AN ANALYSIS OF ANNUAL REPORTS OF LISTED COMPANIES ON THE STOCK EXCHANGE OF THAILAND
SOMBOON WASHIRABOONSOOK
4121032165
Advisor : PROF. DR. PRATIN PIMSARN
A RESEARCH PAPER SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN ENGLISH FOR CAREERS
LANGUAGE INSTITUTE, THAMMASAT UNIVERSITY BANGKOK, THAILAND
SEPTEMBER 2000
ACKNOWLEDGMENTS
The contents of this research are based on my master's paper submitted to the Language Institute, Thammasat University, in 2000 semester. This paper would never have reached completion without the contribution of many concerned parties. I wish to express my sincere thanks to my advisor, Prof. Dr. Pratin Pimsarn at the Language Institute, for reading the draft and making a number of helpful suggestions. I also thank for unforgettable good co-operation from the SET officer and the officer from Business Management Service Co. Ltd., for providing helpful documents and information pertaining to Annual Report Award. Without their supports, this report would not have been able to cover these extensive issues. My special thanks go also to my friends and colleagues for their considerable advice and encouragement. Last but not least, I want to thank my company, Investamatic (Thai) Co., Ltd. where I first knew what an annual report is about and where I had been offered an opportunity to request annual reports from all listed companies on the Stock Exchange of Thailand and to explore the annual reports in other Stock Exchanges e.g. Singaporean and Malaysian exchanges.
CHAPTER ONE
INTRODUCTION
This chapter introduces the study by stating the background of the study. The purposes, significance and scope of the study are addressed with the important terms used in this research. In addition, the basic assumptions and time plan are included in the final parts of the chapter.
Rationale
An annual report is one of the key factors for shareholders or investors to decide whether to buy or sell their shares. It can serve several purposes by showing them not only the company's performance, but also prospective directions . Moreover, it gives them opportunities to learn comparative information so that they can determine their final decisions to buy or to sell their stocks. However, the annual report of different companies is always designed in various ways. Some companies design it attractively and accurately. On the other hand, some of them make it unattractively but precisely in the purpose of only giving the right information to the stockholders. Some do it colorfully, beautifully and reliably with a great deal of pictures in order to grab the attention of the readers. Therefore, it is important for the readers to learn that there are certain ways to do the annual reports.
Although some listed companies provide excellent annual reports, some of them do not. Their annual reports are not of a high standard or uniform pattern2. The information disclosures are fairly brief, so investors and those who need to use financial reports for other purposes can not obtain sufficient information. As a result of this problem, it was researcher's interest to study the patterns and expressions used in annual reports as well as to analyze the format and the contents of annual reports of the listed companies on the Stock Exchange of Thailand (SET).
This study is taken to find out the significant similarities and differences
among those annual reports which are selected randomly from many different sectors.
Moreover, based on the requirements of SET, the difficulties in providing annual
reports in line with standard forms are discussed by interviewing the concerned
parties. Therefore, the result of this research can be used as a direction of
improving the quality of annual reports in the Thai stock market to serve the
investors' or other interested people's needs effectively.
Purposes of the study
This research attempts to study and analyze the format and the content of listed
companies' annual reports in the Stock Exchange of Thailand. It is generally
to study the nature of annual reports which include the patterns and functions
of important parts, the expressions or technical terms differently used in the
important parts. Moreover, this research tries to study the difficulties in
providing annual reports in line with the high standard in order to form the
guidelines in improving the quality of the annual reports in the Stock Exchange
of Thailand.
This research, then, endeavors to answer the following questions: -
1. To what extent do annual reports provide the information for the reader.
2. To what extent of annual reports is required by the Stock Exchange and other
concerned parties.
3. To what extent are the annual reports contained forms and contents.
4. To what extent are the annual reports improved forms and contents.
Significance of the study
1. To know the form and contents of listed companies' annual reports.
2. To acknowledge the difficulties in providing annual reports of listed companies.
3. To get information which may be useful for the improvement of the annual
reports' quality to meet the SET's requirements and shareholders' or investors'
need.
4. This study may be useful for further research dealing with how to improve
annual reports' quality or a content analysis of annual reports in the Stock
Exchange of Thailand.
Scope of the study
The scope of this study will be focused on the annual reports of 15 listed companies
on the SET, excluding Unit Trusts. These annual reports are produced for the
year-end as at December 31, 1999.
Only some important parts for language study and content analysis e.g. summary or highlight of the year, message from chairman, financial and operational review of the year, will be mainly discussed and analyzed in this research.
The 15 annual reports will be selected randomly from different sectors in which contain more than 20 firms within 31 sectors. They can be just representatives of all of them in the SET due to limited time for the research.
This study will not mention the issues of financial statements and the notes of financial statement by audit firms as they are more or less the same due to the automatic compliance to the SET requirements on financial information disclosure.
Definition of Terms
For mutual and clear understanding, the meaning of terms used in the study
should be defined as follows :
-
Annual reports - This refers to the reports of public companies that
are listed on Stock Exchange of Thailand presented each year by the directors
to the members or shareholders.
Formats - This refers to the patterns used in annual reports e.g. covers,
and provided pictures. Contents - This refers to the contents or information
in annual reports that are both descriptive and statistic.
SET - This refers to the Stock Exchange of Thailand where the securities
or companies are listed.
SEC - This refers to the Securities and Exchange Commission. It is an
independent state agency who is responsible for supervision and development
of the capital market.
Shareholders - This means the people or organizations who hold the shares
in the particular companies.
Basic Assumptions
1. Annual reports are from varied sectors in SET.
2. Interviewees are reliable as they are the top executives of different organizations.
Their answers are reliable.
3. The annual reports used in this research are properly representatives of
all annual reports submitted to SET.
Hypotheses
1. The formats and contents used in annual reports of the listed companies on
the SET are the same.
2. There are the difficulties in providing annual reports in line with the high
standard forms.
Time Plan
The proposed schedule for the completion of the task is about 4 months commenced
in June 2000. Completion is expected approximately in September 2000.
Activities Month
Jun Jul Aug Sep
Preliminary research ---------------------
Review literature ---------------------------------------------------
Interview/content preparation ---------------
Preliminary study, test of interview -------------------
Field and interview -----------------------
Data management and analysis ---------------------------
Writing research ------------------------------------------------------
Publication and submission --------------------
CHAPTER TWO
REVIEW OF RELATED LITERATURE
This chapter includes the process in business communication, the writing process, the principles and techniques of business communication and the report writing process. Moreover, the characteristics of annual reports are addressed with their background and general components of annual reports.
Writing Communication process and techniques in business.
Because business is more complex and competition is more vigorous than ever before, improved communication has become a compelling need. A steadily increasing information deluge demands greater control and coordination of work forces. However, the degree to which any organization achieves coordination is usually related to the success or failure of its communication- communication in the form of an oral or a written report.
Communication is considered the major source of information for business and industry. Accurate information assists managers in their decision-making activities and is vital to their success. Thus, the report can be a management tool if the writer provides reliable information. The larger and more complex the business, the greater is the need for communication. The efficiency of communication depends on the quantity and quality of information flowing throughout the organization.
Clear and concise reports are a major factor in the success of any enterprise. Poorly written reports cause the loss of thousands of work hours and perhaps millions of dollars in information.
The Principles of Communication Process
The end result of nearly all research is a report of some sort. Thus, it is necessary to view communication as the life blood of any firm. In no situation is communication used under so many various forms and conditions as it is used on the job. But what is communication?
Communication denotes the conveying of thoughts, opinions, desires, or data to someone else; but it is more than just an exchange of evidence. To be effective, what the sender say or write must be understood by the receiver. Thus, communicators must be concerned with the successful transfer of an idea from one person to someone else. For our purposes, communication is the exchange of information between a writer (or speaker) and reader (or listener) resulting in a common understanding. Diagrammatically, the process of communication as it relates to report writing is shown below.
THE PROCESS OF COMMUNICATION VIA REPORT
SEMATIC& SEMATIC& PSYCHOLOGICAL
PSYCHOLOGICAL NOISE
NOISE ME MECHANICAL
SEMANTIC ENCODER
NOISE SEMANTIC DECODER
Source : Adopted from Robert R.Rathbone. "A New Approach to Effective Writing," Journal of Technical Writing and Communication, 2:181-88, July, 1972.
The process of communication by reports begins when the speaker or writer encodes a message into a report format and transmits it to a listener or reader. The writer (a) selects a message based on some form of research leading to the need for communication or a decision; (b) determines the thesis, intent, and content of the report; and (c) writers the message. The semantic encoder selects the medium (formal or informal report) and aids the sending of a message. The semantic decoder allows the receiver to translate the symbols used in the report, interpret the message, and respond as intended.
The Business Report Process
There is a steady flow of information down, up, and across organizational lines. The larger a firms is, the more necessary are written records; and good reports require ideas, researchers, reporters, and readers. Any breakdowns along this line can lead to serious information loss.
Definition of A Report
The word report covers an extremely wide range of communication activities in modern organizations. Most authorities attempt to include as many of these activities as possible in their definitions. The following definitions are typical:
A report is a presentation of facts and/or ideas to people who need them in decision making.
A report is a written or oral message used to (1) convey business information about research or status from one area of business to an other to assist the decision-making function of management or to (2) present a solution to a business problem.
A report is any record that helps people understand the business environment of which they are a part.
[A] report is a piece of technical writing designed to meet a specific need.
A business report is an orderly and objective communication of factual information which serves some business purpose.
A report is a written communication conveying business information about research or a situation from one area of business to another to assist in making a decision.
Reports are almost always prepared for a select reader or group of readers who will use the information as a basis for making decisions about organizational matters. In addition, reports are usually assigned to those persons who are in the best position to organize, interpret, and analyze the required information. Because those responsible for making the decisions need accurate, reliable, and impartial information, another characteristic of reports is that they should be based on objective, factual data rather than on unsupported opinions. As noted previously, reports help managers achieve a wide variety of organizational objectives, including maintenance, task, and human objectives. However they are defined, reports play a vital function in both routine and special operations in every organization.
Importance of Report
Writing Reports have assumed their central role in modern organizational life
because they have long demonstrated their ability to provide essential information
in usable form. A 1980-1981 study of newly promoted executives revealed that
business communication, including report writing, was the single most useful
area of study for those wishing to work in general managerial positions. Reports
and other written communications have always been important to business.
Today, reports play an important part in almost every decision made in business,
industry, and government . The history of report writing reveals steadily increasing
use of written reports of all types. Because the need for information is increasing
daily, the need for more-and more effective-reports can only increase in the
future.
Who Reports To Whom-And Why
Reports usually go up the chain of command in an organization. Those who are working on specific tasks submit reports to those higher in the organizational hierarchy. The recipients of the reports use them to make decisions and perhaps as the source of information which becomes part of new reports to be sent on to higher management. When reports are exchanged between persons of equal rank, they are still used to provide information necessary for decision making. As a rule, reports are distributed down the chain of command only as a means of disseminating information.
Depending on the circumstances, the section supervisor might need to report the problem immediately and orally to the plant manager, or she or he might wait until the end of the week, month, or quarter to send a written report. The problem could be discussed in an urgent memo, an activities report, a justification report (requesting a new press), or an equipment report. In fact, this problem might be mentioned at this and higher levels of management. It could be included in (1) a planning report, (2) a financial report, (3) a letter to the press manufacturer, (4) a progress report on a new press, or even (5) the firm's annual report to stockholders.
Purposes of Reports
Although the content of reports may vary from business to business depending on the nature of products and services, all reports are functional writing: each report has a particular function or purpose it is to perform.
Most managers in business, industry, and government cannot directly observe materials, personnel, events, and other factors that will influence their decisions. When managers (1) are too far away from an operation to observe it directly, (2) lack the time to observe it directly, or (3) lack the technical expertise to observe it accurately, they must rely on the reports of others. Persons who are in a position to make accurate, reliable, and objective observations write reports for the benefit of a person or persons who will make decisions about the observations.
Characteristics of Good Report
A good report is
Timely:It arrives on or before it is due and contains up-to-date information.
Well written: It is clear, concise, interesting; it is free from errors in grammar,
mechanics, and content; and it is helpful.
Well organized: It is designed to be read selectively, so that a reader can
pay attention only to those parts necessary.
Attractive: It is clearly labeled, assembled so that it will arrive in good
condition, and designed for easy readability.
Cost effective: It is designed to solve a problem for the organization that will make the investment in the report worthwhile.
Reports and The Decision Process
The job of any researcher is to collect, organize, and report informatin necessary for making decisions. The quality of reports determines the quality of an organization's operation and output. Managers at all levels are basic information processors, and reports provide their main sources of reliable information. That is why reports for decision making must be concerned with influencing the behavior of the recipients of information. Several factors influencing the effectiveness with which a message produces the desired response in the receiver are:
1. The communication skills of the sender determine whether the receiver is able to interpret the message. The sender's skills also will determine if the reader's needs and desires are considered. The skilled write will be flexible to the reader's level of understanding the problem.
2. The attitudes of the sender and receiver affect communication effectiveness. The more favorable the attitude, the more effective will be the communication. If the sender perceives the receiver as lazy, incompetent, and unskilled, the report will reflect this negative attitude and the receiver's actions will be negative as well. If the writer designs the report with the attitude of finding fault in someone else, it will not achieve positive results.
3. Message construction is an important factor in effective communication. There are three important factors in each message: message code, message content, and message treatment. Message code refers to the vocabulary used to construct the message. Included as part of the code is the set of rules and procedures which must be followed . Message content refers to the material selected by the sender to express his or her purpose. Unnecessary mechanical roadblocks occur when the writer neglects to provide all the information needed for understanding. Message treatment concerns the amount of detail in the report, the arrangement of the data on the page, and the sequence of data on the report. The language chosen, the amount of detail, and the channel used to carry the message must be chosen with the receiver in mind.
4. The skill level of the receiver has an impact on the message constructed by the sender. The greater the receiver's familiarity with the subject, the message code, and the source, the more sophisticated the message can be. Throughout the reporting process the sender chooses a comprehensible code and arranges the elements in a manner which permits understanding with minimal effort.
5. Two-way communication must be developed through reports. Any organization hoping to function effectively must make it possible for information to flow upward and downward. Upper levels must get much of their information from lower levels if they are to be soundly and accurately informed. When management is accurately informed, it is in a position to make sound decisions and to communicate with line and staff.
Functional Writing for the Reader's Benefit
The only reason to write a report is that the reader needs the information contained in it. Even in those cases when a writer is submitting proposals or suggestions not required by management, he or she is presenting ideas assumed useful to management.
Serve As a Permanent Record
Organizations require records for a variety of reasons. Reports concerning income
and expenditures, for example, may be required for tax purposes. Other major
reasons organizations need permanent records are to avoid duplication of effort
at a later date and to profit from successes and failures in a wide variety
of areas.
Provide Specialized Information
As mentioned previously, reports usually convey information from those with
specialized knowledge to those with more generalized responsibilities. Because
of special training, experience, or proximity to matters of organizational importance,
a report writer is able to observe, describe, and interpret events or problems
for those making organizational decisions.
Evaluate Problems, possibilities, and People
The specialized information provided in reports allows decision makers to see
how the particular parts of a problem fit into the larger organizational whole.
Reports can present the advantages and disadvantages of various possibilities,
allowing decision makers to select the best possibility from a number of alternatives.
Help in Decision Making
The report writer needs to be certain to provide the kind of information
that will assist the decision-making process. The writer should know what the
reader already knows about the topic of the report to avoid emphasizing an aspect
of the topic with which the reader is already familiar. The writer should discover
what the reader needs to know: Are the reader's main concerns financial, technical,
organizational, or political?
The writer also needs to anticipate questions the reader may have while reading
the report. Those questions will usually take the form of one of the following:
What: action do I need to take? is the next step? are my responsibilities?
caused the problem? changes will be required?
Why: should I act? should the company invest in this project? should I permit
the writer to act?
How: will I benefit from this? will the company benefit from this? will the
project be accomplished? much investment will be required? soon will we need
to start? long will it take to finish?
Who: will benefit from this? will be affected by this? should act on this?
needs to know moreabout this?
A good report anticipates the reader's questions and provides answers. To help the reader make the right decision, the writer should provide reliable answers to those questions. To ensure the reliability of your reports, check all data for accuracy, impartiality, and completeness.
Accurate information conforms to the truth and is free from error.
Impartial information is fair and objective. It presents all sides of critical issues so that the reader can see how you reached your conclusions and is free and able to draw different conclusions when the information may be interpreted in more than one way.
Complete information gives the reader everything he or she needs to make the best decision.
Techniques of Report Writing
Regardless of the kind of report its purpose, or its content, the report should be written for a specific audience and be highly organized.
Most reports have both primary and secondary readers. The primary reader is the person who will make a decision and take action on the basis of the report. The secondary audience consists of all others who need the information to perform their jobs well. As a report writer, the main responsibility is to the primary reader-the person who will act.
Because the reader's time is valuable, reports need to be highly organized and to make the organizational pattern clear, predictable, and easy to follow. For this reason, writers often use headings, itemized lists, and a variety of graphic aids to present information in a way that will enable the reader to determine quickly which parts require close attention and which can be skimmed.
Annual Report's characteristics
What is an annual report ?
In accordance with Longman dictionary of Business English1, an annul report is "a report presented each year by the directors to the members and shareholders of a company, giving information about the company's trading activities and including certain documents which must be produced by law, namely the balance sheet, the profit and loss account and the auditors' and directors' reports." In other words, the annual report basically contains all the information regarding the financial position of the company throughout the preceding trading year. This is effective method of communicating with those who have an interest in the company. It is obviously seen that the larger companies or public companies keep sending such reports to the press e.g. to The Nation and Bangkok Post, as a matter of routine. These newspapers very often publish the material in their business sections.
In addition, according to the Stock Exchange of Thailand, there have been the
Information Disclosure requirements under SET Act which was enacted on May 20,
19742 that "after being listed, the company must disclose its annul report promptly,
accurately and publicly within four months of the end of the accounting period".
Besides, it is necessary for every listed company to file the following information
with the SET and to include it in annual report :-
1. Details on the number of ordinary and preferred shares.
2. General financial details such as registered capital.
3. Management and organizational charts.
4. Nature of business description.
5. Production and sales figures for the preceding three years.
6. Financial information for the past three to five years and financial statements
for the past three years.
7. Dividend policy.
8. Summary of future operations and expected business volumes.
Why is an annual report important ?
According to Mr. Leland Brown , " Annual reports have always been a direct and vital communication tool with which a company can tell its story". It is true that in the past, information provided in the beginning of annual reports was largely about financial matters but discussed briefly business activities of the company. At that time, annual reports were intended primarily for shareholders with the purpose of only learning the company's movement so they were back and white, were less than ten pages in length, had no charts and illustrations and were formal in language, style and tone. Nowadays, most of the annual reports are highly informative and analytical to tell all readers the status and progress of the company as well as to create favorable public relations. Moreover, they are now well-designed, very attractive, interesting and colorful, filled with easy readable charts, tables and other visual aids to get the attention and interest of the readers and to support the analysis and statements used. Although during economic crisis, the operational result is not good, many companies still regard the annual report as the most important publication they issue. As a result of this, annual reports can be an integral part of a company's public relations department to promote the company as well as to build its good image to the public.
"Not all parts of an annual report will be read by all" said Mr. Leland Brown " .some readers are interested in details than others." It is noticed that the readers will read what they need and what appeals them. Therefore, in deciding what should be included in the content of an annual report, the writer should consider what the readers want and need for their purpose and what must be told them to accomplish the writer's or the company's purposes.
The shareholders or investors are mainly interested in the financial condition and operational activities of the company. Besides, they want to know how the business of the company is being run and its prospect for the future. Therefore, information that shows them the stability of the company and successful operation can encourage them to keep their shares and invest further in the future. Moreover, the content of annual report should contain all necessary information to serve the needs of those readers and it also should answer all the questions that the readers or the general public might ask.
As a result, determining what formats and contents to include in annual report involves selecting items based on the investment of the readers and the purpose of the report.
Components of Annual Reports
General Formats of Annual Reports
For some companies, the format is not necessary. But, many companies use the talents in their advertising and marketing staffs or advertising and promotion agencies to help make the report as attractive as possible for the shareholders, the financial analysts, or any readers who may be interested in the companies. The covers are used to furnish the reports with certain information. The front page usually carries a very attractive picture and is directed toward the theme of the particular year's annual reports or to some major aspect of the company's operation .
The inside of the first page of the cover usually has information such as :
Date and place of annual meeting
Names of Transfer agents and Registrar of stock
Principal addresses of the company
A brief description of the company
The table of contents
On the back cover, the report might have a list of the principal locations, branches, subsidiaries, or divisions of the company and a list of the members of the board of directors and officers. The outside of the back cover is frequently left blank or may provide for the mailing addresses for the stockholders.
For the formats of the table of contents, the content page shows what is in the report and serves as a page reference for items of special interest to the reader. Generally, the table of contents is either on the inside front cover or the first page of the report. Sometimes, they are placed in a similar position of the list of officers and directors of the company.
This list may also be on the inside back cover or at the end of the report.
The following describes the average table of contents :
Message to Stockholders : This may be called the president's letter or the chairman's
letter, or both.
Financial Summary : Sometimes, it is called "Financial Data in Summary Form"
; it includes information for the current year and the two prior years.
The Company's Report to Stockholders : This is a section of text, pictures,
charts, and statistics by which a company discusses any subject about its operations,
competitors, the economy, the past, the future and so on.
Discussion of Products and Services Sold : In between the messages to
stockholders and the financial review, there usually is a series of sections
about products, services, and operations of the company.
Review of Operations : This is required by SEC and mentions over all picture
of operating results of the company for the particular fiscal year.
Financial Review : This section also is required by SEC and is a discussion
by management comparing the past three years' operations with on another.
Financial Statements : This is the core content of the annual reports. It includes
the financial statements with notes.
Auditors' Opinion : This is the only portion of the report that is the
total responsibility of the auditors. However, in order to give this opinion,
the auditors' work has a tremendous impact on all of the financial data and
even some of the textual material in the annual reports.
Management's Responsibility : Sometimes, it is called Management's Report.
It explains the extent of the auditors' responsibility as compared with management's
responsibility for the financial statements of the company. It also explains
how the company establishes policies and procedures to fulfill its obligation
to its stockholders to fairly report the financial position and results.
Major Markets : This section is different for different companies. Some
of them will list the various markets to whom they sell their products; others
will list the major divisions and subsidiaries.
General Contents of Annual Reports
Although there are various formats used in the annual reports, most of them begin with a summary or highlight of the year and then a chairman's statement or a letter to the shareholders from the president of the company. Next, the company's Board of directors, profiles and products are presented. They are followed by a financial and operational review of the year, the sections on company's social activities, the auditor's report and the financial statement with explanatory notes. They always end with the company's additional information. However, it is obvious that the normal annual reports usually divided into two main parts; statistical and descriptive data.
The most important parts of the annual report are highlight sections. In Effective Business Report Writing , the writer mentions "They are brief statements with supporting figures, presenting in the form of a summary statistical table. Sometimes, outstanding developments of the year are displayed with no figures. The company selects the facts and figures to reflect the program during the year and present them in the graphic forms to convince the readers ." It is true that comparisons with the previous year or several years can make the figures significant and point out the progress of the company. This part may include many important items such as sales figures, earnings before or after corporate income taxes, income per share, dividend per share, net working capital, expenditure, long-term debt, number of employees, number of stockholders and any special features of the company etc.
This part is perhaps called "Highlight of the year", or "Financial highlight".
Although, in this section, almost the same expressions are used, there are a
lot of differences in the use of English which depends on what sectors the companies
are. The followings are the check-lists of expressions commonly used in highlight
section :-
- Total Written premium
- Profit on underwriting
- Investment Income
- Operating expense
- Income Tax
- Net Profit
- Total assets
- Unearned Premium Reserve
- Shareholders' Equity
- Total revenue
- Total operating revenue
- Earning per share
- Total liabilities
- Dividend per share
- Sales & Increased in sale ratios
- Effective from operation
This section can be divided into separable parts which are Per Share Data, Financial Position Analysis, Liquidity Ratios, Leverage Ratios, Activity Ratios, Profitability Ratios and Growth. In the case that the company has subsidiaries, consolidated financial position is included to show the company's operation as a whole.
Apart from the highlight, Chairman's statement is one of the most important
items included in the annual report. The statement by the chairman could be
the first thing that the readers should have noticed in reviewing the report
because it usually tells the readers the operations for the past year and discusses
the future prospects such as the company's programs for expansion and its research
and development. Besides, the following checklist includes some aspects which
may be included in the statement :-
- Results
- Dividend
- Significant developments and changes
- Competition
- Market conditions
- Politic and/or economic developments
- Product development and launches
- Capital Expenditure
- Training and managerial development
- Staff contribution and appreciation
- Future developments
- A review of the constituent parts of the business
- Market(s) Share(s)
- Philosophy and corporate aims
The chairman of the board or the president of the company always writes a letter,
so, in some companies, chairman's statement has become known as the president's
letter, the message from chairman or president. In some instances, the entire
report of the president is written in the letter form. In addition, according
to Mr.Brown Lalend , he suggests " the president's message should be sincere,
clear and informal. The letter should reflect a certain amount of human warmth
toward the readers. A personal conversational style is good..". Therefore, it
is extremely important that the chairman's statement is set out in the form
of a letter to the shareholders and other readers, rather than as a formal report,
and that the statement is accompanied by a photograph of chairman himself. For
some companies, they publish the statement as a letter beginning "Dear Shareholders"
and ending with a signature of the chairman which is quite informal. However,
the essence of the letter is a summary of the report. It should attract the
reader and interest him in reading the report. On the other hand, as readers,
while reading this statement, the readers should be alert to see vague expressions
concealing concern over business conditions. For instance, from the below 1999
annual reports collected by the writer, the followings are some of that vague
and normally used expressions :-
" In 1999, the general economic condition of Thailand was still in the stage
of recession, resulting in careful spending of consumers. However, the operational
results of the Big C Supercenter PCL was still satisfactory because the sales
were beyond its target;"
"1999 recorded another page of success stories for ABN AMRO Asia Securities
PCL, with net profit doubling from Bt376.5m in 1998 to Bt774.2m. Net profit
margin rose from 46.7% to 50.2%, while return on equity surged from 24.7% in
the previous year to 36.4% in 1999."
In this chairman's statement, moreover, it seems to be customary practice in ending the statement with the expressions to thank or wish the concerned people of the company such as clients, staff, shareholders, management team, government organizations, both domestic and foreign financial institutions and investors and so on. In order to understand more the nature of the statement, the followings are the examples from 2 companies :-
"The Bank would like to express its gratitude and appreciation to all shareholders,
customers, business organizations, and the general public for their continuing
support and confidence in the Bank. Their contributions have helped the Bank
to successfully pass through rough business conditions and remain buoyant and
stable ;"
"On behalf of the Chairman of Board of Directors, I offer my genuine thanks
to all the parties concerned. It is my sincere hope that GFPT will grow strongly
in the future with your continuing support."
Additionally, the other two important sections in annual report are the auditors' report and financial statement with explanatory notes. The auditors' report, according to the Longman Dictionary of Business English, means a report by the auditor officially appointed by an organization to audit its accounts. The report, usually written on the balance sheet or attached to it, must by law state: whether he has obtained all necessary information and explanations; whether the books of account have been properly kept; whether the balance sheet and profit and loss account agree with the books of account; whether in his opinion the profit and loss account gives a true and fair view of the state of affairs at the end of the year; and whether the accounts as a whole are in accordance with the provisions of Company Acts. It normally tells the readers if the financial statements are presented in accordance with accounting principles which are generally accepted. Besides, it contains an expression of opinion regarding the financial statements from the auditor whose name is always associated with those financial statements. The standard audit report usually consists of an opening paragraph, a scope paragraph and an opinion paragraph. The opening paragraph is a description of the financial statements whereas a scope paragraph describes about the auditors' responsibilities to detect errors and irregularities. The last part, an opening paragraph, provides the auditors' opinion pertaining to the fair presentation of the financial statements.
The followings are the example formats of auditors' report which are normally used:-
(Opening Paragraph)
We have audited the accompanying balance sheet of X Company as of December 31,19XX,
and the related statements of income, retained earnings, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
(Scope Paragraph)
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
(Opinion Paragraph)
In our opinion, the financial statements referred to above present fairly, in
all material respect, the financial position of X Company as of December 31,
19XX, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
Apart from auditors' report, the Profit and Loss statement, the Balance Sheet, Statement of changes in Financial position or Cash Flow Statement and all accompanying notes are also included in the financial statements. They present information concerning the Assets, Liabilities, Capital, Sales, Profit etc. of particular company. The Profit and Loss account is a financial statement prepared by all companies that have some form of income and expenses. All business organizations usually prepare a profit & loss account annually to show the performance of their business. It tells the readers the amount of revenue and expenses. The statement also discloses the taxation charge for the year. Besides Profit & Loss statement mentioned in financial statement, Balance Sheet is necessary to show the financial position of a business at a certain date. It contains the balances of the accounts which are separated into liabilities and assets. For the users of financial statements, there are various groups of them such as investors, creditors, lenders, management, employees, suppliers, customers, government and the public. Each group may require different information. For instance, the investors are mainly interested in the earning power of the company, its ability to grow and its ability to pay dividends, while, short-terms creditors such as banks and trade creditors are interested in the liquidity of the company. However, long-term lender will be interested in the ability of the company to pay the interest within agreed period. The shareholders will need the information to enable them to make an investment decision either to hold on the shares or to sell them.
However, reading the Profit & Loss statement and Balance Sheet may not give enough information to enable a reader to get a fair conclusion about the performance of a company. As a result, the investor has to study and analyze them along with the other financial statements such as interpretation of financial statements, ratio analysis etc. Besides, if he or she has sufficient time, it is worth to attend the annual stockholders' meeting. It is an excellent source of information. It will give an opportunity to observe members of management during the meeting as they present prepared statements and deal with questions from the floor.
CHAPTER THREE
METHODOLOGY
This chapter introduces the methodological procedures used for this analysis. The subjects and instruments of this study are provided with the methods. These procedures were defined as follows :
Subjects
Subjects of this study were focused on the annual reports of listed companies on the Stock Exchanged of Thailand. In accordance with the Capitalization of Listed Issues by Securities as at December 30,1999, there were 402 listed companies with 31 sectors in the SET . The number of subjects was selected randomly by drawing the name of the particular company from each sector based on the above document. However, due to the large number of them, subjects were selected from the sectors in which contained more than 20 firms. Therefore, from 31 sectors, there were 15 sectors that had more than 20 firms and the 15 annual reports of those firms were randomly selected. The following are the name-lists of listed companies with sectors:-
Names of listed companies
Sectors
1. GFPT PCL
Agribusiness
2. Bank of Ayudhya PCL
Banking
3. Thai-Asahi Glass PCL
Building & Furnishing Materials
4. Thai Petrochemical Industry PCL
Chemicals & Plastics
5. Big C Superstore PCL
Commerce
6. United Communication PCL
Communication
7. ABN Amro Asia Securities PCL
Finance & Securities
8. Lam Soon (Thailand) PCL
Food & Beverage
9. Chiangmai Medical Services PCL
Health Care Services
10. Royal Garden Resort PCL
Hotel & Travel Services
11. Thai Reinsurance PCL
Insurance
12. Thai Nam Plastic PCL
Companies under rehabilitation
13. CarnaudMetalbox (Thailand) PCL
Packaging
14. Five Stars Property PCL
Property Development
15. Saha-Union PCL
Textile, Clothing & Footwear
Instruments
The instruments were the analytical methods which were used as main tools to criticize and analyze the annual reports' selected formats and contents.. Additionally, the in-dept interviews were designed to obtain some information about the background of the annual reports in Thai stock market, the difficulties found in providing annual reports, and attitudes toward qualified annual reports.
Methods
1. Study the forms and contents in annual reports of listed companies on the
Stock Exchange of Thailand.
2. Collect 15 listed companies' annual reports as of fiscal year December 31,
1999 to be analyzed by building the analytical formats from obtained data from
books, magazines and other sources.
3. Analyze the contents of annual reports by employing the analytical formats
and present the data in the forms of description and articles with semi-tables.
4. Summarize the results of this research, discussions and recommendations.
CHAPTER FOUR
RESULTS
This chapter mainly discusses the results of the study. In order to serve the objectives of the study, the results are divided into two parts; the analytical results of the formats and contents of listed companies' annual reports and the results of the interviews concerning the annual reports in the Stock Exchange of Thailand (SET). From the main objective of this research that is to study and analyze the annual reports in terms of the formats and contents, the researcher collected the 15 annual reports of listed companies on the SET as of the fiscal year December 31, 1999 from 15 sectors to be studied and analyzed. For one additional purpose, the researcher wants to study the difficulties in providing annual reports in line with the standard forms and contents. Therefore, the interviews with the concerned parties; the SET senior vice president and the officer of Business Management Services Co., Ltd. (BMS) who has organized "the Annual Report Award" were conducted to acknowledge the problems and difficulties in providing annual reports in line with high standards of contents and information disclosure. In order to serve the two objectives, collected data can be presented into two sections:-
1. The analytical results of the formats and contents of listed companies'
annual reports.
2. The results of the interviews concerning the annual reports in the Stock
Exchange of Thailand (SET).
Numbers and abbreviations used in the tables :
(1) GFPT GFPT PCL (2) BAY Bank of Ayudhya PCL (3) TAG Thai-Asahi Glass PCL (4)
TPI Thai Petrochemical Industry PCL (5) BIGC Big C Superstore PCL (6) UCOM United
Communication Ind PCL (7) AST ABN AMRO Asia Sec PCL (8) LST Lam Soon (Thailand)
PCL (9) LNH Chiangmai Medical Servs PCL (10) RGR Royal Garden Resort PCL (11)
THAIRE Thai Reinsurance PCL (12) TNPC Thai Nam Plastic PCL (13) CMBT CarnaudMetalbox
(Thailand) PCL (14) FSTAR Five Stars Property PCL (15) SUC Saha-Union PCL
1. The analytical results of the formats and contents of listed companies' annual reports on the SET.
From the analysis of 15 annual reports of listed companies which are (1)GFPT
PCL, (2)Bank of Ayudhya PCL, (3)Thai-Asahi Glass PCL, (4)Thai Petrochemical
Industry PCL, (5)Big C Superstore PCL, (6)United Communication Industry PCL,
(7)ABN Amro Asia Securities PCL, (8)Lam Soon (Thailand) PCL, (9)Chiangmai Medical
Services PCL, (10)Royal Garden Resort PCL, (11)Thai Reinsurance PCL, (12)Thai
Nam Plastic PCL, (13)CarnaudMetalbox (Thailand) PCL, (14)Five Star Property
PCL and (15)Saha-Union PCL, the results of their formats and contents analysis
were discussed as follow : -
1.1 Results on the Formats of annual reports
For the formats of annual reports, the covers and layout were analyzed. From the front page of annual reports, all of them provided the name of their firms and the fiscal year of annual reports. It is noticed that only some of them were directed toward the theme of the firms and attractive; that is 8 annual reports out of 15 were considered attractive and 9 of them directed toward the theme . Moreover, for the inside of the front cover, it normally contains various information. But the findings show that none of them provided the date and place of Annual General Meeting (AGM). Only one annual report, BIGC(5), contained the brief description of the firm. More than half of them (9 out of 15 annual reports) included the Table of Contents. But, 3 annul reports left it blank. For the inside of the black cover of annual reports, 6 of them remained blank. But the first three firms, UCOM(6), LST(8) and RGR(10), contained the check list and the second three firms, BAY(2), AST(7) and SUC(15), provided the list of the principal locations, branches and subsidiaries. Only one company, TPI(4), mentioned the list of its divisions. No firms listed the Board of Director and officers on the inside of the back page. For the outside of the back cover, 2 annual reports left the pages blank, but the rest (13 out of 15) contained their mailing addresses. (Details in the Table 1).
Table 1:
The Formats of Listed Companies' Annual Reports as of Dec 31, 1999.
The Forms of 15 Annual Reports as 31/12/99
FORMAT \ NAME 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
TT COVER
(FRONT PAGE)
Attractive / / / / / / / / 8
Directed toward the theme / / / / / / / / / 9
Name of firm / / / / / / / / / / / / / / / 15
Fiscal year / / / / / / / / / / / / / / / 15
(INSIDE OF FIRST PAGE)
Date & Place of AGM 0 A brief description of firm / 1
Table of contents / / / / / / / / / 9
Left blank / / / 3
(INSIDE OF BACK PAGE)
Check list / / / 3
List of principal locations / / / 3
List of divisions / 1
List of the Board of Directors 0
Left blank / / / / / / 6
(BACK PAGE)
Mailing list / / / / / / / / / / / / / 13
Left blank / / 2
Total Items (15) 7 6 7 7 5 6 4 7 4 7 4 5 6 6 7
For the sector, moreover, it is noticed that Banking sector is well-designed, attractive, and reliably. It maybe because they care of their clients and want to build up the readers' confidence. So the annual report of Bank of Ayudhya PCL is dominantly big, attractive and strong, contains as much important information as possible in order to serve what the readers need and what the public might ask. In entire information, they include the research about economic situations either in general point or in only banking sector.
1.2 Results on the Contents of annual reports
The results of the contents of annual reports were divided into two parts; the statistic and descriptive contents. From table 2, the contents of annual reports were analyzed based on the commonly provided contents. It shows that all annual reports contained both statistic and descriptive contents. None of them presented just either statistic or descriptive data. In the contents analysis of annual reports, both statistic and descriptive contents were analyzed. The statistic data consisted of Highlight of the year, Review of operations, Financial review whereas the descriptive data comprised Chairman's Statement, Company's board of directors, profiles of company, products of company, social activities, auditor's report, financial statement with notes, additional information, management responsibilities. For the statistic contents, only the part of Review of operation was provided in all annual reports. But, 13 and 10 companies contained the Highlight of the year and the Financial Review respectively. For the descriptive data, on the other hand, the research shows that all companies contained four important parts; the Chairman's Statement, Company's Board of Directors, Auditor's report and Financial Statement with notes, in their annul reports. Besides, 13 annual reports described their products and services, but 11 firms also mentioned their companies' profiles in their annual reports. It is noticed that only BAY(2), TPI(4), TNPC(12) and SUC(15) contained the company's additional information. And, the part of management responsibilities was provided by 4 annual reports; BAY(2), UCOM(6), RGR(10) and SUC(15). Only a few companies provided the company's social activities in their annual reports. For the items of contents, the first company that had the most items of contents was BAY(2). Its annual report contained all 12 items. And, the second company was SUC(15) which had 11 items. (Details in Table 2)
Table 2 :
The Contents of Listed Companies' Annual Reports as of Dec 31, 1999.
The Contents of 15 Annual Reports as 31/12/1999
CONTENTS \ NAME 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 TT
STATISTIC CONTENTS
Highlight of the year / / / / / / / / / / / / / 13
Review of operation / / / / / / / / / / / / / / / 15
Financial Review / / / / / / / / / / 10
DESCRIPTIVE CONTENTS
Chairman's Statement / / / / / / / / / / / / / / / 15
Firm's Board of Directors / / / / / / / / / / / / / / / 15
Products of firm / / / / / / / / / / / / / 13
Profile of firm / / / / / / / / / / / 11
Firm's Social Activities / / / 3
Auditor's Report / / / / / / / / / / / / / / / 15
Financial Statement / / / / / / / / / / / / / / / 15
Firm's additional information / / / / 4
Management Responsibilities / / / / 4
Total Items (12) 9 12 7 10 9 10 8 9 8 8 9 8 9 6 11
The operational results, on the other hand, can also be proved by annual report since if the company earns a high profit, its annual report is as the most perfect as possible. In this case, it is noted that GFPT PCL and Big C Supercenter PCL are fairly perfect to show their positive performance in that particular fiscal year. In terms of images, lastly, annual report can sometimes, a successful tool to build good image for the company. It can tell the readers whatever good future plan or colorful prospect direction there will hopefully be by creating professional layout with meaningful pictures in order to grab the readers' attention. The annual reports of United Communication Industry PCL and Saha-Union PCL are examples in this case as they are included companies' philosophy and intentions to build good images. The results of formats and contents analysis of listed companies' annual reports can be the factor to prove the first two hypotheses; that is the formats and contents used in annual reports of listed companies on the SET are not the same. (Details will be discussed in the next chapter).
2. The results of the interview concerning the annual reports in the SET.
Referring to Ms.Patareei, the SET has regarded as its prime responsibility and commitment to disclose relevant information of listed companies to investors and the concerned parties for their investment purposes. In addition to the various electronic disclosure systems providing information in a timely manner on a daily basis, the Exchange also attaches importance to the disclosure of information in the form of annual reports which informs investors, stockholders and the interested public about the companies' policies and directions and year-end operating performance. Required to be completed within four months after year-end, annual reports contain such details useful for investment purposes as executive management profiles, management discussion and analysis (MD&A), annual operational performance, finance statements and auditors' report, notes to financial statements and other statistical highlights.
Besides, according to Ms.Pataree, for 22 years, the Stock Exchange of Thailand in collaboration with 11 leading business institutions as well as concerned public organizations and academics has promoted listed companies, private firms, state enterprises and not-for-profit organizations to produce annual reports with sufficient and acceptable information disclosure to benefit investors and stakeholders. Every year, an exhibition was organized at the SET to showcase examples of annual reports from distinguished establishments considered to possess outstanding presentation and disclosure of information. For the standard formats and contents of annual reports in the SET, Ms. Pataree referred to the normal patterns used. The annual reports' presentation should be submitted in an easily comprehensible format. That is the report cover and format should be easy-to-read and attractive. A table of contents, with pagination, charts, tables, and graphs to illustrate important information should be included. Moreover, the company's address, telephone number, and locations of its manufacturing plants should appear on a prominent place, such as the inside back or back cover. For the contents of annual reports, she mentioned the main elements such as the Chairman's or the Board of Directors' Statement, analyzing the firm's performance for the year and its policies, objectives, strategies and plans. Highlight of operating results, financial position and the firm's relevant statistics for the year, in comparison with preceding years should also be included. Besides, an analysis of the firm's operating results, financial position and the environment that affected the company should be discussed in the annual reports.
For the difficulties in providing them found from her experience, moreover, it is the fact that poor performance companies mostly did not care much about the formats and contents provided in their annual reports. In contrast, the big and better performance companies saw the good opportunity to promote their companies by providing perfect annual reports to attract their concerned parties. Most of the important elements of annual reports were included with the colorful and interesting themes. For the time being, in Thailand, the economy was getting better. In improving the quality of annual reports of SET, there were still a lot of difficulties such as the attitude of many listed companies especially the companies whose major shareholders were from single families could not be changed to serve the new era of technology. They still attached with the traditional pictures of their business developments. In other words, they did not see the importance of providing annual reports. Moreover, they saw it the way to waste money instead of the pubic relations or investor relations. Although these difficulties in providing annual reports still happened in some companies, the plans to promote and encourage them to provide high standard of contents and information disclosure were launched by organizing the Annual Report Award each year.
In addition, according to Ms. Pataree, an annual report should have full and timely disclosure of relevant information, in a readily comprehensible format, with sufficient detail for investors and other related parties to assess the financial condition of the organization and to adequately understand its operations, policies and plans. To encourage listed companies to produce annual reports of high standards, with full and timely disclosure, she referred to Annual Report Award Committee that they evaluated the quality and sufficiency of the contents in annual reports, as well as the formats of its presentation. As Thai economic condition was in trouble, it was told that the budget in providing annual reports of many listed companies had been cut. As a result, they did not realize the quality of annual reports, but they provided the annual reports just to serve the SET regulations. Some of them included only required parts for the public and the SET. However, there were also many large and good-performance companies that still kept their standard to fit their policies in providing good annual reports for their shareholders. Those companies certainly realized the importance of a quality of annual reports as well as the image of the companies. As a result, the difficulties in providing good annual reports of almost every listed company in the SET were confirmed. However, time is needed to encourage them to see the importance of annual reports and what can be done now is to list the possible criteria and guidelines for Annual Report Award in various categories. ]
For one more thing, according to Ms. Patrara, as most of Thai companies were developed from family businesses, shareholding and management structure was usually concentrated in family members or one big side shareholder. In the reality, investment decisions of outside investors were based on the confidence in these inside shareholders, but the shareholders of many companies did not emphasize the importance of good governance. Therefore, the poor governance caused the unconfident investors to withdraw or cancel their investment which made the crisis become even more worse and take long time to recover. The results of the interview can be the factors to prove the third hypothesis; that is there are difficulties in providing annual reports in line with high standard. (Details will be discussed in the next chapter).
CHAPTER FIVE
CONCLUSIONS, DISCUSSIONS AND RECOMMENDATIONS
This chapter addresses the summary of the study which includes the purpose of study, its subjects, instruments and procedures. Additionally, the summary of findings and recommendations for future research are provided in this chapter.
Purpose of the Study
This research aims to study and analyze the annual reports of listed companies on the Stock Exchange of Thailand issued for the 1999 fiscal year with focus on forms and contents; to find what are usually included in annual reports. This study, then, attempts to find out the difficulties in providing annual reports in line with the international standard level; to form the guidelines in improving quality of annual reports.
Subjects
Subjects of this study were focused on the 1999 annual reports of listed companies on the Stock Exchanged of Thailand. As December 31, 1999, there were 402 listed companies with 31 sectors in the SET. The number of subjects was selected randomly by drawing the name of the particular company from each sector. However, due to the large number of them, subjects were selected from the sectors in which contained more than 20 firms. Therefore, from 31 sectors, there were 15 sectors that had more than 20 firms and the 15 annual reports of those firms were randomly selected.
Instruments
For the research instruments, the analytical formats were created by searching and collecting data relating annual reports from the various books, documents and research reports. The analytical methods were used as main tools to criticize and analyze the annual reports' selected formats and contents. The tick in selected items found in annual reports was used and the data presentation was displayed in the descriptive articles with semi-tables. In addition, the in-dept interviews were designed to obtain some information about the background of the annual reports in Thai stock market, the difficultiess found in providing annual reports, and attitudes toward qualified annual reports.
Procedures
1. Study the form and contents in annual reports of listed companies on the
Stock Exchange of Thailand.
2. Collect 1999 annual reports of 15 listed companies to be analyzed by building
the analytical format from obtained data from books, magazines and other sources.
3. Analyze the contents of annual reports by employing the analytical format
and present the data in the form of description and article with semi-table.
4. Summarize the result of this research, discussion and recommendation.
Summary of Findings
In general, the contents of 15 annual reports are mostly consisted of important parts mentioned above which are, for example, a summary or highlight of the year, a chairman's statement. In order to serve the two objectives, collected data can be separately presented into two parts: -
1. The analytical results of the formats and contents of listed companies'
annual reports.
2. The result of the interview concerning the annual reports in the Stock Exchange
of Thailand (SET).
From the findings, the results of this research show clearly that all annual reports contained the formats which mainly focus on the lay-out of the covers. It was found that in the front page, all annual repots mentioned their companies' names and the year of annual reports. Additionally, nearly all of annual reports contained the mailing addresses of the companies in outside of the back cover. Significantly, these three elements were necessarily included in most of annual reports due to important and vital communication in business. This is similar to what Mr. Leland Brown wrote "Annual reports have always been a direct and vital communication tool ..". It was also found that many items mentioned in the table 1, for example, list of divisions of companies, a brief description of companies were not included in most of the annual reports. For this point, the findings are the most similar to what Ms. Pataree and Ms. Patrara explained. Those companies who had poor operating results due to economic crisis did not mention as many aspects as they had to in order to serve the international standard levels. For the contents of annual reports, it shows that generally, all annual reports mentioned both statistic and descriptive information. This result is the same as Mr. Adolph Luries mentioned " .the normal annual reports usually divided into two main parts; statistical and descriptive data." For statistic data, they mostly included review of operations and highlight of the year. But, only some of them provided financial review. For descriptive data, on the other hand, all annual reports provided chairman's statement, company's Board of Director, auditor reports and financial statement with the following reasons ; For the first two elements, the result is the same as mentioned in the second chapter that this part could be the first thing that the readers should have noticed in reviewing the reports. But, for the latter two elements, auditor report and financial statement, this research implies that they were included in all annual reports because of the SET requirement of financial information disclosure.
Besides, it was found that the result is similar to the interview with Ms. Patrara by the sense that only a few companies contained companies' social activities, companies' additional information and management responsibility in annual reports as they did not regard them as important items and they were not forced by the SET to include these minor items in their annual reports. From this research, it was found that there were differences among formats and contents of annual reports. As result of this finding, it clearly shows that the result is different from the first hypothesis; the formats and contents used in annual reports of listed companies on the SET are the same. This can be taken into account that only some minor elements are different, but the core contents of those annual reports are still in line with the SET regulations. Moreover, due to economic crisis, the differences in annual reports' formats and contents can be obviously and easily seen. From the interviews, the result is not against the second hypothesis; there are the difficulties in providing listed companies' annual reports in line with the high standard levels. Both interviewees agreed in principle that there were difficulties in providing annual reports in line with the international standard levels because of Thais' traditional attitude towards the importance of annual reports. Economic crisis was also one reason to create difficulties as most of companies tried to save costs.
Recommendations for future research:
1. Due to the limitation of this research for only the formats and contents
of the listed companies' annual reports, it is recommended for other important
elements of annual reports be studied and analyzed in details. 2. The expressions
used in particular parts of annual report e.g. in Chairman's Statement should
be studied as a text analysis.
3. The annual reports of Unit Trusts and state enterprises should be studied
and analyzed. The results can be used as one of many guidelines in improving
the quality of annual reports in Thailand.
4. The steps or procedures in making annual reports should be also studied to
find out the problems and purposes in providing annual reports.
REFERENCES
Books
ABN AMRO Asia Securities PCL. (1999). Annual Report 1999. Adam, J.H.(1989).
Longman Dictionary of Business English (2nd ed.). England: York Press.
Bank of Ayudhya PCL. (1999). Annual Report 1999.
Big C Supercenter PCL. (1999). Annual Report 1999.
Brown, Leland. (1973). Effective Business Report Writing (3rd ed.).
New Jersey: Prentice-Hall.
CarnaudMetalbox PCL. (1999). Annual Report 1999.
Chiangmai Medical Services PCL. (1999). Annual Report 1999.
David, M. Martin. (1989). How to prepare the annual report (2nd ed.). England:
Director Book.
Five Stars Property PCL. (1999). Annual Report 1999.
GFPT PCL. (1999). Annual Report 1999.
Jane Lazar. (1997). How to read financial statements (1st ed.). Kuala Lumber:
Leeds Publications.
Lam Soon (Thailand) PCL. (1999). Annual Report 1999.
Lasser, J.K. (1984). How to read a financial statement. New York: Simon & Schuster.
Lurie, Adolph, (1984). How to read annual reports intelligently. A shareholder's
Guide. New Jersey: Prentice-Hall.
Olanvoravuth, Ninnart. (1996. Business English Communication (8th ed.).Bangkok:
Thammsat University Press.
Hussey, Roger & Bishop, Marry. (1993). Corporate Report (1st ed.). Great Britain:
T.J. Press.
Royal Garden Resort PCL. (1999). Annual Report 1999.
Saha-Union PCL. (1999). Annual Report 1999.
Stock Exchange of Thailand(SET). (1999). The Stock Market of Thailand.
Thai Nam Plastic PCL. (1999). Annual Report 1999.
Thai Petrochemical Industry PCL. (1999). Annual Report 1999.
Thai Reinsurance PCL. (1999). Annual Report 1999.
Thai-Asahi Glass PCL. (1999). Annual Report 1999.
United Communication Industry PCL. (1999). Annual Report 1999.
Other Materials
Business Management Service Co., Ltd.(BMS). (1997). "23rd Annual Report Award". Papers presented by Annual Report Award Committee. (Mimeorgraphed.)
"Operations Timeline".
"Tips for creating a good annual reports".
APPENDIX
Appendix A
Capitalization of Listed Issued by Securities
Appendix B
Examples 1
Example 2
Appendix C
Examples 1
Example 2
Appendix D
Annual Report Award