Finding your way around the notes to accounts: a beginner's map

A note number tells you nothing. Note 12 is borrowings in one company's report and inventories in the next. So don't learn the numbers. Learn the words.

That's the whole trick of this guide. Open the annual report PDF, press Ctrl+F (or Cmd+F), and type the word in the right-hand column below. You'll land on the note.

The map

Two habits before you start. First, most reports carry two sets of notes, one for the standalone accounts and one for the consolidated ones. Your search will hit both, so check the page header to see which set you're in. Second, search for a short phrase, not a single word. "Contingent" finds the note. "Liabilities" finds 200 pages.

Below, the same ten in groups, with what Sameer Chai's FY26 notes would show.

The rulebook

Accounting policies. Usually the first or second note, and the one everyone skips. It's where the company says how it counted: when it books a sale, how it spreads the cost of its kit, how it values stock. Since an amendment notified in March 2023, Ind AS 1 asks for "material accounting policy information", so newer reports use that phrase rather than "significant accounting policies". Search both.

Read it for one thing: has anything changed this year? A changed policy can move profit without anything changing in the business. The audit committee has to review such changes, and the note has to explain them.

This is where Sameer Chai's depreciation policy lives: kiosks, kettles and vans spread over their useful lives, the ordering app written off over five years.

What it owns

Property, plant and equipment. A table of every kind of asset: what it cost, what was added, what was sold, how much has been written off as wear and tear, and what's left. For Sameer Chai, with the app included:

In a real report the app sits in its own small note, "other intangible assets". Search "useful life" to find how many years each kind of asset is spread over. A company that stretches those years books less depreciation and more profit.

Where the money came from

Revenue from operations. The top line, broken down. Most companies split it here by product, service or region. Sameer Chai's ₹120 crore is ₹100 crore from stalls and ₹20 crore from office and café supply.

Other income. Interest, dividends received and other income not from the main business, which Schedule III makes companies show separately. Sameer Chai has none, which is itself a question for an analyst: ₹55 crore of cash and no interest on it?

Segments. The split of revenue and operating profit by business line. Stalls: ₹12 crore of EBIT on ₹100 crore. Supply: ₹2 crore on ₹20 crore. In the annual report, Ind AS 108 requires this note in the consolidated set, so search there first.

Who paid for it

Borrowings. Schedule III asks this note to say which loans are secured and by what, the terms of repayment, any loans guaranteed by directors, and any default on the balance sheet date, with how long and how much. Sameer Chai's: one bank loan of ₹20 crore at 10%, after ₹3 crore was repaid during the year. The word to watch for is "default". It should appear only in a sentence saying there wasn't one.

Other equity. Where the reserves are broken down. Sameer Chai's ₹60 crore is two things: ₹45 crore of securities premium from the IPO and ₹15 crore of kept profits. They look alike in the balance sheet. They aren't: the premium can't be paid out as dividends.

What could go wrong

Contingent liabilities. Claims the company is fighting and hasn't booked, because it doesn't expect to lose. Also try "not acknowledged as debts", a phrase many reports use. Sameer Chai's: a ₹1.2 crore GST notice, disputed and under appeal. Compare it with profit: 1.2 ÷ 9 ≈ 13% of a year's earnings. Not small, not frightening. Then check whether the total grows year after year.

Who it deals with

Related parties. Ind AS 24 makes the company name the relationship, the deals and what's still owed for every related party it traded with. The note usually opens with a list of names (subsidiaries, KMP, relatives' businesses) and then a table of amounts. Sameer Chai's would show the ₹6 crore of milk from Sameer's sister's dairy, the pay of its KMP, and Sameer Chai Foods as a subsidiary, with no trade between them this year.

Per share

Earnings per share. A short note showing the sum: profit for shareholders ÷ the weighted average number of shares. For FY26: ₹9 crore ÷ 5 crore = ₹1.80, because the share count didn't change. The note earns its keep in years when it did. In the IPO year, FY24, the 1.5 crore new shares arrived in October, so they count for only part of the year. Search "weighted average" and the note shows the working.

After the bell

Events after the reporting period. The year ends on 31 March, but the board signs off weeks later. Anything big that happens in between is reported here. Two things always show up:

• The date the accounts were approved, and by whom. For Sameer Chai: the board, on 15 May 2026.
• The proposed dividend. The board recommended ₹0.50 a share (₹2.5 crore) on 15 May. On 31 March nobody owed it, so Ind AS 10 keeps it out of the balance sheet. Ind AS 1 says to disclose it in the notes instead, with the amount per share.

A large event here (a fire, a lost licence, a big acquisition agreed in April) can matter more than anything in the numbers above it, because the numbers are from before it happened.