[Opinion] RoC Penalizes Company, CEO & CFO for Not Attaching Secretarial Audit Report to the Board’s Report
- Blog|News|Company Law|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 21 October, 2023
Latest from Taxmann
Prof R Balakrishnan – [2023] 155 taxmann.com 365 (Article)
1. Secretarial Audit Report
Secretarial Audit is brought in by the Companies Act 2013 and the secretarial audit is a process to check compliance made by the company under the various corporate laws (including the Companies Act 2013), rules, regulations, procedures etc. Secretarial audit is a mechanism to monitor compliance with the requirements of stated laws and processes. The company needs to run a periodical examination of work to find out the errors and mistakes to make a robust compliance mechanism system in any organization. Almost all companies are required to comply with a variety of laws, rules, and regulations and these laws are complex and non-compliance would attract major risk to the company. Periodical inspection of records of the company would give exact information as to whether and if so to what extent the company has complied with the laws applicable to the company. The secretarial audit gives comfort to the regulators, stakeholders and management that the company has a disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
Section 204 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 spells out the category of companies that need to obtain secretarial audit reports from an independent practicing company secretary. The secretarial auditor needs to submit his report to the shareholders of the company and the secretarial report would point out non-compliances if any as well as inadequate compliances in order to protect the interest of various stakeholders. Secretarial audit would largely assist the company to avoid any unwarranted legal actions/penalties by law enforcement agencies and other persons as well by taking the required actions.
2. The framework of the provisions of the Companies Act 2013 on secretarial audit report
As per the provisions of section 204 of the Companies Act 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, requires
(i) every listed company or every public company having paid-up share capital of Rs. 50 crores or more or
(ii) every public company having a turnover of Rs 250 crores or more
(iii) every company having an outstanding loan or borrowing from banks or public financial institutions of one hundred crore rupees or more
shall annex with its board report made in terms of sub-section (3) of section 134 of the Companies Act 2013, a secretarial audit report in the prescribed form MR-3 issued by a practicing company secretary in whole time practice, after carrying out the secretarial audit pursuant to section 204(1) of the Companies Act, 2013 and Rule no.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Click Here To Read The Full Article
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
