A STUDY OF NEW TRENDS IN DISCLOSURE AND PRESENTATION OF FINANCIAL REPORTING

1. "A STUDY OF NEW TRENDS IN
DISCLOSURE AND PRESENTATION OF
FINANCIAL REPORTING"
Submitted by
IBRAHIM HILAL ALKARAWEE
Under the Guidance of
Mrs. MADHURA BHAGWAT
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2. ORGANIZATION OF THE STUDY
I- Research Methodology.
II - Financial Reporting in India.
III - New Trends in Financial Reporting in India.
IV - Profile of Companies under the Study.
V - Analysis and Interpretation.
VI - Findings and Suggestion.
VII - Bibliography and webography.
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3. OBJECTIVES OF THE STUDY
1-To conduct the concept of disclosure and its importance.
2 - To study the types of disclosure.
3 - To determine the new mandatory and voluntary trends,
adopted by companies in financial disclosure.
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4. Concept of Corporate Financial Reporting
Financial reporting may be defined as communication
of published financial statements and related
information from a business enterprise to third parties
(external users) including shareholders, creditors,
customers, governmental authorities and the public.
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5. Objectives of Financial Reporting:
1- Provide Financial Information about the Reporting
Entity.
2- Helps the management to regulate the prices of its
goods and services.
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6. Users of Accounting Information:
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External Users:Internal Users:
i- Creditors.i-Management.
ii- Tax Authorities.ii- Employees.
iii-Investors.iii- Owners.
iv-Customers.

7. Concept of new trends in disclosure
There are two types of disclosure:
1- Mandatory Disclosure and,
2- Voluntary Disclosure.
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8. Mandatory disclosure
Mandatory items are those which are legally required to
be disclosed in corporate annual reports as per the
provisions in the Companies Act, 1956 and its various
amendments.
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9. Voluntary disclosure
Voluntary items are those which are not mandatory, but
these items are voluntarily disclosed by companies in
their annual reports, which are deemed to be relevant
for the interested groups.
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10. Analysis and interpretation data
The companies selected for these studies are Gas
Authority of India Limited (GAIL), Infosys limited and
Indian Tobacco Company Limited.
These new trends introduced in India so as to improvise
the performance of the company and increase the
transparency in the company.
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11. New trends of companies under study (mandatory
disclosure) are:
1) Revised schedule VI.
2) Report on corporate governance.
3) Financial statement as per IFRS.
4) Business responsibility report.
5) Corporate social responsibility.
6) Environment protection.
7) Accounting for intangible assets.
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12. New trends GAIL (India) Ltd Infosys Ltd ITC Ltd
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Revised Schedule VI × × √ √ √ × × √ √ √ × × √ √ √
Report on Corporate
Governance
√ √ √ √ √ √ √ √ √ √ × √ √ √ √
Financial Statement as
per IFRS
× √ √ √ √ √ √ √ √ √ × × × √ √
Business Responsibility
Report
× × × √ √ × × √ √ √ × × × √ √
Corporate Social
Responsibility
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Environment Protection √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Accounting for Intangible
Assets
√ √ √ √ √ √ √ √ √ √ × × √ √ √
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New Trends of Companies under study (Mandatory Disclosure)

13. Other additional aspects reported by the
company voluntary are:
1) Human resources management.
2) Value added statement.
3) Core values of the company.
4) Code of conduct.
5) Client engagement.
6) Inclusive growth.
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14. New trends
GAIL (India) Ltd Infosys ITC Ltd
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Human Resources
Management
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Value Added Statement × × × × × × × × × × × × × × ×
Core Values of the
Company
× × × × √ × √ √ √ √ √ √ √ √ √
Code of Conduct √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Client Engagement × × × × × √ √ √ √ √ × × √ √ √
Inclusive Growth √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
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Other additional aspects reported by the company voluntarily

15. FINDINGS AND SUGGESTIONS
There are many criteria that emphasize the importance
of disclosure, where disclosure is one of the important
base .The important of disclosure comes from the fact
that the majority of the readers of the financial reports
do not have the right to inspect the records of entity.
The following are findings:
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16. FINDINGS
1- Infosys Ltd is the first company in terms of preparing mandatory disclosure,
because it has adopted it early for example it has prepared its financial
statement as per IFRS in 2010 but GAIL (India) Limited has prepared its
financial statement as per IFRS in 2011 and ITC Ltd has adopted financial
statement as per IFRS latterly in 2013. Infosys Ltd has started with Business
Responsibility Report in 2012 in its annual reports but GAIL (India) Limited
and ITC Ltd have started with Business Responsibility Report in their annual
reports in 2013.
2- Infosys Ltd Company and GAIL (India) Limited have provided the report
on corporate governance in their annual reports in 2010 but ITC Ltd provided
it in its annual reports in 2011. Infosys Ltd Company and GAIL (India)
Limited have adopted the accounting for intangible assets in the same year in
2010 but ITC Ltd has adopted it in 2012.
3- However Infosys Ltd came first, the second is GAIL (India) Limited, and
the third is ITC Ltd in mandatory disclosure.
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17. FINDINGS
4- According to the voluntary disclosure, Infosys Ltd is the best company, the
second ITC Ltd, and the third GAIL (India) Limited. All three companies
under the study yet are not reporting value added statement in their annual
reports which is an important indicator of performance.
5- AIL (India) Limited has no report about client engagement adoption.
6- GAIL (India) Limited discloses its corporate social responsibility (CSR)
using diagrams which makes easy for stakholders for analysis and it saves their
time. They have shown value added statement of per employee in the form of
graph. They also focus on women empowerment and play an active role in
innovation research and development.
7- Infosys Ltd and ITC Ltd have described core values in a much prescribed
manner but GAIL (India) Limited has not given much attention to core values
of company. GAIL (India) Limited has been reporting the core values of the
company from 2014.
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18. FINDINGS
8- GAIL (India) Limited has also disclosed various measures undertaken by
them toward environmental protection like rainwater harvesting, solid waste
management etc. with the help of charts. They have described about corporate
governance in a simple manner.
9- Infosys Ltd has focused on human capital management and discloses it in its
annual report in a very nice manner. It has also disclosed its historical data in
the form of bar diagram which simplifies the shareholders task of
comparability.
10- Infosys Ltd has disclosed its financial statement as per revised schedule VI
as well as disclosed it as per IFRS. It has used graphical representation
wherever it is necessary to simplify the report. It has taken active initiation by
giving explanatory statements under various sections.
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19. Suggestion
Presentation of annual financial reports plays an active role in providing useful
financial information about the company's activities that are useful to internal
and external users of financial statements in economic decision-making.
Presentation of financial reports also helps both existing and potential
investors, creditors, and other users in assessing the amounts, timing, and
uncertainty of future cash receipts from dividends and interest.
1- All three companies under the study must prepare the value added statement
in their annual reports.
2- Infosys Ltd and GAIL (India) Limited should adopt the same manner for
certified Global Reporting Initiative (GRI) which was adopted by ITC Ltd in
order to promote the efficiency sustainability reporting to gain competitiveness
advances as well as promote economic sustainability.
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20. Suggestion
3- ITC Ltd played an effective role through participation in UN Global
Compact principle fully but Infosys Ltd and GAIL (India) Limited are
following it in a limited way so they must ensure complete adoption of the
standards in order to comply with the principle of UN Global Compact which
is related with areas like labour standards, human rights, environment and anti-
corruption.
4- GAIL (India) Limited should disclose the ISO in an effective manner in its
annual report so that the shareholders/stakeholders can know about industrial
and commercial standards as well as ensure quality, safety, and efficiency of
business.
5- GAIL (India) Limited should follow Extractive Industries Transparency
Initiative for optimum using of natural resources which will lead to economic
growth and development as well as increase in transparency in transaction
between the government and companies.
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21. Suggestion
6- GAIL (India) Limited also can disclose the proper disclosure of the core
value of the company.
7- GAIL (India) Limited should focuses on client engagement in its annual
reports.
8- All the companies under the study should follow disclosure as per The
Carbon Disclosure (CDP) norms Project in order to disclose their footprint and
water usage and the strategies that they are taking to reduce it in their annual
reports as well as economic decision making to cover all fields such as
environment, health, care etc.
9- All the companies under the study are following proper norms for
mandatory disclosure and also voluntarily disclosing a large amount of data in
the annual reports. They must continue to follow and also continuously
improve upon these high standards of disclosure in future also.
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