India’s top central public sector enterprises with “maharatna” and “navratna” tags reported mixed picture in their efforts to improve corporate governance, going by the fourth edition of the survey by Excellence Enablers. The survey, which covers the four years through FY24 reveals these companies (38 at last count) witnessed an increase in audit committee meetings, and further rise in directors’ attendance at board meetings.
In FY24, for instance, no director had zero attendance at board meetings, while in FY23, 14 directors did not turn up at all. As many as 77 directors had 100% attendance in FY24, the same as in FY23, but lower than 84 in FY21. Independent directors (IDs), meanwhile, saw a slight improvement in full attendance in FY24, with 89 IDs reporting 100% attendance in FY24, up from 87 in FY23. In FY21, 95 IDs had shown full attendance.
The report stresses that independence is one of the most important expectations from statutory auditors. To ensure this, there has been an increasing focus on reducing, if not eliminating, non-audit functions being performed by statutory auditors. However, in FY24, 17 companies paid no non-audit fees, compared with 22 companies in FY21. “In all 4 FYs, 13 companies continued to not pay any non-audit fee to the auditors,” the report highlighted.
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The survey further said that in FY24, 22 companies held more than 7 audit meetings, compared with 14 in FY21. The highest number of meetings in any of these companies in FY21 was 13, and in FY 2, FY23 and FY24 it was 14. SEBI regulations say that audit committee shall meet at least four times in a year and not more than one hundred and twenty days shall elapse between two meetings. “The regulatory prescription that the AC shall meet at least 4 times in a year is clearly inadequate,” said the report.
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