Tony pringle, the availability of company information in bric countries

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Tony pringle, the availability of company information in bric countries

  1. 1. Company information and business intelligence
  2. 2. <ul><li>Tony Pringle </li></ul><ul><li>Regional Managing Director </li></ul><ul><li>UK & Ireland </li></ul>
  3. 4. <ul><li>What kind of information? </li></ul><ul><li>Legal status </li></ul><ul><li>Financials – P&L, balance sheet </li></ul><ul><li>Activities </li></ul><ul><li>Directors / Management </li></ul><ul><li>Corporate structures </li></ul><ul><li>M&A activity </li></ul><ul><li>Associated news </li></ul><ul><li>Independent research </li></ul>
  4. 5. Expertise in aggregating and linking data internationally - honed in our work across Europe
  5. 6. Europe
  6. 7. Total coverage over 75 million companies BRIC coverage over 10.5 million companies
  7. 8. Our three pillars of information
  8. 10. BRIC is home to more than 40% of the world's population
  9. 11. Total BRIC GDP = 18.8 trillion forecast 2010 mil usd PPP source EIU
  10. 12. ...it will continue • China is already second economy • Goldman Sachs predicts China will be first by 2027, others as soon as 2020 • BRIC dominate manufacturing and supplies of raw materials
  11. 13. Common features… <ul><li>Economic expansion ahead of infrastructure </li></ul><ul><li>Business culture tremendously different from “the West” </li></ul>
  12. 14. China
  13. 15. China introduction <ul><li>Scale </li></ul><ul><ul><li>China is huge </li></ul></ul><ul><ul><li>Officially around 10 million companies China </li></ul></ul><ul><ul><li>As many companies with a market capitalisation larger than $1bn </li></ul></ul><ul><ul><li>than Europe and the US combined </li></ul></ul><ul><li>Massive social and economic change </li></ul><ul><ul><li>Many rules and regulations are recent </li></ul></ul><ul><ul><li>Local interests can be very influential </li></ul></ul><ul><ul><li>Disclosure is not part of the culture </li></ul></ul><ul><ul><li>Human capital not in place to deal with large scale quality audits </li></ul></ul>
  14. 16. Types of companies
  15. 17. <ul><li>个人独资企业: sole proprietorship enterprise/sole investment enterprise </li></ul><ul><li>国营企业: state-run enterprise </li></ul><ul><li>国有企业: state-owned enterprise </li></ul><ul><li>集体企业: collectively-run enterprise </li></ul><ul><li>乡镇企业: township enterprise </li></ul><ul><li>公营企业: public enterprise </li></ul><ul><li>私营企业: private enterprise </li></ul><ul><li>私营工商业: privately owned industrial and commercial enterprise </li></ul><ul><li>公私合营企业: joint state-private enterprise </li></ul><ul><li>合作社企业: cooperative enterprise </li></ul><ul><li>合资企业: joint venture </li></ul><ul><li>外向型企业: export-oriented enterprise </li></ul><ul><li>  </li></ul><ul><li>技术密集型企业: technology-intensive enterprise </li></ul><ul><li>国有大中型企业: big-and-medium-sized state-owned enterprise </li></ul><ul><li>亏损企业: money-losing enterprise </li></ul><ul><li>联合企业: conglomerate </li></ul><ul><li>工业企业: industrial complex </li></ul><ul><li>生产型企业: production enterprise </li></ul><ul><li>三资企业 : Tri-capitalized enterprises </li></ul><ul><li>中外合资企业 : Sino-foreign joint ventures </li></ul><ul><li>中外合作企业 : Sino-foreign cooperative enterprise </li></ul><ul><li>外方独资企业 : Foreign-funded enterprise </li></ul><ul><li>股份公司: Joint-stock company or stock company </li></ul><ul><li>劳动密集型企业: labor-intensive enterprise </li></ul>Some commonly used terms regarding Chinese company ownership:
  16. 18. “ Enterprises” in China – Regulatory Procedures Private Enterprises (All types) Public Enterprises SAIC (State Administration of Industry & Commerce) SAT (State Administration of Tax) CSRC (China Security Regulatory Commission) Stock Exchange
  17. 19. The system <ul><li>Listed companies </li></ul><ul><li>Accounting standards, January 1st 2007, became law for listed companies to file accounts largely in line with IFRS, there have been issues around implementation. There is also a code of governance for listed companies </li></ul><ul><li>Banks and financial institutions </li></ul><ul><li>File at CBRC ( China Banking Regulatory Commission and the PBC (The Peoples’ Bank of China) </li></ul><ul><li>Wholly foreign owned enterprises </li></ul><ul><li>Also required to file annual return & accounts to SAFE (State Administration of Foreign Exchange) </li></ul><ul><li>Local filing </li></ul><ul><li>Companies also have to file monthly balance sheets to their local tax office. Local tax is variable </li></ul><ul><li>  </li></ul>
  18. 21. <ul><li>Commercial secrets for state-owned firms include information related to strategic plans, </li></ul><ul><li>management, mergers, equity trades, stock market listings, reserves, production, </li></ul><ul><li>procurement and sales strategy, financing and finances, negotiations, joint venture </li></ul><ul><li>investments and technology transfers </li></ul>Challenges
  19. 22. Challenges <ul><li>Transition from a centrally planned economy. Simply a compilation of the assets owned by a particular company, with no measure of profit and loss </li></ul><ul><li>Accounts often aren’t audited as there are skill shortages - accounts may not balance </li></ul><ul><li>In West, we rely on formal, legally binding accounts, in China, business there is much more emphasis on relationships and connections </li></ul>Accounting standards/different emphasis
  20. 23. Who BvD works with <ul><li>SinoRating, part of Sinosure. Government owned. Background in credit insurance. Have connections to official sources and can provide around 550,000 company reports </li></ul><ul><li>Majority of accounts come from the National and Provincial Registration Bureaus – (500,000) companies. Currently about 80% of the data. </li></ul><ul><li>Complemented with data from 40 different sources – due to quality everything needs checking – duplicates need removing: sources include National Government, Statistic Bureaux, Industry and Commerce departments, tax authorities </li></ul><ul><li>Also from companies directly – about 60% response rate </li></ul>
  21. 24. Russia
  22. 25. Official processes <ul><li>Listed companies and banks </li></ul><ul><li>Accounts available via their website and an independent source </li></ul><ul><li>such as a newspaper </li></ul><ul><li>Companies </li></ul><ul><li>File accounts at the Russian Statistical office </li></ul><ul><li>Only 3 or 4 companies have a licence to obtain the filings </li></ul><ul><li>No public access </li></ul>The system
  23. 26. <ul><li>As recently as 10 years ago Russian businesses saw data as low priority . </li></ul><ul><li>They would rather invest in more outward areas of their business </li></ul><ul><li>than quality data </li></ul><ul><li>This is changing rapidly – largely due to international education and </li></ul><ul><li>wider experience of international business </li></ul><ul><li>Companies still don’t always file data in order to conceal performance </li></ul><ul><li>or general lack of compliance </li></ul>Challenges
  24. 27. <ul><li>“ In Russia, avoid the street salesmen and companies without an office which give out only cell phone numbers.” </li></ul>Challenges
  25. 28. <ul><li>One of the three companies with direct access to data from </li></ul><ul><li>the national statistics office </li></ul><ul><li>Information on around 5 million companies but only 1 million have </li></ul><ul><li>detailed financials – the rest are summaries </li></ul><ul><li>Provided in local language </li></ul><ul><li>Available from BvD in English and standardised format </li></ul>Who BvD works with
  26. 29. <ul><li>India </li></ul>
  27. 30. India Introduction <ul><li>A union of 28 States – very regional and diverse </li></ul><ul><li>Accountancy practices vary between states </li></ul><ul><li>Emergence of free economy 1991 huge internal re-alignment in </li></ul><ul><li>business laws – confusion </li></ul><ul><li>Nature of business – raw materials, large entities, </li></ul><ul><li>but growing number of larger entrepreneurial business </li></ul>
  28. 31. The system <ul><li>Companies Act 1956 </li></ul><ul><li>Publish annual accounts of fair and true disclosure with a proper standard </li></ul><ul><li>of accounting and auditing </li></ul><ul><li>Accounting practice largely influenced by the UK </li></ul><ul><li>E-filing only introduced very recently for company registration </li></ul><ul><li>by the Registrar of Companies </li></ul>
  29. 32. Challenges <ul><li>Financial reports are not available </li></ul><ul><li>Things are not systematic or compulsory – and a lack of compliance </li></ul><ul><li>Companies in India have a low interest in domestic data </li></ul><ul><li>Like China business is driven by relationships </li></ul>
  30. 33. <ul><li>Centre for Monitoring Indian Economy (CMIE) </li></ul><ul><li>Data from independent research and stock exchanges. </li></ul><ul><li>Financial data for 37,335 companies in India. </li></ul><ul><li>We will potentially add directory type data </li></ul>Who BvD works with
  31. 34. Brazil
  32. 35. <ul><li>No specific filing requirements for “private” companies </li></ul><ul><li>Brazil – 4 million companies on Orbis, 27,000 with detailed financials </li></ul><ul><li>BvD sources: </li></ul><ul><ul><li>D&B - all the financial data that they have plus directory type information for other companies </li></ul></ul><ul><ul><li>WVB – listed companies </li></ul></ul><ul><li>Provided in the context of credit reports – reports are created as and when requested </li></ul>Overview
  33. 37. Conclusions <ul><li>Desire to participate in international business will improve availability of data </li></ul><ul><li>Quality of financial data will improve as audit skills are developed </li></ul><ul><li>Availability of financial data in many developing countries still largely driven by the work of credit agencies </li></ul><ul><li>Beware - organisations sell data that’s illegally sourced with no mechanism to update it or that parades as official data but can’t be sure of authenticity </li></ul>
  34. 38. CIVETS <ul><ul><li>Colombia (new data) </li></ul></ul><ul><ul><li>Indonesia </li></ul></ul><ul><ul><li>Vietnam </li></ul></ul><ul><ul><li>Egypt </li></ul></ul><ul><ul><li>Turkey (new data) </li></ul></ul><ul><ul><li>South Africa </li></ul></ul>

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