Annual report map: where to start?

STEP 1Every company uses the same table of contents

It's true that annual reports are thick, but the structure is the same at every company. Let's get that structure into your head first.

In Lesson 4 we saw that the annual report is a statutory report required by the Financial Investment Services and Capital Markets Act, and that it must follow the format and filing method set by the Financial Services Commission. Because of this, the table of contents is the same whether the company makes semiconductors or bread. If you open an annual report actually filed in March 2026, you'll find a 'Confirmation by the CEO and others' at the very front, then twelve chapters from I to XII, and an 'Expert confirmation' at the very end.

Checked against the actual table of contents of listed-company annual reports (general corporations) filed on DART in March 2026. Some item names may differ for financial companies and others.

Having the same table of contents also makes comparison easy. Open Chapter II of two companies side by side and you can compare their business structure in the same frame; open Chapter III side by side and you can compare their financial strength. This advantage matters a lot in Part 5, when we compare companies in the same industry.

The main text, attachments, and semi-annual and quarterly reports

When you open an annual report on DART, there's a selection box at the top of the screen for 'Main text' and 'Attachments'. The main text is the 12 chapters we just looked at, and the attachments include the audit report, the consolidated audit report, the articles of incorporation and so on. If you want to read the full audit opinion, opening the attached audit report is more detailed than the summary in Chapter V. Semi-annual and quarterly reports use the same skeleton, but because the period is shorter, some items are abbreviated or left out. So when you first study a company, an efficient order is to get the big picture from the latest annual report and then follow the changes through later quarterly and semi-annual reports.

STEP 2What each chapter contains

The twelve chapters are not equally weighty. Let's sort them into what to read first, what to check, and what to look up when needed.

II. Business Overview: how the company makes money

The business overview is divided into an overview of the business, main products and services, raw materials and production facilities, sales and orders, risk management and derivatives, major contracts and R&D activities, and other reference matters. At first, reading just 'Business overview' and 'Sales and orders' is enough. For example, the sales table of the fictional Robin Bakery would look like this.

This is an example for the fictional company Robin Bakery Co., Ltd. We use the same numbers throughout this course.

From this one table you get a first hypothesis: "This is a bread company, so if flour prices rise, profits will be shaken." Supply and demand in Economics Lesson 3 and commodity prices in Lesson 29 connect to company earnings in exactly this kind of place.

III. Financial Matters: the heart of the numbers

Chapter III covers summary financial information, consolidated financial statements, notes to the consolidated statements, separate financial statements (balance sheet, comprehensive income statement, statement of changes in equity, cash flow statement), notes to the separate statements, dividends, fundraising through securities issuance, and other financial matters, in that order. All three core financial statements from Lesson 1 are here. 'Consolidated' means figures that include subsidiaries; plain 'financial statements' means the company alone (Lesson 11). At first, the summary financial information at the front is enough: it shows the key figures for three years in one table.

These are fictional numbers. Actual summary financial information usually shows the latest three fiscal years side by side.

IV and V: explanation and verification

Management's discussion and analysis is where management explains in its own words why results and financial position changed, how liquidity and funding look, and how exchange-rate moves affected the company. The FSS guides companies not to simply repeat the financial statements in words or merely compare changes in amounts, but to write information that the statements alone do not reveal. The very next chapter, V, shows how the auditor verified those numbers. If Chapter IV is the company's 'words', Chapter V is the 'check' on whether those words can be trusted.

Short but weighty chapters: I, VII and X

I. Company Overview looks dull, but under 'Changes in share capital' and 'Total number of shares, etc.' you can see how the share count has changed in recent years. EPS, which you learned in Lesson 1, is net income divided by the number of shares, so at a company whose share count keeps growing, a share's slice may not grow even when profit grows. In VII. Shareholders you check how much the largest shareholder and related parties own, and in X. Transactions with Major Shareholders you check whether the company has lent money to, or traded business with, major shareholders or affiliates. These three chapters are only a few pages long, but many of the red flags covered in Part 7 first show up here.

STEP 3The 10-minute skim order

Now let's actually walk through with the map in hand. Even for a company you've never seen, this order draws the big picture in 10 minutes.

The key is 'not trying to understand everything'. Your goal for those 10 minutes is to answer three questions: What does this company earn money from, is that money growing, and can the numbers be trusted? If you notice something odd while answering these, that is exactly where you should read more deeply.

How to use it in investing

If you're worried about a paid-in capital increase or convertible bond that would increase the share count, you can calculate for yourself how much your stake shrinks with the Capital Increase & CB Dilution Calculator. And for a company you've skimmed once, read the next year's annual report in the same order. Comparing the same spots a year apart makes changes much easier to see.

When you read it again a year later: compare the same spots

The biggest strength of an annual report is that you can compare the 'same spot' year after year. For example, if next year the coffee share in Robin Bakery's II-4 sales table grows from 10% to 20%, it means the nature of the company is changing. Coffee beans follow a different price cycle from flour, so the variables that shake profit change too. If management says "expanding coffee shops" in Chapter IV, you can look for traces of that in capital expenditure and cash flow in Chapter III. This habit of checking a question that arises in one chapter against another is the reading style this whole course aims to build.

Not necessarily. The 10-minute skim is not a tool for 'picking' a company; it is the first gate for deciding 'whether to look further'. Even for a company that looks good, hold off on judging until you've carefully read the financial statements we learn from Part 2.