Project 1 - Due 24 Jan 2010

Chapter 1: Understanding the Business

In this discovery project, you shall learn to extract information from company annual reports. Analyzing company annual reports is a very routine function that finance professionals do. A corporate banker analyzes company annual reports to discover the credit-worthiness and value of a firm. A fund manager analyzes company annual reports to discover undervalued and overvalued firms and decide on buy/sell/hold decision of shares. An investment banker analyzes company annual reports to discover good merger and acquisition target firms. A wealth manager analyzes company annual reports to estimate the value of his/her high worth individual (HWI) client’s investment portfolio. Financial industry regulators analyze company annual reports to verify financial practices compliance and detect possible frauds. Shareholders analyze company annual reports to check that the management continue to maximize shareholder wealth. Hence company annual reports are very fundamental source of data for the finance professional.

In this exercise, you shall focus on analyzing qualitative information. Here are the required steps.

1) Step 1: Find the latest available copy of the company annual report of each of the 4 companies assigned to your group. You can either obtain a hard copy annual report or a soft copy version through the internet for the following analysis.

2) Step 2: Concisely but adequately descibe the business of each of the four companies including the following:
a) the mission of the company
b) the products/services of the company
c) the geographical presence of the company
d) the future plans of the company

3) Step 3: Comment on the corporate governance aspects of the board of directors.

4) Step 4: Discuss briefly 4 likely good news and 4 likely bad news that you would look out for which would affect the business performance of the companies (need not affect all 4 companies).

5) Step 5: Briefly discuss your impression on the companies as in are their businesses likely to perform well or poorly in the next 10 weeks.

Notes:
i) you may create sections/subsections in your chapter as you like. Presentation style is up to you.
ii) You can use tables and write in point form in your report. This is according to your presentation style that you would like to adopt. However if your report becomes highly unreadable, then it will be penalized accordingly.
iii) Tables and figures are all included in the word count. In the end, whatever Winword reports as the word count, it will be your essay's word count. Appendices will not be included in the word count, but they may not be read by the marker.
iv) No group is allowed to exceed the deadline.
v) If certain information could not be found in the annual report, you can try other sources such as IPO prospectus and the internet. If still the information cannot be found, then you can just report on what you have found.

Limit your essay to about 1000 words (yes only 1000 words, not negotiable). Submit your essay in Word format or Acrobat (pdf) format through the Plagiarism check. Only one member of each group need to submit the report. State the name of your group and your members (alphabetical order) clearly on the report. The deadline is Jan 24 11:59pm . Late submission may not be accepted. Plagiarized work is liable for disqualification and disclinary action by the university.