Secretarial Audit as per Companies Act 2013

The secretarial auditor shall submit his report to the Board of Directors and it ought to be annexed to Board Report. Secretarial Audit at a glance Conducted by a practicing company secretary Compulsory for listed and other specified class of companies Form and manner to be prescribed Secretarial audit report to be annexed to Board's report Qualifications or observations, if any, in secretarial audit report to be explained in Board's report Any contravention by officer in default / practicing company secretary to attract monetary fine from Rs. 1 lakh to Rs. 5 lakhs. Penalty Where any default is made in complying with the provisions of secretarial audit: (a)    the company and every officer who is in default shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees; (b)    The Company Secretary in practice (undertaking the secretarial audit) who is in default shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. Thus, penal provisions shall be attracted for all i.e., the company, officers in default and company secretary in practice. Rules to be Prescribed Following rules shall be prescribed separately – (a)  Class or classes of Companies, which shall be required to annex Secretarial Audit Report with Board's Report, (b) Form of Secretarial Audit Report to be submitted by the practicing company sectary. The draft rules suggest that secretarial audit shall be compulsory for every public company having a paid up share capital of Rs.100 crore or more. It can be argued that such a limit may be lowered or diluted so as to cover not only public companies but also other private companies and body corporates with such limit of Rs. 100 crore. It may even be expanded to entities where exposure of public funds is of Rs. 100 crore. Also, there is no cap proposed on maximum number of secretarial audits, a practicing company secretary could do. A cap of reasonable number of secretarial audits would be desirable for equity, quality and efficiency.