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The present paper
elaborates five most common queries relating to the Secretarial Audit. It
relates to the applicability, number of audits, a PCS may undertake, scope of
the audit and penal provisions.
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1. ABC Pvt Ltd. was incorporated
in the year 2010 as Private Company. Its paid up capital is Rs 35 crore, but
the annual turnover for the financial year ended on 31stMarch, 2016,
first time crossed from Rs 240 crores to Rs 300 crores. XVY Ltd, a public
company, controls the composition of the Board of Directors of ABC Pvt Ltd,
hence in terms of Section 2(87) of Companies Act, 2013, ABC Pvt Ltd is treated
as subsidiary company of XYZ Ltd. A newly appointed Company Secretary of ABC
Pvt Ltd suggested the Board of Directors to get the Secretarial Audit of this
company. Whether the Secretarial Audit of a Private Limited Company is
mandatory as per the provisions of the Companies Act, 2013.
Section 204(1) of the
Companies Act, 2013 (CA 2013) provides secretarial audit for bigger companies.
In terms this section, "Every listed company and a company belonging to
other class of companies as may be prescribed shall annex with its Board's
report made in terms of sub-section (3) of section 134, a secretarial audit
report given by a company secretary in practice, in such form as
may be prescribed'.
