Annual report
Learn what an annual report includes, why it matters for Malaysian businesses and how to read one effectively.
Published Monday 17 August 2026
Table of contents
Key takeaways
- An annual report is a document that summarises a company's operations, financial performance and future outlook over the preceding 12 months.
- Small businesses can use annual reports to track progress, inform owners and satisfy lender or regulatory requirements.
- Key components include financial statements, a letter from directors, performance highlights and notes explaining the numbers.
- In Malaysia, companies must lodge financial statements with the Companies Commission of Malaysia (SSM), while public listed companies face additional reporting requirements under Bursa Malaysia.
What is an annual report?
An annual report is a detailed document that shows a company's operations and financial performance over the preceding 12 months. Shareholders and potential investors use it to assess how well a business is performing and where it might be heading.
For large, publicly listed companies, the annual report is a formal, heavily regulated publication. A small business's version is much simpler. You might prepare one for your own records, to share with business partners, or to meet requirements from lenders or the company registrar.
Why annual reports matter
Annual reports serve as a transparency tool. They give owners, shareholders and potential investors a clear view of how a business has performed and what direction it's taking.
Beyond transparency, annual reports help you track performance year on year. Comparing this year's results with last year's reveals trends in revenue, expenses and profitability. Lenders also rely on annual reports when deciding whether to extend credit, making them a practical necessity for businesses seeking finance.
What goes in an annual report?
The exact contents depend on whether you're a listed company or a small business. At a minimum, an annual report typically includes these components:
- Financial statements: balance sheet, profit and loss statement, and cash flow statement
- Notes to the financial statements
- A letter from the CEO or directors
- Performance highlights and future outlook
- Management discussion and analysis
- The auditor's report
- Corporate governance information
The financial statements reveal the company's current financial position, whether it made a profit or loss, how much cash is available to pay debts, and how much has been retained in the business.
Who uses an annual report?
Several groups rely on annual reports to make informed decisions:
- Owners and shareholders
- Investors
- Lenders
- Employees
- Customers and suppliers
- Regulators
Public company vs small business annual reports
Listed and public companies must produce detailed statutory annual reports that comply with strict disclosure rules. These reports are often hundreds of pages long and include extensive governance, remuneration and risk disclosures.
A small business's annual report is far simpler. It might be prepared for internal use, to share with a lender, or to meet basic company registration requirements. Many small businesses focus primarily on getting their accounting fundamentals in order rather than producing a formal report.
In Malaysia, under the Companies Act 2016, companies generally must prepare and lodge financial statements with the Companies Commission of Malaysia (SSM). Public listed companies must also issue annual reports under Bursa Malaysia's listing requirements. Private companies typically face fewer disclosure obligations, though they still need to maintain proper accounting records.
How to read an annual report
Reading an annual report can feel overwhelming, but following a logical sequence helps you extract the most useful information.
- Start with the letter to shareholders or directors, which provides an overview of the year's performance and management's outlook.
- Review the financial statements to understand revenue, profit, cash position and financial health.
- Read the notes to the financial statements for context on accounting policies and specific line items.
- Check the auditor's report to see whether the accounts have received a clean opinion or if any concerns were raised.
- Compare figures against previous years to spot trends in growth, profitability or areas of concern.
Simplify your financial reporting with Xero
Preparing accurate financial reports is the foundation of any annual report. Xero helps small businesses run financial reports in real time, so you always know where your business stands. With up-to-date numbers at your fingertips, pulling together an annual summary becomes straightforward. Ready to make financial reporting easier? You can get one month free and see how Xero works for your business.
FAQs on annual reports
Here are answers to common questions about annual reports for Malaysian businesses.
Do small businesses need an annual report?
Small businesses aren't legally required to publish a formal annual report in most cases. However, preparing one can help you review performance, satisfy lenders and keep stakeholders informed.
Are annual reports audited?
Public companies must have their annual reports audited. Private companies in Malaysia may qualify for audit exemptions if they meet certain criteria under the Companies Act 2016.
What is the difference between an annual report and financial statements?
Financial statements are one component of an annual report. The annual report also includes commentary, analysis, governance information and forward-looking statements that provide context beyond the numbers.
Where can you find a company's annual report?
Public listed companies publish annual reports on their websites and through Bursa Malaysia's announcements platform. Private company filings can be accessed through SSM.
What is the main purpose of an annual report?
The main purpose is to provide a comprehensive overview of a company's financial performance and operations, giving stakeholders the information they need to make informed decisions.
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.