Secretarial Audit

A secretarial audit is an independent examination of a company's adherence to corporate governance norms and statutory compliance. It's conducted by a qualified Company Secretary to assess the company's compliance with the Companies Act, 2013, and other relevant regulations.

Key Areas Covered in a Secretarial Audit:

• Corporate Governance:
  • Compliance with the Companies Act, 2013.
  • Adherence to the Companies (Corporate Governance) Rules, 2014.
  • Implementation of corporate governance policies and procedures.
  • Effectiveness of the board of directors and committees.
• Statutory Compliance:
  • Timely filing of statutory returns and forms with the Registrar of Companies (RoC).
  • Maintenance of statutory records and registers.
  • Compliance with SEBI regulations (if applicable).
  • Adherence to labor laws and other regulatory requirements.
• Meetings and Resolutions:
  • Proper conduct of board meetings and general meetings.
  • Timely passing of resolutions.
  • Maintenance of accurate minutes of meetings.
• Disclosure Requirements:
  • Timely disclosure of material information to shareholders and regulators.
  • Compliance with listing regulations (if listed).

Benefits of a Secretarial Audit:

• Risk Mitigation: Identifies and mitigates potential risks and liabilities.
• Enhanced Corporate Governance: Improves the overall corporate governance framework.
• Regulatory Compliance: Ensures adherence to statutory and regulatory requirements.
• Investor Confidence: Boosts investor confidence by demonstrating transparency and accountability.
• Operational Efficiency: Streamlines processes and improves operational efficiency.

Who Needs a Secretarial Audit?

• Listed Companies: Mandatory requirement under SEBI regulations.
• Public Companies: Recommended to maintain good corporate governance practices.
• Private Companies: Beneficial for maintaining compliance and avoiding penalties.

Key Points to Remember:

• Qualified Professionals: A secretarial audit should be conducted by a qualified Company Secretary.
• Independent Review: The auditor should be independent and unbiased.
• Detailed Report: The audit report should provide a comprehensive assessment of the company's compliance.
• Remedial Actions: The company should take prompt action on the recommendations made in the audit report.