Quick Summary
Secretarial Audit is a process to check compliance with applicable laws, rules, regulations, and procedures. It is mandatory for certain companies and conducted by a Company Secretary in Practice.
Secretarial Audit is governed by Section 204 of the Companies Act, 2013. It involves verifying whether the company has complied with the provisions of various laws applicable to it and whether proper systems and processes are in place.
Applicability
- Listed companies
- Public companies with paid-up capital ≥ ₹50 crores
- Public companies with turnover ≥ ₹250 crores
- Companies having outstanding loans/borrowings ≥ ₹100 crores
Scope
- Compliance with Companies Act and rules
- Compliance with Secretarial Standards
- Compliance with listing agreement (for listed companies)
- Compliance with other applicable laws (industry-specific)
- Maintenance of statutory registers and records
- Recording of minutes of meetings
- Filing of forms and returns with ROC
Process
- Appointment of PCS (Practicing Company Secretary)
- PCS conducts examination of records
- Verification of compliance
- Issue of Secretarial Audit Report (Form MR-3)
- Annex to Board's Report
Due Date
- Report to be annexed to Board's Report
- Due with Annual Report
Penalty
- Company: ₹1,00,000 to ₹5,00,000
- Officers in default: ₹25,000 to ₹1,00,000 or imprisonment up to 1 year
Key Points
- Compliance audit by PCS
- Mandatory for listed and large public companies
- Report in Form MR-3
- Annexed to Board Report
- Covers Companies Act and other laws