Secretarial Audit means to check the compliances of various applicable rules and regulations applicable to the company during that particular period of review. It helps to detect instances of non compliances and facilitates taking correctives measures well in time. It audits the adherence of good corporate practices by the company.
> Compliance provision
Section 204 of the Companies Act 2013 and Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
As defined under Rule 9 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014; for the purposes of sub-section (1) of section 204, the other class of companies shall be as under-
(a) Every Listed Company
(b) Every public company having a paid-up share capital of fifty crore rupees or more; or
(b) Every public company having a turnover of two hundred fifty crore rupees or more.
Only a Member, who has registered himself/herself as Company Secretary in Practice with the Institute of Company Secretaries of India and holding the certificate of the same, can conduct Secretarial Audit.
The Council of the Institute at its 235th meeting held on February 11, 2016 reviewed the limits for the issue of Secretarial Audit Reports and decided as below:
> Format of Report
The format of the Secretarial Audit Report shall be in Form No. MR.3
> Disclosure of Secretarial Audit Report
The Board of Directors, in their report made in terms of sub-section (3) of section 134, shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report
> Penal Provisions
If a Company or any officer of the company or the Company Secretary in Practice contravenes the provisions of this section, the company, every officer of the Company or the Company Secretary in Practice, who is in default, shall be punishable with fine which shall not be less than One Lakh Rupees but which may extend to Five Lakh Rupees.
(Author can be reached at Email Id: [email protected] or on Contact no. 9996796365)