Exploring financial risks disclosure: evidence from Indian listed companies

Purpose - The purpose of this paper is to contribute to the existing literature on financial risk disclosure by examining a sample of non-financial Indian companies listed on the Bombay stock exchange (BSE) to explore the degree of information about financial risks contained in their annual reports. Design/methodology/approach - To study the financial risk disclosure of Indian companies, a sample of 206 non-financial companies has been derived from the top 500 listed companies at BSE. The method used in this study to analyze risk disclosure is content analysis. A total of 1,854 annual reports are scanned through software Nvivo-12 to find different types of risk words. Overall, risk disclosure, category wise risk disclosure, year-wise risk disclosure and sector-wise risk disclosure are assessed. The risk disclosure index is also computed. Findings - The results show that there are some risk disclosure practices in Indian companies. No general pattern is observed. Companies are following vague method of risk disclosure. In the true sense, Indian companies are now started risk disclosure practices since 2018. This may be because of pressure from regulating bodies and stakeholders with greater detail about their financial risks. Originality/value - This study is carried out for Indian non-financial companies. The paper adds to the literature relating to financial risk disclosure in developing countries.