presentation on secretarial audit-icsi-vile parle-28.06.14

8/17/2019 Presentation on Secretarial Audit-ICSI-Vile Parle-28.06.14

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PRESENTATION ON

SECRETARIAL AUDIT -

COMPANIES ACT, 2013

K. SETHURAMAN

June 28, 2014


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VOLUTION OF S CR TARIAL AUDIT

Until 2000 – Securities related Audit (Clause 47C)

February 2000 – Corporate Governance (Clause 49) Copanies (Copliance Certi!icate) "ules# 200$ (Section %&%A)

' Unlisted copanies it paid*up capital o! "s $0 la+ or ore

' "e,uired even i! copany ad a Copany Secretary in eployent

(applicable !ro -eceber %$# 2002)' Secretarial Audit "eport !or reconciliation o! total aditted capital it

depositories and total issued and listed capital (CA or CS)

Annual "eturn Certi!ication

-ue -ili.ence certi!icates / reports !or 1# open o!!er# bonus issue#G-" issue# etc3

CA 5oluntary Guidelines# 2009

Secretarial Audit and Annual "eturn certi!ication (Copanies Act 20$%)

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B N FICIARI S OF S CR TARIAL AUDIT

Assurance o! Copliances to6

Copanies-irectors

ana.eent

Sareolders

Creditors / rustees

Credit "atin. A.encies

"e.ulatory Autorities

ter Sta+eolders

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S CR TARIAL AUDIT FOR BIGG R

COMPANI S (S C 204)

Companies covered:

(a)Every Listed Company (includes Copanies ose debentures#arrants are listed)

(b)Other class of companies6

(i) 8very 1ublic Copany avin. a paid up share capital of fifty crore

rupees or more(ii) 8very public copany avin. a turnover of two hundred fifty crore

rupees or more

Secretarial Audit "eport sall be anneed to :oard;s "eport

:oard in teir "eport to eplain in !ull any ,uali!ication or observationor oter rear+s ade by 1CS in is report

Forat o! Secretarial Audit "eport sall be in For "*%

For contravention – copany# every o!!icer o is in de!ault and 1CS

punisable it !ine – "s $ la+ to "s < la+

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APPOINTM NT OF S CR TARIAL AUDITOR

:oard to appoint at its eetin. te Secretarial Auditor (on

yearly basis) and !i is reuneration =Section $79(%)>

Copany to !ile te resolution it "oC =Section $$7>

Period of Office: e Act is silent – su..ested to be

siilar to statutory Auditor appointed under Section $%9($0 years eter Secretarial Auditor is a 1roprietor or a

!ir)

btain consent o! te Secretarial Auditor

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LIGIBILITY, QUALIFICATIONS AND

DISQUALIFICATIONS OF S CR TARIAL AUDITOR

?o le.al provisions in te Act

Su..ested siilar re,uireents as are set out in te Act

!or Statutory Auditors and applicable to Cost Auditors3

(Self Code)

•


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R MOVAL & R SIGNATION OF S CR TARIAL

AUDITOR

"eoval o! Secretarial Auditor – no provisions in te Act

"esi.nation o! Secretarial Auditor – :oard to note and !ile

!or it "oC (not obli.atory)

Secretarial Auditor also to !ile !or it "oC (notobli.atory)

Appointent o! Secretarial Auditor on casual vacancy

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DOCUM NTS R QUIR D FOR AUDIT

?otice# a.enda# notes on a.enda inutes o! eetin.s#

attendance re.isters

-ra!t Financial Stateents# Auditor;s "eport# -irector;s "eport

Stateents !or borroin.s and investents

All Statutory "e.isters -isclosures / consents / declarations

Filin.s it "oC / re.ulatory autorities / ":

Filin.s / subissions to Stoc+ 8can.es

"elevant approvals / correspondence

Copliance certi!icates o! !unctional eads !or copliance o!

applicable las

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AUDIT M THODOLOGY

-eterine scope o! Audit

"e,uest !or details o! various corporate actions / eventssub@ect to audit

-evelop te audit !raeor+

Ascertain applicable las

1repare cec+*lists and tie scedule

Call !or docuents / in!oration

btain ana.eent "epresentation etter

-iscuss and see+ clari!ication# i! re,uired

-iscuss dra!t report it ana.eent

FinaliBe and subit dra!t addressed to sareolders

• "


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S CR TARIAL AUDIT R PORT – FORM NO. MR

!

"eport is !or te !inancial year ended

"eport is to be addressed to te ebers siilar to

independent Auditors; "eport

Parts of Secretarial Audit eport:

(a)Para !: 1reable

(b)Para ": eport in #eneral (based on veri!ication o! te

copany;s boo+s# papers# inute boo+# !ors and returns

!iled and in!oration provided) tat te copany as

coplied it te statutory provisions listed in te reportthat the company has proper $oard processes and

Compliance mechanism

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!

(a) Para %: "eport cites eaination o! te boo+s# papers#

inute boo+s# !ors and returns !iled and oter records

aintained by te copany accordin. to te 1rovisions

o!6

(i) e Copanies Act# 20$% (te Act) and te rules ade tereunder

(ii) e Securities Contracts ("e.ulation) Act# $9


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!

(v) e !olloin. "e.ulations and Guidelines prescribed under te

Securities and 8can.e :oard o! ndia Act# $992 (ES8: Act;)6*(a) e Securities and 8can.e :oard o! ndia (Substantial Ac,uisition

o! Sares and a+eovers) "e.ulations# 20$$

(b) e Securities and 8can.e :oard o! ndia (1roibition o! nsider

radin.) "e.ulations# $992

(c) e Securities and 8can.e :oard o! ndia (ssue o! Capital and

-isclosure "e,uireents) "e.ulations# 2009

(d) e Securities and 8can.e :oard o! ndia (8ployee Stoc+ ption

Scee and 8ployee Stoc+ 1urcase Scee) Guidelines# $999

(e) e Securities and 8can.e :oard o! ndia (ssue and istin. o!

-ebt Securities) "e.ulations# 200&

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!

(!) e Securities and 8can.e :oard o! ndia ("e.istrars to an

ssue and Sare rans!er A.ents) "e.ulations# $99% re.ardin.te Copanies Act and dealin. it client

(.) e Securities and 8can.e :oard o! ndia (-elistin. o! 8,uity

Sares) "e.ulations# 2009 and

() e Securities and 8can.e :oard o! ndia (:uybac+ o!Securities) "e.ulations# $99&

(vi) 33333333333333333333333333333333333333333333333333333333333333 (&ention the other laws

as may be applicable specifically to the company)

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!

(d) Para ': "eport deals it eaination o! copliance it applicable

clauses o! te !olloin.6

(i) Secretarial Standards issued by te nstitute o! Copany

Secretaries o! ndia

(ii) e istin. A.reeents entered into by te Copany it 3 Stoc+

8can.e(s)# i! applicable(iii) "eport deals it copliance or oterise it te provisions o! te

Acts# "ules# "e.ulations# Guidelines# Standards# etc3 entioned

above# sub@ect to !olloin. observations# i! any

(e) Para 6 "eport deals it6

(i) Constitution o! :oard o! -irectors – 8ecutive / ?on*8ecutive#

ndependent -irector / oen -irector# etc3

(ii) Ade,uate ?otice to directors !or :oard eetin.s

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.

!

(.) Para 6 "eport deals it Con!iration o! ade,uate systes and

processes in te copany coensurate it te siBe and operations

o! te copany to monitor and ensure compliance with applicable

laws* rules* re#ulations and #uidelines (List of laws circulated)

+ote: Huali!ications# i! any# observed to be cited3

() Para ,6 "eport deals it speci!ic events / actions avin. a a@or

bearin. on te copany;s a!!airs in pursuance o! te above re!erred

las# rules# re.ulations# .uidelines# standards# etc3 re!erred to above3

For eaple6

(i) 1ublic / "i.t / 1re!erential ssue o! sares / -ebentures / seat e,uity#

etc3

(ii) "edeption / buy*bac+ o! securities

(iii) a@or decisions ta+en by te ebers in pursuance to Section $&0 o!te Copanies Act# 20$%

(iv) er.er / Aal.aation / reconstruction# etc3

(v) Forei.n tecnical collaboration

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DUTI S OF S CR TARIAL AUDITOR – FRAUD R PORTING

"S C #4!(#2)(#4)$

! Copany Secretary in 1ractice# durin. conduct o!

Secretarial Audit# as su!!icient reason to believe tat ano!!ence involvin. fraud is bein# committed or has been

committed a.ainst te copany by officers or employees

of the company# e sall report te sae to te Central

Governent iediately but not later tan D0 days o! is

+noled.e it a copy to te :oard / Audit Coittee see+in.teir reply within ' days

:oard / Audit Coittee to reply in ritin. te steps ta+en to

address te !raud

e Auditor to !orard is report and reply o! te :oard / Audit

Coittee it is Coents to te Central Governent

itin $< days o! reply by :oard / Audit Coittee

-he eport shall be in .orm A/- 0 '

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S CR TARIAL AUDIT

VS

C RTIFICATION OF ANNUAL R TURN

Certi!ication o! Annual "eturn by 1CS

' Annual "eturn !iled by listed copany

' Annual "eturn !iled by a copany avin.6(a) 1aid*up sare capital o! s !1 crore or more or

(b) urnover o! s 1 crore or more

Certi!icate sall be in For G * &

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FORM MGT %

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.orm +o2 &3-04

[Pursuant to section 92(2) of the Companies Act, 2013 and rule $$(2) o!Copanies (ana.eent and Adinistration) "ules# 20$4 ]

CE-5.5CA-E $6 A CO&PA+6 SECE-A6 5+ PAC-5CE

/ e ave eained te re.isters# records and boo+s and papers o!

************ Limited7Private Limited (te Copany) as re,uired to be

aintained under te Copanies Act# 20$% (te Act) and te rules

ade tereunder !or te !inancial year ended on ***************** #

20****3 n y/ our opinion and to te best o! y in!oration and

accordin. to te eainations carried out by e/ us and

eplanations !urnised to e/ us by te copany# its o!!icers and

a.ents# / e certi!y tat6


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FORM MGT %

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A3 te Annual "eturn states te !acts as at te close o! te a!oresaid !inancial

year correctly and ade,uately3

:3 durin. te a!oresaid !inancial year te Copany as coplied itprovisions o! te Act I "ules ade tere under in respect o!6

$3 its status under te Act

23 aintenance o! re.isters/records I a+in. entries terein itin te tie

prescribed tere!or

%3 !ilin. o! !ors and returns as stated in te annual return# it te "e.istrar

o! Copanies# "e.ional -irector# Central Governent# te ribunal# Court

or oter autorities itin/beyond te prescribed tie

43 callin./ convenin./ oldin. eetin.s o! :oard o! -irectors or its

coittees# i! any# and te eetin.s o! te ebers o! te copany on

due dates as stated in te annual return in respect o! ic eetin.s#

proper notices ere .iven and te proceedin.s includin. te circular

resolutions and resolutions passed by postal ballot# i! any# ave been

properly recorded in te inute :oo+/re.isters aintained !or te purpose

and te sae ave been si.ned


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FORM MGT %

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FORM MGT %

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FORM MGT %

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$$3si.nin. o! audited !inancial stateent as per te provisions o! section

$%4 o! te Act and report o! directors is as per sub * sections (%)# (4)

and (


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FORM MGT %

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$D3borroin.s !ro its directors# ebers# public !inancial institutions#

ban+s and oters and creation/ odi!ication/ satis!action o! car.es

in tat respect# erever applicable

$73loans and investents or .uarantees .iven or providin. o! securities

to oter bodies corporate or persons !allin. under te provisions o!

section $&D o! te Act

$&3alteration o! te provisions o! te eorandu and/ or Articles o! Association o! te Copany

1lace6 Si.nature6

-ate6 ?ae o! Copany Secretary in practice6

C313 ?o3 6

?ote6 e ,uali!ication# reservation or adverse rear+s i! any# ay be

stated at te relevant place(s)3


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Comments:

($)1CS to certi!y copliance it provisions o! te Act and

"ules in respect o! the ei#hteen items set out in the

.orm &3- 9 42

(2)e certi!ication by 1CS in te Annual "eturn is it

respect to correctness and ade,uacy o! te !acts as at

te close o! te !inancial year set out in te return3

(%)t does not etend to certi!ication to te e!!ect tat te

Copany as coplied it all te provisions o! te Act

as stated under Section "(") of the Act

S CR TARIAL AUDIT

VS

C RTIFICATION OF ANNUAL R TURN


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PUNISHM NT FOR FRAUD (S C 44)

Section 447 states tat itout pre@udice to any liability includin. !or

repayent o! any debt under te Act or any oter la !or te tie bein.

in !orce# any person who is found #uilty of fraud# sall bepunisable it iprisonent !or a ter ic sall not be less tan

si onts but ic ay etnd to ten years and sall also be liable to

!ine ic sall not be less tan te aount involved in te !raud but

ic ay etend to tree ties te aount involved in !raud

e Section !urter states tat ere te !raud in ,uestion involvespublic interest# te ter o! iprisonent sall not be less tan tree

years3

Fraud in relation to a!!airs o! a copany or any body corporate# includes

any act# oission# concealent o! any !act or abuse o! position

coitted by any person or any oter person it te connivance inany anner# it intent to deceive# to .ain undue advanta.e !ro# or to

in@ure te interests o!# te copany or its sareolders or its creditors

or any oter person# eter or not tere is any ron.!ul .ain or

ron.!ul loss

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PUNISHM NT FOR FALS STAT M NT (S C

44%)

Section 44& states tat# save as oterise provided in te Act# i!

in any return# certi!icate# !inancial stateent# prospectus#stateent or oter docuent re,uired by te Act or "ules ade

tereunder# any person a+es a stateent6

(a)ic is !alse in any aterial particulars# +noin. it to be

!alse or (b)ic oits any aterial !act# +noin. it to be aterial#

Ke sall be liable under Section 447

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PUNISHM NT IN CAS OF R P AT D D FAULT (S C

4'#)

Section 4


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-;A+< 6O=

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presentation on secretarial audit-icsi-vile parle-28.06.14

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