Annual reports and AIFs
What is an annual report or annual information form (AIF)?
An annual report
is a summary of a company’s status of what it did over the past year and what it plans to do in the coming year. It reports on the operations and financial results. The company is not required to send an annual report to you as a shareholder, if you have decided not to receive it. Some annual reports may contain information that focuses more on the positive developments of the company, downplaying the risks that could negatively affect the company in the future.
An AIF is a disclosure document providing material information about a company and its business at a specific point in time. The AIF includes the operations, risks, and other external factors that specifically affect the company. Securities legislation requires larger companies to file an AIF. Many smaller companies choose to do so as well. The company must follow a required format in preparing its AIF. A company is not required to send you its AIF, but you can find it on SEDAR.
Most public companies post their annual reports and AIFs to their websites.
What should you focus on?
Before you begin, review the whole document, making your review more manageable by breaking it down into smaller pieces.
Annual reports
Letter from the senior executive(s). This is a high-level summary of the report, highlighting recent and planned activities, and commenting on the company’s current situation and prospects in view of market and economic conditions.
An annual report is a report to shareholders, with content that varies depending on the type of company and its activities. Some include just an executive letter and annual financial statements. Others include much of the information described below for AIFs. It’s a good idea to compare the information in the executive letter to that in the AIF, especially the risk factors, as the executive letter may include information with the intent to present the best impression possible on shareholders.
Financial statements. Annual financial statements tell the story of a company’s financial health and they’re not as mysterious as you may think. They are audited by certified professionals and follow a generally accepted format. See the Financial statement and MD&A page for more information on understanding annual financial statements and interim financial reports.
AIF
Management team. A company’s success lies with its management. Make sure that management have financial expertise and experience in the industry in which the company operates. Look beyond the annual report to see what information you can find on the internet about individual directors and officers and their past successes or failures, both of which may be relevant to the company’s current success.
Description of the business. Here you will find a detailed description of the business - its operations and prospects, and the risk factors that would most likely influence an investor's decision to purchase shares.
Risk factors. Every investment has risks. Your job is to decide what risks you are comfortable with and whether the risks that existed when you first invested are the same or different from those discussed in the current annual report.
Financial statements. Find out more about how to read annual financial statements and interim financial reports.
What questions should you ask yourself?
Questions on Annual reports and AIFs 
are available as a separate form for downloading and printing.
If you do not feel you have sufficient information or you do not understand the information in the annual report or AIF, you have some options:
- Ask your advisor to discuss your questions with you
- Ask another trusted professional (for example, your lawyer or accountant) to discuss your questions with you
- Call the company and ask for a further explanation
- Ask your question(s) at the company’s annual general meeting