Quick Answer
Secretarial Audit India is a mandatory compliance requirement under Section 204 of the Companies Act, 2013, for listed companies and certain classes of unlisted public companies. It involves an independent review of a company's compliance with applicable corporate laws, rules, regulations, and procedures.
Secretarial Audit — detailed explanation below
Governing Act — Secretarial Audit India
The primary legislation governing Secretarial Audit India is the Companies Act, 2013. Specifically, Section 204 of the Act mandates the requirement for a secretarial audit. The rules and procedures are detailed in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Additionally, the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) provide guidance on the conduct of the audit.
Government Department & Website for Secretarial Audit India
The regulatory authority for Secretarial Audit India is the Ministry of Corporate Affairs (MCA). The official website for filing secretarial audit reports and other compliance documents is the MCA21 portal at www.mca.gov.in. The Institute of Company Secretaries of India (ICSI) is the professional body that regulates Company Secretaries and issues standards for secretarial audits.
Secretarial Audit India Application Process
The process for Secretarial Audit India involves the following steps:
- Appointment of Secretarial Auditor: The board of directors appoints a practicing Company Secretary as the secretarial auditor for the financial year.
- Preparation of Audit Programme: The auditor prepares an audit plan covering all applicable laws, regulations, and internal policies.
- Conduct of Audit: The auditor reviews records, documents, and processes to assess compliance with the Companies Act, SEBI regulations (if applicable), and other relevant laws.
- Drafting of Secretarial Audit Report: The auditor prepares a report in the prescribed format (Form MR-3) detailing findings, observations, and qualifications.
- Submission to Board: The report is submitted to the board of directors and included in the annual report.
- Filing with MCA: The company files the secretarial audit report with the Registrar of Companies (ROC) through the MCA21 portal as part of its annual filings.
Key Forms Required for Secretarial Audit India
The key forms involved in Secretarial Audit India are:
- Form MR-3: Secretarial Audit Report – to be issued by the practicing Company Secretary.
- Form MGT-7: Annual Return – includes a declaration that the secretarial audit was conducted.
- Form AOC-4: Financial Statements – filed along with the annual return.
- Form DIR-12: Appointment of auditor – if the secretarial auditor is appointed during the year.
These forms are filed electronically on the MCA21 portal.
Eligibility Criteria for Secretarial Audit India
Secretarial Audit India is mandatory for the following classes of companies:
- Listed companies and their subsidiaries.
- Unlisted public companies with a paid-up share capital of ₹50 crore or more.
- Unlisted public companies with a turnover of ₹250 crore or more.
- Private companies that are subsidiaries of public companies meeting the above thresholds.
Other companies may voluntarily opt for a secretarial audit to enhance governance.
Timeline for Secretarial Audit India
The secretarial audit must be conducted for each financial year. The audit report is required to be obtained before the board meeting that approves the annual accounts. The report is then filed with the ROC along with the annual return within 60 days of the annual general meeting. No specific timeline is prescribed by law for the completion of the audit itself, but it is typically completed within a few months after the end of the financial year.
Fees for Secretarial Audit India
The fees for Secretarial Audit India are not prescribed by the government and are negotiated between the company and the practicing Company Secretary. However, the government prescribes fees for filing the secretarial audit report with the MCA. The table below shows the applicable filing fees:
| Form | Fee (₹) |
|---|---|
| Form MR-3 (filing) | ₹500 |
| Additional fee for delay | ₹100 per day |
Note: The professional fees of the secretarial auditor are separate and depend on the scope of work.
Frequently Asked Questions
What is Secretarial Audit India?
Secretarial Audit India is a mandatory compliance review under Section 204 of the Companies Act, 2013, conducted by a practicing Company Secretary to verify a company's adherence to corporate laws and regulations.
Who is required to undergo Secretarial Audit India?
Listed companies and unlisted public companies with a paid-up capital of ₹50 crore or more, or turnover of ₹250 crore or more, must undergo Secretarial Audit India. Private companies that are subsidiaries of such public companies are also covered.
What is the penalty for non-compliance with Secretarial Audit India?
Non-compliance with Secretarial Audit India can result in penalties under the Companies Act, 2013. The company and its officers may be liable for fines up to ₹5 lakh and ₹50,000 respectively, as per Section 204(4).
How is Secretarial Audit India different from financial audit?
Secretarial Audit India focuses on compliance with corporate laws, regulations, and governance standards, while a financial audit examines the accuracy of financial statements. Both are independent and conducted by different professionals.
Can a company voluntarily opt for Secretarial Audit India?
Yes, even if not mandatory, a company may voluntarily opt for Secretarial Audit India to enhance corporate governance and demonstrate compliance to stakeholders.
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