Introduced vide Section 204 of the new Indian Companies Act of 2013 for certain categories of companies mentioned below, 'Secretarial Audit' (SA) is the process or mechanism to check and monitor all the compliances made by the concerned company under the various regulatory authorities and laws relevant. This secretarial audit, therefore, necessitates periodic examination of all secretarial and compliance tasks, reports, and records to detect any errors or mistakes, and to build a robust and efficient compliance mechanism system in the entity concerned. Thus, strict and perfect secretarial auditing is beneficial and securing not only to the management and shareholders of a company, but also to the regulators and prospective new investors, as it reveals a disciplined and responsible approach towards the needed effectiveness of risk management and control, and the overall corporate governance of the company. This particular webpage is dedicated exclusively to providing very informative and securing information about the secretarial audit services, to help all relevant economic entities active in entire India.
According to the provisions, rules, and regulations of the Companies Act of 2013 related with company secretarial audit, the Board of Directors of a company (particularly a public limited company, listed or unlisted) is required to devise a proper, critical, and efficient system for ensuring flawless and timely compliances with all the laws the company is concerned with; and submit the secretarial audit report along with the Board's report as per the Section 134 (3) of the Act. The secretarial audit reporting has been made mandatory for the below-noted categories of public limited companies since the financial year 2014-15, for timely submission of the same in Form MR-3. Only a duly recognized practicing member of the Institute of Company Secretaries of India can conduct the secretarial audit, and furnish the report to the company. It is the responsibility of the concerned public limited company and its Board of Directors to get timely secretarial audit report from such a fully recognized and competent practicing company secretary, and submit the same to the relevant ROC.
According to the Section 204 of the Indian Companies Act of 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules of 2014, the following categories of a public limited company are compulsorily required to submit the secretarial audit report for every financial year:
The Companies Act of 2013 has stipulated strict and rigorous provisions for perfect (not incorrect or misleading) and punctual preparation and submission of the secretarial audit report by the concerned company. The Sections 204 (4), 447, and 448 provide information about the fines, penalties, and punishments related with making the faulty or treacherous compliances under the Section 204 by a company or its any officials. The secretarial auditor too is to be penalized or/and punishable as per Section 143 (15), if he commits delinquencies mentioned in the Section 143 (12), and other sections noted above.
The Secretarial Auditor is to be appointed as per the Rule 8 of the Companies (Meetings of Board and Its Powers) Rules of 2014, taking a potent resolution for making the appointment in a duly convened Board meeting, information about which is also to be sent to the relevant ROC through Form MGT-14 within Thirty days of such a resolution. The Companies Act of 2013 offers the secretarial auditor all legitimate rights and powers to act as a statutory auditor, including the power to get necessary pieces of information and explanation from the relevant officials of the company to ensure perfect performance of his/her duties as an auditor. A secretarial auditor is required to check and verify the various compliances to be made by the concerned company under the rules and regulations of the following Acts and Statutes applicable: