The present paper expounds five most normal inquiries identifying with the Secretarial Audit. It identifies with the appropriateness, number of reviews, a PCS may attempt, extent of the review and reformatory procurements.
1. ABC Pvt Ltd. was joined in the year 2010 as Private Company. Its paid up capital is Rs 35 crore, however the yearly turnover for the budgetary year finished on 31stMarch, 2016, first time crossed from Rs 240 crores to Rs 300 crores. XVY Ltd, an open organization, controls the creation of the Board of Directors of ABC Pvt Ltd, thus as far as Section 2(87) of Companies Act, 2013, ABC Pvt Ltd is dealt with as auxiliary organization of XYZ Ltd. A recently delegated Company Secretary of ABC Pvt Ltd proposed the Board of Directors to get the Secretarial Audit of this organization. Whether the Secretarial Audit of a Private Limited Company is compulsory according to the procurements of the Companies Act, 2013.
Segment 204(1) of the Companies Act, 2013 (CA 2013) gives secretarial review to greater organizations. In wording this segment, “Each recorded organization and an organization having a place with different class of organizations as might be endorsed should attach with its Board’s report made as far as sub-segment (3) of segment 134, a secretarial review report given by an organization secretary by and by, in such frame as might be recommended’.
Further, Rule 9(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) gives that to the motivations behind sub-segment (1) of area 204, alternate class of organizations should be as under:
a. each open organization having a paid up offer capital of Rs. 50 crore or more; or
b. each open organization having a turnover of Rs. 250 crores or more.
Sub-segment (2) gives that the arrangement of the Secretarial Audit Report might be in Form No. MR-3.
Paid-up offer capital: regarding Section 2(64) states that ‘paid-up offer capital’ or ‘offer capital paid-up’ means such total measure of cash acknowledged as paid-up as is equal to the sum got as paid-up in appreciation of shares issued furthermore incorporates any sum credited as paid-up in admiration of shares issued furthermore incorporates any sum credited as paid-up in admiration of shares of the organization, however does exclude some other sum got in admiration of such shares, by whatever name called
Turnover: regarding area 2(91) “turnover” implies as the total estimation of the acknowledgment of sum produced using the deal, supply or conveyance of products or by virtue of administrations rendered, or both, by the organization amid a monetary year.
Henceforth, from the plain perusing of area 204(1) read with important Rules, the Secretarial Audit is obligatory just for people in general organizations which are recorded on the bourses and such other open organizations having paid-up capital of Rs 50 crores or increasingly or turnover of Rs 250 crores or more.
In the above case the ABC Pvt Ltd is a Private Limited Company, so one can say that it is not obligatory, but rather as said in the inquiry that ABC Pvt Ltd is getting a charge out of the status of an auxiliary organization as far as area 2(87). Presently taking reference to the procurements contained in segment 2(71) identifying with ‘open organization’, which peruses as under:
‘open organization’ implies an organization which (an) is not a privately owned business; (b) has a base paid-up [xxx]1 offer capital as might be endorsed:
Given that an organization which is a backup of an organization, not being a privately owned business, should be esteemed to be open organization for the reasons for this Act even where such auxiliary organization keeps on being a privately owned business in its articles.