SECRETARIAL AUDIT for Private Company

[vinay.tmmcs tmmcs]

Dear All

i have query on applicability of SECRETARIAL AUDIT for Private Company

Request to share your views

Applicability of SECRETARIAL AUDIT for Private Company as Per the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020.

 

“They shall be applicable in respect of financial years commencing on or after April, 2020.”

Query

·         Secretarial Audit for Private Company shall commence from Financial Year starting from 1^st April 2020, does it means that the secretarial Audit Report is to be submitted for the financial year ending 31 March 2021 and Place the same to the shareholder in the Annual General Meeting held for the Financial Year end 31.03.2021.

OR

·         Secretarial Audit for Private Company shall commence from Financial Year starting from 1^st April 2020, does it means that the secretarial Audit Report is to be submitted for the financial year ending 31 March 2020 and Place the same to the shareholder in the Annual General Meeting held for the Financial Year end 31.03.2020.

 

“(c) Every company having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more.”

 

Query

·         Weather the “outstanding Loan” is to be read separately, if the same is correct then, should  we take into account  Total of loan from Banks, Non –banking financial institutions , Housing Financing Companies and Loan from  Director, Loan from Shareholders.,

 

OR

 

·         Weather “outstanding loans or borrowings from banks or public financial institutions” should be read Together eg, loans obtained from banks and financial institution only, excluding loan obtained from Director, Loan obtained from  Shareholders.,

 

“Public Financial Institutions”

 

Query

·         weather Non-Banking Financial institutions  Registered with RBI,  and

·         Housing Finance Companies Registered  with  National Housing Bank

Are covered  under the Definition of “Public Financial Institutions”

 

 

 

“Explanation :- For the purposes of this sub-rule, it is hereby clarified that the paid up share capital, turnover, or outstanding loans or borrowings as the case may be, existing on the last date of latest audited financial statement shall be taken into account.”.

Query

·         As the amended Rules are applicable from 1^st April 2020, “ outstanding loans or borrowings on the last date of latest audited financial statement shall be taken into account” does it means we should consider the Audited Financial Statement  of the Financial year ended 31.03.2019 or  the Audited Financial Statement  of the Financial year ended 31.03.2020

 

[Prathap]

As the statement says the O/s loan/borrowing from Banks n PFIs as on 31.03.2020 and nowhere mentions the Audited or unaudited. It can be understood as the o/s loans as on the date should be Rs. 100 cr or more and question of Audit or nor matter to figure out the number. If the Amount is identifiable without audt as on the date is sufficient to check the applicability.

As per the term Public Financial Institution my view is that it is only Banks and other register Finance institutions like IFCI, SFC, IDBI and ICICI and others. NBFC is not considered. Loan from directors/memerbs not applicable as the amendment says only Banks n PFIs.

So Appointment of PCS after April 2020 once the company eligible for Sec audit and Audit report for the period 2020-2021 in 2021 AGM to be given.

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[vinay.tmmcs tmmcs]

Mr Pratap

thanks for your inputs

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