FTI Consulting 2016 India Disclosure Index Finds BSE100 Index Companies Showing Significant Improvement on Mandatory Disclosure Compared to 2015 Report
Marginal Progress on Voluntary Disclosure
Mumbai, 23 June 2016 — FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organisations protect and enhance their enterprise value, today announced the launch of its 2016 edition of the India Disclosure Index, a report that tracks mandatory and voluntary disclosure practices amongst India’s publicly-listed corporations on the Bombay Stock Exchange (“BSE”) 100 Index and BSE 200 Index.
FTI Consulting reviewed publicly-disclosed information to create a weighted, Composite Disclosure (“CD”) scoring system with seven Mandatory Disclosure (“MD”) parameters and seven Voluntary Disclosure (“VD”) parameters, and applied it to the BSE 100 Index to create the India Disclosure Index. When scored on a composite scale of one to ten (with a ten score indicating that all 14 MD and VD parameters are publicly and readily available), the India Disclosure Index 2016 revealed that 71 percent of constituent companies in the BSE 100 Index (up from 41 percent last year) were fully compliant on MD parameters. However, the findings reveal much lower compliance of VD parameters, with an average score of 3.7 out of a maximum of six, with most companies providing inadequate information relating to risk mitigation.
FTI Consulting has expanded on the 2015 India Disclosure Index, by including BSE 200 constituent companies in 2016. The methodology for the India Disclosure Index 2016 also includes Annual Report disclosures, in addition to publicly-available information on company websites.
Key Highlights for BSE 100 Companies
- Average CD score ― 7.4/10.0 (up from 6.7/10.0 in 2015)
- Average MD score ― 3.7/4.0 (up from 3.1/4.0 in 2015)
- Only 3 percent of all BSE 100 Index constituents have MD scores of 2.5 or less, which is a significant improvement from over half of all BSE 100 index constituents in 2015.
- 27 percent of Indian companies did not provide earning call transcripts on their websites, which is a significant improvement from 51 percent in 2015.
- Average VD score ― 3.7/6.0 (up from 3.5/6.0 in 2015)
- 26 percent of all BSE 100 Index constituent companies have VD scores of 3.0 or less, up from 33 percent in 2015.
- 68 percent of BSE 100 Index constituents did not provide adequate information on risk management metrics.
- 37 percent did not provide convenient whistleblowing mechanisms to report fraud or unethical activity through a convenient channel (email/phone), even though all BSE 100 companies have instituted a whistleblowing policy as per mandated norms.
Key Highlights BSE 200 Constituents (Excluding BSE100 Index Constituents)
- Average CD score ― 7.4/10.0
- Average MD score ― 3.4/4.0
- Only 6 percent of the companies had MD scores of 2.5 or less.
- 51 percent of companies did not provide analyst transcripts on websites.
- Average VD score ― 4.0/6.0
- 26 percent of the companies have VD scores of 3.0 or less.
- 60 percent of companies did not provide adequate debt related information.
- 51 percent of companies did not provide adequate strategy-related information.
- 31 percent did not provide whistleblowing mechanisms to report fraud or unethical activity through a convenient channel (email/phone), despite all companies having instituted a whistleblowing policy as per mandated norms.
Commenting on the 2016 India Disclosure Index report findings, Amrit Singh Deo, Managing Director in the Strategic Communications segment of FTI Consulting, said, “The significant improvement in Mandatory Disclosure standards compared to last year reinforces the view that greater transparency and disclosure is being led by regulations rather than corporate behavior, as Indian companies have ensured compliance to levels required by recent regulations. Last year was a landmark year for disclosure regulations in the Indian capital markets and in the heightened scrutiny of board members. Disclosure is a moving target and Indian companies should undertake regular voluntary disclosure benchmarking to be recognized as companies with superior disclosure and corporate governance standards.”
About the India Disclosure Index 2016
The India Disclosure Index 2016 is a report of India's leading companies by market capitalization, specifically those on the BSE 100 and BSE 200 indices, and their disclosure and financial communications practices, as assessed by fourteen publicly available information disclosure parameters. The full methodology and ranking of the BSE100 and BSE200 companies by their weighted disclosure scores (split by Mandatory and Voluntary Disclosure scores) can be found here: http://www.fticonsulting-asia.com/insights/reports/india-disclosure-index-2016
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 4,600 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The Company generated $1.78 billion in revenues during fiscal year 2015. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.