Department of Accounting & Information Systems BBA Program.

Report On: Paper Based Annual Report

Vs Web Based Annual Report

Prepared For Md. Mehedi M. Mazumder Lecturer,

Department of Accounting & Information Systems,

University Of Dhaka
Prepared By THE LEGEND Section: A; BBA; 14th Batch Department of Accounting & Information Systems,

University Of Dhaka.

Group Name: THE LEGEND

Group Members: Name

1. Pappu Kumar Dey (Leader) 2. Shah Alam 3. Farjana Yeasmin Chowdhury 4. Mohsena Matin 5. Md. Jahangir Alam 6. Rozina Akter 7. Sazzad Iftekhar 8. Alamgir Hossain 9. Md. Imdadul Haq Fahad 10. Md. Omar Faruk 11. Manoj Roy

Roll No
14008 14001 14019 14045 14051 14053 14059 14063 14064 14067 14081

Abstract:

This research report investigates the utilization of the Internet for Communicating corporate information by the listed insurance companies of Bangladesh. The sample for the study consists of 8 insurance companies listed on the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE). Corporate websites of the sample insurance companies were browsed by using a standard web browser for collecting data relating to corporate reporting on the Internet. The study shows that web-based corporate annual reporting in Bangladesh is still in its infancy. Most of the insurance companies do not update their corporate websites but only maintain some traditional formalities in their websites. Even some insurance companies do not have any corporate website. Again presenting paper based annual report some insurance companies prepared their annual report normally. Most of the insurance companies presented their paper based annual report using glossy paper, colors, photos, graphs, charts, brief text highlights etc. That is the common scenario in presenting annual report of insurance sector in Bangladesh.

Content:

Preamble Objectives of our study Methodology Limitations of our study What is Annual Report Why would we read an Annual Report What intent is included in an Annual Report Sector of our study 11 Insurance Companies that have been studied for our report Rupali Insurance Company Limited Green Delta Insurance Company Limited: Pragati Insurance Limited Global Insurance Limited Sonar Bangla Insurance Company Limited Continental Insurance Limited Agrani Insurance Company Limited Eastland Insurance Company Limited An Overview Conclusion

05 06 07 08 08 09 10

12 13 14 15 16 18 19 20 21 22 23

Recommendation References

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Preamble:

In the era of globalization, Business organizations always try to show their performance and activities summary in the preceding years. For highlighting their performance and activities, Annual Report is the best way.

Normally, Annual Report is prepared for the shareholders and presented in every Annual General Meeting (AGM). But now-a-days not only shareholders but also interested groups use Annual Report to know organizations performance and other information. Paper based annual report is used by the shareholders and it is not available for every body and every time. For this reason, at present business organizations submit their annual report with updated information in their website. Even they provide additional information and half yearly, quarterly annual report. So searching their website both shareholders and interested groups can get sufficient information about them.

As Web-based annual report is a gift of twenty first century for us.

Objectives of our study:

The objectives of the present study are: (01) To survey the availability of websites for the insurance companies listed in the stock exchanges in Bangladesh. (02) To draw a complete picture of the situation of web based annual reporting and paper based annual reporting in insurance sectors in Bangladesh. (03) To analyze and differentiate between paper based annual report and web based annual report. (04) To find out whether a company prepares both the paper based annual report and web-based annual report. (05)To asses the task of presenting annual report of individual insurance company. (06)To determine what types of information is updated in the web-based annual report. (07)To draw performance in presenting annual report of insurance section. (08)To obtain a comprehensive insight about the preparation of annual report of insurance sector. (09)To acquire practical knowledge which will help to build up our career in the real world.

(10) To draw conclusions and offer recommendations on the basis of lack and limitations.

Methodology:

To meet the objectives of the report, a different methodology has been used to acquire as well as to analyze the overall activities of insurance sector. To evaluate the entire process, mainly observation method has been followed. To understand the general process of preparing annual report, face to face conversation has been conducted with our group members. To explore the report preparing method, individual company report has been personally observed. And the analysis has been integrated to determine the issues.

Limitations of our study:

There are some limitations in our study such as: Gathering information through one way communication. Some insurance companies have no their own corporate website. Unavailability of up to date annual report of some insurance companies in their website. Insufficient disclosure of information of some insurance companies. After all lack of knowledge, efficiency and experience of the group members.

What is annual report:

An annual report is exactly what is sounds like a formal report on a companys performance in the preceding years.

In details, an annual report is a published document given to shareholders by public corporations. The document details the financial status of the company with various reports and financial statements. The front of an annual report often will be colorful, flashy and glossy, while possibly containing photos, graphics and

brief text highlights. The latter part of the report contains the detailed financial information.

Why would we read an Annual Report?

Most investors consider the annual report to be the most useful and credible tool for gaining a comprehensive overview of a company. It is one of the most critical documents that a company produces and is often the primary document used by investors when researching a company. It provides details about the financial condition of the company, and offers insight into the details of its business, as well as its management philosophy.

According to a survey by Research Strategy Management, Inc., 91 percent of investors indicate that a company's annual report is the most credible source of information about that company. Billionaire investor Warren Buffet stated that nearly everything he learns about a company comes from public documents. And according to research conducted by Shelley Taylor & Associates, of the 26 sources of information that investors can rely on to make financial decisions, the annual report is ranked as one of the top five.

What content is included in an Annual Report?

The content in annual report is unique to each company. The content that companies select to include in their annual report varies from company to company, and from year to year. Investors usually can expect to find the following items in a company's annual report:

A summary of the previous year Vision, mission, strength and believes Progress and performance at a glance Status of Compliance of Corporate Governance Information about the company, including its structure, product line, and subsidiaries

A letter to shareholders from the President or CEO A detailed discussion about the company's financial results The financial statements (balance sheet, income statement, and cash flow statement)

Notes to the financial statements

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Classified summary of Assets Other information about the company that often is not included in other documents.

Sector of our study: Insurance companies

Insurance sector is becoming most potential and rising sector in the present world with a view to allocating risk of lives and properties. In our country potentiality of this sector is the same as in the outside world.

Here our study is on this sector is related to how the insurance companies in our country communicate with their stakeholders and what basis of reporting they follow. Our study is also related to the differences between their reporting bases if any of them follows more than one.

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Local insurance companies that have been studied for our report:

Rupali Insurance Company Limited

Green Delta Insurance Company Limited

Pragati Insurance Company Limited

Global Insurance Limited

Sonar Bangla Insurance Limited

Continental Insurance Limited

Agrani Insurance Company Limited

Eastland Insurance Company Limited

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Rupali Insurance Company Limited:

Rupali Insurance Company Limited maintains web based annual report and updates their information:

For that reason

1. In the web the financial statement is present but auditors report is not present because of maintaining formalities in presenting web based annual report. 2. In the web based annual report, the name of board of directors is updated which is not possible in paper based until next annual report is published. 3. In web based annual report, assets,, resources, investments etc are updated but the graphical show is not updated. 4. Statement of Equity is a part of paper based annual report but is absent in web based annual report. 5. Some additional information such as background; are presented in web based report but is absent in paper based report.

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6. In corporate web-site Rupali Insurance Company Limited maintains all formalities but they do not present annual report of preceding years except Financial Statements of 2007.

Green Delta Insurance Company Limited:

Green Delta Insurance Company presents their both annual report flamboyantly and nicely. They present their annual report in well furnished and well decorated way. Their report presentation is different from other insurance companies. They used glossy paper and also used colors for easily identifying. There is no difference between hard and soft copy of annual report.

They always update their information. They have presented their annual report of 2005, 2006 and 2007 with additional information such as About us, Vision, Mission, Strength & Believes, Chairmen profile, Company profile, Performance at a glance, Other activities etc.

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Pragati Insurance Limited:

In corporate website of Pragati Insurance Limited, financial statement or annual report is not present. Only Gross Premium Income, Re-Insurance Premium Ceded, Net Premium Income, Gross Claim, Investment and Other Income, Net Profit before Tax, Paid up Capital, Shareholders Equity, Total Assets, Total Reserve, Earning Per Share (EPS), Book Value Per Share of last five years in the title of Companys Performance are presented.

In website Big Client Portfolio i.e. local and foreign clients is present but in their paper based annual report is absent.

In website companys profile is given with huge information and their background but in paper based annual report it is given briefly i.e. date of inauguration, listing with DSE, listing with CSE.

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In website details information about their products and services is given but in paper based annual report only products and services title is given.

In website Directors report is not given.

Global Insurance Limited:

(Symbol of security & peace)

Global Insurance Limited publishes both hard copy and soft copy of their annual report. Through observing both two, we find

1. In the paper based report there is content of where report. But it is absent in the web-based report. 2. Only the names of Board of Directors are presented in the paper based annual report. But in the web based report Board of Directors profile is elaborated with summary of their degree, duties, and responsibilities. 3. In the hard copy annual report there is no introduction about the company for the stake holders and interested groups. In the short version there is a detail introduction titled About us and it includes preamble, capital

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structure, management, and re-insurance protection, settlement of claims, HR & D, promotional activities, and objectives of the company.

4. Paper based report did not indicate about their clients that mean we cant know who this insurances clients are. But in the soft copy we found that theres a chart of their valued clients. 5. Year wise financial performance is shown individually in the hard copy. In the soft copy it is shown under the heading of About Us 6. There is no indication about its services, but in soft version names of services has been shown such as Fire insurance , Marine insurance, Automobile insurance, Engineering insurance and miscellaneous insurance etc. 7. Paper based annual report contains auditors report but it is absent in web based report. 8. Financial Statements of Global insurance Limited is shown in paper based report. We cant find its financial statements in the soft version. Because some organizations dont want to disclose all the information to general people.

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Sonar Bangla Insurance Company Limited:

Sonar Bangla Insurance Company Limited has a website but it is not updated and only maintaining some formalities they had presented annual report of 2004. Even they are not updating their operating results after 2000 and 2001.

1. In paper based annual report there is no existence of Chartered Accountants (CA), Company Secretaries, Managing Directors, and Chairmen. So there is no confident in this report. 2. Also the list of branches of Sonar Bangla Insurance Company Limited is updated in the web based report. 3. Some more information such as directors report, compliance report of Securities Exchange Commission (SEC) notification, Directors Certificate etc. are presented in paper based annual report.

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Continental Insurance Limited:

Continental Insurance Limited (CIL) is newly listed insurance company in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE). Continental Insurance has not its own corporate website. So Continental Insurance can not submit its annual report with additional and updated information. So its a great barrier for us to compare between paper based annual report and web based annual report. Their paper based annual report presentation is nice, but they have some limitation in providing some necessary information such as Directors profile, Chief Executives profile, consolidated balance sheet, schedule of fixed assets, progress at a glance, credit rating report, Corporate Social Responsibility (CSR) etc.

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Agrani Insurance Company Limited:

It is also a rising insurance company. They provide their information only through paper based annual report.

Their paper based annual report provides sufficient information. But still they do not provide any web based annual report. It would be very easy and flexible for us if they had any web based annual report. So it is also a barrier for us. But their paper based report presentation is also nice than most other insurance companies. Their cover page is very enchanting. They use glossy paper. For identifying easily they use various colors. So from observation, it can be said that paper based annual report presentation, information etc. of Agrani Insurance Company Limited are very sophisticated.

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Eastland Insurance Company Limited:

Eastland Insurance Company Limited (EICL) has no corporate website. So we

could not get any information from any source about their financial performance and activities except paper based annual report.

Presentation of their paper based annual report is quite well comparing with
other insurance companies annual report. In Auditors Report & Financial Statements Eastland Insurance Company Limited used colors for better understanding.

They used different types of graphs and charts in presenting their performance
in their annual report.

They showed their Value Added Statement both in the form of table and piechart.

They also showed Audit Committee Report and Compliance Report on SEC
Notification in their annual report.

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An overview to the web based reporting of local insurance companies:

Name Website Updated website Financial statement s Yes No Yes No Yes 01.RICL --------- ------No Performanc e at a glance Yes ------No Mor e ------Les s ---Details Brief Additional information Products & services

02.GDICL 03.PICL 04.GIL 05.SBIL 06.CIL 07.AICL 08.EICL

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Conclusion:

In todays business world, Insurance sector is an essential sector for providing safety and security to business. Here important task is to conduct business in an organized and effective manner. In our country insurance sector is growing very fast and has a very bright future. In any country this sector plays a fundamental role in the economic activities. Now, questions arise that how we con make this process effective.

Business process needs to make lot more progressive. According to this process, insurance companies also present their business performance through annual report. From different perspective it is found that insurance sector in Bangladesh is not so developed in presenting annual report. The practice of reporting both web based and paper based annual report of insurance sector is rare. If insurance companies develop the system of preparing annual report then all the stake holders and interested groups can about the companys all the information and companies will be more benefited in terms of time and money.

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Recommendation:

On the basis of our study we are offering some recommendations for the Insurance Sector in Bangladesh regarding web based and paper based annual report 1. Every insurance company should use personal web site and update their website. 2. In web site they should provide sufficient information i.e. companies background, directors profile, list of branches etc. 3. Presenting annual report in website should maintain some formalities i.e. signature, auditors report etc. 4. Use sufficient graphs so that users can easily understand and compare companys performance and activation with some previous years. 5. Web based annual report should be prepared for corporate people. 6. In financial statement necessary information should be disclosed so that users do not get confused. 7. Annual report should be standard and presentable i.e. different colors, structure for better understanding. 8. Paper based annual report should be prepared for general people.

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References:

1. Rupali Insurance Company Ltd. Annual Report 2007 2. Green Delta Insurance Company Ltd. Annual Report 2007 3. Pragati Insurance Company Ltd. Annual Report 2007 4. Global Insurance Company Ltd. Annual Report 2007 5. Sonar Bangla Insurance Ltd. Annual Report 2007 6. Continental Insurance Ltd. Annual Report 2007 7. Agrani Insurance Company Ltd. Annual Report 2007 8. Eastland Insurance Company Ltd. Annual Report 2007 9. www.rupaliinsurance.com 10. www.green-delta.com 11. www.pragatiinsurance.com 12. www.gilbd.com 13. www.sonarbanglains.com

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