Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh

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An efficient financial reporting disclosure is a yardstick in measuring the strength of any company. The financial reporting disclosure of non-life insurance companies of Bangladesh is the topic of …

An efficient financial reporting disclosure is a yardstick in measuring the strength of any company. The financial reporting disclosure of non-life insurance companies of Bangladesh is the topic of this thesis paper. For the ease of study the disclosures are divided into two categories –mandatory and non-mandatory financial reporting disclosures. The study has been conducted on the listed non-life insurance companies of Bangladesh.
The selection of listed non-life insurance companies has been done in a systematic and representative way. Among 32 companies, 13 companies have been selected to conduct the study. Annual Report 2012 and 2011 has been taken into considerations since the Annual Reports are the yardstick and mirror of the financial reporting disclosures.
The study has been structured with the use of checklists of mandatory disclosures, non-mandatory disclosures and financial reporting standards. These checklists have been analyzed very well to get the actual scenario of the financial reporting disclosure conditions of the non-life insurance companies. This revealed that most companies have poor financial reporting disclosure conditions. With proper compliance with the financial reporting standards this poor condition can be made efficient.

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  • 1. Thesis Report on Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh Submitted to: Tanzina Haque Associate Professor Department of Accounting & Information Systems Faculty of Business Studies University of Dhaka Submitted by: Sazzad Hossain ID – 16-128; Batch: 16th Department of Accounting & Information Systems Faculty of Business Studies University of Dhaka Date of Submission: February 20, 2014
  • 2. Thesis Paper on Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh
  • 3. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh i Letter of Transmittal February 20, 2014 Tanzina Haque Associate Professor Department of Accounting & Information Systems Faculty of Business Studies University of Dhaka Subject: Submission of Thesis Report on “Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh”. Dear Madam, This is my humble attempt to inform you that here is the BBA project paper based on the project work as assigned by you on the topic “Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh”. Insurance plays a vital role in our economy and non-life insurance holds a major portion of this sector. Since I have studied various courses regarding business, laws, accounting I have idea of the depth of the assigned topic. The financial disclosure is a major part of the corporate progress and position. This report is based on the non-life insurance companies in Bangladesh. I am highly grateful to you for your kind expert advice and co-operation to conduct the study. As I lack experience in the practical field, the paper that is, this thesis report may contain some unexpected limitations. I hope you will not treat this kind of mistakes as major. I would like to thank you for allowing me with such an important topic. I am ready to provide any further information regarding the thesis report, if necessary. Sincerely yours Sazzad Hossain ID – 16-128; Batch: 16th Department of Accounting & Information Systems Faculty of Business Studies University of Dhaka
  • 4. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh ii Acknowledgement Thesis paper is based on a deep research and as a BBA student I have little experience in the field of research. Research is, as a result, very challenging task. My supervisor, Ms. Tanzina Haque, FCMA, Associate Professor of Department of Accounting & Information Systems, Faculty of Business Studies, University of Dhaka has helped me a lot with her experienced advice and instructions. Without her supervision, co-operation, detailed instruction my thesis paper would not come to the light. I am very much grateful to her since she not only gave me instructions but also inspired to work hard and do a wide range of research with various laws, regulations, articles, journals regarding insurance. I got the opportunity to do a rigorous research on my assigned topic “Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh”. I also thank the Bangladesh Insurance Academy authority for their assistance. They cordially helped me to find out necessary journal articles for my research. They provided me with some important latest and practical information relating insurance. For many limitations like the time limit of 6 weeks, I could not work effectively & efficiently in this field. However, I tried my best to make the report effective in perspective of present scenario. I expect that my teacher will forgive me for any kind of unintentional mistakes.
  • 5. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh iii Abstract An efficient financial reporting disclosure is a yardstick in measuring the strength of any company. The financial reporting disclosure of non-life insurance companies of Bangladesh is the topic of this thesis paper. For the ease of study the disclosures are divided into two categories –mandatory and non-mandatory financial reporting disclosures. The study has been conducted on the listed non-life insurance companies of Bangladesh. The selection of listed non-life insurance companies has been done in a systematic and representative way. Among 32 companies, 13 companies have been selected to conduct the study. Annual Report 2012 and 2011 has been taken into considerations since the Annual Reports are the yardstick and mirror of the financial reporting disclosures. The study has been structured with the use of checklists of mandatory disclosures, non- mandatory disclosures and financial reporting standards. These checklists have been analyzed very well to get the actual scenario of the financial reporting disclosure conditions of the non-life insurance companies. This revealed that most companies have poor financial reporting disclosure conditions. With proper compliance with the financial reporting standards this poor condition can be made efficient.
  • 6. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh iv Table of Contents Particulars Page no. Letter of Transmittal..................................................................................................................... i Acknowledgement....................................................................................................................... ii Abstract.........................................................................................................................................iii List of Abbreviation:..................................................................................................................vii CHAPTER – ONE: INTRODUCTION .......................................................................................1 1.0 Introduction: ..................................................................................................................2 1.1 Background of the Study: ............................................................................................3 1.2 Objective of the Study: .................................................................................................3 1.3 Scope and Rationality of the Study:............................................................................4 1.5 Limitations of the Study:..............................................................................................4 CHAPTER – TWO: METHODOLOGY......................................................................................5 2.0 Methodology:.................................................................................................................6 2.1 Data Collection and Analysis Procedures: ................................................................6 CHAPTER – THREE: LITERATURE REVIEW .........................................................................8 2.0 Literature Review:.........................................................................................................9 CHAPTER – FOUR: DISCUSSION AND ANALYSIS...........................................................10 4.1 Discussion: ...................................................................................................................11 4.1.1 Brief History of Insurance Business in Bangladesh...............................................11 4.1.2 Insurance Related Laws and Regulations...............................................................12 4.1.2.1 Companies Act ....................................................................................................12 4.1.2.2 Insurance Act 2010..............................................................................................12 4.1.2.3 IDRA Act 2010 .....................................................................................................12 4.1.2.4 Other Related Rules and Regulations ..............................................................12 4.1.2.5 Financial Reporting Standards..........................................................................13 4.2 Analysis: .......................................................................................................................14 4.2.1 Listed Non-life Insurance Company List................................................................14 4.2.2 Selected Non-life Insurance Company List............................................................15 4.2.3 Basis of Analysis.........................................................................................................15 4.2.4 Area of Analysis of Financial Reporting Disclosures ...........................................15 4.2.5 Relevant Information about Annual Reports.........................................................16
  • 7. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh v 4.2.6 Item Wise Analysis of Financial Reporting Disclosures.......................................17 4.2.7 Analysis of Financial Reporting Disclosures in Annual Reports 2012...............18 4.2.8 Analysis of Financial Reporting Disclosures in Annual Reports 2011...............20 4.2.9 Analysis of Mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 ..........................................................................................................................22 4.2.10 Analysis of Non-mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011............................................................................................................24 4.2.11 Analysis of Company Wise Financial Reporting Disclosures ...........................26 CHAPTER – FIVE: FINDINGS..................................................................................................27 5.1 Company Wise Financial Reporting Disclosure Trend ...............................................28 5.2 Comparability of Financial Reporting Status................................................................28 5.3 Disclose Trend of Explanatory Information..................................................................29 5.4 Whole Non-life Insurance and Company Wise Scenario............................................29 CHAPER – SIX: CONCLUSION AND RECOMMENDATION...........................................30 6.1 Conclusion .........................................................................................................................31 6.2 Recommendations.............................................................................................................32 CHAPTER – SEVEN: APPENDICES........................................................................................33 APPENDIX A: References......................................................................................................34 APPENDIX B: Checklists .......................................................................................................36 B 1.0 Analysis of Annual Reports 2012 ............................................................................36 B 1.1 Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012] ..................................................36 B 1.2 Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012] ..................................................50 B 2.0 Analysis of Annual Reports 2011 ............................................................................56 B 2.1 Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011] ..................................................56 B 2.2 Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011] ..................................................69 B 3.0 Checklist of Complied BASs [Annual Reports 2012 & 2011]...............................75 B 4.0 Checklist of Complied BFRSs [Annual Reports 2012 & 2011].............................77
  • 8. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh vi List of Tables Page no. Table 1 : Objectives of the Study 3 Table 2 : Limitations of the Study 4 Table 3 : Item Wise Analysis of Financial Reporting Disclosures 17 Table 4 : Financial Reporting Disclosures of Annual Report 2012 18 Table 5 : Financial Reporting Disclosures of Annual Report 2011 20 Table 6 : Analysis of Mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 22 Table 7 : Analysis of Non-mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 24 Table 8 : Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012] 49 Table 9 : Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012] 55 Table 10 : Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011] 68 Table 11 : Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011] 74 Table 12 : Checklist of Complied BASs [Annual Reports 2012 & 2011] 76 Table 13 : Checklist of Complied BFRSs [Annual Reports 2012 & 2011] 77 List of Figures Page no. Figure 1 : Financial Reporting Disclosures of Annual Report 2012 ..........................19 Figure 2 : Financial Reporting Disclosures of Annual Report 2011 ..........................21 Figure 3 : Analysis of Mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011................................................................................................23 Figure 4 : Analysis of Non-mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011................................................................................................25
  • 9. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh vii List of Abbreviation: BAS Bangladesh Accounting Standards BFRS Bangladesh Financial Reporting Standards BIA Bangladesh Insurance Academy CIC Central Insurance Company Limited CIL Continental Insurance Ltd. CSE Chittagong Stock Exchange DIL Dhaka Insurance Limited DSE Dhaka Stock Exchange EPS Earnings Per Share EU European Union FIL Federal Insurance Company Ltd. GIL Global Insurance Ltd. IAIS International Association of Insurance Supervisors IAS International Accounting Standards IDRA Insurance Development and Regulatory Authority IFRS International Financial Reporting Standards JBC Jiban Bima Corporation MIL Mercantile Insurance Company Ltd. NGIL Northern General Insurance Co. Ltd. NIL Nitol Insurance Company Ltd. PGIL Purobi General Insurance Company Ltd. PICL Peoples Insurance Company Limited PIL Paramount Insurance Company Ltd. RIL Reliance Insurance Limited SBC Sadharan Bima Corporation SEC Securities & Exchange Commission UIL United Insurance Company Limited
  • 10. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 1 CHAPTER – ONE: INTRODUCTION
  • 11. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 2 1.0 Introduction: Insurance is a tool to spread losses among many insurers. This is basically a contract between an insurer and an insured to pay a certain amount of money called premium by the insured for which the insurer will compensate the stated amount of money after the loss has been occurred or will pay a certain sum of money after the expiration of certain time or after the death of the insured in case of life insurance (Carolyn & Baron 2001) (Outreville 1998) (Feetham 2012). The subject matter of insurance in life insurance is human life and associated financial assurance. But in non-life insurance the subject is property and other financial losses. In business and human life lots of risks and uncertainty exists. For deducing the risks of business insurance gives the monetary compensation for the insured risk and for human life it gives assurance to pay certain amount of money for certain conditions. The insurance for human life is called “Life Insurance” (Insurance Act 2010, Section 5(2)), and all the other types are called “Non-life Insurance” (Insurance Act 2010, Section 5(3)). This thesis paper discusses a certain aspect of non-life insurance –the financial reporting disclosure of the non-life insurance companies of Bangladesh. In Bangladesh the Insurance Act 2010 and Insurance Development and Regulatory Authority Act 2010 are the two major acts for regulating the insurance business. As per the Insurance Development and Regulatory Act 2010 an authority named Insurance Development and Regulatory Authority (IDRA) has been formed to regulate all types of insurance businesses. The financial reporting of our country, Bangladesh is still in a developing stage. The non- life insurance companies are required to publish or disclose their financial information to the stockholders, public on a timely basis, but many non-life public limited companies do not comply with this requirement. In this report I studied the listed public limited non-life insurance companies to give the present scenario to bring the actual situation in light. The Insurance Development and Regulatory Authority or IDRA is the controlling authority and it issues various rules and regulations for controlling the insurance business sector. Since IDRA has not published full regulations and rules until June 2012, the companies reporting dated before of that followed the Insurance Act 1938. In the reporting of the insurance companies the BSEC required compliance has been made mandatory in the reporting since IDRA has not been published its regulations yet. I
  • 12. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 3 worked on the published Annual Report in 2012 and for giving a rational comparison of the non-life insurance companies. 1.1 Background of the Study: Financial reporting is a major part of the corporate disclosure. Various factors play vital role in this matter. The transparency of the organization can also be measured by the financial reporting disclosures. Hence, the annual reports of the non-life insurance companies give a concrete picture of their financial activities. As per the SEC Act 1993 the annual reports are to be prepared. The Insurance Act 2010 also outlines the provisions in the Sections 26-42. The IDRA also provides guidelines regarding preparation of financial reports. The financial reporting has many aspects and can be analyzed from some critical aspects to ensure the credibility of the non-life insurance companies’ disclosure conditions and status. The study, as a result, has been conducted to sort out this aspect to present the present scenario of non-life insurance companies of Bangladesh. 1.2 Objective of the Study: The basic objective of this study is to find out the present condition of the Bangladeshi non-life insurance companies’ financial reporting disclosure. The broad and details objectives are: Objectives of the Study  To find out the financial reporting disclosures by the non-life insurance companies in Bangladesh.  To find the well performed companies in case of financial reporting disclosures.  To find the voluntary financial information disclosures of the companies.  Actual conditions of the financial reporting of the non-life insurance companies.  Followed regulations in preparing the Annual Reports.  Applicable laws, rules, and regulations for financial reporting and regulations of the non-life insurance companies. Table 1 : Objectives of the Study
  • 13. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 4 1.3 Scope and Rationality of the Study: The corporate financial reporting disclosure is one of the major yardsticks in measuring the financial strengths, capabilities, transparency, and corporate reporting culture of any company. The same goes for the non-life insurance companies of Bangladesh. The published Annual Reports, various standards, regulations are the basis of this study. The study has been done on these materials. Various financial reporting disclosures studies have been conducted on the financial sector of our country, but on non-life insurance financial reporting disclosures, few studies have been conducted. As a result, this study is a unique opportunity to do such a challenging study to outline the aforementioned objectives. 1.5 Limitations of the Study: The study faced various problems which have been tried to overcome but there are some certain limitations. The major limitations are: Limitations of the Study  The study is not based on the population, it’s based on sample. So the entire scenario cannot be found here.  This study is for educational purpose. No professional purpose is included in this report.  Data collection is done from secondary sources. So, the reliability of this data is related with the sources of secondary data.  I have few practical experiences in analyzing the Annual Reports. So, there may be some lack of professionalism in this report.  All the companies are not interested to reveal their data. So, some company information is not available.  There is only one source for finding the annual reports in Bangladesh. Only SEC (securities & Exchange Commission) reference room is the only source of these annual reports.  All of the non-life insurance companies in Bangladesh are not well occupied with the website. So, the information is not available online.  Many non-life insurance companies’ websites are down. So their information is not accessible. Table 2 : Limitations of the Study
  • 14. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 5 CHAPTER – TWO: METHODOLOGY
  • 15. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 6 2.0 Methodology: Reports are prepared using various data and in processing the data various methods are used. The basic method used in analyzing financial reporting disclosures is to scrutinize the Annual Reports of the non-life insurance companies using checklists. 2.1 Data Collection and Analysis Procedures: In Bangladesh many insurance companies are non-listed with the SEC and therefore their shares are not traded in the DSE and CSE. Since they are non-listed companies, it is not expected that those companies will prepared their Annual Reports on a regular basis, as well as they will prepare it at all. For this reason, the listed companies have been used as the basis to work on. In total there are 62 insurance companies of listed and non-listed category. Among these 46 are listed companies (Dhaka Stock Exchange 2013). Within these 46 listed companies 33 companies are non-life insurance company. I have excluded the Islamic non-life insurance companies because discussion of Islamic insurance companies is not within the limit of this thesis. There are 1 Islamic non-life insurance companies. As a result, I have to work on the 32 non-life companies. I randomly took 13 non-life insurance companies to work on. That is my sample size. Since the population is huge and sample is almost half of the population, it is expected that the sample is representative. All of the Annual Reports are collected from the published Annual Reports found in the non-life insurance companies’ website. Some information has been collected from the Journal of Insurance published by the Bangladesh Insurance Academy (BIA).
  • 16. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 7 I have prepared a detailed checklist and collected the required data from the Annual Reports of the companies. The checklist has been filled up with the required data from those reports. After collecting different field of data, I have calculated the data based on predetermined analysis tools used to analyze the data. Then I compared the companies with its own reporting disclosures and also with other companies as well. The number of disclosure made by the non-life insurance companies in the industry is compared with the other companies in the same industry. Thus the inter industry analysis is done. Again, the non-life insurance companies’ 2 years Annual Reports have been analyzed to get a comparative view of the intercompany disclosure trend. The non-life insurance industry as a whole also been analyzed to see the non-life industry trend. This is intra non-life industry analysis. After comparison, the data are presented in different graphical form. The graphs reflect the data more continently and vividly.
  • 17. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 8 CHAPTER – THREE: LITERATURE REVIEW
  • 18. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 9 2.0 Literature Review: Financial reporting disclosures are an important topic in the corporate world. But there have been few studies directly related to the non-life insurance companies. From the context of Bangladesh no specific research has been done. But from both national and international level vast research has been done on financial disclosures. The impact of corporate financial disclosure and the mentality of the executives to manage the earnings, financial reporting to maintain smooth earnings, constant EPS are the incentives. The financial reporting thus becomes biased to meet up these objectives. Also, the voluntary disclosures are made to reduce the information risk and to create a good image (Graham, Harvey & Shiva 2005). A wide range of theoretical research has been done by (Leuz & Wysocki 2008). They studied numerous journals, articles, books to develop a cross-sectional analysis on the financial reporting disclosures. (Young 2003) has described many aspects of financial reporting by the corporate bodies. He has brought to light the pros and cons of various financial reporting issues. A practical and theoretical based research has been done by (Beaver 1991). He has worked with the factors of laws, regulations and rules applicable for the reporting companies. Various aspects of accounting and financial reporting disclosures have been discussed by (Siegel & Shim 2006). A study has been done by (Holger & Günther 2006) to analyze the scenario of uniform reporting disclosures by the EU countries. On the basis of securities and financial reporting disclosures, a research by (Barrett 1976) revealed the comprehensiveness and extent of the financial reports by the companies. The financial reporting, analysis, valuation, regulations, and measurement –all these have been researched and discussed widely by various authors and researchers (David & Anne 2004) (Charles 2012) (Wahlen, Baginski & Bradshaw 2010) (Alexander, Britton & Jorissen 2007). The aspects of voluntary disclosures (Kees 1997), financial disclosures and market development (Staking & Alison 1999), compliance with the standards and reporting (Greuning, Scott & Terblanche 2011) –these all have been studied by the various authors.
  • 19. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 10 CHAPTER – FOUR: DISCUSSION AND ANALYSIS
  • 20. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 11 4.1 Discussion: To develop and understand the thesis, a brief discussion of the related topics is necessary. In this discussion the brief history, related regulations, importance of the study, prevailed disclosures are essential. 4.1.1 Brief History of Insurance Business in Bangladesh Insurance as a business began almost a century back. Insurance business gained momentum in East Pakistan during 1947-1971, when 49 insurance companies transacted both life and general insurance schemes. These companies were of various origins −−British, Australian, Indian, West Pakistani and local. In 1972, the government of Bangladesh nationalized insurance industry by the Bangladesh Insurance (Nationalization) Order 1972. By virtue of this order, save and except postal life insurance and foreign life insurance companies, all 49 insurance companies and organizations’ transacting insurance business in the country were placed in the public sector under five corporations. These were: the Jatiya Bima Corporation, Tista Bima Corporation, Karnafuli Bima Corporation, Rupsa Jiban Bima Corporation, and Surma Jiban Bima Corporation. But the burden of administrative expenses incurred in maintaining these five corporations became extensive and no competitive environment was there. Consequently, on 14 May 1973, a restructuring was made under the Insurance Corporations Act 1973. Following the Act, in place of five corporations the government formed two: the Sadharan Bima Corporation (SBC) (Banglapedia 2012) for general business, and Jiban Bima Corporation (JBC) (Banglapedia 2012) for life business. After 1973, general insurance business became the sole responsibility of the Sadharan Bima Corporation. Life insurance business was carried out by the Jiban Bima Corporation, the American Life insurance Company, and the Postal Life Insurance Department until 1994, when a change was made in the structural arrangement to keep pace with the new economic trend of liberalization. The Insurance Corporations Act 1973 was amended in 1984 to allow insurance companies in the private sector to operate side by side with Sadharan Bima Corporation and Jiban Bima Corporation (Banglapedia 2012). After this point of time the private insurance companies started their businesses in full pace.
  • 21. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 12 4.1.2 Insurance Related Laws and Regulations The insurance business is a special type of financial business. As a consequence, separate laws, rules and regulations have been issued by the government from time to time to ensure the smooth run and operation of the insurance business. 4.1.2.1 Companies Act Most of the insurance companies, both life and non-life insurance companies, are public limited companies. As a result, they are under the regulations of companies act. In our country they are under the Companies Act 1994. Since insurance business is a special type of financial business, other special acts are applicable in the first place of regulation. 4.1.2.2 Insurance Act 2010 Insurance act is the special act to regulate the insurance business in our country. The current insurance act is Insurance Act 2010. Prior Insurance Act 1938 was in force. As per the regulations of the Act, the insurance companies are to prepare their Annual Reports according to the Act. The Act gave the ruling power to the IDRA as the regulatory body [Sec 3(1)(2)]. 4.1.2.3 IDRA Act 2010 Insurance Development and Regulatory Authority Act 2010 (IDRA Act) describes the in details of the operations of the insurance business in Bangladesh. Ranging from the starting to the accounts, operations and other related activities of the insurance business. IDRA has the sole authority to implement any types of rules and regulations for the benefit of the insurance business. 4.1.2.4 Other Related Rules and Regulations IDRA is to issue rules for the smooth regulations of the insurance business. But until June 2012, it has not issued any rules. As a result, companies preparing their reports followed Insurance Act 1938 and its regulations in preparing their reports. Finance Act 2013, Schedule 2, Paragraph (kha) (1) (kha) indicates that insurance companies have to pay 42.5% income tax as per Income Tax Ordinance 1984.
  • 22. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 13 4.1.2.5 Financial Reporting Standards For maintaining comparability, consistency the non-life insurance companies generally follow the prevailing accounting standards. The prevailing accounting standards are Bangladesh Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs) which are issued by the Institute of Chartered Accountants of Bangladesh (ICAB). These are basically local adoption of international standards. The BASs are the local adoption of International Accounting Standards (IASs) and the BFRSs are the local adoption of the International Financial Reporting Standards (IFRSs). For insurance business a separate BFRS exists. The BFRS 4 Insurance Contracts is especially for clarification of accounting treatments for insurance contracts. This BFRS describes the detailed accounting and financial reporting treatment relating insurance contract in the financial statements (Hennie, Darrel & Simonet 2011) (Alexander & Simon 2008) (OECD 2001). The International Association of Insurance Supervisors (IAIS) issues supervisory standards on various issues of non-life insurance, risk and related disclosures, technical disclosures and many other such issues (IMF 2012) (Wang 2003) (IMF 2007).
  • 23. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 14 4.2 Analysis: 4.2.1 Listed Non-life Insurance Company List In Bangladesh the number of listed non-life insurance companies is 33. Since the Islamic non-life insurance companies have been excluded, my study span is limited to 32 listed non-life insurance companies. These non-life insurance companies are: 1) Agrani Insurance Co. Ltd. 2) Asia Insurance Limited 3) Asia Pacific General Insurance Co. Ltd. 4) Bangladesh General Insurance Company Limited ( BGIC ) 5) Central Insurance Ltd. 6) City General Insurance Co. Ltd. 7) Continental Insurance Ltd. 8) Dhaka Insurance Limited 9) Eastern Insurance Ltd. 10)Eastland Insurance Ltd. 11)Federal Insurance Ltd. 12)Global Insurance Ltd. 13)Green Delta Insurance Ltd. 14)Janata Insurance Ltd. 15)Karnaphuli Insurance Ltd. 16)Mercantile Insurance Co. Ltd. 17)Nitol Insurance Co. Ltd. 18)Northern General Insurance Company Ltd. 19)Paramount Insurance Company Ltd. 20)Peoples Insurance Ltd. 21)Phoenix Insurance Ltd. 22)Pioneer Insurance Ltd. 23)Pragati Insurance Ltd. 24)Prime Insurance Ltd. 25)Provati Insurance Company Limited 26)Purabi Gen. Insurance Ltd. 27)Reliance Insurance Limited 28)Republic Insurance Company Limited 29)Rupali Insurance Ltd. 30)Sonar Bangla Insurance Ltd.
  • 24. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 15 31)Standard Insurance Limited 32)United Insurance Ltd. 4.2.2 Selected Non-life Insurance Company List On a random basis I took 13 companies to do my analysis on. These companies were grouped on the basis of market leading and disclosure practices over the past years. Some have very well financial reporting disclosure practice history, some are mediocre, and some are in the least category or simply have bad financial reporting status. In this list of 13 companies, all the three types of companies exist to give a fair view of the analysis. These companies are: 1) Central Insurance Company Limited 2) Continental Insurance Ltd. 3) Dhaka Insurance Limited 4) Federal Insurance Company Ltd. 5) Global Insurance Ltd. 6) Mercantile Insurance Company Ltd. 7) Nitol Insurance Company Ltd. 8) Northern General Insurance Co. Ltd. 9) Paramount Insurance Company Ltd. 10) Peoples Insurance Company Limited 11) Purobi General Insurance Company Ltd. 12) Reliance Insurance Limited 13) United Insurance Company Limited 4.2.3 Basis of Analysis The analysis of financial reporting disclosures of these 13 non-life insurance companies has been done on their published financial statements, that is, Annual Reports. For a rational and fair analysis, previous two years’ Annual Reports have been taken into consideration. Annual Report 2012 and Annual Report 2011 have been used in this analysis. 4.2.4 Area of Analysis of Financial Reporting Disclosures The annual report of the non-life insurance companies mainly consists of the financial statements and other related statements. The only mandatory or statutory part is the financial statements. The other ones are non-mandatory disclosures of information to the shareholders and stakeholders.
  • 25. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 16 The wide study of these Annual Reports has revealed that the non-mandatory part has two sections: a) Common Disclosures to all Companies b) Voluntary Disclosures The mandatory disclosure indicates the disclosure of information which is compulsory to the companies. This is set by the law, rules and regulations. The non-mandatory disclosure is that type of disclosure which is not made compulsory by the laws, rules and regulations. Within this section the common disclosure to all companies is that information which is given as a general practice and norm to be maintained. This is not stated by the law, but people give them as a matter of professionalism, industry consistency and norm. These are commonly seen to be disclosed by the responsible and well corporate cultured companies. The voluntary disclosures are the ones that are extra information that can’t be classified as common practice except from the mandatory disclosures and are the freewill disclosure of information that make the other information more vivid. 4.2.5 Relevant Information about Annual Reports The companies Act 2010 and the Insurance Development Regulatory Authority (IDRA) Act 2010, Companies Act 1994 are applicable as per the respective laws. The Annual Reports worked on were of 2012, 2011 and up to that time no regulation was prescribed by the IDRA. For that reason, the non-life insurance companies followed and maintained the Insurance Act 1938 and its other relevant provisions in preparing the financial statements. This also has been disclosed in the Notes to the Accounts. Also there is a mandatory compliance report. Status of Compliance with the conditions imposed by the Commission’s Notification No: SEC/CMRRCD/2006-158/Admin/02-08 dated 20th February 2006 issued under section 2cc of the Securities and Exchange Ordinance, 1969 Report under conditions no. 5.00.
  • 26. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 17 4.2.6 Item Wise Analysis of Financial Reporting Disclosures The total items of disclosures in the financial statements by the selected listed non-life insurance companies in Bangladesh in their Annual Reports 2012 & 2011 are as follows: Sl. No. Disclosure Item Name No. of Disclosure Company Mandatory Disclosures 1 Obligatory Financial Statements as per Act and Standards 13 2 Mandatory Statements as per Rules and Regulations 9 3 Detailed Disclosures of Board of Independent Directors 6 4 Details of Financial Conditions 6 5 Compliance with Accounting Standards 7 6 Shareholding Related Issues 8 7 Audit Committee 5 8 Item wise Detailed Information 6 9 Detailed Current Liabilities 8 10 Detailed Current Assets 8 11 Signature 13 12 Item wise Revenues and Expenses Accounts 7 13 Details of Use of Cash and Cash Equivalents 8 14 Compliance Status 7 15 Other Issues 7 Non-mandatory Disclosures 1 Norm Disclosures 8 2 Performance Indicators 7 3 Details of Short-term Investments 8 4 Formal Elements 6 5 Explanatory Information of the Company 9 6 Useful Information for the Shareholders 4 7 Valuation Details 4 8 Additional and Useful Information 8 9 Other Issues 7 Table 3 : Item Wise Analysis of Financial Reporting Disclosures The table shows that a full financial reporting disclosure by the non-life insurance companies is not a common phenomenon. This can be attributed to our poor status of regulations.
  • 27. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 18 4.2.7 Analysis of Financial Reporting Disclosures in Annual Reports 2012 Items RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Mandatory Disclosures Annual Report 2012 Total Disclosure Items 186 Disclosed Items 186 8 97 114 152 165 170 32 18 144 45 20 168 Percentage of Disclosed Items 100% 4.30% 52.15% 61.29% 81.72% 88.70% 91.40% 17.20% 9.68% 77.42% 24.19% 10.75% 90.32% Non-mandatory Disclosures Annual Report 2012 Total Disclosure Items 96 Disclosed Items 94 0 64 48 62 58 76 0 0 66 0 0 84 Percentage of Disclosed Items 97.92% 0% 66.67% 50% 64.58% 60.42% 79.17% 0% 0% 68.75% 0% 0% 87.50% Table 4 : Financial Reporting Disclosures of Annual Report 2012
  • 28. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 19 Graphically we can present it as: Figure 1 : Financial Reporting Disclosures of Annual Report 2012 0 20 40 60 80 100 120 RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Mandatory Disclosures Non-mandatory Disclosures
  • 29. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 20 4.2.8 Analysis of Financial Reporting Disclosures in Annual Reports 2011 Items RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Mandatory Disclosures Annual Report 2011 Total Disclosure Items 186 Disclosed Items 186 10 95 118 138 154 175 24 20 138 35 26 161 Percentage of Disclosed Items 100% 5.37% 51.07% 63.44% 74.19% 82.80% 94.09% 12.90% 10.75% 74.19% 18.81% 13.97% 86.56% Non-mandatory Disclosures Annual Report 2011 Total Disclosure Items 96 Disclosed Items 90 0 57 42 67 58 71 0 0 61 0 0 86 Percentage of Disclosed Items 93.75% 0% 59.38% 43.75% 69.79% 60.42% 13.96% 0% 0% 63.54% 0% 0% 89.58% Table 5 : Financial Reporting Disclosures of Annual Report 2011
  • 30. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 21 Graphically we can present it as: Figure 2 : Financial Reporting Disclosures of Annual Report 2011 0 20 40 60 80 100 120 RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Mandatory Disclosures Non-mandatory Disclosures
  • 31. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 22 4.2.9 Analysis of Mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 Items RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Mandatory Disclosures Annual Report 2012 Total Disclosure Items 186 Disclosed Items 186 8 97 114 152 165 170 32 18 144 45 20 168 Percentage of Disclosed Items 100% 4.30% 52.15% 61.29% 81.72% 88.70% 91.40% 17.20% 9.68% 77.42% 24.19% 10.75% 90.32% Mandatory Disclosures Annual Report 2011 Total Disclosure Items 186 Disclosed Items 186 10 95 118 138 154 175 24 20 138 35 26 161 Percentage of Disclosed Items 100% 5.37% 51.07% 63.44% 74.19% 82.80% 94.09% 12.90% 10.75% 74.19% 18.81% 13.97% 86.56% Table 6 : Analysis of Mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011
  • 32. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 23 Graphically we can present it as: Figure 3 : Analysis of Mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 0 20 40 60 80 100 120 2012 2011
  • 33. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 24 4.2.10 Analysis of Non-mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 Items RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Non-mandatory Disclosures Annual Report 2012 Total Disclosure Items 96 Disclosed Items 94 0 64 48 62 58 76 0 0 66 0 0 84 Percentage of Disclosed Items 97.92% 0% 66.67% 50% 64.58% 60.42% 79.17% 0% 0% 68.75% 0% 0% 87.50% Non-mandatory Disclosures Annual Report 2011 Total Disclosure Items 96 Disclosed Items 90 0 57 42 67 58 71 0 0 61 0 0 86 Percentage of Disclosed Items 93.75% 0% 59.38% 43.75% 69.79% 60.42% 13.96% 0% 0% 63.54% 0% 0% 89.58% Table 7 : Analysis of Non-mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011
  • 34. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 25 Graphically we can present it as: Figure 4 : Analysis of Non-mandatory Financial Reporting Disclosures in Annual Reports 2012 & 2011 0 10 20 30 40 50 60 70 80 90 100 RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 2012 2011
  • 35. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 26 4.2.11 Analysis of Company Wise Financial Reporting Disclosures From a deep analysis and observation of table 6 and table 7; and figure 3 and figure 4, it is obvious that from Annual Report 2011 to Annual Report 2012, there is an upward trend. The non-life insurance companies are disclosing more information to their shareholders, stakeholders. Disclosure of mandatory and associated explanatory materials, information is on increase. The same trend can be observed for non-mandatory financial reporting disclosures. The analysis of the checklist for Annual Reports 2012 and 2011 of both types of information makes it easier to comprehend. There are some companies who do not disclose much information. These companies can be attributed as companies with poor financial reporting.
  • 36. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 27 CHAPTER – FIVE: FINDINGS
  • 37. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 28 5.1 Company Wise Financial Reporting Disclosure Trend The analysis of 13 non-life insurance companies’ Annual Reports of 2012 and 2011 shows that companies’ financial reporting status as a whole is scattered. Some companies’ financial reposting disclosure is remarkable, some are mediocre and some do not have any financial reporting trend yet. Those companies have poor financial reporting status. The checklists found in the “Appendix B” show the evidences. The analysis of those checklists and the scrutiny of the tables, figures in the “Analysis” part of this thesis paper revealed that. Except two or three companies, as taken from the 32 listed non-life insurance companies, most have an average percentage of 50% − 60% reporting status. For a better financial reporting this percentage is to be more than 80%, but these companies have much less than that. This is the scenario of the mandatory financial disclosure requirements. Also some companies have reporting status less than 25% of the standard reporting status. The non-mandatory financial reporting condition is not so good. This can be called as poor. Expect from a few handfuls of companies, most of the non-life insurance companies are not willing to disclose voluntarily this type of information. These are basically various explanatory information to be disclosed. From the study of various non-life insurance companies financial reporting it is clear that they do not have a well-organized reporting condition. It varies vehemently from company to company. 5.2 Comparability of Financial Reporting Status Most non-life insurance companies have a wide variance in their financial reporting. Therefore, deep research to compare their financial reporting status is not a feasible work. They lack qualitative characteristics to be compared with. Many companies just provided the basic financial statements but they have not prepared the supportive mandatory financial reports. Explanation to many financial reporting items are not found yet. As a result, their financial reports are less comparable from the qualitative perspective.
  • 38. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 29 5.3 Disclose Trend of Explanatory Information The checklist of non-mandatory disclosures revealed the truth that our non-life insurance companies are not willing to disclose explanatory and useful information on their free will. They do disclose the mandatory information but they do not disclose other relevant information. The voluntary disclosure part of the non-mandatory disclosure in the checklist reveals that few companies provided with this information to their shareholders and stakeholders. The attributable reason behind this scenario is the poor regulatory and corporate financial reporting culture. Our country’s corporate financial reporting culture is not competitive since our share markets are not efficient. Rather many inefficient players are playing with the motive of making short-term profit. This is also a reason for less willingness to disclose explanatory financial information since no or negligible effect will be on the share price. 5.4 Whole Non-life Insurance Industry and Company Wise Scenario The financial reporting disclosure of the whole non-life insurance sector is not satisfactory. As stated earlier, wide dispersion exists in the non-life insurance business sector, the poor disclosure condition indicates the inefficiency of the sector. Proper utilization of resources can be ensured through well financial reporting. Since well financial reporting indicates the inefficient sectors and to be developed areas, it is important to disclose both mandatory and non-mandatory financial reporting disclosure information on a regular basis. This is not found in the non-life insurance financial reporting. There is a upward trend from the Annual Report 2011 to Annual Report 2012 in many companies. Companies are trying to disclose more and more relevant information to the shareholders. This is clear from the graphical presentation above in the Analysis portion.
  • 39. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 30 CHAPER – SIX: CONCLUSION AND RECOMMENDATION
  • 40. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 31 6.1 Conclusion Financial reporting disclosure is a major issue in interpreting, getting information about the company. As a result, detailed disclosure of financial information gives an opportunity to be well known with the financial condition of the company. The Annual Reports are a mirror for this purpose. These are generally prepared for the shareholders of the company. But it is hard to get the financial information for the shareholders to get the information from the huge figures stated in the Annual Reports. Therefore, the need and necessity of explanatory information is unquestionable. This part has been ignored by many non-life insurance companies. The IDRA should focus on the interpretation and fair representation of the financial activities done by the non-life insurance companies to give the easily understandable financial reports.
  • 41. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 32 6.2 Recommendations Considering the present scenario of the financial reporting disclosures of the non-life insurance companies of Bangladesh the following guidelines are recommended:  Non-life insurance companies should increase their willingness towards the disclosure of explanatory and easily understandable financial information in their Annual Reports.  The IDRA should make the explanatory disclosure mandatory so that all of the companies publish easily understandable financial information in their Annual Reports.  The companies should publish graphical and other understandable format that will help the stakeholder to understand the information easily in their Annual Reports.  Companies should show the year by year comparison of their performance in the Annual Reports.  Companies should follow the financial reporting standards strictly to ensure quality financial reporting disclosures.  The Annual Reports, other related explanatory financial information and qualitative information should be available in their website for all of the companies so that information can easily be accessible.  The companies should increase their concentration on the information disclosures for the researchers and other stakeholders.  IDRA should be more conscious for the well-being of the stakeholders of the companies.  The various regulatory authorities have to be active in ensuring quality financial reporting disclosures by the non-life insurance companies for efficient financial reporting. In conclusion, careful scrutiny and continuous effort to provide with quality financial reporting disclosures will make the non-life insurance sector a very efficient financial sector in the economy of Bangladesh.
  • 42. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 33 CHAPTER – SEVEN: APPENDICES
  • 43. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 34 APPENDIX A: References Alexander, D, Britton, A & Jorissen, A 2007, International Financial Reporting and Analysis, Cengage Learning EMEA. Alexander, D & Simon, A 2008, International Accounting/Financial Reporting Standards Guide, CCH. Banglapedia 2012, Insurance, viewed 11 February 2014, <http://www.banglapedia.org/HT/I_0084.htm>. Banglapedia 2012, Jiban Bima Corporation, viewed 11 February 2014, <http://www.banglapedia.org/HT/J_0123.htm>. Banglapedia 2012, Sadharan Bima Corporation, viewed 11 February 2014, <http://www.banglapedia.org/HT/S_0013.htm>. Barrett, ME 1976, 'Financial Reporting Practices: Disclosure and Comprehensiveness in an International Setting', Journal of Accounting Research, vol 14, no. 1, pp. 10-26. Beaver, WH 1991, Financial reporting: an accounting revolution, Prentice-Hall. Carolyn, A & Baron, B 2001, What Is Insurance?, Crabtree Publishing Company. Charles, G 2012, Financial Reporting and Analysis, Cengage Learning. David, A & Anne, B 2004, Financial Reporting, 7th edn, Cengage Learning EMEA. Dhaka Stock Exchange 2013, List of Companies Selected Industry: Insurance , viewed 10 February 2014, <http://www.dsebd.org/companylistbyindustry.php?industryno=25>. Feetham, 2012, A Guide to Insurance: Combining Governance, Compliance and Regulation, Spiramus Press Ltd. Graham, JR, Harvey, CR & Shiva, R 2005, 'The Economic Implications of Corporate Financial Reporting', Journal of Accounting and Economics, vol 40, no. 1-3, pp. 3-73. Greuning, HV, Scott, D & Terblanche, S 2011, International Financial Reporting Standards: A Practical Guide, World Bank Publications.
  • 44. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 35 Hennie, VG, Darrel, S & Simonet, T 2011, International Financial Reporting Standards: A Practical Guide, World Bank Publications. Holger, D & Günther, G 2006, 'International financial reporting standards and experts’ perceptions of disclosure quality', Abacus, vol 42, no. 3-4, p. 461–498. IMF 2007, Denmark: Financial Sector Assessment Program - Detailed Assessment of Observance of the Insurance Core Principles (EPub), International Monetary Fund. IMF 2012, People’s Republic of China: Detailed Assessment Report: IAIS Insurance Core Principles, International Monetary Fund. Kees, C 1997, Voluntary Annual Report Disclosure by Listed Dutch Companies, 1945- 1983, Taylor & Francis. Leuz, C & Wysocki, PD 2008, Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research, viewed 6 February 2014, <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1105398>. OECD 2001, Insurance Regulation and Supervision in Asia and Latin America, The Organisation for Economic Co-operation and Development (OECD) Publishing. Outreville, JF 1998, Theory and Practice of Insurance, Springer. Siegel, JG & Shim, JK 2006, Accounting Handbook, Barron's Educational Series. Staking, KB & Alison, S 1999, Financial Disclosure: A First Step to Financial Market Development, Islamic Development Bank - IDB. Wahlen, J, Baginski, S & Bradshaw, M 2010, Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective, Cengage Learning. Wang, WH-C 2003, Reinsurance Regulation: A Contemporary and Comparative Study, Kluwer Law International. Young, MR 2003, Financial Reporting Handbook, Aspen Publishers Online.
  • 45. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 36 APPENDIX B: Checklists B 1.0 Analysis of Annual Reports 2012 B 1.1 Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012] Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Obligatory Financial Statements as per Act and Standards 1 Financial Statements as per Act. √ √ √ √ √ √ √ √ √ √ √ √ a) Statement of Financial Position √ √ √ √ √ √ √ √ √ √ √ √ √ b) Statement of Comprehensive Income √ √ √ √ √ √ √ √ √ √ √ √ √ c) Profit & Loss Appropriation Account √ √ √ √ √ √ √ √ √ √ √ √ d) Fire Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ √ √ e) Marine Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ √ √ f) Motor Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ g) Miscellaneous Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ √ √ h) Classified Summary of Assets [Form AA] √ √ √ √ √ √ √ √ √ √ i) Statement of Class-wise Underwriting Profit/(Loss) √ √ √ √ √ √ √ √ j) Statement of Cash Flows √ √ √ √ √ √ √ √ √ √ √ √ k) Statement of Changes in Shareholders’ Equity √ √ √ √ √ √ √ √ √ √ √ √ l) Consolidated Insurance Revenue Account √ √ √ √ √ √ √ √ Mandatory Statements as per Rules and Regulations 2 Report on CSR & Corporate Governance √ √ √ √ √
  • 46. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 37 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 3 Notes to the Accounts √ √ √ √ √ √ √ √ 4 Status of Compliance with the Corporate Governance Guidelines (CGG) √ √ √ √ √ √ √ √ 5 Auditor’s Report √ √ √ √ √ √ √ √ √ √ √ 6 Report of the Audit Committee √ √ √ √ √ 7 Responsibility Statement of Chief Executive Officer and Chief Financial Officer √ √ √ √ √ √ √ 8 Compliance with BAS & BFRS statement √ 9 Certificate on compliance of conditions of corporate governance √ √ √ √ √ √ √ √ Detailed Disclosures of Board of Independent Directors 10 Board size & number of members in the active board √ √ √ √ 11 Independent Director’s and their Positions √ √ √ √ 12 Procedures to select the Independent Directors √ √ √ √ 13 Shareholding position of Independent Director √ √ √ √ √ 14 Independent Director is not sponsor, nor any family member/family relationship of the sponsor √ √ √ √ √ 15 Independent Director does not have any other relationship with the Company or its’ subsidiary associates companies √ √ √ 16 Independent Director is not a member, director or officer of any stock exchange √ √ √ √ √ √
  • 47. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 38 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 17 Independent Director is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm √ √ √ √ √ √ √ 18 Chairman of the Board and Chief Executive Officer shall be filled by different individuals. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer. √ √ √ √ √ √ √ 19 The Director’s Report to Shareholders shall include the additional statements. √ √ √ √ √ √ √ Details of Financial Conditions 20 Industry outlook and possible future developments in the industry √ √ √ √ 21 A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin √ √ √ √ √ √ 22 Discussion on continuity of any Extra-Ordinary gain or loss. √ √ √ √ √ 23 Basis for related party transactions-a statement or all related party transactions should be disclosed in the annual report √ √ √ √ √ √ 24 Utilization of proceeds from public issues, rights issues and/or through any others instruments. √ √ √ √ 25 An explanation if the financial results deteriorate after the company goes IPO, RPO, Rights Officer, Direct Listing, etc. √ √ √ √ √ √
  • 48. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 39 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 26 Significant variance occurs between Quarterly Financial Performance and Annual Financial Statements √ √ √ √ √ √ 27 Remuneration to directors including independent director √ √ √ √ √ √ √ √ 28 Financial statements present fairly state of affairs, the result of its operations, cash flows and changes in Shareholders’ equity of the company √ √ √ √ √ √ √ √ 29 Proper books of account of the issuer company have been maintained √ √ √ √ √ √ √ √ Compliance with Accounting Standards 30 Appropriate accounting policies have been consistently applied in preparation of the financial statements and accounting estimates are based on reasonable and prudent judgment. √ √ √ √ √ √ 31 International Accounting Standards (IAS)/ Bangladesh Accounting Standards (BAS)/ International Financial Reporting Standard (IFRS)/ Bangladesh Financial Reporting Standards (BERS), as applicable in Bangladesh have been followed in preparation of the financial statements √ √ √ √ √ √ √ 32 The system of internal control is sound in design and has been effectively implemented and monitored √ √ 33 There are no significant doubts upon the issuer Company’s ability to continue as a going concern. √ √ √ √
  • 49. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 40 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 34 Significant deviations from the last year’s operating results of the company shall be highlighted √ √ √ √ √ 35 Key operating and financial data of at least preceding 5 (five) years shall be summarized √ √ √ √ √ √ √ 36 If the issuer company has not declared dividend (cash or stock) for the year √ √ √ √ √ √ √ 37 The number of Board meeting held during the year and attendance by each director shall be disclosed √ √ √ √ √ √ √ Shareholding Related Issues 38 Shareholding position parent/ Subsidiary/ associated Companies and other related parties √ √ √ √ √ √ √ 39 Shareholding position of Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children √ √ √ √ √ √ √ 40 Shareholding position of Executives of the Company √ √ √ √ √ √ √ 41 Shareholding ten per cent (10%) or more voting interest in the Company √ √ √ √ √ 42 A brief resume of the appointed/re-appointed director √ √ √ √ 43 Expertise is specific functional areas of the appointed/ reappointed director √ √ √ √ √ 44 Names of companies in which the person also holds the directorship and the and the membership of committees of the board √ √ √ √
  • 50. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 41 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 45 The company appointed Chief Financial Officer, a Head of Internal Audit (Internal Control and Compliance) and Company Secretary. The Board of Directors clearly defined respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the CS √ √ √ √ √ √ 46 Requirement to attend the Board Meeting. The CFO and the Company Secretary of the companies attend meetings of the Board of Directors √ √ √ √ √ √ Audit Committee 47 The company has an Audit Committee as a subcommittee of the Board of Directors √ √ 48 The Audit Committee assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business √ √ √ √ 49 The Audit Committee is responsible to the Board of Directors. The duties of the Audit Committee clearly set forth in writing √ √ √ √ √ 50 The Audit Committee shall be composed of at least 3 (three) members √ √ 51 The Board of Directors appointed members of the Audit Committee who are directors of the company and includes 1 (one) independent directors √ √
  • 51. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 42 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 52 All members of the audit committee are “financially literate” and 1(one) member have accounting or related financial management experience √ √ 53 Board of Directors appoint the new Committee member(s) to fill up the vacancy immediately or not later than 1 (one) month from the date vacancies in the Committee √ √ √ 54 The Company secretary shall act as the secretary of the committee √ √ √ √ 55 The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director √ √ √ √ √ 56 Independent Director is the Chairman of the Audit Committee √ √ √ √ 57 Chairman of the Audit Committee shall remain present in the Annual General Meeting (AGM) √ √ √ √ 58 Audit Committee monitor Internal Control Risk Management process √ √ √ √ 59 Audit Committee oversee hiring and performance of external auditors √ √ 60 Audit Committee review along with the management, the actual financial statements before submission to the board for approval √ √ √ 61 Audit Committee review statements of significant related party transactions submitted by the management √ √ √ 62 The Audit Committee shall report on its activities to the Board of Directors √ √ √ √ √
  • 52. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 43 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 63 Suspected or presumed fraud or irregularity or material defect in the internal control system. √ √ √ √ √ 64 Any other matter which shall be disclosed to the Board of Directors immediately √ √ √ √ √ 65 If the Audit Committee reported to the Board of directors about anything which has material impact on the financial condition as result of operation. Audit Committee funds that such rectification has been unreasonably ignored; the Audit Committee shall report such finding to the Commission. √ √ √ √ 66 Appraisal or valuation services or fairness opinions √ √ √ √ 67 Book-keeping or other services related to the accounting records or financial statements √ √ √ √ 68 Any other service that the Audit Committee determines √ √ 69 No partner or employees of the external audit firms shall possess any share of the Company √ 70 The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company √ 71 The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also √ √ 72 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO) √ √ √
  • 53. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 44 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 73 The CEO and CFO shall certify to the Board that Financial statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading √ √ √ 74 The directors of the Company shall state, in accordance with the Annexure attached, in the directors’ report whether the company has complied with these conditions √ √ √ Item wise Detailed Information 75 Detailed classification of various capitals √ √ 76 Segregated information of the paid up capital √ √ 77 Proper clarified classification of the Balance Sheet Items √ √ 78 Share premium or discount √ √ √ 79 Full information about reserve or contingency account √ √ √ 80 Item wise detailed summary √ √ √ 81 Details of balance of fund & account √ √ √ 82 Details of liabilities & provisions √ √ √ √ √ 83 Details of deposit premium √ √ √ √ √ 84 Details of liabilities & provisions √ √ √ √ √ √ √ 85 Bonus share issuance details √ √ √ √ √ √ √ Detailed Current Liabilities 86 Full disclosure of Sundry Creditors √ √ √ √ √ √ √ 87 Details of Tax liabilities √ √ √ √ √ √ √ 88 Liabilities of short-term nature √ √ √ √ √ √ √ √
  • 54. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 45 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 89 Bank overdraft (O/D) policies √ √ √ √ √ √ √ √ 90 Maintenance of Bank O/D √ √ √ √ √ √ √ √ Detailed Current Assets 91 Classification of Assets √ √ √ √ √ √ √ √ 92 Investments of the company √ √ √ √ √ √ √ √ 93 Outstanding expenses details √ √ √ √ √ √ 94 Outstanding income details √ √ √ √ √ √ 95 Receivables from various organizations and parties √ √ √ 96 Cash in hand √ √ √ √ 97 Bank balance details √ √ √ √ 98 Full disclosure of other accounts with various banks √ √ √ √ √ 99 Classified expense details √ √ √ √ √ 100 Details of profit and loss appropriation √ √ √ √ √ 101 Sector wise interest paid and received details √ √ √ √ √ 102 Details of dividend paid √ √ √ √ √ 103 Details of profit or (loss) transferred from √ √ √ √ √ 104 Details of various adjustments √ √ √ √ √ Signature 105 Signature of the Director √ √ √ √ √ √ √ √ √ √ √ √ √ 106 Signature of the Chairman √ √ √ √ √ √ √ √ √ √ √ √ √ 107 Signature of the Chartered Accountants √ √ √ √ √ √ √ √ √ √ √ √ √ 108 Preparation of the consolidated business revenue account for √ √ √ √ √ √ 109 Balancing details of claims and payments √ √ √ √ √ 110 Commission paid to agencies √ √ √ √ √ Item wise Revenues and Expenses Accounts 111 Expenses regarding management of the company √ √ √
  • 55. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 46 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 112 Account of the Marine Hull Insurance √ √ √ 113 Details of various reserves √ √ √ √ 114 Insurance category wise revenue account √ √ √ √ 115 Reserve for Exceptional Loss √ √ √ √ 116 General Reserve & Investment Equalization Fund √ √ √ √ 117 Revaluation Reserve Account √ √ √ √ 118 Proposed Dividend Account √ √ √ √ 119 Issuance of Bonus & Right Share √ √ √ 120 Appropriation of Share Premium √ √ √ √ Details of Use of Cash and Cash Equivalents 121 Detailed classification of Cash Flows √ √ √ √ √ 122 Cash collection from premium √ √ √ √ 123 Cash collection from other revenue sources √ √ √ √ 124 Payment to income tax √ √ √ √ √ √ 125 Payment made to the management and other parties √ √ √ √ √ √ 126 Purchase of Fixed Assets √ √ √ √ √ √ √ 127 Investment Enhancement √ √ √ √ √ √ 128 Cash collected from right issue √ √ √ √ 129 Overdraft with banks √ √ √ 130 Details of cash and cash equivalents √ √ √ 131 Balance with various banks √ √ √ 132 Classified assets summary report √ √ √ 133 Comparison of assets’ book value and market value √ √ √ √ √ 134 Schedule Of Fixed Assets √ √ √ √ √ 135 Details of depreciation of various assets with depreciation method, rates and calculations √ √ √ √
  • 56. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 47 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 136 Disclosure of basis of presentation of financial statements √ √ √ √ 137 Used accounting polices √ √ √ √ 138 Description of the company √ √ √ √ Compliance Status 139 Compliance with local laws √ √ √ √ 140 Compliance with international accounting standards √ √ √ √ 141 Compliance of BAS √ √ √ √ √ 142 Compliance with International Association Of Insurance Supervisors (IAIS) √ √ √ √ √ 143 Reporting Currency √ √ √ 144 Accounting period √ √ √ 145 Accounting policies regarding various investments √ √ 146 Accounting policies regarding fixed assets √ √ 147 Disclosure of share of public sector business √ √ 148 Provision for tax √ √ √ 149 Policy for employee’s benefit plan √ √ √ 150 Earnings Per Share (EPS) √ √ √ √ √ 151 Reserve for exceptional losses √ √ √ √ √ 152 Criteria for revenue recognition √ √ √ √ √ 153 Policies for cash & cash equivalents √ √ √ √ √ 154 Provisions for deferred tax liabilities as per BAS-12 √ √ √ √ 155 Classification of detailed share capital √ √ √ √ 156 Classifications of holdings of share capital √ √ √ √ 157 Groupings of share capital √ √ √ √ √ 158 Details of Sundry Creditors √ √ √ √ √ 159 Details of Sundry Debtors √ √ √
  • 57. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 48 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 160 Details of Premium Less Re-Insurance √ √ √ 161 Compliance of Section 40C of Insurance Act, 1938 √ √ √ 162 Claims against company not acknowledged as debt √ √ √ √ 163 Contingent Liabilities √ √ √ √ √ √ 164 Appointment of Auditors √ √ √ √ √ √ √ 165 Directors’ Certificate √ √ √ √ √ √ √ 166 Report on Going Concern √ √ √ √ √ √ √ 167 Claims Management and Details of Outstanding Claims Reserving (including IBNR & IBNER) √ √ √ √ √ √ √ 168 Classification of current assets √ √ √ √ √ √ √ 169 Premium Recognition √ √ √ √ √ √ √ Other Issues 170 Accounting Estimates √ √ √ √ √ √ √ 171 Materiality and aggregation √ √ √ √ √ √ √ 172 Foreign currency transaction √ √ √ √ √ 173 Property, Plant and Equipment recognition and measurement √ √ √ √ √ √ 174 Subsequent cost √ √ √ √ √ 175 Assets Revaluation √ √ √ √ √ 176 De-Recognition √ √ √ √ √ 177 Impairment of Assets √ √ √ √ √ 178 Investment Income Recognition √ √ √ √ 179 Segment Reporting √ √ √ √ 180 Fixed assets under construction √ √ √ √ √ √
  • 58. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 49 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 181 Interest Receivable Account √ √ √ √ √ √ 182 Audit fees √ √ √ √ √ √ 183 Transactions with related parties √ √ √ √ 184 Actuarial services √ √ √ 185 Internal audit services √ √ √ √ √ √ 186 Reporting and Compliance of Corporate Governance √ √ √ √ √ Table 8 : Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012]
  • 59. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 50 B 1.2 Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012] Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Common Disclosures to all Companies Norm Disclosures 1 Table of Contents √ √ √ √ √ √ √ √ 2 Chairman’s Statement √ √ √ √ √ √ √ √ 3 Company Profile √ √ √ √ √ √ √ 4 Notice to the General Shareholders √ √ √ √ √ √ √ √ 5 Value added statements √ √ √ √ a) Economic Value Added Statement √ b) Market Value Added Statement √ c) Contribution to the National Economy √ 6 Financial Highlights √ √ √ √ √ √ √ √ 7 Vision & Mission √ √ √ √ √ 8 Contact Information √ √ √ 9 Audit Committee √ √ √ √ 10 Board of Directors √ √ √ √ √ √ √ 11 Organization Chart √ 12 Managing Director’s Statement √ √ √ √ √ √ √ √ 13 Report on Corporate Governance √ √ 14 Quarterly Analysis √ 15 Branches Information √ √ √ √ √ √ √ √ 16 Proxy Form √ √ √ √ √ √ √ 17 Attendance Slip √ √ √ √ √ √ √
  • 60. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 51 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 18 Graphical Presentation √ √ √ 19 Credit facilities √ √ √ 20 History of the Company √ √ √ √ √ √ 21 Capital structure & Share Value √ √ √ √ √ √ √ √ 22 Financial Achievement √ √ √ √ √ √ √ √ 23 Class wise Financial Achievements in 2012 compared to 2011 √ √ √ √ √ √ √ √ 24 Directors List √ √ √ √ √ √ √ √ 25 Name of the Directors/Sponsors with shareholdings in 2012 √ √ √ √ √ √ √ 26 Shareholding of the Executives √ √ √ √ Performance Indicators 27 Company’s Performance 5 Years at a Glance √ √ √ √ √ √ 28 Graphical performance presentation of the company √ 29 Summary of Accounts 2012 √ √ √ √ 30 Performance Indicators √ √ √ √ √ √ Details of Short-term Investments 31 Held to Maturity Investments √ √ √ √ √ √ √ 32 Held for Trading Investments √ √ √ √ √ √ √ 33 Available for Sale Investments √ √ √ √ √ √ √
  • 61. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 52 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 34 Inventories details √ √ √ √ √ √ √ Other Issues 35 Premium Control Account √ √ √ √ √ √ √ 36 Corporate Milestones √ √ √ √ √ Voluntary Disclosures Formal Elements 37 Letter of Transmittal √ 38 Awards and Recognition √ √ 39 Product Information √ 40 Photo Gallery √ √ √ √ √ √ 41 Information about the directors √ √ √ √ √ 42 Glossary √ Explanatory Information of the Company 43 Overall Strategic Objectives √ 44 Core Values √ 45 Key Personnel Information √ √ √ √ √ √ √ 46 Summary of Accounts √ 47 Key Operating and Financial Highlights √ √ √ √ 48 Meeting attended by the Directors √ √ √ √ √ √ √ √ 49 Pattern of Shareholding √ √ √ √ √ √ 50 Performance Indicators √ √ √ √ 51 Report on Corporate Social Responsibility √ √ √ √ 52 Accounting Ratios Pertaining to the Insurance Sector √
  • 62. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 53 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Useful Information for the Shareholders 53 Corporate Milestones √ √ √ √ 54 Bangladesh Map √ √ √ √ √ √ 55 Details of misc. expenses √ √ √ √ 56 Capital Expenditure Commitment √ √ √ √ √ 57 Special employee details √ √ √ √ √ √ 58 Investment in shares of other companies √ √ √ √ √ √ Valuation Details 59 Valuation of Assets √ √ √ 60 Valuation of Shares √ √ 61 Valuation of Investments √ √ Additional and Useful Information 62 Sponsor Shareholder list √ √ √ 63 Sponsor Shareholders’ profile √ √ √ √ 64 Executives of Head Office √ √ √ √ √ √ 65 Investors’ Information √ √ √ √ √ √ 66 Credit Rating √ √ √ √ √ √
  • 63. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 54 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 67 Shareholders’ View √ √ √ √ √ √ 68 Vision and Mission of the company √ √ √ √ √ 69 Product Diversification and Innovation √ √ √ √ √ 70 Company Information √ √ √ √ 71 From the Records Book √ √ √ √ √ 72 Composition of Board and its Committees √ √ √ √ 73 Head of Branches √ √ √ 74 Corporate Social Responsibility (CSR) √ √ √ 75 Meeting attended by the Directors √ √ 76 Pattern of Shareholding √ √ 77 Brief Profile of the Directors √ √ √ 78 Environmental Policy √ √ √ √ 79 Redress of Investors Complaints √ √ √ 80 Redress of Clients Complaints √ √ 81 Economic Value Added Statement √ √ √ 82 Contribution to the National Economy √ √ √
  • 64. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 55 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 83 Bangladesh Non-Life Insurance Market Composition √ √ √ 84 Report on IT √ √ √ √ √ √ 85 Report on Information Technology √ √ √ √ √ √ √ 86 Risk Management √ √ √ √ √ √ √ 87 Insurance Risk and its Mitigation Strategies √ √ √ √ √ √ 88 Solvency Margin √ √ √ √ √ √ 89 Review of Assets Quality √ √ √ √ √ √ √ 90 Legal form of the company √ √ √ √ √ √ 91 Activities of the company √ √ √ √ √ √ 92 Employee Benefits √ √ √ √ √ 93 Changes in fair value of the investments √ √ √ √ √ 94 Post Balance Sheet events √ √ √ 95 Quarterly Analysis √ √ 96 Shareholder’s Note Table 9 : Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2012]
  • 65. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 56 B 2.0 Analysis of Annual Reports 2011 B 2.1 Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011] Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Obligatory Financial Statements as per Act and Standards 1 Financial Statements as per Act. √ √ √ √ √ √ √ √ √ √ √ √ a) Statement of Financial Position √ √ √ √ √ √ √ √ √ √ √ √ √ b) Statement of Comprehensive Income √ √ √ √ √ √ √ √ √ √ √ √ √ c) Profit & Loss Appropriation Account √ √ √ √ √ √ √ √ √ √ √ √ d) Fire Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ √ √ e) Marine Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ √ √ f) Motor Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ g) Miscellaneous Insurance Revenue Account √ √ √ √ √ √ √ √ √ √ √ √ h) Classified Summary of Assets [Form AA] √ √ √ √ √ √ √ √ √ √ i) Statement of Class-wise Underwriting Profit/(Loss) √ √ j) Statement of Cash Flows √ √ √ √ √ √ √ √ √ √ √ √ k) Statement of Changes in Shareholders’ Equity √ √ √ √ √ √ √ √ √ √ √ √ l) Consolidated Insurance Revenue Account √ √ √ √ √ √ √ √ Mandatory Statements as per Act 2 Report on CSR & Corporate Governance √ √ √ √ 3 Notes to the Accounts √ √ √ √ √ √ √ √ 4 Status of Compliance with the Corporate Governance Guidelines (CGG) √ √ √ √ √ √ √ √
  • 66. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 57 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 5 Auditor’s Report √ √ √ √ √ √ √ √ √ √ √ 6 Report of the Audit Committee √ √ √ √ 7 Responsibility Statement of Chief Executive Officer and Chief Financial Officer √ √ √ √ √ √ 8 Compliance with BAS & BFRS statement √ 9 Certificate on compliance of conditions of corporate governance √ √ √ √ √ √ √ √ Detailed Disclosures of Board of Independent Directors 10 Board size & number of members in the active board √ √ √ 11 Independent Director’s and their Positions √ √ √ 12 Procedures to select the Independent Directors √ √ √ 13 Shareholding position of Independent Director √ √ √ √ 14 Independent Director is not sponsor, nor any family member/family relationship of the sponsor √ √ √ √ 15 Independent Director does not have any other relationship with the Company or its’ subsidiary associates companies √ √ √ 16 Independent Director is not a member, director or officer of any stock exchange √ √ √ √ √ √ 17 Independent Director is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm √ √ √ √ √ √ √
  • 67. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 58 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 18 Chairman of the Board and Chief Executive Officer shall be filled by different individuals. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer. √ √ √ √ √ √ √ 19 The Director’s Report to Shareholders shall include the additional statements. √ √ √ √ √ √ √ Details of Financial Conditions 20 Industry outlook and possible future developments in the industry √ √ √ √ 21 A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin √ √ √ √ √ √ 22 Discussion on continuity of any Extra-Ordinary gain or loss. √ √ √ √ √ 23 Basis for related party transactions-a statement or all related party transactions should be disclosed in the annual report √ √ √ √ √ √ 24 Utilization of proceeds from public issues, rights issues and/or through any others instruments. √ √ √ 25 An explanation if the financial results deteriorate after the company goes IPO, RPO, Rights Officer, Direct Listing, etc. √ √ √ √ √ √ 26 Significant variance occurs between Quarterly Financial Performance and Annual Financial Statements √ √ √ √ √ √ 27 Remuneration to directors including independent director √ √ √ √ √ √ √
  • 68. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 59 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 28 Financial statements present fairly state of affairs, the result of its operations, cash flows and changes in Shareholders’ equity of the company √ √ √ √ √ √ √ 29 Proper books of account of the issuer company have been maintained √ √ √ √ √ √ √ Compliance with Accounting Standards 30 Appropriate accounting policies have been consistently applied in preparation of the financial statements and accounting estimates are based on reasonable and prudent judgment. √ √ √ √ √ √ 31 International Accounting Standards (IAS)/ Bangladesh Accounting Standards (BAS)/ International Financial Reporting Standard (IFRS)/ Bangladesh Financial Reporting Standards (BERS), as applicable in Bangladesh have been followed in preparation of the financial statements √ √ √ √ √ √ √ 32 The system of internal control is sound in design and has been effectively implemented and monitored √ √ √ 33 There are no significant doubts upon the issuer Company’s ability to continue as a going concern. √ √ √ √ √ 34 Significant deviations from the last year’s operating results of the company shall be highlighted √ √ √ √ √ √ 35 Key operating and financial data of at least preceding 5 (five) years shall be summarized √ √ √ √ √ √ √ √ 36 If the issuer company has not declared dividend (cash or stock) for the year √ √ √ √ √ √ √ √
  • 69. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 60 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 37 The number of Board meeting held during the year and attendance by each director shall be disclosed √ √ √ √ √ √ √ Shareholding Related Issues 38 Shareholding position parent/ Subsidiary/ associated Companies and other related parties √ √ √ √ √ √ 39 Shareholding position of Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children √ √ √ √ √ √ 40 Shareholding position of Executives of the Company √ √ √ √ √ √ 41 Shareholding ten per cent (10%) or more voting interest in the Company √ √ √ √ 42 A brief resume of the appointed/re-appointed director √ √ √ 43 Expertise is specific functional areas of the appointed/ reappointed director √ √ √ √ 44 Names of companies in which the person also holds the directorship and the and the membership of committees of the board √ √ √ 45 The company appointed Chief Financial Officer, a Head of Internal Audit (Internal Control and Compliance) and Company Secretary. The Board of Directors clearly defined respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the CS √ √ √ √ √
  • 70. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 61 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 46 Requirement to attend the Board Meeting. The CFO and the Company Secretary of the companies attend meetings of the Board of Directors √ √ √ √ √ 47 The company has an Audit Committee as a subcommittee of the Board of Directors √ √ 48 The Audit Committee assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business √ √ √ √ 49 The Audit Committee is responsible to the Board of Directors. The duties of the Audit Committee clearly set forth in writing √ √ √ √ √ 50 The Audit Committee shall be composed of at least 3 (three) members √ √ 51 The Board of Directors appointed members of the Audit Committee who are directors of the company and includes 1 (one) independent directors √ √ 52 All members of the audit committee are “financially literate” and 1(one) member have accounting or related financial management experience √ √ 53 Board of Directors appoint the new Committee member(s) to fill up the vacancy immediately or not later than 1 (one) month from the date vacancies in the Committee √ √ √ 54 The Company secretary shall act as the secretary of the committee √ √ √ √
  • 71. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 62 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 55 The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director √ √ √ √ √ 56 Independent Director is the Chairman of the Audit Committee √ √ √ √ 57 Chairman of the Audit Committee shall remain present in the Annual General Meeting (AGM) √ √ √ 58 Audit Committee monitor Internal Control Risk Management process √ √ √ √ 59 Audit Committee oversee hiring and performance of external auditors √ √ 60 Audit Committee review along with the management, the actual financial statements before submission to the board for approval √ √ √ 61 Audit Committee review statements of significant related party transactions submitted by the management √ √ √ 62 The Audit Committee shall report on its activities to the Board of Directors √ √ √ √ √ 63 Suspected or presumed fraud or irregularity or material defect in the internal control system. √ √ √ √ √ 64 Any other matter which shall be disclosed to the Board of Directors immediately √ √ √ √ √
  • 72. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 63 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 65 If the Audit Committee reported to the Board of directors about anything which has material impact on the financial condition as result of operation. Audit Committee funds that such rectification has been unreasonably ignored; the Audit Committee shall report such finding to the Commission. √ √ √ √ 66 Appraisal or valuation services or fairness opinions √ √ √ √ √ 67 Book-keeping or other services related to the accounting records or financial statements √ √ √ √ √ 68 Any other service that the Audit Committee determines √ √ √ 69 No partner or employees of the external audit firms shall possess any share of the Company √ 70 The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company √ 71 The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also √ √ 72 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO) √ √ 73 The CEO and CFO shall certify to the Board that Financial statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading √ √
  • 73. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 64 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 74 The directors of the Company shall state, in accordance with the Annexure attached, in the directors’ report whether the company has complied with these conditions √ √ Item wise Detailed Information 75 Detailed classification of various capitals √ √ 76 Segregated information of the paid up capital √ √ √ 77 Proper clarified classification of the Balance Sheet Items √ √ √ 78 Share premium or discount √ √ √ √ 79 Full information about reserve or contingency account √ √ √ √ 80 Item wise detailed summary √ √ √ √ 81 Details of balance of fund & account √ √ √ √ 82 Details of liabilities & provisions √ √ √ √ √ √ 83 Details of deposit premium √ √ √ √ √ √ 84 Details of liabilities & provisions √ √ √ √ √ √ √ 85 Bonus share issuance details √ √ √ √ √ √ √ Detailed Current Liabilities 86 Full disclosure of Sundry Creditors √ √ √ √ √ √ √ 87 Details of Tax liabilities √ √ √ √ √ √ √ 88 Liabilities of short-term nature √ √ √ √ √ √ √ √ 89 Bank overdraft (O/D) policies √ √ √ √ √ √ √ √ 90 Maintenance of Bank O/D √ √ √ √ √ √ √ √ Detailed Current Assets 91 Classification of Assets √ √ √ √ √ √ √ √ 92 Investments of the company √ √ √ √ √ √ √ √ 93 Outstanding expenses details √ √ √ √ √ √
  • 74. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 65 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 94 Outstanding income details √ √ √ √ √ √ 95 Receivables from various organizations and parties √ √ √ 96 Cash in hand √ √ √ √ 97 Bank balance details √ √ √ √ 98 Full disclosure of other accounts with various banks √ √ √ √ √ 99 Classified expense details √ √ √ √ √ 100 Details of profit and loss appropriation √ √ √ √ √ 101 Sector wise interest paid and received details √ √ √ √ √ 102 Details of dividend paid √ √ √ √ √ 103 Details of profit or (loss) transferred from √ √ √ √ √ 104 Details of various adjustments √ √ √ √ √ Signature 105 Signature of the Director √ √ √ √ √ √ √ √ √ √ √ √ √ 106 Signature of the Chairman √ √ √ √ √ √ √ √ √ √ √ √ √ 107 Signature of the Chartered Accountants √ √ √ √ √ √ √ √ √ √ √ √ √ 108 Preparation of the consolidated business revenue account for √ √ √ √ √ √ 109 Balancing details of claims and payments √ √ √ √ √ 110 Commission paid to agencies √ √ √ √ √ Item wise Revenues and Expenses Accounts 111 Expenses regarding management of the company √ √ √ 112 Account of the Marine Hull Insurance √ √ √ 113 Details of various reserves √ √ √ √ 114 Insurance category wise revenue account √ √ √ √ 115 Reserve for Exceptional Loss √ √ √ √ 116 General Reserve & Investment Equalization Fund √ √ √ √ 117 Revaluation Reserve Account √ √ √ √
  • 75. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 66 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 118 Proposed Dividend Account √ √ √ √ 119 Issuance of Bonus & Right Share √ √ √ 120 Appropriation of Share Premium √ √ √ √ Details of Use of Cash and Cash Equivalents 121 Detailed classification of Cash Flows √ √ √ √ √ 122 Cash collection from premium √ √ √ √ 123 Cash collection from other revenue sources √ √ √ √ 124 Payment to income tax √ √ √ √ √ √ 125 Payment made to the management and other parties √ √ √ √ √ √ 126 Purchase of Fixed Assets √ √ √ √ √ √ √ 127 Investment Enhancement √ √ √ √ √ √ 128 Cash collected from right issue √ √ √ √ 129 Overdraft with banks √ √ √ 130 Details of cash and cash equivalents √ √ √ 131 Balance with various banks √ √ √ 132 Classified assets summary report √ √ √ 133 Comparison of assets’ book value and market value √ √ √ √ √ 134 Schedule Of Fixed Assets √ √ √ √ √ 135 Details of depreciation of various assets with depreciation method, rates and calculations √ √ √ √ 136 Disclosure of basis of presentation of financial statements √ √ √ √ 137 Used accounting polices √ √ √ √ 138 Description of the company √ √ √ √ Compliance Status 139 Compliance with local laws √ √ √ √ 140 Compliance with international accounting standards √ √ √ √
  • 76. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 67 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 141 Compliance of BAS √ √ √ √ √ 142 Compliance with International Association Of Insurance Supervisors (IAIS) √ √ √ √ √ 143 Reporting Currency √ √ √ 144 Accounting period √ √ √ 145 Accounting policies regarding various investments √ √ 146 Accounting policies regarding fixed assets √ √ 147 Disclosure of share of public sector business √ √ 148 Provision for tax √ √ √ 149 Policy for employee’s benefit plan √ √ √ 150 Earnings Per Share (EPS) √ √ √ √ √ 151 Reserve for exceptional losses √ √ √ √ √ 152 Criteria for revenue recognition √ √ √ √ √ 153 Policies for cash & cash equivalents √ √ √ √ √ 154 Provisions for deferred tax liabilities as per BAS-12 √ √ √ √ 155 Classification of detailed share capital √ √ √ √ 156 Classifications of holdings of share capital √ √ √ √ 157 Groupings of share capital √ √ √ √ √ 158 Details of Sundry Creditors √ √ √ √ √ 159 Details of Sundry Debtors √ √ √ 160 Details of Premium Less Re-Insurance √ √ √ 161 Compliance of Section 40C of Insurance Act, 1938 √ √ √ 162 Claims against company not acknowledged as debt √ √ √ √ 163 Contingent Liabilities √ √ √ √ √ √ 164 Appointment of Auditors √ √ √ √ √ √ √ 165 Directors’ Certificate √ √ √ √ √ √ √ 166 Report on Going Concern √ √ √ √ √ √ √
  • 77. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 68 Sl.No. Items of Mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 167 Claims Management and Details of Outstanding Claims Reserving (including IBNR & IBNER) √ √ √ √ √ √ √ 168 Classification of current assets √ √ √ √ √ √ √ 169 Premium Recognition √ √ √ √ √ √ √ Other Issues 170 Accounting Estimates √ √ √ √ √ √ √ 171 Materiality and aggregation √ √ √ √ √ √ √ 172 Foreign currency transaction √ √ √ √ √ 173 Property, Plant and Equipment recognition and measurement √ √ √ √ √ √ 174 Subsequent cost √ √ √ √ √ 175 Assets Revaluation √ √ √ √ √ 176 De-Recognition √ √ √ √ √ 177 Impairment of Assets √ √ √ √ √ 178 Investment Income Recognition √ √ √ √ 179 Segment Reporting √ √ √ √ 180 Fixed assets under construction √ √ √ √ √ √ 181 Interest Receivable Account √ √ √ √ √ √ 182 Audit fees √ √ √ √ √ √ 183 Transactions with related parties √ √ √ √ 184 Actuarial services √ √ √ 185 Internal audit services √ √ √ √ √ √ 186 Reporting and Compliance of Corporate Governance √ √ √ √ √ Table 10 : Checklist of Mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011]
  • 78. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 69 B 2.2 Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011] Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Common Disclosures to all Companies Norm Disclosures 1 Table of Contents √ √ √ √ √ √ √ √ 2 Chairman’s Statement √ √ √ √ √ √ √ √ 3 Company Profile √ √ √ √ √ √ √ 4 Notice to the General Shareholders √ √ √ √ √ √ √ √ 5 Value added statements √ √ √ √ a) Economic Value Added Statement √ b) Market Value Added Statement √ c) Contribution to the National Economy √ 6 Financial Highlights √ √ √ √ √ √ √ √ 7 Vision & Mission √ √ √ √ √ 8 Contact Information √ √ √ 9 Audit Committee √ √ √ √ 10 Board of Directors √ √ √ √ √ √ √ 11 Organization Chart √ 12 Managing Director’s Statement √ √ √ √ √ √ √ √ 13 Report on Corporate Governance √ √ 14 Quarterly Analysis √ 15 Branches Information √ √ √ √ √ √ √ √ 16 Proxy Form √ √ √ √ √ √ √ 17 Attendance Slip √ √ √ √ √ √ √
  • 79. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 70 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 18 Graphical Presentation √ √ √ 19 Credit facilities √ √ √ 20 History of the Company √ √ √ √ √ √ 21 Capital structure & Share Value √ √ √ √ √ √ √ √ 22 Financial Achievement √ √ √ √ √ √ √ √ 23 Class wise Financial Achievements in 2012 compared to 2011 √ √ √ √ √ √ √ √ 24 Directors List √ √ √ √ √ √ √ √ 25 Name of the Directors/Sponsors with shareholdings in 2012 √ √ √ √ √ √ √ 26 Shareholding of the Executives √ √ √ √ Performance Indicators 27 Company’s Performance 5 Years at a Glance √ √ √ √ √ √ 28 Graphical performance presentation of the company √ 29 Summary of Accounts 2012 √ √ √ √ 30 Performance Indicators √ √ √ √ √ √ Details of Short-term Investments 31 Held to Maturity Investments √ √ √ √ √ √ √ 32 Held for Trading Investments √ √ √ √ √ √ √ 33 Available for Sale Investments √ √ √ √ √ √ √
  • 80. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 71 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 34 Inventories details √ √ √ √ √ √ √ Other Issues 35 Premium Control Account √ √ √ √ √ √ √ 36 Corporate Milestones √ √ √ √ √ Voluntary Disclosures Formal Elements 37 Letter of Transmittal √ 38 Awards and Recognition √ √ 39 Product Information √ 40 Photo Gallery √ √ √ √ √ √ 41 Information about the directors √ √ √ √ √ 42 Glossary √ Explanatory Information of the Company 43 Overall Strategic Objectives √ 44 Core Values √ 45 Key Personnel Information √ √ √ √ √ √ √ 46 Summary of Accounts √ 47 Key Operating and Financial Highlights √ √ √ √ 48 Meeting attended by the Directors √ √ √ √ √ √ √ √ 49 Pattern of Shareholding √ √ √ √ √ √ 50 Performance Indicators √ √ √ √ 51 Report on Corporate Social Responsibility √ √ √ √ 52 Accounting Ratios Pertaining to the Insurance Sector √
  • 81. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 72 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC Useful Information for the Shareholders √ √ √ 53 Corporate Milestones √ √ √ √ 54 Bangladesh Map √ √ √ √ √ √ 55 Details of misc. expenses √ √ √ √ 56 Capital Expenditure Commitment √ √ √ √ √ 57 Special employee details √ √ √ √ √ √ 58 Investment in shares of other companies √ √ √ √ √ √ Valuation Details 59 Valuation of Assets √ √ √ 60 Valuation of Shares √ √ 61 Valuation of Investments √ √ Additional and Useful Information 62 Sponsor Shareholder list √ √ √ 63 Sponsor Shareholders’ profile √ √ √ √ 64 Executives of Head Office √ √ √ √ √ √ 65 Investors’ Information √ √ √ √ √ √ 66 Credit Rating √ √ √ √ √ √
  • 82. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 73 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 67 Shareholders’ View √ √ √ √ √ √ 68 Vision and Mission of the company √ √ √ √ √ 69 Product Diversification and Innovation √ √ √ √ √ 70 Company Information √ √ √ √ 71 From the Records Book √ √ √ √ √ 72 Composition of Board and its Committees √ √ √ √ 73 Head of Branches √ √ √ 74 Corporate Social Responsibility (CSR) √ √ √ 75 Meeting attended by the Directors √ √ 76 Pattern of Shareholding √ √ 77 Brief Profile of the Directors √ √ √ 78 Environmental Policy √ √ √ √ 79 Redress of Investors Complaints √ √ √ 80 Redress of Clients Complaints √ √ 81 Economic Value Added Statement √ √ √ 82 Contribution to the National Economy √ √ √
  • 83. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 74 Sl.No. Items of Non-mandatory Financial Disclosures RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 83 Bangladesh Non-Life Insurance Market Composition √ √ √ 84 Report on IT √ √ √ √ √ √ 85 Report on Information Technology √ √ √ √ √ √ √ 86 Risk Management √ √ √ √ √ √ √ 87 Insurance Risk and its Mitigation Strategies √ √ √ √ √ √ 88 Solvency Margin √ √ √ √ √ √ 89 Review of Assets Quality √ √ √ √ √ √ √ 90 Legal form of the company √ √ √ √ √ √ 91 Activities of the company √ √ √ √ √ √ 92 Employee Benefits √ √ √ √ √ 93 Changes in fair value of the investments √ √ √ √ √ 94 Post Balance Sheet events √ √ √ 95 Quarterly Analysis √ √ 96 Shareholder’s Note Table 11 : Checklist of Non-mandatory Financial Disclosures in Non-life Insurance Companies’ Annual Reports [Annual Report 2011]
  • 84. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 75 B 3.0 Checklist of Complied BASs [Annual Reports 2012 & 2011] Sl.No. Name of the BAS BAS No. RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 1. Presentation of Financial Statements 1 √ √ √ √ √ √ √ √ √ √ √ √ √ 2. Inventories 2 √ √ √ √ √ √ √ √ √ √ √ √ √ 3. Cash Flow Statements 7 √ √ √ √ √ √ √ √ √ 4. Accounting Policies, Changes in Accounting Estimates and Errors 8 √ √ √ √ √ √ √ √ √ 5. Event After Balance Sheet Date 10 √ √ √ √ √ √ 6. Construction Contracts 11 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7. Income Tax 12 √ √ √ √ √ √ √ √ √ √ √ √ √ 8. Property, Plant and Equipment 16 √ √ √ √ √ √ √ √ √ √ √ √ √ 9. Leases 17 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 10. Revenue Recognition 18 √ √ √ √ √ √ √ √ √ √ √ √ √ 11. Employee Benefits 19 √ √ √ √ √ √ 12. Accounting for Government Grants and Disclosure of Government Assistance 20 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 13. Effect of Changes in Exchange Rates of Foreign Currencies 21 √ √ √ √ √ √ 14. Borrowing Costs 23 √ √ √ √ √ √ 15. Related Party Disclosures 24 √ √ √ √ √ 16. Accounting for Investments 25 √ √ √ √ √ √ √
  • 85. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 76 Sl.No. Name of the BAS BAS No. RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 17. Consolidated and Separate Financial Statements 27 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 18. Investments in Associates 28 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 19. Investment in Joint Ventures 31 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 20. Earnings Per Share 33 √ √ √ √ √ √ √ √ √ √ √ 21. Provisions, Contingent Liabilities and Contingent Assets 37 √ √ √ √ √ √ √ √ √ 22. Intangible Assets 38 √ √ √ √ √ √ √ √ √ 23. Financial Instruments: Recognition and Measurement 39 √ √ √ √ √ √ √ √ √ 24. Investment Property 40 √ √ √ √ √ √ √ √ 25. Agriculture 41 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Table 12 : Checklist of Complied BASs [Annual Reports 2012 & 2011]
  • 86. Financial Reporting Disclosures: An Analysis of Non-life Insurance Companies of Bangladesh 77 B 4.0 Checklist of Complied BFRSs [Annual Reports 2012 & 2011] Sl.No. Name of the BFRS BFRS No. RIL NGIL CIL FIL MIL PGIL UIL PIL GIL NIL PICL DIL CIC 1. First Time Adoption of BFRSs 1 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2. Share Based Payment 2 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 3. Business Combination 3 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 4. Insurance Contracts 4 √ √ √ √ √ √ √ √ √ √ √ √ √ 5. Non-Current Assets Held for Sale and Discontinued Operations 5 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 6. Exploration and Evaluation of Mineral Resources 6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7. Financial Instruments: Disclosure 7 √ √ √ √ √ √ 8. Operating Segments 8 √ √ √ √ √ √ Table 13 : Checklist of Complied BFRSs [Annual Reports 2012 & 2011]