Significance of Annual Report

By Aulia R. Sungkar. The writer is director of ALVEO 

An Annual Report is prepared to deliver the main message and transparent information to shareholders and other stakeholders. Therefore, prior to writing the report, a company needs to identify who will peruse the report. Generally, those perusing the report are shareholders (for a publicly listed company), prospective investors, financial analysts, employees, the government (including authorities related to the company/organization), and the media.

In essence, an annual report has the following three functions:

• Effective communication media that also serves as one form of transparency to the shareholders regarding the company’s performance.
•  Material for the Annual General Meeting of Shareholders (GMS).
•  Promotion and marketing media, both domestically and internationally.

Last but not the least, an annual report shall contain:

• Corporate values as well as product and service a company offers.
• Transparency and implementation of Good Corporate Governance (GCG) to all stakeholders.
• Demonstration of how the company provides added values to stakeholders.
• Support to improve the company’s image as one that is dynamic, efficient, and well managed, with an orientation towards the future.