Secretarial Audit - Part 2

Scope of Secretarial Audit:
A secretarial auditor needs to examine and report compliances made by the company under the following laws and rules as mentioned in Form MR-3.

•     Companies Act, 2013
•     Securities Contracts (Regulation) Act, 1956’ (‘SCRA’)
•     Depositories Act, 1996
•     Foreign Exchange Management Act
•     Securities and Exchange Board of India Act, 1992

* Other laws as may be applicable specifically to the company.


‘Other areas’ which need to be checked -
Secretarial Auditor needs to examine and report on the compliance with the applicable clauses of the following:

• Secretarial Standards issued by The Institute of Company Secretaries of India.
• The Listing Agreements entered into by the Company with Stock Exchange(s), if applicable.

Format of Secretarial Audit Report:
Secretarial Audit Report is to be prepared in Form No. MR.3 only. 

To know more - http://goo.gl/AHpVKl

Punishment for default/Professional Responsibility:

Courtesy: www.instablogs.com 

Section  448  of  Companies  Act,  2013  deals  with  penalty  for  false  statements.  The section provides that if in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement,—

(a) which is false in any material particulars, knowing it to be false; or

(b) which omits any material fact, knowing it to be material, he shall be liable under section 447.

Section 447 deals with punishment for fraud which provides that any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud. In case, the fraud in question involves public interest, the term of imprisonment shall not be less than three years.

In view of this, a company secretary in practice will be attracting the penal provisions of section 448, for any false statement in any material particular or omission of any material fact in the Secretarial Audit Report. However, a person will be penalized under section 448 in case he makes a statement, which is false in any material particular, knowing it to be false, or which omits any material fact knowing it to be material.

It is pertinent to note that section 448 applies to “any person”. In view of this, a company secretary in practice, who is an independent professional, will be attracting the penalty, as prescribed in section 448 in case his observations in the secretarial audit report turns out to be false or he omits any material fact, knowing it to be false or material.

Source -

http://www.icsi.edu
http://taxguru.in


Click here for Part 1 of Article...

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United We Stand, Divided We Fall!!

नम: सर्वशुभंकरे । नम: ब्रह्मत्रिपुरसुन्दरि ।
शरण्ये चण्डिके दुर्गे । प्रसीद परमेश्वरि ।

JAI JAGADAMB!  JAI DURGE!

Since birth we have been taught many values and first was always to ‘Respect our Mother’. The mother because of whom we are, what we are today. Also, our Mother Earth and our Motherland. Our country has a big history of being ruled by many kingdoms since many years now. Our Bharatvarsha has been victorious after battling with all these reigns. It is because of the respect and deep love for our motherland. Even the British Raj had to wind up and leave our country after ruling for almost 150 years. The pride for the country was in the blood of these true patriots.

But today, the picture is no more the same. Kaliyug! It is! Yes. Today the enemy is not across the border but it is amongst us. The recent episode that took place in the Jawaharlal Nehru University (JNU) proved it. People are not able to differentiate between the good and the bad.  Unity in diversity is missing indeed. Everyone has their own political interest in each event that happens. Everybody is trying for an anti-Modi campaign forgetting however that it is at the cost of our nation.

The terrorists are being portrayed as ‘Shaheed’. They are the ones responsible for taking lives of thousands of innocent people. On the contrary, our Jawans are being targeted and blamed with very disgusting accusations. Its really shameful and painful. These characters want Freedom. Freedom of Speech is already exploited by them. Freedom within the country, from their own people? How many parts more will this land be divided into?

United we Stand, Divided We Fall! This division within the country, be it at any level is an open invitation for others to come an rule because we have difference of opinions. Is the country going in a right direction? Anybody in the world can guess that it is a path of regress. Upon everything, just under the issue of caste system, these anti nationals, anti humans are uttering sheer non-sense about our Mother Durga, the creator herself. This is climax. Even if there is freedom of worship yet no one has a right to hurt the feelings of others by talking untrue words about their place of worship. It is time and again proved that Truth Prevails. Past itself proves that demons are always defeated by the Mother of the universe. Hence, these creatures too will be taught a lesson from Her sooner or later.

BHARAT MATA KI JAI!

To read more about the JNU ROW - Do visit:

http://www.aniruddhafriend-samirsinh.com/jnu-row-and-what-lies-behind-it/

|| HARI OM||  || SHREERAM ||  || AMBADNYA || 

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Secretarial Audit - Part 1

‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc. It is a mechanism to monitor compliance with the requirements of stated laws and processes. Periodically examination of work is necessary to point out errors & mistakes and to make a robust compliance mechanism system in an organization.


The word “Secretarial Audit” has not been defined in the Companies Act, 1956 or the Act of 2013 or rules made there under or in any other Corporate Laws. The meaning could be ascertained and gathered since the words “Secretarial Audit” has appeared in number of circulars/recommendations issued by the SEBI and following are some of those -

• The SEBI has issued a Circular No. CIR/MRD/DP/30/2010 dated 06.09.2010
• The SEBI has issued Circular No. D&CC/FITTC/CIR - 16/2002 dated 31.12.2002

To which Companies Secretarial Audit is mandatory?

As per Section 204 (1) of the Companies Act 2013 read with rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, following companies are required to obtain Secretarial Audit Report;

• Every listed company.
• Every public company having a paid up share capital of 50 crore rupees or more or.
• Every public company having a turnover of 250 crores or more.

Turnover means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year. [Section 2(91)].

Secretarial Audit is also mandatory to a private company which is a subsidiary of a public company, and which falls under the prescribed class of companies.

                          Image Courtesy: http://www.shining-star.org

Secretarial Auditor -

Eligibility:
Only a member of the Institute of Company Secretaries of India holding certificate of practice (company secretary in practice) can conduct Secretarial Audit and furnish the Secretarial Audit Report to the Company.

As of now, ICSI has not placed any restrictions on number of audits that can be conducted by a Company Secretary in Practice in one financial year.

Appointment:
As per Rule 8 of the Companies (Meetings of Board and its powers) Rules, 2014, Secretarial Auditor is required to be appointed by means of resolution passed at a duly convened Board meeting and resolution for appointment shall be filed with Registrar of Companies within 30 days in E-form MGT-14.

It is advisable for Secretarial Auditor to get the letter of engagement from the company. Secretarial Auditor should formally accept the letter of engagement. Further, as a prudent corporate practice, it is advisable that change in the Secretarial Auditor during the year is reported to the members in the Board’s Report.


Who should sign Secretarial Audit Report?

The Secretarial Audit Report should be signed by the Secretarial Auditor who has been engaged by the company to conduct the Secretarial Audit. In case of firm, by the partner under whose supervision the audit was conducted.


Source -

• Article from Chartered Secretary Journal - June 2015
• Taxguru.in
• Yourfinancebook.com

                                                                                 To be continued...

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Career as a Company Secretary

Everybody has some or the other career goals set in their minds. To become a Doctor or an Engineer is one of the common desires. But for commerce students, there are many streams to jump upon. Company Secretary course is one of such professional course to opt for as profession.

Many of us are truly unaware of the career path as a Company Secretary. Lets put a light on the a few points such as –

1. How to start with?
2. The procedure for enrollment
3. Scope of this career path etc etc…

One can choose to enroll for this profession post SSC/HSC Board exams. If we enroll post our HSC exams we get admitted directly for the Executive Programme (level 2). But, after SSC exams, we should appear for the Foundation Programme (level 1) as well. We should enroll ourselves with ‘The Institute of Company Secretaries of India’, New Delhi. To know more in detail do visit www.icsi.edu. There are three levels of examination and a minimum of 50% passing marks in each subject and the group together as well.

A new set of syllabus has been introduced post the passing of the New Companies Act, 2013. Following are the levels and topics covered as per the new syllabus -

Foundation Programme (Computer based examination)

========================================
1. Business Environment & Entrepreneurship
2. Business Management, Ethics & Communication
3. Business Economics
4. Fundamentals of Accounting and Auditing

Executive Programme:

====================
1. Cost & Management Accounting
2. Tax Laws & Practice
3. Industrial Labour & General Laws

Professional Programme:
====================
Module 1:
1. Advance Company Law & Practice
2. Secretarial Audit, Compliance Management & Due Diligence
3. Corporate Restructuring, Valuation & Insolvency

Module 2:
1. Information Technology & Systems Audit
2. Financial Treasury & Forex Management
3. Ethics, Governance & Sustainability

Module 3:
1. Advance Tax Laws & Practice
2. Drafting, Appearances & Pleadings
3. (Elective 1 out of the following 5 subjects)

• Banking Law & Practice
• Capital, Commodity & Money Market
• Insurance Law & Practice
• Intellectual Property Rights - Law & Practice
• International Business - Laws & Practices

Also, alongwith the academics, we do have to attend various other training programs. These programs do help to get the practical knowledge of our subjects and it also helps us to remain up-to-date with the current happenings of the industry. To know more visit the below given links -

https://www.icsi.edu/webmodules/Student/Impact%20of%20Modified%20Training%20&%20various%20clarifications%20related%20with%20the%20same.pdf

https://www.icsi.edu/webmodules/Student/Status%20of%20applicability%20of%20various%20trainings%20to%20the%20students.pdf

Once a member of the Institute, again there is a compulsory attendance structure for Professional Development Programmes. The structure is as follows-

The Council of the Institute at its 200th Meeting held on March 18, 2011 at New Delhi amended the Guidelines for Compulsory Attendance of Professional Development Programmes by the Members to provide as under:

TITLE	DESCRIPTION
Next block of three years	April 01, 2011 to March 31, 2014
Min. number of Programme Credit Hours (PCH) to be acquired by Members in Practice	15 PCH in each year or 50 PCH in a block of three years w.e.f April 01, 2011
Min. number of PCH to be acquired by Members in Employment (i.e. members in whose name Form 32 has been filed to work as Company Secretary under the provisions of Sec. 383A of the Companies Act, 1956)	10 PCH in each year or 35 PCH in a block of three years w.e.f April 01, 2011
Min. number of PCH to be acquired by Members above the age of 60 years	Presently the members of the age of 65 years are not required to obtain PCH. This age limit stands reduced to 60 years and the members above the age of 60 years shall be required to obtain 50% of the PCH required to be obtained by the members below 60 years w.e.f April 01, 2011.
Members failing to obtain the mandatory PCH upto March 31, 2011	Provided with a shortfall upto 10 PCH and required to compensate by obtaining atleast 5 additional PCH on pro rata basis in the first year of the next  block of three years commencing from April 01, 2011.
Members who have not obtained any PCH during the block ending on March 31, 2011	Members seeking renewal of CoP to provide an explanation for non compliance with the Guidelines – to be decided on case to case basis.
Carry forward of the excess PCH if the member has already completed the mandatory PCH upto December 31, 2010 and continued to attend Professional Development Programmes during January – March, 2011	The Guidelines for Compulsory Attendance of Professional Development Programmes by the Members do not provide for carry forward of PCH from one block of three years to the other. If any member had obtained the mandatory PCH upto December 31, 2010 and continued to attend Professional Development Programmes during January – March, 2011, then in such case the PCH obtained by such member during January – March, 2011 would be treated as having been obtained in the first year of the next block commencing from April 01, 2011.

(Source - www.icsi.edu)



Career Scope and Growth as a Company Secretary:
==========================================

As mentioned in the earlier post (http://chartered-secretarial-spot.blogspot.in/2015/12/company-secretary-at-glance.html) the scope as a Company Secretary has widened with the growth in Corporate World. As a CS one can get highly paid positions in both Private as well as Public Sector Industries. One can also opt for practicing CS post acquiring of the degree. One can start at a junior position and can go upto becoming a legal department head or even to the position of Director or Managing Director as per his/her skills.

In terms of packages, a fresher may get a start of 3-5 lacs/annum. A well deserving candidate will definitely earn a good amount of money. There is a huge demand for this profession in countries like USA, UK too.

To sum up, CS is a very exploring career path in today’s corporate world. 

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