What is Secretarial Audit?

‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc. It is a mechanism to monitor compliance with the requirements of stated laws and processes. Periodical examination is necessary to point out errors & to build a robust compliance mechanism system in an organization.

ICSI views on “Other Laws”

 

FAQ

 

Secretarial Audit offers comfort to the regulators, stakeholders and directors that the company has a disciplined approach to evaluate and improve effectiveness of risk management, control, and governance processes

 

Which Companies are mandatorily covered under Secretarial Audit?

As per section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, following companies are required to obtain ‘Secretarial Audit Report’ from an Independent Practicing Company Secretary:

 

1

Every listed company

 

2

Every public company having a paid-up share capital of Fifty Crore rupees or more; or

 

3

Every public company having a turnover of Two Hundred Fifty Crore rupees or more.

 

4

Private company which is a subsidiary of a public company, and which falls under the aforesaid prescribed class of companies

 

Who can be your Secretarial Auditor?

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. A mature person with experience in dealing with business, bureaucracy, managers, bankers, etc should occupy this position. Dealing with Intermediaries is an essential part of this assignment.

How to Appoint?

As per Rule 8 of the Companies (Meetings of Board and its powers) Rules, 2014, Secretarial Auditor is required to be appointed by means of resolution passed at a duly convened Board meeting and resolution for appointment shall be filed with Registrar of Companies within 30 days in E-form MGT-14. A docket containing the above statutory forms must be offered to the Secretarial Auditor.

Interview with CMD, Auditor, Finance Head & Company Secretary is recommended

What is the scope of Secretarial Audit?

A secretarial auditor must check compliances by the company under the following laws and rules made there-under;

1

The Companies Act, 2013 & the Rules made thereunder

Coverage recommended by ICSI. Retainership Fees for this limited section:

Rs.15,000/= pm

+ reimbursement of travel cost

+ Lodging & Boarding.

2

The Securities Contract (Regulation) Act, 1956

3

The Depositories Act, 1996

4

FEMA, 1999 (limited exposure)

5

The SEBI Act, 1992 (limited exposure)

6

Secretarial Standards issued by ICSI

7

Listing Agreement

8

FEMA 1999 & Foreign Trade Policy

Considered desirable by Directors in view of Schedule V & Economic Offences (Inapplicability of Limitation) Act, 1974 & Personal Liability aspect of Professional engagements.

 

Retainership Fees for this comprehensive arrangement:

Rs.20,000/= pm

+ reimbursement of travel expenses

+ Lodging & Boarding.

9

The Indian Stamp Act, 1899, Local Stamp Acts & Indian Registration Act, 1908

10

The Central Excise Act, 1944 & Rules made thereunder

11

The Industries (Development & Regulations) Act, 1951

12

The Customs Act, 1962 (52 of 1962)

13

The Competition Act, 2002

14

The Prevention of Money-Laundering Act, 2002

15

IPR Laws

16

VAT & CST & Income Tax Act, 1961 (TDS & TCS only)

17

Chapter V & VA of the Finance Act, 1994 – Service Tax Law

18

Insurance & Banking laws (to applicable industries)

19

Labour Laws (Factories Act, PF, ESI, Shops & Establishment Laws, Harassment Law)

20

The Legal Metrology Act, 2009

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Sub-Section 4 of Section 204 of the Companies Act, 2013, provides that if a company or any officer of the company or the company secretary in practice, contravenes the provisions of section 204 of the Act, 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 1 lakh rupees but which may extend to 5 lakh rupees.

 

I handle my assignments all by myself without any intervening assistant or apprentice. This method is intended to provide data secrecy for clients & error-free consultancy. I travel to Mumbai, Bangalore, Chennai, Tatanagar, Delhi, Kutchh & many other places for handling assignments. Client bears the cost of travel & lodging & boarding, apart from retainership fee mentioned above.

 

In Mumbai, I do not need any lodging & boarding arrangements.

 

 

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