Islamabad: Khyber Tobacco Company Limited's compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 has been called into question following an independent auditor's review report. The report highlights a vacancy in the position of Chief Financial Officer (CFO) as a significant instance of non-compliance, according to the regulations for the financial year ending June 30, 2024.

The review report, prepared by the auditors, focused primarily on the Statement of Compliance as per regulation 36 of the Code of Corporate Governance Regulations. The responsibility for adhering to these regulations lies with the Board of Directors of Khyber Tobacco. The auditors' role was to determine whether the Statement of Compliance accurately reflects the company's adherence to the regulations.

For the year ended June 30, 2024, the auditors found no major discrepancies in the company's compliance with the regulations. However, they highlighted the absence of a CFO, which is a violation of the governance code as stipulated in notes 10 and 11 of the Statement of Compliance.

According to information available from the Pakistan Stock Exchange (PSX), the regulations mandate the company to ensure the appointment of a CFO, a matter the board has yet to address. The auditors noted that the board has not filled this critical position, which is essential for maintaining sound financial oversight and governance.

The audit also required the auditors to review the company's internal control systems without forming opinions on their effectiveness. The regulations further require the company's Audit Committee to review related party transactions before they are approved by the Board of Directors. The auditors confirmed compliance with this aspect of the governance code, although they did not assess whether these transactions were conducted at arm's length.

The auditors concluded that apart from the CFO vacancy, the Statement of Compliance reflects Khyber Tobacco Company Limited's adherence to the corporate governance regulations in all other material respects for the specified period. The board is expected to address the highlighted non-compliance to align fully with the governance requirements.