Cos fare poorly on listing norms

The India Disclosure Index revealed that only 41 per cent of constituent companies of the BSE 100 index were fully compliant on Mandatory Disclosure parameters when scored on a composite scale of one to 10 (with a 10 score indicating that all 11 mandatory disclosure and voluntary disclosure parameters are publicly and readily available).

FTI Consulting, Inc. on Tuesday announced the launch of its India Disclosure Index, a report that tracks mandatory and voluntary disclosure practices amongst India’s leading publicly-listed corporations. The report also revealed low levels of Voluntary Disclosure by Indian companies, with a median score of 3.5 out of a maximum of six and with most providing inadequate information relating to business strategy and debt.

The report says “The low disclosure scores of the India Disclosure Index are a cause for concern in the context of the recently enacted Amended Clause 49 of the Securities and Exchange Board of India (Sebi) Listing Agreement, which places responsibility for ‘adequate disclosure and communications’ with the board of directors of India’s listed companies. This is particularly concerning, at a time when international institutional investors are demanding higher levels of voluntary disclosure from emerging market companies.”

The key highlights of the report are — Fifty-one per cent of Indian companies did not provide analyst transcripts on websites; sixty-eight per cent of BSE 100 index constituents did not provide adequate information on debt-related information and fiftyseven per cent of companies currently did not provide adequate strategy-related information on their corporate website.

The low disclosure scores of the India Disclosure Index are a cause for concern in the context of the recently enacted Amended Clause 49 of the Sebi Listing Agreement, which places responsibility for ‘adequate disclosure and communications’ with the board of directors of the listed companies in the country.