Annual reports help shareholders understand how their investment is doing. They are also a good starting point for people who are considering buying shares in a company for the first time.

There are three versions of International Power’s annual report: the Results Brief, the Summary Annual Report, and the Annual Report. All are available in printed form and online (via the internet).

Many individual shareholders choose to receive the Summary Annual Report, which is a shortened version of the Annual Report and provides summary versions of the most important sections of the full report. Most professional investors, however, prefer the full report, which provides more detailed information. Any shareholder who has not elected to receive either the full Annual Report or the Summary Annual Report is sent the Results Brief.

If you would like to receive a printed copy please contact Equiniti on 0871 384 2082, quoting International Power and including your shareholder reference number (found on your share certificate). If you are calling from outside the UK, please dial +44 121 415 7461.

The annual reports of large companies like International Power provide information required by company law, stock exchange regulations and official accounting standards. Many companies include extra information for shareholders and other stakeholders.

Annual reports traditionally begin with a review of the year from the company’s Chairman and Chief Executive Officer, which provide a short summary of events during the year. The report also contains a longer and more detailed review of the performance of the business, the Business review, and information on other issues of importance, such as new acquisitions, the environment and corporate responsibility. In addition there are statements that describe how the Directors maintain control over the company (corporate governance) and how they are paid (the Directors’ remuneration report).

The financial accounts follow the written statements. The most important parts of the accounts are the income statement, the balance sheet, the cash flow statement and the auditor’s report.

The income statement shows how much profit the company has made during the year compared to the previous year. It shows the company’s revenue, and the profit that remains after expenses have been allowed for.

The balance sheet sums up the company’s financial position on the final day of its financial year and shows a comparison to the previous year. It shows what the company owns (its assets), what it owes (its liabilities) and its ‘shareholders equity’, the sum that would be left if the company sold all its assets and paid all its liabilities.

The cash flow statement shows where the cash flowing through the business has come from and how it has been used compared to the previous year. It is an important measure of the company’s financial strength.

By law, companies must have their accounts examined by independent auditors, according to standards laid down by their regulators. The auditors’ report to shareholders is an important safeguard: it contains their opinion on the company’s financial position and the procedures used to prepare the accounts.