Investor Relations

128INVESTOR RELATIONScompany stand at a trade show or recruitment fair on a university campus.It showcases and reflects corporate culture. In this sense, it is intended foremployees as well, but should also be sent to clients and suppliers and willbe undoubtedly analyzed by competitors. Present exhaustive information about the company. Provide aservice to analysts and investors by giving them exhaustive informationabout the company, presented in a timely fashion and in a format that suitsthem. Production processes and the content and form of the report must beconstantly improved if these objectives are to be met.3.6.5.2 Structure of the annual reportAs a general rule, the annual report has the following outlines: General information. Readers should find a description of thecompany and its products and services. These are usually presented by businessline, branch, division or sector, or in some cases the “lead company”(a brand, for instance) is presented separately from its subsidiaries, some ofwhich may be listed themselves. Readers should also get an objective understandingof the company’s competitive positioning and market shares withreference made to industry rankings established by independent third parties. The chairman’s statement. Also referred to as the CEO letter,it is an invaluable vehicle for setting forth the core parts of the company’sstrategy. It should discuss the key events that occurred during the year, placingthem within their broader economic context. Mention should also bemade of any acquisitions and divestments. The statement should address thecompany’s outlook and objectives. Financial information. In general, the law requires that companiesprovide the following, as a minimum: consolidated income statements,cash flow statements, balance sheets, resolutions approving the financialstatements and allocation of earnings (dividend payments and additions tothe reserves), sector information for each business line, and risk factors. Thedata required to analyze the financial statements are provided in notes andappendices, which are also audited by the company’s statutory auditors asrequired by law. The statutory and consolidated financial statements can bepresented in summary form. The annual report should also mention the accounting standardsapplied (International Financial Reporting Standards—IFRS; US GenerallyAccepted Accounting Principles—US GAAP, or other). Ideally, the companyshould also provide a definition of the ratios it uses the most, especiallythose featured prominently in its financial communications, as differentfirms can have different ways of calculating, for instance, net debt, cashflow and returns on investment.