A survey of eva disclosure practices in the annual reports of the indian corporates

This study aims to shed light on the voluntary disclosure practices followed by the listed Indian Corporates of S&P BSE-500 Index to disclose Economic Value Added (EVA) in their Annual Reports. A total of 5500 Annual Reports of these 500 companies of S&P BSE-500 Index were studied for the period of 11 years (2005-2015). The data was hand-collected and analyzed. It was found that there are 47 companies in India which use EVA as their financial performance measurement metric, value creation, incentive compensation and for improving internal governance. This information was mentioned in their Annual Reports. The study took into account the various disclosure attributes like the Number of Years of reporting, Actual EVA values as reported in the Annual Reports, the Year-on-Year EVA changes, Industry-wise and Firm-age wise EVA Reporting, EVA Applications, and the Medium of Disclosure used in the Annual Reports. In this exhaustive and extensive survey of these S&P BSE-500 Index companies it is found that out of the 500 companies under this study, only about 9.4 percent Indian companies voluntarily disclose EVA figures or its other applications in their Annual Reports while the rest 90.6 percent companies do not. The original contribution of this research to the existing literature is the fact that this study has been conducted for a recent and a longer period of time (11 years) in the Indian context by hand-picking the information from the Annual Reports of the companies. It was also observed that the companies which reported EVA earlier have stopped reporting EVA in their Annual Reports in the recent years.