Annual Management Report

With respect to the preparation of Annual Financial Statements for the financial year, article 247 from the Commerce Act requires the management of the entity, represented by a manager or an executive director, to prepare Annual Management Report. It comprises explanation of the business operations and further clarifications on the financial results for the year.

According to the explicit requirements of article 247, it is mandatory to include:

  • remuneration, received in total during the year by members of the boards;
  • acquired, held or transferred by members of the entity’s boards shares and bonds during the year;
  • rights of members of the boards to acquire shares and bonds of the entity;
  • Participation of members of the boards in commercial entities as shareholders with unlimited liability, holding more than 25% of other entity’s capital, as well as their participation in the management of other entities or cooperation as procurators, directors or board members;
  • agreements under article 240b from the Commerce Act, stipulated during the year.

The report presents the planned commercial policy during the following year, including the expected investments and development of personnel, the expected income from investments and development of the entity, as well as any upcoming transactions with significant impact on the business operations of the entity.

Taking into consideration the legal requirements, we suggest the following structure for the report:

Annual Management Report

  1. Development and Results for the Year
    • Information on progress of business operations
    • Relations with clients, suppliers and competitors
    • Impact from market, economic and other trends
  2. Financial Position and Results
    • Property, plant and equipment
    • Capital structure
    • Analysis of results and key indicators
  3. Core Challenges and Risks
  4. Strategy
    • Future development of the entity
    • Commercial objectives
    • Activities in research and development
  5. Events, Past the Date of the Annual Financial Statement
  6. Information on the Capital of the Entity, required by article 187/247 from the Commerce Act
  7. Management
    • Remuneration of the management
    • Good corporate management
    • Responsibilities of the management