ratios based on the standards of the industry. This information is presented in the form of comparison with those three to five years prior using an interesting design aesthetic.

Board of Commissioners and Board of Directors Reports

The reports of the Board of Commissioners and the Board of Directors are written statement from the Board of Commissioners and the Board of Directors regarding the company’s performance. Based on OJK criteria, a company is required to include the company’s opinion and business prospects, and any changes in the composition of the organization.

Company Profile

The Company Profile chapter presents information on the history and development of the company. Other pieces of information in this chapter include the name of the company, its field of business, its history in a condensed form and milestones, profiles of members of the Board of Commissioners and the Board of Directors and their supporting committees. The chapter only presents information about the company’s shareholders or group of companies, organizational structure, awards and certifications the company has won and/or received. To complete the report, the company should also include General Information and Company Profile in one chapter to help with the judging process.

Management Discussion and Analysis on the Company Performance

The Management Discussion and Analysis chapter is one of the crucial parts. The chapter consists of several sub-chapters, including Macroeconomic Analysis, Business Review and Review per Segment of Operations.

The highlight of the chapter is Financial Review which presents the information on financial performance, realization of the financial performance, the realization of the financial performance over targets set at the beginning of the year, the capital aspect, and business prospects.

Corporate Governance

The Corporate Governance chapter is the most important one, as it elaborates on the implementation of Good Corporate Governance (GCG) in a company. This chapter describes corporate organs, namely the General Meeting of Shareholders (GMS), the Board of Commissioners, the Board of Directors, as well as their roles in formulating various corporate strategies and policies. In addition, the chapter also elaborates on Board of Commissioners and Board of Directors’ supporting organs such as secretariat of the Board of Commissioners, the Audit Committee, the Nomination and Remuneration Committee, and other committees, as well as the Corporate Secretary, the Internal Audit and Public Accountants.

Financial Information

The Financial Information according to Annual Report criteria is one that has been audited by a public accounting firm.

To complete the report, the company should pay attention to how the design, layout and content are brought together. This is intended so that the Annual Report serves its function as the communication medium which represents the company, and supported with a visual design which describes the company and reflects its corporate identity.

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