Thursday, December 22

Companies Bill, 2011 – Secretarial Audit for All listed companies

Its good to note that the Companies Bill, 2011 which was tabled in 14th Dec in Lok Sabha has few notable developments for the practicing company secretaries in India. The most awaited domain “SECRETARIAL AUDIT” is now near for Company Secretaries, says CScareer.Org Founder, CS. Bilu Balakrishnan, who is also the President of Corporate Intelligence Education & Research which owns Acsec-Inews Network.

The profession of company secretaries are given welcoming recognition in the new Companies Bill, 2011 – he added. As per clause 204 of the Bill every listed company have to conduct a Secretarial Audit and a secretarial audit report has to be annexed to the Board’s report. Further, the board’s report shall also mention about any qualification or observation made by the practicing company secretary in his secretarial audit report. By this move listed companies apart from their regular and traditional audits will have a strict compliance audit by a practisng secretary, thus ensures more corporate governance norms in their company.

The extract of the provision relating to Secretarial Audit is as under:

“Clause 204

(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 comapny or the company secretary in practice, 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.”

Source: INEWS

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