37. Extent of Disclosure in Corporate Annual Reports in Developing

Extent of Disclosure in Corporate Annual Reports in Developing Countries: A Comparative Study of

India, Pakistan and Bangladesh

Dr. Monirul Alam Hossain

Professor in Accounting E-mail: [email protected]

And Professor Peter Taylor

Manchester Business School

Email: [email protected]

1

Extent of Disclosure in Corporate Annual Reports in Developing Countries: A Comparative Study of


Abstract

This paper focuses on the measurement and analysis of the extent of disclosure in the company

annual reports in India, Pakistan and Bangladesh. Although there is a large accounting literature

in both developed and developing countries relating to studies which have used disclosure indexes

to measure the extent of disclosure made by the companies in corporate annual reports, no

comparative study has been undertaken which focuses on the disclosure of financial information of

companies in developing countries. This study reports significant differences in levels of

disclosure, as measured by the mean values of the two disclosure indices among the sample

developing countries. Companies in Bangladesh appeared to have the lowest levels of disclosure

in the three countries. Companies in Pakistan may be argued to have achieved the highest level

of disclosure because of the more up-to-date regulation in Pakistan as compared to India and

Bangladesh. It was found that significant number of the lowest ranking companies suffered

losses during the period under study and among the ranking companies, it was found that

significant proportions of the companies were subsidiaries of multinational companies or large

corporations. This paper also reports differences in the number of items universally disclosed or

entirely excluded from disclosures by companies in the three countries.

Key Words: Developing countries, Level of Disclosure, Disclosure Index, annual report, India, Pakistan, Bangladesh, listed companies

2

1.1 Introduction

It is well known that the financial reporting practices of a country depend on several factors. The

legal, economic, political, cultural and historical background of a country forms the basis of the

financial reporting environment. The extent of information disclosure, its adequacy, relevance and

reliability are important characteristics of financial reporting practices prevalent in a country.

Financial reporting is not an end itself but is intended to provide information that is used in making

reasoned choices among alternative uses of scarce resources in the conduct of business and

economic activities. Some users of financial reports have a direct interest in the firm, while others

have an indirect interest. Those who are directly interested in financial reports are owners,

managers, creditors, present and prospective investors, customers and the government. Indirect

users of financial reports include financial analysts, trade unions, researchers and the general public.

Disclosure of information in corporate annual reports is an area of research in both developed and

developing countries. A number of different methodologies have been used in this research. There

is a large accounting literature relating to studies which have used disclosure indexes to measure

the extent of disclosure made by the companies in corporate annual reports. Disclosure indexes

are based upon extensive lists of selected items of accounting information which may be disclosed

in corporate annual reports. Disclosure indexes seek to measure the extent of disclosure by using

numerical weights on items of accounting information. This study analyses corporate financial

disclosure in India, Pakistan and Bangladesh.

This paper focuses on the measurement and analysis of the extent of disclosure in the company

annual reports in India, Pakistan and Bangladesh. The paper is organised as follows: Section

3

three reviewed literature, section 4 describes the development of disclosure index and the scoring

methodology and the selection of the sample companies; Section 5 presents the results of the

study. Section 6 concentrates on the items of information universally disclosed and not disclosed

by any companies in the respective countries followed and finally, Section 7 concludes the paper.

1.2 Rationale of the Study

In recent years, research into accounting practices in emerging economies has received more

attention by researchers. These researchers have emphasised the role of the accounting profession,

accounting education and financial reporting practices in developing countries in research and there

are few studies regarding disclosure of information made by companies in corporate financial

reports in developing countries. Even fewer such type of studies can be found in the context of

South Asian countries.

The core of this study is financial disclosure in India, Pakistan and Bangladesh. A comparative

study of financial disclosure requirements between countries can be useful if all countries under

study follow similar financial reporting practices. For example, the disclosure requirements of a

country can be compared with those of another country to discover whether the former adopts

procedures that the latter country follows and vice versa. However, the situation is very rare in

practice. Nevertheless, if the origin of laws and regulations governing financial reporting are similar

or the same (in this case British Companies Acts) and the social, economic and political

characteristics of the countries are similar to some extent, then meaningful comparison is possible.

The three countries studied are developing, politically similar (ruled by democratic governments),

and are broadly economically comparable (economies mostly characterised by private ownership of

property). Accounting education, the accounting profession and the financial and industrial

4

institutions of the sample countries are also quite similar. However, the influences of all these

factors are unlikely to be identical.

The systems of financial reporting and auditing in India, Pakistan and Bangladesh are also similar.

Before 1947, India, Pakistan and Bangladesh had been under British rule for approximately 200

years and the Indian Companies Act, 1913 was the basis for the financial reporting requirements in

all three countries. The three countries followed the same disclosure regulations for corporate

annual reports until 1956. Bangladesh was a part of Pakistan until 1971 before its independence and

both countries adopted the Indian Companies Act, 1913. India replaced its Companies Act, 1913 by

the Indian Companies Act, 1956, Pakistan by the Companies Ordinance, 1984 and Bangladesh by

the Companies Act, 1994. Consequently, the Indian Companies Act, 1956, the Companies Act,

1994 of Bangladesh, and the Companies Ordinance, 1984 of Pakistan are the main bases for

corporate disclosure requirements in these countries. The Acts or Ordinances which replaced the

Indian Companies Act 1913 were themselves based on various British Companies Acts. In the case

of Bangladesh and Pakistan there are also Securities and Exchange Rules for companies listed on

stock exchanges in those countries which require more disclosure requirements than the provisions

laid down in the respective company act or companies ordinance. In the case of India, the

Securities and Exchange (Board of India) Act 1992 does not require any more disclosure

requirements than the provisions laid down in the Companies Act, 1956. In addition to these

regulations, the accounting professions of the three countries have adopted accounting standards

which are expected to be followed by companies in each country in preparing their financial

statements. Thus, the laws and regulations of the three countries are not identical and as a result, the

level of disclosure of financial information is expected to differ.

5

This study may be an aid to practitioners, financial analysts, investors, consumers and government

officials in the three South Asian countries which, and may, allow them to rethink whether the

present state of corporate disclosure is adequate, and to decide whether any change in legislation is

required in order to improve the disclosure of financial reports in these countries. It has been said

that the experience of one developing country may help to clarify the nature of corporate financial

reporting problems for other developing countries (Wallace, 1988; p. 352). The use of disclosure

indexes to carry out international comparisons of corporate disclosure has been relatively neglected.

No comparative study has been undertaken which focuses on the disclosure of financial information

of companies in developing countries using a disclosure index approach. Only four such studies

have used a disclosure index approach to compare disclosure levels among companies in different

developed countries (Barrett, 1977; Choi, 1973; Spero, 1979 and Kahl and Belkaoui, 1981).

1.3 Literature Review

This section reviews the studies that have measured the extent of disclosure of information in

corporate annual reports. In most of the studies reviewed, a disclosure index was prepared in order

to measure the extent of disclosure in the annual reports of the companies under study. In some

studies, disclosure indexes were prepared by surveying a sample of users to determine what they

perceived to be important items of information that should be reported in the corporate annual

report. This approach involves the use of perception data as weights for the construction of a

disclosure index. Some studies used weighted disclosure indexes based on other approaches,

involving study or consultation of knowledgeable users, whilst in other studies, researchers used

weighted disclosure indexes based upon their own subjective assessments of weightings. In some

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studies, emphasis has been frequently placed on aggregate or total disclosure. This type of approach

often considers the adequacy of the disclosure of information based on a check list of desirable

items, both mandatory and voluntary. Other studies have been concerned solely with voluntary

disclosure.

The disclosure indexes constructed to measure the quality and extent of disclosure vary

considerably among the different studies, although all share the basic idea of usefulness of

information for the investment decision process (Inchausti, 1997). Studies considering only

compulsory or mandatory information are Ahmed and Nicholls (1994), Wallace, Naser and

Mora, (1994) and Wallace and Naser (1985). Those studies which have considered only

voluntary information included Firth (1979), Chow and Wong-Boren (1987), Spero, (1979),

Hossain et al. (1994) and Raffournier (1995). In some studies, researchers have included both

mandatory and voluntary information in their disclosure indexes (Singhvi, 1967; Singhvi and

Desai, 1971, Choi, 1973, Barrett, 1976; Wallace, 1987; Cooke, 1989 and Inchausti, 1997). There

are researchers who have measured the extent of disclosure longitudinally to determine whether

quality of disclosure has improved over time (Barrett, 1976; Spero, 1979 and Inchausti, 1997).

The number of items include in disclosure indexes vary from researcher to researcher. Most studies

are country-specific, although there are studies which have measured the extent of disclosure

among countries (Singhvi, 1967; Choi, 1973; Barrett, 1976; Spero, 1979 and Kahl and Belkaoui,

1981). Most disclosure studies have focused on only one year.

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1.4 Research Methodology

1.4.1 Information Items Included in the Disclosure Index

In the present study, items of information have been included keeping in mind their relevance to

a broad range of users. In most previous studies, the number of items selected were relatively

small. In this study the disclosure index has been developed by extensively following Wallaces

(1987) disclosure index which included a wide range of major disclosure items that might be

found in the corporate annual report which is not directed at a particular group of users in the

context of general purpose financial reports that should serve the needs of all users (Wallace,

1988; p. 354). Wallace (1987) included 187 items of information in his disclosure index for the

Nigerian companies in his sample. The disclosure index used by one researcher and consequently

adopted by other researchers is not uncommon. For example, Parry and Groves (1990) argued

that their model was originally developed by Singhvi index (applied in the Indian context) and

they applied the same in the context of Bangladesh (a very similar in terms of both industrial

framework and level of development in India). However, Parry and Groves (1990) dropped 10

items of information because those were not realistic information expectations in Bangladesh and

added other six items of information in their disclosure index.

The disclosure requirements of the respective companies acts/ordinances, stock exchange

requirements and income tax laws have also been taken into the account. In addition, the

disclosure requirements relating to accounting standards adopted by the sample countries have

been considered and taken into account in selecting items of information that ought to be

disclosed by the companies in the sample countries and as such, where relevant, have been

included in the disclosure index. The disclosure index considered both quantitative and

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qualitative items in the corporate annual reports of the sample companies. The disclosure index

constructed for this study included 94 items that were used in both unweighted and weighted

index formulations. The most valuable single source of information items was a comprehensive

study by Wallace. These items of information comprising the disclosure index are shown in

Appendix 5A.

1.4.2 Scoring in the Disclosure Index

There are various approaches available to develop a scoring scheme to determine the disclosure

level of corporate annual reports from the works of other researchers. There are researchers who

adopted a dichotomous procedure in which an item scores one if disclosed and zero if not

disclosed. (e.g. Wallace 1988, Cooke, 1991 and 1992, and Ahmed and Nicholls, 1994). Other

researchers have adopted a weighterd disclosure index. In some cases the weights were

predetermined by the researchers subjectively (e.g. Courtis, 1979, Barrett, 1976 and 1977 and

Marston (1986). In other cases, researchers like Buzby (1974), Stanga (1979) and Firth (1979)

have used average weights derived from questionnaire surveys of users' perceptions of the

importance of disclosure items. There are researchers who used both weighted and unweighted

disclosure index (e.g. Wallace, 1988).

Two versions of a disclosure index were constructed for each country- a Weighted Disclosure

Index (WDI) and an Unweighted Disclosure Index (UDI). Each version had a common base

containing 94 items of information. The annual reports of the sample companies were analysed

to determine the extent to which they contained the items of information included in the

Disclosure index. In constructing the UDI, dichotomous scoring for each of the 94 items was

9

used (disclosure=1, non-disclosure=0). Hence, the maximum possible score attainable by a

company was 94 with a minimum theoretical score of zero. For the WDI, varying weights were

applied to disclosed items. These latter weights were obtained from the results of a survey of

samples of 300 sophisticated users of accounts in the three countries under study. The users of

accounts were provided with a questionnaire that asked them to score the items of information

used in the disclosure index on a five-point Likert scale, denoting their perceptions of the

importance of each item of information. The mean values of the Likert scale scores for each

information item were used as weights for that item in the WDI. Non-disclosure was scored zero

as in the UDI. The values of UDI and WDI obtained as a result provide the basic data reported in

this paper.

1.4.3 Companies included in the sample

As noted earlier the annual reports of the companies were drawn from three developing

countries- India, Pakistan and Bangladesh. The sample companies are listed on respective stock

exchanges in the sample countries. No unlisted or public sector enterprises or financial

companies were included in the sample. Major subsidiaries of Multinational Companies

(MNCs) operating in these countries were included in the sample where more than 50% equity

shares are owned by parent companies. These companies have been referred to as the

subsidiaries of multinational companies throughout the study. Companies other than subsidiaries

of multinational companies are termed domestic companies in the respective countries. In the

case of Bangladesh, 78 annual reports of companies which were listed on the Dhaka Stock

Exchange (DSE) were collected; of these eight are subsidiaries of multinational companies and

the remaining 70 companies were domestic. In the case of India, a sample of 80 annual reports of

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companies which are listed on the Bombay Stock Exchange (BSE) were collected; of which 73

companies are domestic and seven companies are the subsidiaries of multinational companies. In

Pakistan, the sample comprises 103 companies of which 10 are subsidiaries of multinational

companies and 93 domestic companies. These companies are listed on the Karachi Stock

Exchange (KSE).

1.5 Results of the study 1.5.1 Comparative Disclosure Levels by the Sample Companies

in India, Pakistan and Bangladesh

The score received by all individual companies in the sample has been made. A summary

descriptive statistics of values of the two disclosure indices for the three countries are provided

in Table 1.

(Insert Table 1 about here)

The data in the table offers some insights into differences in overall patterns of disclosure in the

sample countries. If we take the means of the UDI and the WDI as indicators of overall

disclosure levels in the three countries, disclosure is highest in Pakistan and least in Bangladesh

under both indices. Overall disclosure might be judged relatively low in all three countries as the

highest score (for Pakistan) represents only 49% of the maximum attainable of 94 under the

mandatory and voluntary elements of the index. However, since the disclosure index represents a

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combination of mandatory and voluntary disclosure items this proportion may disguise different

disclosure performances under the mandatory and voluntary elements of the index. Separation of

the mandatory and voluntary elements of the index for each country and a comparison of each

companys score against these elements would allow an assessment of, on the one hand

regulatory compliance and on the other voluntary disclosure. This requires further analysis. Pair-

wise comparisons of the mean scores by country may indicate characteristics of relative

disclosure.

Comparison of disclosure patterns may also be made by comparing the distribution of scores

under the disclosure indices in the three countries. Table 1 contains data on the dispersion of the

disclosure scores (range as given by the differences between minimum and maximum scores and

standard deviation). We may also assess the distribution patterns of disclosure in other ways.


The statistical significance of the pair-wise differences in the means is summarised in Table 2.

This shows statistically significant differences at 1% or less under the UDI for Bangladesh

versus India and Bangladesh versus Pakistan. As already noted, this may reflect regulatory

differences or differences in company policy towards voluntary disclosure. Using the WDI as the

basis for comparison, there are statistically significant differences at 1% or less for Bangladesh

versus Pakistan and India versus Pakistan. Again, these differences may reflect regulatory

differences or differences in company policy towards voluntary disclosure but in addition, since

this index contains weights reflecting user perceptions, observed differences in disclosure

performance may also reflect users attitudes to what is disclosed.

12


Table 3 shows the distribution of disclosure performance by expressing the number of items

disclosed as percentages of the total of 94 comprising the disclosure score. Column one of the

table distinguishes ranges of disclosure performances in these terms. Table 3 shows the modal

percentage of disclosure to be 30-40% of items in Bangladesh. Compared with 50-60% for India.

The distribution shows a skew towards relatively low levels of disclosure in the case of

Bangladesh. The disclosure indices used in this study were based in large part on the disclosure

index constructed by Wallace (1987). Although not identical, comparison can be made between

Wallaces study and the present one as there are many common items which are identical in both

and hence some potentially useful insights can be obtained. Wallaces results show a more

concentrated distribution for Nigeria with by far the largest modal class across the four countries.

Although the researcher do not report disclosure index scores for the Wallaces study of 1987,

comparison with them shows the overall disclosure level of Bangladeshi listed companies to be

lower than that of Nigerian companies on the basis of the UDI whilst average disclosure levels of

Indian and Pakistani companies in the present study are higher than for the Nigerian companies

studied by Wallace.

1.5.2 Top and Lowest Ranking Companies in India, Pakistan and Bangladesh

The sample companies were ranked on the basis of the value of both the unweighted and

weighted disclosure indices for each of the companies. Table 4 (a), Table 4 (b) Table 5(a), Table

5(b), Table 6 (a) and Table 6 (b) show the top and bottom ranked companies by the size of the

WDI and UDI in the three countries. The main reason behind preparing these tables is to verify

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whether the ranking on the basis of the value under UDI differs from the ranking on the basis of

the values under WDI. These tables also provide the disclosure score and the percentage of

disclosure made by the companies under study. Further, these provide insights about which

industries are disclosing more information in the three countries under study. The rankings were

made on the basis of the UDI and then compared with the rankings based on the WDI.

(Insert Table 4(a) about here)

Table 4 (a) presents the top ranked twelve companies in India under both unweighted and

weighted disclosure indexes, the highest score is obtained by National Organic Chemical

Industries followed by The Tata Iron and Steel Co. Ltd., Transpek Industry Ltd., Reliance

Industries Ltd., Rallies India Ltd. and so on. The ranking under unweighted and weighted

disclosure indexes did not provide the same ranking consistently. A careful observation of the

rankings based on UDI and WDI shows that the rankings differs in the cases of Reliance

Industries Ltd, Rallies India Ltd. and TIL Ltd. Among the top twelve ranking companies it is

interesting to note that three companies are subsidiaries of multinational companies. Further,

while classified these companies on the basis of the industries to which these twelve companies

belong, it is interesting to see that five of the top twelve companies has fallen under

Engineering category.

(Insert Table 4(b) about here)

Table 4 (b) shows that the lowest score obtained by The Mysore Tobacco Company Ltd.,

followed by Silverline Industries Ltd., Manali Petrochemical Ltd. and so on. The ranking under

weighted disclosure index provides slight different ranking as compared to that of unweighted

disclosure index. It is interesting to note that of the twelve companies, six companies are shown

14

to be loss making concerns for the year under study when their profit and loss accounts are

examined. The companies with asterisks sustained losses during the period under study. Further,

out of these twelve lowest ranked Indian companies, four companies fell under Engineering

industrial category while other three companies fell under Chemicals and pharmaceuticals

industrial category.


Table 5 (a) reveals that the highest score is obtained by Shakarganj Industries Ltd. followed by

Bata Pakistan Ltd. Philips Electrical Industries of Pakistan Ltd. The rankings under UDI and

WDI do not provide the same ranking consistently. Out of twelve companies five companies

belongs to the subsidiary of multinational companies marked by double asterisks. Further, while

classified these companies on the basis of the industries to which these twelve companies belong,

it is interesting to see that four of the top twelve companies has fallen under Engineering

category.


Table 5 (b) shows that the ranking under both weighted and unweighted disclosure index have

produced the same ranking. The lowest ranking company was Khyber Tobacco Co. Ltd.

followed by UQAB Breeding Farms Ltd., Haydari Construction Company Ltd., Shaigan Electric

& Engineering Company Ltd. and so on. It is interesting to note that of the twelve companies,

eight companies are shown to be loss making concerns for the year under study when their profit

and loss accounts are examined. The companies with asterisks sustained losses during the period

under study. Further, out of these twelve lowest ranked Pakistani companies, five companies

15

belong to the Textile industrial category while other four companies are from the Food and

Allied industries category.


The table 6(a) indicates that the highest disclosure index in Bangladesh was obtained by Reckitt

& Colman Bangladesh Ltd. followed by Shine Pukur Jute Spinners Ltd., Padma Textile Mills

Ltd., Beximco Pharmaceuticals Ltd., Bengal Carbide Ltd., and Bangladesh Oxygen Ltd. and so

on. Five of the top twelve ranking companies are subsidiaries of multinational companies.

Further, when these companies were classified into industrial categories, it was found that five of

them came from the Chemical and Pharmaceuticals category. The table also indicates that the

ranking of the top twelve Bangladeshi companies based on weighted disclosure index is more or

less the same basis reported for the unweighted disclosure index.


Table 6 (b) presents the lowest ranked twelve companies in Bangladesh using the unweighted

disclosure index as the basis of the rankings. The lowest scores were obtained by Tulip Dairy

and Food Products Ltd. followed by Alpha Tobacco Mgt. Co. Ltd., Bangladesh Leaf Tobacco

Co. Ltd., Panther Steel Ltd., Chand Textile Mills Ltd. and so on. However, it can be noted from

the table that the ranking under the unweighted disclosure index differs from that for the

weighted disclosure index. It is interesting to note that of the twelve companies eight are shown

to be loss-making concerns for the year under study when their profit and loss accounts are

examined. Further, five of these twelve lowest ranked Bangladeshi companies are from the

Food and Allied industrial category.

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1.6.1 Items of information Universally Disclosed by all the Sample Companies in India Pakistan and Bangladesh

As noted above, there are some items of information which are universally disclosed by all the

companies in the sample counties. The number of such items of information disclosed by the

sample companies vary from one country to another. The items disclosed universally by

Bangladeshi, Indian and Pakistani companies are represented in Table 7 as follows.


1.6.2 Items Not Disclosed by any Sample Companies in India Pakistan and Bangladesh

There are some items of information which were not disclosed by any of the companies in the

sample countries under study. These items of information belong to the category of voluntary

disclosure. However, the number of such items of information disclosed by the sample

companies varied from one country than another. The items not disclosed by any Indian,

Pakistani and Bangladeshi sample company number twelve, twelve and eight respectively and

are presented in the Table 8.


1.7 Summary and Conclusion

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This paper reported the results of an explanation of the company annual reports in three

developing countries- India, Pakistan and Bangladesh. Despite their common regulatory roots,

differences in disclosure patterns can be observed between listed non-financial companies in the

three countries. Significant differences in levels of disclosure, as measured by the mean values of

the two disclosure indices, were observed between Bangladesh-India and Bangladesh Pakistan.

(based on the UDI) and Bangladesh-Pakistan and Pakistan-India (based on the WDI). Companies

in Bangladesh appeared to have the lowest levels of disclosure in the three countries. Companies

in Pakistan may be argued to have achieved the highest level of disclosure. This may be due to

more up-to-date regulation in Pakistan (the Companies Ordinance 1984) relative to India

(Companies Act 1956) and Bangladesh (Companies Act 1913).

Differences were also observed in the dispersion of disclosure in the three countries. When

outliers in disclosure were examined it was found that significant number of the twelve lowest

ranking companies from each of India, Pakistan and Bangladesh, suffered losses during the

period under study. This suggests that that less profitable companies will disclose less

information than the more profitable companies. Among the top twelve ranking companies from

India, Pakistan and Bangladesh, it was found that significant proportions of the companies were

subsidiaries of multinational companies or large corporations. This supports the view that

subsidiaries of the multinational companies import accounting practices from developed

countries, including increased disclosure relative to their domestic counterparts. These informal

associations were compared with the results of the regression models which related a range of

corporate attributes to the disclosure index values for the sample companies. When the whole

samples were analysed in this way, different patterns of the determinants of disclosure were

18

observed between the three countries. This paper also reports differences in the number of items

universally disclosed or entirely excluded from disclosures by companies in the three countries.

In the conclusion, the evidence tends to support the hypothesis that companies in the three

countries have diverged in their disclosure practices since independence and partition.

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Table-1 Descriptive statistics of the disclosures under weighted and unweighted disclosure indexes in


Bangladesh India Pakistan

UDI WDI UDI WDI UDI WDI

Mean

35.45 143.74 45.51 147.98 46.29 171.02

Standard Deviation

6.63 28.74 6.98 23.14 5.68 20.79

Minimum

25.00 97.29 22.00 74.34 31.00 116.27

Maximum

52.00 210.27 59.00 191.64 63.00 231.06

Table 2

Statistical significance of pair-wise comparisons of mean disclosure levels by country

Pair-wise comparison by

country

Unweighted disclosure index Weighted disclosure index

Bangladesh-India Significant at 1% Not significant at a conventional level

Bangladesh-Pakistan Significant at 1% Significant at 1%

Pakistan-India Not significant at a

conventional level

Significant at 1%

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Table-3

Comparative Disclosure Levels

Score Range Bangladesh India Pakistan Nigeria

% of total

number of items

in Disclosure

index

No. of

companies

% in the

sample

No. of

companie

s

% in the

sample

No. of

companie

s

% in the

sample

No. of

companies

% in the

sample

Less than 30% 14 17.95 1 1.30 0 0.00 0 0.00

30%-40% 37 47.44 10 12.50 6 5.80 10 21.30

40%-50% 21 26.92 34 40.00 49 47.30 33 70.20

50% - 60% 6 7.69 35 42.50 44 42.70 4 8.50

60 %-Over 0 0.00 3 3.80 4 3.90 - -

Total 78 100.00 80 100.00 103 100.00 47 100.00

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Table 4 (a)

Twelve Top Ranking Indian Companies

No. Name of the company Ranks

under

WDI

Ranks

under

UDI

% of

Disclosure

under UDI

Total

number of

disclosed

items

74 National Organic Chemical Industries 1 1 62.77 59

37 The Tata Iron and Steel Co. Ltd. 2 2 60.64 57

36 Reliance Industries Ltd. 4 2 60.64 57

53 Transpek Industry Ltd. 3 4 59.57 56

60 McDowell and Co. Ltd. 6 5 58.51 55

43 Tata-Robbins-Fraser Ltd. 7 5 58.51 55

17 Rallies India Ltd. 5 7 57.45 54

78* SKF Bearings Ltd. 8 7 57.45 54

73* Pfizer Ltd. 9 9 56.38 53

19 TIL Ltd. 12 9 56.38 53

26 KSB Pumbs Ltd. 10 9 56.38 53

52* Indian Rayon and Industries Ltd. 11 9 56.38 53

Note: * denotes subsidiaries of the Multinational Companies in India.

22

Table 4 (b)

Twelve Lowest Ranking Indian Companies


under

WDI

Ranks

under

UDI

% of

Disclosure

under UDI

Total

number

of

disclose

d

items

51* Consolidated Fibres and Chemical Ltd. 69 69 40.43 38

31 Hind Wire Industries Ltd. 70 70 39.36 37

44 The Premier Construction Company Ltd. 71 71 38.30 36

69 CPPL Ltd. 71 71 38.30 36

41* Him Containers Ltd. 73 73 37.23 35

68 Lakshmi Auto Components Ltd. 73 73 37.23 35

39 Tamilnadu Petroproducts Ltd. 75 75 36.17 34

5* Titanor Components Ltd. 75 75 36.17 34

2* Manali Petrochemical Ltd. 77 75 36.17 34

38* Mafatlal Engineering Industries Ltd. 77 78 35.11 33

29 Silverline Industries Ltd. 79 79 34.04 32

15* The Mysore Tobacco Company Ltd, 80 80 23.40 22

Note: * denotes loss-making companies in India for the year under study.

23

Table 5 (a)

Twelve Top Ranking Pakistani Companies


under

WDI

Ranks

under

UWDI

% of

Disclosu

re under

UDI

Total

number

of

disclosed

items

53 Shakarganj Industries Ltd 1 1 67.02 63

25** Bata Pakistan Ltd. 2 2 62.77 59

100** Philips Electrical Industries of Pakistan Ltd. 3 2 62.77 59

45 Gulistan Textile Mills Ltd. 4 4 60.64 57

41 National Motors Ltd. 5 5 59.57 56

67 The Crescent Textile Mills Ltd. 6 6 58.51 55

26** Hoechst Pakistan Ltd. 7 6 58.51 55

35 Pakistan Cables Ltd. 8 6 58.51 55

24** Reckitt and Colman Pakistan Ltd. 9 9 57.45 54

95 Crescent Sugar Mills and Distillery Ltd. 10 10 56.38 53

43 Muhib Textile Mills Ltd. 11 10 56.38 53

23** Pakistan Tobacco company Ltd. 12 10 56.38 53

Note: ** denotes subsidiaries of the Multinational Companies in Pakistan.

24

Table 5 (b)

Twelve Lowest Ranking Pakistani Companies


under

WDI

Ranks

under

UWDI

% of

Disclosure

under UDI

Total

number of

disclosed

items

18 Al-Jadeed Textile Mills Ltd. 92 92 42.55 40

19** Hilal Flour and General Mills Ltd. 93 92 42.55 40

56** Dadabhoy Padube Ltd. 94 94 41.19 39

33** Sadoon Textile Mills Ltd. 95 94 41.19 39

73** Mehran Jute Mills Ltd. 96 96 40.43 38

103 Ahmed Spinning Mills Ltd. 97 96 40.43 38

47 Nilom Nilon Mills Ltd. 98 98 38.30 36

28** Noor Silk Mills Lid. 99 99 37.23 35

50** Shaigan Electric & Engineering Company Ltd.

100 99 37.23 35

12** UQAB Breeding Farms Ltd. 102 101 36.17 34

2** Haydari Construction Company Ltd. 101 102 35.11 33

77 Khyber Tobacco Co. Ltd 103 103 32.98 31

Note: ** denotes loss making companies in Pakistan for the year under study.

25

Table 6 (a)

Twelve Top Ranking Bangladeshi Companies


under

WDI

Ranks

under

UDI

% of

Disclosure

under UDI

Total

number

of

disclosed

items

23* Reckitt & Colman Bangladesh Ltd. 1 1 55.32 52

57. Shine Pukur Jute Spinners Ltd. 2 2 54.26 51

12 Padma Textile Mills Ltd. 3 3 52.13 49

42 Beximco Pharmaceuticals Ltd. 4 3 52.13 49

73 Bengal Carbide Ltd. 5 5 51.06 48

15* Bangladesh Oxygen Ltd. 6 6 48.94 46

31* Singer Bangladesh Ltd. 7 6 48.94 46

16* Glaxo (BD) Ltd. 8 8 46.81 44

68 GQ Ball Pen Industries Ltd. 9 8 46.81 44

29 Sonali Paper and Board Mills Ltd. 11 10 45.74 43

60 Asraf Textile Mills Ltd. 10 11 44.68 42

78* Bangladesh Tobacco Company Ltd. 12 12 43.62 41

Note: * denotes subsidiaries of the Multinational Companies in Bangladesh.

26

Table 6 (b)

Twelve Lowest Ranking Bangladeshi Companies


under

WDI

Ranks

under

UDI

% of

Disclosu

re under

UDI

Total

number

of

disclose

d

items

34** Rupon Oil & Feeds Ltd. 66 66 29.79 28

50** Saiham Textile Mills Ltd. 66 66 29.79 28

56** Renwick Jajneswar & Co. (BD) Ltd. 66 66 29.79 28

32 Tamijuddin Textile Mills Ltd. 71 66 28.72 27

11 GMG Industrial Ltd. 71 70 28.72 27

21** Modern Dying and Scree Printing

Ltd.

71 70 28.72 27

58** Jeminee Sea Food Ltd. 71 70 28.72 27

70** Chand Textile Mills Ltd. 71 70 28.72 27

62** Panther Steel Ltd. 75 75 27.6 26

37 Bangladesh Leaf Tobacco Co. Ltd. 75 75 27.66 26

39 Alpha Tobacco Mgt. Co. Ltd. 78 77 26.60 25

45** Tulip Dairy and Food Products Ltd. 78 77 26.60 25

Note: ** denotes loss-making companies in Bangladesh for the year under study.

.

27

Table 7

Items Disclosed by all Bangladeshi, Indian and Pakistani Sample Companies

Items disclosed by all

Bangladeshi sample

companies

Items Disclosed by all

Indian Sample

Companies

Items disclosed by all

Pakistani sample companies

1. Amount and sources of

revenue for the period

1. Amount and sources of

revenue for the period 1. Amount and sources of

revenue for the period

2.Total property, plant and

equipment including its

composition

2. Total property, plant and equipment

including its

composition

2. Total property, plant and

equipment including its

composition

3. Audit Report 3. Current liabilities and its composition

3. Audit Report

4. Comparative balance

sheet for 2 years 4. Current assets and its

composition

4. Comparative balance sheet

for 2 Years

5. Number of authorised

or unissued equity 5. Number and type of

ordinary shareholders

5. Current liabilities and its

composition

6. Discussion of the

company's operating

results for the past year

6. Equity shareholders' equity and number of

shares issued

6. Current assets and its

composition

7. Number of authorized or unissued equity

7. Amount and breakdown of

operating expenses

8. Amount expended on

human resources 8.Accumulated Depreciation

on property, plant and

equipment

9. List of directors

10. Amount of

depreciation for the

period

28

Table 8

Items Disclosed by all Indian, Pakistani and Bangladeshi Sample Companies

Items Not Disclosed by any Bangladeshi Sample

Companies

Items Not Disclosed by any Indian Sample Companies Items Not Disclosed by any Pakistani Sample

Companies

1. Foreign Currencies bought and sold for the period 1. Market value of inventory 1. Basis of valuing fixed assets

2. Shares held by directors of the company 2. Shares held by directors of the company 2. Market value of inventory

3. Extraordinary gains and losses for the period 3. Shares held by the government 3. Shares held by directors of the company

4. Number of shares in the company owned by its officers at

the end of the period 4. Name of principal shareholders 4. Number of shares in the company owned by its

officers at the end of the period

5. Amount of past pension liabilities, if any 5. Number of shares in the company owned by its officers at

the end of the period

5. Cash flow projections for the next two years

6. Cash flow projections for the next two years 6. Intangible assets breakdown 6. Forecast of next years' profit

7.Forecast of next years' profit 7. Cash flow projections for the next two years 7. Price level adjusted corporate reports as

supplementary statements

8. Expected future growth in sales 8. Forecast of next years' profit 8. Planned expenditure on human resource

development in the next 5 years

9. Names of top employees, line of authority and their

remuneration 9.Forecast of the company performance

10. Price level adjusted corporate reports as supplementary

statements

10. Transaction with government

11. Changes in accounting policies and methods 11. Price level adjusted corporate reports as supplementary

statements

12. Planned expenditure on human resource development in

the next 5 years 12. Planned expenditure on human resource development in

the next 5 years

29

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32

Appendix B

Disclosure Index

NO. ITEM OF INFORMATION

1. Amount and sources of revenue for the period

2. Total of property, plant and equipment including its composition

3. Report of the chairman or CEO

4. Audit report

5. Value added statement

6. Sources and application of funds statement

7. Comparative Balance sheet for two years

8. Comparative income statement for two years

9. Trading account and gross profit for the year

10. Operating profit/losses before extra ordinary gains and losses

11. Statement of profit or loss appropriation

12. Current liabilities and its composition

13. Current assets and its composition

14. Contingent liabilities at the end

15. Operating profit/ losses before extra ordinary gains and losses

16. Basis of valuing fixed assets

17. Basis of valuing intangible assets

18. Inventory valuation method

19. Breakdown of inventory reported under major categories

33

20. Amount of inventory at the year end

21. Basis of inventory valuation

22. Market value of inventory

23. Amount and breakdown of operating expenses

24. Date of Incorporation

25. Accumulated depreciation on property, plant and equipment

26. Methods of depreciation

27. Amount of depreciation for the period

28. Reported capital expenditure for the period

29. Planned capital expenditure

30. Statement of Comparative statistics

31. Market value of marketable securities

32. Cost of marketable securities

33. Method used in valuation of marketable securities

34. Number and type of ordinary shareholders

35. Shares held by directors of the company

36. Shares held by government, if any

37. Equity shareholder's interest and no. of shares issued

38. Names of principal shareholders

39. Number of authorised or unissued equity

40. Dividend per ordinary share for the period

41. Earnings per share

42. Breakdown of sales per operating division, product and/or customer group

34

43. Discussion of specific factors affecting future business of the company

44. Discussion of general factors affecting future business of the company

45. Foreign currency translation method

46. Gains or losses on foreign currencies translation or conversion

47. Extra ordinary gains or losses for the period

48. Basic policies & objectives of management

49. Productive capacity actual output

50. Discussion of industry trends

51. Amount expended on advertising

52. Information of tax clearance and pending tax claims

53. Income tax expense for the period

54. Amount of deferred income tax liability or prepaid income tax at the end of the period

55. Rent payment and receipts of long term leases for the year

56. Names of top employees, lines of authority and their remuneration

57. List of directors

58. Transaction with government

59. Statement of money exchanged with government

60. Number of shares in the company owned by its officers at the end of the period

61. Number of employees

62. Cost of goods sold for the period

63. Allowances for doubtful debts

64. Disclosure of accounting policies

65. Intangible assets breakdown

35

66. Key financial ratios

67. Description of the terms and security provided for the long term loans

68. Summary of major products produced

69. Amount of total assets

70. Maintenance and repairs expenditures

71. Amount of past pension liability, if material

72. Amount expended on human resources, if material

73. Share of market in major product areas

74. Cash flow projections for next two years

75. Brief narrative history of the company

76. Forecast of next year's profit

77. Historical summary of price range of ordinary shares in past few years

78. Policies regarding the amortisation of intangible assets

79. Expected future growth in sales

80. Rate of return the company earn on its assets

81. Discussion of competitive position of the company

82. Forecast of company performance

83. Discussion of the company's operating results for the past year

84. Information regarding contigencies and events occurring after balance sheet date

85. Income for investment

86. Profit and/or loss on sale or investment

87. Related party disclosure

88. Price level adjusted corporate reports as supplementary statements

36

89. Revenue recognition method

90. Changes in accounting method/policies

91. Depreciation rates and estimated life of an asset

92. Accounting policy adopted for research and development

93. Provision for gratuities

94. Planned expenditure on human resource development in the next 5 years.

Documents

37. Extent of Disclosure in Corporate Annual Reports in Developing