Secretarial Audit

What is Secretarial Audit?


Secretarial Audit is an audit to check compliance of various legislations including the Companies Act and other corporate and economic laws applicable to the company. replica watches 

The Secretarial Auditor expresses an opinion as to whether there exist adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. Secretarial Audit helps to detect the instances of non-compliance and facilitates taking corrective measures. It audits the adherence of good corporate practices by the company.

Who can conduct Secretarial Audit?

Only a member of the Institute of Company Secretaries of India holding certificate of practice (company secretary in practice) can conduct Secretarial Audit and furnish the Secretarial Audit Report to the company. [Section 204(1) of Companies Act, 2013]

Which companies are required to undergo Secretarial Audit?

Every listed company
Every public company having a paid-up share capital of fifty crore rupees or more; 
Every public company having a turnover of two hundred fifty crore rupees or more.

 What is periodicity of Secretarial Audit?

Proactive Secretarial Audit on a continuous basis would help the company in initiating corrective measures and strengthening its compliance mechanism and processes. It is therefore, advisable that the Secretarial Audit is carried out periodically (quarterly / half year / annually) and adverse finding if any, is reported on interim basis to the Board immediately. The Secretarial Audit Report to be annexed with Board‟s report is required to be submitted before the preparation of Board‟s Report. 

 What is the format of Secretarial Audit Report? 

Secretarial Audit Report is required to be provided in the format prescribed in Form MR-3. (Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014).

Who can sign the Secretarial Audit Report? 

The Secretarial Audit Report should be signed by the Secretarial Auditor who has been engaged by the company to conduct the Secretarial Audit and in case of a firm of Company Secretaries, by the partner under whose supervision the Secretarial Audit was conducted. While conducting and signing Secretarial Audit Report, Company Secretary in Practice should ensure that he holds the valid certificate of practice number.

What are the rights and duties of Secretarial Auditor under the Companies Act, 2013?

Section 143 of the Companies Act, 2013 deals with powers and duties of Auditors. Sub-section (14) of the section provides that the provisions of this section shall mutatis mutandis apply to the Company Secretary in Practice conducting Secretarial Audit under section 204.

Is Secretarial Audit applicable to a private company which is a subsidiary of a public company?

Section 2(71) of the Companies Act, 2013 defines a “Public Company as one (a) Which is not a private company; (b) Has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital as may be prescribed. 
The proviso to the definition states that “Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles

By this definition, it can be inferred that Secretarial Audit would be applicable to a private company which is a subsidiary of a public company, and which falls under the prescribed class of companies.



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