ICSI wants secretarial audit for private cos too

VADODARA: The Institute of Company Secretaries of India (ICSI) has made a representation to the Union ministry of corporate affairs to bring private limited companies under the ambit of secretarial audit under the Companies Act 2013. This was disclosed by ICSI president R Sridharan here on Saturday.

Sridharan was in the city to participate in the practicing company secretary (PCS) conference on the theme of 'PCS: Governance professional and the facilitator for corporate growth' organized by the Vadodara chapter of ICSI jointly with the Western India Regional Council of ICSI.

He said that ICSI through its representation has urged that private companies should be mandated to have key managerial personnel (KMP) like chief financial officers and company secretaries.

Under the Companies Act 2013, private companies have been excluded from the audit and need not compulsorily appoint KMPs.

"Private limited companies should also be included in the secretarial audit. We have advised the Union ministry about the need to have KMPs in private companies," said Sridharan, while adding that all the companies with a capital of Rs 5 crore and above were required to have KMPs under the previous Companies Act.

He underlined that secretarial audit would focus only on the non-finance aspects in a company and would in no way overlap with the regular financial audit.

"In the Companies Act 2013, there is no bifurcation between public limited and private limited companies. The penalties are the same. KMPs are needed to ensure the focus on governance and compliance," he said, adding that around 5,000 listed companies have been now asked to mandatorily appoint KMPs.

He sought that in all, nearly 20,000 companies should appoint KMPs now.