Annual Report & AIFs
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. As well, the company may choose not to prepare an annual report.
An annual information form (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. Not all companies are required to prepare an AIF under securities law. If the company does prepare an AIF, it must follow a required format. Most public companies post their annual reports and AIFs to their websites.
A company is not required to send you its AIF, but you can find it on SEDAR.
Focus on These Areas When Reviewing an Annual Report
Letter from the Senior Executive(s)
This high-level summary of the report highlights recent and planned activities, and comments on the company’s current situation and prospects in view of market and economic conditions.
It’s a good idea to compare the information in the executive letter to the information 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.
Annual financial statements tell the story of a company’s financial health and they’re not as mysterious as you may think. See the Financial Statement and MD&A page for more information on understanding annual financial statements and interim financial reports.
Focus on These Areas When Reviewing an AIF
Make sure that management have financial expertise and experience in the industry in which the company operates.
Description of the Business
Here you will find a detailed description of the business – its operations, prospects, and the risk factors that would most likely influence an investor’s decision to purchase shares.
During Your Review, Ask These Questions
- Are there specific risks or trends that may affect the company’s current or future operations? What are those specific risks or trends?
- Are you comfortable with management’s plans for dealing with these risks or trends?
If You Need Help, Consider These Options
- Ask your investment 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.