Blog: Why annual reporting is so much more than a financial update

Reading an annual report was once considered an excellent cure for insomnia, but companies now view them as an effective marketing tool to communicate directly with shareholders and stakeholders.

There are strict rules for ASX-listed companies regarding the content and timing of annual reports including financial statements, and a requirement to report half-yearly or even quarterly to the stock exchange.

However, even privately-owned SMEs can benefit from producing an annual update to clients, suppliers, partners and other stakeholders. And they don’t need to include a balance sheet. Often it’s a concise and simple stocktake on your successes, challenges and future opportunities.

Most annual reports are now published online and you’re less likely to receive a printed copy in the mail. Online reporting provides greater opportunities to incorporate strong imagery and design such as the use of interactive elements and infographics, and you can include links to other parts of your website for those seeking more information. There are even opportunities to incorporate video elements for stronger visuals.

A couple of our clients produce annual reports that offer excellent updates on their respective businesses, but the reporting approaches of each are noticeably different.

Adelaide Airport ascribes to the ‘integrated reporting’ approach. According to the IFRS Foundation, which maintains the globally accepted ‘Integrated Reporting Framework’ – an integrated report offers “… a concise communication about an organisation’s strategy, governance, performance and prospects. Presenting each topic in the context of the organisation’s external environment, the report summarises how the organisation creates value in the short, medium and long term.”

What’s notable about this approach compared with a traditional annual report is a focus on looking forward and examining future prospects, not just reviewing the past financial year. In Adelaide Airport’s case in 2023, it announced $1 billion in capital investment over the next five years, of which $500 million will be spent on major aviation infrastructure projects. Integrated reports also place a strong emphasis on governance and sustainability.

Guide Dogs SA/NT’s Annual Report is considerably shorter but is equally effective at communicating with its key stakeholders, including clients and donors through highlighting achievements and heart-warming case studies on clients who have benefited from the organisation’s services.

It’s important that annual report content is relatable and easily digestible for the stakeholders you’re seeking to reach, whether that be investors, partners, clients or customers.

Even if you’re not inclined to produce an annual report and regularly communicate with customers and other stakeholders, a yearly wrap-up of achievements, highlights, challenges and looking to the future is more likely to be opened and carries more weight than a regular EDM.

Hughes can assist with content writing, editing and design of annual reports. More information on our services can be found here.

Mark Williams

Hughes | Consultant