About Uttara Bank Limited Uttara Bank Limited (UBL) is a private commercial bank in Bangladesh established in 1965 with

the head office located at Motijheel in Dhaka, the capital city of Bangladesh. At the time of its establishment in 1965, it was named "Eastern Banking Corporation". After the liberation war of Bangladesh, the bank was nationalized. In 1983, it became the first privatized bank of Bangladesh. Uttara Bank Limited at a glance: It operates through 211 fully computerized branches ensuring best possible and fastest services to its valued clients. The bank has more than 600 foreign correspondents world wide. Total number of employees nearly 3,562. The Board of Directors consists of 13 members. The bank is headed by the Managing Director who is the Chief Executive Officer. Uttara Bank Limiteds Income Analysis Uttara Bank Limited generates its income from several sources such as investment income interest income, commission and brokerage, and so on. Here, sources of income are divided into four categories: Net Interest Income Income from Investment Commission, Exchange and Brokerage Other Operating Income Among these sources the bank generates income most from is Investment income. In 2010, the bank earned revenue from investment was approximately 45.57%. In 2009, the banks income from investment was 40.96% whereas in the previous year the percentage of total income was 39.16%. Investment income consists of interest earned and capital gains on treasury bills and bonds, dividend received from shares and gain from investment in securities. The proportion of income from investment has been increasing since 2008 to 2010. The next major source of income for the bank has been Interest income. The net interest income was 38.87% in the year 2010. In 2009, it was 37.89% and in 2008, the banks net interest income was 37.26%. The banks proportion of interest income has been also increasing from 2008 to 2010. Uttara Banks income through commission, exchange and brokerage in the year 2010 was 19.40%. The values were 20.33% and 21.13% in the year 2009 and 2008 respectively. The banks income from commission, exchange and brokerage has been decreasing since 2008 till 2010.

Income from other sources was 16.12% in the year 2010 which was much higher than previous years proportion that is 9.09%. However, in 2008, income from various sources was 8.47%. Following are the graphical view of income sources contribution:
Proportion of Income in the year 2010

16.12% 38.87% 19.40%

Net Interest Income Income from Investment. Commission,Exchange and Brokerage Other Operating Income

45.57%

Proportion of Income in the year 2009

9.09% Net Interest Income 20.33% 37.89% Income from Investment. Commission,Exchange and Brokerage Other Operating Income 40.96%

Proportion of Income in the year 2008

8.47% Net Interest Income 21.13% 37.26% Income from Investment. Commission,Exchange and Brokerage Other Operating Income 39.16%

Uttara Banks risk analysis for Income Comparing the 3 years data of Uttara Bank Limited, we can see that the maximum income of this Bank is comes from investments. Though investment income increased, the bank is also depending on investments more than interest income. Thus, if there will be a downward trend in securities market or in case of unexpected interest rate changes there is risk of facing serious problem. Another major source of the banks income is net interest income, which has been increasing since 2008 to 2010. But, in these years deposits percentage has been decreasing and so is also the investment amount. Uttara Bank Limiteds Expense analysis Uttara Banks sources of expense includes salary and allowances; rent, taxes, insurance, electricity; postage, stamp, telecommunication; stationery, printing, advertisements etc. Among these expenses the major portion has been taken by salary and allowance the percentage of which was 32.90% in 2010, 34.17% in 2009 and 35.86% in 2008. Though the amount has increased in each year, according to the percentage of income it decreased. Rent, taxes, insurance, electricity etc. expenses has increased over the period. But, in terms of percentage of interest income this expense was less than previous years in 2009, being 3.74% whereas in 2008 the value was 3.85%. However, in the year 2010 the expense risen to 4.02%. Expenses including legal issues; postage, stamp, telecommunication etc; Stationery, printing, advertisements; Managing Director, Director and Audit fees constitute a small part of the total operating expense. Also, these expenses were almost in the same level in the years 200810.

Repair, maintenance and depreciation have decreased in the year 2009 than 2008, dropping from 2.93% to 2.77% in terms of percentage of interest income. However, in the year 2010, it increased again and went to 3.11%. Miscellaneous expenses which are considered minor are termed as other expense in the financial report. But, sum of these other expenses are not that small. In the year 2008, it was 8.07%. In 2009, it was 9.02% and in 2010 the expenses soared to 13.90% of the interest income given that interest income increased over the years.

Following are the graphical view of proportion of expenses:

Proportion of Expenses in the year 2010
Salary and allowances. Rent, taxes, insurance, electricity etc. Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisements etc.

13.90%

3.11% 0.01% 0.05% 0.22% 1.44% 0.77% 0.21% 4.02%

32.90%

Managing Director's salary & allowances and fees Directors' fees Auditors' fees Repair, maintenance and depreciation of Bank's property Other expenses

Proportion of Expenses in the year 2009

Salary and allowances. Rent, taxes, insurance, electricity etc.

2.77% 0.01% 0.05% 0.21% 1.35% 0.79% 0.20% 3.74% 34.17% 9.02%

Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisements etc. Managing Director's salary & allowances and fees Directors' fees Auditors' fees Repair, maintenance and depreciation of Bank's property Other expenses

Proportion of Expenses in the year 2008

Salary and allowances. Rent, taxes, insurance, electricity etc.

2.93% 0.05% 0.01% 0.22% 1.45% 0.81% 0.20% 3.85% 8.07%

Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisements etc.

35.86%

Managing Director's salary & allowances and fees Directors' fees Auditors' fees Repair, maintenance and depreciation of Bank's property Other expenses

Uttara Banks risk analysis for Expense More than half of the total operating expense is consumed by salary and allowances. But, with the passage of time the banks expense on this segment is decreasing comparing to interest income. However, in the view of amount this expense is increasing which affects the net income directly. If net interest income becomes insufficient to cover operating expenses the bank may have to face losses. On the other hand, rent, tax, insurance etc. also increased in percentage of interest income given that interest income itself has been increasing in value since 2008. Uttara Bank should take possible steps to limit the increase of such expense or else may be in the following years the expense will present an alarming amount. Another alarming issue that catches eye is the other expenses portion. Over time in these years this portion has been increasing alarmingly. In the year 2009, this expense has increased by 11.71% than the previous year. In 2010, it increased by 54.19% than the year 2009. This portion of expenses consists of miscellaneous expenses. If such expenses increase so much it could be harmful for the bank. Thus, Uttara Bank should also focus to reduce such expense.

Uttara Bank Limiteds Asset analysis Uttara Banks Assets in the balance sheet include the major categories: Cash and cash equivalents, Balance with other banks and financial institutions, Money at short call notice, Investments, Loans and advances, and other assets. Major contribution to the total asset has been making by the Loan and advances portion. This segment constituted 51.64% of total asset in the year 2008, 54.83% in 2009 and 59.76% in 2010. The proportion of this segment is increasing from 2008 to 2010. As of contribution to total assets the second position is held by the Investment segment. In 2008, 35.98% of total assets were investment. In 2009, the percentage was 31.28% and in 2010 it was 22.82%. But, from 2008 the portion of this segment is decreasing. In the year 2008, Uttara Bank held 7.13% of its assets as cash and cash equivalent. In 2009, it has been increased a bit to 7.43% and in the year 2010 it was 8.15%. Money at short call notice and Balance with other banks compose a very small part of total assets. And, their portions were almost same. However, Other assets contribution has been increasing significantly during the years. In 2008, 4.53% of total assets was composed by other assets. The value was 5.60% and 8.74% in the years 2009 and 2010 respectively. Following are the graphical view of proportion of Assets:

P roportionof Assets inthe yea r 2010

8.74% 8.15% 0.49% 0.04% Cash Balance with other Banks and Financial institutions Money at call and short notice Investments Loans and Advances 59.76% Other Assets

22.82%

P rop ortionof As s etsinth ey ea r2 0 0 9

5.60% 7.43% 0.40% 0.46% C ash Balance with other Banks and Financial institutions Money at call and short notice Investm ents L oans and Advances 54.83% Other Assets

31.28%

P rop ortionof Assetsinth e yea r 2008

4.53% 7.13% 0.35% 0.38% Cash Balance with other Banks and Financial institutions Money at call and short notice Investm ents Loans and Advances Other Assets

35.98% 51.64%

Uttara Banks risk analysis for Asset The most noticeable point is that the banks investment has decreased from 2008 to 2010. But, other than the interest income from loans provided, investment income is one of the major sources of income for the bank. A decrease in investment means less income from investments. On the other hand, other assets and cashs portion increased. If the bank does not fully utilize its assets to generate income in the long run it will have to suffer.

Uttara Bank Limiteds Liability and Equity analysis Uttara Banks liabilities can be classified into three major categories: Borrowings from other banks, financial institutions and agents; Deposits; and Other liabilities. Here, under deposits three basic types of deposit (Current deposit, Savings deposit and Fixed deposit) are considered and other than these are termed as Other deposits. More than 85% of total liabilities of the bank have been constituted by the deposits segment. Among these current deposits and savings deposits portion share almost same portion and compose more twothird of the total deposits. In 2008, current deposit was 25.05%, savings deposit was 34.25%, fixed deposit was 19.70% and other deposits were 2.26% of total equity and liabilities. In 2009, current deposit was 28.34%, savings deposit was 29.73%, fixed deposit was 19.51% and other deposits were 2.53% and in 2010, current deposit was 28.39%, savings deposit was 29.21%, fixed deposit was 18.58% and other deposits were 2.61%. Uttara Banks borrowings from other banks, financial institutions and agents are a very small proportion of total liabilities and equity. In 2008, it was 2.33% and in 2009 it was 1.64%. In the year 2010 it was 0.25%. From 2008 to 2010 the value has been decreasing. In the year 2008, total equity attributable to the equity-holders was 6.75%. In 2009, it was 8.63% and in 2010, it was 10.57%. Following are the graphical view of proportion of Liability and Equity: Proportion of Liabilities in the year 2010
Borrowings from other Banks, Financial Institutions and Agents Current and other accounts etc. Saving bank deposits Fixed deposits Other deposits
18.58%

10.57% 10.38% 2.61%

0.25% 28.39%

Other liabilities
29.21%

Total equity

Proportion of liabilities in the year 2009

Borrowings from other Banks, Financial Institutions and Agents Current and other accounts etc. 28.34% Saving bank deposits Fixed deposits 19.51% Other deposits Other liabilities 29.73% Total equity

8.63% 9.63% 2.53%

1.64%

Proportion of liabilities in the year 2008

6.75% 9.65% 25.05% 2.26% 2.33% Borrowings from other Banks, Financial Institutions and Agents Current and other accounts etc. Saving bank deposits Fixed deposits 19.70% Other deposits Other liabilities Total equity

34.25%

Uttara Banks risk analysis for Liability and Equity Uttara Banks borrowings from other institutions have decreased in the years from 2008 to 2010. Though, liability have decreased the bank is not focusing on leverage benefits it could have. On the other hand, other liabilities which include bills payable have increased over time which can be said increasing obligations in other words.

About United Commercial Bank Limited Some leading personalities from industry and business of the country got together in early eighties of the last century to build up a commercial bank. The result was one of the first generation private sector banks of the country. Thus United commercial Bank Limited (UCBL) came into reality and GOB was kind enough to participate as a share holder of it. UCBL started operating as a commercial bank in 1983. UCBL is committed for sustainable development of the country. Visionary policy makers along with a dynamic Management team are leading UCBL to its goal. It has created a clear difference from the competitors with its fast, friendly and personalized services to its clients. Modern, world class banking is made available here in Bangladesh by UCBL. General Banking Services UCBL provides all general banking services to its clients through its 110 branches all over the country. Savings and current accounts, transfer of money, Western Union Money Transfer are some of the services UCBL presents. DPS plus, Earning plus, Deposit Insurance scheme, Multimillionaire, Money maximizer, Time deposit scheme, Monthly saving scheme etc. are some of their deposit services. Clients having requisite qualifications may have Foreign Currency Deposit accounts in UCBL. It operates through 110 fully computerized branches ensuring best possible and fastest services to its valued clients. Total number of employees nearly 2738. The Board of Directors consists of 17 members. The bank is headed by the Managing Director who is the Chief Executive Officer. Company had made a profit of BDT 2.80 billion against BDT 2.26 billion for the corresponding period of previous year 2010 United Commercial Bank Limiteds Income Analysis United Commercial Bank Limited generates its income from several sources such as investment income interest income, commission and brokerage, and so on. Here, sources of income are divided into four categories: Net Interest Income Income from Investment Commission, Exchange and Brokerage Other Operating Income

Among these sources the bank generates income most from is Interest income. In 2010, the bank earned revenue from interest was approximately 49% of its total revenue and the net interest income was 40.51% of its interest income. In 2009, the banks net income from interest was 37.57% whereas in the previous year the percentage of interest income was 34.94%. The proportion of net interest income has been increasing since 2008 to 2010. United Commercial Banks income from investment in the year 2010 was 20.83%. The values were 13.83% and 11.67% in the year 2009 and 2008 respectively. The banks investment income has been increasing since 2008 with respect to interest income. Income from commission, exchange and brokerage was 14.35% of interest income in the year 2010. In 2009, it was 16.10% and in 2008, the banks net interest income was 19.76%. The banks income from this segment has decreased both in 2009 and 2010 than the respective previous years. Income from other sources was 7.27% in the year 2010 which was a bit higher than previous years proportion that is 7.04%. However, in 2008, income from various sources was 5.12%. Following are the graphical view of income sources contribution:

Proportionof Incom e in the yea r 2010

7.27% , 9% Net Interest Incom e 14.35% , 17% 40.51% , 49% Investm ent incom e Com m ission,Exchange and Brokerage 20.83% , 25% Other Operating Incom e

P roportionof Incom e inthe year 2009

7.04% , 9% Net Interest Incom e 16.10% , 22% 37.57% , 50% Investm ent incom e Com m ission,Exchange and Brokerage 13.83% , 19% Other Operating Incom e

P roportionof Incom e inthe year 2008

5.12% , 7% Net Interest Incom e Investm ent income 19.76% , 28% 34.94% , 49% Com m ission,Exchange and Brokerage 11.67% , 16% Other Operating Incom e

United Commercial Banks risk analysis for Income Comparing the 3 years data of United Commercial Bank Limited, we can see that the banks major source of income is interest. And, the share of net interest income on interest income is increasing. But, in 2010 share of net interest income on total income has decreased. Another major source of the banks income is the investment income. It is increasing but the bank should manage the portfolio so that chances of default will be minimal. And, the bank also needs to focus on commission, exchange and brokerage income because such loss of income is adverse for the banks operation and goodwill. United Commercial Bank Limiteds Expense analysis United Commercial Banks sources of expense includes salary and allowances; rent, taxes, insurance, electricity; postage, stamp, telecommunication; stationery, printing, advertisements etc. Among these expenses the major portion has been taken by salary and allowance the percentage of which was 18.96% in 2010, 18.86% in 2009 and 19.69% of interest income in 2008. Though the amount has increased in each year, according to the percentage of income it decreased. But, it is decreasing as share of total expense. Rent, taxes, insurance, electricity etc. expenses has increased over the period. In 2009, it was 3.56% whereas in 2008 the value was 2.11% of interest income. However, in the year 2010 the expense risen to 3.94%. Expenses including legal issues; postage, stamp, telecommunication etc; Stationery, printing, advertisements; Managing Director, Director and Audit fees constitute a small part of the total operating expense. Also, these expenses were almost in the same level in the years 200810.

Miscellaneous expenses which are considered minor are termed as other expense in the financial report. In the year 2008, it was 5.76%. In 2009, it was 3.32% and in 2010 the expenses soared to 3.06% of the interest income given that interest income increased over the years.

Following are the graphical view of proportion of expenses: Proportion of Expenses in the year 2010
Salary and allowances.

1.79%, 5% 0.01%, 0% 5.76%, 18% 0.11%, 0% 0.05%, 0% 1.68%, 5% 0.57%, 2% 0.12%, 0% 18.96%, 58%

Rent, taxes, insurance, electricity etc. Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisements etc. Chief executive's salary and fees Directors' fees Auditors' fees Repair, maintenance and depreciation Other expenses

3.94%, 12%

Proportion of Expenses in the year 2009

3.32%, 11% 1.56%, 5% 0.00%, 0% 0.05%, 0% 0.13%, 0% 1.37%, 5% 0.74%, 3% 0.08%, 0% 18.86%, 64%
Postage, stamp, telecommunication etc. Stationery, printing, advertisements etc. Chief executive's salary and fees Directors' fees Auditors' fees Repair, maintenance and depreciation Other expenses Salary and allowances. Rent, taxes, insurance, electricity etc. Legal expenses

3.56%, 12%

Proportion of Expenses in the year 2008

Salary and allowances.

3.06%, 11% 1.65%, 6% 0.06%, 0% 0.00%, 0% 0.09%, 0% 1.42%, 5% 0.60%, 2% 0.18%, 1% 2.11%, 7% 19.69%, 68%

Rent, taxes, insurance, electricity etc. Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisements etc. Chief executive's salary and fees Directors' fees Auditors' fees Repair, maintenance and depreciation Other expenses

United Commercial Banks risk analysis for Expense More than half of the total operating expense is consumed by salary and allowances. But, with the passage of time the banks expense on this segment is decreasing comparing to interest income. However, in the view of amount this expense is increasing which affects the net income directly. If net interest income becomes insufficient to cover operating expenses the bank may have to face losses. On the other hand, rent, tax, insurance etc. also increased in percentage of interest income given that interest income itself has been increasing in value since 2008. United Commercial Banks proportion of this expense to total expense had risen very high from year 2008 to 2009. However, in 2010 it was almost same to the previous years amount. The bank should take possible steps to limit the increase of such expense or else may be in the following years the expense will present an alarming amount. Another alarming issue that catches eye is the other expenses portion. Over time in these years this portion has been increasing alarmingly. In the year 2009, this expense was almost same proportionate to the previous year. But in 2010, it increased by 63.63% than the year 2009. This portion of expenses consists of miscellaneous expenses. If such expenses increase so much it could be harmful for the bank. Thus, United Commercial Bank should also focus to reduce such expense.

United Commercial Bank Limiteds Asset analysis United Commercial Banks Assets in the balance sheet include the major categories: Cash and cash equivalents, Balance with other banks and financial institutions, Money at short call notice, Investments, Loans and advances, and other assets. Major contribution to the total asset has been making by the Loan and advances portion. This segment constituted 68.60% of total asset in the year 2008, 68.18% in 2009 and 71.96% in 2010. The proportion of this segment slightly decreased from 2008 to 2009 but increased in 2010. As of contribution to total assets the second position is held by the Investment segment. In 2008, 11.11% of total assets were investment. In 2009, the percentage was 10.33% and in 2010 it was 11.59%. In 2009, the share of this asset decreased from previous year and again increased in the next year. In the year 2008, United Commercial Bank held 7.32% of its assets as cash and cash equivalent. In 2009, it has been increased a bit to 7.74% and in the year 2010 it was 7.72%. Money at short call notice and Balance with other banks compose a very small part of total assets. And, their portions were almost same. However, Other assets contribution has been increasing significantly during the years. In 2008, 4.67% of total assets were composed by other assets. The value was 5.32% and 4.95% in the years 2009 and 2010 respectively. And, the banks fixed assets are also of very small proportion of the total asset. Following are the graphical view of proportion of Assets:

Proportion of Assets in the year 2010 7.72% 1.40% 0.86% 11.59%

Cash Balance with other Banks and Financial institutions Money at call and short notice Investments Loans and Advances Fixed assets including land, building

4.95% 1.51%

71.96%

Other Assets

Proportion of Assets in the year 2009

Cash

5.32% 1.44%

7.74% 2.67% 4.31% 10.33%

Balance with other Banks and Financial institutions Money at call and short notice Investments Loans and Advances Fixed assets including land, building

68.18%

Other Assets

Proportion of Assets in the year 2008 4.67% 1.54% 7.32% 6.56% 0.20% 11.11%
Cash Balance with other Banks and Financial institutions Money at call and short notice Investments Loans and Advances Fixed assets including land, building

68.60%

Other Assets

United Commercial Banks risk analysis for Asset United Commercial Banks major asset has been loans and advances in these 3 years. However, with this proportion the bank has more risk of default and credit risk. Also, the bank should have more investments in their portfolio. It should not solely depend on the loans for income. Its balance with other financial institution has also decreased over time. It should have more money on short call notice for minimizing the liquidity risk.

United Commercial Bank Limiteds Liability and Equity analysis United Commercial Banks liabilities can be classified into three major categories: Borrowings from other banks, financial institutions and agents; Deposits; and Other liabilities. Here, under deposits three basic types of deposit (Current deposit, Savings deposit and Fixed deposit) are considered and other than these are termed as Other deposits. More than 86% of total liabilities of the bank have been constituted by the deposits segment. In 2008, current deposit was 10.79%, savings deposit was 13.67%, and fixed deposit was 58.05% of total equity and liabilities. In 2009, current deposit was 11.34%, savings deposit was 12.48%, fixed deposit was 61% and in 2010, current deposit was 12.58%, savings deposit was 10.80%, fixed deposit was 61.72% of the total equity and liabilities. United Commercial Banks borrowing from other banks, financial institutions and agents was reported only in the balance sheet of 2009. It means only in 2009 the bank had borrowings from other financial institutions. The percentage of the loan was 0.25% of total equity and liabilities. In 2008 and 2010, it was an unlevered firm. In the year 2008, total equity attributable to the equity-holders was 6.77%. In 2009, it was 6.31% and in 2010, it was 6.02%. Following are the graphical view of proportion of Liability and Equity:

Proportion of liabilities in the year 2010

6.02% 8.88% 12.58% 10.80%
Current and other accounts Saving bank deposits Term deposits Other liabilities

61.72%

Total shareholder's equity

Proportion of liabilities in the year 2009

0.61% 8.26% 6.31%
Current and other accounts Saving bank deposits

11.34% 12.48%

Term deposits Other liabilities

61.00%

Borrowings from other Banks, Financial Institutions and Agents Total shareholder's equity

Proportion of liabilities in the year 2008

6.77% 10.72% 13.67% 10.79%
Current and other accounts Saving bank deposits Term deposits Other liabilities

58.05%

Total shareholder's equity

United Commercial Banks risk analysis for Liability and Equity United Commercial Banks borrowings from other institutions have been zero in the years 2008 and 2010. Though, it did not have obligations on these years but in these years the bank could have tax benefits through debt. The bank should also focus to raise the amount of savings accounts. On the other hand, equity of the bank has been decreasing since 2008. The managers should take steps to make sure that equity value is maximized.

About Sonar Bangla Insurance Limited Sonar Bangla Insurance Limited was incorporated in Bangladesh on March 14, 2000 and went into operation on May 1, 2000 as a Public Limited company under the Companies Act, 1994 with a view to run all types of general Insurance business except life as per Insurance Act, 1938 in Bangladesh. Sonar Bangla Insurance Limiteds head office is located at Motijheel in Dhaka, the capital city of Bangladesh.

Sonar Bangla Insurance Limiteds Income Analysis Sonar Bangla Insurance Limited generates its income from two major sources. These are: Income from insurance policies Income from Investment Among these sources the bank generates income most from is the income from insurance policies. Such income is term as the Profit and loss account balance from revenue account. It is the value of premium minus claims. In 2008, the insurance companys 60% of total income was contributed by this segment. In 2009, 40% of the total income was provided by this segment and in the year 2010 the value was 18%. The next major source In 2008, the rest 40% interest income was proportion was 26% insurance policies. of income for the firm has been Interest income. of income came from interest income. In 2009, 37% of the total income and in 2010 the which was much higher than income from

Sonar Bangla Insurance Limiteds another source of income has been Realized gain form share transactions. In the year 2009, income from this segment was 19% of total income and in 2010 it was 54%. Other income was 4% in 2009 and 2% in 2010. Sonar Bangla Insurance Limiteds risk analysis for Income Comparing the 3 years data of Sonar Bangla Insurance Limited, we can see that there is not any common trend in the contribution of segments of income. Percentage of income from policies has dramatically decreased over time. As this is the main source of income for an insurance company, the firm should try to stabilize this segment or else it may not survive and may face insolvency. On the other hand, in 2010 income from share transaction was so high that it can be called a windfall gain. If the company depends on such income it may face insolvency and may not continue operation.

Following are the graphical view of income sources contribution:

Proportion of Income in the year 2010

Interst incom e

1%

18%

26%

Dividend income

1% 54%

Realized gain from share transaction Other income

Profit and loss account balance from revenue account

Proportion of Income in the year 2009

Interst income

40%

37%

Realized gain from share transaction Profit from disposal of fixed asset Profit and loss account balance from revenue account

19% 4%

Proportion of Income in the year 2008

Interst income

40% 60%
Profit and loss account balance from revenue account

Sonar Bangla Insurance Limiteds Expense analysis Sonar Bangla Insurance Limiteds sources of expense includes meeting expenses, Directors fees, Audit fees, Advertisements and publicity, Legal fees, Claim under policies etc. Among these expenses the major portion has been taken by the claims under policies and the percentage of it was 58% in 2010, 37% in 2009 and 36% in 2008. Expense for this sector has increased very high in 2010 though it had increased very little in 2009 than of the year 2008. The next major expense for the company is depreciation. Depreciation of fixed assets in the year 2010 was 38%, 34% in 2009 and 35% in 2008. Among the expenses the portion of depreciation is astonishingly high. In the year 2009, lease rental expenses were 4% whereas in 2010 it was 20%. Such an increase in this type of expense is alarming. Managerial expenses include meeting expense; Audit and directors fees, Advertisements and publicity etc. Sum of these expenses remained almost same over these years and almost one-third of total expense has been constituted in 2009 and 2008. And, in the year 2010, almost one-fourth of total expense has been constituted by this segment. That is in 2010 the expenses proportion has decreased. Following are the graphical view of proportion of expenses: Proportion of expense in the year 2010
6% 1% 11% 20% 3% 1% 6% 1% 4% 38% Meeting expense Directors fee Audit fee Advertisement and publicity Renewal of registration and tread licence Fees and charges Legal fee Subscription Claim under policies Depreciation 58% Lease rental

Proportion of Expense in the year 2009

Meeting expense

2% 3% 1% 4% 7%

4%

Directors fee

3% 3% 0% 0% 2%

Audit fee Advertisement and publicity Renewal of registration and tread licence Fees and charges Legal fee Levy charges

34% 37%

Subscription Claim under policies Depreciation Lease rental Share issue exp

Proportion of Expense in the year 2008

12% 2% 4% 1% 2% 8%
Meeting expense Directors fee Audit fee Advertisement and publicity Renewal of registration and tread licence Claim under policies

35% 36%

Depreciation Share issue exp

Sonar Bangla Insurance Limiteds risk analysis for Expense Sonar Bangla Insurance Limiteds expenses are many. However, managerial expenses are quiet constant in terms of percentage. And, in the latest year the portion has decreased. If in the future the company does not control the expenses, there is chance to loose profits. The major issue is that the companys depreciation is very high. Either the firm has too much assets in their fixed assets or the depreciation rates are kept very high. This reserves the percentage of

profit and forces to sell assets before they have reached their maturity. This leads to misuse of cash and unutilized assets. Sonar Bangla Insurance Limiteds Asset analysis Sonar Bangla Insurance Limiteds Assets in the balance sheet include the major categories: Investments; Interest, dividend and rent receivables; Sundry debtors; Cash and bank balance; Fixed assets and Other assets. Major contribution to the total asset has been making by Cash and bank balance. This segment constituted 50% of total asset in the year 2010, 38% in 2009 and 43% in 2008. The proportion of this segment decreased from 2008 to 2009 and increased much high in 2010. As of contribution to total assets the second position is held by the Sundry debtors. In 2010, 25% of total assets were investment. In 2009, the percentage was 36% and in 2008 it was 33%. In the year 2008, Sonar Bangla Insurance Limited had 4% of its assets as Investment. In 2009, it has been doubled to 8% and in the year 2010 it was 5%. The companys fixed asset is 15% of total asset in the year 2010. In 2009, this portion was 8% and in the year 2008 it was 5%. Fixed assets of the company have been increased noticeably in these years. In 2009 and 2010 other assets were only 1% whereas in 2008 the percentage was 12%. Following are the graphical view of proportion of Assets:

Proportion of Assets in the year 2010 1% 5% 15% 25%

INTEREST. DIVIDENT AND RENT RECEIVABLES SUNDRY DEBTORS: CASH AND BANK BALANCE:

2%

INVESTMENT

50%

Fixed assests Other Assets

Proportion of Assets in the year 2009 1% 8% 8% 2%

INVESTMENT INTEREST. DIVIDENT AND RENT RECEIVABLES SUNDRY DEBTORS:

38%

36%

CASH AND BANK BALANCE: Fixed assests Other Assets

Proportion of Assets in the year 2008 4% 2% 12% 5% 33% 43%

CASH AND BANK BALANCE: Fixed assests Other Assets INVESTMENT INTEREST. DIVIDENT AND RENT RECEIVABLES SUNDRY DEBTORS:

Sonar Bangla Insurance Limiteds risk analysis for Asset The most obvious point is that Sonar Bangla Insurance Limited holds a lot of cash and bank balance. Keeping such an amount idle, whereas investment portion is so little, the company loses huge opportunity. The company should analyze and keep only the optimal cash and reduce the amount of free cash flow. Being so much conservative does result in huge opportunity cost. Alternatively, fixed assets have risen in these years. However, these fixed assets caused the company more depreciation expense.

Sonar Bangla Insurance Limiteds Liability and Equity analysis Sonar Bangla Insurance Limiteds liabilities can be classified into four major categories: Reserve for contingency, Balance of funds and accounts, Premium deposits and Sundry creditors. In the year 2010, Sonar Bangla Insurance Limited kept 18% of its total liabilities and equity as reserve for contingency to meet sudden need for cash. In 2009, the amount was 13% and in 2008 it was 11%. That means, the company tried to keep more reserve with the passage of time. Sonar Bangla Insurance Limiteds balance of funds and accounts was 19% of total liabilities and equity in 2010. It was 14% in the year 2009 and 10% in 2008. The companys premium deposits are very small in terms of proportion to total liabilities and equity. The amount was only 1% in the year 2010. In 2009 and 2008, the share was 2% and 1%. Sundry creditors, that is, credits taken from various sources are 8% in 2010, 13% in 2009 and 12% in 2008. In 2009 the amount had increased a little but decreased much in the following year. In the year 2008, other liabilities were 6% and 2% in 2009. In 2010, there was no miscellaneous liability. Following are the graphical view of proportion of Liability and Equity:

Proportion of Liabilities and equity in the year 2010

1% 8%
ISSUED,SUBSCRIBED AND PAID UP CAPITAL RESERVE FOR CONTINGENCY

19% 54% 18%

BALANCE OF FUNDS AND ACOCUNTS PREMIUM DEPOSIT

SUNDRY CREDITORS

Proportion of Liabilities and equity in the year 2009

ISSUED,SUBSCRIBED AND PAID UP CAPITAL

2% 2% 14%

13%

RESERVE FOR CONTINGENCY BALANCE OF FUNDS AND ACOCUNTS

56% 13%

PREMIUM DEPOSIT OTHER LIABILITIES SUNDRY CREDITORS

Proportion of Liabilities and equity in the year 2008

ISSUED,SUBSCRIBED AND PAID UP CAPITAL

6% 1% 10%

12%

RESERVE FOR CONTINGENCY BALANCE OF FUNDS AND ACOCUNTS

11%

60%

PREMIUM DEPOSIT OTHER LIABILITIES SUNDRY CREDITORS

Sonar Bangla Insurance Limiteds risk analysis for Liability and Equity Sonar Bangla Insurance Limiteds proportion of equity has decreased since 2008 to 2010. As the company has reduced liabilities in the latest year, it has reduced risk and obligations too.