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GOVERNANCE STRUCTURE AND ACCOUNTING RETURNS: STUDY OF NIFTY500 CORPORATES

M.V. Shivani, P.K Jain and S.S. Yadav

Volume 37, Issue 2 (October 2016 to March 2017)

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The paper attempts to examine the relationship between various aspects of governance structure and return on assets as well as return on equity. For the purpose, the study makes use of some pertinent provisions such as size of board, board diversity in terms of gender, proportion of executive directors, proportion of independent directors, Chief risk officer (CRO), risk management committee, mandatory committees, voluntary committees and existence/nonexistence of whistle blower policy. The sample consists of Nifty500 corporates and covers a 10 year period from 2005-2015. Pooled OLS regression has been used to gauge the relationship. To ensure robustness of results year and industry effects, among other control variables, have been controlled for and results are similar across all models used. On a descriptive level, some noncompliance with certain mandatory provisions (e.g.: proportion of independent directors to be maintained) has been observed. Regression results indicate that larger boards and constitution of compulsory committees tend to be negatively related to return on assets (ROA) and return on equity (ROE). This calls for a review of provisions related to compulsory committees. Further, presence of non-executive directors, constitution of a risk management committee and formulation of a whistle blower policy has a significant positive impact on ROA and ROE. The results of the study are expected to be of immense utility to regulators, practitioners and academicians.

STUDY OF INTER-LINKAGES AND INTER-DEPENDENCE BETWEEN STOCK MARKET OF INDIA AND SRI-LANKA

Amit Kumar Singh and Rohit Kumar Shrivastav

Volume 37, Issue 2 (October 2016 to March 2017)

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Capital market of a country works as a channel for creating demand and supply of the debt and equity capital. It’s always been a very important part of overall financial system of every economy. On one hand primary market helps raising the funds for long-term requirements of the corporates and institution and on the other, secondary market provides buying and selling the securities already issued in primary market and hence provide liquidity to investors. This paper made an attempt to investigate the inter linkages and inter relationships between Sri Lanka and India’s stock market. This paper made an attempt for investigating the inter linkages and interrelationships between India and Sri Lanka’s stock market. Colombo stock exchange and National Stock Exchange are two fully automated exchanges of South Asia and leading stock exchange too. Since Sri Lanka and India are not only neighboring Asian Countries but they also enjoy good economic and political relationship from years therefore this paper tried to identify scope of integration between Sri-Lanka and India’s stock market due to establishment of the long-term relations between both the countries. We applied ADF test for stationarity of data series and found stationary at first difference. Descriptive statistics showed NSE market provide a little higher return in compare of Colombo stock market. Correlation between the indices of India and Sri Lanka is coming out to be +0.545507. Testing results of Granger Causality explained that return at Colombo exchange does not Granger Cause return at Indian stock exchange and vice versa. Johansen Co-integration test also speaks about no co-integration between them. Therefore, even though good relationship exists between these nations still stock market of both the nations are not integrated towards each other. Moreover, we did not find any causal relationship and inter linkages between both the nations stock market.

TO STAY OR TO QUIT: THE CLIMATE MATTERS

Gurpreet Randhawa and Kuldeep Kaur

Volume 37, Issue 2 (October 2016 to March 2017)

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Successful organizations strive to solve the perennial problem of employee turnover drawing their focus on factors which are considered responsible for it. The present study aims to determine the perception of employee turnover intentions and its relationship with organizational climate. The sample consisted of 509 respondents working in 10 large scale food processing companies of Punjab. The data was collected using a single structured questionnaire and was analysed using Pearson product–moment correlation and multiple regression analysis. The findings of the study have indicated a moderate level of employee turnover intentions prevailing in the large scale food processing companies of Punjab. A strong negative correlation has been observed between overall organizational climate and turnover intentions (r = -0.603, p<.01). Further, the result of multiple regression analysis has shown that the dimensions of organizational climate such as supervisory support, clarity of organizational goals, participation, welfare, training, pressure to produce, efficiency, integration, performance feedback and autonomy have significant impact in determining the employee turnover intentions.

INTELLECTUAL CAPITAL DISCLOSURES PRACTICES OF INDIAN FIRMS

Harsh Purohit and Kamini Tandon

Volume 37, Issue 2 (October 2016 to March 2017)

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In the New Economy, Intellectual Capital(IC) can be recognized as an integral factor driving economic growth. Rapid globalization characterized by advances in technology, research & development and increasing competition has been essentially driven by growth in IC. But the current accounting framework do not provide for mandatory reporting of intellectual capital items in the annual financial statements in any country. There is limited disclosure of intellectual capital related items and whatever information is provided, it is based on voluntary disclosures only. At best, the only intangible assets that have found place in corporate financial statements are in the nature of intellectual property such as patents, trademarks and acquired items like goodwill. Tangible assets have failed to explain the increasing gap between market and book value of firms, this creates the need for more comprehensive disclosure practices taking into account the crucial contribution of intangible resources. Thus, the present study has been undertaken to study and analyze the intellectual capital disclosure practices of publicly listed firms in India in which can provide useful information on developing the intellectual capital base of the nation.

Book Review - CORPORATE FRAUDS & THEIR REGULATIONS IN INDIA

Abhay Jain

Volume 37, Issue 2 (October 2016 to March 2017)

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Corporate fraud, whether big or small has become a persisting phenomenon now these days. If someone delves down the surface of the corporate world, he will come across a continuous stream of crucial corporate scams which are approximately unbelievable in the sheer scale of their subterfuge. The perpetrators of such frauds intricate their web of deceit, entice the stakeholders initially to invest their hard earned money and become fugitives someday by allegedly duping these stakeholders leaving them behind for terrible consequences. It becomes imperative to spread awareness by engaging the readers to enlighten them about the major causes of such frauds, enable them to analyse fraud risk and accordingly legal remedies available under different regulatory frameworks for effective fraud preventions, in turn minimizing financial catastrophes.