accounting annual report

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Presented By: Mahesh Shailaja A G Shanish Nikhil Bimami Zeeshan Aquib

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Page 1: Accounting annual report

Presented By:Mahesh Shailaja A GShanishNikhilBimamiZeeshanAquib

Page 2: Accounting annual report

What is annual report?

An annual report is a comprehensive report on a company’s activities throughout the preceding year.

Annual reports are intended to give share holders and other interested people information about company’s activities and financial performance.

Page 3: Accounting annual report

Importance of annual report

Communicating with investors : An annual report is an important element of a financial communication strategy to attract and retain investors.

Building customers’ confidence : Annual reports keep customers informed on the status of a company and help build confidence in it as a long-term suppliers.

Attracting and retaining employees : Employees want to know that are working for a progressive company that can offer them secure future and strong job opportunities.

Informing and influencing the media : Journalists monitor companies’ activities to report on financial and business performance. They pay particular attention to company’s results and its prospects.

Page 4: Accounting annual report

CONTENTS OF ANNUAL REPORTS

Directors and Management Annual general meeting Report of board of directors to members Management report Auditors report CAG report Financial statement Shareholder’s fund and policy holder’s fund details Significant accounting policies, notes and disclosure Segment reporting schedule Balance sheet abstract

Page 5: Accounting annual report

Directors and management:

• The director’s role is to represent and serve the interests of shareholders by overseeing and appraising the Company’s strategy, policies and performance. • The Management Board are responsible for management decisions

and operations across the Company's brands.

Annual general meeting:

• Gathering of the directors and stockholders of every incorporated firm, required by law to be held each calendar year.

Page 6: Accounting annual report

Report of board of directors to members:

• Board of directors issue a report quarterly, half yearly and annually giving details about the companies, policies, programs, and formulating strategies about the company to members.

Management report:

• Management report is a statement made by management and it is used to compare the actual results achieved with the budgeted forecast levels. This report helps the management to see where they went wrong and they apply other measures to improve the business.

Page 7: Accounting annual report

Auditors report:

• An auditor's report provides an opinion of the validity and reliability of a company or organization’s financial statements.• The goal of an auditor's report is ultimately to document

reasonable assurance that a company’s financial statements are free from material error.

CAG report:

• CAG report shows all receipts and expenditure of the government of India and the state government.

Page 8: Accounting annual report

Financial statement:

• It is prepared to know profit or loss and also the financial position of the business.

Shareholder’s fund and policy holder’s fund:

• Shareholder's funds are usually the shares in the company, any share issue premium, retained profits and possibly other reserved that have been accumulated.

• Policyholders funds represent customer deposits plus interest credited at contract rates.

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Significant accounting policies, notes and disclosure:

• The disclosure of some of the accounting policies followed in the preparation and presentation of the financial statements is required by law in some cases.

Segment reporting schedule:

• In an annual report, the purpose of business segment reporting is to provide an accurate picture of a public company's performance to its shareholders. For upper management, business segment reporting is used to evaluate each segment's income, expenses, assets, liabilities and so on in order to assess profitability and riskiness.

Page 10: Accounting annual report

Balance sheet abstract:

• An abstract balance sheet is a kind of financial statement that shows what the business is worth at one point in time. A standard company’s balance sheet has three parts, assets, liabilities and ownership equity or capital.

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particulars Current year’s(rs)

Privious years’s(rs)

I. EQUITY AND LIABILITIES Shareholders’ funds

(a)  Share capital (b)  Reserves and surplus

Minority interest Non-current liabilities (a)  Long-term borrowings (b)  Deferred tax liabilities (net) (c)  Other long-term liabilities (d)  Long-term provisions

Current liabilities (a)  Short-term borrowings (b)  Trade payables (c)  Other current liabilities (d)  Short-term provisions

TOTAL

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Balance sheet Proforma

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Balance sheet Proforma(contd.)

II. ASSETS Non-current assets

(a)  Fixed assets (b)  Non-current investments (c)  Deferred tax assets (d)  Long-term loans and advances (e)  Other non-current assets (f)  Goodwill

Current assets (a)  Current investments (b)  Inventories (c)  Unbilled revenue (d)  Trade receivables (e)  Cash and bank balances (f)  Short-term loans and advances (g)  Other current assets

TOTAL

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Page 13: Accounting annual report

Cash Flow Statement

• Cash flows are inflows and outflows of cash and cash equivalents.

• Inflows refers to receipts.• outflow refers to payments.

Page 14: Accounting annual report

cash flow statement proformaPARTICULARS CY (RS) PY(RS)

I)CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Depreciation and amortisation expense Bad Debts written off Provision for doubtful receivables Provision for doubtful advances Advances written-off Provision for diminution in value of long-term investments Interest expense Profit on sale of fixed assets Unrealised exchange loss /gain Exchange difference on translation of foreign currency cash and cash equivalents Dividend income Interest income Profit on redemption of mutual funds and sale of other current investmentsOperating profit before working capital changes

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Cash flow statement(contd.)

Inventories Unbilled revenue Trade receivables Loans and advances and other assets Trade payables, other liabilities and provisionsCash generated from operations Taxes paidNet cash provided by operating activities

II  CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Proceeds from sale of fixed assets Purchase of trade investments Purchase of mutual funds and other investments Proceeds from sale Proceeds from redemption of mutual funds and sale of other investments Loans repaid by subsidiaries

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Page 16: Accounting annual report

Cash flow statement(contd.)

Inter-corporate deposits placed Inter-corporate deposits matured Earmarked deposits placed with banks Earmarked deposits with banks matured Fixed deposit placed with banks having original maturity over three months Fixed deposit with banks matured having original maturity over three months Dividend received from subsidiaries Dividend received from other investments Interest receivedNet cash used in investing activities

III  CASH FLOWS FROM FINANCING ACTIVITIES Redemption of preference shares Repayment of long-term borrowings Short-term borrowings

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Page 17: Accounting annual report

Cash flow statement(contd.)

Dividend paid Interest paid Net cash used in financing activities Cash and cash equivalents at the beginning of the year Transferred consequent to amalgamation of companies Exchange difference on translation of foreign currency cash and cash equivalentsCash and cash equivalents at the end of the year Earmarked balances with banks Short-term bank depositsCash and bank balances at the end of the year

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Page 18: Accounting annual report

Profit and loss account• The profit and loss statement is a summary of the financial

performance of a business over time (monthly, quarterly or annually is most common). It reflects the past performance of the business and is the report most often used by small business owners to track how their business is performing.

• As the name indicates the profit and loss statement (also known as a statement of financial performance or an income statement) measures the profit or loss of a business over a specified period. A profit and loss statement summarises the income for a period and subtracts the expenses incurred for the same period to calculate the profit or loss for the business.

Page 19: Accounting annual report

Profit and loss account proformaPARTICULARS Current

year (rs)Previousyear (rs)

Revenue (+)Net incomeTOTAL REVENUE Expenses:

(a)  Employee benefit expense (b)  Operation and other expenses (c)  Finance costs (d)  Depreciation and amortisation expense

(-)TOTAL EXPENSES PROFIT BEFORE TAX(-)Tax

PROFIT FOR THE YEAR

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Page 20: Accounting annual report