Playing the governance and transparency card, the Company Secretaries Institute has urged the Corporate Affairs Ministry to revisit the proposed criteria for mandatory secretarial audit in companies.
The new company law has stipulated secretarial audit for certain companies including listed ones.
All non-listed companies with paid up capital of ₹100 crore and above should also undergo secretarial audit, the draft rules issued by the Ministry had said.
However, the Company Secretaries Institute wants secretarial audit trigger to be based on multiple factors including bank borrowings of the company.
Under the criteria spelt out in the draft rules, only about 2,000 companies (for the ₹100 crore paid up capital criteria) are expected to come under secretarial audit.
“We can take additional workload. If more companies come under the ambit of secretarial audit, it will only be to the advantage of regulators,” R Sridharan, the newly elected ICSI President, told Business Line.
Besides listed companies, secretarial audit should become mandatory for all companies with paid up capital of ₹10 crore or annual turnover of ₹25 crore and above, the ICSI has submitted.
Capacity building
Also, secretarial audit should be mandatory for all companies with existing bank borrowing of ₹25 crore or more at any point in time during a financial year.
Sridharan sees his tenure as one of “continuity” (taking forward the work of his predecessor) even while focusing on “capacity building”.(The Hindu)
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