INSUBCONTINENT EXCLUSIVE:
This is the time of the year when we as investors start getting emails of annual reports from companies where we are invested in
of companies which I am interested in reading annual reports for even when I am not a shareholder means I get notified when it is published
I use screener.in and keep all such companies in my watchlist
I get an automated message, which informs me when the company makes a BSE/NSE announcement regarding publication of its annual
report.
Cluster annual reports from the same industryI make a folder on my computer and keep saving all the annual reports based on their
Reading annual reports of companies from an industry as a group gives a lot of insights into the competitive landscape, new developments and
differentiators for any company
For example, when I want to look at annual reports of banks, I will read HDFC Bank, Kotak Mahindra Bank, SBI, IndusInd Bank, Yes Bank, PNB
(!!) one after the other covering both private and PSU banks
Sometimes just looking at reports from the same industry helps identify the good and bad ones
Comparing management compensation and board composition across companies in the same industry also provides better insights than reading
reports across multiple industries.
Read reports of global leadersWhen I am at it, I usually pick one or two global leaders and read their
they are progressing to root out their mis-selling problems
In some industries, global reports can provide a glimpse of things to come
Annual reports of Google and Amazon are a must read for anyone interested in technology and its impact on our day-to-day lives.
Opening last
I tend to open the reports for last three, and sometimes five, years in different tabs
Then when I am reading through, say, the management discussion and analysis, I will glance through what was written in the same passage last
This would help me understand how the management commentary has changed over time
Is the same passage being copy-pasted every year Are there same spelling mistakes every year Has the management said something three years
back and then not mentioned it ever again Is the management in the habit of over-promising and under-delivering or vice versa
Focus of
Secondary focus is on the financials, which I glance through at a high level
for companies in the portfolio and which I have been invested in for a long time
For those where I am looking to invest, I take a more sceptical approach and try to drill holes in my investment thesis.
Annual reports are
the primary sources of investor information and reading them in a disciplined way can give a lot of information and insights on the workings
of a company and industry
