Disclosures given in the `Management Discussion and Analysis' (MD&A) are meant to ensure that there is transparency in company's financial performance. They enable the investors to evaluate a company and make informed investment decisions. Sebi has made it mandatory for the companies to have MD&A report in their annual reports. This research work intends to analyze how far this measure has been effective in providing right information to the investors in the right format. The results suggest that two-third of the Sensex and Nifty companies miss at least one important information component, which has the potential to affect the company's performance in the future. Nearly one-third of the Nifty and Sensex companies do not comply with Sebi norms in making disclosures.

Corporate Governance (CG) may have come into prominence with the `Cadbury Committee Report' in 1991 in UK. But there is one CG practice, which has been around much before the Cadbury Committee report. It is the disclosure of Management Discussion and Analysis (MD&A). Financial statements alone are not sufficient to judge a company's current performance and predict the future performance. The ordinary investor needs narrative explanations to have a better understanding of the performance and the environment in which the firm operates. MD&A fulfills this objective. It gives the investor an opportunity to look at the company through the eyes of management by providing both a short and long-term analysis of the business of the company. Paragraph (a) of Item 303 of Regulation S-K of Securities and Exchange Commission (SEC) of US requires MD&A: to provide such other information that the registrant believes to be necessary to an understanding of its financial condition, changes in financial condition and results of operations.

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