Financial Highlights contains the bird’s eye view on how the financials of the company looks for the year gone by.
This section of the annual report generally does a multi-year comparison of the operating and business metrics.
Management Statement
- The content here is usually broad based and gives a sense on how the business is positioned.
- Observe if they are transparent on discussing details on what went right and what went wrong for the business.
Management Discussion & Analysis (MDA)
- One of the most important sections in the whole of AR.
- Discussions on the overall economic activity of the country and the business sentiment across the corporate world.
- The companies usually talk about the trends in the industry and what they expect for the year ahead.
- Compare it with its peers to understand if the company has any advantage over its peers.
- After discussing these in ‘Management Discussion & Analysis’ the annual report includes a series of other reports such as – Human Resources report, R&D report, Technology report etc.
- These reports should be carefully read to check if any management issues exist in the company.
Financial Statements
- Standalone Financial statements represent the standalone numbers/financials of the company itself and do not include the financials of its subsidiaries.
- Consolidated numbers includes the companies (i.e.standalone financials) and its subsidiaries financial statements.
- Financial Statements have schedules (reference notes/appendix) with line items for detailed break-up of the financials.