Several shortcomings in the annual reports of many of the top companies in the Nifty

The annual reports of about 50 of the top Nifty companies have many shortcomings. Former chairman of SEBI M. Damodaren has revealed that many improvements are needed. Damodaran's corporate governance advisory firm Excellence Ablebers has released a report. According to the report, the annual report is expected to contain complete information regarding all stakeholders but important information has been found missing in the report. On the one hand, only a little information is given about the composition of the board and committees, while on the attendance of the meeting, the composition of the committee and the change in the membership of the board and committees during the year is given incomplete information. Also the information about the payments made to the key employees involved with the management is not clear. Because of this the reader of the report does not know what effect the compensation given to him has on the performance. The annual report also hints at the expertise of the board members.

The independence of auditors is considered an important aspect of corporate governance. There are certain things that need to be done to improve it. According to the annual report it is not clear how much the auditors have been paid for non-auditors work. For this it is difficult to estimate how much non-audit work is being done by the auditors.

Damodar said there needs to be clarity in the categories of different directors. It has promoters, nominees and non-independent directors. Also, information regarding attendance at board meetings and committee meetings should be presented according to the reader. It should provide the date of appointment of the directors and the date of termination of the appointment.

Meanwhile, the Securities and Exchange Board of India (SEBI) has proposed to introduce an Employee Stock Ownership Plan (ESOP) for temporary employees and non-executive directors of listed companies. SEBI, through its Special Group Report, recommended improving the definition of employee in the Share Based Employee Benefit (SBEB) Regulation. In addition, it has recommended a waiver on the proportion of Sweat equity shares to be issued by a new-age company listed on the Innovators Growth Platform, according to a consultation paper issued on July 6. Led by partner, S&R Associates Sandeep Bhagat, the seven-member group has made a number of policy recommendations in its 121-page report, which includes both SWET equities and SBEB exchanges.