In Canada, publicly traded companies are required to file a number of periodic forms with the Securities Regulatory Authority (SRA), not only for their own bureaucratic sake, but because it’s the responsibility of the SRA and other regulatory agencies to ensure business confidence and a level playing field, forming a permanent part of the architecture of economic growth.
One of the more important forms to be familiar with in this regard is 51-102F2, more commonly called the Annual Information Form (AIF). The AIF report filed annually with the SRA reports to investors and potential investors everything they would want to know before buying or selling shares of the company: operations, finances, risks, opportunities, etc. It does similar work to Form 10-K of the US Securities and Exchange Commission, which we covered in a separate post.
The AIF is full of the kind of details and figures that make our eyes glaze over. So, some investors never bother to read through a full AIF filing. However, diligent investors read these filings and develop a sense of the pattern for the industry. There are ways that your organization can facilitate this and both satisfy the Canadian state and maintain the interest of investors in the AIF. This post serves as an introduction to some of them.
What is the AIF, and what can you find in it?
The AIF is similar to the annual reports leadership an organization prepares for its investors. However, it differs in that the SRA requires companies to include certain information in their filings. Some of these required documents include:
- Financial statements, including the income and balance sheets;
- How a company makes money, and which markets it operates within;
- Accounting policies, as well as warranties and insurance;
- Disclosure of risks or potential risks, including current lawsuits;
- Listing of all debt not included on the balance sheet, such as operating leases;
- A signed oath from the CEO and CFO that the filings are accurate; and
- Assessment from an independent auditor of financial records.
The AIF must be filed annually within a minimum of 90 days after the completed financial year.
The role of technology in creating and leveraging 10-K forms
The AIF should therefore not be seen just as red tape to be cleared away, but as an opportunity to “open the books” to the government and the public. Thus, the AIF can also provide an opportunity to attract more and better investment.
Organizations preparing their AIF filing can facilitate this by using advanced methods of data presentation that come along with certain entity management software platforms.
For instance, the reason why our eyes glaze over when presented with endless blocks of text and tables of figures is that human beings (including your investors, and even the SRA) don’t primarily learn by reading by itself. We’re actually visual learners—which means that the most important information should be presented in a visual form. These forms depend on the needs of the organization (and, especially in terms of an AIF filing, the legal requirements), but they include diagrams, charts and graphs that serve as accessible entry points into the story that a company tells us through its filings.
In several previous posts, we covered Entity Relationship Diagramming (ERD), which is a method of visualizing operations across an organization’s various entities and subsidiaries. These tools and others can be applied to the filing process to make magic happen and turn the filing into something actually attractive and interesting to investors or potential investors.
While filing the AIF and other forms is a process of composition that requires the coordination of (at the bare minimum) leadership, accounting and legal departments, the tools of entity management software can provide a tremendous boon to companies by automating the collection and presentation of data that goes into a standard filing.
Blueprint OneWorld has a number of elegant and effective solutions along these lines to enable smarter and more effective filing. Our software can automatically generate reports in PDF form that chart the global structure of your entity, tie this information into specialized spreadsheets to see specific transactional data, as well as providing overall indexing, sorting and management functions.
We hope to be your organization’s entry point into a reliable and effective strategy for legal filings, of the 10-K form and beyond. Please call or email us today to discuss this and others of our software solutions.