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Get Started in Shares by Glen Arnold

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Chairman’s statement

The law does not require a chairman’s statement, but most companies include one. It can be useful because it helps to put the accounting numbers into context. Events might have occurred which have a significant effect on the profit and loss and balance sheet, and it is often the chairman’s statement that flags these. For example, a major acquisition may have taken place, together with a rights issue and a rise in borrowing impacting on the accounts. Without the comment from the chairman, it may not be possible to understand why the accounts show dramatic change from one year to the next.

The statement is also a personal comment from the chairman that will attempt to enlighten the shareholders on the general trading environment ...

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