SECRETARIAL AUDIT UNDER COMPANIES ACT 2013
Secretarial audit means Verification of Records to Check Compliance with the Provisions of Various laws by an Independent Professional to Ensure that Company has made relevant disclosures. This Concept of Secretarial Audit was introduced to keep a check on the scams or fraud to ensure all compliances has been made with the provisions of law. Periodically examination of work is necessary to point out errors & mistakes and to make a robust compliance mechanism system in an organization.
APPLICABILITY UNDER SECTION 204 OF COMPANIES ACT 2013
Every listed company
Every public company
Having a paid-up share capital of Fifty Crore rupees or more; or Having a turnover of Two Hundred Fifty Crore rupees or more “Turnover” means the aggregate value of the Realization of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year. [Section 2(91)]
Note: Secretarial Audit is also mandatory to a private company which is a subsidiary of a public company, and which falls under the prescribed class of companies.
INDEPENDENT PROFESSIONAL TO BE APPOINTED:
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. He is entitled to acquire all necessary information from officers of Company for the Performance of his duties. Practicing Company Secretary gives a Secretarial Audit Report which shall be annexed to Board’s Report which shall in the format of Form MR-3.