Secretarial audit for bigger companies
📚 Law Minded summary
Every listed company, and prescribed classes of other companies, must attach a secretarial audit report to the Board's report.
The audit is carried out by a company secretary in practice, and it examines whether the company has complied with the applicable laws — not just the Companies Act.
The Board must explain in its report any qualification or observation the secretarial auditor makes. It is the compliance equivalent of a financial audit.
(1) 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.
(2) It shall be the duty of the company to give all assistance and facilities to the company secretary in practice, for auditing the secretarial and related records of the company.
(3) The Board of Directors, in their report made in terms of sub-section (3) of section 134, shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report under sub-section (1).
(4) If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be 2[liable to a penalty of two lakh rupees].
All sections in Chapter XIII — Appointment and Remuneration of Managerial Personnel