Farooq Awan

Only about one-third of Pakistan’s federal state-owned enterprises (SOEs) had finalized their audited financial statements by the reporting cut-off date for fiscal year 2025, according to the Federal State-Owned Enterprises Annual Aggregate Report FY2025, which also highlights several governance and oversight indicators across the portfolio.

The report states that approximately 36 percent of SOEs completed their external audits within the reporting timeline, while the remaining entities had not finalized audited accounts at the time of compilation of the aggregate assessment. The report notes that the timely completion of audited financial statements is a key component of performance analysis, valuation assessments, and fiscal risk evaluation within the SOE sector.

As part of its corporate governance review, the report provides information on board structures and oversight practices across SOEs. It states that board evaluations are applied with varying levels of depth and consistency among entities. Board evaluations are described as an important element of oversight under established governance frameworks. These assessments relate to board effectiveness, decision-making processes, committee performance and strategic oversight.

The report further indicates that independent directors constitute a share of board memberships across SOEs. It notes that governance practices include representation of independent members on boards and committees. Additional governance features mentioned in the report include defined terms for directors, committee-level responsibilities and internal oversight mechanisms.

The report also documents variations in disclosure practices among SOEs. These include differences in the extent of information provided regarding board deliberations, performance indicators and risk exposures. Corporate governance information is presented alongside broader reviews of financial planning and reporting practices. The report states that SOEs prepare financial planning and analysis documents, business plans and strategic alignment frameworks as part of their operational management processes.

The governance section forms part of the report’s overall assessment of compliance with the SOE Act 2023 and related requirements for financial reporting, board oversight and institutional accountability. The review covers SOEs operating across multiple sectors, including financial services, oil and gas, power, infrastructure and transport, manufacturing, mining, engineering, industrial estate development, trading and other public enterprises.

The figures and governance indicators are compiled in the annual aggregate report prepared by the Central Monitoring Unit of the Finance Division for the fiscal year ended June 2025, which consolidates financial, operational and institutional data of federal state-owned enterprises.

Credit: INP-WealthPk