Whether you are dealing in agri-food, restaurant, asset management or oil refinery business, you need to have a Secretarial Audit done.
A secretarial audit is a part of the organization’s total compliance management system. The secretarial audit acts as an effective tool for corporate compliance management. Also, it benefits in detecting the noncompliance and to take the respective measures.
Secretarial Audit is a process to check the company compliance with the provisions of many laws and rules or regulations or procedures, records, accounting, maintenance of books, etc. An independent professional can take control of the secretarial audit of the company. It is a procedure to make sure that the legal and procedural specifications are followed and observed. No matter what, the secretarial audit follows the due process. It is primarily a mechanism to monitor compliance concerning the requirements of stated laws.
Secretarial Audit is applicable and mandatory to which companies?
It is mandatory for the following companies which relate to the applicability of the secretarial audit and has to be followed. These are mentioned below:
When it comes to a public company, then it has a few restrictions:
A public company with a Paid-up share capital of more than Rs. 50 crore and a turnover of more than Rs. 250 crore is only applicable. If anyone of the criteria meets, a secretarial audit is mandatory for that as well. A Company Secretary who has been practicing has also been recognized to conduct a secretarial audit to organizations.
Who can be appointed as Secretarial Auditor?
Members of the Institute of Company Secretaries of India, who are holding the certificate of practice which certifies to perform as a secretarial audit, can only conduct Secretarial Audit and provide with the Secretarial Audit Report to the Company or organization.
For every company, the secretarial audit report is applicable only when it is fulfilled by the following conditions such as:
What are the services provided under the Secretarial Audit?
The secretarial audit checks compliance of various legislations including the Companies Act and other corporate and economic laws applicable to the company. A secretarial audit is a process to check the compliances made by a company under the Corporate Law and the other relevant laws, regulations, rules, and procedures, etc. It was enacted vide section 204 of the 2013 Companies Act. Under this, the regulators monitor the companies for compliances as needed by the stated laws and processes.
Every company must comply with government rules, regulations, and laws. Any non-adherence to the compliances can be dicey for the company. Organizations need to conduct a periodical examination of their work to point out the errors and to maintain a strong compliance mechanism system in any organization.
It is maintained that periodical inspections of the records give the Authority the exact information of the company’s compliance policy.
A detailed secretarial audit helps:
Companies Act, 2013
Foreign Exchange Management Act
Securities And Exchange Board Of India Act, 1992
Labour, Fiscal & Other Laws
Depositories Act, 1996
* Labour, Fiscal, and Other laws are limited to the applicability of the Company
Documents Required for Secretarial Audit
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25-Mar-2020: More Unlisted Companies to Come Under Secretarial Audit
With effect from 1st April 2020, all unlisted companies/private firms with outstanding loans on or above Rs 1 billion will come under the ambit of the secretarial audit. Such companies will have to submit the findings of the mandatory audit to the MCA, without fail.
20-Mar-2020: ICSI Sets up New Secretarial Audit Standards
The Institute of Company Secretaries India (ICSI) has published new guidelines for Secretarial Auditing standards for the upcoming financial year. This is in adherence to the audit provisions mentioned in Section 204 of the Companies Act, 2013.