Journal Press India^®

              Mandeep At the outset, we thank our readers and authors for their continued patronage of MUDRA which has enabled us to make it an effective platform for sharing of research work in the area of finance and accounting. In line with our objectives, this issue of MUDRA addresses diverse and contemporary themes in finance and accounting.  

               A couple of papers in this issue focus on the aspect of risk management and financial soundness of banks and companies, which has gained prominence in recent times. The lead paper by Prof. Pankaj Trivedi, Prof. Thomas Berger and Dr. Sunil Parmar presents an interesting comparison of risk information practices in annual reports of Indian companies and German companies. The authors find that while sample companies for both countries comply with the mandatory requirements, information on voluntary basis, especially on numerical concrete risk reporting, can be improved, more so in the Indian context. Another paper on financial risk identification by Ms. Sangeeta Shankar, Dr. K. Ramulu and Mr. Shankar S present a taxonomy based study that brings out the different classifications of financial risks so as to enable one to identify the risks pertinent to an organisation. This, in turn, is expected to  lead to a better evaluation by creating a risk profile and hence making more informed decisions. The financial soundness of private sector banks in India and their relationship with shareholder value has been examined by Dr. K. Abirami in his paper where he finds that private banks, which are observed to be financially sound have not been able to create value to their shareholders mainly due to the existence of high cost of capital. Similarly, private banks which have been efficient in shareholder value creation have not attained the corresponding level of financial soundness.

               In addition to the above, there are empirical papers that focus on important aspects of financial markets. The paper by Dr. Sonal Sharma tests the performance of Black and Scholes pricing model in the Indian options market. The results of her study show that the BS model overall tends to overprice all categories of option contracts. In implementing the BS model, volatility of the underlying NIFTY Index is measured through the Random Walk model and the Historical Mean model. The results obtained in the study can provide pertinent inputs for the traders while valuing the option contracts and creating portfolio diversification in the Indian markets. Another paper by Mr. Shukrant Jagotra and Dr. Amanpreet Singh look at the impact of macroeconomic variables on small, mid and large cap stocks for India using VAR approach. Taking IIP, WPI, money supply, exchange rate and call money rate, they find that these macroeconomic variables significantly impact stock prices depending upon the type of index. An interesting paper by Ms. Anita Mendiratta and Mr. Mudit Mendiratta examines whether discretionary accruals of the company are related with the auditing done by Big 4 auditors of the company. Their empirical results reveal that the absolute discretionary accrual is higher in non - Big 4 client firms as compared to Big 4 client firms. Further, the discretionary accrual and absolute discretionary accrual is found to be significantly associated with Big 4 client firms. An empirical study by Ms. Pooja Chaturvedi Sharma inspects the association amongst stock market index and selected macroeconomic variables. 

               As sustainability and corporate social responsibility has become an integral part of all businesses worldwide, this issue has two papers dealing with these aspects of business. The paper by Mr. Amit Kumar, Mr. Avneet Sinha, Mr. Anish Arora and Mr. Akshat Aggarwal analyses the impact of CSR activities on the financial performance of BSE companies of four different industries - the information and technology, automobile, cosmetics & toiletries, and the petroleum industry. Their results suggest that the public image of a particular industry has a great influence on the relation between these two variables. Another paper on Green Finance by Mr. Sharif Mohd. and Prof. Vijay Kumar Kaushal explore the existing literature in this area and conclude that India has a great potential to create a green infrastructure needed for green finance.

                We hope our readers find this issue of MUDRA interesting and insightful and thank all our authors for providing their valuable contributions to this issue.

Prof. Muralidhar A. Lokhande

Dr. Jitendra Janardan Ahirrao

Dr. Pavnesh Kumar

         Editors