Secretarial Audit

Secretarial Audit for Big Companies is introduced Under Companies Act, 2013. Section 204 of the ACT Specifying the applicability of the Audit. Here is list  of first set of required documents from the client before the commencement of the Secretarial Audit :-

1.Latest Memorandum of Association & Articles of Association and Annual Report.

2.Notice of all the Meetings.  if notice is sent through electronic mode, email Copy sent to the Directors of the Company.

3.Minutes of the Board Meetings.

4.Minutes of the Audit Committee Meetings.

5.Minutes of the Stakeholder Relationship Committee.

6.Minutes of the Nomination and Remuneration Committee Meetings.

7.Minutes of Corporate Social Responsibility Committee.

8.Minutes of all other Committee Meetings, if any.

9.Minutes of Annual General Meeting as well as Extra Ordinary General Meetings.

10.Notice and Minutes of Resolutions passed through postal ballot process.

11.Notice and Resolutions passed through circulations.

12.All the Statutory Registers.

13.Any Disclosure Received from Directors in accordance with Section 184 of the Companies Act, 2013. (Form MBP-1 of all directors).

14.Auditors Consent for Appointment/Re-appointment.

15.Letters under Section 164(2) read with Rule 14(1) from the Directors(DIR-8).

16.Copies of Form CHG 4 (Satisfaction of Charge) and CHG 5(Memorandum of Satisfaction of Charge).

17.Correspondence file with the Registrar of Companies.

18.Correspondence file with the Stock Exchanges.

19.Correspondence file with the Directors of the Company.

20.Annual General Meeting File if any.

21.Details of Complaints received from shareholders.

22.Compliance of Clause 16, 17, 20, 35,35B, 41 and 49 of the Listing Agreement.

23.Statement of Account of Remuneration & other benefits  paid to the Directors.

24.Any Remuneration paid to any relative of Director as per Section 188 of the Companies Act, 2013

25.Statement of Account of Sitting Fees paid to the Directors.

26.Statement of Account of Loans and Advances given.

27.Statement of Account of Investment made.

28.Investments made/ Fixed Assets Purchased are they in Company’s name?

29.Statement of Account of Loans and Advances taken, whether secured or unsecured.

30.Details of Public Deposit Accepted, if any.

31.Details of surety or guarantee provided. if any.

32.Details of Amounts transferred to Investor and Education Protection Fund(IEPF).

33.Statements of Dividend Reconciliation.

34.Any Show Cause Notice received from ROC / Stock Exchanges / SEBI.

35.Details of Compliance of Code of Conduct in terms of the Insider Trading Including Closing of Trading windows.

36.Details of Compliance of Take Over code in terms of SAST Provisions.

37.Whether any Loan or guarantee given to foreign subsidiary or Joint venture company.

38.Details of Stock option given to the employees of the Company.

39.Details of Stock option Converted into equity shares of the Company.

40.Any issue of Capital (Right issue, Preferential Issue, Bonus Issue, IPO/FPO), Details of it.

41.List of Other Laws applicable specifically to the Company and Compliance Mechanism of the same.

42.Agreement between the Company and Registrar and share Transfer Agent.

43.The details of Compliance Mechanism of Labour Laws i.e. for examining and reporting whether the adequate systems and processes are in place to monitor and ensure compliance with general laws like Labour laws, Competition law, Environmental laws.

ANNUAL COMPLIANCE FOR SMALL COMPANIES

‘‘Small Company’’ means a company, other than a public company,(ONLY PVT CO )Paid-Up Share capital of which does not exceed fifty lakh  & Turnover of which as per its last profit and loss account does not exceed two crore rupees  Not applicable on a holding company or a subsidiary company;a company registered under Section 8; or a company or body corporate governed by any special Act
The status of a company as “Small Company” may change from year to year. Thus the benefits which are available during a particular year may stand withdrawn in the next year and become available again in the subsequent year. Capital & Turnover both conditions to be fulfilled.
 
ANNUAL RETURN  E- FORMS FILING REQUIREMENTS-
 
1.   Section 92 -E-form:MGT-7
Annual Return: EverySmall Company will file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31stMarch.
 
2.     Section 137 E-form:AOC-4
 
Financial Statement: Company required filing its Balance Sheet along with statement of profit and Loss account and Director Report in this form.
 
3.     Attachments:Balance Sheet, Statement of Profit & Loss account, Directors’ Report, Auditors’ Report and Notice of AGM.
 
DIRECTORS’ REPORT SECTION 134
 
Directors’ report shall be prepared by mention of all the information required for Small company to be signed by Chairman or two directors.
 
CIRCULATION OF FINANCIAL STATEMENTS SECTION 136
Company will send to the Members of the Company approved financial statement, Directors’ report and auditors’ Report at least 21 clear days before the Annual General Meeting.(Except in case of AGM is called on Shorter Notice)Notice as per section 101 .
 
YEARLY DIRECTORS DISCLOSURE TO COMPANY
Every year director shall disclose his interest  in other entities  & and his non Disqualification as per section 184A, 164(2) & 143 (3) G.

HOLDING AND SUBSIDIARY COMPANIES

Holding  and subsidiary companies are relative terms. A company is holding company of another if the other is its subsidiary.

According to the section 4, a company shall be deemed to be subsidiary of another, if and only if

i)  that other controls the composition of Board of directors ; 

Explanation: Company A(holding company) controls the composition of the board of directors of Company B(subsidiary company). Company A can appoint or remove all or majority of directors of the Company B.

                                                or

ii) where the first mentioned company is any other company, holds more than half in the nominal value of its equity share capital ;

Explanation:Company A(holding company) holds more than 51% of  equity shares(voting power)  of Company B(subsidiary company) or more than 50% of voting powers through preferential shares.

Here any shares held by virtue of the provisions of any debentures of the first mentioned company (company A) or of a trust deed for securing issue of such debentures shall be disregarded.

                                               or

iii) the first mentioned company is a subsidiary of any company which is the other's subsidiary

Explanation: Company B (subsidiary company)  is a subsidiary of company C which is subsidiary of company A, then the company B is also a subsidiary of company A.

RELEVANT SECTIONS: SECTION 4, SECTION 41, SECTION 42.