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: monirulhossain@yahoo.com

And
Professor Peter Taylor
Manchester Business School
Email: peter.taylor@mbs.ac.uk
1
Extent of Disclosure in Corporate Annual Reports
in Developing Countries: A Comparative Study of
India, Pakistan and Bangladesh

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

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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
6
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.

7
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
8
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
10
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
11
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.
(Insert Table 2 about here)
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
(Insert Table 3 about here)

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
13
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.
(Insert Table 5(a) about here)
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.

(Insert Table 5(b) about here)
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.
(Insert Table 6(a) about here)
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.

(Insert Table 6(b) about here)
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.
(Insert Table 7 about here)
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.

(Insert Table 8 about here)



1.7 Summary and Conclusion
17
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
India, Pakistan and Bangladesh

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

21
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


No. Name of the company Ranks
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

No. Name of the company Ranks
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


No. Name of the company Ranks
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

No. Name of the company Ranks
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


No. Name of the company Ranks
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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31

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.