SECRETARIAL AUDIT OF COMPANIES
Pursuant to Section 204, every listed company and a company, belonging to such class as prescribed namely, every public company having paid-up capital of Rs. 50 crore or more or every public company having turnover of Rs. 250 crore, shall annex with its board’s report a secretarial audit report given by a company secretary in practice in such form as may be prescribed. It is prescribed in Rule 9 of the companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014, that the format of Secretarial Audit Report shall be in Form No. MR-3.
Where in the course of such audit, the company secretary in practice is of opinion that an offence involving fraud has been committed by officers or employees against the company as per Section-143(12), he shall report the matter to the Central Government as required in Section-143(12) failing which he shall be punishable with finr of Rs. 1 lakh which may extend to Rs. 25 lakh.
As per Rule 8 of the Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is prescribed that-
- Every listed company; and
- Every other public company having paid-up capital of Rs. 10 crore or more,
Shall have key managerial personnel including company secretary.
Every whole-time key managerial personnel including company secretary shall be appointed by the Board of Directors by means of resolution containing the terms and conditions of appointment including remuneration.
Section 143 of the companies act,2013 deals with powers & duties of statutory auditore. Sub-section (14) of the section provides that the provisions of this section shall mutatis mutandis apply to the company secretary in practice conducting secretarial audi under section 204.
Where any of the matters required to be included in the audit report under section 204 is answered in the negative or with a qualification, the report shall state the reasons therefor.