The Hindu Business Line : DCA makes secretarial audit mandatory for cos

Announcing this at a press conference here on Saturday, the National President of Institute of Company Secretaries of India (ICSI), Mr Subhrendu Gangopadhyay, said the DCA has relaxed the norms for appointment of Company Secretaries by increasing the limit prescribed under the Companies Act. The limit has now been increased to Rs 2 crore from the existing limit of Rs 50 lakh.

Those companies which fall in the bracket of Rs 10 lakh and more and less than Rs 2 crore, would now have to submit a Compliance Report from a Company Secretary in practice. Thus, all those companies that were not required to appoint a Company Secretary would now have to submit a Compliance Report.

Mr Gangopadhyay termed this as a first step towards making secretarial audit compulsory for all the companies registered with the Registrar of Companies (RoCs).

Further, the DCA would soon prescribe for pre-certification of the forms. Currently, all forms submitted to the RoCs need to be scrutinised. In a bid to lessen the burden on the RoC staff, the DCA expressed its in-principle approval to outsource scrutiny services from the Company Secretaries.

He said the ICSI was working closely with the DCA on amending the Company Secretaries Act, 1980, which would address the issue of discipline, penalties and revision of membership fees among others. Stating that the ICSI had already completed its job of submitting detailed suggestions on the issue, he said the Parliamentary Committee was expected to give its recommendations on the proposed amendment by the month-end. The amendment to the Act was likely to take place during the next session of Parliament, he said.

The ICSI is currently working on preparing guidelines for the proposed Corporate Governance Matrix and expects to submit them to the Securities and Exchange Board of India by November. This Matrix would enable the regulators to rate the adherence of companies to the Corporate Governance norms prescribed by SEBI, he said.

According to Mr Gangopadhyay, the Secretarial Standard (SS2) recently released by the ICSI seeks to prescribe a set of principles for convening and conduct of general meetings of companies. It also intends to integrate and standardise the diverse secretarial practices prevalent in the corporate sector for conducting general meetings to achieve uniformity of practices and for attaining sound corporate governance principles.

To increase awareness among the investing community and assist the gullible investors, the ICSI proposes to set up investor clinics across the country. Stating that investor clinics would be set up at all the 62 chapters of the institute, Mr Gangopadhyay said the investor education programmes proposed to be organised through them would help in bridging the gap between the company and the investors.

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