13 listed PSUs have no independent director

A CAG report on Central Public Sector Enterprises (CPSE) has found that there was no independent director on the board of 13 CPSEs listed on stock exchanges, while citing their  inadequacy in 33 CPSEs.

There was no whistle blower mechanism in three CPSEs. In six CPSEs the Audit Committee did not review the whistle blower mechanism. “Provisions of the Companies Act, 2013, and guidelines of Department of Public Enterprises/Securities and Exchange Board of India on corporate governance, though mandatory, were not being complied with by some of the CPSEs listed on the stock exchanges. A significant departures from the prescribed guidelines were noticed,” the CAG report said.

The report said that compliance by 76 CPSEs under administrative control of 24 ministries with the provisions of the Companies Act, 2013, and Department of Public Enterprises’ guidelines on corporate social responsibility (CSR) were reviewed. It was observed that four CPSEs did not disclose the composition of the CSR Committee in the Board’s report. Eight CPSEs had either not formulated CSR or sustainability policy or the policy of the CPSE was not duly approved by the Board. Four CPSEs did not allocate the prescribed amount of at least 2% of the average net profits of the company made during the three immediately preceding financial years towards budget for CSR expenditure.

Out of 36 CPSEs, which maintained information regarding actual expenditure incurred on corporate social responsibility, 27 had spent the full amount earmarked for CSR activities and nine CPSEs had an unspent amount of Rs 193 crore.

Two CPSEs did not include annual report on CSR in their Board’s report. Impact assessment for completed projects/activities was not carried out in case of 19 CPSEs.