How to Understand Annual Report of a Company

 Annual report of a company is most important document which helps the shareholders, investors and creditors to know about company from inside. If you can understand it, you can find the strength and weakness of company and you can take the decision whether you have to buy more its share or it is good time to sell company share and save your own personal capital. 

You can get it from company's official website. 

We are taking the sample of NIIT company annual report and teach you how can you understand it. I downloaded it from its official website.

1. Understand Chairman's Message 

Chairman is the main leader of company's management after shareholders. Shareholders does not operate company personally. I read its chairman's message and I am explaining so, you can understand it and other annual report's chairman's message

• Chairman is telling that due to coronavirus, we are facing big challenge.
• Chairman is telling that we have bought own share and used our 68% cash flow.
• Chairman is telling some terms are important for us

SNC = Skill and career business

TPAAS = Talent pipeline as service 

AGM = Annual general meeting 

2. Understand Corporate Information 

In this, there is CIN no. What is this?

CIN means corporate identification no.

Like aadhar no. like pan no. and same is CIN to identify the company. Company has given

Niit is operating from Delhi and gurugram

3. Understand Company's Business

Every company has the business which it promote in its annual reports. NIIT is telling in annual general meeting that 

Its main focus to Cyber security course and Data science and machine learning course with job assurance

4. Understand Financial History

It has shown financial history trend graph and all are going up. Means company is growing

One term, you have to understand

ROCE

it means return on capital employeed

= net profit / capital or share capital

5. Notice 

In annual report, company shows the notice, read it carefully. In NIIT annual report, it has given also notice which it has resolved. Means it has solved 

1. In this, it appointed some directors and cost accountants and given salary to them.

2. In this notice, what board of directors and AGM approved the dividend. Same is given to all who has name in the member register on specific date. Now, TDS will deducted from same dividend if have pan, 10% deducted, otherwise 20% deducted. 

3. TDS will deducted high rate if you have dividend of Rs. 50000 or more if you did not file your income tax return as income tax law 206B under finance act 2021

SAME will not apply on NRI 

Person get his TDS certificate from incometaxindiaefiling.gov.in 

4. What is IEPF = It means investor education and protection fund 

Now, when you did not understand highlight it which you can ask direct from company email or mobile no.

Like it is saying  43731 equity share transferred  at Rs. 2, will it get shareholder under IEPF fund? page 25 written 

5. Join evoting through

www.evoting.nsdl.com or toll free call 1800102090

6. Company management and administeration rule 2014 amendment in 2015 

7. Annual general meeting details 

8. Salary of director

Basic salary Rs. 351000 per month + other gifts

9. past remuneration = 2020-2021 = Rs. 1 Crore 8 lakh 8 thousand 9 hundred 77

10. Managing director salary = Rs. 5,50,000 pm 

11. All directors' qualification and experience