May is annual report season

What is annual report season?

It’s annual report season. May is the time when the majority of listed companies publish their annual reports. This is because the majority of companies use the calendar year as their financial year. Although you might initially think that companies would publish their annual reports within days of their year end (31 December for those using the calendar year), in fact this simply isn’t possible. Firstly, all the data has to be gathered internally, processed, checked and adjusted and corrected. Once all this is done, the information is ready for publication in its unaudited form, but then still has to be audited before it can be published in the annual report. In the UK, listed companies publish the unaudited information in a document which they call the preliminary results or the final results. For companies with a 31 December year end, these tend to be published in February, March or April.

What are preliminary results and final results?

The preliminary results or final results (those names both mean the same thing, despite the fact they sound like they ought to be the opposite of each other) appear in a long press release which typically includes some text about how the company has performed, some text about its outlook and its balance sheet (also known as its statement of financial position), its income statement (also known as its profit and loss account) and its cash flow statement (also known as its statement of cash flows). This is a lot less detail than goes into the annual report, which generally includes much more information about the company’s position and outlook and also contains notes to the financial statements, which are notes clarifying or expanding on information provided in the balance sheet, income statement and cash flow statement. Annual reports are also generally glossy documents, including photos and graphics, and most importantly of all, the audited financial statements. Usually this makes no difference to the actual figures, but every now and again, having the financial statements audited means that very different figures appear in the annual report from the preliminary results.

Getting your annual report translated – the time factor

All this takes time, which is why annual reports appear so long after the end of the financial year. But it does mean that there is often a gap between most of the content of the annual report being prepared and the report being ready to publish. You can use this gap to your advantage so that you can publish a translation of your annual report at the same time you publish your annual report – and all your investors can read the information at once. One of the ways it is possible to manage this is to send the annual report to the translators before it has been finalised – for instance after the text has been written, but before the auditors have finished auditing the figures. You can either replace the figures with placeholders (e.g. €X million) or leave the unaudited figures in for you to change any that later need changing. You don’t need to worry about removing the figures to stop the translators from seeing them, as any good translation company will happily sign a non-disclosure agreement and any insider trading documents necessary in your country. Also, annual reports often say very similar things from one year to the next  – especially in the notes to the accounts or when explaining business activities were also carried out in the previous year. After you’ve had your annual report translated once, this can save time (and money) the next time round, as translators can use the previous translation to inform and speed up their new translation and can give you a discount accordingly. City Translations uses translation software which makes this process even quicker, more efficient and more reliable – and enables it to work out the best discount it can offer you.

The same translation software means City Translations can be consistent not just within this year’s annual report, but with your previous annual reports – of course this means that it is important that all your translations of your annual reports are translated correctly by experts in their field. There are so many places it is possible to make mistakes in translating an annual report if you’re not familiar with financial reporting and what it means and it’s all too easy to end up with a translation that’s so wrong as to be incomprehensible. City Translations is run by a former financial analyst who uses her professional knowledge to makes sure that all the translators involved in a project know their depreciation from the amortisation and know the IFRS terminology needed for reports prepared in accordance with International Financial Reporting Standards. To find out more, just send us an email at info@citytranslations.co.uk or give us a call on +44 (0)20 8617 0199.

 

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