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Secretarial audit Under Section 204 of Companies Act 2013

secretarial-audit

SECRETARIAL AUDIT is a process to check compliance with the provisions of various laws and rules/ regulations/procedures, maintenance of books, records etc., by an independent professional to make sure that the legal and procedural requirements are complied with & also followed the due process. It is essentially a mechanism to monitor compliance with the requirements of stated laws.

Secretarial Audit Applicability

The mandatory provisions relating to applicability of secretarial audit are as explained below

  • Every Listed Company.
  • Every public company having –
    Paid up share capital > Rs. 50 crore or more
    Turnover > Rs. 250 crore or more

Every company having outstanding loans or borrowings from banks or public financial institutions of
100 crore rupees or more

If anyone of the criteria meets then also secretarial audit is mandatory. A practicing Company Secretary has been recognized to conduct a secretarial audit.

Secretarial Audit Report

Every company to which secretarial report applies –

  • It shall be prepared by a Company Secretary in Practice.
  • It shall be prepared in Form MR-3.
  • Annexed with Board’s Report, considering the increasing importance of Corporate Governance.
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