All public sector companies have been directed to publish and circulate a statement of compliance with Public Sector Companies (Corporate Governance) Rules, 2013 along with its annual report to set out the status of its compliance, therewith. According to Public Sector Companies (Corporate Governance Compliance) Guidelines issued by the SECP, here on Friday, the guidelines shall apply to all public sector companies, as defined in the Companies Act, 2017 (the Act) and Public Sector Companies (Corporate Governance) Rules, 2013.
As per SECP guidelines, the statement of compliance shall be signed either by the chief executive jointly with the chairman of the board or in case of his absence, with any of the independent non-executive directors. In case of non-compliance with any of the provisions of the Rules, the reasons for non-compliance along with a line of action for complying with the provision in the future shall be provided in the statement of compliance, in the form set out in Schedule-II to the guidelines.
As per guidelines, the external auditors of the company, before publication of the statement of compliance, shall review the same and certify compliance through review report to the members, as set out in Schedule III to the guidelines, and the relevant details. In case of listed public sector companies, which are also subject to the provisions of the Code of Corporate Governance, the external auditors would issue a clean review report in the form set out in Schedule III (i), in cases where management has accepted and disclosed the non-compliances in the statement of compliance.
The external auditors would also issue a modified review report, in the form set out in Schedule-III (ii), in cases where the non-compliance is on the part of the company but management is neither accepting nor disclosing the fact. In case of unlisted public sector companies, the external auditors would issue a clean review report in the form set out in Schedule-III (iii), in cases where management has accepted and disclosed the non-compliances in the statement of compliance.
In case of unlisted public sector companies, the external auditors would issue a modified review report, in the form set out in Schedule-III (iv), in cases where the non-compliance is on the part of the company but management is neither accepting nor disclosing the fact. Any disclosure required under any other directive, code, regulation or rules shall be made in the statement, the SECP said.