United Spirits (USL) defended the appointment of Price Waterhouse and Company as auditors of the liquor giant, even as opposition came from a proxy advisory firm Stakeholders' Empowerment Services, which egged on the shareholders to vote against such a resolution.
Addressing the Annual General Body Meeting of USL Chairman M K Sharma said there was duplication of certain audit processes.
Sharma made the statement as Stakeholders' Empowerment Services had asked USL to disclose the reasons for not continuing BSR and Company LLP as the auditors as a good governance practice to shareholders.
The advisory firm had questioned the proposal of USL to appoint PwC as its auditors.
E-voting on the resolution was taken up today but the outcome will be known tomorrow, company sources said.
The advisory firm in its report had said PwC cannot be termed as independent as they had been hired to conduct an inquiry into the financials of USL on behalf of the parent, Diageo plc, the London-based liquor company.
It had also urged the shareholders to vote against the resolution when it comes up for voting during the AGM.
The report had argued that such a move raised governance issues as change of auditors mid-way in its five year term is not normally carried out unless there is a major issue with them.
Sharma, in his speech, said the Indian Audit Standard Conversion is currently being done by PwC and the first reporting is effective Q1 FY17 starting from June 2016 quarter.
He further said it will be more beneficial in terms of continuity and improvement in reporting under Indian accounting standards going forward.
He also said it will also help align with IFRS reporting at group level for Diageo.
PwC appointment will also help leverage on the work performed by PwC for internal financial control, certification and reporting under SOX Act, reporting as well which are currently being handled by two different set of auditors.
This will help in reporting efficiently under multiple statutory regulations in different geographies, Sharma said.
It will also help bring cost optimisation of having audit fees being negotiated at the group level and likely reduction, arising there from to United Spirits Limited, Sharma said.
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