Secretarial Audit is an independent verification of the records, books, papers and documents by a Company Secretary to check the compliance status of the company and also to ensure the compliance of legal and procedural requirements and processes followed by the company. A Secretarial Audit is an audit to examine the compliances of various legislations including the Companies Act and other cooperative and economic laws applicable to the company. Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed with effect from the year ended March 31, 2019.
Section 204(1) of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 provides that-
The Ministry of Corporate Affairs(MCA) vide its Notification dated January3, 2020, mandated every Company (including Private Company):- having outstanding loans or borrowings from banks or public financial institutions ofone hundred crore rupees or more. (Rs. 100 Cr or more) *shall annex with its Board’s report a Secretarial Audit Report, given by a Company Secretary in Practice with effect from financial year 2020-21 onwards.
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