FTI Consulting Releases India Disclosure Index 2017
Top 200 Listed Indian Companies Making Steady Progress on Voluntary Disclosure
Mumbai, 25 July 2017 — FTI Consulting, Inc. (NYSE: FCN) today announced the launch of its India Disclosure Index 2017, an annual report that tracks corporate disclosure practices amongst India’s top 200 publicly listed corporations1. The India Disclosure Index 2017 reveals an average Composite Disclosure (“CD”) score of 6.5 out of a maximum of 10 and a Voluntary Disclosure (“VD”) score of 4.8 out of a maximum of 8 for all 200 companies.
FTI Consulting worked with a three-member research jury comprising of Dr V.R. Narasimhan, Chief Regulatory Officer of the National Stock Exchange; Vikram Desai, Director at the Canada Pension Plan Investment Board India; and Sandeep Parekh, Founder and Partner, Finsec Law Advisors, to set the research methodology for the India Disclosure Index 2017. The jury finalised 15 disclosure parameters, weighted to reflect importance of each parameters and recent changes in disclosure-related regulations. The India Disclosure Index covers publicly disclosed information by Indian companies to create a weighted CD scoring system with seven Mandatory Disclosure (“MD”) parameters and eight VD parameters.
Key Highlights for Top 100 Listed Indian Companies (By Market Capitalisation)
- Average CD score ― 6.8/10.0
- Three companies had perfect CD scores of 10/10.
- 26 percent had CD scores of 8 or more.
- 14 percent had CD scores of less than 5.
- Average MD score ― 1.8/2.0
- 78 percent of the Top 100 Indian companies provided earnings call transcripts on their websites, a marginal improvement from 73 percent in 2016 and up significantly from 49 percent in 2015.
- Average VD score ― 5.0/8.0
- 50 percent of Top 100 Indian companies provided adequate information on risk management metrics, an improvement from 32 percent in 2016.
- 71 percent provided convenient whistleblowing mechanisms to report fraud or unethical activity through a convenient channel (email/phone), an improvement from 63 percent in 2016.
- 53 percent did not provide any commentary on the implementation or impact of adopting Indian Accounting Standards (“IndAS”) on their business or financial performance.
- Only six percent engaged independent third-party advisors or consultants to evaluate board performance. Boards of the other 94 percent declared that they had self-evaluated themselves and were satisfied with the assessments.
Key Highlights Next 100 Listed Indian Companies2 (By Market Capitalisation)
- Average CD score ― 6.2/10.0
- 25 percent had a CD score of 8 or more.
- 23 percent had a CD score of less than 5.
- Average MD score ― 1.8/2.0
- 53 percent of companies provided earnings call transcripts on websites, an improvement from 49 percent in 2016.
- Average VD score ― 4.6/8.0
- 66 percent of companies provided sufficient debt-related information, a significant improvement from 40 percent in 2016.
- 66 percent of companies provided adequate strategy-related information, a significant increase from 49 percent in 2016.
- 23 percent did not provide whistleblowing mechanisms to report fraud or unethical activity through a convenient channel (email/phone), an improvement from the 31 percent in 2016.
- 54 percent did not provide any commentary on the implementation or impact of adopting IndAS on their business or financial performance.
- Only one company out of 99 companies engaged an independent third-party advisors or consultants to evaluate board performance. All other 99 companies mentioned that they had self-evaluated themselves and were satisfied with the assessments.
Commenting on the India Disclosure Index 2017 report findings, Amrit Singh Deo, a Managing Director in the Strategic Communications segment of FTI Consulting, said, “About 22 Indian companies in the Top 200 list are disclosure champions, with scores of more than nine. Unlike two years back, they come from a broad spectrum of industries. Other companies seem to be following them, in their respective sectors, when it comes to corporate disclosure. The India Disclosure Index points to specific areas of how Corporate India is raising disclosure standards and tries to identify future parameters that could become important. Corporate India’s embrace of Voluntary Disclosure standards is a positive sign for investors. I expect boards and independent directors will advocate for more corporate information to be shared proactively as board performance comes under greater scrutiny in India. This report is a potent tool in the hands of directors in Indian boardrooms.”
About the India Disclosure Index 2017
India Disclosure Index 2017 is a report of corporate disclosure by India’s leading companies, by market capitalisation, as assessed on 15 publicly available information disclosure parameters. Full methodology and rankings of all 200 Indian listed companies with weighted disclosure scores (split by MD and VD scores) can be found here: http://www.fticonsulting-asia.com/insights/reports/india-disclosure-index-2017
2BSE200 Index constituents excluding the BSE100 constituents
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