Annual report
Learn what an annual report includes, who needs to prepare one and Philippines SEC filing requirements.
Published Monday 17 August 2026
Table of contents
Key takeaways
- An annual report is a document that summarises a company's operations, achievements and financial performance over the previous 12 months.
- Annual reports typically include a letter to shareholders, management discussion and analysis, the auditor's report, corporate governance information and financial statements.
- Publicly listed companies must prepare annual reports for regulators and shareholders, while companies registered with the Securities and Exchange Commission (SEC) in the Philippines must submit annual financial statements and a General Information Sheet each year.
- Financial statements are one component of the wider annual report, covering the balance sheet, profit and loss statement and cash flow statement.
What is an annual report?
An annual report is a document that sets out a company's operations and financial performance over the previous 12 months. It's of interest to shareholders and potential investors who want to understand how a business is performing.
Publicly traded companies must produce annual reports for regulators and shareholders. Some private companies also prepare them to provide stakeholders with a clear picture of business health and direction.
What does an annual report include?
An annual report brings together narrative sections and financial data to give readers a complete view of the company. The exact contents vary depending on company size and whether the business is publicly listed.
Common components include:
- highlights of the year's activities and performance
- a letter to shareholders from the CEO or president
- management discussion and analysis (MD&A)
- the auditor's report
- corporate governance information
- the financial statements
The financial statements section provides detailed numbers on the company's finances. It includes the balance sheet, profit and loss statement, and cash flow statement. Together, these tell you:
- the current financial state of the business
- profit or loss in the previous fiscal year
- cash available to pay debts as they fall due
- earnings retained to grow the business
- the operating ratio (ratio of operating expenses to revenue)
A small business annual report is usually much simpler than a listed company's, often focusing on core financial statements without extensive narrative sections.
Who needs to prepare an annual report?
Publicly listed companies are required by law to prepare and publish annual reports. These documents keep shareholders informed and satisfy regulatory requirements.
Small and private businesses aren't always required to produce a formal annual report. However, many choose to create one to share with investors, lenders or internal stakeholders.
In the Philippines, companies registered with the Securities and Exchange Commission (SEC) must submit Annual Financial Statements (AFS), which generally need to be audited, and a General Information Sheet (GIS) each year. Publicly listed companies file a fuller annual report that includes additional disclosures required by the SEC and the Philippine Stock Exchange. Keeping your accounting records accurate helps you remain compliant and ready for any audits.
Annual report vs financial statements
Financial statements and annual reports are related but not the same. Financial statements are one component of the wider annual report.
An annual report includes narrative sections such as the CEO letter and management discussion and analysis, alongside corporate governance details and the auditor's report. The financial statements provide the numbers, while the rest of the report adds context and commentary.
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FAQs on annual reports
Here are answers to common questions about annual reports.
What is the main purpose of an annual report?
The main purpose is to inform shareholders, investors and regulators about a company's financial health and operational performance over the past year. It builds trust through transparency.
Do small businesses need to prepare an annual report?
Most small businesses aren't legally required to prepare a formal annual report. However, preparing one can help when seeking funding or communicating with stakeholders.
Are annual reports audited?
Publicly listed companies are required to include an auditor's report in their annual report. Private companies may also choose to have their financial statements audited for credibility.
What must companies in the Philippines file with the SEC each year?
Companies registered with the SEC must submit Annual Financial Statements (which generally need to be audited) and a General Information Sheet annually. Publicly listed companies have additional disclosure requirements.
When is an annual report usually prepared?
An annual report is prepared after the fiscal year ends. Companies typically finalise and publish their reports within a few months of the year-end close.
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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.