APPLICABILITY OF SECRETARIAL AUDIT

DETAILS

Section 204 read with Rule 9(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Applicable to: 
i. Every listed company
ii. Every Public Company with paid-up share capital of Rs. 50 crore or more
iii. Every Public Company with turnover of Rs. 250 crore or more
iv. Every Company with outstanding loans or borrowings from banks or public financial institutions of Rs. 100 crore or more

Explanation: Consider the paid-up share capital, turnover, or outstanding loans or borrowings as of the last date of the latest audited financial statement.

Regulation 24A

Under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: 
1. Every listed entity and its material unlisted subsidiaries incorporated in India must undertake secretarial audit and annex a secretarial audit report by a practicing company secretary with the annual report.
2. Every listed entity must submit a secretarial compliance report to stock exchanges within 60 days from the end of each financial year.

APPOINTMENT OF SECRETARIAL AUDITOR

DETAILS

Section 204(1)

Only a member of the Institute of Company Secretaries of India holding a Certificate of Practice (Company Secretary in Practice) can conduct Secretarial Audit and furnish the Secretarial Audit Report to the company.

As per Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014

Secretarial auditor must be appointed by resolution at a duly convened Board meeting, and it should be intimated to the Registrar of Companies in Form MGT-14 within 30 days.

ICSI AUDITING STANDARDS

DETAILS

CSAS 1

Auditing Standard on Audit Engagement

CSAS 2

Auditing Standard on Audit Process and Documentation

CSAS 3

Auditing Standard on Forming of Opinion

CSAS 4

Auditing Standard on Secretarial Audit

LIMITS ON AUDIT ENGAGEMENTS

DETAILS

Peer Review

Secretarial Audit/Secretarial Compliance Report must be done by Peer Reviewed Units for all companies effective from April 1, 2023.

ICSI BEST SECRETARIAL AUDIT REPORT AWARD

DETAILS

Award Introduction

Introduced in 2019 to recognize and encourage the efforts of Company Secretaries in Practice in their role as Secretarial Auditors.

Limits

A Company Secretary in Practice can nominate 5 Secretarial Audit Reports for the award.

POWERS AND DUTIES OF SECRETARIAL AUDITOR

DETAILS

Section 143 of the Companies Act, 2013

Sub-section (14) of section 143 applies to the Company Secretary in Practice conducting Secretarial Audit under Section 204.

PUNISHMENT

DETAILS

Section 143(15)

Penalties: 
(a) Rs. 5,00,000 for listed companies
(b) Rs. 1,00,000 for any other company.

Punishment for Fraud

Punishment for fraud under Section 447 of the Companies Act, 2013.

Punishment for False Statement

Punishment for false statement under Section 448 of the Companies Act, 2013.

Section 204 Contravention

Penalty of Rs. 2,00,000 for the company, every officer, or company secretary in practice in default.

Company Secretaries Act, 1980

Penalties for professional or other misconduct.

S. NO

DOCUMENTS TO BE GIVEN

STATUS

REMARKS

1

Board, Committee, General Meetings Minutes

2

Proof of sending BM, AGM notices, Annual report to Directors, Auditors, etc.

3

Proof of circulation of Minutes to Directors

4

Attendance registers

5

Recordings of Board, Committee meetings

6

MBP-1, DIR-8, ID declaration u/s 149(7)

7

Receipt of Listing fees

8

BSE/NSE (Acknowledgement)
a. RSCA
b. Corporate Governance
c. Shareholding pattern
d. ASCR
e. Financial results
f. Related party disclosure
g. Voting results
h. Disclosure u/r 7(3), 40(10)
i. XBRL mode disclosures

9

Signed Internal Audit report, Cost Audit report

10

i. Details of Loan given (fresh) along with borrower name, purpose of grant of loan, tenure of repayment, interest rate
ii. Details of Loan borrowed (fresh) along with lender name
iii. Details of Investments (fresh) made during 2023-24

11

Details of increase in remuneration for KMP or any director during the audit period

12

Signed Auditor’s Report along with financial statements and Board’s Report

13

All e-forms filed with ROC along with acknowledgment

14

Bank statements or email confirmation for crediting Dividend Amount in a separate Bank account, and transfer to shareholders within prescribed time

15

Structural Digital Database as per PIT regulations and proof of capturing

16

Disclosures done under Reg 29, 31 of SAST, 2011 and proof of service to BSE/NSE

17

Proof of sending circular resolutions along with replies of circular resolution assent/dissent (if any)

18

Statutory registers

19

Show cause notices, Summons, Punishments, Fines imposed by regulators, Authorities, tribunals or courts (if any)

20

CSR receipts, CSR 1 filed, CSR impact assessment report (if any), CSR-2 Acknowledgment, Workings on Calculation of Net profit as per Sec 198, if applicable

21

Audit Engagement Letter as per CSAS

22

APR/FLA returns filed if applicable; Access to FIRMS Portal

23

Disclosure under 7(1)(b), 7(2) of PIT along with acknowledgment (if applicable)

24

Various licenses in the name of the Company during the Audit Period

25

Various Policies adopted by the Company during the Audit Period

26

Share Transfers and Share Transmission Report from RTA for the Audit Period

27

Details regarding Beneficial & Significant Beneficial Ownership and change during the year (if any)

28

Certified copies of MOA & AOA

29

Compliance record under FEMA with respect to FDI, ECB, and ODI as applicable

30

Corporate Action Forms filed by the Company with Depositories

31

Investor complaints

32

Any orders received by the company from the High court/Tribunal or any other regulatory body

33

MCA portal checking meticulously