Secretarial audit for bigger companies (Section 204 of the Companies Act, 2013) :

Section 204 of the Companies Act, 2013 provides the provisions for secretarial audit for bigger companies which are as under:

(i) Companies that are required to conduct secretarial audit: Under Section 204(1), every listed company and a company belonging to other class of companies as may be prescribed, shall annex with its Board’s report made in terms of section 134 (3), a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed.

Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 provides that for the purposes of section 204 (1), the other class of companies shall be as under:

(a) Every public company having a paid up share capital of ` 50 crore or more; or

(b) Every public company having a turnover of ` 250 crore or more.

The format of the Secretarial Audit Report shall be in Form No. MR 3.

(ii) Duty of the company:

(a) It shall be the duty of the company to give all assistance and facilities to the company secretary in practice, for auditing the secretarial and related records of the company [Section 204(2)].

(b) The Board of Directors, in their Report prepared under section [134(3)] shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report [Section 204 (3)].

(iii) Contravention [Section 204(4)]: If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, then

(a) the company; or

(b) every officer of the company; or

(c) the company secretary in practice,

who is in default, shall be punishable with fine which shall not be less than ` 1 Lac but which  may extend to ` 5 Lacs.